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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission file # 0-2129
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)
20 South Canal Street, 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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(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 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.______
As of March 14, 1997, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $255,620,275.
As of March 14, 1997, there were 10,705,623 shares of the registrant's Common
Stock, $1.50 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Shareholders Meeting to be held
June 2, 1997 are incorporated by reference into Part III.
Exhibit Index is located on pages 30 - 32.
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THE RAYMOND CORPORATION
TABLE OF CONTENTS
Page
Part I
Item 1. Description of Business.................................3 - 10
Item 2. Properties..............................................11
Item 3. Legal Proceedings.......................................11
Item 4. Submission of Matters to a Vote of Security Holders.....12
Additional Information: Executive Officers.............13 - 14
Part II
Item 5. Market for Company's Common Stock and
Related Security Holder Matters........................15
Item 6. Selected Financial Data.................................16 - 17
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.....................18 - 27
Item 8. Financial Statements and Supplementary Data.............28
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure..................28
Part III
Item 10. Directors and Executive Officers of the Registrant......28
Item 11. Executive Compensation..................................28
Item 12. Security Ownership of Certain Beneficial Owners
and Management..........................................28
Item 13. Certain Relationships and Related Transactions..........28
Part IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.....................................29
Signatures..............................................33
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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,
distribution and service of materials handling equipment.
Revenues are realized primarily from distribution of
the RAYMOND(R) and DOCKSTOCKER(R) product lines through the
Company's Dealer Network which is principally located in North
America. In addition, the Company has expanded in both the
domestic and international markets through distribution and
Original Equipment Manufacturer ("O.E.M.") 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 74% 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 and options.
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. ("M.H.A."), is a separate enterprise which
designs, develops, and sells products to be manufactured
exclusively by the Company and distributed exclusively through
M.H.A. 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. Certain officers of the
Company are also officers of M.H.A.
In 1994, MCFA signed an agreement with Raymond to purchase for
resale battery powered, electric low lift pallet trucks known as
walkies, similar to those currently manufactured by the Company
for M.H.A. MCFA markets the walkies, using Mitsubishi trademarks
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.
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In 1994, Raymond entered into an agreement with Jungheinrich
A.G. ("Jungheinrich") of Hamburg, Germany, a large 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 formed Dockstocker Corporation, a New York
corporation, owned by Raymond Sales Corporation, a 100% owned
subsidiary of Raymond. Dockstocker Corporation markets and sells
stand-up end control counterbalanced forklift trucks featuring
flexible dockstance operator configuration designed to maximize
loading productivity in the dock environment, as well as its own
line of walkie products.
In 1995, Raymond and MCFA entered into another agreement whereby
the Company manufactures and MCFA purchases for resale to end
users certain battery powered, electric orderpickers, straddle
and reach trucks under the Mitsubishi trademark for distribution
in the United States, Canada, Mexico, Central and South America.
Also in 1995, Raymond and Toyota Industrial Equipment
("T.I.E."), a division of Toyota Motor Sales, U.S.A., Inc.,
entered into an agreement whereby the Company manufactures
electric low lift walkie pallet trucks and service parts for
distribution through T.I.E.'s dealer network in the continental
United States. In 1996, the agreement was amended to provide
T.I.E. with the right to distribute such products and services
through its authorized dealers in Mexico, New Zealand and
Australia. Raymond and T.I.E. entered into another agreement in
1996 whereby the Company manufactures electric orderpickers,
straddle and reach trucks for distribution under the Toyota
trademark.
Raymond initiated a plant modernization plan in 1995 which
included a major upgrading of production equipment and processes
in its Greene, New York facility. The modernization plan, which
cost approximately $12 million of capital expenditures, is in
its final stages of completion. The factory modernization
project has significantly upgraded the technology of the plant
and has also increased its efficiency.
The Company has equity investments in certain members of its
Dealer Network. In 1996, it increased equity investments in
Dealerships with principal offices in Illinois, Pennsylvania and
Canada. In addition to North America, the Company has Dealers in
Central and South America, Australia, New Zealand and Singapore.
In October 1996, Ross K. Colquhoun, Chairman of the Board and
Chief Executive Officer of Raymond sold his shares of common
stock of G. N. Johnston Equipment Co. Ltd. ("Johnston") and
Associated Material Handling Industries, Inc. ("Associated"),
both distributors of the Company's products. The shares were
valued in accordance with the terms and conditions set forth in
shareholder buy/sell agreements dated July 1, 1968 and August
15, 1980, respectively. The Johnston shares, which represent
approximately 28% of the total outstanding shares, were acquired
by R.H.E. Ltd. ("R.H.E."), a wholly-owned Canadian subsidiary of
Raymond. The Associated shares, which represent approximately
26% of the total outstanding shares, were acquired by Raymond.
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According to the provisions of an Indenture dated December 15,
1993, the Company issued 6 1/2% Convertible Subordinated
Debentures due December 15, 2003. In December 1996, the Company
announced the redemption of all of its outstanding 6 1/2%
Convertible Subordinated Debentures.
(b) Financial Information about Industry Segments
See "Note N - Business Segment Information" of the consolidated
financial statements included in Item 8 of this Form 10-K Annual
Report.
(c) Narrative Description of Business
(i) Principal Products and Services
The Company's products are marketed principally under the
RAYMOND(R) and DOCKSTOCKER(R) trademarks, and fall into the
category of unit load and case pick load handling.
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 counter- balanced PACER(TM) and
DOCKSTOCKER 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 predominately on
hydraulic and mechanical technologies. 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.
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.
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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.
Also in 1994, two new products were introduced 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.
In 1995, the dual-drive PACER(TM) stand-up, electric
counterbalanced lift truck was redesigned for improved operator
ergonomics. The steering wheel and travel control were
repositioned to make them easier to reach during forks first and
tractor first facing stances.
Also in 1995, the Company introduced the first reach truck
design which incorporates a Radio Frequency ("RF") terminal,
providing an ergonomic integration of this important
productivity tool with the lift truck. RF communication systems
are used in high throughput distribution operations.
In addition, in 1995 the DOCKSTOCKER(R) stand-up, end-control
electric counter-balanced trucks and DOCKSTOCKER walkie product
line were introduced. These products feature enhanced technology
and ergonomics.
In 1996, Dockstocker Corporation introduced a Walkie-Reach truck
which enables a pedestrian controlled vehicle to lift palletized
loads up to 237 inches, as well as an enhanced counterbalanced
truck designed to handle attachments.
Also in 1996, the Company marketed an enhanced EASi REACH-FORK
truck with increased lift speed, productivity enhancers and
other customized features. The EASi Orderpicker product line was
expanded in 1996 to include products for applications up to 366
inches.
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.
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Raymond Leasing Corporation, a wholly-owned subsidiary of
Raymond, 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
additional O.E.M. customers.
The product and service categories of the Company's business
segment are shown with percentage of revenues contributed in
"Note N - Business Segment Information" of the consolidated
financial statements in Item 8 of this Form 10-K Annual Report.
(ii) Status of New Products That Have Been Publicly Announced And
Require a Material Investment
There are no new products or industry segments that have been
publicly announced by the Company 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, sheet 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. 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 and consequently, 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.
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(iv) Importance to the Industry and the Duration of Patents,
Trademarks, Licenses and Concessions
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. These industries include
the grocery, automotive, health care and consumer product
industries.
In 1992, the Company established its National Accounts Program,
which offers to certain 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. In 1996, the National Accounts Program consisted of
seven customers nationwide.
In 1996, the Company established the Regional Accounts Program
in conjunction with the National Accounts Program. The Program
targets existing dealership customers and promotes factory
directed assistance for approximately forty high volume regional
accounts.
No single customer (end user) of the Company accounts for 10% or
more of the Company's total consolidated revenues. However, at
December 31, 1996, lease receivables from one customer
represented approximately 16% of the total investment in leases.
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(viii) Backlog
As of December 31, 1996, the backlog of orders aggregated
approximately $76,386,000 compared with a backlog of
approximately $65,640,000 on December 31, 1995. 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 delivery 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
technology, 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. 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
narrow aisle manufacturer which designs and manufactures a
highly integrated vehicle control system. 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, SWING-REACH(R) trucks, stand-up, end-control
electric counterbalanced 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 and the Yale Industrial and Hyster subsidiaries of North
American Coal Company.
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 O.E.M. customer.
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(xi) Research and Development
The cost of the Company's research and development program
amounted to $3,269,000 in 1996 compared to $3,601,000 in 1995
and $3,958,000 in 1994. 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 1,700 employees on December 31, 1996.
(d) Financial Information about Foreign and Domestic Operations and
Export Sales
See "Note N - Business Segment Information" of the consolidated
financial statements included in Item 8 of this Form 10-K Annual
Report.
(2) The Company has no extraordinary risks attendant to its
foreign operations.
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Item 2. Properties
The Company's corporate headquarters and main manufacturing
facility, made of steel and masonry construction, 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. In 1996, the
Greene manufacturing facility underwent a $12 million
modernization plan which addressed both the manufacturing
processes and the information system processes.
Expansion was completed in 1994 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. The facility, made of steel and masonry construction,
contains approximately 61,000 square feet of warehouse and
office space.
The Company currently leases approximately 14,000 square feet of
space in Greene, New York for use as a manufacturing and
assembly facility.
The Company also leases approximately 10,301 square feet of
space in Greene, New York for use as a training center. The
lease, for a five year period, expires December 2000.
Raymond Leasing Corporation, a 100% owned subsidiary of Raymond,
leases approximately 35,600 square feet of space in Dewitt, New
York for use as office space, warehousing of rental fleet and
repair and maintenance shop.
All of the Company's properties and machinery are believed to be
well maintained and in good condition. With the completion of
the modernization plan at the Greene facility, the Company
estimates that its production capacity will be adequate for the
business anticipated during the next three or four years.
Item 3. Legal Proceedings
The Company is currently defending approximately 65 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.
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The Company is also one of seventeen 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
("EPA") to perform a Remedial Investigation/Feasibility Study
("RI/FS") with respect to a 20 acre site located in Cortland,
New York and remediate the site. Plaintiffs are seeking
contribution from each of the defendants. The RI/FS has been
completed by the plaintiffs and submitted to the EPA for
approval. The plaintiffs expect the EPA to issue a Record of
Decision by the second quarter of 1997. The EPA decision will
define the scope of the remediation required and is expected to
narrow the issues in the private party litigation. Pretrial
factual discovery on the plaintiffs' claims against each
defendant has been completed. Expert discovery is expected to
continue through 1997. The site involved in the litigation was a
manufacturing site for many years 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 hazardous and/or was coated with certain solvents
and/or cutting oils. Plaintiffs have successfully moved for
partial summary judgment, on liability only, against two
co-defendants who contributed scrap metal to the site.
Similar motions as to the Company and two other co-defendants
are pending. 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.
In addition to the matters discussed above, the Company is
subject to various other legal proceedings, claims and
liabilities which have arisen in the ordinary course of its
business. In the opinion of management, the amount of ultimate
liability, if any, with respect to these actions will not
materially affect the financial results of operations or
financial position of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
During the fourth quarter of 1996, no matter was submitted to a
vote of security holders.
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ADDITIONAL INFORMATION REQUIRED IN PART I:
Executive Officers of the Registrant
The names, ages and positions of all the Executive Officers of
Raymond, as of March 14, 1997, 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 Raymond, nor any arrangement or
understanding between any officer and any other person pursuant
to which the officer was elected. Certain Executive Officers of
Raymond are also officers of Raymond's principal subsidiaries.
<TABLE>
<CAPTION>
Name and Position Age Business Experience
----------------- --- -------------------
<S> <C> <C>
Ross K. Colquhoun 66 Appointed Chairman of the
Chairman of the Board, Chief Board and Chief Executive
Executive Officer and Director Officer in 1995 and elected in
1996; Appointed and
elected Chief Executive Officer
prior to 1992; Formerly President
from 1987-1995.
James J. Malvaso 46 Appointed President and Chief
President, Chief Operating Operating Officer in 1995 and
Officer and Director elected in 1996; Appointed and
elected Vice President-
Operations in 1993; Vice
President of Operations of
Pfaudler-U.S. Inc.(1990-1993), a
leading manufacturer of glass-
lined reactors, pressure vessels
and accessories with revenues
in excess of $130 million.
William B. Lynn 51 Appointed and elected
Executive Vice President Executive Vice President
Principal Financial Officer in 1994; Formerly Vice
President-Finance from 1984-
1994.
James B. Bennett, III 56 Appointed Vice President-
Vice President-Sales and Sales and Dealer Develop-
Dealer Development ment in 1995 and elected in
1996; 1994-1996, Vice
President and General Manager
of Dockstocker Corporation, a
wholly-owned subsidiary of
Raymond Sales Corporation;
President from 1992-1993, and
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
(Con't) James B. Bennett, III Vice President from 1983-1992,
Vice President-Sales and of Clark Material Handling,
Dealer Development Company, a manufacturer of
materials handling equipment.
James W. Davis 51 Appointed and elected Vice
Vice President-Engineering President-Engineering
prior to 1992.
Jerome R. Dinn 54 Appointed Vice President-
Vice President-National Accounts National Accounts in 1995
and elected in 1996; Appointed
and elected Vice President-Sales
& Quality prior to 1992.
John F. Everts 38 Appointed and elected Treasurer
Treasurer and and Chief Accounting Officer in
Chief Accounting Officer 1996; Appointed and elected
Corporate Controller prior to
1992.
Margaret L. Gallagher 49 Appointed and elected Vice
Vice President-Marketing President-Marketing prior to
1992.
Patrick J. McManus 42 Appointed and elected
President, Raymond Leasing President, Raymond Leasing
Corporation Corporation prior to 1992;
Raymond Leasing Corporation
is a wholly-owned leasing
subsidiary of the Company;
Treasurer from 1990-1995.
Paul J. Sternberg 63 Appointed and elected Vice
Vice President, President in 1992; Appointed
General Counsel & and elected General Counsel
Secretary and Secretary prior to 1992.
</TABLE>
14
<PAGE>
PART II
Item 5. Market for the Company's Common Stock and Related Security
Holder Matters
See "Note P - Quarterly Information (Unaudited)" of the
consolidated financial statements included in Item 8 and the
discussion on Liquidity and Sources of Capital included in Item
7 of this Form 10-K Annual Report.
The number of shareholders of record on March 14, 1997 was
2,259.
In March 1997, the Company announced that it had retained an
investment banking firm to assist in evaluating strategic
alternatives available to increase shareholder value. In
conjunction with this, the Company's Board of Directors adopted
a Shareholders Right Plan. The Rights provide protection against
coercive or unfair takeover tactics. The Rights Plan is similar
to plans adopted by many public companies and should provide a
sound and reasonable means of safeguarding the interests of all
shareholders should an effort be made to acquire the Company at
a price not reflective of its fair value.
15
<PAGE>
Item 6. Selected Financial Data
Financial Summary: Current and Ten Year
The Raymond Corporation and Subsidiaries
(Dollars in thousands, except per share data)
<TABLE>
Years ended December 31, 1996 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Summary of Operations
Net sales, leasing and rental revenues $305,490 $282,570 $226,727 $ 169,489 $146,662 $ 138,824
Other income 3,317 2,813 2,820 2,460 2,071 1,871
----------------------------------------------------------------
Total revenues 308,807 285,383 229,547 171,949 148,733 140,695
----------------------------------------------------------------
Cost of sales and rentals 228,964 213,175 170,831 127,911 109,716 109,180
Expenses 49,677 44,722 36,621 31,282 27,586 28,725
Interest expense:
Lease financing 4,703 2,950 2,192 3,044 3,391 3,590
Other 3,054 3,721 3,950 1,765 1,567 2,032
----------------------------------------------------------------
Total costs and expenses 286,398 264,568 213,594 164,002 142,260 143,527
----------------------------------------------------------------
22,409 20,815 15,953 7,947 6,473 (2,832)
Income tax expense (benefit) 8,282 8,088 6,428 3,202 2,664 (930)
----------------------------------------------------------------
Income (loss) before minority interest and
equity in earnings of unconsolidated
investees 14,127 12,727 9,525 4,745 3,809 (1,902)
Minority interest in earnings of subsidiaries 176 -- -- -- -- --
Net equity earnings--unconsolidated investees 1,068 347 202 262 152 377
----------------------------------------------------------------
Income (loss) from continuing operations 15,019 13,074 9,727 5,007 3,961 (1,525)
Income (loss) from discontinued operations -- -- -- -- -- --
----------------------------------------------------------------
Net income (loss) $ 15,019 $ 13,074 $ 9,727 $ 5,007 $ 3,961 $ (1,525)
================================================================
- -----------------------------------------------------------------------------------------------------------------
Statistical Information*
Per common share:
Income from continuing operations
(Primary) $ 2.00 $ 1.82 $ 1.39 $ .72 $ .57 $ (.22)
Net income (Primary) 2.00 1.82 1.39 .72 .57 (.22)
Cash dividends .075 -- -- -- -- --
Book value 15.58 13.63 11.58 10.47 9.98 9.79
Weighted average number of shares
outstanding 7,524,097 7,176,862 6,984,319 6,972,923 6,958,098 6,956,381
Cash dividends $ 573 $ -- $ -- $ -- $ -- $ --
Order backlog 76,386 65,640 78,119 52,297 31,919 31,430
Income from continuing operations
as % of total revenues 4.9 4.6 4.2 2.9 2.7 (1.1)
Net income as % of average
shareholders' equity 13.1 14.3 12.6 7.0 5.8 (2.2)
- -----------------------------------------------------------------------------------------------------------------
Financial Position
Working capital $ 85,264 $ 73,801 $ 58,498 $ 82,917 $ 49,000 $ 31,259
Total assets 322,938 249,927 204,376 190,749 153,844 152,443
Long-term obligations 94,136 84,548 70,546 81,510 47,876 39,128
Shareholders' equity 128,672 101,334 81,000 73,053 69,447 68,099
</TABLE>
Note: As indicated in Note H to the financial statments, beginning in the fourth
quarter of 1996 the operating results of G.N. Johnston Equipment Co. Ltd.
(Johnston) and Associated Material Handling Industries, Inc. (Associated) have
been consolidated with those of the Company. Prior to the fourth quarter of
1996, the Company accounted for its investments in Johnston and Associated using
the equity method.
*Restated for the 1996 5% stock dividend.
16
<PAGE>
<TABLE>
Years ended December 31, 1990 1989 1988 1987 1986
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Summary of Operations
Net sales, leasing and rental revenues $145,525 $163,541 $151,920 $126,011 $124,929
Other income 1,823 1,770 1,191 838 1,605
--------------------------------------------------
Total revenues 147,348 165,311 153,111 126,849 126,534
--------------------------------------------------
Cost of sales and rentals 109,953 130,752 121,224 97,180 92,594
Expenses 28,930 29,890 26,575 25,018 22,510
Interest expense:
Lease financing 3,792 3,502 3,607 3,431 2,489
Other 2,151 2,651 1,400 411 703
--------------------------------------------------
Total costs and expenses 144,826 166,795 152,806 126,040 118,296
--------------------------------------------------
2,522 (1,484) 305 809 8,238
Income tax expense (benefit) 1,092 (506) (181) (624) 3,201
--------------------------------------------------
Income (loss) before minority interest and
equity in earnings of unconsolidated
investees 1,430 (978) 486 1,433 5,037
Minority interest in earnings of subsidiaries -- -- -- -- --
Net equity earnings-- unconsolidated investees 503 1,374 943 930 973
--------------------------------------------------
Income (loss) from continuing operations 1,933 396 1,429 2,363 6,010
Income (loss) from discontinued operations -- (1,616) 282 261 217
--------------------------------------------------
Net income (loss) $ 1,933 $ (1,220) $ 1,711 $ 2,624 $ 6,227
==================================================
- --------------------------------------------------------------------------------------------------
Statistical Information*
Per common share:
Income from continuing operations
(Primary) $ .28 $ .06 $ .21 $ .34 $ .87
Net income (Primary) .28 (.18) .25 .38 .90
Cash dividends -- .30 .41 .41 .41
Book value 10.00 9.71 10.07 10.05 9.96
Weighted average number of shares
outstanding 6,956,196 6,952,765 6,939,045 6,931,489 6,907,711
Cash dividends $ -- $ 2,117 $ 2,821 $ 2,815 $ 2,796
Order backlog 29,673 38,442 46,427 42,655 33,157
Income from continuing operations
as % of total revenues 1.3 .2 .9 1.9 4.7
Net income as of average
shareholders' equity 2.8 (1.8) 2.5 3.8 9.3
- ---------------------------------------------------------------------------------------------------
Financial Position
Working capital $ 30,535 $27,412 $ 41,268 $ 53,807 $ 46,107
Total assets 153,008 156,672 169,476 156,684 128,129
Long-term obligations 35,571 31,913 36,428 39,943 24,462
Shareholders' equity 69,530 67,544 69,803 69,616 68,828
</TABLE>
17
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Raymond Corporation and Subsidiaries
Overview
The Raymond Corporation ("Raymond" or the "Company") is based in Greene, New
York and operates predominantly in one business segment, that being the design,
manufacture, distribution and service of materials handling equipment. Revenues
are realized primarily from distribution of the Raymond(R) and Dockstocker(R)
product lines through the Company's Dealer Network which is principally located
in North America. The Dockstocker product line of electric, stand-up
counterbalanced lift trucks was launched in 1995 and is designed for work in
loading and shipping dock areas. The Dealer Network is complemented by the
Company's National Accounts Program, which offers certain large customers single
source coordination of their materials handling needs, and a similar program
managed at the regional level. Raymond also has Dealers in Central and South
America, Australia, New Zealand and Singapore.
In addition, the Company has expanded in both the domestic and international
markets with minimal capital investment through joint venture and Original
Equipment Manufacturer (O.E.M.) supply agreements. O.E.M. agreements are in
place with Mitsubishi Caterpillar Forklift America Inc. and Toyota Industrial
Equipment for distribution in North America and Jungheinrich A.G. for
distribution in Europe. Material Handling Associates, Inc. (M.H.A.), which
distributes equipment manufactured by Raymond through the Caterpillar
distribution network, is the Company's 50% owned joint venture company with
Mitsubishi Caterpillar Forklift America Inc.
The assets and liabilities of Raymond Leasing Corporation, a wholly-owned
subsidiary which finances Company products and related accessories only in the
United States, are classified under the caption "Financial Services" in the
consolidated balance sheets. Raymond Leasing Corporation also provides the
Dealer Network with short-term rental units and used equipment.
As discussed in Note H - Acquisitions to the consolidated financial statements,
the Company acquired controlling interest in G.N. Johnston Equipment Co. Ltd.
(Johnston) and Associated Material Handling Industries, Inc. (Associated), both
distributors of the Company's products that were previously accounted for as
equity investees. Johnston is the exclusive Canadian distributor for the Company
with sales and service outlets in the principal business regions of the Dominion
of Canada. Associated is a U.S. distributor based in Elmhurst, Illinois that
serves portions of the Midwest and Pacific Northwest. The combined purchase
price for the acquired shares of Johnston and Associated was approximately $4.5
million. The operating results of Johnston and Associated, net of minority
interests, were consolidated with those of the Company starting in the fourth
quarter of 1996.
18
<PAGE>
The major components of the Company's international operations are Raymond
Industrial Equipment, Ltd., a wholly-owned Canadian manufacturing subsidiary,
and Johnston. Foreign exchange exposure on international operations is limited
primarily to the Canadian dollar and is minimized through the purchase of
foreign currency exchange contracts and foreign exchange options. The impact on
the financial statements of the settlement of foreign currency exchange
contracts has not been material for the three years ending December 31, 1996.
Based on current rates and the relative historical stability of the Canadian
dollar, it is also expected that there will be no material adverse impact on
operating results from the settlement of those contracts that are outstanding at
December 31, 1996. Detailed information pertaining to foreign currency exchange
contracts and foreign exchange options is contained in Notes A and F to the
consolidated financial statements.
Products produced at the U.S. and Canadian manufacturing facilities are
determined by manufacturing process; 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 Company distributes its repair and replacement parts from its
Distribution Center in Syracuse, New York.
The major revenue categories are shown below:
Percentage of Total Revenues 1996 1995 1994
- ---------------------------- ---- ---- ----
Narrow and very narrow
aisle applications 56% 60% 57%
All other applications 20% 18% 20%
Repair and replacement parts 16% 16% 17%
Leasing and rentals 5% 5% 5%
Service 2% - -
Other 1% 1% 1%
Net Sales
In 1996, record net sales were reported for the fourth consecutive year. Net
sales of $289.6 million represented an increase of approximately $18.2 million
or 6.7% from the previous record set in 1995. Net sales in 1995 were $271.4
million, up approximately $53.6 million or 24.6% from the 1994 level of $217.8
million.
In 1996, the growth in net sales was attributable to the approximate $17.8
million of incremental sales and service revenue recognized as a result of the
consolidation of Johnston and Associated in the fourth quarter. The Company was
also successful in increasing its market share as well as O.E.M., Dockstocker
and National Accounts Program sales in a North American market that remained
strong in 1996 but that was down from the record levels attained in 1994 and
1995.
19
<PAGE>
The substantial growth in net sales in 1995 reflected a continuation of trends
noted throughout 1994, including the Company's success in expanding its
distribution to serve new and different markets. The Company's shipments to its
Dealer Network increased as a result of the record backlog (unfilled new
equipment orders) at the start of 1995 and the continued success of its new
products with the intellidrive(R) controls technology and increased sales
efforts at the Dealership level. The successful launch of the new Dockstocker
product line, which addressed a market segment not specifically targeted by the
Company previously, contributed to the sales growth. Other significant increases
were attained through sales to M.H.A. and the increased volume of repair and
replacement parts sales.
Rental Revenues
Rental revenues were $3.7, $1.8 and $1.9 million in 1996, 1995 and 1994,
respectively. The current year increase is attributable to the rental revenues
recognized by Johnston and Associated.
Lease Finance Revenues
Lease finance revenues recognized by Raymond Leasing Corporation and Johnston in
1996 increased approximately $2.8 million or 30.3% to $12.2 million. In 1995,
lease finance revenues increased by $2.4 million or 32.9% to $9.4 million as
compared to the $7.0 million recognized in 1994. The increased revenues in the
current year primarily reflect the record level of leases booked in 1996 which
corresponds to the record sales level attained by The Raymond Corporation. In
1996, approximately 31% of the units delivered under the Raymond brand name in
the United States were financed through Raymond Leasing Corporation. Johnston's
fourth quarter lease finance revenues contributed approximately $0.4 million of
the 1996 increase. The growth in 1995 revenues also corresponded to record sales
levels attained by the Company.
The net lease portfolio of Raymond Leasing Corporation increased approximately
$24.8 million in 1996 to a record level of $131.2 million. At December 31, 1996
lease receivables from one customer represented approximately 16% of the total
investment in leases.
Other Income
Other income was $3.3 million in 1996 and $2.8 million in both 1995 and 1994.
The primary components of other income during these years were interest income,
foreign currency exchange gains, cash discounts taken and license and royalty
fees. The increase in 1996 relates to the gain recognized on the sale of an idle
facility and increased interest income.
20
<PAGE>
Cost of Sales
Cost of sales as a percentage of net sales was 78.1%, 77.9% and 77.6% in 1996,
1995 and 1994, respectively.
The Company was able to maintain a relatively stable cost of sales percentage in
both 1996 and 1995 despite additional costs and short-term inefficiencies
incurred in connection with the disposal and relocation of existing
manufacturing equipment and the installation of new manufacturing equipment at
the Greene, New York facility. This factory modernization project was
essentially completed in the fourth quarter of 1996. The Company intends to
continue its efforts to reduce manufacturing costs through improved
manufacturing processes and research and development activities.
The cost of sales percentage is also impacted by the volume produced for O.E.M.
customers. Offsetting the percentage impact on cost of goods sold is the benefit
received from attaining these additional sales without incurring additional
marketing and distribution expenses.
Cost of Rentals
Cost of rentals, which consist primarily of depreciation and maintenance, was
$2.7, $1.7 and $1.8 million in 1996, 1995 and 1994, respectively. The increase
in the cost of rentals is directly related to the increased rental revenues. The
improved margins in 1996 pertain to the rental operations with end users
conducted by Johnston and Associated.
Selling, General and Administrative Expenses
Selling, general and administrative expenses of $41.3, $34.7 and $28.5 million
were 13.4%, 12.2% and 12.4% of total revenues in 1996, 1995 and 1994,
respectively. The current year increase is primarily attributable to the
inclusion of costs associated with the distribution expenses of the Dealers
acquired late in 1996. The Company's percentage of selling, general and
administrative expenses, excluding Johnston and Associated , is consistent with
the 1995 percentage even though additional costs were incurred in connection
with the Greene factory modernization project including those associated with
the implementation of a new business system.
The dollar level increase in 1995 reflects expenses incurred to support the
growth in sales volume including costs to launch the Dockstocker(R) product line
and costs for the Company's biannual International Sales Meeting. There were
increases in engineering expenditures and compensation and benefit expenses
including costs associated with stock appreciation rights. Also, increased costs
were incurred in connection with an upgrade of the Company's computer systems.
The Company's efforts to contain costs and appropriately focus its resources
enabled it to reduce selling, general and administrative costs as a percentage
of total revenues in 1995.
21
<PAGE>
Interest Expense
Interest expense related to lease financing is reported net of charges on
intercompany borrowings. Lease finance interest expense of $4.7, $3.0 and $2.2
million represented 38.6%, 31.5% and 31.1% of lease finance revenues in 1996,
1995 and 1994, respectively. The increases in interest expense in both 1996 and
1995 reflect the additional external borrowings incurred to finance the growth
of the lease portfolio. The percentage increase in 1996 reflects the greater
percentage of external borrowings incurred by Raymond Leasing Corporation. It is
expected that lease financing interest expense will continue to fluctuate with
the volume of outstanding leases.
Other interest expense incurred by the manufacturing and distribution divisions
was $3.1, $3.7 and $4.0 million in 1996, 1995 and 1994, respectively. The
current year decrease reflects the impact for a full year of the subordinated
debentures converted in the third quarter of 1995, the 1996 conversion of $13.2
million of debentures, which occurred primarily in the fourth quarter, and the
$0.5 million interest subsidy grant received from New York State in connection
with the Greene factory modernization project. The decrease in 1995 was the
result of the conversion of $6.2 million of debentures in the third quarter.
Other Expenses
Other expenses were $4.8, $6.2 and $5.2 million, or 1.6%, 2.2% and 2.3% of total
revenues in 1996, 1995 and 1994, respectively. The principal components of other
expenses are cash discounts paid to Dealers for the timely payment of invoices
and the provision for losses on accounts receivable and investment in leases.
Decreases in the provision for losses on accounts and leases receivable and
certain costs incurred in connection with foreign currency transactions were the
main components of both the dollar and percentage decreases in 1996.
The formulas for computing the profit sharing provisions are consistent for all
periods presented.
Income Tax Expense
The provision for federal, state and foreign income taxes represented a combined
effective tax rate of 37.0%, 38.9% and 40.3% in 1996, 1995 and 1994,
respectively. The tax rates on foreign subsidiaries and state income taxes
accounted for the majority of the difference in the effective tax rate from the
expected U.S. federal statutory rate. Note M to the consolidated financial
statements contains further information concerning the provision for income
taxes as well as the detail components of the effective tax rate.
22
<PAGE>
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.
Unconsolidated Investees
Prior to its inclusion in the consolidated financial statements in the fourth
quarter of 1996, Johnston was the Company's primary unconsolidated investee.
Other unconsolidated investees include several Dealerships located throughout
the United States, as well as M.H.A.
The Company's net equity in earnings of unconsolidated investees was $1.1
million in 1996 as compared to $0.3 and $0.2 million in 1995 and 1994,
respectively. The increase in 1996 was primarily attributable to the improved
financial performance of several U.S. Dealerships, some of whom had experienced
losses in prior years. As the presentation of the operating results of Johnston
and Associated will change with their inclusion in the consolidated results of
the Company for all of 1997 as opposed to just the fourth quarter in 1996, it is
expected that the earnings reported for unconsolidated investees will decrease
in 1997.
The Company considers its Dealer Network to be 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. Net additional
advances to and investments in unconsolidated investees have averaged
approximately $3.3 million for the three years ended December 31, 1996. In 1996,
the Company continued its strategy of increasing minority equity investments in
Dealerships serving key geographic areas.
Liquidity and Sources of Capital
The Company used $12.2 million for operating activities in 1996 as compared to
$10.3 million in 1995. The cash generated from earnings was used primarily to
fund the continued growth in the lease portfolio, capital expenditures and the
increase in other working capital requirements. Cash used in investing
activities decreased approximately $1.6 million in 1996 versus 1995 as a result
of proceeds received from the sale of an idle facility in the third quarter of
1996. Cash flows from financing activities primarily reflect the external
borrowings and related debt repayments made by Raymond Leasing Corporation to
fund a portion of the continued growth of the lease portfolio.
In 1995, the Company used $10.3 million to fund operating activities, an
increase of approximately $3.0 million from 1994. As in the current year, cash
was primarily used to fund the growth of the lease portfolio and the increase in
other working capital components necessary to support the higher sales volume.
Net cash used for investing activities increased approximately $3.3 million in
1995 compared to 1994 as additional capital expenditures were incurred in
connection with the accelerated capital expenditure program at the Greene, New
York facility. The 1995 cash flows from financing activities reflect the
proceeds of long-term debt obtained by Raymond Leasing Corporation to fund a
portion of the continued growth of the lease portfolio and repay intercompany
borrowings.
23
<PAGE>
The Company's manufacturing and distribution working capital was $74.2 million
at December 31, 1996 and its ratio of manufacturing current assets to
manufacturing current liabilities was 2.4 to 1.0. Financial Services total
external debt was 59.5% of the related net investment in leases at December 31,
1996.
At December 31, 1996, the Company and its subsidiaries had unused lines of
credit of $26.3 million of which approximately $10.9 million may be converted
into long-term debt at the option of the Company and/or Raymond Leasing
Corporation. In addition, payments made under the Company's revolving credit and
term loan facilities increase the funds available for borrowing. These credit
facilities, along with internally generated resources, will enable the Company
to continue to fund its growth strategy and enable Raymond Leasing Corporation
to obtain the external funds necessary to fund the growth of the lease portfolio
and to repay intercompany borrowings with The Raymond Corporation as the
manufacturing divisions require additional funds. The factory modernization
project at the Greene facility is essentially complete and there are no material
commitments for new capital expenditures although the Company intends to
continue its policy of upgrading its manufacturing equipment and facilities as
appropriate.
In March 1996, the Board of Directors declared a 5% stock dividend on the
Company's common stock payable to shareholders of record as of March 29, 1996.
All appropriate per share data and the weighted average shares outstanding have
been restated to reflect this dividend. On April 8, 1996, the Board of Directors
reinstated a regular quarterly cash dividend of 2 1/2 cents on the Company's
outstanding shares of common stock, effective for the second quarter of 1996.
The Company announced in March 1997 that the regular quarterly cash dividend was
increased to 6 1/4 cents per share, effective for the first quarter of 1997. The
Company expects to continue the quarterly cash dividends at this level but its
ability to do so will depend on a variety of factors including the Company's
earnings, cash flows and financial resources.
Maintaining a sound and flexible financial structure through conservative
financial strategies continues to be a high priority for The Raymond
Corporation. The Company's overall strong financial condition continued to
improve throughout 1996. On December 20, 1996, the Company issued a Call for
Redemption of its outstanding 6 1/2% convertible subordinated debentures due
December 15, 2003. Prior to issuing the Call for Redemption, an additional $9.5
million of the debentures were converted into shares of common stock, primarily
in the fourth quarter. The redemption was completed on January 21, 1997 and
substantially all of the outstanding debentures were converted into common stock
at the originally stated conversion rates adjusted for stock dividends.
Approximately 3.2 million shares of common stock was issued in 1996 and January
1997 in connection with the conversion of the debentures. The Company's reported
primary earnings per share of $2.00 for 1996 would have been $1.62 had these
conversions taken place as of January 1, 1996. As a result of the successful
conversion of the debentures completed in January 1997, the Company's
outstanding shares of common stock increased to approximately 10.6 million and
the net worth increased to $165.9 million. The convertible debentures were the
main component of the difference in the computation of primary and fully diluted
earnings per share as the dilution that could result from the assumed exercise
of stock options is not material.
24
<PAGE>
As discussed in Note G 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 impact the parent
company. 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 improved capital structure resulting from continued profitability
and the conversion of the debentures will aid the Company's growth strategy
which includes pursuing additional opportunities in North America and Europe.
Changing Price Levels
Although inflation has slowed in recent years, it is still a factor in our
economy and the Company continues to seek ways to minimize its impact. To the
extent permitted by competition in general, the Company attempts to recover
increased costs by increasing selling prices over time. However, the Company has
not realized any substantial growth in revenues from increased unit selling
prices during the past three years except for the approximate 3 1/2% aggregate
unit price increase that was announced in December 1994. In addition, selling
price increases are implemented to recover cost increases with respect to repair
and replacement parts when appropriate and lease finance rates are adjusted to
reflect changes in market conditions and the Company's cost of funds. Cost
containment, technological improvements and improved manufacturing methods
continue to be emphasized as a means to improve product margins.
The Company uses the FIFO (first-in, first-out) 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. Over 40% of the
Company's property, plant and equipment has 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.
25
<PAGE>
Contingencies
The Company is currently defending approximately 65 products liability and
similar lawsuits involving industrial accidents. The number of outstanding
lawsuits 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 seventeen remaining defendants in a private
environmental lawsuit pertaining to a site remediation. The plaintiffs have
alleged that scrap metal purchased from the Company was hazardous and/or 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. Plaintiffs
have successfully moved for partial summary judgment, on liability only, against
two co-defendants who contributed scrap metal to the site. Similar motions as to
the Company and two other co-defendants are pending. The Company is aggressively
defending the claim and does not believe it is likely to have a material adverse
effect on the Company.
In addition to the matters discussed above, the Company is subject to various
other legal proceedings, claims and liabilities which have arisen in the
ordinary course of business. In the opinion of management, the amount of
ultimate liability, if any, with respect to these actions will not materially
affect the financial results of operations or financial position of the Company.
Outlook
Orders received in 1996 were a record $300.4 million, an increase of
approximately $41.5 million or 16.0% from the orders received in 1995. In 1995,
the previous record for orders received was established at $258.9 million, an
increase of approximately $15.2 million or 6.3% from the orders received in the
previous year.
26
<PAGE>
At December 31, 1996, the Company's order backlog of unfilled new equipment
orders was $76.4 million and approximately $8.9 million relates to the
incremental backlog of Johnston and Associated. The current year backlog is up
$10.8 million or 16.4% and provides a solid foundation for the upcoming year. In
1995, the backlog was $65.6 million, down approximately $12.5 million or 16.0%
from the record backlog level of $78.1 million established at December 31, 1994.
The Company believes that the overall market will improve in 1997, although it
is not expected to return to the record levels of 1994. The Company attempts to
outperform the lift truck market through various growth strategies. These
strategies include continued product development such as the additions to the
Dockstocker(R) product line, enhanced distribution through the Dealer Network,
increased participation in domestic and international markets through strategic
alliances or acquisitions and continued improvements in the manufacturing
processes.
It is expected that the Company's revenues will increase in 1997 as a result of
the consolidation of Johnston and Associated. See Note H - Acquisitions to the
consolidated financial statements for the unaudited pro forma information
presented as if the acquisitions had occurred as of January 1, 1995. Net income
for these Dealers has historically been a smaller percentage of total revenues
than that attained by the Company in the last few years.
In March 1997, the Company announced that it had retained an investment banking
firm to assist in evaluating strategic alternatives available to the Company to
increase shareholder value. In conjunction with this, the Company's Board of
Directors adopted a Shareholders Rights Plan. The Rights provide protection
against coercive or unfair takeover tactics. The Rights Plan is similar to plans
adopted by many public companies and should provide a sound and reasonable means
of safeguarding the interests of all shareholders should an effort be made to
acquire the Company at a price not reflective of its fair value.
Statements included in this Management's Discussion and Analysis of Financial
Condition and Results of Operations which are not historical in nature, are
intended to be, and are hereby identified as, forward looking statements for
purposes of the safe harbor provided by Section 21E of the Securities and
Exchange Act of 1934, as amended by Public Law 104-67. The Company cautions
readers that forward looking statements, including without limitation, those
relating to the Company's future business prospects, revenues, risks of foreign
operations, working capital and liquidity and new equipment orders, are subject
to certain risks and uncertainties that could cause actual results to differ
materially from those indicated in the forward looking statements. These risks
and uncertainties include general economic and market conditions, including
demand for the Company's products and services, competition and price levels;
the possibility of catastrophic events that could impact the Company's
manufacturing, distribution and computer facilities; and changes in interest
rates and foreign currency fluctuations, among others. Additional risks and
factors are identified from time to time in the Company's reports filed with the
SEC.
27
<PAGE>
Item 8. Financial Statements and Supplementary Data
The response to this Item is submitted in a separate section of
this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
Not applicable.
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 June 2, 1997 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 June 2, 1997, 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 June 2, 1997, and is incorporated
herein by reference thereto.
Item 13. Certain Relationships and Related Transactions
This information is disclosed in the 1997 Proxy Statement for
the Annual Meeting of Shareholders in the section captioned
"Certain Relationships and Related Transactions" and is
incorporated herein by reference thereto.
28
<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 consolidated financial
statements of The Raymond Corporation, and Subsidiaries,
are included in Item 8:
10-K
Report Page
-----------
Report of Independent Auditors 35
Consolidated Balance Sheets -
December 31, 1996, 1995 and 1994 36 - 37
Consolidated Statements of Income - Years ended
December 31, 1996, 1995 and 1994 38
Consolidated Statements of Shareholders' Equity -
Years ended December 31, 1996, 1995 and 1994 39
Consolidated Statements of Cash Flows - Years
ended December 31, 1996, 1995 and 1994 40 - 41
Notes to Consolidated Financial Statements - 42 - 61
December 31, 1996
2. The following Consolidated Financial Statement Schedules
of The Raymond Corporation and Subsidiaries are required by Item 14(d):
10-K
Report Page
-----------
Schedule I - Condensed Financial Information
of Registrant - The Raymond
Corporation Years ended December
31, 1996, 1995 and 1994 62 - 67
Schedule II - Valuation and Qualifying Accounts
Years ended December 31, 1996,
1995 and 1994 68 - 70
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 30-32 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, 1996.
29
<PAGE>
(c) Exhibits:
Exhibit
# Description
- ------- -----------
3.1 Restated and Amended Certificate of Incorporation of The Raymond
Corporation. Filed as Exhibit 3.1 to the 1995 Form 10-K Annual Report
of the Company on page 32 and incorporated herein by reference.
3.2 Bylaws of the Company, as amended, dated March 24, 1997. Filed as
Exhibit 3.2 to this Form 10-K Annual Report of the Company on page 73.
4.1 Form 8-A12G/A dated March 13, 1997 and filed March 14, 1997 with the
Securities and Exchange Commission, File Number 001-12801 and
incorporated herein by reference.
4.2 Shareholder Rights Plan filed as Exhibit 1 to the Form 8-12G/A dated
March 13, 1997 and filed March 14, 1997 with the Securities and
Exchange Commission, File Number 001-12801 and incorporated herein by
reference.
10.1 Joint Venture Agreement dated August 1, 1991 between Caterpillar
Industrial Inc., and The Raymond Corporation. Filed as Exhibit 10.1 to
this Form 10-K Annual Report of the Company on page 89.
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 on page 63 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. Filed
as Exhibit 10.3 to the 1994 Form 10-K Annual Report of the Company on
page 32 and incorporated herein by reference.
10.4 Third Amendment to Joint Venture Agreement dated August 1, 1991 between
Caterpillar Industrial Inc. and The Raymond Corporation. Filed as
Exhibit 10.4 to the 1994 Form 10-K Annual Report of the Company on page
37 and incorporated herein by reference.
11. Statement Re: Computation of Per Share Earnings. Filed as Exhibit 11 to
this Form 10-K Annual Report of the Company at page 187.
20.1 Form 8-K Report dated January 7, 1997 and filed January 7, 1997 with
the Securities and Exchange Commission, File Number 000-02129 and
incorporated herein by reference.
20.2 Form 8-K Report dated February 5,1997 and filed February 5, 1997 with
the Securities and Exchange Commission, File Number 000-02129 and
incorporated herein by reference.
30
<PAGE>
Exhibit
# Description
- ------- -----------
20.3 Form 8-K/A Report dated March 17, 1997 and filed March 17, 1997 with
the Securities and Exchange Commission, File Number 001-12801 and
incorporated herein by reference.
21. Subsidiaries (Direct and Indirect) of The Raymond Corporation for the
year ending December 31, 1996 filed as Exhibit 21 to this Form 10-K
Annual Report of the Company on page 189.
23. Consent of Independent Auditors dated April 10, 1997 filed as Exhibit
23 to this Form 10-K Annual Report of the Company on page 191.
24. Power of Attorney of Directors dated March 1, 1997 filed as Exhibit 24
of this Form 10-K Annual Report of the Company on page 193.
27. Financial Data Schedule filed as Exhibit 27 to this Form 10-K Annual
Report of the Company on page 195.
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
10.6 Employment Agreement dated as of November 3, 1987 amended as of June
14, 1994 and as of November 1, 1995 and amended and restated as of
March 24, 1997 between Ross K. Colquhoun and The Raymond Corporation.
Filed as Exhibit 10.6 to this Form 10-K Report of the Company at
page 113.
10.7 Sample form of Executive Agreement (Tier II) between The Raymond
Corporation and Company Executives. Filed as Exhibit 10.7 to this
Form 10-K Report of the Company at page 127.
10.8 Sample form of Executive Agreement (Tier III) between The Raymond
Corporation and Company Executives. Filed as Exhibit 10.8 to this Form
10-K Report of The Company at page 140.
10.9 The Raymond Corporation Retirement Benefits Equalization Plan. Filed as
Exhibit 10.17 to the 1995 Form 10-K Annual Report of the Company at
page 250 and incorporated herein by reference.
10.10 The Raymond Corporation 1996 Deferred Stock Unit Plan for Non-Employee
Directors. Filed as Exhibit 10.10 to this Form 10-K Report of the
Company at page 151.
10.11 The Raymond Corporation Stock Option Plan (1991) amended as of March
24, 1997. Filed as Exhibit 10.11 to this Form 10-K Report of the
Company at page 156.
31
<PAGE>
Exhibit
# Description
- ------- -----------
10.12 The Raymond Corporation Stock Option Plan (1995) as amended as of March
24, 1997. Filed as Exhibit 10.12 to this Form 10-K Report of the
Company at page 168.
10.13 The Raymond Corporation Deferred Compensation Plan for Exempt Employees
restated as of September 1, 1994, amended as of March 24, 1997. Filed
as Exhibit 10.13 to this Form 10-K Annual Report of the Company at
page 180.
10.14 The Raymond Corporation Officer Performance Bonus Plan Formula. Filed
as Exhibit 10.15 to the 1992 Form 10-K Annual Report of the Company at
page 357 and incorporated herein by reference.
32
<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: April 14, 1997 THE RAYMOND CORPORATION
-----------------------
(Registrant)
By: /s/ Ross K. Colquhoun
----------------------
Ross K. Colquhoun
Chairman of the Board 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.
<TABLE>
<CAPTION>
<S> <C> <C>
By: /s/ Ross K. Colquhoun By: /s/ James J. Malvaso By: /s/ William B. Lynn
---------------------- --------------------- ---------------------
Ross K. Colquhoun James J. Malvaso William B. Lynn
Chairman of the Board, Chief President, Chief Operating Executive Vice President
Executive Officer and Director Officer and Director Principal Financial Officer
Date: 04/14/97 Date: 04/14/97 Date: 04/14/97
By: /s/ John F. Everts
--------------------
John F. Everts
Treasurer and Chief
Accounting Officer
Date: 04/14/97
By: /s/ James F. Matthews By: /s/ Arthur M. Richardson
------------------------ ----------------------------
James F. Matthews, Director Arthur M. Richardson, Director
Date: 04/14/97 Date: 04/14/97
By: /s/ John E. Mott By: /s/ M. Richard Rose
------------------------ ----------------------------
John E. Mott, Director M. Richard Rose, Director
Date: 04/14/97 Date: 04/14/97
By: /s/ Michael R. Porter By: /s/ John V. Sponyoe
------------------------ ----------------------------
Michael R. Porter, Director John V. Sponyoe, Director
Date: 04/14/97 Date: 04/14/97
By: By: /s/ Michael O. Womack
------------------------ ----------------------------
George G. Raymond, Jr. Michael O. Womack, Director
Date: Date: 04/14/97
</TABLE>
33
<PAGE>
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 14(a)(1) and (2), (c), and (d)
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULES
YEAR ENDED DECEMBER 31, 1996
THE RAYMOND CORPORATION
GREENE, NEW YORK
34
<PAGE>
Report of Independent Auditors
We have audited the accompanying consolidated balance sheets of The Raymond
Corporation and subsidiaries as of December 31, 1996, 1995 and 1994, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1996. Our audits
also included the financial statement schedules listed in the Index at Item
14(a). These financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedules 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
Raymond Corporation and subsidiaries at December 31, 1996, 1995 and 1994, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
/s/ Ernst & Young LLP
Syracuse, New York
February 7, 1997
35
<PAGE>
Consolidated Balance Sheets
The Raymond Corporation and Subsidiaries
<TABLE>
<CAPTION>
December 31, 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Manufacturing and Distribution
Cash and cash equivalents $ 12,389,071 $ 12,341,383 $ 5,351,161
Accounts receivable:
Trade, net of allowances ($1,636,809 in 1996; $1,718,651
in 1995 and $986,093 in 1994) 38,512,979 17,621,830 20,777,505
Unconsolidated investees 12,263,324 18,727,995 12,132,856
Investment in leases; net of unearned lease income;
net of allowances for doubtful contracts ($122,394 in 1996) 4,285,087 -- --
Inventories 47,203,818 34,645,114 30,911,341
Recoverable income taxes 774,051 1,159,325 --
Deferred income taxes* 5,012,215 5,434,967 3,764,243
Prepaid expenses and other current assets 8,651,725 4,326,925 4,656,816
---------------------------------------------------
Total Manufacturing and Distribution Current Assets 129,092,270 94,257,539 77,593,922
Investment in and advances to unconsolidated investees, at equity 9,462,438 19,165,362 16,666,728
Investment in leases; net of unearned lease income;
net of allowances for doubtful contracts ($228,003 in 1996) 7,979,598 -- --
Property, plant and equipment, at cost 69,321,643 54,179,355 46,896,174
Less accumulated depreciation 40,974,213 31,043,877 29,947,379
---------------------------------------------------
Net property, plant and equipment 28,347,430 23,135,478 16,948,795
Rental equipment, at cost 19,226,214 -- --
Less accumulated depreciation 12,786,112 -- --
---------------------------------------------------
Net rental equipment 6,440,102 -- --
Other assets 7,343,355 4,226,451 5,775,276
---------------------------------------------------
Total Manufacturing and Distribution Assets 188,665,193 140,784,830 116,984,721
---------------------------------------------------
Financial Services
Cash and cash equivalents 31,012 17,664 72,302
Investment in leases; net of unearned lease income;
net of allowances for doubtful contracts ($1,757,202 in 1996;
$1,782,906 in 1995 and $1,228,788 in 1994) 131,184,628 106,409,973 84,724,886
Property, plant and equipment, at cost 413,256 385,486 234,712
Less accumulated depreciation 233,106 193,086 162,654
---------------------------------------------------
Net property, plant and equipment 180,150 192,400 72,058
Rental equipment, at cost 4,690,627 4,379,990 4,327,691
Less accumulated depreciation 2,004,428 2,145,390 2,004,464
---------------------------------------------------
Net rental equipment 2,686,199 2,234,600 2,323,227
Other assets 190,995 287,702 198,550
---------------------------------------------------
Total Financial Services Assets 134,272,984 109,142,339 87,391,023
---------------------------------------------------
Total Assets $322,938,177 $249,927,169 $204,375,744
===================================================
</TABLE>
*Includes Manufacturing and Distribution and Financial Services
The accompanying notes are a part of the financial statements.
36
<PAGE>
<TABLE>
December 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Liabilities and Shareholders' Equity
Manufacturing and Distribution
Accounts payable $ 20,804,292 $ 13,656,877 $ 14,194,244
Accrued liabilities 26,479,042 20,461,499 16,782,258
Current portion of long-term debt 7,573,164 -- --
------------------------------------------------------
Total Manufacturing and Distribution Current Liabilities 54,856,498 34,118,376 30,976,502
Long-term debt 41,961,472 51,260,000 57,500,000
Deferred income taxes* 5,196,603 3,982,867 4,184,235
Deferred compensation 3,173,472 2,920,974 2,140,912
Other liabilities 3,326,874 777,865 386,408
------------------------------------------------------
Total Manufacturing and Distribution Liabilities 108,514,919 93,060,082 95,188,057
------------------------------------------------------
Financial Services
Accounts payable 80,943 79,275 767,205
Income taxes* 2,083,272 1,103,878 2,230,445
Accrued liabilities 1,285,322 1,954,196 1,037,822
Notes payable -- banks 74,062,500 41,537,500 6,437,500
Notes payable -- insurance companies 4,000,000 10,858,000 17,715,000
------------------------------------------------------
Total Financial Services Liabilities 81,512,037 55,532,849 28,187,972
------------------------------------------------------
------------------------------------------------------
Minority Interests 4,238,918 -- --
------------------------------------------------------
Shareholders' Equity
Common stock, $1.50 par value: authorized 15,000,000 shares
(Issued 1996 - 8,281,694; 1995 - 7,100,444 and 1994 - 6,364,221) 12,422,541 10,650,666 9,546,332
Capital surplus 41,787,444 23,643,394 12,712,723
Retained earnings 77,590,950 69,945,200 62,566,473
Cumulative translation adjustments (2,821,639) (2,596,653) (3,515,662)
------------------------------------------------------
128,979,296 101,642,607 81,309,866
Less:
Treasury stock, at cost (Shares 1996 - 22,969; 1995 - 21,974
and 1994 - 21,049) 306,993 308,369 310,151
------------------------------------------------------
Total Shareholders' Equity 128,672,303 101,334,238 80,999,715
------------------------------------------------------
Commitments and contingencies (Notes C and O)
Total Liabilities and Shareholders' Equity $322,938,177 $249,927,169 $204,375,744
=======================================================
</TABLE>
*Includes Manufacturing and Distribution and Financial Services
The accompanying notes are a part of the financial statements.
37
<PAGE>
Consolidated Statements of Income
The Raymond Corporation and Subsidiaries
<TABLE>
Years ended December 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues
Net sales $289,643,479 $271,388,087 $217,831,647
Rental revenues 3,658,304 1,830,847 1,857,128
Lease finance revenues 12,188,464 9,351,252 7,038,222
Other income 3,316,650 2,812,828 2,819,718
------------------------------------------------------
Total Revenues 308,806,897 285,383,014 229,546,715
------------------------------------------------------
Costs and Expenses
Cost of sales 226,233,006 211,523,419 169,071,126
Cost of rentals 2,730,506 1,651,046 1,759,701
Selling, general and administrative expenses 41,330,922 34,680,275 28,479,497
Employees' profit sharing 3,543,292 3,810,045 2,907,251
Interest expense:
Lease financing 4,703,311 2,950,221 2,191,684
Other 3,054,144 3,721,370 3,950,452
Other expenses 4,802,554 6,231,805 5,233,695
------------------------------------------------------
Total Costs and Expenses 286,397,735 264,568,181 213,593,406
------------------------------------------------------
Income before taxes, minority interest and equity in earnings of
unconsolidated investees 22,409,162 20,814,833 15,953,309
Income tax expense 8,281,964 8,087,785 6,427,672
------------------------------------------------------
Income before minority interest and equity in earnings of
unconsolidated investees 14,127,198 12,727,048 9,525,637
Minority interest in earnings of subsidiaries 176,403 -- --
Net equity in earnings of unconsolidated investees 1,068,626 346,887 201,634
------------------------------------------------------
Net Income $ 15,019,421 $ 13,073,935 $ 9,727,271
======================================================
Net Income Per Share:
Primary $ 2.00 $ 1.82 $ 1.39
======================================================
Fully Diluted $ 1.61 $ 1.44 $ 1.15
======================================================
</TABLE>
The accompanying notes are a part of the financial statements.
38
<PAGE>
Consolidated Statements of Shareholders' Equity
The Raymond Corporation and Subsidiaries
Years ended December 31, 1996, 1995 and 1994
<TABLE>
Total
Common Capital Retained Currency Treasury Shareholders'
Stock Surplus Earnings Translation Stock Equity
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
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 (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
Net income 13,073,935 13,073,935
Issuance of 318,227 shares for stock dividend 477,340 5,210,968 (5,695,208) (6,900)
Issuance of 369,868 shares for redemption of
convertible debentures 554,802 5,685,198 6,240,000
Issuance of 48,128 shares under stock option plan 72,192 33,723 105,915
Treasury shares (127) issued 782 1,782 2,564
Currency translation adjustments 919,009 919,009
- ------------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1995 10,650,666 23,643,394 69,945,200 (2,596,653) (308,369) 101,334,238
Net income 15,019,421 15,019,421
Cash dividends; $0.075 per share (572,650) (572,650)
Issuance of 821,537 shares for redemption of
convertible debentures 1,232,305 11,882,890 13,115,195
Issuance of 355,245 shares for stock dividend 532,868 6,261,193 (6,801,021) (6,960)
Issuance of 4,468 shares under stock option plan 6,702 (498) 6,204
Treasury shares (103) issued 465 1,376 1,841
Currency translation adjustments (224,986) (224,986)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance December 31, 1996 $12,422,541 $41,787,444 $77,590,950 $(2,821,639) $(306,993) $128,672,303
====================================================================================================================================
</TABLE>
The accompanying notes are a part of the financial statements.
39
<PAGE>
Consolidated Statements of Cash Flows
The Raymond Corporation and Subsidiaries
<TABLE>
Years ended December 31, 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net income $15,019,421 $ 13,073,935 $ 9,727,271
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization 6,697,869 4,561,770 4,007,881
Provision for losses on accounts receivable and investment
in leases 357,016 1,399,000 1,079,908
Earnings of unconsolidated investees, net of dividends received (817,122) (11,494) (93,665)
Foreign currency transaction (gains) losses (20,257) 87,312 (607,762)
Acquisition of rental equipment (4,706,092) (1,421,194) (1,956,104)
Gains on dispositions of rental equipment (726,286) (732,967) (672,190)
Proceeds from rental equipment sales 2,752,085 1,497,320 1,625,456
(Gains) losses on sales of property, plant and equipment (357,321) 58,379 1,398
Deferred income taxes 323,233 (1,951,794) 238,732
Other items, net (559,440) 2,000,037 1,317,953
Changes in operating assets and liabilities:
Increase in accounts receivable (649,591) (4,231,514) (7,476,834)
Increase in investment in leases (25,475,436) (22,264,087) (21,366,477)
Increase in inventories and prepaid expenses (4,643,333) (4,679,521) (6,258,217)
Increase in accounts payable and accrued expenses 642,095 2,271,235 13,114,995
------------------------------------------------------------
Net cash used in operating activities (12,163,159) (10,343,583) (7,317,655)
------------------------------------------------------------
Cash Flows from Investing Activities
Purchase of subsidiaries, net of cash acquired (886,975) -- --
Additions to property, plant and equipment (7,141,433) (8,011,503) (4,596,668)
Proceeds received from sales of property, plant and equipment 1,896,300 41,915 11,666
Investments in and advances to unconsolidated investees (3,448,763) (3,168,965) (3,293,143)
------------------------------------------------------------
Net cash used in investing activities (9,580,871) (11,138,553) (7,878,145)
------------------------------------------------------------
</TABLE>
The accompanying notes are a part of the financial statements.
40
<PAGE>
<TABLE>
Years ended December 31, 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Financing Activities
Net additional borrowings (repayments) under lines of credit 2,349,306 (2,000,000) 3,000,000
Proceeds from long-term debt 38,750,000 41,000,000 --
Repayment of long-term debt (18,669,320) (10,757,000) (10,964,000)
Cash dividends paid (572,650) -- --
Capital stock transactions, net 1,085 101,579 121,222
------------------------------------------------------------
Net cash provided by (used in) financing activities 21,858,421 28,344,579 (7,842,778)
------------------------------------------------------------
Effect of foreign currency rate fluctuations on cash
and cash equivalents (53,355) 73,141 (192,447)
------------------------------------------------------------
Increase (Decrease) in cash and cash equivalents 61,036 6,935,584 (23,231,025)
Cash and cash equivalents at January 1, 12,359,047 5,423,463 28,654,488
------------------------------------------------------------
Cash and cash equivalents at December 31, $ 12,420,083 $ 12,359,047 $ 5,423,463
============================================================
Cash and cash equivalents is comprised of:
Manufacturing and Distribution $ 12,389,071 $ 12,341,383 $ 5,351,161
Financial Services 31,012 17,664 72,302
------------------------------------------------------------
$ 12,420,083 $ 12,359,047 $ 5,423,463
============================================================
</TABLE>
<TABLE>
1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes, net of refunds $ 7,412,994 $ 11,000,603 $ 5,332,402
Interest 8,856,404 6,693,912 6,570,979
Purchase of subsidiaries:
Fair value of assets acquired, net of cash acquired $ 35,027,509 -- --
Fair value of liabilities assumed (34,140,534) -- --
------------------------------------------------------------
Net cash payment $ 886,975 -- --
============================================================
Noncash activities:
Issuance of common stock for conversion of debentures $ 13,115,195 $ 6,240,000 --
Property acquired in exchange for retirement of
mortgage receivable -- 1,500,000 --
</TABLE>
The accompanying notes are a part of the financial statements.
41
<PAGE>
Notes to Financial Statements
The Raymond Corporation and Subsidiaries
Years ended December 31, 1996, 1995 and 1994
A. Significant Accounting Policies
(1) Organization: The Raymond Corporation and subsidiaries (the Company)
designs, manufactures, distributes and services materials handling equipment.
Manufacturing, distribution, and service facilities are located in the U.S. and
Canada and revenues are realized primarily from distribution of the Raymond(R)
and Dockstocker(R) product lines through the Company's Dealer Network which is
predominantly located in North America. In addition, the Company produces
materials handling equipment under Original Equipment Manufacturer (O. E. M.)
agreements for distribution by other companies in both North America and Europe.
(2) 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 transactions.
Unconsolidated investees are stated at cost plus equity in unremitted earnings
since acquisition. The Company's share of earnings of unconsolidated investees
is included in consolidated net 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. Net exchange gains (losses) were not significant in
1996, ($0.1) million in 1995 and $0.6 million in 1994.
Earnings of consolidated foreign companies, net of minority interests, were
$8.8, $9.0 and $7.1 million in 1996, 1995 and 1994, respectively.
(3) Use of Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
(4) 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 $5.1, $4.5 and $3.8 million at December 31, 1996, 1995 and 1994,
respectively.
(5) Foreign Currency Exchange Contracts: In the normal course of business, the
Company's Canadian subsidiaries, enter into foreign currency exchange contracts
to provide economic hedges against foreign currency fluctuations on future
inventory purchases. Gains and losses resulting from foreign currency exchange
contracts are deferred and recognized when the offsetting gains and losses are
recognized in the related hedged item. At December 31, 1996, outstanding forward
contracts were $24.4 million which mature in increments ranging from
approximately $1.0 to $2.5 million on a monthly basis through December 1997.
(6) Foreign Exchange Options: R.H.E. Ltd., a wholly-owned Canadian subsidiary,
also purchases foreign exchange options which permit but do not require R.H.E.
Ltd. to exchange foreign currencies at a future date with another party at a
contracted exchange rate. These option contracts typically expire within one
year. At December 31, 1996, R.H.E. Ltd. had purchased foreign exchange options
of $15.9 million related to Canadian dollars.
42
<PAGE>
(7) Inventories: Inventories are stated principally at the lower of cost (FIFO -
first-in, first-out method) or market.
(8) Property and Depreciation: Rental equipment and property, plant and
equipment are stated at cost. Depreciation is computed primarily on the straight
line and declining balance methods for financial reporting and accelerated
methods for income tax purposes. The estimated useful lives range primarily from
ten to twenty years for buildings and improvements and from three to ten years
for all other assets.
(9) Income Taxes: The Company uses the liability method of accounting for income
taxes in accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." The Company considers the undistributed earnings
of its foreign subsidiaries at December 31, 1996 to be indefinitely reinvested.
(10) Revenue Recognition and Related Costs: Revenues from product sales are
recognized based upon shipment to customers. 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
based upon the principal amounts outstanding. Financial Services interest
expense is reported net of charges on intercompany borrowings. Short-term
rentals are recognized as revenues over the term of the contract. Related costs
consist primarily of depreciation and maintenance. Cash receipts from
comprehensive fixed price maintenance contracts, which range in length from one
to seven years, are initially recorded as deferred revenue and recognized as
revenue when repair services are performed.
Net sales include sales to unconsolidated investees of $111.3, $131.1 and $89.8
million in 1996, 1995 and 1994, respectively.
(11) 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. At December 31, 1996, lease
receivables from one customer represented approximately 16% of the total
investment in leases.
Reserves for potential credit losses on accounts and lease receivables are
maintained and such losses have been within management's expectations.
(12) Product Warranties: Estimated product warranty costs are accrued at the
time of revenue recognition.
(13) 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.
(14) Stock Based Compensation: The Company accounts for stock option grants in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." Accordingly, no compensation expense is recognized
for stock option grants other than the amounts accrued in connection with the
stock appreciation rights associated with these grants.
(15) Research and Development Costs: Research and development costs are charged
to expense as incurred and amounted to $3.3 million in 1996; $3.6 million in
1995 and $4.0 million in 1994.
43
<PAGE>
(16) Stock Dividend: On March 2, 1996, the Board of Directors declared a 5%
stock dividend on the Company's outstanding common stock payable to shareholders
of record as of March 29, 1996. All appropriate per share data and weighted
average shares outstanding have been restated to reflect this dividend.
(17) Per Share Amounts: Primary net income per share is computed by dividing net
income by the weighted average number of shares outstanding (1996 - 7,524,097;
1995 - 7,176,862 and 1994 - 6,984,319). Dilution that could result from the
assumed exercise of stock options is not material. Fully diluted net income per
share 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 (1996 - 10,675,633; 1995 -
10,675,929 and 1994 - 10,640,237).
- ------------------------------------------------------------------------------
B. Inventories
The composition of inventories at December 31 was:
(in Thousands) 1996 1995 1994
- -------------------------------------------------------------------
Materials $ 26,239 $ 18,095 $ 15,804
Work-in-process 12,548 14,804 13,407
Finished goods 8,417 1,746 1,700
--------------------------------------
$ 47,204 $ 34,645 $ 30,911
======================================
C. Unconsolidated Investees
Unconsolidated investees consist of certain North American Dealers of the
Company's products. Investments in and advances to unconsolidated investees at
equity are summarized as follows at December 31:
(in Thousands) 1996 1995 1994
- ---------------------------------------------------------------------
Unconsolidated investees at
various percentages of
ownership:
Investments* $ 7,587 $ 10,951 $ 8,572
Advances 1,875 8,214 8,095
--------------------------------------
$ 9,462 $ 19,165 $ 16,667
======================================
*Investments are stated at cost, plus equity in subsequent earnings, net of
dividends.
44
<PAGE>
At December 31,1996, consolidated retained earnings included $1.9 million of
undistributed earnings of the Company's unconsolidated investees.
As discussed in Note H - Acquisitions, in October 1996, the Company acquired an
additional 28% and 26% of the total outstanding shares of G.N. Johnston
Equipment Co. Ltd. (Johnston) and Associated Material Handling Industries, Inc.
(Associated), respectively. As a result of the acquisitions, the Company's
ownership increased to 74% and 70% of the total outstanding shares of Johnston
and Associated, respectively. Therefore, in the fourth quarter of 1996, the
operating results of Johnston and Associated have been consolidated with those
of the Company with appropriate adjustments made to reflect minority interests.
Investments in and advances to Johnston and Associated totaled $9.0 and $8.5
million at December 31, 1995 and 1994, respectively.
Twenty-six percent and 30% of the common shares of Johnston and Associated,
respectively, and various percentages of the unconsolidated investees are
controlled by their management. Upon death or termination of employment, the
Company 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 the Company may be
purchased by management at a price which will return to the Company 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
Caterpillar Industrial Inc., predecessor of 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. Certain officers of the Company are also
officers of M.H.A.
The following is summarized financial information for the unconsolidated
investees:
(in Thousands) 1996 1995 1994
- -----------------------------------------------------------------
Revenues $ 279,197 $ 302,852 $ 225,175
Gross margin 68,998 75,667 41,901
Net income 3,243 2,834 1,634
Current assets 43,057 80,188 55,215
Noncurrent assets 11,621 30,308 24,304
Current liabilities 31,153 60,983 39,373
Noncurrent liabilities 11,708 25,849 22,897
45
<PAGE>
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) 1996 1995 1994
- -----------------------------------------------------------------
Revenues $ 15,559 $ 12,718 $ 10,583
Gross margin 6,255 5,562 4,602
Net income 2,919 2,397 1,956
Total assets 135,772 109,243 87,510
Total liabilities 102,327 78,717 59,380
The assets and liabilities of Raymond Leasing Corporation, which finances
Company products and related accessories only in the United States, are
classified under the caption Financial Services in the consolidated balance
sheets.
D. Property, Plant and Equipment
The composition of property, plant and equipment for Manufacturing and
Distribution and Financial Services at December 31 was:
(in Thousands) 1996 1995 1994
- -------------------------------------------------------------------
Land $ 502 $ 609 $ 323
Buildings and
improvements 18,878 17,839 15,982
Machinery, equipment
and tools 36,819 28,580 23,332
Furniture and fixtures 13,536 7,537 7,494
--------------------------------------
$69,735 $54,565 $47,131
=======================================
E. Net Investment in Leases
The Raymond Leasing Corporation leases Raymond(R) and Dockstocker(R) equipment
to customers and its Dealers, including equity investees, under arrangements
covering three to seven years. Additionally, Johnston leases Raymond(R) and
Dockstocker(R) equipment to its customers, under arrangements covering two to
five 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 $37.2, $25.5 and $19.4 million at December 31, 1996, 1995 and 1994,
respectively. Unearned lease income on fixed rate leases totaled $23.9, $18.2
and $14.2 million at December 31, 1996, 1995 and 1994, respectively.
At December 31, 1996 future minimum lease payments to be received for
Manufacturing and Distribution and Financial Services are as follows:
(in Thousands)
- -----------------------------------------------------------------
1997 $ 50,482
1998 35,767
1999 24,418
2000 14,180
2001 4,866
Thereafter 412
----------
Total future minimum lease payments 130,125
Residual values 37,247
----------
167,372
Less unearned income 23,923
----------
$ 143,449
==========
46
<PAGE>
F. Fair Value of Financial Instruments
The carrying amount and fair value of significant financial instruments at
December 31 were as follows:
(in Thousands)
- ------------------------------------------------------------------
1996 Carrying Amount Fair Value
- ---- --------------- ----------
Investment in leases $ 143,449 $ 141,308
Manufacturing and
Distribution debt (49,535) (52,621)
Financial Services debt (78,063) (78,213)
Foreign currency exchange
contracts -- (857)
1995
- ----
Investment in leases $ 106,410 $ 104,706
Manufacturing and
Distribution debt (51,260) (70,995)
Financial Services debt (52,396) (53,967)
1994
- ----
Investment in leases $ 84,725 $ 82,737
Manufacturing and
Distribution debt (57,500) (64,400)
Financial Services debt (24,153) (24,276)
The carrying value of cash and cash equivalents approximates fair value because
of the short-term maturities of these instruments.
The carrying value of advances to unconsolidated investees approximates fair
value.
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 Subordinated Convertible Debentures is estimated
based on the quoted market price.
The fair value of Financial Services and Manufacturing and Distribution 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 contracts is estimated based upon
quoted market prices for similar instruments with similar maturities. At
December 31, 1995 and 1994, the fair value of foreign currency exchange
contracts was not significant due to the contracts' short-term nature and the
fact that they were purchased near year-end.
47
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
G. Debt and Lease Obligations and Subsequent Event
(in Thousands) 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Manufacturing and Distribution Debt
Short-term borrowings under lines of credit at variable interest
rates (composite rate of 7.28%). Borrowings are secured
by subsidiary assets $ 3,645 $ -- $ --
Various notes with maturities ranging from April 30, 1997 through
April 30, 1999. Aggregate monthly principal payments of approximately
$0.1 million are required through April 30, 1997 when the
first note matures. Interest is payable monthly at
rates ranging from 7.75% to 9.75%. Notes are
secured by subsidiary investment in leases 2,252 -- --
Term loans with maturities of July 31, 1999 and November 30, 1999.
Aggregate monthly principal payments of approximately $0.1 million
are required through July 31, 1999 when the first loan matures.
Interest is payable monthly at rates ranging from 7.43% to 8.75%.
Loans are secured by subsidiary assets 2,539 -- --
Notes payable to related parties with maturities of
March 31, 1997 and October 10, 1998. Aggregate annual installments
of $1.7 million and $1.3 million are due in 1997 and 1998,
respectively. Interest is payable annually at 6.0% 3,039 -- --
6.50% convertible subordinated debentures due December 15, 2003.
Interest is payable semi-annually 38,060 51,260 57,500
---------------------------------------------
Total Manufacturing and Distribution Debt 49,535 51,260 57.500
Less current portion 7,573 -- --
---------------------------------------------
Total Long-term Manufacturing and Distribution Debt $ 41,962 $ 51,260 $ 57,500
=============================================
Financial Services Debt
Short-term borrowings under lines of credit
at variable interest rates (8.00% in 1996, 6.75% in
1995 and 7.00% in 1994) $ 4,000 $ 1,000 $ 3,000
6.35% note, principal is payable in quarterly installments of approximately
$0.3 million through July 1, 1997. Interest is payable quarterly 938 2,188 3,438
8.86% note, remaining principal is due November 27,1997. Iterest is
payable semi-annually 4,000 8,000 12,000
Various notes executed under revolving credit and term loan agreements
with maturities ranging from December 31, 1999 through December 31, 2001.
Aggregate quarterly principal payments of approximately $4.2 million are
required through December 31, 1999 when the first note matures. Interest
is payable quarterly at rates ranging from 6.40% to 8.40% 69,125 38,350 --
8.75% note, repaid in 1996 -- 2,858 5,715
---------------------------------------------
Total Financial Services Debt $ 78,063 $ 52,396 s $ 24,153
=============================================
</TABLE>
48
<PAGE>
Annual repayments of debt obligations are as follows:
Manufacturing and Financial
(in Thousands) Distribution Debt Services Debt
- -------------------------------------------------------------------------
1997 $ 7,573 $ 25,889
1998 3,100 16,949
1999 802 16,950
2000 -- 12,500
2001 -- 5,775
Thereafter 38,060 --
----------------------------
Total $49,535 $ 78,063
============================
On December 20, 1996, the Company issued a Call for Redemption of its 6.50%
convertible subordinated debentures due December 15, 2003. Prior to the January
21, 1997 redemption date, debenture holders could convert their outstanding
debentures into common stock of the Company at a conversion price of
approximately $16.07 per share or receive 103.50% of their principal amount,
plus accrued interest, upon redemption. Subsequent to the call date and prior to
December 31, 1996, debenture holders converted $3.7 million of debentures into
229,034 shares of common stock. Prior to issuing the Call for Redemption, an
additional $9.5 million of the debentures were converted into 592,503 shares of
common stock primarily in the fourth quarter of 1996.
Through January 21, 1997, substantially all of the debentures outstanding at
December 31, 1996 were converted and an additional 2,368,395 shares of common
stock were issued. The 1996 and 1997 conversions were at the originally stated
conversion rates adjusted for stock dividends.
Had the 1996 and 1997 conversions of the Company's debentures occurred on
January 1, 1996, the reported primary net income per share of $2.00 would have
been $1.62.
Terms of subsidiary notes provide for certain debt covenants. Among other
things, Raymond Leasing Corporation 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, 1996, the
restricted retained earnings of Raymond Leasing Corporation were approximately
$26.7 million.
The Company had unused lines of credit totaling approximately $26.3 million at
December 31, 1996 of which approximately $10.9 million may be converted into
long-term debt. No significant commitment fees are paid for these lines.
Rent expense under operating leases amounted to approximately $2.3, $2.1 and
$1.6 million in 1996, 1995 and 1994, respectively. At December 31, 1996, the
Company was obligated for future minimum lease payments under noncancelable
operating leases for certain equipment as follows:
(in Thousands)
- -------------------------------------------------------
1997 $ 2,349
1998 2,297
1999 1,509
2000 1,151
2001 837
Thereafter 569
--------
$ 8,712
========
49
<PAGE>
H. Acquisitions
On October 10, 1996, an executive officer of the Company, sold his shares of
common stock of G.N. Johnston Equipment Co. Ltd. (Johnston) and Associated
Material Handling Industries, Inc. (Associated), both distributors of the
Company's products. The shares were valued in accordance with the terms and
conditions set forth in shareholder buy/sell agreements dated July 1, 1968 and
August 15, 1980, respectively.
The Johnston shares, which represent approximately 28% of the total outstanding
shares, were acquired by R.H.E. Ltd., a wholly-owned Canadian subsidiary of the
Company. R.H.E. Ltd. had previously owned approximately 47% of the outstanding
shares of Johnston. Johnston is the exclusive Canadian distributor for the
Company with sales and service outlets in the principal business regions of
Canada.
The Associated shares, which represent approximately 26% of the total
outstanding shares, were acquired by the Company. The Company had previously
owned approximately 44% of the outstanding shares of Associated. Associated is a
U.S. distributor based in Elmhurst, Illinois that serves portions of the Midwest
and Pacific Northwest.
The combined purchase price for the shares of Johnston and Associated was
approximately $4.5 million. The acquisitions have been accounted for as a
purchase and the operating results of Johnston and Associated have been
consolidated with those of the Company starting in the fourth quarter of 1996.
The following unaudited pro forma information presents a summary of consolidated
results of operations of the Company, Johnston and Associated as if the
acquisitions had occurred on January 1, 1995. The information reflects
consolidation of all revenues, net of intercompany transactions, and the
incremental net income above amounts previously recognized using the equity
method. The pro forma financial information is not necessarily indicative of the
results of operations that would have occurred had the purchase been made at the
beginning of the periods presented or of the future results of the combined
operations.
(in Thousands, except per share data) 1996 1995
- -------------------------------------------------------------------------
Total revenues $ 370,349 $ 365,973
Net income $ 15,843 $ 13,678
Primary net income per share $ 2.11 $ 1.91
50
<PAGE>
I. Stock Options
The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related Interpretations
in accounting for its stock options because, as discussed below, the alternative
fair value accounting provided for under FASB Statement No. 123, "Accounting for
Stock-Based Compensation," requires use of option valuation models that were not
developed for use in valuing employee stock options. Under APB 25, because the
exercise price of the Company's stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized.
The shareholders of the Company have approved stock option plans for officers,
directors and key employees. At December 31, 1996, there are 236,710 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.
Pro forma information regarding net income and earnings per share is required by
Statement 123, which also requires that the information be determined as if the
company had accounted for its stock options granted subsequent to December
31, 1994 under the fair value method of that Statement. The fair value for these
options was estimated at the date of grant using a Black-Scholes option pricing
model with the following weighted-average assumptions for 1996 and 1995,
respectively: risk-free interest rate of 6.0% and 7.0%; dividend yield of 0.55%
and 0.60%; volatility factor of the expected market price of the Company's
common stock of .30 and .31; and a weighted-average expected life of the options
of 6 years.
The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's stock options have characteristics significantly different from
those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of the fair
value of its stock options.
51
<PAGE>
For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period (one year for officers
and key employees and immediate vesting for directors). The weighted-average
fair value of options granted in 1996 and 1995 were $7.09 and $7.00 per share,
respectively. The Company's pro forma information for 1996 and 1995 follows:
(in Thousands, except per share data) 1996 1995
- -------------------------------------------------------------------------
Pro forma net income $ 14,724 $ 12,862
Pro forma earnings per share:
Primary $ 1.96 $ 1.79
Fully Diluted $ 1.58 $ 1.42
The pro forma disclosures above for 1995 amounts reflect only the vesting of
options granted in 1995.
A summary of the Company's stock option activity and related information for
1996 follows:
Weighted-Average
Options Exercise Price
- ------------------------------------------------------------------------------
Outstanding-beginning of year 338,474 $ 13.33
Granted 94,834 18.22
Exercised (13,763) 15.73
Forfeited -- --
------- -------
Outstanding-end of year 419,545 $ 14.83
======= =======
Exercisable at end of year 322,726 --
Exercise prices for options issued in 1996 ranged from $18.21 to $18.38 per
share. The weighted-average remaining contractual life of those options is 9.2
years.
The following data for 1995 and 1994 has been restated to reflect the effects
of the 1996 5% stock dividend:
Outstanding Options
Options Price Range Exercisable
- ---------------------------------------------------------------------
1995 338,474 $7.29 - $18.35 258,340
1994 436,011 7.29 - 18.35 352,834
Options
Exercised Price Range
- ---------------------------------------------------------------------
1995 177,441 $7.29 - $17.60
1994 20,595 7.29 - 14.90
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:
1996 - 372,154, 1995 - 291,290 and 1994 - 377,873. 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. In 1996,
approximately $0.6 million in pre-tax income was recognized in connection with
stock appreciation rights as a result of the stock price volatility.
52
<PAGE>
J. 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:
<TABLE>
<CAPTION>
(in Thousands) 1996 1995 1994
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Actuarial present value of accumulated benefit obligation,
including vested benefits of $25,142 in 1996, $20,234
in 1995 and $15,298 in 1994 $ (27,350) $ (21,806) $ (16,532)
Plan assets at fair value, primarily listed ========= ========= =========
stocks and bonds held in trust 40,963 30,737 24,990
Projected benefit obligation for
service rendered to date (36,896) (29,650) (21,662)
Plan assets in excess of projected --------- --------- ---------
benefit obligation 4,067 1,087 3,328
Unrecognized net transition asset (1,334) (1,692) (2,038)
Unrecognized net (gain) loss from past
experience different from that assumed
and effect of change in assumptions (3,441) 1,743 145
Unrecognized prior service cost 729 332 363
--------- --------- ---------
Net prepaid pension cost $ 21 $ 1,470 $ 1,798
========= ========= =========
</TABLE>
Net periodic pension cost for the plans included the following components:
<TABLE>
<CAPTION>
(in Thousands) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost -- benefits earned during the period $ 2,441 $ 1,253 $ 1,378
Interest cost on projected benefit obligation 2,663 1,859 1,604
Actual return on plan assets (5,723) (5,990) 341
Net amortization and deferral 2,247 3,704 (2,773)
------- ------ ------
Net periodic pension cost $ 1,628 $ 826 $ 550
======= ====== ======
</TABLE>
53
<PAGE>
The assumptions used to develop the projected benefit obligation as of December
31 were as follows:
1996 1995 1994
- -----------------------------------------------------------------------------
Weighted average discount rate 7.50% 7.00% 8.50%
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 $1.9 million at December 31, 1996 and increased
by approximately $4.9 million at December 31, 1995 as a result of the changes in
the weighted average discount rate.
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 $3.5 million in 1996, $3.8 million in 1995, and $2.9 million in
1994. In addition, salary-reduction 401(k) Plans are 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 formal bonus plans for key executives. The plans provide, among
other things, that annual bonuses be computed on pre-tax income after
consideration for a return on consolidated shareholders' equity. Charges to
operations under these plans were $2.4 million in 1996, $1.9 million in 1995 and
$1.4 million in 1994.
54
<PAGE>
K. 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 premiums
are paid and claims are submitted.
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) 1996 1995 1994
- --------------------------------------------------------------------------
Accumulated postretirement
benefit obligation:
Retirees $ (3,466) $ (2,779) $ (2,777)
Fully eligible active
plan participants (657) (892) (835)
Other active plan
participants (54) (57) (38)
----- ----- -----
(4,177) (3,728) (3,650)
Plan assets at fair value -- -- --
----- ------ -----
Accumulated postretirement
benefit obligation in
exess of plan assets (4,177) (3,728) (3,650)
Unrecognized net loss (gain) 153 (329) (467)
Unrecognized transition obligation 3,316 3,524 3,731
------ ------ ------
Accrued postretirement benefit cost $ (708) $ (533) $ (386)
====== ====== ======
55
<PAGE>
The assumptions used to develop the net periodic postretirement benefit costs
and the accumulated postretirement benefit obligations were as follows:
1996 1995 1994
- ---------------------------------------------------------------------------
Weighted average
discount rate 7.50% 7.00% 8.50%
Health care cost trend rate:
Retirees under age 65 9.50% 10.00% 10.50%
Retirees age 65 and older 7.50% 7.75% 8.00%
Net periodic postretirement benefit cost includes the following components:
(in Thousands) 1996 1995 1994
- ---------------------------------------------------------------------------
Service cost $ 5 $ 4 $ 5
Interest cost 293 259 314
Amortization of transition
obligation over 20 years 207 207 207
Net amortization and deferral -- 15 7
Net periodic postretirement ------------------------------
benefit cost $ 505 $ 485 $ 533
==============================
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
$0.2 million in 1996 and increased by approximately $0.4 million in 1995 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 by approximately $0.3 million at December 31, 1996 and would
not be significant to reported net periodic postretirement benefit cost.
L. Accrued Liabilities
Accrued liabilities for Manufacturing and Distribution and Financial Services
are summarized as follows:
(in Thousands) 1996 1995 1994
- -------------------------------------------------------------------
Insurance $ 7,871 $ 7,724 $ 6,113
Compensation 6,203 3,467 3,703
Service agreements 2,955 3,878 2,619
Deferred revenue 2,515 -- --
Profit sharing 1,444 1,538 1,410
Dealer commissions 1,073 795 981
Stock appreciation rights 490 1,120 888
Interest 293 876 510
Other 4,920 3,018 1,596
--------------------------------------
$ 27,764 $ 22,416 $ 17,820
======================================
56
<PAGE>
M. Income Taxes
The components of income before income taxes consisted of the following:
(in Thousands) 1996 1995 1994
- -------------------------------------------------------------------
Domestic $ 9,427 $ 8,269 $ 5,645
Foreign 12,982 12,546 10,308
--------------------------------------------
$ 22,409 $ 20,815 $ 15,953
============================================
Federal, foreign and state income tax expense (benefit)
consisted of the following:
(in Thousands) 1996 1995 1994
- ---------------------------------------------------------------
Currently payable:
Federal $ 2,580 $ 4,692 $ 1,637
Foreign 5,051 4,675 4,199
State 328 673 353
---------------------------------
7,959 10,040 6,189
---------------------------------
Deferred:
Federal 439 (1,757) 401
Foreign (184) 24 (250)
State 68 (219) 88
---------------------------------
323 (1,952) 239
---------------------------------
Total income tax expense $ 8,282 $ 8,088 $ 6,428
=================================
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) 1996 1995 1994
- ---------------------------------------------------------------
Deferred tax liabilities:
Lease finance revenues $ 7,203 $ 4,696 $ 4,207
Excess tax over book
depreciation 1,705 1,281 1,262
Pension assets - 497 707
LIFO inventory
accounting change 236 471 621
Other 717 668 670
---------------------------------
Total deferred tax
liabilities 9,861 7,613 7,467
---------------------------------
Deferred tax assets:
Insurance reserves 2,676 2,626 2,058
Compensation 2,242 2,268 1,846
Accounts receivable 1,169 1,579 1,088
Service agreements 1,159 821 641
Inventory 743 762 640
Tax credit carryforward 700 - -
Other 988 1,009 774
---------------------------------
Total deferred
tax assets 9,677 9,065 7,047
- ---------------------------------------------------------------
Net deferred tax
liability (asset) $ 184 $(1,452) $ 420
===============================================================
57
<PAGE>
The differences between the income tax provisions and the amounts
computed by applying the U.S. Federal statutory rate (35%) are explained as
follows:
(in Thousands) 1996 1995 1994
- ---------------------------------------------------------------
Statutory provision $ 7,843 $ 7,285 $ 5,584
State income taxes,
net of federal tax
benefit 257 295 287
Foreign subsidiaries 323 308 341
Other - net (141) 200 216
---------------------------------
Provision $ 8,282 $ 8,088 $ 6,428
=================================
For federal income tax purposes, the Company has approximately $0.7 million of
alternative minimum tax payments available to offset future domestic regular
income taxes payable to the extent such regular taxes exceed alternative minimum
taxes payable.
The Raymond Corporation files a consolidated federal tax return which includes
Raymond Leasing Corporation and all required domestic subsidiaries.
Deferred income taxes and income taxes payable reported in the consolidated
balance sheets include the aggregate amounts for Manufacturing and Distribution
and Financial Services.
Undistributed earnings of the Company's foreign subsidiaries amounted to
approximately $52.6 million at December 31, 1996. 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
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 $2.6 million would be payable upon
remittance of all previously unremitted earnings at December 31, 1996.
N. Business Segment Information
The Company operates predominantly in one business segment, that being the
design, manufacture, distribution and service of materials handling equipment.
Revenues from unaffiliated customers are realized primarily through its Dealer
Network which is predominantly located in North America.
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.
58
<PAGE>
A summary of information about the Company's operation within the one business
segment follows:
(in Thousands)
- -----------------------------------------------------------------
Product Mix 1996 1995 1994
- -----------------------------------------------------------------
Total Revenues $308,807 $285,383 $229,547
Narrow and very
narrow aisle applications 56% 60% 57%
All other applications 20% 18% 20%
Repair and replacement parts 16% 16% 17%
Leasing and rentals 5% 5% 5%
Service 2% - -
Other 1% 1% 1%
- -----------------------------------------------------------------
Geographic Areas 1996 1995 1994
- -----------------------------------------------------------------
United States:
Unaffiliated customers $194,761 $163,737 $129,460
Interarea sales
and transfers* 19,622 23,015 20,136
-----------------------------------
214,383 186,752 149,596
Canada:
Unaffiliated customers 28,083 12,553 10,880
Interarea sales
and transfers 101,202 101,134 81,891
-----------------------------------
129,285 113,687 92,771
Eliminations (34,861) (15,056) (12,820)
-----------------------------------
Total Revenues $308,807 $285,383 $229,547
===================================
1996 1995 1994
- -----------------------------------------------------------------------------
Operating Income:
United States $ 12,476 $ 12,028 $ 9,573
Canada 12,987 12,508 10,331
-----------------------------------
$ 25,463 $24,536 $ 19,904
===================================
Identifiable Assets:
United States $247,004 $210,510 $180,196
Canada 75,934 39,417 24,180
-----------------------------------
$322,938 $249,927 $204,376
===================================
*Includes sales of $7,283, $12,477, and $11,082 in 1996, 1995 and 1994,
respectively, to Canadian company at arms-length pricing which previously was
unconsolidated but which was consolidated effective in the fourth quarter of
1996.
59
<PAGE>
O. Commitments and 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 seventeen remaining defendants in a private
environmental lawsuit pertaining to a site remediation. The plaintiffs have
alleged that scrap metal purchased from the Company was hazardous and/or 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. Plaintiffs
have successfully moved for partial summary judgment, on liability only, against
two co-defendants who contributed scrap metal to the site. Similar motions as to
the Company and two other co-defendants are pending. The Company is aggressively
defending the claim and does not believe it is likely to have a material adverse
effect on the Company.
In addition to the matters discussed above, the Company is subject to various
other legal proceedings, claims and liabilities which have arisen in the
ordinary course of its business. In the opinion of management, the amount of
ultimate liability, if any, with respect to these actions will not materially
affect the financial results of operations or financial position of the Company.
The Company has agreements with certain officers which provide, in the event of
a change in control of the Company, for continuing the employment of the officer
for a period of three years at salary and benefit levels not less than that
which existed immediately prior to the change in control. In the event of
termination of employment without cause during this three year period, the
officer's non cash benefits continue for the remainder of the three year period
together with a single advance payment of any cash compensation due for the
remainder of the three year period.
60
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
P. Quarterly Information (Unaudited)
(in Thousands, except per share data)
1996 Quarters First Second Third Fourth
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $69,628 $67,798 $75,755 $95,626
Gross profit* 15,200 15,118 16,932 24,573
Net income 3,382 3,310 3,828 4,500
Per share amounts:
Net income (Primary) .45(1) .45(1) .51(1) .58(1)
Net income (Fully Diluted) .37 .36 .41 .47
Cash dividends - .025 .025 .025
Market price range:
High 22.62 19.75 20.63 19.25
Low 17.25 16.00 16.75 16.00
<CAPTION>
1995 Quarters First Second Third Fourth
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $73,007 $72,843 $68,959 $70,574
Gross profit* 17,256 17,651 15,236 16,303
Net income 3,075 3,485 3,002 3,512
Per share amounts:
Net income (Primary) .44(2) .50(2) .41 .47
Net income (Fully Diluted) .35 .38 .33 .38
Market price range:
High 17.46 21.19 20.24 22.38
Low 14.29 17.62 17.38 18.39
</TABLE>
*Includes net sales, lease finance revenues and rental revenues less applicable
expenses.
(1) Primary earnings per share would have been $0.37, $0.36, $0.41, and $0.47 in
the first, second, third, and fourth quarters of 1996, respectively, if the
$51.3 million conversion of debentures, which occurred primarily in the fourth
quarter of 1996 through January 21, 1997, occurred as of January 1, 1996.
(2) Primary earnings per share would have been $0.43 and $0.48 in the first and
second quarters of 1995, respectively, if the $6.2 million conversion of
debentures, which occurred in the third quarter of 1995, had occurred as of
January 1, 1995.
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.
61
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I - Condensed Financial Information of Registrant
- The Raymond Corporation
Years ended December 31, 1996, 1995 and 1994
Condensed Balance Sheets
<TABLE>
<CAPTION>
December 31,
----------------------------------------------------
1996 1995 1994
----------------------------------------------------
<S> <C> <C> <C>
Assets
Current Assets
Cash $ 559,647 $ 759,712 $ 4,081,322
Accounts Receivable (including $12,263,324,
$18,727,995 and $12,132,856 due from
unconsolidated investees in 1996, 1995 and 1994,
respectively) less allowances ($1,828,051 in 1996,
$1,718,651 in 1995 and $986,093 in 1994). 33,493,460 30,685,950 34,554,193
Inventories 28,243,595 29,453,674 25,513,226
Other Current Assets 3,348,927 2,801,298 2,453,898
------------- ------------- -------------
Total Current Assets 65,645,629 63,700,634 66,602,639
Property, Plant & Equipment 46,144,700 41,466,806 36,944,902
Allowance for Depreciation (26,691,257) (24,845,922) (24,622,493)
------------- ------------- -------------
Net Property, Plant & Equipment 19,453,443 16,620,884 12,322,409
Investment in and Advances to Wholly-owned
Subsidiaries and Unconsolidated Investees, at Equity. 124,979,445 107,801,894 101,180,813
Other Assets 6,718,897 3,943,511 4,360,714
------------- ------------- -------------
Total Assets $ 216,797,414 $ 192,066,923 $ 184,466,575
============= ============= =============
</TABLE>
The accompanying notes are a part of the financial statements.
62
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I - Condensed Financial Information of Registrant
- The Raymond Corporation
Years ended December 31, 1996, 1995 and 1994
Condensed Balance Sheets
<TABLE>
<CAPTION>
December 31,
----------------------------------------------------
1996 1995 1994
----------------------------------------------------
<S> <C> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities $ 43,055,405 $ 34,097,486 $ 41,574,752
Long-term Debt (Note B) 38,060,000 51,260,000 57,500,000
Other Liabilities 7,009,706 5,375,199 4,392,108
Shareholders' Equity
Common Stock 12,422,541 10,650,666 9,546,332
Other Shareholders' Equity 116,249,762 90,683,572 71,453,383
------------- ------------- -------------
Total Shareholders' Equity 128,672,303 101,334,238 80,999,715
------------- ------------- -------------
Total Liabilities and Shareholders' Equity $ 216,797,414 $ 192,066,923 $ 184,466,575
============= ============= =============
</TABLE>
The accompanying notes are a part of the financial statements.
63
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I - Condensed Financial Information of Registrant
- The Raymond Corporation
Years ended December 31, 1996, 1995 and 1994
Condensed Statements of Income
<TABLE>
<CAPTION>
Years Ended
December 31,
---------------------------------------------------
1996 1995 1994
---------------------------------------------------
<S> <C> <C> <C>
Net Sales $ 170,375,239 $ 169,507,696 $ 142,333,992
Other Income, Net 7,750,173 9,122,514 7,872,226
------------- ------------- -------------
Total Revenues 178,125,412 178,630,210 150,206,218
Cost of Sales 140,169,904 135,066,815 113,340,243
Selling, General and Administrative Expenses
(Includes Research & Development Costs of
$3,269,000 in 1996, $3,601,000 in 1995 and
$3,958,000 in 1994) 32,031,284 34,972,693 28,479,361
Interest Expense 2,969,918 3,694,630 3,926,796
------------- ------------- -------------
Total Cost of Sales and Expenses 175,171,106 173,734,138 145,746,400
Income Before Taxes and Equity in Earnings of
Wholly-owned Subsidiaries and Unconsolidated
Investees 2,954,306 4,896,072 4,459,818
Income Tax Expense 1,091,851 1,902,413 1,796,883
Equity in Net Income of Wholly-owned Subsidiaries
and Unconsolidated Investees 13,156,966 10,080,276 7,064,336
------------- ------------- -------------
Net Income $ 15,019,421 $ 13,073,935 $ 9,727,271
============= ============= =============
</TABLE>
The accompanying notes are a part of the financial statements.
64
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I - Condensed Financial Information of Registrant
- The Raymond Corporation
Years ended December 31, 1996, 1995 and 1994
Condensed Statements of Cash Flow
<TABLE>
<CAPTION>
Years Ended
December 31,
---------------------------------------------------
1996 1995 1994
---------------------------------------------------
<S> <C> <C> <C>
Net Cash Provided by
Operating Activities $ 10,653,652 $ 236,890 $ 6,019,696
Cash Flows from Investing Activities
Additions to Property, Plant and Equipment (6,100,980) (6,806,129) (2,972,384)
Proceeds from Sales of Property, Plant & Equipment 90,917 22,248 7,750
Investments in and Advances to Wholly-owned
Subsidiaries and Unconsolidated Investees (4,272,089) 3,123,802 (22,383,741)
----------- ------------- ------------
Net Cash Used for Investing Activities (10,282,152) (3,660,079) (25,348,375)
Cash Flows from Financing Activities
Cash Dividends Paid (572,650) 0 0
Capital Stock Transactions, Net 1,085 101,579 121,222
----------- ------------- ------------
Net Cash (Used for) Provided by Financing Activities (571,565) 101,579 121,222
Decrease in Cash (200,065) (3,321,610) (19,207,457)
Cash Balance at January 1, 759,712 4,081,322 23,288,779
----------- ------------- ------------
Cash Balance at December 31, $ 559,647 $ 759,712 $ 4,081,322
=========== ============= ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Noncash Activities:
Common Stock Issued for Conversion
of Debentures $ 13,115,195 $ 6,240,000 $ -
</TABLE>
The accompanying notes are part of the financial statements.
65
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I - Condensed Financial Information of Registrant
- The Raymond Corporation
Years ended December 31, 1996, 1995 and 1994
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>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
6.5% convertible subordinated debentures
due December 15, 2003. Interest is
payable semi-annually. $38,060,000 $51,260,000 $57,500,000
=========== =========== ===========
</TABLE>
On December 20, 1996, the Company issued a Call for Redemption of its 6.5%
convertible subordinated debentures due December 15, 2003. Prior to the January
21, 1997 redemption date, debenture holders could convert their outstanding
debentures into common stock of the Company at a conversion price of
approximately $16.07 per share or receive 103.5% of their principal amount, plus
accrued interest, upon redemption. Subsequent to the call date and prior to
December 31, 1996, debenture holders converted $3.7 million of debentures into
229,034 shares of common stock. Prior to issuing the Call for Redemption, an
additional $9.5 million of the debentures were converted into 592,503 shares of
common stock primarily in the fourth quarter of 1996.
Through January 21, 1997, substantially all of the debentures outstanding at
December 31, 1996 were converted and an additional 2,368,395 shares of common
stock were issued. The 1996 and 1997 conversions were at the originally stated
conversion rates adjusted for stock dividends.
66
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE I - Condensed Financial Information of Registrant
- The Raymond Corporation
Years ended December 31, 1996, 1995 and 1994
Notes to Condensed Financial Statements (cont'd)
NOTE C - Guarantee
Raymond Leasing Corporation, a wholly-owned subsidiary of the Company, has a
$4,000,000 long-term debt obligation outstanding at December 31, 1996. 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 $251,504 in 1996, $335,393 in 1995,
and $107,969 in 1994. No cash dividends were paid to The Raymond Corporation by
subsidiaries in 1996, 1995, or 1994.
67
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
Year Ending December 31, 1996
<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 $3,501,557 357,016 127,139-D 241,304-B $3,744,408
================ ================ ================ ================ =================
Reserves reported in accrued liabilities:
Service agreements $3,625,755 5,213,402 6,251,465-A $2,587,692
Insurance reserves 7,723,735 5,587,868 5,440,137-C 7,871,466
---------------- ---------------- ---------------- ---------------- -----------------
$11,349,490 $10,801,270 $11,691,602 $10,459,158
================ ================ ================ ================ =================
</TABLE>
A - Warranty & maintenance costs charged against reserve.
B - Bad debt write-offs charged against reserve.
C - Insurance costs charged against reserve.
D - Relates to companies acquired in 1996.
68
<PAGE>
THE RAYMOND CORPORATION AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
Year Ending December 31, 1995
<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 $2,214,881 $1,399,000 $112,324-B $3,501,557
================ ================ ================ ================ =================
Reserves reported in accrued liabilities:
Service agreements $2,443,168 $6,902,683 $5,720,096-A $3,625,755
Insurance reserves 6,053,159 7,567,802 5,897,226-C 7,723,735
---------------- ---------------- ---------------- ---------------- -----------------
$8,496,327 $14,470,485 $11,617,322 $11,349,490
================ ================ ================ ================ =================
</TABLE>
A - Warranty & maintenance costs charged against reserve.
B - Bad debt write-offs charged against reserve.
C - Insurance costs charged against reserve.
69
<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.
70
<PAGE>
Exhibit 3.2
BYLAWS
OF
THE RAYMOND CORPORATION
-------------------------------------
AS AMENDED THROUGH March 24, 1997
--------------------------------------
<PAGE>
BYLAWS
of
THE RAYMOND CORPORATION
TABLE OF CONTENTS
ARTICLE I
MEETING OF STOCKHOLDERS
Section 1. Annual Meeting
" 2. Notice of Annual Meeting
" 3. Order of Business
" 4. Special Meetings and Notice Thereof
" 5. Quorum at Meetings
" 6. Mode of Voting
" 7. Waiver of Notice
" 8. Proxies
" 9. Qualifications of Voters
ARTICLE II
DIRECTORS
Section 1. Number of Directors and Term of Office
" 2. Vacancies in the Board
" 3. Rules and Regulations
" 4. Meeting of Board of Directors and Notice Thereof
" 5. Quorum at Meetings
" 6. Standing or Temporary Committees
" 7. Attendance by Electronic Means
<PAGE>
ARTICLE III
OFFICERS
Section 1. Election
" 2. Chairman of the Board
" 3. President
" 4. Vice Presidents
" 5. Treasurer
" 6. Chief Accounting Officer
" 7. Corporate Controller
" 8. Secretary
" 9. Assistant Treasurer
" 10. Assistant Secretary
" 11. Delegation of Duties
" 12. Facsimile Signatures
ARTICLE IV
CAPITAL STOCK
Section 1. Certificates of Stock
" 2. Transfers of Shares
" 3. Loss or Destruction
" 4. Regulations
ARTICLE V
DIVIDENDS
Section 1. No Impairment of Capital or
Capital Stock
" 2. Dividends
<PAGE>
ARTICLE VI
INSPECTORS OF ELECTION
Section 1. Appointment
" 2. Qualification and Certificate of
Result of Vote
ARTICLE VII
INDEMNITY
Section 1. Indemnity
ARTICLE VIII
SEAL
Section 1. Seal
ARTICLE IX
AMENDMENTS
Section 1. Manner of Amending
ARTICLE X
WAIVER OF NOTICE
Section 1. Authority to Waive Notice
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BYLAWS
OF
THE RAYMOND CORPORATION
ARTICLE I
MEETING OF STOCKHOLDERS
Annual Meeting.
Section 1. (As Amended December 17, 1971, November 5, 1976, December
15, 1978 and March 24, 1997). The Annual Meeting of the Stockholders of this
Corporation shall be held in accordance with the law of the State of New York at
a location and time to be determined by or at the direction of the Board of
Directors in each and every year for the purpose of electing directors.
Notice of Annual Meeting.
Section 2. (As Amended June 20, 1975) Notice of the time, place and
purpose of such meeting shall be in writing, shall be signed by the President,
Vice-President or Secretary, and shall be served, either personally or by mail,
not less than ten nor more than fifty days before the meeting upon each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be directed to each such stockholder at his address as it appears on the
stock books, unless he shall have filed with the Secretary a written request
that notices intended for him be mailed to some other address, in which case it
shall be mailed to the address designated in such request. No business other
than that stated in such notice shall be transacted at such meeting without the
unanimous consent of all of the stockholders present thereat in person or by
proxy.
Order of Business.
Section 3. At the Annual Meeting of Stockholders, the following shall
be the order of business, viz:
1. Call of roll.
2. Proof of proper notice of meeting.
3. Reports respectively of President, Treasurer
and Secretary.
4. Appointment of Inspectors of Election.
5. Election of Directors.
6. Miscellaneous Business.
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Special Meetings and Notice Thereof.
Section 4. Special meetings of stockholders, other than those regulated
by statute, may be held in the Village of Greene, Chenango County, New York, and
at such place or places, either within or without the State of New York,
designated in a waiver of notice of such meeting signed by all of the
stockholders and consenting to holding the meeting at the place so designated,
and may be called at any time by the President or by a majority of the
directors. A written notice of every special meeting stating the time, place and
purpose thereof shall be signed by the President, Vice-President or Secretary,
and shall be served, either personally or by mail, at least ten days before such
meeting. If mailed, such notice shall be directed to each of such stockholder at
his address as it appears on the stock book unless he shall have filed with the
Secretary a written request that notices intended for him be mailed to some
other address, in which case it shall be mailed to the address designated in
such request.
Quorum at Meetings.
Section 5. A majority of the stock entitled to vote shall constitute a
quorum for the transaction of business, unless a greater number is required by
statute; but any lesser number may adjourn any meeting at such time not
exceeding thirty days and to such place as they may decide upon. No further
notice of any adjourned meeting shall be required.
Mode of Voting.
Section 6. At each meeting of the stockholders, every stockholder of
record entitled to vote may vote in person or by proxy, and he shall have one
vote for each share of stock standing in his name on the books of the
Corporation. The voting may be viva voce, but any qualified voter may demand a
stock vote, whereupon such stock vote shall be taken by ballot, each of which
shall state the name of the stockholder voting and the number of shares voted by
him, and, if such ballot be cast by proxy, it shall also state the name of such
proxy. At all meetings of stockholders all questions, except those the manner of
deciding which is expressly regulated by statute or by the bylaws of this
Company, shall be determined by a majority vote of the stockholders entitled to
vote thereat present in person or by proxy, and each such stockholder shall be
entitled to only one vote for each share of stock standing in his name on the
books of the Corporation.
Waiver of Notice.
Section 7. Whenever, under any provisions of these bylaws or any
statute, the Corporation is authorized to take any action at a meeting of
stockholders entitled to vote thereat, after notice to such stockholders or
after the lapse of a prescribed period of time, such action may be taken at the
meeting, without notice and without the lapse of any period of time, if the
required notice and lapse of time be waived in writing by every stockholder
entitled to vote at such meeting or by his attorney thereunto authorized.
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Proxies.
Section 8. The instrument appointing a proxy shall be in writing and
subscribed by the person making the appointment. The person so appointed need
not be a stockholder. A proxy shall be valid only for eleven months from the
date of the execution unless its duration is specified therein, but every proxy
shall be revocable at the pleasure of the person executing it or of his personal
representatives or assigns.
Qualification of Voters.
Section 9. (As Amended April 26, 1975) The Board of Directors may fix a
date, not exceeding fifty (50) days preceding the date of any meeting of
stockholders, as a record date for the determination of the stockholders
entitled to notice of and to vote at any such meeting.
Article II
DIRECTORS
Numbers of Directors and Term of Office.
Section 1. (As Amended March 1, 1975, April 24, 1976, May 5, 1979, May
1, 1982, February 26, 1983, April 30, 1983, October 18, 1984, December 20, 1984,
March 5, 1985, effective May 4, 1985, December 18, l986, April 30, 1988, May 5,
1990, March 4, 1995 and April 29, 1995). The Board of Directors of the
Corporation shall be ten (10) in number, which number within the maximum and
minimum limits specified in the Certificate of Incorporation or amendments
thereto shall be subject to change by the Board of Directors from time to time
by amendment to these Bylaws. In the event of any increase in the number of
directors by amendment of this section, the additional directors may be elected
by a majority of the directors in office at the time of the increase to serve
until the next Annual Meeting of Stockholders. No decrease in the number of
directors shall be effective to remove any director prior to the expiration of
his term of office.
At each Annual Meeting of the Stockholders, a quorum being present, the
successors to the directors of the class whose terms of office shall expire in
that year shall be elected by a plurality of the votes cast to serve until the
third Annual Meeting of Stockholders thereafter and until their successors are
elected and have qualified.
Vacancies in the Board.
Section 2. (As Amended April 24, 1976 and December 14, 1995) Any
vacancy in the Board of Directors occurring during the year, through death,
resignation or other cause, shall be filled by a majority vote of the remaining
directors at any special meeting of the Board called for that purpose or at any
regular meeting thereof, and any director elected to fill a vacancy, unless
elected by the stockholders, shall hold office until the next meeting of
stockholders at which the election of directors is in the regular order of
business, provided, however, when the number of directors is increased by the
Board and any newly created directorships are filled by the Board, there shall
be no classification of the additional directors until the next Annual Meeting
of Stockholders. In case of disagreement of the directors as to the person to be
chosen to fill such vacancy, the same shall be filled by the stockholders, at a
meeting called for that purpose.
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Rules and Regulations.
Section 3. The Board of Directors may adopt such rules, regulations and
bylaws, not inconsistent with these bylaws or law of the State of New York, for
the conduct of its meetings and the management of the affairs of the Corporation
as it may deem proper.
Meetings of Board of Directors and Notice Thereof.
Section 4. (As Amended May 22, 1956) A regular meeting of the Board of
Directors shall be held immediately after the Annual Meeting of Stockholders.
Special meetings of the Board of Directors shall be held at the times and places
fixed by the Board or upon call of the President or a majority of the Directors.
Five days' written notice of such meeting shall be served personally or by mail
upon each director. Meetings may be held at any time without notice if all
directors are present or if those not present waive notice thereof in writing
either before, at or after the meeting. The directors may hold their meetings at
such place or places, either within or without the State of New York, as the
Board may designate from time to time.
(Added June 20, 1975) Any action required or permitted to be taken by
the Board or any Committee thereof may be taken without a meeting if all members
of the Board or the Committee consent in writing to the adoption of resolutions
authorizing the action. The resolutions and the written consents thereto by the
members of the Board or Committee shall be filed with the minutes of the
proceedings of the Board or the Committee.
Quorum at Meetings.
Section 5. (As Amended June 20, 1975, and August 30, l985) The presence
of a majority of the Board of Directors shall be necessary to constitute a
quorum for the transaction of business at any meeting of the Board, but any
director present at the time and place of any meeting, although there is less
than a quorum, may adjourn the same from time to time, without further notice,
until a quorum shall attend.
Standing or Temporary Committees.
Section 6. (Added April 13, 1960) Standing or temporary committees may
be appointed from its own number by the Board of Directors from time to time and
the Board of Directors may from time to time invest such committees with such
powers as it may see fit subject to such conditions as may be prescribed by such
Board. An executive committee may be appointed by resolution passed by a
majority of the whole Board, which shall have all the powers provided by statute
except as specially limited by the Board and shall keep regular minutes of the
transactions of their meetings and shall report the same to the Board of
Directors at its next meeting.
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Attendance by Electronic Means.
Section 7. (Added August 14, l986) Any one or more members of the Board
of Directors or of any Committee established by the Board may participate in a
meeting of the Board of Directors or of any such Committee by means of a
conference telephone or similar communications equipment, allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
ARTICLE III
OFFICERS
Election and Appointment of Officers by Board.
Section 1. (As Amended June 20, 1975, April 29, 1978, June 19, 1981 and
December 18, 1986). The Officers of the Corporation shall consist of a Chairman
of the Board, a President, one or more Vice Presidents, of whom one may be
appointed Executive Vice President, a Corporate Controller, a Treasurer, one or
more Assistant Treasurers, a Secretary, and one or more Assistant Secretaries.
The Officers shall be elected by a majority vote of the Board of Directors at a
meeting held promptly after the annual meeting of stockholders, and shall hold
office for a term of one year, or until their successors shall be chosen and
qualified, but any Officer may be removed from office at any time by the Board
of Directors. The Board of Directors may elect or appoint such other Officers
and Agents as it may deem proper. The same person may hold two offices, except
those of President and Secretary. Vacancies in the offices shall be filled by
the Board of Directors.
Chairman of the Board.
Section 2. (As amended November 11, 1959, April 29, 1978, December 18,
1986 and August 2, 1995) The Chairman shall preside over all meetings of
Stockholders, and shall be the Chief Executive Officer of the Corporation and
shall have full charge of the management and supervision of the business of the
Corporation. He shall be an ex-officio member of all standing committees of the
Board except for the Audit Committee and the Executive Compensation Committee.
President.
Section 3. (As amended November 11, 1959, April 29, 1978, December 18,
1986, March 3, 1988, January 1, 1993 and August 2, 1995). The President shall be
the Chief Operations Officer of the Corporation, and shall perform such other
duties and exercise such other powers as the Board of Directors or the Chairman
may from time to time determine. In the absence or disability of the Chairman,
he shall preside at all meetings of the Stockholders and perform the other
duties of the Chairman, or he may designate the Executive Officers of the
Corporation by whom any such duties shall be performed.
<PAGE>
Vice Presidents.
Section 4. (As amended March 25, 1955, November 5, 1976, April 29, 1978
and December 18, 1986) The Vice Presidents shall assist the President and Chief
Executive Officer in the management of the business of the Corporation and in
the implementation of resolutions and orders of the Board of Directors at such
times and in such manner as the President and Chief Executive Officer or
Executive Officer next in authority may deem to be advisable. The Board of
Directors may designate the order of seniority and may also grant such titles as
shall be descriptive of their respective function indicative of their relative
seniority as Vice Presidents. The Vice Presidents in the order of their
seniority as indicated by their titles or as otherwise determined by the Board
of Directors, shall, in the absence or disability of the President and Chief
Executive Officer, exercise the powers and perform the duties of the President,
and they shall also have such other powers and duties as the Board of Directors
may from time to time prescribe.
Treasurer.
Section 5. (As Amended March 25, 1955) The Treasurer shall endorse, in
the name of the Company, and deposit in its bank account, all checks, drafts,
notes and orders for the payment of money; shall have the care and custody of
all the funds and securities of the Corporation; shall deposit the same in the
name of the Corporation in such bank or trust company as the directors may
designate; shall pay out and disburse the funds of the Corporation under the
direction of the President and perform all duties incidental to his office. The
Treasurer shall render a full and true account of all his receipts and
disbursements and of all moneys and property in his hands or under his control,
whenever requested by order of the majority of the Board of Directors.
Chief Accounting Office
Section 6. (Added May 4, 1996) The Chief Accounting Officer directs the
establishment and maintenance of the organization's accounting principles,
practices, and procedures for the maintenance of its fiscal records and the
preparation of its financial reports. He shall be responsible for the filing of
such reports, statements and tax returns as may be required by law or senior
management of the Corporation.
Corporate Controller.
Section 7. (Added April 26, 1975 and amended March 12, l986 and May 4,
1996) The Corporate Controller shall be the assistant to the chief accounting
officer of the Corporation. He shall have charge of the books of account of the
Corporation, and have general supervision of the accounting practices of the
Corporation and each of its subsidiary corporations. He shall be responsible for
cash flow analysis, budgeting and financial forecasting activities, as well as
the reporting of variances/deviations from approved plan. He shall also be
responsible for the preparation of such reports, statements, tax returns,
financial statistics and other data as may be required by law or as may be
prescribed by the Chief Accounting Officer.
<PAGE>
Secretary.
Section 8. (As Amended March 25, 1955 and May 22, 1956) The Secretary
shall keep the minutes of the meetings of the Board of Directors and of the
stockholders; shall attend to the giving and serving of all notices of the
Company; shall have charge of the seal of the Corporation and shall affix the
seal to all certificates of stock, when signed by the proper officers; shall
have charge of the stock certificate book and such other books and papers as the
Board may direct; shall also keep, in the office of the Corporation, a stock
book containing the names, alphabetically arranged, of all persons who are
holders of the stock of the Company, showing their places of residence, the
number of shares of stock held by them respectively, the time when they
respectively became owners thereof and the amount paid thereon; shall keep such
books open for inspection, as provided by Section 10 of the Stock Corporation
Law; shall attend to such correspondence as may be assigned to him and shall
perform all the duties incidental to his office, to the extent that any of the
foregoing duties shall be performed by a transfer agent or agents appointed by
the Board of Directors, the Secretary shall be relieved of the same.
Assistant Treasurer.
Section 9. (As Amended March 25, 1955 and April 26, 1975) The Assistant
Treasurer, in the absence or disability of the Treasurer or when circumstances
shall prevent the latter from acting, shall perform all of the duties and
possess all of the power of the Treasurer.
Assistant Secretary.
Section 10. (As Amended March 25, 1955 and April 26, 1975) The
Assistant Secretary, in the absence or disability of the Secretary or when
circumstances shall prevent the latter from acting, shall perform all of the
duties and possess all of the powers of the Secretary.
Delegation of Duties.
Section 11. (As Amended March 25, 1955 and April 26, 1975) The Board of
Directors shall have power to delegate the duties of any officers to any other
officer, and generally to control the actions of the officers and to require the
performance of duties in addition to these mentioned herein. Checks, notes and
similar instruments shall be signed by such officers as the Board may from time
to time designate.
Facsimile Signatures.
Section 12. (Added May 2, 1956 and Amended April 26, 1975) In the event
that the corporation shall have designated a transfer agent, or agents to
transfer the stock of the corporation, and certificates of stock of the
corporation are signed by such transfer agent, or assistant transfer agent or by
a transfer clerk acting in behalf of the corporation, the signatures of the
officers thereon may be facsimile.
<PAGE>
ARTICLE IV
(As Amended May 2, 1956)
CAPITAL STOCK
Certificates of Stock.
Section 1. (As Amended August 30, l985) Certificates of stock shall be
signed by the Chairman of the Board or President and by the Secretary or
Treasurer and the seal of the corporation shall be affixed thereto. The
signatures of said officers and seal may be facsimile when such certificates are
signed by a transfer agent or an assistant transfer agent or by a transfer clerk
acting in behalf of the corporation.
In case any officer who has signed or whose facsimile signature has
been used on a certificate, has ceased to be an officer before the certificate
has been delivered, such certificate may, nevertheless, be adopted and issued
and delivered by the corporation as though the officer who signed such
certificate or certificates, or whose facsimile signature or signatures shall
have been used thereon, had not ceased to be such officer of the corporation.
Transfer of Shares.
Section 2. Transfers of shares shall only be made upon the transfer
books of the corporation kept at the office of the corporation or transfer
agent, or agents, designated to transfer such shares of stock and before a new
certificate is issued the old certificate, or certificates, shall be surrendered
for cancellation.
Loss or Destruction.
Section 3. In case of loss or destruction of any certificate of stock,
another may be issued in its place upon proof of such loss or destruction, as
the Board of Directors may provide. The Board of Directors may require that a
satisfactory bond of indemnity be given to the Corporation and/or to the
transfer agent of such stock.
Regulations.
Section 4. The Board of Directors shall have power and authority to
make all such rules and regulations as it may deem expedient concerning the
issue, transfer, conversion and registration of certificates for shares of the
capital stock of the Corporation, not inconsistent with the laws of New York,
the Certificate of Incorporation of the Corporation, and these Bylaws.
<PAGE>
ARTICLE V
DIVIDENDS
No Impairment of Capital or Capital Stock.
Section 1. No dividend shall be declared or paid which shall impair the
Company's capital or capital stock, nor while its capital or capital stock is
impaired, nor shall any dividends be declared or paid or any distribution be
made of assets to any of the stockholders, either upon reduction of the number
of shares or of the Company's capital or capital stock, unless the value of the
assets remaining after the payment of such dividend or after such distribution
of assets, as the case may be.
Dividends.
Section 2. (As Amended May 22, 1956) The Corporation shall pay no
dividends on any of its outstanding stock where there is any existing default in
the payment of principal or interest due on its ten-year five and one-half per
cent debenture bonds.
ARTICLE VI.
INSPECTORS OF ELECTION
Appointment.
Section 1. (As Amended May 22, 1956) Two (2) inspectors of election
shall be appointed by the Chairman of the Board at each annual meeting of
stockholders to serve until and including the next annual meeting. If there be a
failure to appoint inspectors, or if any inspector appointed be absent at a
meeting or refuse to act or if his office becomes vacant, the stockholders
present at the meeting and entitled to vote thereat, by a per capita majority
vote, may choose, temporarily, inspectors of the number required.
Qualification and Certificates of Result of Vote.
Section 2. The inspectors of election, before entering upon the
discharge of their duties, shall be sworn faithfully to execute the duties of
inspector at such meeting, with strict impartiality and according to the best of
their ability, and the oath so taken shall be subscribed by them and immediately
filed with the Secretary, with a certificate of the result of the vote taken at
the election or meeting at which they served.
<PAGE>
ARTICLE VII
(As Amended May 2, l987)
INDEMNITY
Section 1. To the maximum extent permitted by Article 7 of the Business
Corporation Law of the State of New York, as amended from time to time:
(a) The Corporation shall indemnify any person made, or
threatened to be made, a party to any action or proceeding (including one by or
in the right of the Corporation to procure a judgment in its favor), whether
civil or criminal, including an action by or in the right of any other
corporation of any type or kind, domestic or foreign, or any partnership, joint
venture, trust, employee benefit plan or other enterprise, which any director or
officer of the Corporation served in any capacity at the request of the
Corporation, by reason of the fact that he, his testator or intestate, is or was
a director or officer of the Corporation, or is or was serving such other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in any capacity, against judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys' fees actually and necessarily
incurred as a result of such action or proceeding, or any appeal therein.
(b) No indemnification may be made to or on behalf of any
director or officer if a judgment or other final adjudication adverse to the
director or officer establishes that his acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material to the
cause of action so adjudicated, or that he personally gained in fact a financial
profit or other advantage to which he was not legally entitled.
(c) The Corporation may, in the discretion of the Board of
Directors, indemnify all corporate personnel of the Corporation, other than
Directors and Officers, in the same manner and to the same extent as any
director or officer shall be indemnified as aforesaid by reason of his being, or
having been, a director or officer of the Corporation or having served any other
company as aforesaid.
(d) The Corporation may enter into written indemnification
agreements with Directors, Officers and corporate personnel referred to in
subparagraph (c) hereof, providing for indemnification in accordance with the
terms of this Article VII and containing such other terms, conditions and
procedures deemed by the Corporation necessary or proper to carry out the full
intent of this Article VII.
ARTICLE VIII
SEAL
Section 1. The Corporate Seal shall be an impression on wax or paper,
circular in form, with the words "The RAYMOND CORPORATION" on the outer margin
thereof, and bearing on the inner portion the words "Incorporated 1887".
<PAGE>
ARTICLE IX
AMENDMENTS
Manner of Amending.
Section 1. (As Amended May 2, 1956) These bylaws may be altered,
amended, repealed or added to by affirmative vote of the stockholders
representing a majority of the entire outstanding capital stock having voting
power at an annual meeting or at a special meeting called for that purpose or by
the Board of Directors by a majority vote of the whole Board of Directors at any
regular or special meeting.
ARTICLE X
WAIVER OF NOTICE
(Added May 2, l956)
Authority to Waive Notice.
Section 1. Whenever under the provisions of these bylaws any
stockholder or Director is entitled to notice of any regular or special meeting
or of any action to be taken by the Corporation, such meeting may be held or
such action may be taken without the giving of such notice, provided every
stockholder or Director entitled to such notice shall in writing waive the
requirement of these bylaws in respect thereto.
<PAGE>
Exhibit 10.1
JOINT VENTURE AGREEMENT
THIS AGREEMENT, made and entered into this __1st___ day of August,
1991, by and between CATERPILLAR INDUSTRIAL INC., a corporation incorporated and
existing under the laws of the State of Ohio, having its principal office at
5960 Heisley Road, Mentor, Ohio (hereinafter referred to as "Caterpillar"), and
THE RAYMOND CORPORATION, a corporation incorporated and existing under the laws
of the State of New York, having its principal office at South Canal Street,
Greene, New York (hereinafter referred to as "Raymond").
WITNESSETH:
WHEREAS Caterpillar desires to enter the market for Class II
and Class III forklift trucks as rapidly as possible at the most advantageous
cost possible; and
WHEREAS Caterpillar agrees to fund creation of a
differentiated product line; and
WHEREAS Raymond has developed valuable Class II and Class III
forklift truck design technology; and
WHEREAS Raymond desires to increase utilization of its
manufacturing capacity to achieve greater manufacturing cost efficiencies; and
WHEREAS, the parties desire to incorporate and operate a joint
venture company to engage in the business of developing and designing products
to be manufactured by Raymond for sale to the joint venture company and marketed
through the dealer network of Caterpillar and its Affiliates and to national
account customers of the joint venture company; and
WHEREAS the parties desire to provide products and services to
the joint venture company at cost and share equally in profits of the joint
venture company; and
<PAGE>
WHEREAS Raymond, during the period of joint ownership of the
joint venture by Caterpillar and Raymond, agrees to make available specified
industrial property for use by the joint venture in connection with the design
and development of those products.
NOW, THEREFORE, the parties hereto hereby agree as follows:
Article 1 Definitions
Each of the following terms when used in this Agreement, shall
have the meanings indicated:
1.1 "Affiliate" shall mean any person (individual, corporation,
partnership or other entity) that directly or indirectly controls
any party to this Agreement, any person at least fifty percent of
whose voting shares are beneficially owned by any party to this
Agreement, and any person directly or indirectly controlled by such
an affiliate.
1.2 "JVC": the joint venture company to be incorporated and jointly
owned by the parties in the manner provided in Article 2.
1.3 "JVC Shares": those shares of common stock of the JVC issued in
accordance with this Agreement.
1.4 "Products": those models and configurations of Class II and Class
III electric powered forklift trucks, set forth in Exhibit 1
hereto, including parts and attachments therefor, and those
additional products hereafter developed by the JVC at the direction
of its Board of Directors.
1.5 "Subsidiary": a corporation in which one hundred percent (100%) of
the voting interest (excluding qualifying shares) is directly or
indirectly beneficially owned, individually or in the aggregate, by
a party and/or one or more Subsidiaries of that party.
1.6 "Industrial Property" of a party or the JVC: patents, designs,
trade secrets, copyrights, know-how, information and technology
owned by such party or the JVC, or licensed by such party or the
JVC with the right to sublicense.
1.7 "manufacture": The fabrication, assembly or procurement of a
completed "Product", sub-assembly or component or any part thereof.
Article 2 Formation of JVC
2.1 Caterpillar and Raymond shall cause the JVC to be organized and
registered as a corporation under the laws of the State of Delaware
as soon as reasonably possible following the date of this
Agreement.
2.2 The Certificate of Incorporation and the Bylaws of the JVC shall
be, in form and substance, as agreed by the parties.
2.3 (a) The capital of the JVC shall consist of 2000 shares of $100.
par value, voting, fully paid and non-assessable common stock. Each
party agrees to purchase 1000 shares thereof.
(b) Caterpillar agrees to loan $1,000,000.00 in cash to the JVC to
be spent on development and engineering of the "Products". The loan
shall be evidenced by a JVC interest-free note having the following
characteristics: 50% of the principal shall be payable in six
months from the last launch (take order) date of the "Products" set
forth in Exhibit 1. The balance of the loan shall be repaid
eighteen months after the aforesaid launch (take order) date.
(c) Caterpillar agrees to loan $2,000,000.00 in cash to the JVC for
its initial "S G & A" expenses, such loan to be made in
installments as funds are required. The loan shall be evidenced by
one or more JVC notes having the following characteristics:
Interest shall be computed on the last day of each month at Chase
(New York) Bank's prime commercial lending rate plus 1%; repayment
of principal and payments of interest shall be made annually as JVC
cash flows permit and before repayment of any other loans from any
party other than the loan set forth in Article 2.3(b) above.
2.4 All shares issued by the JVC shall be in registered form.
2.5 No shares of the JVC in addition to those provided for in Article
2.3 may be authorized or issued except with the prior written
Agreement of the parties.
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2.6 Each stock certificate issued during the term of this Agreement
shall bear the following words: "This certificate is held subject
to the terms of a joint venture agreement between Caterpillar
Industrial Inc. and The Raymond Corporation, dated August ________,
1991, a copy of which is on file at the head offices of Material
Handling Associates, Inc., and may not be transferred except in
compliance with the terms of said agreement."
2.7 Unless the parties otherwise agree in writing, each party, together
with such of its transferees as are permitted herein, shall hold
fifty percent (50%) of the JVC Shares during the term of this
Agreement.
Article 3 Primary Purpose and Objective
3.1 The primary purpose of the JVC shall be the development and design
of "Products" to be manufactured by
Raymond as follows:
(a) "Products" of designs and quality standards, approved
by Caterpillar and Raymond, to be manufactured
exclusively by Raymond and to be sold exclusively to the
JVC for resale exclusively to dealers of Caterpillar and
its Affiliates and national account customers of the JVC
for worldwide distribution under Caterpillar trademarks.
(b) The license of JVC Industrial Property to Raymond for
differentiation, manufacture and distribution by Raymond
of products. Such Industrial Property may be the same as
JVC products, less subsystems that the JVC, Caterpillar
and Raymond determine to be reasonable differentiation.
3.2 Raymond and Caterpillar each desire to have differentiated products
bearing their respective trademarks and distributed through their
respective dealer networks. Each party will continue to design,
develop, manufacture and market other products, including lift
trucks, independently.
3.3 The "Products" sold by the JVC shall be warranted by the JVC on the
terms that are competitive with warranties offered by others in
each market. Raymond shall not warrant "Products" sold to the JVC
but shall assign to the JVC any assignable warranties it has
received from its suppliers in connection with components of the
"Products".
<PAGE>
3.4 (a) Except for a "Product" or part thereof defective in material or
workmanship in manufacture, JVC shall defend, indemnify and hold
harmless Caterpillar and Raymond, their Affiliates (excluding JVC
dealers), and their respective employees, officers and directors,
harmless against and from all claims, demands, liabilities, loss,
damage, cost and expense of whatsoever nature, including costs,
attorney's fees and expenses, which arise from claims of third
parties (including dealers) resulting from any injury to persons or
property damage claimed to have been caused by a "Product" or part
thereof.
(b) Raymond shall defend, indemnify and hold JVC, Caterpillar and
its Affiliates, and their respective employees, officers and
directors, harmless against and from all claims, demands,
liabilities, loss, damage, cost and expense of whatsoever nature,
including costs, attorney's fees and expenses, which arise from
claims of third parties (including dealers) resulting from any
injury to persons or property damage claimed to have been caused by
a defect in the material or workmanship in manufacture of a
"Product" or part thereof.
(c) Raymond and JVC agree to coordinate their respective defenses
to eliminate unnecessary duplicate legal expense and to provide a
coordinated defense against claims. Raymond and JVC agree not to
file cross-claims or third-party claims against each other and to
resolve such differences as would have been covered by such
cross-claims or third-party claims through alternative dispute
procedures.
(d) If Raymond and JVC are unable to resolve a dispute within 60
days through negotiation, they may, if mutually agreed, retain a
facilitator or mediator to conduct further discussion. If further
negotiation is unsuccessful after 120 days or such additional time
as they mutually agree, they shall submit the dispute to
non-binding arbitration using procedures and an arbitrator provided
by Endispute, Inc., Chicago, Illinois, or such other procedures or
arbitration services as they mutually agree. Raymond and JVC
further agree to pay on an equal basis for such facilitator,
mediator or arbitrator. In the event that such alternative dispute
procedures are unsuccessful to resolve the dispute, either party
may file a cause of action for contribution or indemnity. If the
jurisdiction in which the primary lawsuit or claim was pending
requires that such claims, cross-claims or third-party claims be
filed with the primary lawsuit, then the parties agree that the
arbitration hearing aforementioned shall be binding upon the
parties rather than advisory.
<PAGE>
Article 4 Transfer of Shares
4.1 Either party may sell or otherwise transfer ownership of some or
all of its JVC Shares at any time to one or more of its
Subsidiaries without restriction, except such party shall cause any
such Subsidiary to undertake to perform all obligations of such
party under this Agreement, and such party shall remain liable for
the performance of all provisions of this Agreement. Caterpillar
may sell or otherwise transfer ownership of some or all of its JVC
Shares at any time to a joint venture comprised of Caterpillar or
an Affiliate and another person acceptable to Raymond upon the same
terms and conditions as to Subsidiary except that the transferring
party shall not remain liable for performance of any provision of
this Agreement. Raymond shall have the same right of transfer to a
joint venture as Caterpillar, should it wish to do so hereafter.
4.2 Except as provided in Article 4.1 above, no party shall assign,
pledge, mortgage, hypothecate or otherwise encumber its JVC Shares,
wholly or in part.
4.3 The parties, as shareholders of the JVC, shall have preemptive
rights to acquire any additional JVC Shares which the JVC may issue
subsequent to its incorporation.
Article 5 Financing
5.1 If it is determined by the parties that, in accordance with sound
and prudent business practices, additional capital is required for
the JVC, such additional capital will be provided by Caterpillar
and Raymond, each of whom shall contribute in proportion to their
common stock equity in the JVC, and in like manner and on the same
terms and conditions, whether made in the form of additional
equity, loans or guarantees of loans authorized to be obtained by
the JVC, or otherwise.
5.2 Land, buildings, equipment, Industrial Property, if any, sold or
exchanged from time to time by any party to this agreement or their
Affiliates to the JVC, by way of contribution to capital or
otherwise, shall be valued as mutually agreed between Raymond and
Caterpillar prior to such sale or transfer. The parties may base
their agreed valuation on the opinion of one or more independent
experts or appraisers selected by Caterpillar and Raymond. The cost
of any such expert's or appraiser's services shall be borne by the
JVC.
<PAGE>
Article 6 Board of Directors
6.1 Raymond and Caterpillar shall exercise their respective voting
rights in the JVC and shall take such other steps as are necessary
to ensure:
(a) that the Board of Directors of JVC shall consist of
six (6) members;
(b) that of such six (6) members, three (3) shall be
nominated by Caterpillar and three (3) shall be nominated
by Raymond, and that each party shall support the
election of members nominated by the other party, and
(c) that if either Raymond or Caterpillar wishes to
change any of its nominated members, with or without
cause, the other party shall vote accordingly; provided,
however, the party proposing the change shall indemnify
and hold the JVC and other party harmless for any and all
damages and other expenses that may arise from such
action.
6.2 In case of vacancy in the Board of Directors for any reason,
Raymond and Caterpillar agree to cause to be elected as a new
member a person nominated by the party who nominated the member
whose office is vacant.
Article 7 Accounting Matters
7.1 The parties, as shareholders, shall cause the Independent Public
Accountants of the JVC to be appointed or dismissed at a meeting of
shareholders. The initial Independent Public Accountants of the JVC
shall be Price Waterhouse, or Ernst & Young, as determined by
competitive bidding.
7.2 The accounting books and documents of the JVC shall be regularly
audited by the Independent Public Accountants of the JVC.
7.3 Annual financial statements, including a general balance sheet,
related statements of income, shareholders equity and cash flows,
audited by the Independent Public Accountants of the JVC, shall be
prepared and provided to the shareholders at the JVC's expense
within forty-five (45) days following the close of each fiscal year
of the JVC. Such annual financial statements, as audited, shall be
final and binding upon the parties as to the revenue, costs, fees,
expenses, losses and profits of JVC.
<PAGE>
7.4 Unaudited interim financial statements (including a general balance
sheet, related statements of income, shareholders equity and cash
flows) shall be prepared and provided to the shareholders, at the
JVC's expense, on a monthly basis, within thirty (30) days
following the end of each interim fiscal month, unless otherwise
agreed by the parties.
7.5 Annual and interim financial statements shall be provided and
maintained in accordance with accounting principles generally
accepted in the United States of America, and shall contain such
statements and schedules, prepared in accordance with the
requirements of Raymond and Caterpillar, and copies of tax returns
and receipts for tax payments, as may be requested in writing by
Raymond or Caterpillar.
7.6 Either party may request an audit of the books and records of the
JVC ("shareholder's audit") by an independent auditor of its
selection, other than the Independent Public Accountants of the
JVC. Any shareholder's audit shall be at the expense of the
requesting party unless material error or fraud is found, in which
case such audit shall be at the expense of the JVC. In addition,
Caterpillar and Raymond, each through its duly authorized
representative, shall at all reasonable times have access to, and
the right to, examine the books of account and other documents and
records of the JVC.
Article 8 Operating Policies
8.1 As soon as reasonably possible following the date of this
Agreement, Raymond and Caterpillar shall, on an "as needed" basis,
agree upon, and reduce to writing, the financial policies and
practices to be adopted and followed by the JVC including, but not
limited to, those relating to dividends, loans to and from
affiliated companies, cash management systems, banking
arrangements, asset valuation, depreciation practices, accounting
and reporting practices, internal auditing policies and deferred
payment financing.
8.2 "Products" shall be subject to quality a assurance program
satisfactory to Caterpillar and Raymond, to be prepared and made
available to each of the parties.
8.3 Product safety and improvement are goals to which each of the
parties are, and the JVC must be, committed. To assist in achieving
these goals, Caterpillar and Raymond shall cause the JVC to be
informed about the performance and application of "Products", and
the JVC shall promptly correct any feature which may adversely
affect the proper or safe functioning of any "Product".
<PAGE>
Article 9 Product Design and Manufacture
9.1 Raymond shall grant a royalty-free, non-exlusive license to the JVC
to manufacture use and sell to Caterpillar's and its Affiliate's
dealers and national account customers of the JVC, "Products"
embodying or made by the use of Raymond's Industrial Property shown
in Exhibit 2. This license shall encompass all parts, components
and subsystems necessary to use and sell the "Products" and shall
include all updates, improvements, replacements and adjustments
which are developed for the purpose of maintaining the designs
owned by Raymond and used in the JVC "Products". This license shall
not apply to parts, components and subsystems which Raymond deems
necessary for differentiation. The areas of differentiation for the
JVC's "Products" listed in Exhibit 1 are shown in Exhibit 2.
Raymond represents and warrants that the Raymond Industrial
Property listed in Exhibit 2, when combined with the contemplated
JVC Industrial Property, and Caterpillar Industrial Property listed
in Exhibit 3 is sufficient to produce "Products" listed in Exhibit
1.
9.2 The JVC shall grant a non-exclusive license to Raymond in
accordance with Article 3.1(b) to manufacture use and sell to
Raymond dealers products embodying or made by the use of the JVC's
Industrial Property. This license shall encompass all parts,
components and subsystems necessary to manufacture use and sell
"Products" developed by, or caused to be developed by, the JVC and
shall include all updates, improvements, replacements and
adjustments which are developed for the purpose of maintaining
future products sold at any time by the JVC and used in products
marketed by Raymond. Raymond shall pay a mutually agreed,
reasonable user fee for the license of JVC Industrial Property.
9.3 The JVC, Raymond and Caterpillar shall be jointly responsible for
updating, improving and maintaining their Industrial Property,
which is common to their respective products. The cost of
implementing changes for this purpose shall be borne by the party
or JVC, whoever initiates the change. These costs shall include,
but shall not be limited to, the cost of engineering review,
documentation change, handling, process creation, tooling creation
or modifications, inventory rework and scrap but shall exclude the
cost of changes to manuals, literature, service parts and other
aftermarket support. The JVC and Raymond shall have the right to
abandon commonality by exercising the right to refuse a requested
change.
<PAGE>
9.4 As soon as feasibly possible following incorporation of the JVC,
Raymond and the JVC shall enter into a
contract, for the manufacture by Raymond of "Products" for the JVC.
9.5 Caterpillar shall grant a royalty-free, non-exclusive license to
the JVC to manufacture use and sell to Caterpillar's and its
Affiliates' dealers and national account customers of the JVC ,
"Products" embodying or made by the use of Caterpillar's Industrial
Property shown in Exhibit 3. This license shall encompass all
parts, components and subsystems necessary to manufacture use and
sell the "Products" shown in Exhibit 1 and shall include all
updates, improvements, replacements and adjustments which are
developed for the purpose of maintaining the designs owned by
Caterpillar and used in the JVC "Products".
9.6 The non-exclusive licenses to manufacture specified in Articles 9.1
and 9.5 shall terminate in the event ownership of the JVC Shares
are transferred in whole or in part to a person not i) a party, ii)
an Affiliate or subsidiary of a party or iii) a joint venture
company referred to in Article 4.1.
Article 10 Inventions
10.1 Inventions made during the term of this Agreement and relating to
technology described in Article 9 shall be owned as follows:
(a) Those conceived and made by Caterpillar personnel
shall be the sole property of Caterpillar, (b) Those
conceived and made by Raymond personnel shall be the sole
property of Raymond, (c) Those conceived and made by the
JVC personnel (including personnel of the parties working
for the JVC under contract) shall be the property of the
JVC who shall grant non-exclusive licenses to Raymond, in
accordance with Article 9.2, and to Caterpillar (upon
payment of a mutually agreed, reasonable user fee) and (d)
Those conceived and made jointly by personnel of two or
more of Raymond, Caterpillar and the JVC shall be jointly
owned by Raymond, Caterpillar and the JVC.
10.2 The sole owner of any such invention shall have the right to file
and prosecute patent applications therefor. The parties shall cause
the JVC to file and prosecute patent applications for inventions
the JVC owns in any country in which one of the parties desires an
application to be filed.
<PAGE>
10.3 In the event of jointly owned inventions, the parties hereto shall
agree which one of them shall be primarily responsible for filing
and prosecuting patent applications therefor. The filer shall keep
the others informed of the status of all such patent applications
and any resulting patents. The filing, prosecution and maintenance
costs of the jointly owned patent applications and resulting
patents shall be equally shared by the parties and the JVC. If a
party, as part owner of any such jointly owned invention, decides
not to participate in such costs in any country which another part
owner desires an application be filed, said another owner shall
have the right to do so at its own expense and in its name. The
filing person shall grant perpetual, non-exclusive licenses to the
two other persons whether parties or the JVC, as the case may be.
10.4 Patents and patent applications on such inventions shall be
licensed pursuant to Article 9 and 15.6.
Article 11 Marketing Arrangements
11.1 The JVC shall enter into agreements with Caterpillar's and its
Affiliates' dealers substantially identical to Caterpillar's
corresponding "Sales and Service Agreement - Lift Truck Products".
In this connection, Caterpillar shall cause the JVC to be granted a
royalty-free license to use appropriate trade and service marks of
Caterpillar, Inc., subject to unilateral cancellation of such
license by Caterpillar, Inc. at any time, upon 180 days' written
notice, in which event the JVC shall cease marketing "Products"
under those marks.
11.2 JVC will contract with Caterpillar to administer JVC agree ments
with Caterpillar's and its Affiliates' dealers. JVC shall reimburse
Caterpillar its costs for providing such services. Such
reimbursement shall be calculated and paid annually. CII Marketing
Expense is as follows: costs incurred by the North American
Commerical Division regions of Caterpillar and its Fleet Marketing
Group. Including labor and labor-related expenses (excluding
non-recurring bonuses, profit-sharing and any incentive pay);
indirect material and expenses including travel and entertainment,
leased automobiles, communications tolls, dealer advertising co-op
expense, customer visits, regional office lease costs and
shows/exhibits. The formula to calculate is as follows:
<TABLE>
<CAPTION>
<S> <C>
JVC Annual "Product" Gross Sales
------------------------------------------- x CII Marketing = Marketing Expense Charge to JVC
JVC & CII Annual "Product" Gross Sa;es Expense
</TABLE>
<PAGE>
This charge is based on the prior fiscal
years sales and expenses and is to be calculated and paid
within the 1st QTR. of each year. The sales (JVC's and
CII's) are those made to Caterpillar's and its Affiliates'
Dealers and na tional account customers. The above formula
shall be applied pro rata to any partial fiscal year.
The following is an illustration of the marketing
expense calculation:
<TABLE>
<CAPTION>
<S> <C>
$15.4M (JVC)
------------------------- x $6.6M (Mktg. Expense) = $0.3M
$315.4M (JVC/CII) (Attributable to Dealers who sell JVC "Products")
</TABLE>
Article 12 Confidentiality of Information
12.1 The parties mutually acknowledge that (a) each may from time to
time disclose proprietary information to the JVC, to each other, to
employees of the JVC and to employees of each other, and (b) the
JVC may from time to time disclose proprietary information to a
shareholder and to employees of a shareholder. Notwithstanding any
such disclosure, the parties hereto agree, and shall cause the JVC
to agree, that the proprietary information of Caterpillar shall
remain Caterpillar's proprietary information, the proprietary
information of Raymond shall remain Raymond's proprietary
information, and except as otherwise provided in this Agreement,
proprietary information developed by the JVC shall remain the JVC's
proprietary information. Neither the JVC nor any party to whom it
may be disclosed shall directly or indirectly disclose such
information to third parties or use proprietary information of
another in any manner, except as may be required for the
performance by the JVC of its corporate purposes or for the
fulfillment by a party of its obligations under this Agreement.
Prior to the disclosure of any such proprietary information to a
subcontractor, supplier or any other person or entity, the JVC or
the party shall first enter into a confidentiality agreement with
such person or entity, which confidentiality agreement must be
acceptable in form and substance to the party whose proprietary
information is being disclosed.
<PAGE>
12.2 Proprietary information shall include all trade secrets, know-how
and information, whether or not patentable or copyrightable,
developed or acquired by a party, or the JVC, including without
limitation technical expertise and related experience and skills,
drawings, blueprints, specifications, catalogs, manuals, designs,
instructions, lists, descriptions of processes and other
engineering, technical, cost, economic and financial data,
engineering, design, manufacturing, procurement, marketing and
distribution information, testing and quality control information
and procedures, operating techniques, processes, and computer and
information programs. Information disclosed by either party, or the
JVC, shall not be deemed proprietary information to the extent such
information, either singularly or in a specific combination thereof
as the case may be, (1) is already in the receiving party's or the
JVC's possession, otherwise than under the terms of another
confidentiality agreement between or among the parties and the JVC
(b) is or becomes available to the general public through no act or
fault of the receiving party, or the JVC, or (c) is rightfully
disclosed to the receiving party or the JVC, by a third party.
Article 13 Governmental Applications
13.1 Promptly after the execution of this Agreement, Caterpillar and
Raymond shall make such filings with the appropriate governmental
authorities for such validations, authorizations, licenses and
approvals of the relationship contemplated by this Agreement
("Authorizations") as may be necessary or desirable under any
applicable laws or regulations, and shall exert their utmost
efforts to obtain the Authorization as soon as possible.
13.2 Except for the obligation of each party to cooperate in the
diligent prosecution of any applications filed pursuant to Article
13.1, this Agreement shall remain wholly executory and conditional
until the Authorizations have become effective or have been
obtained in form and substance satisfactory to the parties hereto.
Article 14 Term
This Agreement shall remain in force as long as the JVC continues
to exist, unless earlier terminated as provided in Article 15.
<PAGE>
Article 15 Termination
15.1 Anything in this Agreement to the contrary notwithstanding, this
Agreement shall terminate:
(a) If either party shall become or be adjudicated
bankrupt or insolvent or commit any act of bankruptcy or
insolvency (including the failure to pay debts as they
mature) or file a petition for or in bankruptcy,
insolvency, reorganization or a similar proceeding or
file an answer admitting the material facts alleged in
such a petition filed by another, or make an assignment
or attempted assignment for the benefit of creditors, or
otherwise avail itself of the benefit of any bankruptcy,
insolvency, reorganization or similar laws, or shall have
a receiver, liquidator or trustee appointed for it or any
of its assets, or shall have all or a substantial portion
of its assets taken by provisionary seizure or similar
proceedings, whether voluntary or involuntary, instituted
for its liquidation or dissolution.
(b) If either party for any reason shall at any time
default in any material respect in the performance of any
of its obligations under or otherwise commit any breach
of this Agreement, where such default or breach shall
have been notified in writing to the party claimed to be
in default and such default has not been remedied within
sixty (60) days after such written notice.
15.2 Any party may terminate this Agreement in its entirety if: (a)
performance of this Agreement shall become in any material respect
impossible or impracticable by virtue of any order, action,
regulation, interference or intervention of the federal or any
state government, or agency thereof, having the requisite
jurisdiction over the parties or the JVC. (b) the JVC operates at a
loss for three (3) consecutive years after launch of all "Products"
set forth in Exhibit 1.
15.3 Raymond may terminate if the JVC is required to cease marketing the
"Products" under Caterpillar, Inc. trademarks pursuant to Article
11.1.
15.4 In the event of any termination of this Agreement due to:
(a) any provision of Article 15.1, the bankrupt or
default ing party shall, at the option of the terminating
party,
(i) sell all its JVC shares to the terminating
party, or a third party designated by the
terminating party;
(ii) purchase all of the terminating party's shares,
or (iii) take all actions necessary to dissolve and
liquidate the JVC.
(b) any other reason, the parties shall take all actions
necessary to dissolve and liquidate the JVC.
<PAGE>
15.5 In the event of a transfer of JVC Shares pursuant to Article 15.4,
the purchase price shall be the book value of the JVC Shares at
that time. The book value of the shares to be transferred shall be
determined by the JVC's Independent Public Accountants.
15.6 In the event of any termination of this Agreement, except for
patented Raymond or Caterpillar technology, Raymond and Caterpillar
hereby agrees to grant to the other and agrees to cause the JVC to
grant to both parties such license or licenses as may be necessary
to enable Caterpillar and Raymond after any termination of this
Agreement, to make, have made, use and sell throughout the world
"Products" for sale under their respective trademarks. Such license
or licenses shall be made available to Caterpillar and Raymond
without charge. Raymond and Caterpillar patented technology used in
the "Products" shall be made available at the option of the party
desiring the license, which shall provide for mutually acceptable,
reasonable consideration.
15.7 Termination of this Agreement shall not relieve the parties from
their covenants under Article 12 or from any other obligation of a
continuing nature.
Article 16 Notices
Any notice to be given or made hereunder shall be in writing, shall
be effective when received and shall be sent by certified or
registered airmail, return receipt requested, postage prepaid to
the following address or such other address specified by either
party by similar notice:
(a) If to Caterpillar, to the attention of the
Secretary at:
5960 Heisley Road
Mentor, Ohio 44060
(b) If to Raymond, to the attention of the
Secretary at:
South Canal Street
Greene, New York 13778-0130
<PAGE>
Article 17 Formation Costs and Expenses
17.1 Each party shall bear its own attorney fees and other expenses
incurred in connection with the Agreement and, except as provided
in Article 17.2 hereof, shall hold the other party and the JVC
harmless from any such expenses.
17.2 The parties shall cause the JVC to reimburse each of them for all
reasonable and necessary out of pocket costs and expenses, as
recorded by each of them, incurred on and after August 1, 1991,
associated with the design or development of "Products", production
facilities, processes, procedures and systems for the JVC and
incorporation of the JVC. Reimbursable expenses shall include,
without limitation, payment of incorporation fees, legal expenses,
consultants' fees, costs related to securing the Authorizations and
other government approvals and privileges, the cost of otherwise
uncompensated services rendered to or on behalf of JVC, and other
incidental expenses.
Article 18 Miscellaneous
18.1 Any disagreement with respect to this Agreement or the operation of
the JVC which is not resolved by the Board of Directors of the JVC
shall be presented to the chief operating or executive officers of
Raymond and Caterpillar sitting in arbitration of the matter. If
the disagreement is not resolved within ninety (90) days from the
date of presentation or such additional period as may be mutually
agreed, then a failure to resolve the disagreement shall be deemed
to have occurred. No legal proceeding involving such disa greement
shall be instituted by a party prior to such a failure of the
arbitrators to resolve any disagreement.
18.2 Except as otherwise provided herein, neither this Agreement, nor
any right or obligation hereunder, shall be assigned, by operation
of law or otherwise, by or on behalf of a party without the prior
written consent of the other party.
18.3 No amendment of the Agreement shall be effective or binding on any
party unless it is reduced to writing, specifies that it is an
amendment hereof and is executed by duly authorized representatives
of the parties.
18.4 There shall be no waiver of any right under this Agreement unless
such waiver is in writing signed by a duly authorized
representative of the party charged therewith. The waiver by any
party hereto of any right granted hereunder, or arising from any
breach of this Agreement by any other party hereto, shall not
constitute, or be deemed to constitute, a waiver of any other
similar or dissimilar right.
<PAGE>
18.5 This Agreement shall not cause any party hereto, or the JVC, to be
the legal representative or agent of the other party, or of the
JVC, nor shall any party, or the JVC, have the right or authority
to assume, create or incur any liability or obligation of any kind,
express or implied, against, in the name of, or on behalf of, the
other party, or the JVC.
18.6 In no event shall the JVC engage in any activity if, under the laws
or regulations of the United States of America, such activity would
result in the imposition of any penalty upon, or the loss of any
privilege by, the JVC, Raymond, Caterpillar or any of their
Affiliates.
18.7 The headings to articles of this Agreement are intended merely to
facilitate reference, do not form a part of this Agreement, and
shall not affect the interpretation hereof.
18.8 This Agreement constitutes the entire understanding between the
parties with respect to the subject matter set forth herein and
supersedes and cancels all previous agreements, negotiations,
commitments and representations, if any, between the parties
concerning the subject matter of this Agreement.
18.9 The parties hereto agree to cause the JVC to be bound by the terms
of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, in duplicate originals, by their respective authorized representatives
as of the day and year first above written.
CATERPILLAR INDUSTRIAL, INC. THE RAYMOND CORPORATION
By: /s/ Richard Benson By: /s/ Ross Colquhoun
--------------------------- -------------------------------
President President
CATERPIL.AGR.080191
<PAGE>
EXHIBIT 1
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
<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
<PAGE>
EXHIBIT 2
RAYMOND INDUSTRIAL PROPERTY
REACH TRUCK
Available industrial property shall include all internal hydraulic components
and bracketry and all standard options relating to Raymond model 021 and 031
Reach Trucks (except as identified below). Items specifically included are:
1. "Brand X" Reach Truck frame, lift system, control handle, and control
handle mechanism.
2. Four point suspension system with spring loaded caster design.
3. All model 031 and 021 front ends, including all masts and attachments (but
excluding certain overhead guard styling features) which are available as
standard options on the Raymond products which are in production at the
time of first shipment of JVC "Products".
4. All patents relating to the design of the mast and load handler, for which
an application has been made or granted, as of the date of first shipment
of the Initial JVC "Product(s)" on which the patent is used.
5. The transmission from the new Raymond model 031.
6. Steering geometry (patent nos. 4,754,837 and 4,813,512) and foreign
derivatives and implementing designs from the model 031.
7. Tracqualizer TM caster.
8. Hydraulic pumps and motors (36 volt) from the Raymond Reach Truck models
21 and 31 (except 31 traction motor) which are in production at the time
of first shipment of JVC Reach Truck "Products".
Items specifically excluded, not available to the JVC, are:
1. Certain overhead guard styling features.
2. Control handles other than the brand "X" handle.
3. All external, non-structural covers.
4. Transmissions from the model 20 and 21.
5. All miscellaneous items excluded on page 3.
<PAGE>
ORDERPICKER
Except as identified below the available industrial property shall include the
tractor frame with internal bracketry, hydraulic components, standard masts, and
standard platform from the Raymond model 152 and 162 orderpickers. Also included
are all standard options available on standard Raymond orderpickers at the time
of first shipment of JVC orderpickers. This will include the following which are
in production at the time of first shipment of the JVC Orderpicker "Products":
1. 24 and 36 volt lift, traction, and auxiliary motors, hydraulic pumps,
related valving and plumbing from Raymond models 152 and 162.
2. Standard transmission (Hurth 300)
3. Wire guidance (5.2 and 6.25 KHz) and line drivers
4. Electronic steer and power steering
5. All standard three stage and two stage masts (up to 315" EH)
The following is a listing of industrial property not available to the JVC:
1. All external, non-structural covers.
2. The styling and appearance of the lift/lower/traction control handle.
3. The overhead guard design and light package.
4. Side gates
5. intellispeed TM
6. All miscellaneous items excluded on page 3.
WALKIE
The Raymond Transitor models 111, 112, 113, 114, and the model 19 Elf as offered
at the time of first shipment of the equivalent JVC product. Excluded items are
those set forth as miscellaneous items on page 3.
<PAGE>
PATENTS
Other patents, their foreign derivatives, and the knowhow to apply the teachings
therefrom:
4,813,512 Idler Wheel Assemblies
4,762,203 Lift Truck Lowering System
4,754,837 Lift Truck Steering Apparatus
4,721,187 Lift Truck Mast Structure
4,534,433 Material Handling Vehicle
4,307,329 Wire Guidance Method and Apparatus
3,778,080 Lift Truck Load Wheel Arrangement
3,738,665 Hydraulic Seals
3,424,475 Lift Truck Suspension System
3,392,797 Steering and Suspension Systems for Motorized Lift
3,389,325 System to Disconnect A Motor Responsive to Low
Batt Voltage
3,370,337 Ball Bearing Manufacturing Method
3,370,333 Ball Bearing Manufacturing Method
3,332,728 Hardened Racewire Ball Bearing
3,280,933 Disc Brake Arrangements For Industrial Truck
3,275,926 Direct Current Control Systems
3,259,365 Rack and Pinion Load Manipulator
MISCELLANEOUS
Included items are:
1. Battery Pullers
2. Battery Stand
3. Optional (large waist size) safety belts
4. All stability and performance information relevant to the appli- ation of
JVC "Products".
5. General hardware common to other Raymond products such as bearings,
bushings, fasteners, gears, hoses, fittings, connectors, and wire.
<PAGE>
Excluded items are:
1. Raymond manuals, publications, and product literature
2. Tires: red Ray-DLTM
3. Raymond orange paint
4. Raymond trademarks and logos
5. intellidrive TM traction controller
6. intellidrive2 TM controls and associated designs, patents, know how, and
components.
7. Designs relating to Raymond products other than those specifically
indentified above.
CATERPILLAR INDUSTRIAL PROPERTY - EXHIBIT 3
Patents, designs, computer programs and data, drawings and specifications, trade
secrets, know-how, analytical and test methods and information and technology as
applied to:
Microcommand integrated traction/steering/implement control systems including
controllers, software, motors, sensors, instrumentation and DC-DC converters.
Integral Hydraulic Power Steering Systems.
Industrial design (styling and ergonomics)
<PAGE>
Exhibit 10.6
EMPLOYMENT AGREEMENT
Agreement, made as of November 3, 1987, amended as of June 14, 1994 and
as of November 1, 1995, and amended and restated as of March 24, 1997, at
Greene, New York, between The Raymond Corporation, a New York corporation
(hereinafter, together with its successors and assigns, "Raymond"), and Ross K.
Colquhoun (hereinafter "Employee").
WHEREAS Employee has contributed substantially to the growth and
success of Raymond through his leadership of Raymond as Chief Executive Officer
and Chairman of the Board of Directors; and
WHEREAS Raymond desires to retain his services as set forth in this
Agreement and to provide the necessary compensation to ensure such services;
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, Raymond and Employee hereby agree as follows:
1. Employment. Raymond hereby employs Employee as Chief Executive
Officer and Chairman of the Board of Directors or in such other senior executive
position as the Board of Directors and Employee shall mutually agree. Employee
hereby accepts employment specified herein, agrees to perform the duties
prescribed by the Board of Directors, abide by the terms and conditions
described in this Agreement and to devote his best efforts and his full working
time to the interest and business of Raymond. Employee may devote a reasonable
amount of time to civic and community affairs. Employee shall not perform
services for any business organization except Raymond and its subsidiaries and
affiliated companies without the consent of the Board of Directors.
<PAGE>
2
2. Term of Employment. The term of employment under this Agreement
shall commence on the date on which this Agreement is amended and restated and
shall continue until terminated by Employee or Raymond in accordance with
paragraph 5 or 7.
3. Compensation. During the term of employment, Raymond shall pay to
Employee a base salary at the rate of $443,000 per annum, or such greater amount
as the Board of Directors shall determine. Such salary shall be payable in
substantially equal monthly installments. Raymond may pay Employee a bonus or
other incentive compensation in such amount and at such time as the Board of
Directors shall determine. Employee shall be eligible to participate in
Raymond's Profit Sharing Plan and Deferred Compensation Plan. In addition,
Raymond shall provide Employee with other benefits, facilities, services and
perquisites generally available to Raymond executive officers and no less
favorable than those Employee is receiving from Raymond on the date on which
this Agreement is amended and restated.
4. Pension and Supplemental Pension. Employee shall be eligible for
coverage under Raymond's Pension Plan. Raymond agrees to pay Employee a
supplemental pension, starting in December 1995, consisting of monthly payments
of $16,710.42, payable to Employee as a life annuity with a ten-year period
certain income option (the "50% Supplemental Pension"). Raymond agrees, starting
in April 1997, to increase the monthly payment amount payable to Employee to
$20,052.51 (the "60% Supplemental Pension"). Raymond has purchased a whole life
insurance policy with rights of conversion to an annuity contract to fund a
portion of the 50% Supplemental Pension (the "Company Insured Portion").
Employee has purchased a credit insurance policy to insure himself against any
loss with respect to the excess of the 50% Supplemental Pension over the Company
Insured Portion. If
<PAGE>
3
Employee is unable, despite his reasonable efforts, to obtain additional credit
insurance to cover the excess of the 60% Supplemental Pension over the 50%
Supplemental Pension (the "Spread"), Raymond shall contribute assets equal to
the Spread, calculated by Employee's actuary, to a grantor trust of which
Raymond will be the grantor, no later than 30 days after Employee has given
Raymond notice of his inability to obtain additional insurance.
5. Termination.
(a) Resignation Without Breach by Raymond; Termination for Cause;
Death or Disability. If:
(i) Employee shall resign from the employ of Raymond for any
reason prior to a Change in Control as defined in paragraph 6
herein except after a material breach of this Agreement by
Raymond; or
(ii) Raymond terminates Employee's employment for Cause (as
defined in subparagraph 5(d) herein); or
(iii) Executive dies or becomes permanently disabled (as
determined under Raymond's disability insurance plan);
then Employee shall not be entitled to further compensation under this
Agreement except as expressly provided herein, but shall be eligible for any
payments and benefits otherwise provided under Raymond's compensation and
benefit plans.
(b) Termination Other than for Cause; Resignation with Breach by
Raymond. If (other than following a Change in Control) Raymond terminates
Employee's employment for other than Cause as defined in subparagraph 5(d)
herein, or if Employee resigns after a breach of this Agreement by Raymond,
then, no later than 30 days following his termination, Employee shall receive
(i) a lump sum in an amount equal to Employee's
<PAGE>
4
then current base salary under paragraph 3 herein and (ii) all other vested
benefits under Raymond's compensation and benefit plans. Raymond shall continue
to provide Employee, at its expense, medical, dental and life insurance under
Raymond plans, or with benefits equivalent to Raymond's plans then in effect at
the date of termination for twelve months following termination.
(c) For purposes of this Agreement, "Cause" shall mean:
(i) any material misappropriation of funds or property of
Raymond by Employee; or
(ii) unreasonable and persistent neglect or refusal by Employee
to perform his duties as provided in paragraph 1 hereof, which
results in material harm to Raymond; or
(iii) conviction of Employee of a felony.
6. Change of Control. The term "Change of Control" shall mean a change
of control of Raymond of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 or, if Item 6(e) is no longer in effect, any
regulations issued by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 which serves similar purposes; provided that,
without limitation, such a Change of Control shall be deemed to have occurred if
and when:
(a) any "Person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes a beneficial
owner, directly or indirectly, of securities of Raymond representing 25% or more
of a combined voting power of Raymond's then outstanding securities; or
<PAGE>
5
(b) individuals who on the date this Agreement is amended and
restated constituted the Board of Directors (together with any new directors
whose election by such Board of Directors, or whose nomination for election by
the shareholders of Raymond, was approved by a vote of a majority of the
directors of Raymond then still in office who were either directors on the date
this Agreement is amended and restated or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office; or
(c) any Person is or becomes a beneficial owner, directly or
indirectly, of securities of Raymond representing 20% or more of a combined
voting power of Raymond's then outstanding securities, and, at any time within
twenty-four months after such event, individuals who were members of the Board
of Directors of Raymond immediately prior to such event (but excluding any
individuals who constituted any part of such "person") shall not constitute at
least 75% of the Board of Directors of Raymond; or
(d) the stockholders of Raymond approve any transaction or series of
transactions under which Raymond is merged or consolidated with any other
company, other than a merger or consolidation which would result in the voting
securities of Raymond outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 75% of the combined voting power
of the voting securities of Raymond or such surviving entity outstanding
immediately after such merger or consolidation; or
<PAGE>
6
(e) the stockholders of Raymond approve a plan of complete
liquidation of Raymond or an agreement for the sale or disposition by Raymond of
all or substantially all of Raymond's assets.
7. Termination After a Change of Control.
(a) "Event(s) of Termination" as used herein are:
(i) termination of Employee by Raymond within three years
following a Change of Control; or
(ii) termination of Employee by Raymond, if Employee was
terminated at the request of any potential purchaser of
Raymond's stock or assets, and, within one year following such
termination, a Change of Control occurs; or
(iii) termination of Employee at Employee's discretion within
eighteen months following a Change of Control.
If Employee is terminated within one year prior to a Change in Control pursuant
to paragraph 7(a)(ii) above, the "Event of Termination" shall be his termination
of employment, which shall be deemed to have occurred immediately after the
Change in Control.
(b) On an Event of Termination, Employee shall be entitled to the
following payments ("Termination Payments") and benefits:
(i) an amount equal to three times the sum of (A) the Employee's
base salary in effect on the Event of Termination and (B) the
Employee's target annual bonus (or, if higher, the average of
the Employee's actual annual bonuses (paid or accrued) for the
three fiscal years immediately
<PAGE>
7
preceding the Event of Termination), payable in a lump sum
within 30 days following an Event of Termination; and
(ii) an amount equal to the Employee's target annual bonus for
the fiscal year in which the Event of Termination occurs,
multiplied by a fraction, the numerator of which is the number
of days in such fiscal year that the Employee was employed by
Raymond and the denominator of which is 365, payable in a lump
sum within 30 days following an Event of Termination; and
(iii) all benefits, compensation and perquisites (including,
without limitation, life, medical, dental, travel, accident and
disability insurance) in such amounts and with such benefits,
compensation and perquisites no less than those in effect for
the Employee immediately prior to the Event of Termination, for
a period of three years following the Event of Termination; and
(iv) after the three-year period set forth in clause 7(b)(iii)
above, retiree medical and life insurance in such amounts and
with such benefits equivalent to that in effect for the Employee
on the Event of Termination, for the remainder of the Employee's
life.
(c) Upon an Event of Termination, (i) Raymond shall purchase an
annuity contract from a major national insurance company authorized to issue
such contracts in the state of New York (or fully pay and convert to an annuity
any life insurance policy then in effect) sufficient to pay to Employee a
supplemental pension benefit in an amount and on the terms provided in paragraph
4 of this Agreement, (ii) Employee shall have the option of
<PAGE>
8
taking an actuarially reduced benefit under said contract, (iii) Raymond shall
contribute said contract to a grantor trust of which Raymond shall be the
grantor and (iv) any amounts transferred to a grantor trust pursuant to
paragraph 4 of this Agreement shall become payable to Employee to the extent
necessary to provide Employee with a full supplemental pension benefit.
(d) If any amounts payable to Employee in connection with a Change
of Control (whether or not such amounts are payable pursuant to this Agreement)
(the "Severance Payments") are subject to the tax (the "Excise Tax") imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or
any similar federal, state or local tax that may hereafter be imposed), then
Raymond shall pay to Employee within 30 days after an Event of Termination an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Employee, after deduction of any Excise Tax on the Total Payments (as
hereinafter defined) and any federal, state and local income tax and Excise Tax
upon the payment provided for by this Section 3(c), shall be equal to the Total
Payments. For purposes of determining whether any of the Severance Payments will
be subject to the Excise Tax and the amount of such Excise Tax: (i) any other
payments or benefits received or to be received by Employee in connection with a
Change in Control or Employee's termination of employment (whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement with
Raymond, any Person whose actions result in a Change in Control or any other
Person affiliated with Raymond or such Person) (which, together with the
Severance Payments, constitute the "Total Payments") shall be treated as
"Parachute Payments" within the meaning of Section 280G(b)(2) of the Code, and
all "Excess Parachute Payments" within the meaning of Section 280G(b)(1) of the
Code shall be treated as subject
<PAGE>
9
to the Excise Tax, unless in the opinion of nationally-recognized tax counsel
selected by Employee such other payments or benefits (in whole or in part) do
not constitute Parachute Payments, or such Excess Parachute Payments (in whole
or in part) represent reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code in excess of the base
amount within the meaning of Section 280G(b)(3) of the Code, or are otherwise
not subject to the Excise Tax; (ii) the amount of the Total Payments which shall
be treated as subject to the Excise Tax shall be equal to the lesser of (A) the
total amount of the Total Payments and (B) the amount of Excess Parachute
Payments (after applying Section 3(c)(i) hereof); and (iii) the value of any
non-cash benefits or any deferred payments or benefit shall be determined by a
nationally-recognized accounting firm selected by Employee in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, Employee shall be deemed to pay
federal income taxes at the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of Employee's residence on the Event of Termination, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such
state and local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of the Event of Termination, Employee shall repay to Raymond within ten days
after the time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to such reduction
(plus the portion of the Gross-Up Payment attributable to the Excise Tax and
federal and state and local income tax imposed on the Gross-Up Payment being
repaid by Employee if such repayment results in a reduction in
<PAGE>
10
Excise Tax and/or federal and state and local income tax deduction) plus
interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to
exceed the amount taken into account hereunder at the time of the Event of
Termination (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), Raymond shall make an
additional gross-up payment in respect of such excess within ten days after the
time that the amount of such excess is finally determined.
8. Benefits Triggered Solely Upon a Change in Control. Upon a Change in
Control, all equity-based awards held by the Employee shall be fully vested, and
such awards shall be fully exercisable pursuant to the terms of the plans under
which such awards were granted.
9. No Mitigation. Employee shall not be required to seek employment
with any subsequent employer following his termination of employment from
Raymond, and no amounts payable hereunder shall be reduced by reason of any
compensation or benefits received by Employee from a subsequent employer.
10. Noncompetition. Except in the case where an Event of Termination
occurs (in which case this paragraph 10 shall not apply), Employee agrees that
for two years after the termination of his employment he will not, without prior
written consent of Raymond, directly or indirectly, as a principal, officer,
director, stockholder (except as the owner of less than 5% of the stock of a
company whose stock is publicly traded), partner, employee or in any other
capacity whatsoever, engage in or become associated with, or advise or assist,
any business or enterprise which is engaged in providing any goods or services
that are competitive with any goods or services that are or may at any time in
the period be offered by Raymond. For the
<PAGE>
11
purposes of this paragraph, a business or enterprise shall be deemed to be
engaged in providing goods or services that are competitive with any goods or
services offered by Raymond if the Board of Directors of Raymond so determines.
11. Confidential Information. Employee agrees that unless duly
authorized in writing by Raymond, he will neither during his employment by
Raymond nor at any time thereafter disclose or use directly or indirectly any
trade secrets or confidential or proprietary information of Raymond.
12. Withholding. Raymond may withhold from any amounts due Employee
under this Agreement such amounts as may be required under applicable federal,
state or local tax laws.
13. Funding. Raymond may in its discretion establish a trust to fund
any of the payments which are or may become payable to Employee under this
Agreement.
14. Notice. Any and all notices referred to herein shall be sufficient
if furnished in writing and sent by registered mail to the parties.
15. Transferability. The rights and benefits of Raymond under this
Agreement shall be transferable and all covenants and agreements hereunder shall
inure to the benefit of and be enforceable by or against its successors and
assigns. Whenever the term "Raymond" is used in this Agreement, such term shall
mean and include The Raymond Corporation and its successors and assigns. The
rights and benefits of Employee under this Agreement shall not be transferable
other than by will or the laws of descent and distribution.
16. Waiver. Any waiver of any breach of any of the terms of this
Agreement shall not operate as a waiver of any other breach of such terms or
conditions of any other such
<PAGE>
12
terms or conditions, nor shall any failure to enforce any provision hereof
operate as a waiver of such provision or of any other provision hereof.
17. Severability. If any provision of this Agreement or the application
thereof is held invalid or unenforceable, the invalidity or unenforceability
thereof shall not affect any other provisions of this Agreement which can be
given effect without the invalid or unenforceable provision, and to this end the
provisions of this Agreement are to be severable.
18. Choice of Law and Arbitration. The Agreement shall be governed and
continued in accordance with the laws of the State of New York, without
reference to principles of conflict of laws. Employee and Raymond hereby agree
to resolve any dispute arising out of this Agreement through arbitration, and
Raymond shall bear all costs relating to any such arbitration (except that
Employee shall bear his portion of the costs if Employee initiates the
arbitration and an arbitrator expressly determines that such action was brought
in bad faith).
19. Modification. This Agreement may not be amended or modified except
in writing, executed by the parties or their respective successors or legal
representatives.
<PAGE>
13
IN WITNESS WHEREOF, the parties have amended and restated this
Agreement as of March 24, 1997.
The Raymond Corporation
By: /s/ Paul J. Sternberg
----------------------
Paul J. Sternberg
General Counsel
/s/ Ross K. Colquhoun
---------------------------
Ross K. Colquhoun
Employee
<PAGE>
Exhibit 10.7
FORM OF EXECUTIVE AGREEMENT (TIER II)
THIS AMENDED AND RESTATED AGREEMENT, made this 24th day of
March, 1997, by and between THE RAYMOND CORPORATION, a New York corporation
having a principal place of business in Greene, New York (hereinafter, together
with its successors and assigns, "Raymond") and ________________, an individual
having a principal place of residence in ___________, __________ (hereinafter
"Executive").
W I T N E S S E T H :
WHEREAS, Raymond has a long-standing tradition of employment
at will; and
WHEREAS, Executive has been a trusted and valuable employee of
Raymond for a period of time; and
WHEREAS, the loss of Executive's services during a period in
which there was a change in control of Raymond would be harmful to Raymond; and
WHEREAS, the possibility of a change in control creates an
unsettling atmosphere and uncertainties for Executive; and
WHEREAS, Raymond and Executive wish to amend and restate the
Executive Agreement dated _________ __, 19__;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements herein contained, and for other good and valuable
consideration receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. Effective Date. This Agreement shall become effective on
the date on which a "Change of Control" (as such term is defined in paragraph 2
hereof) occurs.
<PAGE>
2. Change of Control. The term "Change of Control" shall mean
a change of control of Raymond of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 as in effect on the date of this Agreement or,
if Item 6(e) is no longer in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934 which
serves similar purposes; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if and when:
A. any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes
a beneficial owner, directly or indirectly, of securities of
Raymond representing 25% or more of the combined voting power
of Raymond's then outstanding securities; or
B. individuals who on the date this Agreement is amended and
restated constituted the Board of Directors (together with any
new directors whose election by such Board of Directors, or
whose nomination for election by the shareholders of Raymond,
was approved by a vote of a majority of the directors of
Raymond then still in office who were either directors on the
date this Agreement is amended and restated or whose election
or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of
Directors then in office; or
C. the stockholders of Raymond approve any transaction or
series of transactions under which Raymond is merged or
consolidated with any other company, other than a merger or
consolidation which would result in the voting securities of
Raymond outstanding immediately prior thereto continuing to
<PAGE>
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 75% of the combined voting power of the voting securities
of Raymond or such surviving entity outstanding immediately
after such merger or consolidation; or
D. the stockholders of Raymond approve a plan of complete
liquidation of Raymond or an agreement for the sale or
disposition by Raymond of all or substantially all of
Raymond's assets.
3. Employment. Raymond hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ of
Raymond, for the period commencing on the effective date of this Agreement and
ending on the third anniversary of such date (the "Employment Period"). During
such Employment Period, the Executive shall exercise such authority and perform
such executive duties as are commensurate with the authority being exercised and
the duties being performed by the Executive immediately prior to the effective
date of this Agreement. Such services shall be performed at the location where
the Executive was the employee immediately prior to the effective date of this
Agreement or at such other location as Raymond may reasonably require that is
within 30 miles of such prior location; provided, however, the Executive shall
not be required to accept a location which is unreasonable in light of the
Executive's personal circumstances. The Executive agrees that during the period
of employment he shall devote his full business time exclusively to his
executive duties as described herein and shall perform such duties faithfully
and efficiently.
4. Compensation. During the Employment Period, the Executive
shall be entitled to the following compensation and benefits:
<PAGE>
A. An annual salary which is not less than the Executive's
annual salary immediately prior to the effective date of this
Agreement, with the opportunity for increases, from time to
time thereafter, which are in accordance with Raymond's
regular practices. Such salary shall be paid in substantially
equal monthly installments commencing with the first day of
the month following the month in which the Change in Control
occurs. In the event the Executive dies or is terminated for
"Cause" (as such term is hereinafter defined) at any time
during the three year period during which payments are made
pursuant to this paragraph, no further payments shall be paid
or payable pursuant to this paragraph 4A.
B. Executive shall be entitled to participate in accordance
and with the terms of any bonus, stock option, restricted
stock, pension and/or profit sharing or other incentive
compensation plans in which he was a participant immediately
prior to the effective date of this Agreement, or any
successor plans that provide Executive with compensation and
benefits no less than such prior plans.
C. Executive shall be entitled to receive all employee
benefits including, but not limited to, medical, life, and
split-dollar life insurance benefits, to which he was entitled
immediately prior to the effective date of this Agreement.
<PAGE>
5. Termination. The term "Termination" shall mean termination
by Raymond of the employment of the Executive during the Employment Period, (for
any reason other than death, "Disability" or "Cause" as such terms are defined
below), or the resignation of the Executive upon the occurrence of any of the
following events:
A. a significant change in the nature or scope of the
Executive's authorities or duties from those described in
paragraph 3, a reduction in total compensation and/or benefits
from those provided in paragraph 4, or the breach by Raymond
of any other provision of this Agreement; or
B. a reasonable determination by the Executive that, as the
result of a Change of Control of Raymond and a change in
circumstances thereafter significantly affecting his position,
he is unable to exercise the authorities, powers, functions or
duties attached to his position and contemplated by paragraph
3 of this Agreement; or
C. a failure by Raymond to assign this Agreement to its
successors and assigns.
For purposes of this Agreement, the term "Disability" shall
mean permanent disability (as determined under Raymond's disability insurance
plan). For purposes of this Agreement, the term "Cause" shall mean:
A. any material misappropriation of funds or property of
Raymond by Employee; or
B. unreasonable and persistent neglect or refusal by Employee
to perform his duties as provided in paragraph 3 hereof, which
results in material harm to Raymond; or
<PAGE>
C. conviction of Employee of a felony.
6. Termination Payments. In the event the Executive's
employment is terminated and subject to the provisions of paragraph 5 of this
Agreement, Raymond shall pay to and provide the Executive with the following:
A. The greater of the following amounts:
(i) a lump sum amount, payable within 60 days following the
Executive's Termination, equal to the sum of (1) all salary
payments that would have been payable to Executive during
the remainder of the Employment Period had no Termination
occurred (at same rate as payable immediately prior to the
date of Termination), plus (2) the estimated amount of any
bonuses to which the Executive would have been entitled had
he remained in the employ of Raymond (provided that in no
event will the amount of any bonus for any particular year
be less than the amount of the bonus paid to the Executive
for the year immediately preceding the year of
Termination); or
(ii) a lump sum amount, payable within 60 days following
the Executive's Termination, equal to two times the sum of
(1) Executive's base salary in effect immediately prior to
the Termination and (2) Executive's target annual bonus
(or, if higher, the average of Executive's actual annual
bonuses (paid or accrued) for the three fiscal years
immediately preceding the year in which the Termination
occurred); and
<PAGE>
B. an amount equal to the Employee's target annual bonus for
the fiscal year in which the Termination occurs, multiplied by
a fraction, the numerator of which is the number of days in
such fiscal year that the Employee was employed by Raymond and
the denominator of which is 365, payable in a lump sum within
60 days following the Termination; and
C. During the remainder of the Employment Period, the
Executive shall continue to be treated as an employee under
the provisions of any stock option, restricted stock, pension
and/or profit sharing plans or other incentive compensation
arrangements described in paragraph 4B. In addition the
Executive shall continue to be entitled to all benefits and
service credit for benefits under medical, life insurance,
split dollar life insurance and other employee benefit plans,
programs and arrangements of Raymond described in paragraph 4C
as if he were still employed during such period under this
Agreement; and
D. If, despite the provisions of paragraph 6C above, benefits
or service credits under any employee benefit plan shall not
be payable or provided under any such plan to the Executive,
or his dependents, beneficiaries and estate, because he is no
longer an employee of Raymond, Raymond itself shall, to the
extent necessary, pay or provide for payment of such benefits
or service credit for such benefits to the Executive, his
dependents, beneficiaries and estate.
<PAGE>
E. If, despite the provisions of paragraph 6C above, benefits
or the right to accrue further benefits under any stock
option, restricted stock, pension and/or profit sharing plan
or other incentive compensation arrangement described in
paragraph 4B shall not be provided under any such arrangement
to the Executive, or his dependents, beneficiaries and estate,
because he is no longer an employee of Raymond, Raymond shall,
to the extent necessary, pay or provide for payment of such
benefits to the Executive, his dependents, beneficiaries and
estate.
7. Benefits Triggered Solely Upon a Change in Control. Upon a
Change in Control, all equity-based awards held by Executive shall be fully
vested, and such awards shall be fully exercisable pursuant to the terms of the
plans under which such awards were granted. Furthermore, following a Change in
Control, Raymond shall pay Executive a stay bonus in the amount of an additional
month's salary (based on Executive's annual salary immediately prior to such
Change in Control) for each month (up to a maximum of six months) that Executive
remains employed with Raymond following a Change in Control.
8. Code Section 280G Limitation. Notwithstanding anything to
the contrary in this Agreement, any amounts payable under this Agreement shall
be reduced to the extent necessary to avoid Executive being deemed to have
received an "Excess Parachute Payment" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"); provided, however, that
such a reduction shall occur only to the extent that the amounts received by the
Executive on an after-tax basis with such a reduction would exceed the amounts
received by the Executive on an after-tax basis without such a reduction.
<PAGE>
9. Non-Competition and Confidentiality. The Executive agrees
that:
A. There shall be no obligation on the part of Raymond to
provide any further payments or benefits (other than benefits
or payments already earned or accrued) described in paragraph
6, if, during the Employment Period, the Executive shall be
employed by or otherwise engage or be interested in any
business which is competitive with any business of Raymond or
any of its subsidiaries in which the Executive was engaged
during his employment prior to a termination and if, but only
if, such employment or activity is likely to cause, or causes,
serious damage to Raymond or any of its subsidiaries;
provided, however, nothing herein shall prohibit Executive
from owning less than 3% of the issued and outstanding stock
of a company traded on a national securities exchange; and
B. During and after the Employment Period, he will not divulge
or appropriate to his own use or the use of others any secret
or confidential information or knowledge pertaining to the
business of Raymond, or any of its subsidiaries, obtained
during his employment by Raymond or any of its subsidiaries.
10. No Mitigation. Executive shall not be required to seek
employment with any subsequent employer following his Termination of employment
from Raymond, and no amounts payable hereunder shall be reduced by reason of any
compensation or benefits received by Executive from a subsequent employer.
<PAGE>
11. Arbitration. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof, shall be settled by
arbitration in the City of Syracuse in accordance with the laws of the State of
New York by three arbitrators, one of whom shall be appointed by Raymond, one by
the Executive and the third of whom shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator shall be appointed by a Justice of
the Supreme Court for the County of Onondaga, State of New York. The arbitration
shall be conducted in accordance with the rules of the American Arbitration
Association, except with respect to the selection of arbitrators which shall be
as provided in this paragraph 11. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. In the
event that it shall be necessary or desirable for the Executive to retain legal
counsel and/or incur other costs and expenses in connection with the enforcement
of any and all of his rights under this Agreement, Raymond shall pay (or the
Executive shall be entitled to recover from Raymond, as the case may be) his
reasonable attorneys' fees and costs and expenses in connection with the
enforcement of his said rights (including the enforcement of any arbitration
award in court), regardless of the final outcome, unless the arbitrator shall
expressly determine that such action was brought by Executive in bad faith.
12. Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if in writing
and if sent by registered or certified mail to the Executive at the last address
he has filed in writing with Raymond, or, in the case of Raymond, at its
principal executive offices.
<PAGE>
13. Non-Alienation. The Executive shall not have any right to
pledge, hypothecate, anticipate or in any way create a lien upon any amounts
provided under this Agreement. No benefits payable hereunder shall be assignable
in anticipation of payment either by voluntary or involuntary acts, or by
operation or law.
14. Governing Law. The provisions of this Agreement shall be
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
15. Amendment. This Agreement may be amended or cancelled by
mutual agreement of the parties in writing without the consent of any other
person and, so long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interests in this Agreement or the
subject matter hereof.
16. Successors to the Company. Except as otherwise provided
herein, this Agreement shall be binding upon or inure to the benefit of Raymond
and any successor of Raymond.
17. Severability. In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set his hand,
and pursuant to the authorization from its Board of Directors, Raymond has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
THE RAYMOND CORPORATION
By: __________________________
Ross K. Colquhoun
Chief Executive Officer
and Chairman of the Board
of Directors
_________________________
_________________________
Executive
<PAGE>
FORM OF EXECUTIVE AGREEMENT (TIER III)
THIS AMENDED AND RESTATED AGREEMENT, made this 24th day of
March, 1997, by and between THE RAYMOND CORPORATION, a New York corporation
having a principal place of business in Greene, New York (hereinafter, together
with its successors and assigns, "Raymond") and ________________, an individual
having a principal place of residence in ___________, ____________ (hereinafter
"Executive").
W I T N E S S E T H :
WHEREAS, Raymond has a long-standing tradition of employment
at will; and WHEREAS, Executive has been a trusted and
valuable employee of Raymond for a period of time;
and
WHEREAS, the loss of Executive's services during a period in
which there was a change in control of Raymond would be harmful to Raymond; and
WHEREAS, the possibility of a change in control creates an
unsettling atmosphere and uncertainties for Executive; and
WHEREAS, Raymond and Executive wish to amend and restate the
Executive Agreement dated __________ __, 19__;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements herein contained, and for other good and valuable
consideration receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. Effective Date. This Agreement shall become effective on
the date on which a "Change of Control" (as such term is defined in paragraph 2
hereof) occurs.
<PAGE>
2. Change of Control. The term "Change of Control" shall mean
a change of control of Raymond of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 as in effect on the date of this Agreement or,
if Item 6(e) is no longer in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934 which
serves similar purposes; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if and when:
A. any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes
a beneficial owner, directly or indirectly, of securities of
Raymond representing 25% or more of the combined voting power
of Raymond's then outstanding securities; or
B. individuals who on the date this Agreement is amended and
restated constituted the Board of Directors (together with any
new directors whose election by such Board of Directors, or
whose nomination for election by the shareholders of Raymond,
was approved by a vote of a majority of the directors of
Raymond then still in office who were either directors on the
date this Agreement is amended or restated or whose election
or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of
Directors then in office; or
C. the stockholders of Raymond approve any transaction or
series of transactions under which Raymond is merged or
consolidated with any other company, other than a merger or
consolidation which would result in the voting securities of
Raymond outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 75% of the combined voting power of the voting securities
of Raymond or such surviving entity outstanding immediately
after such merger or consolidation; or
<PAGE>
D. the stockholders of Raymond approve a plan of complete
liquidation of Raymond or an agreement for the sale or
disposition by Raymond of all or substantially all of
Raymond's assets.
3. Employment. Raymond hereby agrees to continue the Executive
in its employ, and the
Executive hereby agrees to remain in the employ of Raymond,
for the period commencing on the effective date of this Agreement and ending on
the third anniversary of such date (the "Employment Period"). During such
Employment Period, the Executive shall exercise such authority and perform such
executive duties as are commensurate with the authority being exercised and the
duties being performed by the Executive immediately prior to the effective date
of this Agreement. Such services shall be performed at the location where the
Executive was the employee immediately prior to the effective date of this
Agreement or at such other location as Raymond may reasonably require; provided,
however, the Executive shall not be required to accept a location which is
unreasonable in light of the Executive's personal circumstances. The Executive
agrees that during the period of employment he shall devote his full business
time exclusively to his executive duties as described herein and shall perform
such duties faithfully and efficiently.
4. Compensation. During the Employment Period, the Executive
shall be entitled to the following compensation and benefits:
<PAGE>
A. An annual salary which is not less than the Executive's
annual salary immediately prior to the effective date of this
Agreement, with the opportunity for increases, from time to
time thereafter, which are in accordance with Raymond's
regular practices. Such salary shall be paid in substantially
equal monthly installments commencing with the first day of
the month following the month in which the Change in Control
occurs. In the event the Executive dies or is terminated for
"Cause" (as such term is hereinafter defined) at any time
during the three year period during which payments are made
pursuant to this paragraph, no further payments shall be paid
or payable pursuant to this paragraph 4A.
B. Executive shall be entitled to participate in accordance
and with the terms of any bonus, stock option, restricted
stock, pension and/or profit sharing or other incentive
compensation plans in which he was a participant immediately
prior to the effective date of this Agreement, or any
successor plans that provide Executive with compensation and
benefits no less than such prior plans.
C. Executive shall be entitled to receive all employee
benefits including, but not limited to, medical, life, and
split-dollar life insurance benefits, to which he was entitled
immediately prior to the effective date of this Agreement.
<PAGE>
5. Termination. The term "Termination" shall mean termination
by Raymond of the employment of the Executive during the Employment Period, (for
any reason other than death, "Disability" or "Cause" as such terms are defined
below), or the resignation of the Executive upon the occurrence of any of the
following events:
A. a significant change in the nature or scope of the
Executive's authorities or duties from those described in
paragraph 3, a reduction in total compensation and/or benefits
from those provided in paragraph 4, or the breach by Raymond
of any other provision of this Agreement; or
B. a reasonable determination by the Executive that, as the
result of a Change of Control of Raymond and a change in
circumstances thereafter significantly affecting his position,
he is unable to exercise the authorities, powers, functions or
duties attached to his position and contemplated by paragraph
3 of this Agreement.
C. a failure by Raymond to assign this Agreement to its
successors and assigns.
For purposes of this Agreement, the term "Disability" shall
mean permanent disability (as determined under Raymond's disability insurance
plan). For purposes of this Agreement, the term "Cause" shall mean gross
misconduct or willful and material breach of this Agreement by the Executive.
6. Termination Payments. In the event the Executive's
employment is terminated and subject to the provisions of Section 5 of this
Agreement, Raymond shall pay to and provide the Executive with the following:
<PAGE>
A. A lump sum amount, payable within 60 days following the
Executive's Termination, equal to the sum of (i) all salary
payments that would have been payable to the Executive during
the remainder of the Employment Period had no Termination
occurred (at the same rate as payable immediately prior to the
date of Termination), plus (ii) the estimated amount of any
bonuses to which the Executive would have been entitled had he
remained in the employ of Raymond (provided that in no event
will the amount of any bonus for any particular year be less
than the amount of the bonus paid to the Executive for the
year immediately preceding the year of Termination); and
B. During the remainder of the Employment Period, the
Executive shall continue to be treated as an employee under
the provisions of any stock option, restricted stock, pension
and/or profit sharing plans or other incentive compensation
arrangements described in paragraph 4B. In addition the
Executive shall continue to be entitled to all benefits and
service credit for benefits under medical, life insurance,
split dollar life insurance and other employee benefit plans,
programs and arrangements of Raymond described in paragraph 4C
as if he were still employed during such period under this
Agreement; and
C. If, despite the provisions of paragraph 6B above, benefits
or service credits under any employee benefit plan shall not
be payable or provided under any such plan to the Executive,
or his dependents, beneficiaries and estate, because be is no
longer an employee of Raymond, Raymond itself shall, to the
extent necessary, pay or provide for payment of such benefits
or service credit for such benefits to the Executive, his
dependents, beneficiaries and estate.
<PAGE>
D. If, despite the provisions of paragraph 6B above, benefits
or the right to accrue further benefits under any stock
option, restricted stock, pension and/or profit sharing plan
or other incentive compensation arrangement described in
paragraph 4B shall not be provided under any such arrangement
to the Executive, or his dependents, beneficiaries and estate,
because he is no longer an employee of Raymond, Raymond shall,
to the extent necessary, pay or provide for payment of such
benefits to the Executive, his dependents, beneficiaries and
estate.
It is the intention of this paragraph 6 that the total
compensation and benefits paid to the Executive pursuant to this Agreement equal
those amounts he would have received had be remained in the employ of Raymond
until the expiration of the Employment Period or, if earlier, his death.
7. Code Section 280G Limitation. Notwithstanding anything to
the contrary in this Agreement, any amounts payable under this Agreement shall
be reduced to the extent necessary to avoid Executive being deemed to have
received an "excess parachute payment" as defined in Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"); provided, however, that
such a reduction shall occur only to the extent that the amounts received by the
Executive on an after-tax basis with such a reduction would exceed the amounts
received by the Executive on an after-tax basis without such a reduction.
<PAGE>
8. Non-Competition and Confidentiality. The Executive agrees
that:
A. There shall be no obligation on the part of Raymond to
provide any further payments or benefits (other than benefits
or payments already earned or accrued) described in paragraph
6, if, during the Employment Period, the Executive shall be
employed by or otherwise engage or be interested in any
business which is competitive with any business of Raymond or
any of its subsidiaries in which the Executive was engaged
during his employment prior to a termination and if, but only
if, such employment or activity is likely to cause, or causes,
serious damage to Raymond or any of its subsidiaries;
provided, however, nothing herein shall prohibit Executive
from owning less than 3% of the issued and outstanding stock
of a company traded on a national securities exchange; and
B. During and after the Employment Period, he will not divulge
or appropriate to his own use or the use of others any secret
or confidential information or knowledge pertaining to the
business of Raymond, or any of its subsidiaries, obtained
during his employment by Raymond or any of its subsidiaries.
9. No Mitigation. Executive shall not be required to seek
employment with any subsequent employer following his Termination of employment
from Raymond, and no amounts payable hereunder shall be reduced by reason of any
compensation or benefits received by Executive from a subsequent employer.
10. Arbitration. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof, shall be settled by
arbitration in the City of Syracuse in accordance with the laws of the State of
New York by three arbitrators, one of whom shall be appointed by Raymond, one by
the Executive and the third of whom shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator shall be appointed by a Justice of
the Supreme Court for the County of Onondaga, State of New York. The arbitration
shall be conducted in accordance with the rules of the American Arbitration
Association, except with respect to the selection of arbitrators which shall be
as provided in this paragraph 10. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. In the
event that it shall be necessary or desirable for the Executive to retain legal
counsel and/or incur other costs and expenses in connection with the enforcement
of any and all of his rights under this Agreement, Raymond shall pay (or the
Executive shall be entitled to recover from Raymond, as the case may be) his
reasonable attorneys' fees and costs and expenses in connection with the
enforcement of his said rights (including the enforcement of any arbitration
award in court), regardless of the final outcome, unless the arbitrator shall
expressly determine that such action was brought by Executive in bad faith.
<PAGE>
11. Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be sufficient if in writing
and if sent by registered or certified mail to the Executive at the last address
he has filed in writing with Raymond, or, in the case of Raymond, at its
principal executive offices.
12. Non-Alienation. The Executive shall not have any right to
pledge, hypothecate, anticipate or in any way create a lien upon any amounts
provided under this Agreement. No benefits payable hereunder shall be assignable
in anticipation of payment either by voluntary or involuntary acts, or by
operation or law.
13. Governing Law. The provisions of this Agreement shall be
construed in accordance with the laws of the State of New York, without
reference to principles of conflict of laws.
14. Amendment. This Agreement may be amended or cancelled by
mutual agreement of the parties in writing without the consent of any other
person and, so long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interests in this Agreement or the
subject matter hereof.
15. Successors to the Company. Except as otherwise provided
herein, this Agreement shall be binding upon or inure to the benefit of Raymond
and any successor of Raymond.
16. Severability. In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set his hand,
and pursuant to the authorization from its Board of Directors, Raymond has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
THE RAYMOND CORPORATION
By:
------------------------------------
Ross K. Colquhoun
Chief Executive Officer
and Chairman of the Board
of Directors
-----------------------------------
-----------------------------------
Executive
<PAGE>
Exhibit 10.10
THE RAYMOND CORPORATION
1996 DEFERRED STOCK UNIT PLAN
FOR NON-EMPLOYEE DIRECTORS
THE RAYMOND CORPORATION (the "Company") hereby establishes this
Deferred Stock Unit Plan for Non-Employee Directors (the "Plan") to provide
benefits for non-employee directors of the Company in order to serve as an
inducement for their continued service to the Company and to align such
directors' financial interests with those of the shareholders.
Section 1. Eligibility. Each director of the Company (including current
directors) who is not a current or former employee of the Company (collectively,
the "Participants") shall participate in this Plan.
Section 2. DSU Account. As of May 22, 1996, a Deferred Stock Unit
("DSU") account shall be established for each Participant. The initial balance
for each Participant shall be calculated by (i) multiplying a $12,000 annual
retainer times each year of the Participant's prior service ("Prior Board
Service") on the Company's Board of Directors (the "Board") as of May 22, 1996,
(ii) calculating the net present value of such product (assuming the Participant
will retire at age 70 and commence receiving at such time an annual amount equal
to such annual retainer, such payments to continue for the same number of years
as his or her Prior Board Service) using the Company retirement plan discount
rate on May 22, 1996 of 7.0% and (iii) converting such net present value into
equivalent DSUs by dividing it by the average of the high and low trading prices
of Company common stock on May 22, 1996 of $18 3/8 per share.
Section 3. Additions to the DSU Account. On the fourth Wednesday of May
of each year subsequent to 1996, each Participant shall be credited with DSUs
equal to 100% of the annual retainer for such year, using the average of the
high and low trading prices of Company common stock on such date. Each
Participant shall also be credited with dividend equivalents in the form of
additional DSUs.
Section 4. Vesting. The value of each Participant's DSU account shall
vest according to the following schedule:
Years of Service for Participant Percentage Vesting
-------------------------------- ------------------
10 or more 100%
9 90%
8 80%
7 70%
6 60%
5 50%
Less than 5 0%
<PAGE>
Section 5. Payment. Upon termination from Board service, each
Participant shall receive the vested value of his or her DSU account in the form
of cash. Such value shall be determined by multiplying the number of DSUs in
such account by the average of the high and low trading prices of Company common
stock on the date of the Participant's termination. The benefits payable to each
Participant shall be paid in a lump sum no later than 30 days after the date on
which the Participant terminates from the Board.
Section 6. Years of Service. For purposes of vesting, a Participant's
years of service shall be measured from the later of (i) the date on which he or
she is elected to the Board or (ii) the effective date of the Plan.
Section 7. Death Benefit. If a Participant dies prior to receiving the
total amount of benefits which he or she would have otherwise received under
this Plan (regardless of whether the Participant had started to receive benefits
prior to his or her death), the unpaid portion of those benefits shall be paid
to the beneficiary last designated by the Participant in writing to the Board.
If no beneficiary is designated or if the designated beneficiary predeceases the
Participant, payments shall be made to the Participant's estate. In the event of
the death of a beneficiary to whom payments are being made, the remaining
payment shall be made to such beneficiary's estate. In the event payments are to
be made to a beneficiary or to the estate of a Participant or a beneficiary, the
Board may, in its sole discretion, provide for payment of any remaining amounts
in a lump sum.
Section 8. Change in Control. In the event of a Change in Control (as
hereinafter defined), any benefits or rights accrued and unpaid to a Participant
(whether or not the Participant has terminated from the Board, and whether or
not such benefits or rights are vested under Section 4) shall be paid in a lump
sum to such Participant no later than 30 days after the date on which the Change
in Control occurs. As used in this Plan, "Change of Control" shall mean a change
of control of the Company of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 as in effect on the date of this Agreement or,
if Item 6(e) is no longer in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934 which
serves similar purposes; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if and when:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) is or becomes a beneficial
owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's
then outstanding securities; or
(ii) individuals who on the effective date of this Plan constituted the
Board (together with any new directors whose election by such Board,
or whose nomination for election by the shareholders of the Company,
was approved by a vote of a majority of the directors of the Company
then still in office who were either directors on the effective date of
this Plan or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the Board
then in office; or
<PAGE>
(iii) the stockholders of the Company approve any transaction or series
of transactions under which the Company is merged or consolidated with
any other company, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than 75% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such
merger or consolidation; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
With respect to any Participant who is not re-elected to the Board as the result
of an actual or threatened proxy contest, any benefits or rights accrued and
unpaid to such Participant (whether or not such benefits or rights are vested
under Section 4) shall be paid in a lump sum to such Participant no later than
30 days after the date on which such Participant is not re-elected to the Board.
Section 9. Nature of Benefits. The Plan represents a contractual
obligation on the part of the Company. All benefits payable under the Plan shall
be paid out of the assets of the Company that are subject to the claims of
creditors of the Company. Although it is not intended that the Plan be funded,
the Company may in its sole discretion designate or segregate certain of its
assets to assist it in making the payment of benefits under the Plan.
Section 10. Impact on Participant's Status. Nothing contained in the
Plan shall be construed as affecting a Participant's status as a director or his
or her length of term as a director of the Company.
Section 11. Assignability. Neither the benefits payable under the Plan
nor the right to receive any payment of those benefits shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, attachment, execution or levy of any kind,
whether voluntary or involuntary, prior to actually being received by a
Participant, except as set forth in this Plan. Except as otherwise provided by
law, any attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge, garnish, attach, execute or levy on any benefit under the Plan
shall be null and void.
Section 12. Administration of the Plan. The Plan shall be administered
by the corporate secretary of the Company (the "Secretary"). The Secretary shall
have the authority to interpret, construe and implement the provision of the
Plan and to adopt rules and regulations for administering the Plan. All
decisions, actions or interpretations of the Secretary shall be final,
conclusive and binding on all parties.
<PAGE>
Section 13. Amendment. The Plan may be amended, modified, suspended or
terminated by the Board at any time. No amendment, modification, suspension or
termination shall adversely affect the previously accrued rights and benefits of
a Participant under this Plan, however, unless the Participant expressly
consents thereto in writing.
Section 14. Governing Law. The Plan shall be interpreted and enforced
in accordance with the laws of the State of New York, without reference to
principles of conflict of laws.
Section 15. Benefits and Obligations. The Plan shall inure to the
benefit of, and be binding upon, the Company, its successors and assigns and the
Participants, their respective heirs, executors and administrators.
Section 16. Effective Date. The Plan shall be effective as of May 22,
1996.
<PAGE>
Exhibit 10.11
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
Amended March 24, 1997
<PAGE>
THE RAYMOND CORPORATION
STOCK OPTION PLAN (1991)
TABLE TO 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 4
8 Exercise of Options 4
9 Transferability of Options 5
10 Death, Retirement, and Termination of Employment 5
or Director Status
11 Change of Control 5
12 Amendments, Suspension or Discontinuance 7
13 Termination 7
14 Stock Appreciation Rights 7
15 Withholding 8
16 Director Stock Option 8
<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
<PAGE>
subject to, but not delivered under, such option shall be available for other
options to the same person or other persons.
(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 Plan option may be granted to the same employee, but the
maximum number of shares that can be granted to an individual employee during
any given Plan year shall be 50,000 shares.
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;
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<PAGE>
(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.
(iv) 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.
(v) 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.
(vi) 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.
3
<PAGE>
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.
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 of 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.
4
<PAGE>
(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.
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
CHANCE OF CONTROL
Notwithstanding anything to the contrary in the Plan, upon a Change in
Control (as hereinafter defined), all unexercised options awarded under the Plan
shall immediately vest, and the Board shall not amend, suspend or discontinue
any option
5
<PAGE>
under the Plan without the express written consent of the affected optionee. As
used in this Plan, "Change of Control" shall mean a change of control of the
Company of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 as in effect on the date of this Agreement or, if Item 6(e) is no
longer in effect, any regulations issued by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 which serves similar
purposes; provided that, without limitation, such a Change of Control shall be
deemed to have occurred if and when:
(a) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) is or becomes a beneficial owner,
directly or indirectly, of securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding securities; or
(b) individuals who on March 24, 1997 constituted the Board (together
with any new directors whose election by such Board, or whose nomination for
election by the shareholders of the Company, was approved by a vote of a
majority of the directors of the Company then still in office who were either
directors on March 24, 1997 or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office; or
(c) the stockholders of the Company approve any transaction or series
of transactions under which the Company is merged or consolidated with any other
company, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 75% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
Notwithstanding anything to the contrary in the Plan, with respect to
any director and who is not re-elected to the Board as the result of an actual
or threatened proxy contest, all unexercised options held by such director shall
immediately vest, and the Board shall not amend, suspend or discontinue the Plan
in any way that affects such director without the express written consent of
such director.
6
<PAGE>
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 Plan from its supervision, (b) to make any
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
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
7
<PAGE>
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.
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
8
<PAGE>
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.
9
<PAGE>
Exhibit 10.12
THE RAYMOND CORPORATION
STOCK OPTION PLAN (1995)
---------------------------------
Adopted by the Board of Directors on March 4, 1995
Approved by the Shareholders on April 29, 1995
Amended March 24, 1997
<PAGE>
THE RAYMOND CORPORATION
STOCK OPTION PLAN (1995)
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 4
8 Exercise of Options 4
9 Transferability of Options 5
10 Death, Retirement, and Termination of Employment 5
or Director Status
11 Change of Control 6
12 Amendments, Suspension or Discontinuance 7
13 Termination 7
14 Stock Appreciation Rights 7
15 Withholding 8
16 Director Stock Options 9
<PAGE>
THE RAYMOND CORPORATION
Stock Option Plan (1995)
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 ByLaws 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.
<PAGE>
(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
315,000 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.
(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 Plan option may be granted to the same employee, but the
maximum number of shares that can be granted to an individual employee during
any given Plan year shall be 50,000 shares.
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, 2005 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:
2
<PAGE>
(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.
(iii) 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
3
<PAGE>
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.
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
4
<PAGE>
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.
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
5
<PAGE>
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
CHANGE IN CONTROL
Notwithstanding anything to the contrary in the Plan, upon a Change in
Control (as hereinafter defined), all unexercised options awarded under the Plan
shall immediately vest, and the Board shall not amend, suspend or discontinue
any option under the Plan without the express written consent of the affected
optionee. As used in this Plan, "Change of Control" shall mean a change of
control of the Company of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 as in effect on the date of this Agreement or,
if Item 6(e) is no longer in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934 which
serves similar purposes; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if and when:
(a) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) is or becomes a beneficial owner,
directly or indirectly, of securities of the Company representing 25% or more of
the combined voting power of the Company's then outstanding securities; or
(b) individuals who on March 24, 1997 constituted the Board (together
with any new directors whose election by such Board, or whose nomination for
election by the shareholders of the Company, was approved by a vote of a
majority of the directors of the Company then still in office who were either
directors on March 24, 1997 or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office; or
(c) the stockholders of the Company approve any transaction or series
of transactions under which the Company is merged or consolidated with any other
company, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 75% of the combined voting power
of the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
6
<PAGE>
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
Notwithstanding anything to the contrary in the Plan, with respect to
any director who is not re-elected to the Board of Directors as the result of an
actual or threatened proxy contest, all unexercised options held by such
director shall immediately vest, and the Board shall not amend, suspend or
discontinue the Plan in any way that affects such director without the express
written consent of such director.
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
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.
7
<PAGE>
(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 Stock 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.
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.
8
<PAGE>
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 1995 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.
9
<PAGE>
EXHIBIT 10.13
THE RAYMOND CORPORATION
1970 DEFERRED COMPENSATION PLAN
Restated as of September 1, 1994
As Amended through March 24, 1997
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 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 earned 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.
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 or kind of Directors' fees, however
described, without limitation.
<PAGE>
(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 cash portion
of the Account shall be credited with assumed interest earnings
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 earned in the Interest Fund and any cash
dividends on deferred stock shall be deemed reinvested in the Interest
Fund.
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).
<PAGE>
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 including 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 or shares held in 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 designated beneficiary 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.
(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 previously
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.
<PAGE>
(h) Payments from the Plan shall be in cash except that shares
deferred by Director Participants shall be distributed and not
converted to 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 designated beneficiary
in the event of the Participant's total disability or
death; and
(iii) the Payment Commencement Date.
(b) Unless a longer period has been specified by a Participant, 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 earned during that or other ensuing calendar
years.
2.10 Change in Control
Notwithstanding anything to the contrary in the Plan, no later than 30
days after a Change in Control (as hereinafter defined), Raymond shall
contribute assets in an amount equal to all amounts deferred under the
Plan to a grantor trust of which Raymond shall be the grantor, and the
Board shall not amend, suspend or discontinue any Deferred Compensation
Account under the Plan without the express written consent of the
affected Participants. As used in this Plan, "Change of Control" shall
mean a change of control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 as
in effect on the date of this Agreement or, if Item 6(e) is no longer
in effect, any regulations issued by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 which serves
similar purposes; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if and when:
<PAGE>
(a) any "person" (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) is or becomes a
beneficial owner, directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of
the Company's then outstanding securities; or
(b) individuals who on March 24, 1997 constituted the Board
(together with any new directors whose election by such Board,
or whose nomination for election by the shareholders of the
Company, was approved by a vote of a majority of the directors
of the Company then still in office who were either directors on
March 24, 1997 or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the Board then in office; or
(c) the stockholders of the Company approve any transaction or
series of transactions under which the Company is merged or
consolidated with any other company, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 75% of
the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
Notwithstanding anything to the contrary in the Plan, with respect to
any Participant who is a Director and who is not re-elected to the
Board as the result of an actual or threatened proxy contest, Raymond
shall contribute (no later than 30 days after the date on which such
Participant is not re-elected to the Board) assets in an amount equal
to all amounts deferred under the Plan by such Participant to a grantor
trust of which Raymond shall be the grantor, and the Board shall not
amend, suspend or discontinue the Plan in any manner that would affect
such Participant without the express written consent of such
Participant.
3.0 ADMINISTRATION 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.
<PAGE>
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.
<PAGE>
Exhibit 11
THE RAYMOND CORPORATION AND SUBSIDIARIES
Exhibit 11: Statement Re: Computation of Per-Share Earnings
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994
---- ---- ----
(In thousands except per share data.)
<S> <C> <C> <C>
Primary
Average Shares Outstanding 7,524 7,177 6,984
Net effect of dilutive stock
options based on the treasury
stock method using average
market price 47 67 71
------- ------- -------
Total 7,571 7,244 7,055
======= ======= =======
Net Income $15,019 $13,074 $ 9,727
======= ======= =======
Per Share Amount (1) $ 1.98 $ 1.80 $ 1.38
======= ======= =======
Fully Diluted:
Average Shares Outstanding 7,524 7,177 6,984
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 49 72 77
Assumed conversion of 6.5%
convertible subordinated
debentures (62.2379 shs./$1000) 3,103 3,427 3,579
------- ------- -------
Total Outstanding 10,676 10,676 10,640
======= ======= =======
Net Income: $15,019 $13,074 $ 9,727
Add 6.5% convertible subordinated
debenture interest, net of
federal tax effect: 2,134 2,333 2,467
------- ------- -------
Net Income $17,153 $15,407 $12,194
======= ======= =======
Per Share Amount $ 1.61 $ 1.44 $ 1.15
======= ======= =======
</TABLE>
- -----------
(1) Primary per share amounts of $2.00, $1.82 and $1.39 for 1996, 1995 and 1994
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 21
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>
Associated Material Handling Industries, Inc. 70(b) Illinois
Dockstocker Corporation 100(b) New York
(Subsidiary of Raymond Sales Corporation)
Heubel Material Handling, Inc. 86(c) Missouri
(Subsidiary of Raymond Sales Corporation)
G.N. Johnston Equipment Co. Ltd. 74(b) Canada
(Subsidiary of R.H.E. Ltd.)
Pengate Handling Systems, Inc. 99 (c) Pennsylvania
(Subsidiary of Raymond Sales Corporation)
Raymond Accounts Management, Inc. 100(b) New Jersey
(Subsidiary of Raymond Sales Corporation)
The Raymond Export Corporation 100(b) U.S. Virgin Islands
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 Sales Corporation 100(b) New York
Raymond Transportation Corporation 100(b) New York
Robert Abel & Co., Inc. 55(c) Massachusetts
(Subsidiary of Raymond Sales Corporation)
Welch Equipment Company, Inc. 77(c) Colorado
(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>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-63806) pertaining to The Raymond Corporation Savings Plan of our
report dated February 7, 1997, with respect to the consolidated financial
statements and schedules of The Raymond Corporation and subsidiaries included in
the Annual Report (Form 10-K) for the year ended December 31, 1996.
/s/ Ernst & Young LLP
Syracuse, New York
April 10, 1997
<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 1996 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 1st day of March, 1997.
/s/ Ross K. Colquhoun
- -------------------------------------- ---------------------------------
Ross K. Colquhoun, George G. Raymond, Jr.,
Chairman of the Board, Chief Executive Director
Officer and Director
/s/ James J. Malvaso /s/ Arthur M. Richardson
- -------------------------------------- ---------------------------------
James J. Malvaso . Arthur M. Richardson, Director
President, Chief Operating Officer
and Director
/s/ James F. Matthews /s/ Dr. M. Richard Rose
- -------------------------------------- ---------------------------------
James F. Matthews, Director Dr. M. Richard Rose, Director
/s/ John E. Mott /s/ John V. Sponyoe
- -------------------------------------- ---------------------------------
John E. Mott, Director John V. Sponyoe, Director
/s/ Michael R. Porter /s/ Michael O. Womack
- -------------------------------------- ---------------------------------
Michael R. Porter, Director Michael O. Womack, Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the December
31, 1996 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-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 12,420
<SECURITIES> 0
<RECEIVABLES> 52,413
<ALLOWANCES> 1,637
<INVENTORY> 47,204
<CURRENT-ASSETS> 129,092<F1>
<PP&E> 69,735
<DEPRECIATION> 41,207
<TOTAL-ASSETS> 322,938
<CURRENT-LIABILITIES> 54,856<F1>
<BONDS> 120,024
0
0
<COMMON> 12,423
<OTHER-SE> 116,250
<TOTAL-LIABILITY-AND-EQUITY> 322,938
<SALES> 289,643
<TOTAL-REVENUES> 308,807
<CGS> 226,233
<TOTAL-COSTS> 233,667
<OTHER-EXPENSES> 49,677
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,054
<INCOME-PRETAX> 23,301
<INCOME-TAX> 8,282
<INCOME-CONTINUING> 15,019
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,019
<EPS-PRIMARY> 2.00
<EPS-DILUTED> 1.61
<FN>
<F1> Reflects current portion of Manufacturing and Distribution operations only
as accounts for Financial Services are presented in a non-classified format.
</FN>
</TABLE>
