FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition period from __ to __
Commision file number 0-18110
Gehl Company
(Exact name of registrant as specified in its charter)
Wisconsin 39-0300430
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
143 Water Street, West Bend, WI 53095
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (414) 334-9461
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
(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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X]
Aggregate market value of voting stock held by non-affiliates of the
registrant: $38,705,166 at February 22, 1995.
Number of shares outstanding of each of the registrant's classes of
common stock, as of February 22, 1995:
Class Shares Outstanding
Common Stock, $.10 Par Value 6,169,523
DOCUMENTS INCORPORATED BY REFERENCE
Gehl Company 1994 Annual Report to Shareholders (Parts I and II)
Gehl Company Proxy Statement for the 1995 Annual Meeting of Shareholders
(to be filed with the Commission under Regulation 14A within 120
days after the end of the registrant's fiscal year and, upon such
filing, to be incorporated by reference into Part III)
<PAGE>
GEHL COMPANY
_________________
INDEX TO
ANNUAL REPORT ON FORM 10-K
For The Year Ended December 31, 1994
Page
Part I
Item 1 Business . . . . . . . . . . . . . . . 1
Item 2 Properties . . . . . . . . . . . . . . 7
Item 3 Legal Proceedings . . . . . . . . . . . 8
Item 4 Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . 8
Executive Officers of the Registrant . 9
Part II
Item 5 Market for Registrant's Common Equity and Related
Shareholder Matters . . . . . . . . . . 11
Item 6 Selected Financial Data . . . . . . . . 11
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations . . 11
Item 8 Financial Statements and Supplementary Data . . 11
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 11
Part III
Item 10 Directors and Executive Officers of the
Registrant . . . . . . . . . . . . . . 12
Item 11 Executive Compensation . . . . . . . . 12
Item 12 Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . 12
Item 13 Certain Relationships and Related Transactions 12
Part IV
Item 14 Exhibits, Financial Statement Schedules, and
Reports on Form 8-K . . . . . . . . . . 13
Signatures . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
Part I
Item 1. Business
Overview
Gehl Company (the "Company" or "Gehl") designs, manufactures, distributes,
sells and finances equipment used in the agricultural equipment and the light
construction equipment industries. The Company's agricultural segment ("Gehl
Agriculture") has manufactured agricultural implements for 136 years, and
today markets a broad range of equipment used primarily in the dairy and
livestock industries, including haymaking, forage harvesting, materials
handling (skid steer loaders and attachments), manure handling and feedmaking
equipment. The Company believes that it is currently the largest non-tractor
agricultural equipment manufacturer in North America. The Company's
construction segment ("Gehl Construction") manufactures and markets skid steer
loaders, rough-terrain telescoping-boom forklifts and asphalt pavers used by
contractors, sub-contractors, owner operators and municipalities.
Equipment for Gehl Agriculture is manufactured in plants in Wisconsin,
Pennsylvania and South Dakota and equipment for Gehl Construction is
manufactured in two South Dakota facilities. The Company was founded in 1859
and was incorporated in the State of Wisconsin in 1890.
Business Segments
The Company operates in two business segments, agriculture and
construction. The following table shows certain information relating to the
Company's operations by industry segment:
(dollars in thousands)
Year Ended December 31,
1992 1993 1994
Amount % Amount % Amount %
Net sales:
Gehl Agri-
culture $ 91,223 70.3% $ 93,931 68.5% $ 94,824 64.7%
Gehl Con-
struction 38,471 29.7 43,287 31.5 51,796 35.3
-------- ----- -------- ----- ------- -----
Total $129,694 100% $137,218 100% $146,620 100%
======== ===== ======== ===== ======== =====
Income (loss
from
operations:
Gehl Agri-
culture $(4,393) 64.0% $ 5,509 75.1% $ 4,419 34.1%
Gehl Con-
struction (2,473) 36.0 1,830 24.9 8,542 65.9
-------- ----- -------- ----- -------- -----
Total $(6,866) 100% $ 7,339 100% $ 12,961 100%
======== ===== ======== ===== ======== =====
The Company had no intersegment sales or transfers during the years set forth
above. For segment information with respect to identifiable assets,
depreciation/amortization and capital expenditures for the agriculture and
construction markets, see Note 12 of "Notes to Consolidated Financial
Statements", included on Page 24 of the Gehl Company 1994 Annual Report to
Shareholders, which page is incorporated by reference herein.
Gehl Agriculture
Products:
Gehl Agriculture markets equipment in five product areas.
1. Haymaking - Gehl's haymaking line includes a broad range of products
used to harvest and process hay crops for livestock feed. The Company
offers disc mowers, a wide range of pull-type disc and sickle mower
conditioners, hay rakes and fixed-chamber and variable-chamber round
balers.
2. Forage Harvesting - The Company believes that it currently
manufactures and sells one of the industry's most complete lines of
forage harvesting equipment, including forage harvesters, wagons and
blowers.
3. Materials Handling - Gehl Agriculture's materials handling line
consists of eight different models of skid steer loaders and the Dyna-
Handler[R] introduced in 1993. The skid steer loader is a compact,
fixed-wheel four-wheel drive unit typically equipped with a bucket or
fork and is used for moving a variety of material. The Dyna-Handler
[R] is a rough-terrain telescoping-boom forklift with digging
capabilities. The skid steer loader and Dyna-Handler[R] are marketed by
both Gehl Agriculture and Gehl Construction.
4. Manure Handling - Gehl offers a broad range of manure spreaders,
including the Scavenger[R] II. The Scavenger[R] II "V-Tank" side-
discharge manure spreader incorporates a hydraulically controlled
square tube auger which allows the spreader to handle a wide range of
semi-liquid waste products, including municipal sludge. For handling
mostly solid manure, the Company also markets five models of rear-
discharge box spreaders.
5. Feedmaking - The Company believes that it offers the broadest line of
portable feedmaking equipment in the industry. Gehl Agriculture
currently offers the Gehl Mix-All[R] line of grinder mixers and roller
mixers and a line of mixer feeders and a feeder wagon for both mixing
feed rations and delivery to livestock feeders.
Marketing and Distribution:
In North America, Gehl's agricultural equipment is sold through
approximately 719 geographically dispersed dealers (with 784 outlets). Gehl
Agriculture also markets products through 27 distributors in Europe, the
Middle East, the Pacific Rim and Latin America. The Company has no Company-
owned dealers and its dealers may sell equipment produced by other
agricultural equipment manufacturers.
It has been and remains the Company's objective to increase the share of
Gehl products sold by a Gehl dealer. Gehl Agriculture is not dependent for
its sales on any specific dealer or group of dealers. The top ten dealers and
distributors in Gehl Agriculture accounted for approximately 7% of the
Company's sales for the year ended December 31, 1994 and no one dealer or
distributor accounted for over 1% of the Company's sales during that period.
Sales of the skid steer loader product line by Gehl Agriculture accounted for
more than 10% of the Company's net sales in 1992, 1993 and 1994.
The Company, which currently has 108 agricultural dealers in Canada,
believes that the dairy and livestock regions of Canada, especially the
Provinces of Alberta, Ontario and Quebec, present an opportunity for the
Company to expand its agricultural equipment sales.
The Company provides various forms of support for its dealer network,
including sales and service training. The Company also provides floor plan
and retail finance support for products sold by its dealers in the United
States and Canada.
The Company employs district and regional sales managers to assist its
agricultural dealers by providing training, equipment demonstrations and
assistance with sales, warranty and servicing matters. The Company currently
operates three service parts distribution centers located in: Memphis,
Tennessee; Syracuse, New York; and Minneapolis, Minnesota. The Company also
contracts for two service parts distribution locations in Rockwood, Ontario
and Saskatoon, Saskatchewan.
Industry and Competition:
The agricultural equipment industry has seen significant consolidation and
retrenchment since 1980. This has served to reduce the total number of
competitors, to strengthen certain major competitors, and to reduce the
strength of certain other companies in the industry. The Company competes
within the agricultural equipment industry based primarily on price, quality,
service and distribution.
The agricultural equipment markets in North America are highly competitive
and require substantial capital outlays. The Company has four major
competitors as well as numerous other limited line manufacturers and
importers. The largest manufacturers in the agricultural equipment industry,
the Company's major competitors, generally produce tractors and combines as
well as a full line of tillage and planting equipment. Such manufacturers
also market, to varying degrees, haymaking, forage harvesting, materials
handling, manure handling and/or feedmaking equipment, the areas in which the
Company's agricultural products are concentrated. Except for one competitor,
no other single competitor competes with the Company in each of its product
lines. The Company believes that it is the only non-tractor manufacturer in
the industry that produces equipment in each of these product lines. Smaller
manufacturers which compete with the Company produce only a limited line of
specialty items and often compete only in regional markets.
Gehl Agriculture primarily serves the dairy and livestock industries.
Compared to a more volatile period in the late 1980's through 1992, milk
prices, cash income, land values, and the general economy were more favorable
and stable for the dairy farmer in 1993 and 1994. These more favorable
conditions and lower debt to equity ratios than generally experienced in most
of the 1980's led to increased buying by farmers of agriculture equipment in
1993 and 1994. There can be no assurance, however, that these favorable
trends will continue.
Approximately 80% of the Company's agricultural dealers also carry the
tractor and combine product lines of a major manufacturer. In addition to
selling the tractors and combines of a major manufacturer, many of these
dealers carry the major manufacturer's entire line of products, some of which
directly compete with the products offered by Gehl Agriculture. Gehl
Agriculture's dealers also market equipment manufactured by limited line
manufacturers which compete with specific product lines offered by the
Company.
Gehl Agriculture's primary markets outside of North America are in Europe,
the Pacific Rim and increasingly South and Central America. In these markets
the Company competes with both agricultural manufacturers from the United
States, some of which have manufacturing facilities in foreign countries, and
foreign manufacturers. The Company does not believe, however, that it is
presently a significant competitor in any of these foreign markets.
Gehl Construction
Products:
Gehl Construction markets equipment in the following three product areas:
1. Skid Steer Loaders - Gehl Construction offers four models of skid
steer loaders which feature a choice of hand-operated controls or hand
and foot controls. The skid steer loader, with its fixed-wheel four-
wheel drive, is used principally for materials handling duties. The
skid steer loader may also be used with a variety of attachments,
including dirt, snow and cement buckets, pallet forks and
hydraulically-operated devices such as cold planers, backhoes, brooms,
trenchers, snowblowers, industrial grapples, tree diggers, concrete
breakers and augers.
2. Rough-Terrain Forklifts - Gehl markets five models of Dynalift[R] rough-
terrain telescoping-boom forklifts and one model of the Dyna-Handler[R],
a rough-terrain telescoping-boom forklift with digging capabilities.
These forklifts are designed to handle heavy loads (up to 10,000
pounds) reaching horizontally and vertically for use by a variety of
customers, including masons, roofers and building contractors.
3. Asphalt Paving Equipment - Four models of Power Box[R] pavers are
marketed by Gehl. These pavers allow variable paving widths from 4
1/2 to 13 feet and are used for both commercial and municipal jobs
such as county and municipal road, sidewalk, golf cart path, jogging
trail, parking lot, driveway, trailer court and tennis court
preparation.
Marketing and Distribution:
The Company maintains a separate distribution system for Gehl
Construction. The Company markets its equipment in North America through 123
independent dealers (with 217 outlets) and worldwide through 20 distributors.
The top ten dealers and distributors in Gehl Construction accounted for
approximately 15% of the Company's sales for the year ended December 31, 1994;
however, no single dealer or distributor accounted for more than 4% of the
Company's sales for that period. Sales of the skid steer loader product line
by Gehl Construction accounted for more than 10% of the Company's net sales in
1992, 1993 and 1994. Sales of the Dynalift[R] product line accounted for more
than 10% of the Company's net sales in 1993 and 1994.
As with Gehl Agriculture, the Company believes that maintenance and
expansion of its dealer network is important to its success in the light
construction equipment market. Gehl Construction provides various forms of
support for its dealers, including sales and service training, and, in the
United States and Canada, floor plan financing for its dealers and retail
financing for both its dealers and their customers. The light construction
equipment dealers in North America are also supported by district sales
managers who provide a variety of services, including training, equipment
demonstrations and sales, warranty and service assistance.
Industry and Competition:
Gehl Construction's product lines face competition in each of their
markets. In general, each line competes with a small group of from seven to
twelve different companies. No one company competes directly with Gehl
Construction across all of its product lines. In the compact asphalt paving
equipment market niche Gehl serves, the Company believes it has the number 1
or 2 market share. In the rough-terrain telescoping-boom forklift market, the
Company believes it and four other competitors share at least 75% of the
market among them. In the skid steer loader product market three other
companies share over 80% of the market. The Company believes that it shares a
greater portion of the balance of the skid steer loader market than does any
of its remaining competitors. The Company competes within the light
construction equipment markets based primarily on price, quality, service and
distribution.
Gehl Construction's primary markets outside of North America are in
Europe, Latin America, the Middle East and the Pacific Rim. The Company
believes it is a significant competitor in the skid steer loader market in
Western Europe.
Backlog
The backlog of unfilled equipment orders (which orders are subject to
cancellation in certain circumstances) as of December 31, 1994 was $60.2
million versus $38.5 million at December 31, 1993. Virtually all orders in
the backlog at December 31, 1994 should be shipped in 1995. The higher
backlog at December 31, 1994 was due primarily to increased orders from Gehl
Construction dealers.
As the Company has broadened its Gehl Agriculture product offerings and
diversified into products serving the light construction equipment market, the
Company has been successful in reducing the seasonality of its sales.
However, some sales seasonality still remains, primarily in April through
June, the Company's second fiscal quarter. The Company's first fiscal quarter
in January through March has traditionally been its weakest, with the Company
frequently incurring a first quarter loss. Because the haymaking and forage
equipment products are primarily retailed by the Company's dealers in the
Spring, Summer, and early Fall, the Company's floor plan financed accounts
receivable generally reach a seasonal peak in early Summer and a post-seasonal
low in late Fall.
Floor Plan and Retail Financing
Floor Plan Financing:
The Company, as is typical in the industry, generally provides floor plan
financing for its dealers. Products shipped to dealers under the Company's
floor plan financing program are recorded by the Company as sales and the
dealers' obligations to the Company are reflected as accounts receivable.
The Company provides interest-free floor plan financing to its dealers, in
Gehl Agriculture generally for up to one year and in Gehl Construction for
varying periods of time generally up to nine months. Gehl dealers who sell
products utilizing floor plan financing are required to make immediate payment
for those products to the Company upon sale or delivery to the retail
customer. At the end of the interest-free period, if the equipment remains
unsold to retail customers, the Company generally charges interest to the
dealer at a rate of between 1.5% to 3.0% above the prime rate or on occasion
provides interest-free extensions of up to six months upon payment by the
dealer of curtailments generally between 10% to 20% of the original invoice
price to the dealer. This type of floor plan equipment financing accounts for
approximately 90% of Gehl's accounts receivable, with all such floor planned
receivables required to be secured by a first priority security interest in
the equipment sold.
Retail Financing:
The Company also provides retail financing primarily to facilitate the
sale of Gehl equipment to end users. Additionally, a number of Gehl dealers
purchase equipment which is held for rental to the public. The Company also
provides retail financing to such dealers in connection with these purchases.
Retail financing in the United States is provided by the Company through Gehl
Finance[R], the Company's finance division. Retail financing is provided in
Canada by a third party at rates subsidized by the Company. The Company does
not offer or sponsor retail financing outside of North America.
The Company maintains arrangements with third parties pursuant to which
the Company sells with recourse certain of the Company's finance contracts.
The finance contracts require periodic installments of principal and interest
over periods of up to 60 months; interest rates are based on market
conditions. The majority of these contracts have maturities of 36 to 48
months. The Company continues to service the finance contracts it sells,
including cash collections. See Note 2 of "Notes to Consolidated Financial
Statements," Page 19, and "Management's Discussion and Analysis," Page 13 of
the Gehl Company 1994 Annual Report to Shareholders, which pages are
incorporated by reference herein.
Employees
As of December 31, 1994, the Company had 928 employees, of which 631 were
hourly employees and 297 were salaried employees. At the production
facilities in West Bend, Wisconsin, one of four Gehl production facilities,
321 hourly employees are covered by a collective bargaining agreement with the
United Paperworkers International Union (formerly the Allied Industrial
Workers) which expires December 31, 1995. None of the remaining employees of
the Company are represented by unions. There have been no labor-related work
stoppages at the Company's facilities during the past twenty-one years.
Manufacturing
The Company believes that its present manufacturing facilities are
sufficient to provide adequate capacity for its operations for the foreseeable
future.
Component parts needed in the manufacture of the Company's equipment are
primarily produced by the Company. The Company obtains raw materials
(principally steel), component parts that it does not manufacture, most
notably engines and hydraulics, and supplies from third party suppliers. All
such materials and components used are available from a number of sources.
The Company is not dependent on any supplier that cannot be readily replaced
and has not experienced difficulty in obtaining necessary purchased materials.
In addition to the equipment it manufacturers, the Company markets
equipment acquired from third party suppliers. Products acquired from these
suppliers accounted for less than 10% of the Company's sales in 1994.
Research and Development
The Company attempts to maintain and strengthen its market position
through internal new product development and incremental improvement to
existing products. Products obtained through acquisition have generally
undergone redesign by the Company to enhance their marketability. This
redesign was in some cases major.
The Company's research and development is devoted to developing new
products that meet specific customer needs and to devising incremental
improvements to existing products. Research and development performed by the
Company includes the designing and testing of new and improved products as
well as the fabrication of prototypes. The Company expended approximately
$1.2 million, $1.0 million and $1.7 million on research and development for
the years ended December 31, 1994, 1993 and 1992, respectively.
Patents and Trademarks
The Company possesses rights under a number of domestic and foreign
patents and trademarks relating to its products and business. While the
Company considers the patents and trademarks important in the operation of its
business, including the Gehl[R] name and the group of patents relating to the
Scavenger[R] II manure spreader, the business of the Company is not dependent on
any single patent or trademark or group of patents or trademarks.
Export Sales
Information regarding the Company's export sales is included in Note 12 of
"Notes to Consolidated Financial Statements," Pages 24 through 25, of the Gehl
Company 1994 Annual Report to Shareholders, which pages are incorporated by
reference herein.
Item 2. Properties
The following table sets forth certain information as of December 31,
1994, relating to the Company's principal manufacturing facilities. See
"Management's Discussion and Analysis - Liquidity and Capital Resources,
Capital Expenditures," Page 12, of the Gehl Company 1994 Annual Report to
Shareholders, which page is incorporated by reference herein.
Approximate
Floor Area
in Square Owned or
Feet Leased(1) Principal Uses
West Bend, WI 450,000 Owned General offices and
engineering, research and
development and manufacture
of products for Gehl
Agriculture
West Bend, WI 19,000 Leased Manufacture of products for
Gehl Agriculture
Madison, SD 110,000 Owned Manufacture of skid steer
loaders for Gehl Agriculture
and Gehl Construction
Lebanon, PA 170,000 Owned(2) Manufacture of products for
Gehl Agriculture
Yankton, SD 68,000 Owned Manufacture of products for
Gehl Construction
(1) For information regarding collateral pledges and the Company's lease
commitments, see Notes 5 and 10 of "Notes to Consolidated Financial
Statements", included on Pages 20 and 23, of the Gehl Company 1994
Annual Report to Shareholders, which pages are incorporated by
reference herein.
(2) This facility is financed with the proceeds from the sale of
industrial development bonds maturing in 2010.
The Company also operates three service parts centers located in:
Memphis, Tennessee; Syracuse, New York; and Minneapolis, Minnesota. The
Company leases these facilities, except for the Minneapolis center, which
is owned.
Item 3. Legal Proceedings.
The Company is a defendant from time to time in actions for product
liability and other matters arising out of its ordinary business operations.
The Company believes that the actions presently pending will not have a
material adverse effect on its consolidated financial position or results of
operations. To the Company's knowledge, there are no material legal
proceedings to which any director, officer, affiliate or more than 5%
shareholder of the Company (or any associate of the foregoing persons) is a
party adverse to the Company or any of its subsidiaries or has a material
interest adverse to the Company or its subsidiaries.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the quarter
ended December 31, 1994.
<PAGE>
Executive Officers of the Registrant.
Set forth below is certain information concerning the executive officers
of the Company as of March 1, 1995:
Name, Age and Position Business Experience
William D. Gehl, 48, Mr. Gehl has served as
President, Chief President and Chief Executive
Executive Officer Officer of the Company since November, 1992 and
and Director has served as a director of the Company since
1987. From January, 1990 until joining the
Company, Mr. Gehl served as Executive Vice
President, Chief Operating Officer, General
Counsel and Secretary of The Ziegler Companies,
Inc. (a financial services holding company).
Mr. Gehl held various positions with The
Ziegler Companies from 1978 to 1990.
Victor A. Mancinelli, 51 Mr. Mancinelli has served as
Executive Vice President Executive Vice President and
and Chief Operating Chief Operating Officer of the Company since
Officer November, 1992. From 1990 to 1992, Mr.
Mancinelli served as Group Vice President of W.
H. Brady Co. From 1987 to 1990, Mr. Mancinelli
served as President and Chief Operating Officer
of Syracuse China Corp., a subsidiary of
Canadian Pacific Ltd. Prior to 1987, Mr.
Mancinelli served in a variety of management
positions with Cummins Engine Company, Inc.
John W. Gehl, 53, Mr. Gehl has served as Vice
Vice President, International President, International of the Company since
1992. Mr. Gehl joined the Company in 1962 and
has served as a Vice President of the Company
since 1977 and in a variety of positions in
marketing, manufacturing and strategic
planning. Mr. Gehl has been a director of the
Company since 1974.
Kenneth F. Kaplan, 49, Mr. Kaplan joined the Company
Vice President of Finance as Corporate Controller in
and Treasurer September, 1985, was elected Treasurer of the
Company in April, 1986 and was elected Vice
President of Finance and Treasurer in December,
1987.
Michael J. Mulcahy, 48, Mr. Mulcahy has served as
Vice President, Secretary General Counsel of the Company
and General Counsel since 1974 and became Secretary in 1977 and a
Vice President in 1986. Mr. Mulcahy has also
served, since 1988, as President of Equipco
Insurance Company, Ltd., which provides
liability insurance coverage for equipment
manufacturers, including the Company.
Richard J. Semler, 55, Mr. Semler has served in his
Vice President of current position with the
Data Systems Company since January, 1977.
Kenneth P. Hahn, 37, Mr. Hahn has served in his
Corporate Controller current position since joining the Company in
April, 1988. Mr. Hahn was elected as an
executive officer of the Company in April,
1994.
All officers of the Company are elected annually by the Board of
Directors following the Annual Meeting of Shareholders. The 1995 Annual
Meeting of Shareholders is currently scheduled for April 27, 1995. The
Company has employment agreements with William D. Gehl and Victor A.
Mancinelli pursuant to which they are to serve as President and Chief
Executive Officer of the Company and Executive Vice President and Chief
Operating Officer of the Company, respectively, through the expiration of the
agreements on November 23, 1995.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters.
Information required by this item is included on Pages 27 and 28 of the
Gehl Company 1994 Annual Report to Shareholders, which pages are hereby
incorporated herein by reference. As of February 22, 1995, shareholders of
record numbered 1,131. This number does not include shareholders who hold
Gehl Company stock in street name.
Item 6. Selected Financial Data.
Information required by this item is included on Page 26 of the Gehl
Company 1994 Annual Report to Shareholders, which page is hereby incorporated
herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Information required by this item is included on Pages 9 through 13 of
the Gehl Company 1994 Annual Report to Shareholders, which pages are hereby
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
Information required by this item is included on Page 8 and Pages 14
through 25 of the Gehl Company 1994 Annual Report to Shareholders, which pages
are hereby incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
There have been no changes in or disagreements with the Company's
accountants regarding accounting and financial disclosure required to be
reported pursuant to this item.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the
Registrant.
Pursuant to Instruction G, the information required by this item with
respect to directors is hereby incorporated herein by reference from the
caption entitled "Election of Directors" set forth in the Company's definitive
Proxy Statement for its 1995 Annual Meeting of Shareholders ("Proxy
Statement")<F1>. Information with respect to executive officers of the Company
appears at the end of Part I, Pages 9 and 10 of this Annual Report on Form
10-K.
Item 11. Executive Compensation.
Pursuant to Instruction G, the information required by this item is
hereby incorporated herein by reference from the captions entitled "Board of
Directors" and "Executive Compensation" set forth in the Proxy Statement;
provided, however, that the subsection entitled "Executive Compensation -
Report on Executive Compensation" shall not be deemed to be incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial
Owners and Management.
Pursuant to Instruction G, the information required by this item is
hereby incorporated by reference herein from the caption "Principal
Shareholders" set forth in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
There are no relationships or related transactions required to be
reported pursuant to this item.
<F1>
The Proxy Statement will be filed with the Commission pursuant to
Regulation 14A within 120 days after the end of the Company's fiscal year.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K.
(a) 1 and 2. Financial statements and financial
statement schedules.
Reference is made to the separate index to the Company's
consolidated financial statements and schedules contained
on Page 15 hereof.
3. Exhibits.
Reference is made to the separate exhibit index contained
on Pages 18 through 20 hereof.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during
the quarter ended December 31, 1994.
<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.
GEHL COMPANY
Date: March 7, 1995 By /s/ William D. Gehl
William D. Gehl,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ William D. Gehl President, Chief March 7, 1995
William D. Gehl Executive Officer and
Director (Principal
Executive Officer)
/s/ Kenneth F. Kaplan Vice President of March 7, 1995
Kenneth F. Kaplan Finance and Treasurer
(Principal Financial
and Accounting Officer)
/s/ John W. Findley Director March 7, 1995
John W. Findley
/s/ Peter A. Fischer Director March 7, 1995
Peter A. Fischer
/s/ John W. Gehl Director March 7, 1995
John W. Gehl
/s/ Arthur W. Nesbitt Director March 7, 1995
Arthur W. Nesbitt
/s/ Roger E. Secrist Director March 7, 1995
Roger E. Secrist
/s/ Richard G. Sim Director March 7, 1995
Richard G. Sim
<PAGE>
GEHL COMPANY
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
Page(s) in
Annual Report*
The following documents are filed as
part of this report:
(1)Financial Statements:
Report of Independent Accountants 8
Consolidated Statements of Income
for the three years ended
December 31, 1994 14
Consolidated Balance Sheets at
December 31, 1994 and 1993 15
Consolidated Statements of
Shareholders' Equity for the
three years ended December 31, 1994 16
Consolidated Statements of Cash
Flows for the three years ended
December 31, 1994 17
Notes to Consolidated Financial
Statements 18-25
* Incorporated by reference from the indicated pages of the Gehl
Company 1994 Annual Report to Shareholders.
Page in
Form 10-K
(2)Financial Statement Schedules:
Report of Independent Accountants
on Financial Statement Schedule 16
For the three years ended
December 31, 1994 --
Schedule VIII - Valuation and
Qualifying Accounts 17
All other schedules are omitted because they are not applicable
or the required information is shown in the financial statements
or notes thereto.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Gehl Company
Our audits of the consolidated financial statements referred to
in our report dated February 10, 1995 appearing on page 8 of the
1994 Annual Report to Shareholders of Gehl Company (which report
and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K) also included an
audit of the Financial Statement Schedule listed in Item 14(a) of
this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the
related consolidated financial statements.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
February 10, 1995
<PAGE>
GEHL COMPANY AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Additions
Balance Charged Charged Balance
at to Costs to Other at End
Period Description Beginning and Accounts Deductions of Year
of Year Expenses
Year Ended
December 31, Return &
1992 Allowances $ 115 $ - $ - $ - $ 115
Allowance for
Doubtful
Accounts-Trade
Receivables . . 1,108 137 - 318 927
Volume
Discounts . . . 3,673 1,464 - 2,501 2,636
______ ______ ______ ______ ______
Total $4,896 $1,601 $ - $2,819 $3,678
====== ====== ====== ====== ======
Allowances for
Doubtful
Accounts -
Retail
Contracts . . . $ 804 $1,521 $ - $1,893 $ 432
====== ====== ====== ====== ======
Inventory
Obsolescence
Reserve $1,825 $1,491 $ - $ 40 $3,276
====== ====== ====== ====== ======
Year Ended
December 31, Return &
1993 Allowances $ 115 $ - $ - $ - $ 115
Allowance for
Doubtful
Accounts-Trade
Receivables . . 927 1,473 - 557 1,843
Volume
Discounts . . . 2,636 2,117 - 2,645 2,108
______ ______ ______ ______ ______
Total $3,678 $3,590 $ - $3,202 $4,066
====== ====== ====== ====== ======
Allowances for
Doubtful
Accounts -
Retail
Contracts . . . $ 432 $ 599 $ - $ 381 $ 650
====== ====== ====== ====== ======
Inventory
Obsolescence
Reserve $3,276 $1,215 $ - $ 610 $3,881
====== ====== ====== ====== ======
Income Tax
Valuation
Allowance $ - $5,881 $ - $ - $5,881
====== ====== ====== ====== ======
Year Ended
December 31, Return &
1994 Allowances $ 115 $ - $ - $ - $ 115
Allowance for
Doubtful
Accounts-Trade
Receivables . . 1,843 (888) - 316 639
Volume
Discounts . . . 2,108 2,200 - 2,318 1,990
Product
Discontinuance - 1,600 - - 1,600
______ ______ ______ ______ ______
Total $4,066 $2,912 $ - $2,634 $4,344
====== ====== ====== ====== ======
Allowances for
Doubtful
Accounts -
Retail
Contracts . . . $ 650 $ 424 $ - $ 570 $ 504
====== ====== ====== ====== ======
Inventory
Obsolescence
Reserve $3,881 $1,523 $ - $1,352 $4,052
====== ====== ====== ====== ======
Income Tax
Valuation
Allowance $5,881 $ (900) $ - $ 509 $4,472
====== ====== ====== ====== ======
<PAGE>
GEHL COMPANY
INDEX TO EXHIBITS
Exhibit Number Document Description
(3.1) Restated Articles of Incorporation of Gehl Company
[Incorporated by reference to Exhibit 3.1 to the
Company's Form S-1 Registration Statement (Reg. No. 33-
31571)]
(3.2) Amendment to Gehl Company By-laws, dated February 24,
1995
(3.3) By-laws of Gehl Company, as amended
(4.1) Amended and Restated Loan and Security Agreement by and
between ITT Commercial Finance Corp. and Gehl Company and
its subsidiaries, dated October 1, 1994
(4.2) Common Stock Purchase Warrant, dated as of March 5, 1993,
from Gehl Company to State of Wisconsin Investment Board
[Incorporated by reference to Exhibit 4.14 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1992]
(4.3) Loan Agreement between Pennsylvania Economic Development
Financing Authority and Gehl Company, dated as of
September 1, 1990 [Incorporated by reference to Exhibit
4.1 to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 29, 1990]
(4.4) First Supplemental Loan Agreement between Pennsylvania
Economic Development Financing Authority and Gehl
Company, dated as of April 23, 1993 [Incorporated by
reference to Exhibit 4.3 to the Company's Quarterly
Report on Form 10-Q for the quarter ended April 3, 1993]
(4.5) Second Supplemental Loan Agreement between Pennsylvania
Economic Development Financing Authority and Gehl
Company, dated as of February 1, 1994 [Incorporated by
reference to Exhibit 4.10 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1993]
(4.6) Mortgage and Security Agreement by and between Gehl
Company and First Pennsylvania Bank N.A., dated as of
September 1, 1990 [Incorporated by reference to Exhibit
4.2 to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 29, 1990]
(10.1)* Form of Supplemental Retirement Benefit Agreement between
Gehl Company and Messrs. J.W. Gehl, Hahn, Kaplan, Mulcahy
and Semler [Incorporated by reference to Exhibit 10.4 to
the Company's Form S-1 Registration Statement (Reg. No.
33-31571)]
(10.2)* Employment Agreement between Gehl Company and William D.
Gehl, dated as of December 29, 1992 [Incorporated by
reference to Exhibit 10.2 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1993]
(10.3)* Employment Agreement by and between Victor A. Mancinelli
and Gehl Company, dated as of December 29, 1992
[Incorporated by reference to Exhibit 10.3 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993]
(10.4)* Supplemental Retirement Benefit Agreement by and between
William D. Gehl and Gehl Company, as amended
(10.5)* Supplemental Retirement Benefit Agreement by and between
Victor A. Mancinelli and Gehl Company, as amended
(10.6)* Gehl Savings Plan, as amended
(10.7)* Gehl Company Retirement Income Plan "B", as amended
(10.8)* Gehl Company 1987 Stock Option Plan, as amended
[Incorporated by reference to Exhibit 4.1 to the
Company's Form S-8 Registration Statement (Reg. No. 33-
38392)]
(10.9)* Form of Stock Option Agreement used in conjunction with
the Gehl Company 1987 Stock Option Plan [Incorporated by
reference to Exhibit 4.2 to the Company's Form S-8
Registration Statement (Reg. No. 33-38392)]
(10.10) Technical Assistance and License Agreement by and between
Gehl Company and Rheiner Maschinenfabrik Windhoff AG,
dated as of May 4, 1985, as amended [Incorporated by
reference to Exhibit 10.13 to the Company's Form S-1
Registration Statement (Reg. No. 33-31571)]
(10.11) Distributorship Agreement by and between Gehl Company and
Gehl GmbH, dated as of April 15, 1985 [Incorporated by
reference to Exhibit 10.16 to the Company's Form S-1
Registration Statement (Reg. No. 33-31571)]
(10.12) Trademark Licensing Agreement by and between Gehl Company
and Gehl GmbH, dated as of April 15, 1985 [Incorporated
by reference to Exhibit 10.17 to the Company's Form S-1
Registration Statement (Reg. No. 33-31571)]
(13) Portions of the Gehl Company 1994 Annual Report to Share-
holders that are incorporated by reference herein
(21) Subsidiaries of Gehl Company
(23) Consent of Price Waterhouse
(27) Financial Data Schedule
(99) Proxy Statement for 1995 Annual Meeting of Shareholders
(To be filed with the Securities and Exchange Commission
under Regulation 14A within 120 days after the end of the
Company's fiscal year; except to the extent incorporated
by reference, the Proxy Statement for the 1995 Annual
Meeting of Shareholders shall not be deemed to be filed
with the Securities and Exchange Commission as part of
this Annual Report or Form 10-K)
__________________
* A management contract or compensatory plan or arrangement.
Fourth
Amendment
of the
Restated 2/22/91
By-Laws
of
GEHL COMPANY
(A Wisconsin Corporation)
Effective immediately, Section 3.01 shall be revised to read as follows:
"3.01. General Powers and Number. All corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
corporation shall be managed under the direction of its Board of Directors.
The number of directors of the corporation shall be eight (8), divided into
three (3) classes: Class I - three (3) directors; Class II - three (3)
directors; Class III - two (2) directors."
Approved at 02/24/95 Board Meeting
(Restated/Approved 2/22//91)
(As Amended 2/24/95)
BY-LAWS
OF
GEHL COMPANY
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may have
such principal and other business offices, either within or without the State
of Wisconsin, as the Board of Directors may designate or as the business of
the corporation may require from time to time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to be
maintained in the State of Wisconsin may be, but need not be, identical with
the principal office in the State of Wisconsin, and the address of the
registered office may be changed from time to time by the Board of Directors.
The business office of the registered agent of the corporation shall be
identical to such registered office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of shareholders (the
"Annual Meeting") shall be held each year at 7:00 P.M. (Central Time) on the
last Thursday in April, or at such other time and date as may be fixed by or
under the authority of the Board of Directors, for the purpose of electing
that number of directors equal to the number of directors in the class whose
term expires at the time of the Annual Meeting and for the transaction of such
other business as may properly come before the Annual Meeting in accordance
with Section 2.14 of these by-laws. If the day fixed for the Annual Meeting
is a legal holiday in the State of Wisconsin, such meeting shall be held on
the next succeeding business day. In fixing a meeting date for any Annual
Meeting, the Board of Directors may consider such factors as it deems relevant
within the good faith exercise of its business judgment.
2.02. Special Meetings.
(a) A special meeting of shareholders (a "Special Meeting") may be
called only by (i) the President or (ii) the Board of Directors and shall be
called by the President upon the demand, in accordance with this Section 2.02,
of the holders of record of shares representing at least 10% of all the votes
entitled to be cast on any issue proposed to be considered at the Special
Meeting.
(b) In order that the corporation may determine the shareholders
entitled to demand a Special Meeting, the Board of Directors may fix a record
date to determine the shareholders entitled to make such a demand (the "Demand
Record Date"). The Demand Record Date shall not precede the date upon which
the resolution fixing the Demand Record Date is adopted by the Board of
Directors and shall not be more than 10 days after the date upon which the
resolution fixing the Demand Record Date is adopted by the Board of Directors.
Any shareholder of record seeking to have shareholders demand a Special
Meeting shall, by sending written notice to the Secretary of the corporation
by hand or by certified or registered mail, return receipt requested, request
the Board of Directors to fix a Demand Record Date. The Board of Directors
shall promptly, but in all events within 10 days after the date on which a
valid request to fix a Demand Record Date is received, adopt a resolution
fixing the Demand Record Date and shall make a public announcement of such
Demand Record Date. If no Demand Record Date has been fixed by the Board of
Directors within 10 days after the date on which such request is received by
the Secretary, the Demand Record Date shall be the 10th day after the first
date on which a valid written request to set a Demand Record Date is received
by the Secretary. To be valid, such written request shall set forth the
purpose or purposes for which the Special Meeting is to be held, shall be
signed by one or more shareholders of record (or their duly authorized proxies
or other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative) and shall set forth all
information about each such shareholder and about the beneficial owner or
owners, if any, on whose behalf the request is made that would be required to
be set forth in a shareholder's notice described in paragraph (a)(ii) of
Section 2.14 of these by-laws.
(c) In order for a shareholder or shareholders to demand a Special
Meeting, a written demand or demands for a Special Meeting by the holders of
record as of the Demand Record Date of shares representing at least 10% of all
the votes entitled to be cast on any issue proposed to be considered at the
Special Meeting must be delivered to the corporation. To be valid, each
written demand by a shareholder for a Special Meeting shall set forth the
specific purpose or purposes for which the Special Meeting is to be held
(which purpose or purposes shall be limited to the purpose or purposes set
forth in the written request to set a Demand Record Date received by the
corporation pursuant to paragraph (b) of this Section 2.02), shall be signed
by one or more persons who as of the Demand Record Date are shareholders of
record (or their duly authorized proxies or other representatives), shall bear
the date of signature of each such shareholder (or proxy or other
representative), and shall set forth the name and address, as they appear in
the corporation's books, of each shareholder signing such demand and the class
and number of shares of the corporation which are owned of record and
beneficially by each such shareholder, shall be sent to the Secretary by hand
or by certified or registered mail, return receipt requested, and shall be
received by the Secretary within 70 days after the Demand Record Date.
(d) The corporation shall not be required to call a Special Meeting
upon shareholder demand unless, in addition to the documents required by
paragraph (c) of this Section 2.02, the Secretary receives a written agreement
signed by each Soliciting Shareholder (as defined below), pursuant to which
each Soliciting Shareholder, jointly and severally, agrees to pay the
corporation's costs of holding the Special Meeting, including the costs of
preparing and mailing proxy materials for the corporation's own solicitation,
provided that if each of the resolutions introduced by any Soliciting
Shareholder at such meeting is adopted, and each of the individuals nominated
by or on behalf of any Soliciting Shareholder for election as director at such
meeting is elected, then the Soliciting Shareholders shall not be required to
pay such costs. For purposes of this paragraph (d), the following terms shall
have the meanings set forth below:
(i) "Affiliate" of any Person (as defined
herein) shall mean any Person controlling,
controlled by or under common control with such
first Person.
(ii) "Participant" shall have the meaning assigned
to such term in Rule 14a-11 promulgated under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(iii) "Person" shall mean any individual,
firm, corporation, partnership, joint venture,
association, trust, unincorporated organization or
other entity.
(iv) "Proxy" shall have the meaning assigned to
such term in Rule 14a-1 promulgated under the Exchange
Act.
(v) "Solicitation" shall have the meaning
assigned to such term in Rule 14a-11 promulgated under
the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with
respect to any Special Meeting demanded by a
shareholder or shareholders, any of the following
Persons:
(A) if the number of shareholders signing
the demand or demands of meeting delivered to the
corporation pursuant to paragraph (c) of this
Section 2.02 is 10 or fewer, each shareholder
signing any such demand;
(B) if the number of shareholders signing
the demand or demands of meeting delivered to the
corporation pursuant to paragraph (c) of this
Section 2.02 is more than 10, each Person who
either (I) was a Participant in any Solicitation
of such demand or demands or (II) at the time of
the delivery to the corporation of the documents
described in paragraph (c) of this Section 2.02
had engaged or intended to engage in any
Solicitation of Proxies for use at such Special
Meeting (other than a Solicitation of Proxies on
behalf of the corporation); or
(C) any Affiliate of a Soliciting
Shareholder, if a majority of the directors then
in office determine, reasonably and in good faith,
that such Affiliate should be required to sign the
written notice described in paragraph (c) of this
Section 2.02 and/or the written agreement
described in this paragraph (d) in order to
prevent the purposes of this Section 2.02 from
being evaded.
(e) Except as provided in the following sentence, any
Special Meeting shall be held at such hour and day as may be
designated by whichever of the President or the Board of
Directors shall have called such meeting. In the case of any
Special Meeting called by the President upon the demand of
shareholders (a "Demand Special Meeting"), such meeting shall be
held at such hour and day as may be designated by the Board of
Directors; provided, however, that the date of any Demand Special
Meeting shall be not more than 70 days after the Meeting Record
Date (as defined in Section 2.05 hereof); and provided further
that in the event that the directors then in office fail to
designate an hour and date for a Demand Special Meeting within 10
days after the date that valid written demands for such meeting
by the holders of record as of the Demand Record Date of shares
representing at least 10% of all the votes entitled to be cast on
each issue proposed to be considered at the Special Meeting are
delivered to the corporation (the "Delivery Date"), then such
meeting shall be held at 2:00 P.M. (Central Time) on the 100th
day after the Delivery Date or, if such 100th day is not a
Business Day (as defined below), on the first preceding Business
Day. In fixing a meeting date for any Special Meeting, the
President or the Board of Directors may consider such factors as
he or it deems relevant within the good faith exercise of his or
its business judgment, including, without limitation, the nature
of the action proposed to be taken, the facts and circumstances
surrounding any demand for such meeting, and any plan of the
Board of Directors to call an Annual Meeting or a Special Meeting
for the conduct of related business.
(f) The corporation may engage regionally or
nationally recognized independent inspectors of elections to act
as an agent of the corporation for the purpose of promptly
performing a ministerial review of the validity of any purported
written demand or demands for a Special Meeting received by the
Secretary. For the purpose of permitting the inspectors to
perform such review, no purported demand shall be deemed to have
been delivered to the corporation until the earlier of (i) 5
Business Days following receipt by the Secretary of such
purported demand and (ii) such date as the independent inspectors
certify to the corporation that the valid demands received by the
Secretary represent at least 10% of all the votes entitled to be
cast on each issue proposed to be considered at the Special
Meeting. Nothing contained in this paragraph (f) shall in any
way be construed to suggest or imply that the Board of Directors
or any shareholder shall not be entitled to contest the validity
of any demand, whether during or after such 5 Business Day
period, or to take any other action (including, without
limitation, the commencement, prosecution or defense of any
litigation with respect thereto).
(g) For purposes of these by-laws, "Business Day"
shall mean any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of Wisconsin are
authorized or obligated by law or executive order to close.
2.03. Place of Meeting. The Board of Directors or
the President may designate any place, either within or without
the State of Wisconsin, as the place of meeting for any Annual
Meeting or for any Special Meeting, or for any postponement
thereof. If no designation is made, the place of meeting shall
be the principal office of the corporation in the State of
Wisconsin. Any meeting may be adjourned to reconvene at any
place designated by vote of the Board of Directors or by the
President.
2.04. Notice of Meeting. Written or printed notice
stating the place, day and hour of any Annual Meeting or Special
Meeting shall be delivered not less than 10 days (unless a longer
period is required by the Wisconsin Business Corporation Law) nor
more than 70 days, before the date of such meeting, either
personally or by mail, by or at the direction of the Secretary to
each shareholder of record entitled to vote at such meeting and
to other shareholders as may be required by the Wisconsin
Business Corporation Law. In the event of any Demand Special
Meeting, such notice of meeting shall be sent not more than 30
days after the Delivery Date. If mailed, notice pursuant to this
Section 2.04 shall be deemed to be effective when deposited in
the United States mail, addressed to the shareholder at his
address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid. Unless otherwise
required by the Wisconsin Business Corporation Law or the
restated articles of incorporation, a notice of an Annual Meeting
need not include a description of the purpose for which the
meeting is called. In the case of any Special Meeting, (a) the
notice of meeting shall describe any business that the Board of
Directors shall have theretofore determined to bring before the
meeting and (b) in the case of a Demand Special Meeting, the
notice of meeting (i) shall describe any business set forth in
the statement of purpose of the demands received by the
corporation in accordance with Section 2.02 of these by-laws and
(ii) shall contain all of the information required in the notice
received by the corporation in accordance with Section 2.14(b) of
these by-laws. If an Annual Meeting or Special Meeting is
adjourned to a different date, time or place, the corporation
shall not be required to give notice of the new date, time or
place if the new date, time or place is announced at the meeting
before adjournment; provided, however, that if a new Meeting
Record Date for an adjourned meeting is or must be fixed, the
corporation shall give notice of the adjourned meeting to persons
who are shareholders as of the new Meeting Record Date.
2.05. Fixing of Record Date. The Board of
Directors may fix a future date not less than 10 days and not
more than 70 days prior to the date of any Annual Meeting or
Special Meeting as the record date for the determination of
shareholders entitled to notice of, or to vote at, such meeting
(the "Meeting Record Date"). In the case of any Demand Special
Meeting, (i) the Meeting Record Date shall be not later than the
30th day after the Delivery Date and (ii) if the Board of
Directors fails to fix the Meeting Record Date within 30 days
after the Delivery Date, then the close of business on such 30th
day shall be the Meeting Record Date. The shareholders of record
on the Meeting Record Date shall be the shareholders entitled to
notice of and to vote at the meeting. Except as provided by the
Wisconsin Business Corporation Law for a court-ordered
adjournment, a determination of shareholders entitled to notice
of or to vote at any Annual Meeting or Special Meeting is
effective for any adjournment of such meeting unless the Board of
Directors fixes a new Meeting Record Date, which it shall do if
the meeting is adjourned to a date more than 120 days after the
date fixed for the original meeting. The Board of Directors may
also fix a future date as the record date for the purpose of
determining shareholders entitled to take any other action or
determining shareholders for any other purpose. Such record date
shall be not more than 70 days prior to the date on which the
particular action, requiring such determination of shareholders,
is to be taken. The record date for determining shareholders
entitled to a distribution (other than a distribution involving a
purchase, redemption or other acquisition of the corporation's
shares) or a share dividend is the date on which the Board of
Directors authorizes the distribution or share dividend, as the
case may be, unless the Board of Directors fixes a different
record date.
2.06. Voting Lists. After a Meeting Record Date
has been fixed, the corporation shall prepare a list of the names
of all of the shareholders entitled to notice of the meeting.
The list shall be arranged by class or series of shares, if any,
and show the address of and number of shares held by each
shareholder. Such list shall be available for inspection by any
shareholder, beginning two business days after notice of the
meeting is given for which the list was prepared and continuing
to the date of the meeting, at the corporation's principal office
or at a place identified in the meeting notice in the city where
the meeting will be held. A shareholder or his or her agent may,
on written demand, inspect and, subject to the limitations
imposed by the Wisconsin Business Corporation Law, copy the list,
during regular business hours and at his or her expense, during
the period that it is available for inspection pursuant to this
Section 2.06. The corporation shall make the shareholders' list
available at the meeting and any shareholder or his or her agent
or attorney may inspect the list at any time during the meeting
or any adjournment thereof. Refusal or failure to prepare or
make available the shareholders' list shall not affect the
validity of any action taken at an Annual Meeting or Special
Meeting.
2.07. Quorum and Voting Requirements;
Postponements; Adjournments.
(a) Shares entitled to vote as a separate voting group
may take action on a matter at any Annual Meeting or Special
Meeting only if a quorum of those shares exists with respect to
that matter. If the corporation has only one class of stock
outstanding, such class shall constitute a separate voting group
for purposes of this Section 2.07. Except as otherwise provided
in the restated articles of incorporation or the Wisconsin
Business Corporation Law, a majority of the votes entitled to be
cast on the matter shall constitute a quorum of the voting group
for action on that matter. Once a share is represented for any
purpose at any Annual Meeting or Special Meeting, other than for
the purpose of objecting to holding the meeting or transacting
business at the meeting, it is considered present for purposes of
determining whether a quorum exists for the remainder of the
meeting and for any adjournment of that meeting unless a new
Meeting Record Date is or must be set for the adjourned meeting.
If a quorum exists, except in the case of the election of
directors, action on a matter shall be approved if the votes cast
within the voting group favoring the action exceed the votes cast
opposing the action, unless the restated articles of
incorporation, these by-laws or the Wisconsin Business
Corporation Law requires a greater number of affirmative votes.
Unless otherwise provided in the restated articles of
incorporation, each director shall be elected by a plurality of
the votes cast by the shares entitled to vote in the election of
directors at any Annual Meeting or Special Meeting at which a
quorum is present.
(b) The Board of Directors acting by resolution may
postpone and reschedule any previously scheduled Annual Meeting
or Special Meeting; provided, however, that a Demand Special
Meeting shall not be postponed beyond the 100th day following the
Delivery Date. Any Annual Meeting or Special Meeting may be
adjourned from time to time, whether or not there is a quorum,
(i) at any time, upon a resolution of shareholders if the votes
cast in favor of such resolution by the holders of shares of each
voting group entitled to vote on any matter theretofore properly
brought before the meeting exceed the number of votes cast
against such resolution by the holders of shares of each such
voting group or (ii) at any time prior to the transaction of any
business at such meeting, by the President or pursuant to a
resolution of the Board of Directors. No notice of the time and
place of adjourned meetings need be given except as required by
the Wisconsin Business Corporation Law. At any adjourned meeting
at which a quorum shall be present or represented, any business
may be transacted which might have been transacted at the meeting
as originally notified.
2.08. Conduct of Meetings. The President, and in
his absence a Vice-President in the order provided under Section
4.06, and in their absence, any person chosen by the shareholders
present shall call any Annual Meeting or Special Meeting to order
and shall act as chairman of such meeting, and the Secretary of
the corporation shall act as secretary of all meetings of the
shareholders, but, in the absence of the Secretary, the presiding
officer may appoint any other person to act as secretary of the
meeting.
2.09. Proxies. At any Annual Meeting or Special
Meeting, a shareholder entitled to vote may vote in person or by
proxy. A shareholder may appoint a proxy to vote or otherwise
act for the shareholder by signing an appointment form, either
personally or by his attorney-in-fact. An appointment of a proxy
is effective when received by the Secretary or other officer or
agent of the corporation authorized to tabulate votes. An
appointment is valid for 11 months from the date of its signing
unless a different period is expressly provided in the
appointment form. Unless otherwise provided in the proxy, a
proxy may be revoked at any time before it is voted, either by
written notice filed with the Secretary or the acting secretary
of the meeting or by oral notice given by the shareholder to the
presiding officer during the meeting. The presence of a
shareholder who has filed his proxy shall not of itself
constitute a revocation.
2.10. Voting of Shares. Each outstanding share
shall be entitled to one vote upon each matter submitted to a
vote at an Annual Meeting or Special Meeting, except to the
extent that the voting rights of the shares of any class or
classes are enlarged, limited or denied by the Wisconsin Business
Corporation Law or by the restated articles of incorporation.
2.11. Acceptance of Instruments Showing Shareholder
Action. If the name signed on a vote, consent, waiver or proxy
appointment corresponds to the name of the shareholder, the
corporation, if acting in good faith, may accept the vote,
consent, waiver or proxy appointment and give it effect as the
act of a shareholder. If the name signed on a vote, consent,
waiver or proxy appointment does not correspond to the name of a
shareholder, the corporation may accept the vote, consent, waiver
or proxy appointment and give it effect as the act of the
shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed
purports to be that of an officer or agent of the entity.
(b) The name purports to be that of a personal
representative, administrator, executor, guardian or conservator
representing the shareholder and, if the corporation requests,
evidence of fiduciary status acceptable to the corporation is
presented with respect to the vote, consent, waiver or proxy
appointment.
(c) The name signed purports to be that of a receiver
or trustee in bankruptcy of the shareholder and, if the
corporation requests, evidence of this status acceptable to the
corporation is presented with respect to the vote, consent,
waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if
the corporation requests, evidence acceptable to the corporation
of the signatory's authority to sign for the shareholder is
presented with respect to the vote, consent, waiver or proxy
appointment.
(e) Two or more persons are the shareholder as
co-tenants or fiduciaries and the name signed purports to be the
name of at least one of the co-owners and the person signing
appears to be acting on behalf of all co-owners.
The corporation may reject a vote, consent, waiver or
proxy appointment if the Secretary or other officer or agent of
the corporation who is authorized to tabulate votes, acting in
good faith, has reasonable basis for doubt about the validity of
the signature on it or about the signatory's authority to sign
for the shareholder.
2.12. Waiver of Notice by Shareholders. A
shareholder may waive any notice required by the Wisconsin
Business Corporation Law, the restated articles of incorporation
or these by-laws before or after the date and time stated in the
notice. The waiver shall be in writing and signed by the
shareholder entitled to the notice, contain the same information
that would have been required in the notice under applicable
provisions of the Wisconsin Business Corporation Law (except that
the time and place of meeting need not be stated) and be
delivered to the corporation for inclusion in the corporate
records. A shareholder's attendance at any Annual Meeting or
Special Meeting, in person or by proxy, waives objection to all
of the following: (a) lack of notice or defective notice of the
meeting, unless the shareholder at the beginning of the meeting
or promptly upon arrival objects to holding the meeting or
transacting business at the meeting; and (b) consideration of a
particular matter at the meeting that is not within the purpose
described in the meeting notice, unless the shareholder objects
to considering the matter when it is presented.
2.13. Unanimous Consent without Meeting. Any
action required or permitted by the restated articles of
incorporation or these by-laws or any provision of the Wisconsin
Business Corporation Law to be taken at an Annual Meeting or
Special Meeting, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
all of the shareholders entitled to vote with respect to the
subject matter thereof.
2.14. Notice of Shareholder Business and Nomination
of Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board
of Directors of the corporation and the proposal of business
to be considered by the shareholders may be made at an
Annual Meeting (A) pursuant to the corporation's notice of
meeting, (B) by or at the direction of the Board of
Directors or (C) by any shareholder of the corporation who
is a shareholder of record at the time of giving of notice
provided for in this by-law and who is entitled to vote at
the meeting and complies with the notice procedures set
forth in this Section 2.14.
(ii) For nominations or other business to be properly
brought before an Annual Meeting by a shareholder pursuant
to clause (C) of paragraph (a)(i) of this Section 2.14, the
shareholder must have given timely notice thereof in writing
to the Secretary of the corporation. To be timely, a
shareholder's notice shall be received by the Secretary of
the corporation at the principal office of the corporation
not less than 60 days nor more than 90 days prior to the
last Thursday in the month of April; provided, however, that
in the event that the date of the Annual Meeting is advanced
by more than 30 days or delayed by more than 60 days from
the last Thursday in the month of April, notice by the
shareholder to be timely must be so received not earlier
than the 90th day prior to the date of such Annual Meeting
and not later than the close of business on the later of (x)
the 60th day prior to such Annual Meeting and (y) the 10th
day following the day on which public announcement of the
date of such meeting is first made. Such shareholder's
notice shall be signed by the shareholder of record who
intends to make the nomination or introduce the other
business (or his duly authorized proxy or other
representative), shall bear the date of signature of such
shareholder (or proxy or other representative) and shall set
forth: (A) the name and address, as they appear on the
corporation's books, of such shareholder and the beneficial
owner or owners, if any, on whose behalf the nomination or
proposal is made; (B) the class and number of shares of the
corporation which are beneficially owned by such shareholder
or beneficial owner or owners; (C) a representation that
such shareholder is a holder of record of shares of the
corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to make the
nomination or introduce the other business specified in the
notice; (D) in the case of any proposed nomination for
election or re-election as a director, (I) the name and
residence address of the person or persons to be nominated,
(II) a description of all arrangements or understandings
between such shareholder or beneficial owner or owners and
each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination is to be
made by such shareholder, (III) such other information
regarding each nominee proposed by such shareholder as would
be required to be disclosed in solicitations of proxies for
elections of directors, or would be otherwise required to be
disclosed, in each case pursuant to Regulation 14A under the
Exchange Act, including any information that would be
required to be included in a proxy statement filed pursuant
to Regulation 14A had the nominee been nominated by the
Board of Directors and (IV) the written consent of each
nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected; and (E) in the
case of any other business that such shareholder proposes to
bring before the meeting, (I) a brief description of the
business desired to be brought before the meeting and, if
such business includes a proposal to amend these by-laws,
the language of the proposed amendment, (II) such
shareholder's and beneficial owner's or owners' reasons for
conducting such business at the meeting and (III) any
material interest in such business of such shareholder and
beneficial owner or owners.
(iii) Notwithstanding anything in the second
sentence of paragraph (a)(ii) of this Section 2.14 to the
contrary, in the event that the number of directors to be
elected to the Board of Directors of the corporation is
increased and there is no public announcement naming all of
the nominees for director or specifying the size of the
increased Board of Directors made by the corporation at
least 70 days prior to the last Thursday in the month of
April, a shareholder's notice required by this Section 2.14
shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if
it shall be received by the Secretary at the principal
office of the corporation not later than the close of
business on the 10th day following the day on which such
public announcement is first made by the corporation.
(b) Special Meetings. Only such business shall be
conducted at a Special Meeting as shall have been described in
the notice of meeting sent to shareholders pursuant to Section
2.04 of these by-laws. Nominations of persons for election to
the Board of Directors may be made at a Special Meeting at which
directors are to be elected pursuant to such notice of meeting
(i) by or at the direction of the Board of Directors or (ii) by
any shareholder of the corporation who (A) is a shareholder of
record at the time of giving of such notice of meeting, (B) is
entitled to vote at the meeting and (C) complies with the notice
procedures set forth in this Section 2.14. Any shareholder
desiring to nominate persons for election to the Board of
Directors at such a Special Meeting shall cause a written notice
to be received by the Secretary of the corporation at the
principal office of the corporation not earlier than 90 days
prior to such Special Meeting and not later than the close of
business on the later of (x) the 60th day prior to such Special
Meeting and (y) the 10th day following the day on which public
announcement is first made of the date of such Special Meeting
and of the nominees proposed by the Board of Directors to be
elected at such meeting. Such written notice shall be signed by
the shareholder of record who intends to make the nomination (or
his duly authorized proxy or other representative), shall bear
the date of signature of such shareholder (or proxy or other
representative) and shall set forth: (A) the name and address,
as they appear on the corporation's books, of such shareholder
and the beneficial owner or owners, if any, on whose behalf the
nomination is made; (B) the class and number of shares of the
corporation which are beneficially owned by such shareholder or
beneficial owner or owners; (C) a representation that such
shareholder is a holder of record of shares of the corporation
entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to make the nomination specified in
the notice; (D) the name and residence address of the person or
persons to be nominated; (E) a description of all arrangements or
understandings between such shareholder or beneficial owner or
owners and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination is to be
made by such shareholder; (F) such other information regarding
each nominee proposed by such shareholder as would be required to
be disclosed in solicitations of proxies for elections of
directors, or would be otherwise required to be disclosed, in
each case pursuant to Regulation 14A under the Exchange Act,
including any information that would be required to be included
in a proxy statement filed pursuant to Regulation 14A had the
nominee been nominated by the Board of Directors; and (G) the
written consent of each nominee to be named in a proxy statement
and to serve as a director of the corporation if so elected.
(c) General.
(i) Only persons who are nominated in accordance with
the procedures set forth in this Section 2.14 shall be
eligible to serve as directors. Only such business shall be
conducted at an Annual Meeting or Special Meeting as shall
have been brought before such meeting in accordance with the
procedures set forth in this Section 2.14. The chairman of
the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought
before the meeting was made in accordance with the
procedures set forth in this Section 2.14 and, if any
proposed nomination or business is not in compliance with
this Section 2.14, to declare that such defective proposal
shall be disregarded.
(ii) For purposes of this Section 2.14, "public
announcement" shall mean disclosure in a press release
reported by the Dow Jones News Service, Associated Press or
comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act.
(iii) Notwithstanding the foregoing provisions of
this Section 2.14, a shareholder shall also comply with all
applicable requirements of the Exchange Act and the rules
and regulations thereunder with respect to the matters set
forth in this Section 2.14. Nothing in this Section 2.14
shall be deemed to limit the corporation's obligation to
include shareholder proposals in its proxy statement if such
inclusion is required by Rule 14a-8 under the Exchange Act.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. All corporate
powers shall be exercised by or under the authority of, and the
business and affairs of the corporation shall be managed under
the direction of its Board of Directors. The number of directors
of the corporation shall be eight (8), divided into three (3)
classes: Class I - three (3) directors; Class II - three (3)
directors; Class III - two (2) directors.
3.02. Term and Qualifications. At each Annual
Meeting the successors to the class of directors whose terms
shall expire at the time of such Annual Meeting shall be elected
to hold office until the third succeeding Annual Meeting of
shareholders, and until their successors are duly elected and
qualified. A director may resign at any time by delivering
written notice which complies with the Wisconsin Business
Corporation Law to the Chairman of the Board or to the
corporation. Directors need not be residents of the State of
Wisconsin or shareholders of the corporation.
3.03. Nominations. Nominations for the election of
directors may only be made in accordance with the requirements of
Section 2.14 hereof, which requirements are hereby incorporated
by reference in this Section 3.03.
3.04. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
by-law immediately after the Annual Meeting, and each adjourned
session thereof. The place of such regular meeting shall be the
same as the place of the Annual Meeting which precedes it, or
such other suitable place as may be announced at such Annual
Meeting. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of Wisconsin,
for the holding of additional regular meetings without other
notice than such resolution.
3.05. Special Meetings. Special meetings of the
Board of Directors may be called by or at the request of the
President, Secretary or any two directors. The President or
Secretary may fix any place, either within or without the State
of Wisconsin, as the place for holding any special meeting of the
Board of Directors, and if no other place is fixed, the place of
meeting shall be the principal office of the corporation in the
State of Wisconsin.
3.06. Notice; Waiver. Notice of each meeting of
the Board of Directors (unless otherwise provided in or pursuant
to Section 3.04) shall be given by written notice delivered or
communicated in person, by telegram, facsimile or other form of
wire or wireless communication, or by mail or private carrier, to
each director at his business address or at such other address as
such director shall have designated in writing filed with the
Secretary, in each case not less than 48 hours prior to the time
of the meeting. If mailed, such notice shall be deemed to be
effective when deposited in the United States mail so addressed,
with postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be effective when the telegram is
delivered to the telegraph company. If notice is given by
private carrier, such notice shall be deemed to be effective when
the notice is delivered to the private carrier. Whenever any
notice whatever is required to be given to any director of the
corporation under the restated articles of incorporation or these
by-laws or any provision of the Wisconsin Business Corporation
Law, a waiver thereof in writing, signed at any time, whether
before or after the time of meeting, by the director entitled to
such notice, shall be deemed equivalent to the giving of such
notice. The corporation shall retain any such waiver as part of
the permanent corporate records. A director's attendance at or
participation in a meeting waives any required notice to him of
the meeting unless the director at the beginning of the meeting
or promptly upon his arrival objects to holding the meeting or
transacting business at the meeting and does not thereafter vote
for or assent to action taken at the meeting. Neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the Board of Directors need be specified in
the notice or waiver of notice of such meeting.
3.07. Quorum. Except as otherwise provided by the
Wisconsin Business Corporation Law or by the restated articles of
incorporation or these by-laws, a majority of the number of
directors set forth in Section 3.01 shall constitute a quorum for
the transaction of business at any meeting of the Board of
Directors, but a majority of the directors present (though less
than such quorum) may adjourn the meeting from time to time
without further notice.
3.08. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors, unless the act of a
greater number is required by the Wisconsin Business Corporation
Law or by the restated articles of incorporation or these
by-laws.
3.09. Conduct of Meetings. The Chairman of the
Board, and in his absence, the President, and in his absence, a
Vice-President in the order provided under Section 4.06, and in
their absence, any director chosen by the directors present,
shall call meetings of the Board of Directors to order and shall
act as chairman of the meeting. The Secretary of the corporation
shall act as secretary of all meetings of the Board of Directors,
but in the absence of the Secretary, the presiding officer may
appoint any Assistant Secretary or any director or any other
person present to act as secretary of the meeting. Minutes of any
regular or special meeting of the Board of Directors shall be
prepared and distributed to each director.
3.10. Compensation. The Board of Directors, by
affirmative vote of a majority of the directors then in office,
and irrespective of any personal interest of any of its members,
may establish reasonable compensation of all directors for
services to the corporation as directors, officers or otherwise,
or may delegate such authority to an appropriate committee. The
Board of Directors also shall have authority to provide for or to
delegate authority to an appropriate committee to provide for
reasonable pensions, disability or death benefits, and other
benefits or payments, to directors, officers and employees and to
their estates, families, dependents or beneficiaries on account
of prior services rendered by such directors, officers and
employees to the corporation.
3.11. Presumption of Assent. A director of the
corporation who is present at a meeting of the Board of Directors
or a committee thereof of which he is a member at which action on
any corporate matter is taken shall be presumed to have assented
to the action taken unless any of the following occurs: (a) the
director objects at the beginning of the meeting or promptly upon
his arrival to holding the meeting or transacting business at the
meeting; (b) the director's dissent or abstention from the action
taken is entered in the minutes of the meeting; or (c) the
director delivers written notice that complies with the Wisconsin
Business Corporation Law of his dissent or abstention to the
presiding officer of the meeting before its adjournment or to the
corporation immediately after adjournment of the meeting. Such
right to dissent or abstain shall not apply to a director who
voted in favor of such action.
3.12. Committees. The Board of Directors by
resolution adopted by the affirmative vote of a majority of the
number of directors set forth in Section 3.01 may create one or
more committees, appoint members of the Board of Directors to
serve on the committees and designate other members of the Board
of Directors to serve as alternates. Alternate members of a
committee shall take the place of any absent member or members at
any meeting of such committee upon request of the President or
upon request of the chairman of such meeting. Each committee
shall have two or more members who shall, unless otherwise
provided by the Board of Directors, serve at the pleasure of the
Board of Directors. A committee may be authorized to exercise
the authority of the Board of Directors, except that a committee
may not do any of the following: (a) authorize distributions;
(b) approve or propose to shareholders action that the Wisconsin
Business Corporation Law requires to be approved by shareholders;
(c) fill vacancies on the Board of Directors or, unless the Board
of Directors provides by resolution that vacancies on a committee
shall be filled by the affirmative vote of the remaining
committee members, on any Board committee; (d) amend the
corporation's restated articles of incorporation; (e) adopt,
amend or repeal by-laws; (f) approve a plan of merger not
requiring shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method
prescribed by the Board of Directors; and (h) authorize or
approve the issuance or sale or contract for sale of shares, or
determine the designation and relative rights, preferences and
limitations of a class or series of shares, except that the Board
of Directors may authorize a committee to do so within limits
prescribed by the Board of Directors. Unless otherwise provided
by the Board of Directors in creating the committee, a committee
may employ counsel, accountants and other consultants to assist
it in the exercise of its authority.
3.13. Telephonic Meetings. Except as herein
provided and notwithstanding any place set forth in the notice of
the meeting or these by-laws, members of the Board of Directors
(and any committee thereof) may participate in regular or special
meetings by, or through the use of, any means of communication by
which all participants may simultaneously hear each other, such
as by conference telephone. If a meeting is conducted by such
means, then at the commencement of such meeting the presiding
officer shall inform the participating directors that a meeting
is taking place at which official business may be transacted.
Any participant in a meeting by such means shall be deemed
present in person at such meeting. If action is to be taken at
any meeting held by such means on any of the following: (a) a
plan of merger or share exchange; (b) a sale, lease, exchange or
other disposition of substantial property or assets of the
corporation; (c) a voluntary dissolution or the revocation of
voluntary dissolution proceedings; or (d) a filing for
bankruptcy, then the identity of each director participating in
such meeting must be verified by the disclosure at such meeting
by each such director of each such director's social security
number to the secretary of the meeting before a vote may be taken
on any of the foregoing matters. For purposes of the preceding
clause (b), the phrase "sale, lease, exchange or other
disposition of substantial property or assets" shall mean any
sale, lease, exchange or other disposition of property or assets
of the corporation having a net book value equal to 10% or more
of the net book value of the total assets of the corporation on
and as of the close of the fiscal year last ended prior to the
date of such meeting and as to which financial statements of the
corporation have been prepared. Notwithstanding the foregoing, no
action may be taken at any meeting held by such means on any
particular matter which the presiding officer determines, in his
sole discretion, to be inappropriate under the circumstances for
action at a meeting held by such means. Such determination shall
be made and announced in advance of such meeting.
3.14. Unanimous Consent without Meeting. Any
action required or permitted by the restated articles of
incorporation or these by-laws or any provision of the Wisconsin
Business Corporation Law to be taken by the Board of Directors
(or any committee thereof) at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so
taken, shall be signed by all members of the Board of Directors
or of the committee, as the case may be, then in office. Such
action shall be effective when the last director or committee
member signs the consent, unless the consent specifies a
different effective date.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the
corporation shall be a Chairman of the Board, a President, such
number of Vice-Presidents as the Board of Directors shall elect
from time to time by affirmative vote of a majority of the number
of directors present at a meeting at which a quorum is in
attendance, a Secretary, and a Treasurer, each of whom shall be
elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or
appointed by the Board of Directors. The Board of Directors may
also authorize any duly appointed officer to appoint one or more
officers or assistant officers. Any two or more offices may be
held by the same person.
4.02. Election and Term of Office. The officers of
the corporation to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting
of the Board of Directors held after each Annual Meeting. If the
election of officers shall not be held at such meeting, such
election shall be held as soon thereafter as conveniently may be.
Each officer shall hold office until his successor shall have
been duly elected or until his prior death, resignation or
removal.
4.03. Removal; Vacancies. The Board of Directors
may remove any officer and, unless restricted by the Board of
Directors or these by-laws, an officer may remove any officer or
assistant officer appointed by that officer, at any time, with or
without cause and notwithstanding the contract rights, if any, of
the officer removed. Election or appointment shall not of itself
create contract rights. An officer may resign at any time by
delivering notice to the corporation that complies with the
Wisconsin Business Corporation Law. The resignation shall be
effective when the notice is delivered, unless the notice
specifies a later effective date and the corporation accepts the
later effective date. A vacancy in any principal office because
of death, resignation, removal, disqualification or otherwise,
shall be filled by the Board of Directors for the unexpired
portion of the term. If a resignation of an officer is effective
at a later date as contemplated by this Section 4.03, the Board
of Directors may fill the pending vacancy before the effective
date if the Board provides that the successor may not take office
until the effective date.
4.04. Chairman of the Board. The Chairman of the
Board shall, when present, preside at all meetings of the Board
of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors from time to time.
4.05. President. The President shall be the
principal executive officer of the corporation and, subject to
the control of the Board of Directors, shall in general supervise
and control all of the business and affairs of the corporation.
He shall, when present, preside at all Annual Meetings and
Special Meetings. He shall have authority, subject to such rules
as may be prescribed by the Board of Directors, to appoint such
agents and employees of the corporation as he shall deem
necessary, to prescribe their powers, duties and compensation,
and to delegate authority to them. Such agents and employees
shall hold office at the discretion of the President. He shall
have authority to sign, execute and acknowledge, on behalf of the
corporation, all deeds, mortgages, bonds, stock certificates,
contracts, leases, reports and all other documents or instruments
necessary or proper to be executed in the course of the
corporation's regular business, or which shall be authorized by
resolution of the Board of Directors; and, except as otherwise
provided by law or the Board of Directors, he may authorize any
Vice-President or other officer or agent of the corporation to
sign, execute and acknowledge such documents or instruments in
his place and stead. In general he shall perform all duties
incident to the office of the President and such other duties as
may be prescribed by the Board of Directors from time to time.
4.06. The Vice-Presidents. In the absence of the
President or in the event of his death, inability or refusal to
act, or in the event for any reason it shall be impracticable for
the President to act personally, the Vice-President (or in the
event there be more than one Vice-President, the Vice-Presidents
in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election)
shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice-President may sign,
with the Secretary or Assistant Secretary, certificates for
shares of the corporation; and shall perform such other duties
and have such authority as from time to time may be delegated or
assigned to him by the President or by the Board of Directors.
The execution of any instrument of the corporation by any
Vice-President shall be conclusive evidence, as to third parties,
of his authority to act in the stead of the President.
4.07. The Secretary. The Secretary shall: (a)
keep the minutes of all Annual Meetings and Special Meetings and
all meetings of the Board of Directors in one or more books
provided for that purpose (including records of actions taken
without a meeting); (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by
the Wisconsin Business Corporation Law; (c) be custodian of the
corporate records and of the seal of the corporation and see that
the seal of the corporation is affixed to all documents the
execution of which on behalf of the corporation under its seal is
duly authorized; (d) maintain a record of the shareholders of the
corporation, in the form that permits preparation of a list of
the names and addresses of all shareholders, by class or series
of shares and showing the number and class or series of shares
held by each shareholder; (e) sign with the President, or a
Vice-President, certificates for shares of the corporation, the
issuance of which shall have been authorized by resolution of the
Board of Directors; (f) have general charge of the stock transfer
books of the corporation; and (g) in general perform all duties
incident to the office of Secretary and have such other duties
and exercise such authority as from time to time may be delegated
or assigned to him by the President or by the Board of Directors.
4.08. The Treasurer. The Treasurer shall: (a)
have charge and custody of and be responsible for all funds and
securities of the corporation; (b) maintain appropriate
accounting records; (c) receive and give receipts for moneys due
and payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositaries as shall be selected
in accordance with the provisions of Section 5.04; and (d) in
general perform all of the duties incident to the office of
Treasurer and have such other duties and exercise such other
authority as from time to time may be delegated or assigned to
him by the President or by the Board of Directors. If required by
the Board of Directors, the Treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety
or sureties as the Board of Directors shall determine.
4.09. Assistant Secretaries and Assistant
Treasurers. There shall be such number of Assistant Secretaries
and Assistant Treasurers as the Board of Directors may from time
to time authorize. The Assistant Secretaries may sign with the
President or a Vice-President certificates for shares of the
corporation the issuance of which shall have been authorized by a
resolution of the Board of Directors. The Assistant Treasurers
shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and
with such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in general,
shall perform such duties and have such authority as shall from
time to time be delegated or assigned to them by the Secretary or
the Treasurer, respectively, or by the President or the Board of
Directors.
4.10. Other Assistants and Acting Officers. The
Board of Directors shall have the power to appoint, or to
authorize any duly appointed officer of the corporation to
appoint, any person to act as assistant to any officer, or as
agent for the corporation in his stead, or to perform the duties
of such officer whenever for any reason it is impracticable for
such officer to act personally, and such assistant or acting
officer or other agent so appointed by the Board of Directors or
the appointing officer shall have the power to perform all duties
of the office to which he is so appointed to be assistant, or as
to which he is so appointed to act, except as such power may be
otherwise defined or restricted by the Board of Directors or the
appointing officer.
4.11. Salaries. The salaries of the principal
officers shall be fixed from time to time by the Board of
Directors or by a duly authorized committee thereof, and no
officer shall be prevented from receiving such salary by reason
of the fact that he is also a director of the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS; SPECIAL
CORPORATE ACTS
5.01. Contracts. The Board of Directors may
authorize any officer or officers, agent or agents, to enter into
any contract or execute or deliver any instrument in the name of
and on behalf of the corporation, and such authorization may be
general or confined to specific instances. In the absence of
other designation, all deeds, mortgages and instruments of
assignment or pledge made by the corporation shall be executed in
the name of the corporation by the President or one of the
Vice-Presidents and by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer; the Secretary or an
Assistant Secretary, when necessary or required, shall affix the
corporate seal thereto; and when so executed no other party to
such instrument or any third party shall be required to make any
inquiry into the authority of the signing officer or officers.
5.02. Loans. No indebtedness for borrowed money
shall be contracted on behalf of the corporation and no evidences
of such indebtedness shall be issued in its name unless
authorized by or under the authority of a resolution of the Board
of Directors. Such authorization may be general or confined to
specific instances.
5.03. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by or under the authority of a resolution of the Board
of Directors.
5.04. Deposits. All funds of the corporation not
otherwise employed shall be deposited from time to time to the
credit of the corporation in such banks, trust companies or other
depositaries as may be selected by or under the authority of a
resolution of the Board of Directors.
5.05. Voting of Securities Owned by this
Corporation. Subject always to the specific directions of the
Board of Directors, (a) any shares or other securities issued by
any other corporation and owned or controlled by this corporation
may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he be
present, or in his absence by any Vice-President of this
corporation who may be present, and (b) whenever, in the judgment
of the President, or in his absence, of any Vice-President, it is
desirable for this corporation to execute a proxy or written
consent in respect to any shares or other securities issued by
any other corporation and owned by this corporation, such proxy
or consent shall be executed in the name of this corporation by
the President or one of the Vice-Presidents of this corporation,
without necessity of any authorization by the Board of Directors,
affixation of corporate seal or countersignature or attestation
by another officer. Any person or persons designated in the
manner above stated as the proxy or proxies of this corporation
shall have full right, power and authority to vote the shares or
other securities issued by such other corporation and owned by
this corporation the same as such shares or other securities
might be voted by this corporation.
5.06. No Nominee Procedures. The corporation has
not established, and nothing in these by-laws shall be deemed to
establish, any procedure by which a beneficial owner of the
corporation's shares that are registered in the name of a nominee
is recognized by the corporation as the shareholder under Section
180.0723 of the Wisconsin Business Corporation Law.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates
representing shares of the corporation shall be in such form,
consistent with the Wisconsin Business Corporation Law, as shall
be determined by the Board of Directors. Such certificates shall
be signed by the President or a Vice-President and by the
Secretary or an Assistant Secretary. All certificates for shares
shall be consecutively numbered or otherwise identified. The
name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the corporation.
All certificates surrendered to the corporation for transfer
shall be cancelled and no new certificate shall be issued until
the former certificate for a like number of shares shall have
been surrendered and cancelled, except as provided in Section
6.06.
6.02. Facsimile Signatures and Seal. The seal of
the corporation on any certificates for shares may be a
facsimile. The signatures of the President or Vice-President and
the Secretary or Assistant Secretary upon a certificate may be
facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the corporation
itself or an employee of the corporation.
6.03. Signature by Former Officers. In case any
officer, who has signed or whose facsimile signature has been
placed upon any certificate for shares, shall have ceased to be
such officer before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such
officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment
of a certificate for shares for registration of transfer the
corporation may treat the registered owner of such shares as the
person exclusively entitled to vote, to receive notifications and
otherwise to exercise all the rights and powers of an owner.
Where a certificate for shares is presented to the corporation
with a request to register for transfer, the corporation shall
not be liable to the owner or any other person suffering loss as
a result of such registration of transfer if (a) there were on or
with the certificate the necessary endorsements, and (b) the
corporation had no duty to inquire into adverse claims or has
discharged any such duty. The corporation may require reasonable
assurance that said endorsements are genuine and effective and
compliance with such other regulations as may be prescribed under
the authority of the Board of Directors.
6.05. Restrictions on Transfer. The face or
reverse side of each certificate representing shares shall bear a
conspicuous notation of any restriction imposed by the
corporation upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where
the owner claims that his certificate for shares has been lost,
destroyed or wrongfully taken, a new certificate shall be issued
in place thereof if the owner (a) so requests before the
corporation has notice that such shares have been acquired by a
bona fide purchaser, and (b) files with the corporation a
sufficient indemnity bond, and (c) satisfies such other
reasonable requirements as the Board of Directors may prescribe.
6.07. Consideration for Shares. The Board of
Directors may authorize shares to be issued for consideration
consisting of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services
performed, contracts for services to be performed or other
securities of the corporation. Before the corporation issues
shares, the Board of Directors shall determine that the
consideration received or to be received for the shares to be
issued is adequate. In the absence of a resolution adopted by
the Board of Directors expressly determining that the
consideration received or to be received is adequate, Board
approval of the issuance of the shares shall be deemed to
constitute such a determination. The determination of the Board
of Directors is conclusive insofar as the adequacy of
consideration for the issuance of shares relates to whether the
shares are validly issued, fully paid and nonassessable. The
corporation may place in escrow shares issued in whole or in part
for a contract for future services or benefits, a promissory
note, or other property to be issued in the future, or make other
arrangements to restrict the transfer of the shares, and may
credit distributions in respect of the shares against their
purchase price, until the services are performed, the benefits or
property are received or the promissory note is paid. If the
services are not performed, the benefits or property are not
received or the promissory note is not paid, the corporation may
cancel, in whole or in part, the shares escrowed or restricted
and the distributions credited.
6.08. Stock Regulations. The Board of Directors
shall have the power and authority to make all such further rules
and regulations not inconsistent with the statutes of the State
of Wisconsin as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of
the corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a
corporate seal which shall be circular in form and shall have
inscribed thereon the name of the corporation and the state of
incorporation and the words, "Corporate Seal."
ARTICLE VIII. AMENDMENTS
8.01. By Shareholders. The affirmative vote of
shareholders possessing at least seventy-five percent of the
voting power of the then outstanding shares of all classes of
stock of the corporation generally possessing voting rights in
elections of directors, considered for this purpose as one class,
shall be required to amend, alter, change or repeal, or to adopt
any provision inconsistent with, Sections 2.01 to 2.05 inclusive
of Article II of these by-laws, Sections 8.01 to 8.03 inclusive
of Article VIII of these by-laws and Sections 9.01 to 9.11
inclusive of Article IX of these by-laws. Subject to the
foregoing and except as otherwise provided in the restated
articles of incorporation of the corporation, the by-laws of this
corporation may be altered, amended, changed or repealed by the
affirmative vote of shareholders possessing at least a majority
of the voting power of the shares of all classes of stock of the
corporation generally possessing voting rights in elections of
directors considered for this purpose as one class, which are
present or represented at any Annual Meeting or Special Meeting
at which a quorum is present.
8.02. By Directors. A Requisite Vote (as defined
herein) of the directors shall be required to alter, amend,
change or repeal, or to adopt any provision inconsistent with,
Sections 2.01 to 2.05 inclusive, Section 2.07 and Section 2.14 of
Article II of these by-laws, Sections 8.01 to 8.03 inclusive of
Article VIII of these by-laws and Sections 9.01 to 9.11 inclusive
of Article IX of these by-laws. For purposes of this Section
8.02, "Requisite Vote" shall mean the affirmative vote of at
least two-thirds of the directors then in office plus one
director. Subject to the foregoing and except as otherwise
provided in the restated articles of incorporation of the
corporation, the by-laws of this corporation may be altered,
amended, changed or repealed by the Board of Directors by the
affirmative vote of a majority of the number of directors present
at any meeting at which a quorum is present; provided, however,
that the shareholders in altering, adopting, amending, changing
or repealing a particular by-law may provide therein that the
Board of Directors may not amend, repeal or readopt that by-law.
8.03. Implied Amendments. Any action taken or
authorized by the shareholders or by the Board of Directors,
which would be inconsistent with the by-laws then in effect but
is taken or authorized by affirmative vote of not less than the
number of votes or the number of directors required to amend the
by-laws so that the by-laws would be consistent with such action,
shall be given the same effect as though the by-laws had been
temporarily amended or suspended so far, but only so far, as is
necessary to permit the specific action so taken or authorized.
ARTICLE IX. INDEMNIFICATION
9.01. Certain Definitions. All capitalized terms
used in this Article IX and not otherwise hereinafter defined in
this Section 9.01 shall have the meaning set forth in Section
180.0850 of the Statute. The following capitalized terms
(including any plural forms thereof) used in this Article IX
shall be defined as follows:
(a) "Affiliate" shall include, without limitation, any
corporation, partnership, joint venture, employee benefit plan,
trust or other enterprise that directly or indirectly through one
or more intermediaries, controls or is controlled by, or is under
common control with, the Corporation.
(b) "Authority" shall mean the entity selected by the
Director or Officer to determine his or her right to
indemnification pursuant to Section 9.04.
(c) "Board" shall mean the entire then elected and
serving Board of Directors of the Corporation, including all
members thereof who are Parties to the subject Proceeding or any
related Proceeding.
(d) "Breach of Duty" shall mean the Director or
Officer breached or failed to perform his or her duties to the
Corporation and his or her breach of or failure to perform those
duties is determined, in accordance with Section 9.04, to
constitute misconduct under Section 180.0851(2)(a) l, 2, 3 or 4
of the Statute.
(e) "Corporation," as used herein and as defined in
the Statute and incorporated by reference into the definitions of
certain other capitalized terms used herein, shall mean this
Corporation, including, without limitation, any successor
corporation or entity to this Corporation by way of merger,
consolidation or acquisition of all or substantially all of the
capital stock or assets of this Corporation.
(f) "Director or Officer" shall have the meaning set
forth in the Statute; provided, that, for purposes of this
Article IX, it shall be conclusively presumed that any Director
or Officer serving as a director, officer, partner, trustee,
member of any governing or decision-making committee, employee or
agent of an Affiliate shall be so serving at the request of the
Corporation.
(g) "Disinterested Quorum" shall mean a quorum of the
Board who are not Parties to the subject Proceeding or any
related Proceeding.
(h) "Party" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article IX, the
term "Party" shall also include any Director or Officer or
employee of the Corporation who is or was a witness in a
Proceeding at a time when he or she has not otherwise been
formally named a Party thereto.
(i) "Proceeding" shall have the meaning set forth in
the Statute; provided, that, in accordance with Section 180.0859
of the Statute and for purposes of this Article IX, the term
"Proceeding" shall also include all Proceedings (i) brought under
(in whole or in part) the Securities Act of 1933, as amended, the
Exchange Act, their respective state counterparts, and/or any
rule or regulation promulgated under any of the foregoing; (ii)
brought before an Authority or otherwise to enforce rights
hereunder; (iii) any appeal from a Proceeding; and (iv) any
Proceeding in which the Director or Officer is a plaintiff or
petitioner because he or she is a Director or Officer; provided,
however, that any such Proceeding under this subsection (iv) must
be authorized by a majority vote of a Disinterested Quorum.
(j) "Statute" shall mean Sections 180.0850 through
180.0859, inclusive, of the Wisconsin Business Corporation Law,
Chapter 180 of the Wisconsin Statutes, as the same shall then be
in effect, including any amendments thereto, but, in the case of
any such amendment, only to the extent such amendment permits or
requires the Corporation to provide broader indemnification
rights than the Statute permitted or required the Corporation to
provide prior to such amendment.
9.02. Mandatory Indemnification. To the fullest
extent permitted or required by the Statute, the Corporation
shall indemnify a Director or Officer against all Liabilities
incurred by or on behalf of such Director or Officer in
connection with a Proceeding in which the Director or Officer is
a Party because he or she is a Director or Officer.
9.03. Procedural Requirements.
(a) A Director or Officer who seeks indemnification
under Section 9.02 shall make a written request therefor to the
Corporation. Subject to Section 9.03(b), within 60 days of the
Corporation's receipt of such request, the Corporation shall pay
or reimburse the Director or Officer for the entire amount of
Liabilities incurred by the Director or Officer in connection
with the subject Proceeding (net of any Expenses previously
advanced pursuant to Section 9.05).
(b) No indemnification shall be required to be paid by
the Corporation pursuant to Section 9.02 if, within such 60-day
period, (i) a Disinterested Quorum, by a majority vote thereof,
determines that the Director or Officer requesting
indemnification engaged in misconduct constituting a Breach of
Duty or (ii) a Disinterested Quorum cannot be obtained.
(c) In either case of nonpayment pursuant to Section
9.03(b), the Board shall immediately authorize by resolution that
an Authority, as provided in Section 9.04, determine whether the
Director's or Officer's conduct constituted a Breach of Duty and,
therefore, whether indemnification should be denied hereunder.
(d) (i) If the Board does not authorize an Authority
to determine the Director's or Officer's right to indemnification
hereunder within such 60-day period and/or (ii) if
indemnification of the requested amount of Liabilities is paid by
the Corporation, then it shall be conclusively presumed for all
purposes that a Disinterested Quorum has affirmatively determined
that the Director or Officer did not engage in misconduct
constituting a Breach of Duty and, in the case of subsection (i)
above (but not subsection (ii)), indemnification by the
Corporation of the requested amount of Liabilities shall be paid
to the Director or Officer immediately.
9.04. Determination of Indemnification.
(a) If the Board authorizes an Authority to determine
a Director's or Officer's right to indemnification pursuant to
Section 9.03, then the Director or Officer requesting
indemnification shall have the absolute discretionary authority
to select one of the following as such Authority:
(i) An independent legal counsel; provided, that such
counsel shall be mutually selected by such Director or
Officer and by a majority vote of a Disinterested Quorum or,
if a Disinterested Quorum cannot be obtained, then by a
majority vote of the Board;
(ii) A panel of three arbitrators selected from the
panels of arbitrators of the American Arbitration
Association in Wisconsin; provided, that (A) one arbitrator
shall be selected by such Director or Officer, the second
arbitrator shall be selected by a majority vote of a
Disinterested Quorum or, if a Disinterested Quorum cannot be
obtained, then by a majority vote of the Board, and the
third arbitrator shall be selected by the two previously
selected arbitrators, and (B) in all other respects, such
panel shall be governed by the American Arbitration
Association's then existing Commercial Arbitration Rules; or
(iii) A court pursuant to and in accordance with
Section 180.0854 of the Statute.
(b) In any such determination by the selected
Authority there shall exist a rebuttable presumption that the
Director's or Officer's conduct did not constitute a Breach of
Duty and that indemnification against the requested amount of
Liabilities is required. The burden of rebutting such a
presumption by clear and convincing evidence shall be on the
Corporation or such other party asserting that such
indemnification should not be allowed.
(c) The Authority shall make its determination within
60 days of being selected and shall submit a written opinion of
its conclusion simultaneously to both the Corporation and the
Director or Officer.
(d) If the Authority determines that indemnification
is required hereunder, the Corporation shall pay the entire
requested amount of Liabilities (net of any Expenses previously
advanced pursuant to Section 9.05), including interest thereon at
a reasonable rate, as determined by the Authority, within 10 days
of receipt of the Authority's opinion; provided, that, if it is
determined by the Authority that a Director or Officer is
entitled to indemnification against Liabilities incurred in
connection with some claims, issues or matters, but not as to
other claims, issues or matters, involved in the subject
Proceeding, the Corporation shall be required to pay (as set
forth above) only the amount of such requested Liabilities as the
Authority shall deem appropriate in light of all of the
circumstances of such Proceeding.
(e) The determination by the Authority that
indemnification is required hereunder shall be binding upon the
Corporation regardless of any prior determination that the
Director or Officer engaged in a Breach of Duty.
(f) All Expenses incurred in the determination process
under this Section 9.04 by either the Corporation or the Director
or Officer, including, without limitation, all Expenses of the
selected Authority, shall be paid by the Corporation.
9.05. Mandatory Allowance of Expenses.
(a) The Corporation shall pay or reimburse from time
to time or at any time, within 10 days after the receipt of the
Director's or Officer's written request therefor, the reasonable
Expenses of the Director or Officer as such Expenses are
incurred; provided, the following conditions are satisfied:
(i) The Director or Officer furnishes to the
Corporation an executed written certificate affirming his or
her good faith belief that he or she has not engaged in
misconduct which constitutes a Breach of Duty; and
(ii) The Director or Officer furnishes to the
Corporation an unsecured executed written agreement to repay
any advances made under this Section 9.05 if it is
ultimately determined by an Authority that he or she is not
entitled to be indemnified by the Corporation for such
Expenses pursuant to Section 9.04.
(b) If the Director or Officer must repay any
previously advanced Expenses pursuant to this Section 9.05, such
Director or Officer shall not be required to pay interest on such
amounts.
9.06. Indemnification and Allowance of Expenses of
Certain Others.
(a) The Board may, in its sole and absolute discretion
as it deems appropriate, pursuant to a majority vote thereof,
indemnify a director or officer of an Affiliate (who is not
otherwise serving as a Director or Officer) against all
Liabilities, and shall advance the reasonable Expenses, incurred
by such director or officer in a Proceeding to the same extent
hereunder as if such director or officer incurred such
Liabilities because he or she was a Director or Officer, if such
director or officer is a Party thereto because he or she is or
was a director or officer of the Affiliate.
(b) The Corporation shall indemnify an employee of the
Corporation who is not a Director or Officer, to the extent he or
she has been successful on the merits or otherwise in defense of
a Proceeding, for all Expenses incurred in the Proceeding if the
employee was a Party because he or she was an employee of the
Corporation.
(c) The Board may, in its sole and absolute discretion
as it deems appropriate, pursuant to a majority vote thereof,
indemnify (to the extent not otherwise provided in Section
9.06(b) hereof) against Liabilities incurred by, and/or provide
for the allowance of reasonable Expenses of, an employee or
authorized agent of the Corporation acting within the scope of
his or her duties as such and who is not otherwise a Director or
Officer.
9.07. Insurance. The Corporation may purchase and
maintain insurance on behalf of a Director or Officer or any
individual who is or was an employee or authorized agent of the
Corporation against any Liability asserted against or incurred by
such individual in his or her capacity as such or arising from
his or her status as such, regardless of whether the Corporation
is required or permitted to indemnify against any such Liability
under this Article IX.
9.08. Notice to the Corporation. A Director,
Officer or employee of the Corporation shall promptly notify the
Corporation in writing when he or she has actual knowledge of a
Proceeding which may result in a claim of indemnification against
Liabilities or allowance of Expenses hereunder, but the failure
to do so shall not relieve the Corporation of any liability to
the Director, Officer or employee hereunder unless the
Corporation shall have been irreparably prejudiced by such
failure (as determined, in the case of Directors or Officers
only, by an Authority selected pursuant to Section 9.04(a)).
9.09. Severability. If any provision of this
Article IX shall be deemed invalid or inoperative, or if a court
of competent jurisdiction determines that any of the provisions
of this Article IX contravene public policy, this Article IX
shall be construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any such
provisions which are invalid or inoperative or which contravene
public policy shall be deemed, without further action or deed by
or on behalf of the Corporation, to be modified, amended and/or
limited, but only to the extent necessary to render the same
valid and enforceable; it being understood that it is the
Corporation's intention to provide the Directors and Officers
with the broadest possible protection against personal liability
allowable under the Statute.
9.10. Nonexclusivity of Article IX. The rights of
a Director, Officer or employee of the Corporation (or any other
person) granted under this Article IX shall not be deemed
exclusive of any other rights to indemnification against
Liabilities or allowance of Expenses which the Director, Officer
or employee (or such other person) may be entitled to under any
written agreement, Board resolution, vote of shareholders of the
corporation or otherwise, including, without limitation, under
the Statute. Nothing contained in this Article IX shall be
deemed to limit the Corporation's obligations to indemnify
against Liabilities or allow Expenses to a Director, Officer or
employee of the Corporation under the Statute.
9.11. Contractual Nature of Article IX; Repeal or
Limitation of Rights. This Article IX shall be deemed to be a
contract between the Corporation and each Director, Officer and
employee of the Corporation and any repeal or other limitation of
this Article IX or any repeal or limitation of the Statute or any
other applicable law shall not limit any rights of
indemnification against Liabilities or allowance of Expenses then
existing or arising out of events, acts or omissions occurring
prior to such repeal or limitation, including, without
limitation, the right to indemnification against Liabilities or
allowance of Expenses for Proceedings commenced after such repeal
or limitation to enforce this Article IX with regard to acts,
omissions or events arising prior to such repeal or limitation.
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This Amended and Restated Loan and Security Agreement ("Agreement") is
hereby made as of the first day of October, 1994, by and between ITT
COMMERCIAL FINANCE CORP., a Nevada corporation, with its principal office at
8251 Maryland Avenue, Clayton, Missouri 63105 ("ITT") and GEHL COMPANY, a
Wisconsin corporation, with its principal office at 143 Water Street, West
Bend, Wisconsin 53095, and its subsidiaries/divisions including but not
limited to Hedlund Manufacturing, Inc., Hedlund Martin, Inc., and Gehl Power
Products, Inc. (collectively and individually "Gehl Company"). ITT and Gehl
Company desire to amend and restate in its entirety that certain Loan and
Security Agreement dated October 21, 1993, as amended.
1. DEFINITIONS
1.1 Special Definitions. The following terms will have the following
meanings in this Agreement and in the Other Agreements:
(a) "Accounts": all of Gehl Company's rights to payment for goods
sold or for services rendered to Dealers and Retail Customers,
whether characterized as accounts, contract rights, chattel
paper, instruments, or general intangibles, including any lien
or other security interest that secures or may secure any of
the foregoing, plus all books, invoices, documents and other
records in any form evidencing or relating to any of the
foregoing, now owned or hereafter acquired by Gehl Company.
(b) "Collateral": as defined in Section 5.1.
(c) "Dealer": any dealer in goods manufactured, distributed or
sold by Gehl Company for resale by such dealer.
(d) "Default": the events or occurrences enumerated in Section 6.3
(c) and Section 7 of this Agreement.
(e) "Eligible Account": any of the following, solely to the extent
that such Accounts do not otherwise constitute Ineligible
Accounts:
(i) 100% of the outstanding balance of Accounts arising
from sales of Finished Goods which have aged not more
than 12 months from the Original Invoice Date;
(ii) 100% of the outstanding balance of Accounts arising
from sales of service parts which require payment
within 30 days of the Original Invoice Date and which
are not more than 90 days delinquent ("Net
Accounts");
(iii) 80% of the outstanding balance of Accounts arising
from sales of Finished Goods which have aged more
than 12 months but not more than 24 months from the
Original Invoice Date, and to the extent that said
12-24 month aged Accounts comprise 35% or less of all
Accounts; and
(iv) 50% of the outstanding balance of Accounts arising
from sales or financing of Used Finished Goods,
having maturities of not more than six (6) months,
and to the extent current and not past due.
(f) "Eligible Inventory": 100% of Gehl Company's Finished Goods
and Service Parts that are in the care, control and custody of
Gehl Company.
(g) "Eligible Retail Accounts" and "Eligible Repurchased Retail
Accounts": 100% of Gehl Company's Retail Accounts (including
without limitation Repurchased Retail Accounts) which are
evidenced by Retail Chattel Paper and which are not more than
90 days delinquent, extended more than once or extended for
more than 90 days, or which are in a non-accrual status or
otherwise pledged or sold to another financial institution.
(h) "Finished Goods": Serialized goods and all attachments for
such serialized goods manufactured, distributed or sold by Gehl
Company to authorized Dealers and held for sale or lease.
(i) "Ineligible Accounts": as defined in Section 3.
(j) "Inventory": All of Gehl Company's presently owned and
hereafter acquired inventory, which shall have the meaning
given to that term in the Uniform Commercial Code as set forth
in the Missouri Revised Statutes, as amended from time to time,
and, to the extent not included therein shall also mean all of
Gehl Company's inventory, goods, merchandise, materials,
finished goods, whole goods, work-in-process, component
materials, packaging shipping materials, parts, and other
tangible personal property, now owned or hereafter acquired,
and accessories and attachments thereto held for sale or lease.
(k) "Maximum Line of Credit": the maximum amount extended pursuant
to Section 2.l of this Agreement.
(l) "Obligations": all covenants, agreements, warranties, duties,
representations, loans, liabilities and indebtednesses of any
kind and nature whatsoever now or hereafter arising, owing, due
or payable from Gehl Company to ITT, whether primary or
secondary, joint or several, direct, contingent, fixed or
otherwise, unsecured or arising under this Agreement, the Other
Agreements or any other agreements previously, now or hereafter
executed by Gehl Company and delivered to ITT or by oral
agreement or operation of law and whether or not evidenced by
instruments or evidences of indebtedness.
(m) "Original Invoice Date": is the original invoice date of the
sale of the Finished Goods or Service Parts to the first
Dealer.
(n) "Other Agreements": all security agreements, mortgages,
leases, instruments, documents, guarantees, schedules of
assignment, contracts and similar agreements heretofore, now or
hereafter executed by Gehl Company and delivered to ITT or
delivered by or on behalf of Gehl Company to a third party and
assigned to ITT by operation of law or otherwise.
(o) "Person": any individual, association, firm, corporation,
governmental body, agency or instrumentality whatsoever.
(p) "Policies": all policies of property insurance required to be
maintained by Gehl Company under this Agreement or any of the
Other Agreements.
(q) "Prime Rate": (i) with respect to U.S. Loans, the term "Prime
Rate" shall mean the rate of interest publicly announced or so
designated from time to time by Chase Manhattan Bank as its
prime rate or reference rate, and (ii) with respect to Canadian
Loans (as defined in Section 2.1), the term "Prime Rate" shall
mean the rate of interest publicly announced or so designated
from time to time by the Royal Bank of Canada as its prime rate
for loans in Canadian dollars to borrowers in Canada. The
Prime Rate in effect on the last business day of any given
month will be the Prime Rate for the following month and will
be effective as of the first (1st) day of such following month
without any notice to either party.
(r) "Retail Accounts": Accounts, including, without limitation,
Accounts repurchased by Gehl Company from third party creditors
to whom Gehl Company previously pledged or sold such Accounts
("Repurchased Retail Accounts"), arising from the sale of
Finished Goods to Retail Customers or to Dealers for the
purpose of lease or rental to the Dealers' customers.
(s) "Retail Chattel Paper": all of Gehl Company's chattel paper
arising from Gehl Company's sale of Finished Goods to Dealers
under installment sales contracts or arising from Dealer's sale
of Finished Goods to retail customers under installment sales
contracts.
(t) "Retail Customer": any and all purchasers of goods
manufactured, distributed or sold by Gehl Company.
(u) "Service Parts": Parts manufactured, sold or distributed by
Gehl Company to authorized Dealers and in Gehl Company's
possession.
(v) "Supplemental Line of Credit": a line of credit extended
pursuant to Section 4.1 of this Agreement.
(w) "Used Finished Goods": means Finished Goods acquired by any
Dealer from, or financed by, Gehl Company, which are unable to
be sold by Dealer as new and unused, and including, without
limitation trade-in Finished Goods and repossessed Finished
Goods previously sold at retail.
1.2. Uniform Commercial Code Definitions. Each term used in
this Agreement or the Other Agreements and not
specifically defined herein shall have the meaning
provided by the Uniform Commercial Code (from time to time
in effect in the state of Missouri) to the extent the same
is defined or used therein.
2. CREDIT FACILITY/INTEREST RATE/CHARGES
2.1 Credit Facility. In consideration of Gehl Company's performance of
its Obligations and subject to Sections 3 and 4, ITT grants to Gehl
Company an aggregate credit facility in the maximum amount of
Seventy-five Million DOLLARS ($75,000,000.00) (the "Credit
Facility"), which shall be available in the form as follows:
(a) "Maximum Line of Credit": In consideration of Gehl Company's
performance of its Obligations and subject to Sections 3 and 4,
ITT grants to Gehl Company separate lines of credit of (a)
SIXTY-SEVEN MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS
($67,500,000.00 U.S.) (the "U.S. Line"), and (b) that
fluctuating amount of Canadian Dollars which, from day-to-day,
shall equal, based on the daily noon spot exchange rate of the
Royal Bank of Canada (the "Exchange Rate") SEVEN MILLION FIVE
HUNDRED THOUSAND UNITED STATES DOLLARS ($7,500,000.00 U.S.)
(the "Canadian Line") for the period commencing on the
execution of this Agreement until December 31, 1997. Such
lines of credit are collectively called the "Maximum Line of
Credit"; loans under the U.S. Line are called "U.S. Loans"; and
loans under the Canadian Line are called "Canadian Loans".
U.S. Loans shall be repayable only in United States Dollars and
Canadian Loans shall be repayable only in Canadian Dollars.
Gehl Company agrees that for purposes of determining loan
availability and over-advance positions, all outstanding
Canadian Loans shall be valued daily, at the then current
Exchange Rate (for example: if on January 1, Gehl Company
borrowed $9,500,000 Canadian which at the time was equivalent
to $7,500,000 U.S., and on January 3, the Exchange Rate changed
such that $9,500,000 Canadian was then valued at $8,000,000
U.S., Gehl Company will be deemed over-advanced by $500,000).
Any over-advance will be immediately repayable by Gehl Company
upon demand by ITT. In determining credit available at any
given time for U.S. Loans pursuant to the provisions of
Sections 3.2 and 4.2 or Canadian Loans pursuant to the
provisions of Section 3.2, Canadian Loans may be made only with
respect to Eligible Accounts arising from sales payable in
Canadian Dollars, and U.S. Loans may be made only with respect
to Eligible Accounts, including, but not limited to, Eligible
Retail Accounts, arising from sales payable in United States
dollars and Eligible Inventory. Gehl Company agrees that all
reports, agings, records and other information provided by it
pursuant to this Agreement, including without limitation, those
provided pursuant to Section 3.1, shall, in form and detail
reasonably satisfactory to ITT, separately identify Gehl
Company's Accounts payable in Canadian Dollars from those
payable in United States Dollars.
(b) Supplemental Line of Credit. ITT grants to Gehl Company a
Supplemental Line of Credit in an amount not to exceed Fifteen
Million Dollars ($15,000,000.00) of the U.S. Line.
2.1.1 Interest. Gehl Company agrees to pay interest to ITT, payable
as provided in Section 2.2, on the average daily outstanding
balance under the Credit Facility, at a rate that is:
U.S. Loans the lesser of (i) one-half of one percent (0.5%) per
annum higher than the daily Prime Rate in effect; and (ii) the
highest rate from time to time permitted by applicable law (and
amounts received from Gehl Company in excess of such highest
rate from time to time permitted by applicable law will be
considered reductions of principal to the extent of such
excess). Notwithstanding the foregoing, the rate shall be
adjusted if Gehl Company breaches any financial covenant set
forth in Section 6.3 of this Agreement, in which event the rate
shall be determined in accordance with that subsection. The
rate determined pursuant to the preceding sentence shall take
effect upon ITT's receipt of Gehl Company's quarterly or
audited fiscal year-end financial statements for such periods,
as applicable. Canada Loans. With respect to Canadian Loans,
Gehl Company agrees to pay interest to ITT, payable as provided
in Section 2.2, on the average daily outstanding balance under
the Canadian Line, at a rate (i) that is the lesser of (a) one
and one-half of one percent (1.50%) per annum higher than the
Prime Rate in effect, and (b) the highest rate from time to
time permitted by applicable law (and amounts received from
Gehl Company in excess of such highest rate from time to time
permitted by applicable law will be considered reductions of
principal to the extent of such excess); or (ii) pursuant to
Section 6.3 of this Agreement.
2.1.2 Charges. Gehl Company agrees to pay to ITT an annual fee
(hereinafter sometimes referred to as a "charge") equal to the
lesser of (a) the amount of One-Eighth of One percent (.125%)
of the aggregate amount of the Maximum Line of Credit; and (b)
the highest charges from time to time permitted by applicable
law (and amounts received from Gehl Company in excess of such
highest rate from time to time permitted by applicable law will
be considered reductions of principal to the extent of such
excess). Said charge shall be payable on December 31, 1994, on
December 31, 1995, and on December 31, 1996.
2.1.3 Days. All interest to be charged under the Agreement will be
computed on the basis of a year of 360 days divided by the
actual number of days elapsed in the applicable interest
period.
2.1.4 Non-Use of Credit Facility Fee. Gehl Company agrees to pay ITT
an annual non-use of credit facility fee on the daily average
of the unused amount of the U.S. Line during each calendar year
of the term of this Agreement (including without limitation
calendar year 1994). Such non-use fee shall be payable within
fifteen days following the end of each calendar year. Such
non-use fee shall be calculated by multiplying (a) one-half of
one percent (0.5%) times (b) the positive difference if any
between (i) Thirty Million Dollars ($30,000,000.00) minus (ii)
the average daily balance of the U.S. Line for the applicable
calendar year.
2.2 Payments.
(a) Interest and Charges. Interest and any charges (other than
those charges provided in Sections 2.1.2 and 2.1.4) hereafter
agreed to by the parties, are payable monthly on the fifteenth
(15th) calendar day of the month that follows Gehl Company's
receipt of ITT's bill or statement therefor, or within seven
(7) days after Gehl Company's receipt of such bill or
statement, whichever is later. For example, if Gehl Company
receives ITT's interest statement for November at any time on
or prior to December 8, the interest charges are payable on
December 15, and if Gehl Company receives such interest
statement after December 8 the interest charges are payable
within seven (7) days after said receipt. Interest and any
charges that remain outstanding after the foregoing due date
shall be assessed a finance charge equal to the Prime Rate plus
Three percent (3.0%) on such outstanding amounts until paid in
full. Each statement of account rendered by ITT to Gehl
Company and relating to the Obligations will be presumed to be
correct and accurate and will constitute an account stated
fully binding upon Gehl Company unless, within sixty (60) days
from the date of receipt of such statement, Gehl Company gives
to ITT written objection specifying the error or errors, if
any, contained in that statement. If Gehl Company gives
written objection to ITT after said sixty (60) day period, ITT
may, but is not obligated to, correct said billing errors.
(b) Principal. Principal amounts advanced hereunder shall be due
and payable by Gehl Company, as follows:
(i) in full upon the termination of this Agreement;
(ii) immediately at any time or times during the term of
this Agreement by an amount equal to the excess, if
any, of Gehl Company's outstanding principal balance
over the then applicable line of credit set forth in
Section 2.1; and
(iii) in full immediately upon any demand for payment made
pursuant to Section 7.2.
2.3 Funding Source
Gehl Company acknowledges that ITT may, in its sole discretion, make
any Canadian Loan by causing its Canadian affiliate, ITT Commercial
Finance, a Division of ITT Industries of Canada, Ltd., or any other
affiliate of ITT ("ITT Canada") to fund or make advances of such
loans on ITT's behalf, or to make or continue such Canadian Loans
directly. ITT Canada shall inure to the rights and benefits of this
Agreement with respect to Canadian Loans made or funded by it, as
though it were a party hereto, although, unless an assignment as
described below shall have occurred, ITT may continue to hold all
Collateral (and enforce the security interest therein), and receive
and issue all communications, notices, requests, waivers, consents
and amendments (collectively, "Communications"), in ITT's own name,
acting individually and/or on behalf, and for the benefit, of ITT
Canada, and Gehl Company may rely upon any Communication received
from ITT as being made by ITT both on its own behalf and on behalf
of ITT Canada. ITT hereby directs Gehl Company, and Gehl Company
hereby agrees (until otherwise advised by ITT), to pay all amounts
in respect of Canadian Loans directly to the order of ITT Canada, at
such addresses as ITT Canada may from time to time specify in
writing. ITT may, upon notice to Gehl Company, elect to assign
directly all or any part of the Canadian Loans to ITT Canada,
together with an undivided pro-rata portion of all Collateral and
any other security for all Loans, and Gehl Company agrees in such
event to recognize ITT Canada as its direct lender of the Canadian
Loans with all rights and benefits of this Agreement. ITT may elect
to also require Gehl Company, and Gehl Company hereby agrees, to
amend or execute such financing statements (or Canadian
equivalents), and amendments to this Agreement and the other
documents entered into in connection herewith, as may be reasonably
required to effect such assignment, or to obtain for ITT Canada the
rights, protections, security and/or Collateral (or Canadian
equivalent) granted to ITT under this Agreement. Without limiting
the generality of the foregoing, Gehl Company hereby grants to ITT
Canada as continuing security for its Obligations hereunder, a
continuing specific and fixed security interest in the Collateral
pursuant to all the terms and conditions of this Agreement.
3. LINE OF CREDIT - ACCOUNTS RECEIVABLE - ADDITIONAL PROVISIONS
3.1 Schedules. To facilitate Gehl Company's borrowings and the
maintenance of ITT's records, Gehl Company will, no less than
monthly or as otherwise agreed to, furnish ITT with a schedule of
Accounts in a form mutually agreeable to Gehl Company and ITT
("Schedule") describing all Accounts created or acquired by Gehl
Company since the last Schedule furnished ITT (which are readily
traceable to Gehl Company's subordinate accounts receivable journal
or general ledger accounts), the total collections that Gehl Company
received on the outstanding Accounts (including cash, cash
equivalents such as checks and drafts, and Retail Chattel Paper),
the total of any positive or negative adjustments or adjustments
other than cash with supporting documentation (including discounts
allowed or credit memorandums or returns), and the Ineligible
Accounts. However, failure to provide any such Schedules in a
timely manner will not impair ITT's rights and security interest
with respect to all of the Accounts.
3.2 Available Credit. On receipt of each Schedule, or as otherwise
requested by Gehl Company, ITT will credit Gehl Company with (a)
Seventy-Seven and one-half percent (77.5%) of the net amount of the
Eligible Accounts listed in such Schedule, excluding Net Accounts,
and (b) Fifty percent (50%) of the net amount of Net Accounts listed
in such Schedule, and remit to Gehl Company, in immediately
available funds, an amount equal to Gehl Company's loan request up
to the Maximum Line of Credit, in accordance with the electronic
transfer instructions contained in Section 8.16 of this Agreement;
provided however, that the outstanding principal balance of all
advances or loans made on Net Accounts will at no time exceed Two
Million Five Hundred Thousand Dollars ($2,500,000.00), and the
outstanding principal balance of all loans made on foreign Accounts
which are insured by a policy in form and substance and issued by an
insurer acceptable to ITT will at no time exceed Two Million Dollars
($2,000,000.00). ITT will loan Gehl Company, on request, such
amounts so credited or a part thereof as requested provided that at
no time will such outstanding loans exceed Gehl Company's Maximum
Line of Credit. No advances or loans need be made by ITT if Gehl
Company is in Default. Gehl Company acknowledges that any advances
or loans made on Net Accounts or foreign Accounts will be deemed
made under the U.S. Line.
3.3 Ineligible Accounts. The following Accounts will be deemed
ineligible accounts ("Ineligible Accounts"):
(a) Accounts created from the sale of goods and services on non-
standard terms and/or that allow for payment to be made outside
standard financing program terms established by Gehl Company,
but excluding Accounts as reasonably modified by Gehl Company
in accordance with past business practices. With ITT's consent,
which consent will not be unreasonably withheld, new terms or
programs not in accordance with past business practices will
not be grounds for ineligibility;
(b) Accounts arising from sales of Finished Goods which have aged
by more than twenty-four (24) months from the Original Invoice
Date;
(c) Accounts arising from sales of Used Finished Goods which are
past due;
(d) Accounts with respect to which the obligor is an officer,
employee, agent, parent, subsidiary or affiliate of Gehl
Company or is related or has common shareholders, officers or
directors with Gehl Company;
(e) Consignment sales;
(f) Accounts with respect to which the payment by the obligor is or
may be conditional, excluding the effect of any state or
provincial buy-back laws;
(g) Accounts with respect to which (i) the obligor is not a
commercial or institutional entity, or (ii) the obligor is not
a resident of the United States, Canada or Puerto Rico, unless
said foreign Accounts are either secured by letters of credit
acceptable to ITT or insured by a policy in form and substance
and issued by an insurer acceptable to ITT;
(h) Accounts with respect to which any warranty or representation
provided in Subsection 3.4 is not true and correct;
(i) Accounts which represent goods purchased for a personal, family
or household purpose;
(j) Accounts which represent goods that have been used for
demonstration purposes or loaned by Gehl Company to another
party except as may be presently allowed under the standard
financing program terms established by Gehl Company or in
accordance with past business practices;
(k) Accounts which are progress payment accounts or contra
accounts;
(l) for Accounts in excess of $500,000.00 and not specifically
approved by ITT in writing, which approval will not be
unreasonably withheld, all amounts in excess of $500,000.00;
(m) Accounts which are unsecured, secured by unperfected security
interests, secured but, in ITT's reasonable determination,
undercollateralized, not secured by first priority security
interests, or which are secured by assets other than Finished
Goods or Service Parts which have not been expressly approved
by ITT, including, without limitation, Accounts relating to
repossessed or returned Finished Goods, but excluding such
Accounts that are re-invoiced to another Dealer provided that
said Account has not aged more than 24 months from the Original
Invoice Date;
(n) Accounts with respect to which the obligor is in default of any
material provision of the financing or security agreement
governing such Account, including, without limitation, Accounts
paid with checks returned and marked Insufficient Funds,
Accounts relating to Finished Goods sold out of trust, or
Accounts which are otherwise in dispute, and in each case not
resolved within 30 days; or
(o) any and all other Accounts which ITT, by using reasonable
business judgment in good faith and after giving Gehl Company
three (3) business days to respond, deems to be unacceptable.
3.4 Warranties and Representations. With respect to each Account now or
hereafter listed or referred to by Gehl Company on any Schedule,
Gehl Company warrants and represents to ITT that (except as
otherwise specified in this Agreement or the Other Agreements or as
otherwise disclosed in writing to ITT): (a) such Account is genuine,
in all respects what it purports to be and is not evidenced by a
judgment or promissory note or similar instrument or agreement; (b)
it represents undisputed bona fide transactions completed in
accordance with the terms and conditions contained in the invoices
and purchase orders relating thereto; (c) the goods sold (or
services rendered) which resulted in the creation of such Account
have been delivered or rendered to and accepted by the obligor; (d)
the amounts shown on the respective Schedules, Gehl Company's books
and records and all invoices and statements delivered to ITT with
respect thereto are absolutely owing to Gehl Company and are not
contingent for any reason; (e) no payments have been or will be made
thereon except payments turned over to ITT; (f) there are no set-
offs, counterclaims or disputes existing or asserted with respect
thereto from any Dealer in excess of $50,000.00 that has not been
resolved within thirty (30) days; (g) Gehl Company has not made any
agreement with any obligor without ITT's written consent, which
consent shall not be unreasonably withheld, for any deduction or
discount of the sum payable thereunder in excess of 10% of the sum
payable thereunder or in excess of $1,000.00, whichever is greater,
except discounts allowed by Gehl Company in the ordinary course of
its business as set forth in the Dealer's schedule of discounts and
terms; Gehl Company and ITT agree, if either party believes that the
provisions of this subsection (g) are posing undue administrative
hardship or risk, as the case may be, to negotiate in good faith to
attempt to satisfy the concerns of the other party; (h) there are no
facts, events or occurrences which in any way impair the validity or
enforcement thereof or tend to reduce the amount payable thereunder
from the amount thereof as shown on the respective Schedules, Gehl
Company's books and records and the invoices and statements
delivered to ITT with respect thereto; (i) all obligors thereon have
the ostensible authority to contract; and (j) there are no
proceedings or actions known to Gehl Company which are threatened or
pending against any obligor thereon which might result in any
material adverse change in its financial condition.
3.5 Notes. Gehl Company's Obligations for loans made pursuant to the
Maximum Line of Credit, at ITT's sole discretion, will be evidenced
by promissory notes in form satisfactory to ITT. Such loans will
bear interest at the rate and will be subject to the terms set forth
herein and the Other Agreements.
3.6 Reimbursement for Charges. Gehl Company will reimburse ITT for all
charges made by banks for collection of checks, including charges
for NSF checks, and other items of payment and for remittances of
proceeds of the loans hereunder.
3.7 Collections. Gehl Company is authorized to collect Accounts
(excluding payments arising out of Retail Chattel Paper, except as
set forth below) in a lockbox account that is to be blocked in the
favor of ITT so that only disbursements to be made against the
lockbox account will be in favor of ITT ("Lockbox Account"). Gehl
Company will advise all obligors of the Accounts to make all
payments on Accounts into the Lockbox Account. Such authorization
may be terminated by ITT at any time if Gehl Company is in Default
under this Agreement and the Obligations have been accelerated by
ITT, and ITT may notify any obligor of the assignment of Accounts
and collect the same. All payments on Accounts from Canadian
Dealers will be deposited into a Canadian lockbox account, converted
into U.S. dollars, and then electronically transferred to ITT in
accordance with the Electronic Transfer Instructions in Section 8.16
of this Agreement. So long as Gehl Company is not in Default and
the Obligations have not been accelerated, Gehl Company has no
obligation to make payments on Accounts from Dealers located outside
of the United States, Canada or Puerto Rico to ITT into the Lockbox
Account, unless such Accounts have not been deemed ineligible
pursuant to Section 3.3(g). Until delivery to ITT, Gehl Company
will keep all payments on the Accounts that it otherwise receives in
trust for ITT separate and apart from Gehl Company's own funds so
that they are capable of identification as the property of ITT, and
will deposit said payments into the Lockbox Account within one (1)
business day of their receipt. In the event of a Default, Gehl
Company shall collect any payments arising from Retail Chattel Paper
in a separate lockbox account blocked in favor of ITT ("the Standby
Lockbox Account"). Any disbursements made against the Standby
Lockbox Account will be in favor of ITT. Gehl Company will advise
all obligors of such Retail Chattel Paper to make all payments into
the Standby Lockbox Account. If Gehl Company is in default under
this Agreement and the Obligations have been accelerated by ITT, ITT
may notify said obligors of the assignment of the Retail Chattel
Paper and the collection of the same. Until delivery to ITT, Gehl
Company will keep all payments on the Retail Chattel Paper that it
otherwise receives in trust for ITT separate and apart from Gehl
Company's own funds so that they are capable of identification as
the property of ITT, and will deposit said payments into the Standby
Lockbox Account within one (1) business day of their receipt.
3.8 Collection Days. All Gehl Company payments and all amounts received
in settlement, adjustment, or liquidation of any Account will be
credited by ITT to Gehl Company's account upon the receipt of
immediately available funds for said payments.
3.9 Power of Attorney. Gehl Company irrevocably appoints ITT (and any
Person designated by it) as Gehl Company's true and lawful Attorney
with full power at any time, in the discretion of ITT, if a Default
has occurred under this Agreement and ITT has accelerated the
indebtedness, to, in a commercially reasonable manner: (a) demand
payment, enforce payment and otherwise exercise all of Gehl
Company's rights, and remedies with respect to the collection of any
Accounts; (b) settle, adjust, compromise, extend or renew any
Accounts; (c) settle, adjust or compromise any legal proceedings
brought to collect any Accounts; (d) sell or assign any Accounts
upon such terms, for such amounts and at such time or times as ITT
may deem advisable; (e) discharge and release any Accounts; (f)
prepare, file and sign Gehl Company's name on any Proof of Claim in
Bankruptcy or similar document against any obligor; (g) endorse the
name of Gehl Company upon any chattel paper, document, instrument,
invoice, freight bill, bill of lading or similar document or
agreement relating to any Account or goods pertaining thereto; (h)
endorse the name of Gehl Company upon any of the items of payment of
proceeds and deposit the same in the account of ITT for application
to the Obligations; (i) sign the name of Gehl Company to
verifications of Accounts and notices thereof to obligors; (j) sign
the name of Gehl Company on any document or instrument that ITT
shall deem necessary or appropriate to perfect and maintain
perfected the security interests in the Collateral under this
Agreement and the Other Agreements; (k) make, settle and adjust
claims under the Policies and endorse Gehl Company's name on any
check, instrument or other item of payment of the proceeds of the
Policies; (l) take control in any manner of any item of payments or
proceeds and for such purpose to notify the Postal Authorities to
change the address for delivery of mail addressed to Gehl Company to
such address as ITT may designate. The power of attorney granted by
this Section is for value and coupled with an interest and is
irrevocable so long as any Obligations remain outstanding and
nothing done by ITT pursuant to such power of attorney will reduce
any of the Obligations, except as pursuant to applicable law.
3.10 Continuing Requirements. Gehl Company will submit to ITT a report
each month that contains: (a) if from time to time requested by
ITT, copies of all invoices, delivery evidences and other such
documents relating to each Account; (b) information of any rejection
of goods by any obligor, delays in delivery of goods, non-
performance of contracts and of any assertion of any claim, offset
or counterclaim by any obligor in excess of $50,000.00; (c)
information of all material adverse information relating to the
financial condition of any obligor; (d) information of which
Accounts may be deemed ineligible as defined in Subsection 3.3; and
(e) an aging of its Accounts for each month which shall include its
accounts receivable ledger and its on line aging of Accounts. In
addition, Gehl Company shall: (a) place the appropriate endorsements
or assignments upon all such items of payment and proceeds so that
the same may be properly deposited by ITT to ITT's account; (b) not
permit or agree to any compromise or settlement or make any material
change or modification of any kind or nature with respect to any
Account, including any of the terms relating thereto except as in
accordance with Section 3.4(g); (c) keep all goods rejected or
returned by any obligor and all goods repossessed or stopped in
transit by Gehl Company from any obligor in the aggregate in excess
of $50,000.00 segregated from other property of Gehl Company,
holding the same in trust and as trustee for ITT until such time as
Gehl Company reports to ITT that said Account is no longer in its
borrowing base; (d) upon ITT's request, stamp or otherwise mark all
chattel paper and instruments relating to the Accounts now owned or
hereafter acquired by it to show that the same are subject to ITT's
security interest and immediately thereafter deliver or cause such
chattel paper and instruments to be delivered to ITT with
appropriate endorsements and assignments to vest a security interest
in and possession in ITT; and (e) continue to conduct floorcheck
inspections of its Dealers in accordance with standard financing
program terms established by Gehl Company, and assist ITT in
conducting periodic floorchecks and/or mail verifications of
approximately ten percent (10%) of the Dealers per month.
3.11 Rights of ITT. ITT may, without notice to Gehl Company and at any
time or times hereafter verify the validity and amount of any
Accounts, and with the consent of Gehl Company, verify any other
matter relating to any Account, by mail, telephone or by means
otherwise as agreed to by the parties.
3.12 Release. Gehl Company releases ITT from all claims and causes of
action which Gehl Company may now or hereafter have for any loss or
damage to it claimed to be caused by or arising from any action
taken by ITT in accordance with the terms of this Agreement from:
(a) any failure of ITT to protect, enforce or collect, in whole or
in part, any Account; (b) ITT's notification to any obligors thereon
of ITT's security interest in any of the Accounts; (c) ITT's
directing any obligor to pay any sum owing to Gehl Company directly
to ITT; and (d) any other act or omission to act on the part of ITT,
its officers, agents or employees, except for gross negligence or
willful misconduct.
3.13 Books and Records. Gehl Company represents and warrants that it
keeps and maintains all of its books and records pertaining to the
Accounts at its principal place of business designated on page 1 of
this Agreement, and agrees to give ITT at least ten (10) days prior
written notice before moving any such books and records to any other
location.
4. SUPPLEMENTAL LINE OF CREDIT - ADDITIONAL PROVISIONS
4.1 Schedules. To facilitate Gehl Company's borrowings and the
maintenance of ITT's records, Gehl Company will, no less than
monthly or as otherwise agreed to, furnish ITT with a schedule of
Inventory ("Inventory Schedule") and a schedule of Retail Accounts
("Retail Accounts Schedule"). The Inventory Schedule shall specify
Gehl Company's cost of Inventory, and such other matters and
information relating to Inventory as ITT may from time to time
request, and such Retail Accounts Schedule shall describe all Retail
Accounts and Ineligible Accounts, in such manner as ITT may from
time to time request, created or acquired by Gehl Company since the
last Retail Accounts Schedule furnished ITT (which are readily
traceable to Gehl Company's subordinate accounts receivable journal
or general ledger accounts). However, failure to provide any such
Schedules in a timely manner will not impair ITT's rights and
security interest with respect to all of the Inventory or Retail
Accounts.
4.2 Available Credit. On receipt of each Inventory Schedule and Retail
Account Schedule, ITT will credit Gehl Company at the following
percentages of the net amount of the Eligible Inventory and Eligible
Retail Accounts, respectively, listed in such Schedule:
Finished Goods 75%
Service Parts 25%
Eligible Retail Accounts (except Eligible Repurchased Retail
Accounts) 75%
Eligible Repurchased Retail Accounts 50%
ITT will loan Gehl Company, on request, such amounts so credited or
a part thereof as provided by the terms of Section 2.1 and this
section; provided, however, that the outstanding principal balance
of all advances or loans made on Eligible Repurchased Retail
Accounts will at no time exceed One Million Dollars ($1,000,000.00).
No advances or loans need be made by ITT if Gehl Company is in
Default.
4.3 Payments. Payments shall be made in accordance with Section 2.2
above.
4.4 Warranties and Representations. Gehl Company warrants and
represents to ITT and covenants and agrees with ITT that: (a)
Inventory will be kept only at the locations identified in Exhibit
A, except for demonstrator or repossessed inventory listed in Gehl
Company's monthly memorandums to ITT, (b) Gehl Company now keeps and
will keep correct and accurate records itemizing and describing the
kind, type, quality and quantity of Inventory, Gehl Company's cost
therefor and the selling price thereof, and the monthly withdrawals
of Finished Goods and Service Parts therefrom; (c) Inventory is not
and will not be stored with a bailee, repairman, warehouseman or
similar party without ITT's prior written consent, and Gehl Company
will, concurrently with delivery to such party, cause any such party
to issue and deliver to ITT, in form acceptable to ITT, warehouse
receipts, in ITT's name evidencing the storage of such Inventory,
and waivers of warehouseman's liens in favor of ITT; (d) ITT and its
agents and representatives may, from time to time upon demand,
during Gehl Company's usual business hours, inspect and examine
Inventory and check and test the same as to quality, quantity, value
and condition, and any collection by ITT of any amounts Gehl Company
owes ITT under this Agreement at or during ITT's examination of the
Inventory will not relieve Gehl Company of its continuing obligation
to pay its Obligations owed to ITT in strict accordance with the
terms of this Agreement; (e) Gehl Company will pay all taxes, rents,
business taxes, and the like on the premises where the Inventory is
located; and (f) Gehl Company will not rent, lease, lend,
demonstrate, pledge, transfer or secrete any of the Inventory or use
any of the Inventory for any purpose other than demonstration,
exhibition and sale to buyers in the ordinary course of business,
without ITT's prior written consent.
4.5 Revisions. ITT, after consulting with Gehl Company, may in its sole
discretion using reasonable business judgment in good faith, and
after giving Gehl Company three (3) business days to respond,
declare amounts of the Inventory and Retail Accounts ineligible.
ITT need not advance on Inventory, including Finished Goods and
Service Parts and attachments thereto, which it deems obsolete.
4.6 Release of Security Interest. ITT agrees at Gehl Company's request
to release its security interest in Retail Chattel Paper for the
purpose of sale of the Retail Chattel Paper to third parties so long
as proceeds of such sale of the Retail Chatter Paper are deposited
in the Lockbox Account.
5. SECURITY - COLLATERAL
5.1 Grant. To secure Gehl Company's payment of the Obligations and to
secure Gehl Company's performance of all of the provisions under
this Agreement and the Other Agreements, Gehl Company grants ITT a
security interest in all inventory, equipment, fixtures, accounts,
contract rights, chattel paper, instruments, reserves, documents of
title, deposit accounts, and general intangibles, whether now owned
or hereafter acquired by Gehl Company, and all attachments, parts,
accessories, accessions, substitutions and replacements thereto, all
trade secrets, patents, inventions and other proprietary
information, trademarks, service marks, technical know-how, quality
control standards, business names and the goodwill of the business
relating thereto, all copyrights and all tangible property embodying
the copyrights and all license agreements relating to any of the
foregoing and income from such license agreements and the right to
sue for all past, present and future infringements of the foregoing
and any and all other items of intellectual property, whether now
owned or hereafter acquired, and all proceeds of any of the
foregoing. All of the above assets are hereinafter collectively
referred to as "Collateral." Gehl Company covenants with ITT that:
(a) ITT may realize upon all or part of any collateral in any order
it desires and any realization by any means upon any collateral will
not bar realization upon any other collateral; and (b) the security
hereby created is a continuing security interest and will secure the
payment of all present and future Obligations pursuant to this
Agreement and the Other Agreements.
5.2 Instruments. Gehl Company will execute and deliver to ITT, or cause
to be executed and delivered, at such time or times as ITT may
request, all financing statements, security agreements, assignments,
certificates, affidavits, reports, schedules of accounts, and other
documents and instruments that ITT may deem necessary to perfect and
maintain perfected ITT's security interests in the Collateral and to
fully consummate the transactions contemplated under this Agreement
and the Other Agreements. Gehl Company will make appropriate
entries on its books and records disclosing ITT's security interests
in the Collateral.
6. WARRANTIES AND REPRESENTATIONS
6.1 Affirmative Warranties and Representations. Except as otherwise
specifically provided in the Other Agreements, Gehl Company warrants
and represents to ITT that: (a) Gehl Company has good and valid
title to all Collateral, all Accounts are secured by a perfected,
first security interest in all Inventory of any Dealer financed by
Gehl Company, and ITT's security interest in the Collateral is now
and will at all times constitute a perfected, first security
interest in such Collateral; (b) ITT's security interest in the
Collateral is not now and will not become subordinate to the
security interest, lien, encumbrance or claim of any Person; (c)
Gehl Company is and will at all times during the term of this
Agreement be a corporation duly organized, existing and in good
standing under the laws of the state of Wisconsin and qualified and
licensed to do business in each state, county, or parish, in which
the nature of its business or property requires it be qualified or
licensed; (d) Gehl Company has the right and is duly authorized to
enter into this Agreement and the Other Agreements; (e) Gehl
Company's execution of this Agreement and the Other Agreements does
not constitute a breach of any provision contained in Gehl Company's
articles of incorporation or by-laws or in any agreement to which
Gehl Company is now or hereafter becomes a party or by which Gehl
Company is, may or hereafter becomes or may become bound; (f) all
financial statements and information relating to Gehl Company which
have been delivered by Gehl Company to ITT are true and correct and
have been prepared in accordance with generally accepted accounting
principles and there has been no material adverse change in the
financial or business condition of Gehl Company since the submission
of any such financial information to ITT; (g) there are no actions
or proceedings pending or threatened against Gehl Company which can
be reasonably expected to result in any material adverse change in
Gehl Company's financial or business condition or which in any
material way adversely affect any of Gehl Company's assets; (h) Gehl
Company will maintain all of its properties in good condition and
repair and pay and discharge all costs of repair and maintenance
thereof and all rental and mortgage payments and related charges
pertaining thereto; (i) Gehl Company has duly filed and will
hereafter duly file all federal, state, local and other governmental
tax returns which it is required by law to file; (j) all taxes,
levies, assessments and governmental charges of any nature which are
or may be due by Gehl Company have been fully paid and Gehl Company
will promptly pay when due all such tax liabilities which may
hereafter accrue, unless contested in good faith by Gehl Company
with written notice to ITT, and Gehl Company will promptly notify
ITT of any tax liens filed against its assets; (k) Gehl Company will
maintain a standard and modern system of accounting in accordance
with generally accepted accounting principles and ledger and account
records which contain such information as may be requested by ITT;
(l) Gehl Company will at all times permit ITT (or any Person
designated by it) upon demand, during Gehl Company's usual business
hours, to have access to and examine the Collateral, Gehl Company's
other assets and Gehl Company's books and records and, in connection
with the latter, permit the copying of the same; (m) Gehl Company
will deliver to ITT (1) within ninety (90) days after the end of
each of Gehl Company's fiscal years, a reasonably detailed balance
sheet and a reasonably detailed profit and loss statement covering
Gehl Company's operations for such fiscal year, certified by an
independent certified public accountant satisfactory to ITT, and a
copy of Gehl Company's Form 10-K annual report to the Securities and
Exchange Commission ("SEC"); (2) within forty-five (45) days after
the end of each of Gehl Company's fiscal quarters, Gehl Company will
deliver to ITT a reasonably detailed balance sheet as of the last
day of such quarter and a profit and loss statement covering Gehl
Company's operations for such quarter prepared in accordance with
GAAP, and a copy of Gehl Company's Form 10-Q quarterly report to the
SEC; (3) within thirty (30) days after the end of each of Gehl
Company's fiscal months, Gehl Company will deliver to ITT a
reasonably detailed balance sheet as of the last day of such month
and a profit and loss statement covering Gehl Company's operations
for such month; and (4) within (10) days after request therefor by
ITT, any other report reasonably requested by ITT relating to the
Collateral or the financial condition of Gehl Company; (n) Gehl
Company will promptly supply ITT with such other information
concerning its affairs as ITT hereafter may reasonably request; (o)
Gehl Company will give ITT thirty (30) days advance notice prior to
any change in Gehl Company's identity, name, form of ownership or
management and any change in its principal place of business,
additions or discontinuances of any locations; (p) Gehl Company, at
its sole expense, will keep and maintain the Collateral insured for
its full insurable value against loss or damage under an "all risk"
property insurance policy. All Policies will be in form, with "A
minus" rated insurance companies or better, and in amounts
satisfactory to ITT. Gehl Company will deliver to ITT upon ITT's
request, true and correct copies of the Policies as well as such
evidence of insurance as ITT may require, and evidence of payment of
all premiums therefor. Each of the Policies will contain an
endorsement, in a form satisfactory to ITT, showing loss payable to
ITT as its interests may appear. Each insurer will agree, by
endorsement upon the Policy issued by it or by independent
instruments furnished to ITT, that it will give ITT at least ten
(10) days written notice before any Policy is altered or cancelled
and that no act or default of Gehl Company or any other Person will
affect the right of ITT to recover under the Policies. Gehl Company
hereby directs all insurers under the Policies to pay the proceeds
as ITT's interests may appear directly to ITT; (q) Gehl Company will
observe and perform all matters necessary or expedient to be
observed or performed under or by virtue of any lease, license,
concession or franchise forming part of the Collateral in order to
preserve, protect and maintain all the rights of ITT thereunder; (r)
Gehl Company, upon ITT's request, will pledge, mortgage and convey
to ITT real properties to secure the payment and performance of its
current and future Obligations to ITT; (s) Gehl Company will advise
ITT of the commencement or institution of legal proceedings against
Gehl Company before any court, administrative board or tribunal
which Gehl Company management reasonably believes seeks damages or
which may result in liability in excess of $100,000.00; (t) Gehl
Company will diligently maintain, use and operate the Collateral and
will conduct its business in a proper and efficient manner so as to
preserve and protect the Collateral and the earnings, incomes, rents
and profits thereof; (u) it will not revise or amend any documents,
instruments, security agreements and other agreements executed by
any Dealer with or for the benefit of Gehl Company to document any
Account without the express written consent of ITT, which consent
will not be unreasonably withheld, except for discounts and
deductions as provided in Section 3.4(g); and (v) other than Gehl
International, Gehl Company has no subsidiaries or affiliates other
than those set forth at the top of the first page of this Agreement.
6.2. Negative Covenants. Gehl Company will not at any time (without
ITT's prior written consent): (a) except to ITT, grant to or in
favor of any Person a security interest in or permit to exist a
lien, claim or encumbrance in the Collateral except for any lien,
claim or encumbrance: (i) that secures an obligation incurred in the
ordinary course of business and which obligation is not delinquent;
(ii) that is subordinated to ITT in a form acceptable to ITT; or
(iii) is permitted by the terms of this Agreement; (b) other than in
the ordinary course of its business, sell, lease or otherwise
dispose of or transfer any of its assets or make any distribution of
Gehl Company's property or assets which might in any material way
adversely affect the ability of Gehl Company to repay the
Obligations; (c) grant a lien in or pledge any real properties to
any third party without ITT's prior written consent or further
encumber after the date of this Agreement any real properties set
forth in Exhibit B hereto; (d) merge or consolidate with another
corporation; (e) acquire any other corporation which might in any
material way adversely affect the ability of Gehl Company to repay
the Obligations; (f) enter into any transaction not in the usual
course of its business which might in any material way adversely
affect the ability of Gehl Company to repay the Obligations; (g)
guarantee or indemnify or otherwise become in any way liable with
respect to the obligations of any Person which might in any material
way adversely affect the ability of Gehl Company to repay the
Obligations, except by endorsement of instruments or items of
payment for deposit to the general account of Gehl Company or which
are transmitted or turned over to ITT on account of the Obligations;
(h) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Gehl Company's capital stock; (i) make any change
in Gehl Company's capital structure or in any of its business
objectives, purposes or operations which might in any material way
adversely affect the ability of Gehl Company to repay the
Obligations; and (j) make any loans, advances, contributions or
payments of money or goods to any present subsidiary, affiliated or
parent corporation other than in the ordinary course of business, or
to any officer, director or stockholder of Gehl Company or of any
such corporation not to exceed $500,000.00 (except for compensation
for personal services actually rendered).
6.3 Financial Covenants. Gehl Company will at all times maintain a
Tangible Net Worth and Subordinated Debt in the combined amount of
not less than the sum of (a) THIRTY TWO MILLION DOLLARS
($32,000,000.00), plus (b) the cumulative positive consolidated Net
Income for each calendar quarter, commencing with Gehl Company's Net
Income earned for the calendar quarter ending December 31, 1994 (Net
Losses for any calendar quarter shall not, however, reduce the
minimum amount required under this paragraph); provided, however, at
such time as Gehl Company's financial statements provided to ITT
pursuant to Section 6.1 of this Agreement indicate that Gehl
Company's Tangible Net Worth and Subordinated Debt is at least
Thirty Five Million Dollars ($35,000,000.00), the amount required to
be maintained hereunder will thereafter no longer be increased on a
quarterly basis for Gehl Company's Net Income, and Gehl Company will
at all times thereafter maintain a Tangible Net Worth and
Subordinated Debt in the combined amount of not less than Thirty
Five Million Dollars ($35,000,000.00). Gehl Company will also at
all times maintain a ratio of Debt to Tangible Net Worth and
Subordinated Debt of not more than three and six tenths to one
(3.6:1). For purposes of this Section: (i) "Debt" means the total
sum of all creditor claims against Gehl Company minus Subordinated
Debt; (ii) "Tangible Net Worth" means the net book value of assets
less liabilities determined on a consolidated basis and in
accordance with generally accepted accounting principles ("GAAP")
consistently applied, excluding from such assets all Intangibles;
(iii) "Intangibles" means and includes general intangibles (as that
term is defined in the Uniform Commercial Code), accounts receivable
from officers, directors and stockholders, and affiliated companies,
leasehold improvements net of depreciation, licenses, good will,
prepaid expenses, covenants not to compete, the excess of cost over
book value of acquired assets, franchise fees, organizational costs,
finance reserves held for recourse obligations, capitalized research
and development costs, the categories of assets listed on Exhibit C
attached hereto which are marked as "intangible," and such similar
intangible assets under GAAP; (iv) "Subordinated Debt" means all of
Gehl Company's indebtedness which is subordinated to the payment of
its liabilities to ITT by an agreement in form and substance
satisfactory to ITT; and (v) "Net Income" and "Net Losses" mean the
net income or net loss of Gehl Company for such period after
provision for income taxes, determined in accordance with GAAP.
Gehl Company will report its Tangible Net Worth and Debt to Tangible
Net Worth ratio to ITT quarterly, in accordance with Section
6.1(m)(2) of this Agreement. If Gehl Company violates any of the
foregoing financial covenants to ITT, the parties agree: (a) that
Gehl Company will pay interest to ITT, payable as provided in
Section 2.1, on the average daily outstanding balance under the
Credit Facility, at a rate that is the lesser of (i) Three percent
(3.0%) per annum higher than the daily Prime Rate in effect and (ii)
the highest rate from time to time permitted by applicable law, from
the time in which Gehl Company violates any of the financial
covenants until such time as Gehl Company has cured its violation of
its financial covenants to ITT; (b) that ITT may elect, in its sole
discretion, to amend its eligibility formula of and its advance rate
against the Accounts; and (c) that ITT may elect to declare Gehl
Company in default under this Agreement and exercise any of its
rights pursuant to Section 7 of this Agreement.
7. DEFAULT
7.1 Definition. Any one or more of the following events will constitute
a Default by Gehl Company under this Agreement and the Other
Agreements, provided that ITT shall allow Gehl Company from the time
ITT notifies Gehl Company in writing of said Defaults, five (5) days
to fully remedy monetary defaults, and fifteen (15) days to fully
remedy non-monetary defaults: (a) Gehl Company fails to perform any
term, condition, covenant, or breaches or permits a breach of any
warranty or representation contained in this Agreement, except for
Section 3.4, in which case Section 3.3(h) would apply, or in any of
the Other Agreements; (b) any representation, statement, report, or
certificate made or delivered by Gehl Company or any of its
officers, employees, or agents to ITT is not true and correct in any
material manner as of the date when made or given; (c) Gehl Company
fails to immediately pay any of the Obligations when due and payable
or declared to be due and payable; (d) ITT believing in good faith
that the prospect of payment of any material amount of the
Obligations secured hereby is impaired, and after thirty (30) days
of said notice to Gehl Company [inclusive of the foregoing fifteen
(15) day cure period] Gehl Company has not fully satisfied ITT on a
reasonable basis that the payment of any material amount of the
Obligations is not impaired; (e) Gehl Company shall sell, transfer,
convey, exchange, assign, mortgage, pledge, hypothecate, grant a
security interest in or otherwise dispose of or in any way part with
the possession of the Collateral, other than in the ordinary course
of business or as permitted under this Agreement; (f) Gehl Company
removes, other than by sale to the extent allowed under this
Agreement, any part of the Collateral from the Gehl Company's
locations specified above without providing ITT with at least thirty
(30) days prior notice of said removal; (g) Gehl Company abandons
the Collateral or any part thereof; (h) judgment issues on any money
demand against Gehl Company in which the loss to Gehl Company
excluding amounts covered by insurance is in excess of
$1,000,000.00, excluding judgments that are paid, appealed or fully
satisfied within sixty (60) days; (i) an attachment, sale or seizure
is issued against Gehl Company or any of the Collateral which causes
the Obligations to exceed the Maximum Line of Credit; (j) Any part
of the Collateral is seized or taken in execution which causes the
Obligations to exceed the Maximum Line of Credit; (k) Gehl Company
ceases or suspends business; (l) Gehl Company makes a general
assignment for the benefit of its creditors; (m) Gehl Company
becomes bankrupt or insolvent or becomes subject to the provisions
of the Federal Bankruptcy Code, state insolvency laws or any Act or
Code for the benefit of creditors; (n) any receiver is appointed by
any court for any of the assets, of the Gehl Company; (o) Gehl
Company is in default in excess of $1,000,000.00, with or without
the passage of time and/or giving of notice, under any agreement,
contract, document, promissory note or other instrument entered into
with or for the benefit of ITT or any third party, for any reason
whatsoever; (p) Gehl Company is in material default under the terms
of any of the Other Agreements; or (q) Gehl Company misrepresents
its respective financial condition or organizational structure in
any material manner.
7.2 Rights of ITT. In the event of a Default, and, in the case of
clauses (c) and (d) hereunder, acceleration of the Obligations by
ITT, ITT may, at its election, agree to waive such Default in
writing, or without demand, do any one or more of the following:
(a) declare all or any of the Obligations immediately due and
payable together with all costs and expenses of ITT's repossession
and collection activity, including, but not limited to, reasonable
attorney's fees or the amount legally permitted; (b) cease advancing
money or extending credit to or for the benefit of Gehl Company; (c)
exercise any or all of the rights accruing to a secured party, upon
default by a debtor, under the Uniform Commercial Code and any other
applicable law including, without limitation, exercising any and all
of Gehl Company's rights under any security agreements relating to
the Inventory; (d) at its sole election and without demand and in
accordance with applicable law and agreements with other Persons,
enter, with or without process of law, any premises where Collateral
might be and, without charge or liability to ITT therefor do one or
more of the following: (i) take possession of the Collateral and use
or store it in said premises or remove it to such other place or
places as ITT may deem convenient; (ii) exercise an irrevocable
license to come upon such premises and place a custodian in the
exclusive control of the Collateral until completion of enforcement
of ITT's security interest in the Collateral or until ITT's removal
of the Collateral, and (iii) remain on such premises and use the
same, together with Gehl Company's materials, supplies, books and
records, for the purpose of liquidating or collecting such
Collateral and conducting and preparing for disposition of such
Collateral; and (e) exercise any and all rights pursuant to Section
3.9 of this Agreement.
7.3 Gehl Company's Obligations. In the event of a Default, Gehl Company
will, if ITT requests, in accordance with applicable law and
agreements with other Persons, assemble the Collateral and make it
available to ITT at a place or places to be designated by ITT. All
of ITT's rights and remedies granted under this Agreement and Other
Agreements are cumulative and non-exclusive.
7.4 Waiver. In the event of a Default, Gehl Company waives and
releases, except for instances of ITT's gross negligence or willful
misconduct: any claims and causes of action which it may now or
ever have against ITT as a direct or indirect result of any
possession, repossession, collection or sale by ITT of any of the
Collateral, notwithstanding the effect of such possession,
repossession, collection or sale upon Gehl Company's business; and
the benefit of all valuation, appraisal and exemption laws.
8. MISCELLANEOUS
8.1 Term. The term of this Agreement shall commence on the date hereof
and terminate on December 31, 1997. This Agreement may not be
terminated by either party prior to December 31, 1997, other than as
a result of any Default by Gehl Company, or any default by ITT,
hereunder. Gehl Company and ITT agree that in the event that this
Agreement shall have been terminated by Gehl Company prior to
January 1, 1997, ITT's liquidated damages hereunder shall include,
in addition to principal, interest, charges, and expense
reimbursements that are then owed and unpaid, (i) an amount equal to
all annual charges described in Section 2.1.2 which would have been
payable from the date of termination, through December 31, 1996, and
(ii) One Hundred Fifty Thousand Dollars ($150,000.00). Gehl Company
agrees that ITT's actual damages in such event are difficult to
calculate, and that such measure of damages reflects a fair and
reasonable agreement. Such damages shall be payable immediately,
upon the date of termination, without discount to present value. In
no event shall Gehl Company be entitled to the return of all or any
portion of any annual or other charge payable hereunder,
notwithstanding any subsequent termination hereof. Gehl Company's
obligation to pay the non-use of credit facility fee described in
Section 2.1.4 above for calendar year 1997 shall survive the
termination of this Agreement and be due and payable by January 15,
1998. The parties agree to consider and negotiate in good faith an
extension or renewal of this Agreement beginning not later than six
(6) months prior to the termination date hereof.
8.2 Collection. Checks and other instruments delivered to ITT on
account of the Obligations will constitute conditional payment until
such items are actually paid to ITT. Gehl Company waives the right
to direct the application of any payments hereafter received by ITT
on account of the Obligations. ITT will have the continuing
exclusive right to apply and reapply any and all such payments in
such manner as ITT may deem advisable notwithstanding any entry by
ITT upon its books and records.
8.3 Demand, Etc. Gehl Company waives, except as otherwise expressly set
forth in this Agreement: (a) demand, protest and all notices of
protest, default or dishonor; (b) all notices of payment and non-
payment; and (c) all notices of default, non-payment at maturity,
release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments,
chattel paper and guarantees at any time held by ITT on which Gehl
Company may, in any way, be liable and Gehl Company hereby ratifies
and confirms whatever ITT may do in that regard.
8.4 Additional Obligations. ITT, without waiving or releasing any
Obligation or Default, upon Default, may perform any Obligations
that Gehl Company fails or refuses to perform, and, ITT may, but
will be under no obligation so to do, pay, acquire or accept any
assignment of any security interest, lien, encumbrance or claim
against the Collateral asserted by any Person. All sums paid by ITT
in performing in satisfaction or on account of the foregoing and any
expenses, including reasonable attorney's fees, court costs, and
other charges relating thereto, will be a part of the Obligations,
payable on demand and secured by the Collateral.
8.5 Alteration/Waiver. This Agreement and the Other Agreements may not
be altered or amended except by an agreement in writing signed by
Gehl Company and ITT. If ITT at any time dispenses with any
requirements specified in this Agreement or any of the Other
Agreements, such dispensation may be revoked by ITT at any time and
will not be deemed to constitute a waiver of any such requirement
subsequent thereto. ITT's failure to require strict performance by
Gehl Company of any undertakings, agreements, covenants, warranties
and representations will not waive, affect or diminish any right of
ITT thereafter to demand strict compliance and performance. Any
waiver by ITT of any Default will not waive or affect any other
default by Gehl Company under this Agreement or any of the Other
Agreements, whether such Default is prior or subsequent to such
other default and whether of the same or a different type. None of
the undertakings, agreements, warranties and representations of Gehl
Company contained in this Agreement or the Other Agreements and no
Default will be deemed waived by ITT unless such waiver is by a
written instrument specifying such waiver signed by an officer of
ITT and directed to Gehl Company.
8.6 Severability. If any provision of this Agreement or the Other
Agreements or the application thereof is held invalid or
unenforceable, the remainder of this Agreement and the Other
Agreements will not be affected thereby, the provisions of this
Agreement and the Other Agreements being severable in any such
instance.
8.7 One Loan. All loans and advances heretofore, now or hereafter made
by ITT to Gehl Company under this Agreement or the Other Agreements
will constitute one loan secured by ITT's security interests in the
Collateral and by all other security interests, liens and
encumbrances heretofore, now or hereafter granted by Gehl Company to
ITT.
8.8 Additional Collateral. All monies, reserves and proceeds received
or collected by ITT with respect to Accounts and other property of
Gehl Company provided by Gehl Company to ITT, in possession of ITT
at any time or times hereafter are hereby pledged by Gehl Company to
ITT as security for the payment of the Obligations and may be held
by ITT (without interest to Gehl Company) until all Obligations are
paid in full or, at any time or times, applied by ITT on account of
the Obligations. ITT may release to Gehl Company such portions of
such monies, reserves, proceeds and other property as ITT may
determine.
8.9 Exclusion of Equities. The Obligations hereby secured will be paid
without regard to any equities between Gehl Company and ITT or any
intermediate holder hereof or to any set-off or counterclaim.
8.10 No Merger or Novation. Neither the taking of any judgment nor the
exercise of any power of seizure or sale will operate to extinguish
the Obligations secured by this Agreement and will not operate as a
merger of any covenant in this Agreement. The acceptance of any
payment or alternate security will not constitute or create a
novation and the taking of a judgment under a covenant herein
contained will not operate as a merger of that covenant or affect
ITT's right to interest under this Agreement.
8.11 Entire Agreement. Time is of the essence hereof. This Agreement,
together with the Other Agreements and any other documents to be
delivered pursuant hereto and thereto, constitutes the entire
Agreement between the Gehl Company and ITT pertaining to the subject
matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, with respect
to the subject matter hereof.
8.12 Paragraph Titles. The Section titles used in this Agreement are for
convenience only and do not define or limit the contents of any
Section.
8.13 Binding Effect. This Agreement and the Other Agreements will be
binding upon and inure to the benefit of ITT and Gehl Company and
their respective successors and assigns but Gehl Company will have
no right to assign this Agreement or any of the Other Agreements
without the prior written consent of ITT. If ITT assigns all of its
rights under this Agreement to any Person, Gehl Company will have
the right to terminate this Agreement, only within the thirty (30)
day period immediately following its receipt of written notice from
ITT or its assignee that ITT has assigned all of its rights under
this Agreement, and upon any such timely termination, Gehl Company
will be relieved of its obligations to pay charges pursuant to
Sections 2.1.2 and 8.1 for the unexpired term of this Agreement.
Notwithstanding the foregoing provision, ITT may assign
participation interests in this Agreement to other Persons without
relieving Gehl Company of its obligations to pay charges pursuant to
Sections 2.1.2 and 8.1, provided that ITT remains the lead lender
and Gehl Company consents to said participations, which consent will
not be unreasonably withheld.
8.14 Submission by Gehl Company. This Agreement and the Other Agreements
are submitted by Gehl Company to ITT (for ITT's acceptance or
rejection thereof) at ITT's place of business specified at the
beginning of this Agreement, as an offer by Gehl Company to borrow
monies from ITT. If accepted by ITT, this Agreement and the Other
Agreements will be deemed to have been made at ITT's said place of
business.
8.15 Recourse Obligations. Gehl Company specifically acknowledges and
agrees that the Obligations, including without limitation, repayment
of all advances made by ITT pursuant to the Maximum Line of Credit
are full recourse obligations of Gehl Company, notwithstanding Gehl
Company's grant of a security interest in the Collateral, and
assignment of the Accounts, and any foreclosure of ITT's interests
therein.
8.16 Electronic Transfer Instructions. All payments under this Agreement
shall be made in immediately available funds by the end of the day
on the same day as requested pursuant to this Agreement, provided
that said request for payment is made by 11:00 a.m., in accordance
with the transfer instructions set forth below or as changed from
time to time by one party with prior written notice given to the
other:
If to Gehl Company:
Bank One - Milwaukee, N.A.
ABA Number: 075-00-00-19
Reference: Gehl Company
Account Number: 29-42-92
If to ITT:
Boatmen's National Bank of St. Louis
ABA Number: 081000032
Reference: ITT Commercial Finance Corp.
Account Number: 100-101225551
8.17 Mutual Cooperation. The parties hereto agree to negotiate, in good
faith, any other matters related to this Agreement that are not
otherwise set forth in this Agreement.
8.18 Notices. All notices sent pursuant to this Agreement will be sent
to the parties addresses set forth on the first page of this
Agreement, and if sent, first class, postage pre-paid, will be
deemed accepted three (3) days after said notice was mailed.
8.19 Previous Agreement. This Agreement amends and supplements that
certain Loan and Security Agreement dated October 21, 1993, as
amended, between the parties. If the terms hereof conflict with the
terms of such prior Loan and Security Agreement, the terms of this
Agreement will govern.
9. BINDING ARBITRATION.
9.1 Arbitrators. Except as otherwise specifically provided below, all
actions, disputes, claims and controversies heretofore or hereafter
arising out of or directly or indirectly relating to (a) this
Agreement and/or any renewals, extensions, changes, amendments,
addenda, additions or modifications hereto, or the breach,
invalidity or termination hereof, (b) any subsequent agreement
entered into between the parties hereto, (c) any previous agreement
entered into between the parties hereto, (d) any relationship or
business dealings between the parties hereto, and/or (e) the
transactions contemplated by this Agreement or any previous or
subsequent agreement between the parties hereto (collectively the
"Disputes"), will be subject to and resolved by binding arbitration
pursuant to the Commercial Arbitration Rules in effect from time to
time ("Rules") of the American Arbitration Association ("AAA"). If
the Rules are cancelled and/or the AAA dissolves or disbands, the
parties will remain subject to binding arbitration which will be
conducted by a mutually agreeable arbitral forum. The arbitrator(s)
selected to arbitrate the Disputes will decide whether any
inconsistency exists between the Rules and the arbitration
provisions contained herein. If the arbitrator(s) determines
(determine) that such an inconsistency exists, the arbitration
provisions contained herein will control and supersede the Rules,
and the arbitrator(s) will apply the arbitration provisions
contained herein. Any fees resulting from any hearing by the
arbitrator(s) on any such inconsistency will be shared equally by
the parties.
9.2 Jurisdiction. The parties to this Agreement agree that the locale
and situs of all arbitration provided for herein will be in the
Division of the Federal Judicial District closest to St. Louis
Missouri. The parties to this Agreement also agree that the laws of
the State of MISSOURI will govern this Agreement and all arbitration
hereunder, and that the arbitrator(s) shall interpret this Agreement
in accordance with and shall comply with the laws of such state;
provided, however, when the jurisdictional requirements of the
Federal Arbitration Act, 9 U.S.C., Sections 1-14 (1982), ("FAA") are
satisfied, the FAA shall, with respect to all Disputes within the
scope of the FAA, supersede the laws of such state, and the FAA will
govern the arbitration hereunder and be applied by the
arbitrator(s). The parties agree that this Agreement evidences
transactions involving commerce among the several states.
9.3 Scope. Nothing in this Agreement will be construed to prevent
either party's use of bankruptcy, receivership, injunction,
repossession, replevin, claim and delivery, sequestration, seizure,
attachment, foreclosure, dation, direct collection from obligors
and/or any other prejudgment or provisional action or remedy
relating to any collateral or security for any contractual debts now
or hereafter owed by either party to the other under this Agreement,
any previous agreement entered into between the parties, any
subsequent agreement entered into between the parties and/or any
renewals, extensions, changes, amendments, addenda, additions or
modifications thereto. The institution and maintenance of an action
for judicial relief in pursuit of any such prejudgment or
provisional remedies will not constitute a waiver of the right of
any party, including the plaintiff, to compel arbitration of any
Disputes subject to arbitration as provided herein. If, however,
either party brings any other action for judicial relief with
respect to any Disputes that the parties have agreed to arbitrate
under the terms of this Agreement, the party who brought such action
will be liable for and will immediately pay to the other party all
of the other party's costs and expenses (including attorney's fees)
incurred by the other party to stay such action and remove or refer
such Disputes to arbitration. Without limiting the foregoing, the
parties hereto further specifically and expressly agree that all
Disputes arising under common law, statutory law and in equity,
including, without limitation, all tort Disputes (including, without
limitation, Disputes for negligence, breach of fiduciary duty,
restraint of trade, fraud, conversion, duress, interference,
wrongful replevin, wrongful sequestration and all other intentional
and unintentional torts) and all Disputes involving issues of
implied contract, deceptive trade practices and the reasonableness
or lawfulness of any act (including, without limitation, implied
covenants of good faith, fair dealing, commercial reasonableness of
the disposition of any collateral and similar matter), will be
subject to binding arbitration pursuant to the terms stated herein.
9.4 Procedure. In any Disputes arbitrated pursuant to the terms of this
Agreement, the arbitrator(s) is(are) specifically empowered to hear
and decide pre-hearing motions to dismiss such Disputes and for
summary judgment on such Disputes. The parties agree to permit
discovery proceedings of the type provided by the Federal Rules of
Civil Procedure both in advance and during recesses of the
arbitration hearings, but only with respect to any Disputes
arbitrated where the amount in controversy is at least $250,000.00.
Any disagreements relating to such discovery will be resolved by the
arbitrator(s) after a hearing by such arbitrator(s). All
arbitration proceedings conducted hereunder will be conducted on a
confidential basis and all awards granted thereunder will be kept
confidential. Any award, judgment or order rendered by the
arbitrator(s) pursuant to the terms of this Agreement may be entered
and enforced by either party in any state or federal court having
competent jurisdiction. Each party agrees to submit to the
jurisdiction of any such court for purposes of enforcement of any
such award, order or judgment. Any award, judgment or order
rendered by the arbitrator(s) pursuant to such arbitration will be
included in a written decision signed by the arbitrator(s) joining
therein, which will specify the reasons upon which the award,
judgment or order was based, including all of the elements involved
in the calculation of any award of damages. The arbitrator(s) will
deliver a copy of the award, judgment or order rendered by the
arbitrator(s) and the written decision to the parties personally or
by U.S. mail to the parties' addresses specified in this Agreement.
9.5 Limitations/Notices. Any arbitration proceeding must be instituted
within thirteen (13) months after the date: (a) the last payment
was received by the instituting party with respect to any Dispute
for the collection of contractual debts, now or hereafter owed by
either party to the other, that the parties have agreed to arbitrate
hereunder; or (b) the incident giving rise to the Dispute initially
occurred (regardless of whether any damage was sustained or capable
of ascertainment at such time, or whether either party had any
knowledge of the occurrence of such Dispute at such time) with
respect to any other type of Dispute that the parties have agreed to
arbitrate hereunder. Failure to institute an arbitration proceeding
within such period will constitute an absolute bar to the
institution of any proceeding with respect to such Dispute and a
waiver thereof. All notices that ITT sends to Gehl Company will be
sufficiently given if mailed or delivered to Gehl Company at the
address specified above. All notices that Gehl Company sends to ITT
will be sufficiently given if mailed or delivered to ITT at: 8251
Maryland Avenue, Clayton, Missouri 63105, Attention: General
Counsel, or such other address as ITT may specify from time to time.
9.6 Parties. No arbitration arising under the terms of this Agreement
will include, by consolidation, joinder or in any other manner, any
additional Person not a party to this Agreement, except: (a) for
any guarantor(s) of our liabilities and obligations to you under
this Agreement, if such guarantor(s) has(have) agreed in writing to
arbitrate pursuant to the arbitration provisions contained in this
Agreement and the Rules, and to abide by and perform any award
rendered pursuant thereto; and (b) for any other Person(s), who
has(have) agreed to arbitrate pursuant to the arbitration provisions
contained in this Agreement and the Rules and to abide by and
perform any award rendered pursuant thereto, but only upon the prior
written consent of both parties hereto. Any consent to arbitration
involving such guarantor(s) or other Person(s) will not constitute
consent to arbitrate any dispute that is not an arbitrable Dispute
under the terms of this Agreement or with any Person not
specifically named therein.
9.7 Expenses. If either party brings legal action to vacate or modify
the arbitrator's(s') award and such party does not prevail, such
party will pay all costs and expenses, including attorney's fees,
incurred by the other party in defending such action. Such costs
and expenses will also be assessed against the petitioning party who
does not prevail in any subsequent appellate action.
9.8 No Jury Trial. If the arbitration provisions contained in this
Agreement are invalid or their application is invalid or
unenforceable, thereby allowing the parties to resolve their
Disputes outside of arbitration, the parties hereby agree that any
legal proceeding with respect to any Disputes in which the parties
or any of their affiliates or successors are parties, will be tried
in a court of competent jurisdiction by a judge without a jury. The
parties hereby waive any right to a jury trial in any such
proceeding.
THIS CONTRACT CONTAINS BINDING ARBITRATION AND JURY WAIVER PROVISIONS WHICH
MAY BE ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, Gehl Company has read this entire Agreement and
executed this Agreement by its corporate officers thereunto duly authorized,
all as of the first day of October, 1994.
GEHL COMPANY
By: K.F. Kaplan
Its: Vice President
By: M. Mulcahy
Its: Secretary
HEDLUND MANUFACTURING, INC.
By: K.F. Kaplan
Its: Treasurer
By: M. Mulcahy
Its: Secretary
HEDLUND MARTIN, INC.
By: K.F. Kaplan
Its: Treasurer
By: M. Mulcahy
Its: Secretary
GEHL POWER PRODUCTS, INC.
By: K.F. Kaplan
Its: Treasurer
By: M. Mulcahy
Its: Secretary
ACCEPTED as of the first day of October, 1994 at ITT's place of business
specified at the beginning of this Agreement.
ITT COMMERCIAL FINANCE CORP.
By: Thomas L. Meredith
Its: Regional Vice President
ITT COMMERCIAL FINANCE, A DIVISION
OF
ITT INDUSTRIES OF CANADA, LTD.
By: Geoff D. Lyon
Its: Signing Officer
As Amended
February 2, 1995
WILLIAM D. GEHL/GEHL COMPANY
SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT
THIS AGREEMENT, made this 29th day of December, 1992, by and between
GEHL COMPANY, West Bend, Wisconsin (hereinafter referred to as the
"Company"), and William D. Gehl, of Milwaukee, Wisconsin (hereinafter referred
to as the "Employee"):
W I T N E S S E T H:
WHEREAS, the Employee is currently employed by the Company in the capacity
of President and Chief Executive Officer and in such position can contribute
materially to its continued growth and development and to its future financial
success; and
WHEREAS, the Company desires to insure insofar as possible that the
Company will have the benefit of the Employee's full services and executive
capacities for future years;
NOW, THEREFORE, in consideration of services rendered by the Employee to
the Company, it is agreed as follows:
Section 1. Definitions.
(a) "Average Monthly Compensation" means one-sixtieth (1/60th) of the
Employee's base salary from the Company for the highest five (5) consecutive
calendars years within the last ten (10) completed calendar years preceding
the date of the Employee's termination of employment with the Company. In the
event the Employee does not have five (5) calendar years of employment, only
the number of full months from the date of hire through the December preceding
termination of employment shall be used to determine Average Monthly
Compensation. Base salary for this purpose includes any salary reduction
deferrals pursuant to a cash or deferred arrangement or a cafeteria plan
pursuant to Internal Revenue Code ("Code") Sections 401(k) or 125.
(b) "Beneficiary" means the person, trust and/or other entity
designated by the Employee on the form most recently filed with the Secretary
of the Company prior to the Employee's death. In the absence of a valid
designation, the Beneficiary shall be the Employee's estate.
(c) "Disability means a physical or mental condition which totally and
presumably permanently prevents the Employee from engaging in any
substantially gainful activity as determined in accordance with Section 4.03
of the Gehl Company Retirement Income Plan "B".
(d) "Vested Percentage" means the percentage of the supplemental
retirement benefit in Section 2 earned by the Employee, subject in any event
to the forfeiture provision of Section 4 and the change in control provision
of Section 5. The Vested Percentage is one hundred percent (100%) in any of
the following circumstances:
(i) after the Employee completes five (5) years of Vesting Service;
(ii) if the Employee suffers a Disability; or
(iii) if the Employee retires from the Company after attainment of
age sixty-two (62).
In the event an Employee does not have a Vested Percentage of one hundred
percent (100%), he shall receive ten percent (10%) for each complete year of
Vesting Service.
(e) "Vesting Service" means the period of the Employee's consecutive
employment with the Company from November 24, 1992, through the date of
termination of employment.
Section 2. Supplemental Retirement Benefits.
(a) The amount of the monthly supplemental retirement benefit shall be
the Employee's Vested Percentage times an amount equal to twenty percent (20%)
of the Employee's Average Monthly Compensation.
(b) The monthly supplement shall be payable to the Employee commencing as
of the first day of the month following the earlier to occur of:
(i) age sixty-five (65); or
(ii) the later of termination of employment from the Company or age
sixty-two (62).
The supplement shall continue to be paid to the Employee for a period of
fifteen (15) years.
(c) In the event the Employee commences receiving the supplement but dies
prior to the end of the payment period, the remaining monthly payments in the
fifteen (15)-year period shall be made to the Beneficiary.
(d) In the event the Employee dies after termination of employment from
the Company but prior to the commencement of benefits pursuant to (b) above,
the monthly supplement calculated pursuant to subsection (a) above shall be
paid to the Beneficiary for the fifteen (15)-year period commencing as of the
first day of the month following the later to occur of the Employee's death or
the date the Employee would have attained (or if applicable, did attain) age
sixty-two (62).
Section 3. Pre-Retirement Death Benefit.
(a) In the event the Employee dies prior to commencement of the
supplemental retirement benefit under Section 2(b) above and while employed by
the Company, in lieu of any payment pursuant to Section 2 above, a pre-
retirement death benefit shall be paid to the Beneficiary.
(b) The death benefit shall be comprised of ten (10) payments, the
first being due as of the last day of the month following the Employee's
death. Each succeeding payment shall be made on successive anniversaries of
the first payment due date.
(c) The amount of the ten (10) payments shall be thirty percent (30%)
of the Employee's annual salary as of the Employee's date of death.
Section 4. Non-Competition Requirement. Employee agrees that for a
period of two (2) years after termination of active employment hereunder, the
Employee shall not, except as permitted by the Company's prior written
consent, engage in, be employed by, or in any way advise or act for, or have
any financial interest in any business which is a competitor of the Company.
The ownership of minority and non-controlling shares of any corporation whose
shares are listed on a recognized stock exchange or traded in an over-the-
counter market shall not be deemed as constituting a financial interest in
such corporation. If the Employee shall fail to comply with any of the
foregoing conditions, he shall forfeit all right to any payments pursuant to
Section 2 hereof which would otherwise be payable to him thereafter.
Section 5. Change of Control. Notwithstanding the definition of Vested
Percentage in Section 1 hereof, an Employee shall be one hundred percent
(100%) vested, subject to Section 4, in the event there is a change of control
of the Company. For purposes of this Agreement, a "change in control of the
Company" occurs when:
(i) securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding
voting securities are acquired pursuant to a tender offer
or an exchange offer; or
(ii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation as
a result of which less than fifty percent (50%) of the
outstanding voting securities of the surviving or
resulting entity are owned by the former shareholders of
the Company (other than a shareholder who is an
"affiliate," as defined in the Act, of any party to such
consolidation or merger); or
(iii) the shareholders of the Company approve the sale of
substantially all of the Company's assets to a corporation
which is not a wholly-owned subsidiary of the Company; or
(iv) any person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting
power of the Company's then outstanding securities the
effect of which (as determined by the Board) is to take
over control of the Company; or
(v) during any period of two consecutive years, individuals
who, at the beginning of such period, constituted the
Board of Directors of the Company cease, for any reason,
to constitute at least a majority thereof, unless the
election or nomination for election of each new director
was approved by the vote of at least two-thirds of the
directors then still in office who were directors at the
beginning of the period.
Section 6. No Rights of Employment. Nothing herein contained shall be
deemed to confer upon the Employee any right to continue in the employ of the
Company nor to interfere with the right of the Company to terminate his
employment at any time.
Section 7. Employee's Rights Non-Assignable. Neither the Employee nor
the Beneficiary shall have the power to transfer, assign, anticipate,
mortgage, or otherwise encumber in advance any of the payments provided in
this Agreement; nor shall any of said payments nor any assets of the Company,
including any insurance policies owned by the Company, be subject to seizure
for the payment of any of the recipient's debts, judgments or other
obligations arising by operation of law or in the event of bankruptcy,
insolvency or otherwise.
Section 8. Company Not Required to Fund This Agreement. The Company is
not obligated to set aside or credit the Employee or the Beneficiary with
funds to provide for the payment of the amounts due under this Agreement, and
nothing in this Agreement shall be construed as creating a trust fund of any
kind for the benefit of the Employee or the Beneficiary.
Section 9. Administration. This Agreement shall be administered by the
Gehl Company Compensation and Benefits Committee (herein referred to as the
"Committee"). If the Employee is also a Committee member, he shall abstain
from any deliberations or vote on any matter in connection with this
Agreement.
Section 10. Successors and Assigns. This Agreement shall inure to and be
binding upon the successors and assigns of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Attest: GEHL COMPANY
M. Mulcahy Joseph J. Zadra
Its: Secretary Its: Chairman of the Board
Marlys M. Nonhof William D. Gehl
Witness as to Employee
William D. Gehl
As Amended
February 2, 1995
VICTOR A. MANCINELLI/GEHL COMPANY
SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT
THIS AGREEMENT, made this 29th day of December, 1992, by and between
GEHL COMPANY, West Bend, Wisconsin (hereinafter referred to as the
"Company"), and Victor A. Mancinelli, of Mequon, Wisconsin (hereinafter
referred to as the "Employee"):
W I T N E S S E T H:
WHEREAS, the Employee is currently employed by the Company in the capacity
of Executive Vice President and Chief Operating Officer and in such position
can contribute materially to its continued growth and development and to its
future financial success; and
WHEREAS, the Company desires to insure insofar as possible that the
Company will have the benefit of the Employee's full services and executive
capacities for future years;
NOW, THEREFORE, in consideration of services rendered by the Employee to
the Company, it is agreed as follows:
Section 1. Definitions.
(a) "Average Monthly Compensation" means one-sixtieth (1/60th) of the
Employee's base salary from the Company for the highest five (5) consecutive
calendars years within the last ten (10) completed calendar years preceding
the date of the Employee's termination of employment with the Company. In the
event the Employee does not have five (5) calendar years of employment, only
the number of full months from the date of hire through the December preceding
termination of employment shall be used to determine Average Monthly
Compensation. Base salary for this purpose includes any salary reduction
deferrals pursuant to a cash or deferred arrangement or a cafeteria plan
pursuant to Internal Revenue Code ("Code") Sections 401(k) or 125.
(b) "Beneficiary" means the person, trust and/or other entity
designated by the Employee on the form most recently filed with the Secretary
of the Company prior to the Employee's death. In the absence of a valid
designation, the Beneficiary shall be the Employee's estate.
(c) "Disability means a physical or mental condition which totally and
presumably permanently prevents the Employee from engaging in any
substantially gainful activity as determined in accordance with Section 4.03
of the Gehl Company Retirement Income Plan "B".
(d) "Vested Percentage" means the percentage of the supplemental
retirement benefit in Section 2 earned by the Employee, subject in any event
to the forfeiture provision of Section 4 and the change in control provision
of Section 5. The Vested Percentage is one hundred percent (100%) in any of
the following circumstances:
(i) after the Employee completes five (5) years of
Vesting Service;
(ii) if the Employee suffers a Disability; or
(iii) if the Employee retires from the Company after attainment of
age sixty-two (62).
In the event an Employee does not have a Vested Percentage of one hundred
percent (100%), he shall receive ten percent (10%) for each complete year of
Vesting Service.
(e) "Vesting Service" means the period of the Employee's consecutive
employment with the Company from November 24, 1992, through the date of
termination of employment.
Section 2. Supplemental Retirement Benefits.
(a) The amount of the monthly supplemental retirement benefit shall be
the Employee's Vested Percentage times an amount equal to ten percent (10%) of
the Employee's Average Monthly Compensation.
(b) The monthly supplement shall be payable to the Employee commencing as
of the first day of the month following the earlier to occur of:
(i) age sixty-five (65); or
(ii) the later of termination of employment from the Company or age
sixty-two (62).
The supplement shall continue to be paid to the Employee for a period of
fifteen (15) years.
(c) In the event the Employee commences receiving the supplement but dies
prior to the end of the payment period, the remaining monthly payments in the
fifteen (15)-year period shall be made to the Beneficiary.
(d) In the event the Employee dies after termination of employment from
the Company but prior to the commencement of benefits pursuant to (b) above,
the monthly supplement calculated pursuant to subsection (a) above shall be
paid to the Beneficiary for the fifteen (15)-year period commencing as of the
first day of the month following the later to occur of the Employee's death or
the date the Employee would have attained (or if applicable, did attain) age
sixty-two (62).
Section 3. Pre-Retirement Death Benefit.
(a) In the event the Employee dies prior to commencement of the
supplemental retirement benefit under Section 2(b) above and while employed by
the Company, in lieu of any payment pursuant to Section 2 above, a pre-
retirement death benefit shall be paid to the Beneficiary.
(b) The death benefit shall be comprised of ten (10) payments, the
first being due as of the last day of the month following the Employee's
death. Each succeeding payment shall be made on successive anniversaries of
the first payment due date.
(c) The amount of the ten (10) payments shall be thirty percent (30%)
of the Employee's annual salary as of the Employee's date of death.
Section 4. Non-Competition Requirement. Employee agrees that for a
period of two (2) years after termination of active employment hereunder, the
Employee shall not, except as permitted by the Company's prior written
consent, engage in, be employed by, or in any way advise or act for, or have
any financial interest in any business which is a competitor of the Company.
The ownership of minority and non-controlling shares of any corporation whose
shares are listed on a recognized stock exchange or traded in an over-the-
counter market shall not be deemed as constituting a financial interest in
such corporation. If the Employee shall fail to comply with any of the
foregoing conditions, he shall forfeit all right to any payments pursuant to
Section 2 hereof which would otherwise be payable to him thereafter.
Section 5. Change of Control. Notwithstanding the definition of Vested
Percentage in Section 1 hereof, an Employee shall be one hundred percent
(100%) vested, subject to Section 4, in the event there is a change of control
of the Company. For purposes of this Agreement, a "change in control of the
Company" occurs when:
(i) securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding voting
securities are acquired pursuant to a tender offer or an exchange
offer; or
(ii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation as a result of
which less than fifty percent (50%) of the outstanding voting
securities of the surviving or resulting entity are owned by the
former shareholders of the Company (other than a shareholder who is an
"affiliate," as defined in the Act, of any party to such consolidation
or merger); or
(iii) the shareholders of the Company approve the sale of
substantially all of the Company's assets to a corporation which is
not a wholly-owned subsidiary of the Company; or
(iv) any person becomes the beneficial owner, directly or
indirectly, of securities of the Company representing twenty-five
percent (25%) or more of the combined voting power of the Company's
then outstanding securities the effect of which (as determined by the
Board) is to take over control of the Company; or
(v) during any period of two consecutive years, individuals who,
at the beginning of such period, constituted the Board of Directors of
the Company cease, for any reason, to constitute at least a majority
thereof, unless the election or nomination for election of each new
director was approved by the vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
the period.
Section 6. No Rights of Employment. Nothing herein contained shall be
deemed to confer upon the Employee any right to continue in the employ of the
Company nor to interfere with the right of the Company to terminate his
employment at any time.
Section 7. Employee's Rights Non-Assignable. Neither the Employee nor
the Beneficiary shall have the power to transfer, assign, anticipate,
mortgage, or otherwise encumber in advance any of the payments provided in
this Agreement; nor shall any of said payments nor any assets of the Company,
including any insurance policies owned by the Company, be subject to seizure
for the payment of any of the recipient's debts, judgments or other
obligations arising by operation of law or in the event of bankruptcy,
insolvency or otherwise.
Section 8. Company Not Required to Fund This Agreement. The Company is
not obligated to set aside or credit the Employee or the Beneficiary with
funds to provide for the payment of the amounts due under this Agreement, and
nothing in this Agreement shall be construed as creating a trust fund of any
kind for the benefit of the Employee or the Beneficiary.
Section 9. Administration. This Agreement shall be administered by the
Gehl Company Compensation and Benefits Committee (herein referred to as the
"Committee"). If the Employee is also a Committee member, he shall abstain
from any deliberations or vote on any matter in connection with this
Agreement.
Section 10. Successors and Assigns. This Agreement shall inure to and be
binding upon the successors and assigns of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Attest: GEHL COMPANY
M. Mulcahy Joseph J. Zadra
Its: Secretary Its: Chairman of the Board
Marlys M. Nonhof Victor A. Mancinelli
Witness as to Employee
Victor A. Mancinelli
GEHL SAVINGS PLAN
AND
TRUST AGREEMENT
As Amended and Restated By the Board of Directors as of December 16, 1994
GEHL SAVINGS PLAN
Table of Contents
Page
ARTICLE I.
DEFINITIONS AND CONSTRUCTION
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Construction . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II.
PARTICIPATION, VESTING SERVICE, BREAK IN SERVICE
Section 2.01. Participation . . . . . . . . . . . . . . . . . . . . 6
Section 2.02. Vesting Service . . . . . . . . . . . . . . . . . . . 7
Section 2.03. Break in Service . . . . . . . . . . . . . . . . . . 7
Section 2.04. Service for Controlled Group . . . . . . . . . . . . 7
ARTICLE III.
CONTRIBUTIONS TO THE TRUST FUND
Section 3.01. Election to Make Deposits . . . . . . . . . . . . . . 8
Section 3.02. Amount and Payment of Participant
Deposits . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.03. Company Matching Contributions . . . . . . . . . . . 9
Section 3.04. No Liability for Future Company
Contributions . . . . . . . . . . . . . . . . . . . . 10
Section 3.05. Time Period for Payment of Company
Contributions . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV.
INVESTMENTS
Section 4.01. Direction of Investment . . . . . . . . . . . . . . . 11
Section 4.02. Reallocation of Accounts . . . . . . . . . . . . . . 11
Section 4.03. Description of Funds . . . . . . . . . . . . . . . . 11
Section 4.04. Funding Policy . . . . . . . . . . . . . . . . . . . 12
ARTICLE V.
PARTICIPANT ACCOUNTS
Section 5.01. Participant Accounts . . . . . . . . . . . . . . . . 13
Section 5.02. Allocation of Participant Deposits . . . . . . . . . 13
Section 5.03. Allocation of Company Matching
Contributions . . . . . . . . . . . . . . . . . . . . 13
Section 5.04. Disposition of Forfeitures . . . . . . . . . . . . . 13
Section 5.05. Allocation of Changes in Value . . . . . . . . . . . 13
Section 5.06. Maximum Allocation Limitations . . . . . . . . . . . 14
Page
ARTICLE VI.
BENEFITS
Section 6.01. Eligibility for Benefits and Vesting . . . . . . . . 15
Section 6.02. Death . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6.03. Form and Time of Payment . . . . . . . . . . . . . . 16
Section 6.04. Payments to Minor or Incompetent Person . . . . . . . 18
Section 6.05. Direct Transfer of Eligible Rollover
Distributions . . . . . . . . . . . . . . . . . . . . 18
Section 6.06. Withdrawals . . . . . . . . . . . . . . . . . . . . . 19
Section 6.07. Erroneous Overpayments . . . . . . . . . . . . . . . 20
ARTICLE VII.
PLAN ADMINISTRATION
Section 7.01. Appointment of Administrator . . . . . . . . . . . . 21
Section 7.02. Responsibility and Authority of the
Administrator . . . . . . . . . . . . . . . . . . . . 21
Section 7.03. Use of Professional Services . . . . . . . . . . . . 22
Section 7.04. Fees and Expenses . . . . . . . . . . . . . . . . . . 22
Section 7.05. Delegation of Authority and
Responsibility . . . . . . . . . . . . . . . . . . . 22
Section 7.06. Requirement to Furnish Information and
to Use Administrator's Forms . . . . . . . . . . . . 23
Section 7.07. Claims Procedure . . . . . . . . . . . . . . . . . . 23
Section 7.08. Agent for Service of Process . . . . . . . . . . . . 23
ARTICLE VIII.
TRUSTEE
Section 8.01. Successor Trustee . . . . . . . . . . . . . . . . . . 24
Section 8.02. General Powers . . . . . . . . . . . . . . . . . . . 24
Section 8.03. Payments from the Trust Fund . . . . . . . . . . . . 25
Section 8.04. Trustee Accounting . . . . . . . . . . . . . . . . . 25
Section 8.05. Settlement of Trustee Accounts . . . . . . . . . . . 25
Section 8.06. Reliance on Written Communications . . . . . . . . . 26
Section 8.07. Trustee Fees and Expenses . . . . . . . . . . . . . . 26
ARTICLE IX.
INVESTMENT OF TRUST FUND
Section 9.01. Trustee Investment of Trust Fund . . . . . . . . . . 27
Section 9.02. Appointment of Investment Manager . . . . . . . . . . 27
ARTICLE X.
FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
Section 10.01. Fiduciaries . . . . . . . . . . . . . . . . . . . . 28
Section 10.02. Allocation of Fiduciary
Responsibilities . . . . . . . . . . . . . . . . . . 28
Section 10.03. General Limitation on Liability . . . . . . . . . . 28
Section 10.04. Multiple Fiduciary Capacities . . . . . . . . . . . 28
Page
ARTICLE XI.
AMENDMENT AND TERMINATION
Section 11.01. Amendment . . . . . . . . . . . . . . . . . . . . . 29
Section 11.02. Termination . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XII.
GENERAL PROVISIONS
Section 12.01. Non-Guarantee of Continued Employment
or Other Benefits . . . . . . . . . . . . . . . . . 30
Section 12.02. Mergers, Consolidations and Transfers
of Plan Assets . . . . . . . . . . . . . . . . . . . 30
Section 12.03. Spendthrift Clause . . . . . . . . . . . . . . . . . 30
Section 12.04. Exclusive Benefit . . . . . . . . . . . . . . . . . 30
Section 12.05. Full Satisfaction of Claims . . . . . . . . . . . . 31
Section 12.06. Indemnification . . . . . . . . . . . . . . . . . . 31
Section 12.07. Counterparts . . . . . . . . . . . . . . . . . . . . 31
Section 12.08. Successors and Assigns . . . . . . . . . . . . . . . 31
Section 12.09. IRS Approval . . . . . . . . . . . . . . . . . . . . 31
Section 12.10. Top-Heavy Restrictions . . . . . . . . . . . . . . . 31
Section 12.11. Retroactive Effective Date . . . . . . . . . . . . . 33
ARTICLE XIII.
TRUSTEE ACCEPTANCE
Section 13.01. Effective Date of Acceptance . . . . . . . . . . . . 34
GEHL SAVINGS PLAN
THIS TRUST AGREEMENT, revised and continued this 16th day of
December, 1994 by and between Gehl Company, a Wisconsin corporation
(hereinafter called the "Company"), and Bank One Wisconsin Trust Company, N.A.
as trustee of the trust hereby created (hereinafter called the "Trustee").
W I T N E S S E T H:
WHEREAS, effective as of April 22, 1985, the Company adopted the
Gehl Savings Plan to encourage eligible employees to contribute toward their
own retirement savings through the means of a "cash or deferred arrangement"
under Section 401(k) of the Internal Revenue Code of 1954, as amended; and
WHEREAS, the plan and trust herein set forth is intended to satisfy
the applicable requirements of Sections 401(a), 401(k), and 501(a) of such
Code, as amended by the Tax Reform Act of 1986 (and now known as the Internal
Revenue Code of 1986) and other statutory and regulatory requirements; and
WHEREAS, in order to satisfy such requirements, it is necessary to
amend and restate the plan and trust as hereinafter set forth, effective as of
December 16, 1994;
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the Company and the Trustee agree as follows:
ARTICLE I.
DEFINITIONS AND CONSTRUCTION
Section 1.01. Definitions. Whenever used herein, the following
words and phrases shall have the following meanings, except as required
otherwise by the context:
(a) "Administrator" means the individual, group of individuals,
corporation or other entity appointed by the Board to administer the Plan
pursuant to Section 7.01 hereof.
(b) "Beneficiary" means the person, trust and/or other entity
entitled to receive benefits in the event of the Participant's death. A
Participant shall designate his Beneficiary on the form and in the manner
prescribed by the Administrator and such designation may be changed or
withdrawn by the Participant at any time. The most recent valid designation
on file with the Administrator at the time of the Participant's death shall be
the Beneficiary. Notwithstanding the foregoing, in the event the Participant
is married at the time of his death, the Beneficiary shall be the
Participant's spouse at such time unless such spouse consented in writing to
the designation of an alternative Beneficiary after notice of the spouse's
rights and such consent was witnessed (i) by a Plan representative appointed
by the Administrator or (ii) by a notary public. In the event no valid
designation of a Beneficiary is on file with the Administrator at the date of
death or no designated Beneficiary survives him, the Participant's spouse
shall be deemed the Beneficiary; in the further event the Participant is
unmarried or his spouse does not survive him, the Participant's estate shall
be deemed to be his Beneficiary.
(c) "Board" means the Board of Directors of the Company.
(d) "Break in Service" means, with respect to a Participant, any
Period of Severance which lasts for twelve (12) or more consecutive months.
(e) "Code" means the Internal Revenue Code of 1986, as interpreted
by applicable regulations and rulings issued pursuant thereto, all as amended
and in effect from time to time.
(f) "Company" means Gehl Company, a Wisconsin corporation, and any
successors and assigns thereto.
(g) "Compensation" means the earnings paid to a Participant for
services on or after his entry date in Section 2.01(a), equal to the sum of
the amount reportable in Box 1 of Form W-2, plus any Deposits hereunder and
salary reduction pursuant to Code Section 125 or 401(k), less any
reimbursements or other expense allowances, fringe benefits (cash or noncash),
moving expenses, deferred compensation, and welfare benefits. The maximum
annual compensation taken into account hereunder for purposes of calculating
any Participant's accrued benefit (including the right to any optional
benefit) and for all other purposes under the Plan shall be $150,000 (or such
higher amount permitted pursuant to Code Section 401(a)(17)). For purposes of
calculating this maximum for any 5 percent owner or highly compensated
employee who is in the group of ten employees paid the greatest compensation
during the year, pursuant to Code Section 414(q)(6), the compensation of a
spouse or a lineal descendant under age nineteen before the end of the Plan
Year shall be treated as if paid to the employee.
(h) "Date of Hire" means the first day on which an individual
performs an hour of employment as defined in Section 2.01(c) hereof.
(i) "Date of Rehire" means the first day on which an individual
performs an hour of employment upon rehire following a Break in Service.
(j) "Deposits" means amounts designated under the Plan by
Participants pursuant to Article III hereof which are contributed by the
Company in lieu of payment of an equal amount to the Participant as
compensation.
(k) "Effective Date" means December 16, 1994, the date on which the
provisions of this amended and restated Plan became effective.
(l) "Employee" means any person employed on other than a temporary
basis (i) by the Company in the position of an office, sales, or supervisory
employee or (ii) in a non-union hourly position by either Gehl in Madison,
South Dakota, Gehl Power Products, Inc. in Yankton, South Dakota or
Hedlund-Martin, Inc. in Lebanon, Pennsylvania. Persons working at Company
facilities which are acquired or otherwise made operational after the
Effective Date shall become Employees only upon specific action of the Board.
A person who is a "leased employee" within the meaning of Code Section 414(n)
and (o) shall not be eligible to participate in the Plan, but in the event
such a person was participating or subsequently becomes eligible to
participate herein, credit shall be given for the person's service as a leased
employee toward completion of the Plan's eligibility and vesting requirements,
including any service for a member of the controlled group or affiliated
service group, if applicable. In addition, "Employee" shall also mean any
person employed in West Bend, Wisconsin, in a position represented by a
collective bargaining unit, provided that any such Employee shall not be
eligible for any contributions under Sections 3.03 and 5.03.
(m) "ERISA" means the Employee Retirement Income Security Act of
1974, as interpreted and applied under regulations and rulings issued pursuant
thereto, all as amended and in effect from time to time.
(n) "Investment Manager" means the Administrator or a person,
insurance company, corporation or association which qualifies as an
"investment manager" as defined in Section 3(38) of ERISA, including the
Trustee, appointed pursuant to Section 9.02 to direct the investment of all or
any portion of the assets held by the Trustee under this Agreement.
(o) "Normal Retirement Date" means the Participant's sixty-fifth
(65th) birthday.
(p) "Participant" means any Employee who satisfies the provisions
of Section 2.01 hereof.
(q) "Period of Severance" means the total period of time,
calculated in years, months and days, which elapses between an employee's
Severance from Service Date and such employee's Date of Rehire.
(r) "Plan" means the profit sharing retirement plan herein
contained, as amended and in effect from time to time, which shall be known as
the "Gehl Savings Plan."
(s) "Plan Year" means the twelve (12) month period commencing on
January 1 of each year except that the first Plan Year will be April 22, 1985
through December 31, 1985.
(t) "Severance From Service Date" means the earlier of the date on
which an employee's employment with the Company terminates on account of a
quit, discharge, retirement (including retirement due to Total and Permanent
Disability) or death, or the first anniversary of an employee's absence for
any other reason, including a leave of absence, sick leave or disability
leave; provided, however, that, in the case of an employee who leaves active
service with the Company in connection with his commencing to perform military
duty in the armed forces of the United States of America or of any state
thereof under circumstances entitling him to veterans' reemployment rights
pursuant to the Vietnam Era Veterans' Readjustment Act or any other comparable
federal statute, he shall not be deemed to have incurred a Severance from
Service Date hereunder while performing such military duty and shall have the
period thereof included as part of his Vesting Service hereunder if, but only
if, he returns to the Company's service within the applicable time limit and
under the other conditions prescribed by such statutes for his exercise of
such veterans' reemployment rights.
(u) "Total and Permanent Disability" means a physical or mental
condition which totally and presumably permanently prevents a Participant from
engaging in any substantially gainful activity, as determined by the
Administrator based on a medical examination by a doctor or clinic appointed
by the Administrator. Notwithstanding any other provision of this section, no
Participant shall qualify if the Administrator determines that his disability
results from an injury suffered while engaged in a felonious or criminal act
or enterprise.
(v) "Trust Fund" means all sums of money and other property,
together with all earnings, income and other increment thereon, held in trust
for purposes of providing benefits and defraying the reasonable expenses of
the Plan, pursuant to the terms of this Agreement.
(w) "Trustee" means Bank One Wisconsin Trust Company, N.A. or any
successor or successors thereto designated by the Board pursuant to Section
8.01 hereof.
(x) "Vesting Service" means a Participant's service with the
Company as calculated under Section 2.02 hereof.
Section 1.02. Construction. (a) Whenever any words are used
herein in the masculine, they shall be construed as though they were used in
the feminine in all cases where they would so apply; and wherever any words
are used in the singular or the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases
where they would so apply. The words "hereof," "herein," "hereunder" and
other similar compounds of the word "here" shall mean and refer to this entire
Agreement and not to any particular article or section. Titles of articles
and sections hereof are for general information only, and this Agreement and
the Plan are not to be construed by reference thereto.
(b) The Plan is intended to qualify under Section 401 of the Code
and shall be interpreted so as to comply with the applicable requirements
thereof, where such requirements are not clearly contrary to the express terms
hereof. This Agreement and the Plan shall be construed and their validity
determined according to the laws of the State of Wisconsin to the extent such
laws are not preempted by federal law. In case any provision of this
Agreement and/or the Plan shall be held illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining parts of this
Agreement and/or the Plan, but this Agreement and/or the Plan shall be
construed and enforced as if said illegal and invalid provisions had never
been inserted therein.
ARTICLE II.
PARTICIPATION, VESTING SERVICE, BREAK IN SERVICE
Section 2.01. Participation. (a) Each Employee who has completed
the qualifying period is eligible to elect Deposits pursuant to Article III.
Eligible Employees who were participating in the Plan as of December 31, 1988,
shall continue to participate under this amended Plan if they were employed on
the Effective Date. Thereafter, any other Employee shall become a Participant
as of the first day of any quarter (i.e., January 1, April 1, July 1 or
October 1) coincident with or next following his completion of the qualifying
period and filing of the election of Deposits.
(b) The qualifying period shall be the first to occur of the
following:
(i) the twelve (12) month period immediately following
the employee's date of employment during which the
employee accumulates at least 1,000 hours of
employment; or
(ii) any Plan Year commencing after the date of employment
during which the employee accumulates at least 1,000
hours of employment; or
(iii) for any employee regularly scheduled to work forty
(40) hours per week, sixty (60) days of Vesting
Service before or after the Effective Date.
(c) For purposes of this Section an hour of employment is an hour
for which a person is directly or indirectly paid by the Company for the
performance of duties. Hours of employment shall also include each hour not
credited under the preceding sentence for which back pay has been either
awarded or agreed to, irrespective of mitigation of damages, and each of the
first 501 hours during a single continuous period of absence for which a
Participant is paid or entitled to payment for vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military duty, or leave
of absence. Notwithstanding the foregoing, no credit shall be given for
payments pursuant to applicable workers' compensation or unemployment
compensation or disability insurance laws. The Administrator shall determine
each Participant's hours of employment in accordance with Department of Labor
Regulations section 2530.200b-2(b) and (c).
(d) A former Participant who is rehired by the Company shall resume
participation in the Plan as of the first day of the calendar month coincident
with or next following his election to make Deposits.
(e) It is expressly provided that any employee who is in a unit of
employees covered by a collective bargaining agreement shall become, or
continue as, a Participant only if such bargaining agreement specifically
provides that employees in such unit shall be covered by the Plan.
Section 2.02. Vesting Service. Each Participant shall be credited
with Vesting Service equal to the aggregate periods of time between his Date
of Hire or subsequent Date of Rehire, as applicable, and the next following
Severance from Service Date. A Participant shall also be credited with
Vesting Service for any Period of Severance of less than twelve (12)
consecutive months in duration. Except for purposes of eligibility to
participate pursuant to Section 2.01(b)(iii), Vesting Service shall not count
any period prior to January 1, 1985.
Section 2.03. Break in Service. Vesting Service earned after a
Break in Service which lasts for at least six (6) years shall not be
considered for purposes of determining a Participant's vested interest in
amounts accrued in his account prior to the Break in Service. Vesting Service
earned prior to a Break in Service shall be aggregated with Vesting Service
earned after the Break in Service for purposes of determining a Participant's
vested interest in amounts accrued in his account after the Break in Service.
Separate accounts shall be maintained for amounts accrued with respect to a
Participant before a six (6) year Break in Service and after such a Break in
Service.
Section 2.04. Service for Controlled Group. Solely for purposes of
Sections 2.01(b), 2.01(c), 2.02, and 2.03 hereof, employment with the Company
shall include employment with any member of a controlled group of
corporations, a group of trades or businesses under common control or an
affiliated service group member as defined in Code Sections 414(b), (c) and
(m) that includes the Company, but only while such corporation is in such
controlled group.
ARTICLE III.
CONTRIBUTIONS TO THE TRUST FUND
Section 3.01. Election to Make Deposits. Upon completion of his
qualification requirement under Section 2.01, an Employee may file a written
election for the Company to make Deposits under the Plan. An Employee is not
required to file such election immediately upon completion of his qualifying
period but may, subject to any rules the Administrator may adopt, file the
election at a later date. The election shall be filed with the Administrator
on such form and in the manner the Administrator prescribes. The election
shall be effective as of the Employee's participation date in subsection
2.01(a) and shall continue in effect until suspended or terminated pursuant to
the terms hereof.
Section 3.02. Amount and Payment of Participant Deposits. (a)
Amount: At the time of his election under Section 3.01 hereof, the Employee
shall select the rate of his Deposits, based on a percentage of his
Compensation. Deposits shall commence with the payroll period which commences
on or immediately after the Employee's participation date. The Employee may
designate any whole percentage from one percent (1%) through fifteen percent
(15%), but only the first six percent (6%) of Compensation shall be eligible
for a match by Company contributions.
(b) Change in Rate: The rate of a Participant's Deposits shall
remain in effect and may be changed only as of the payroll period which
commences on or immediately after the first day of any quarter (i.e., January
1, April 1, July 1 or October 1) or other date provided by the Company,
pursuant to such rules as the Administrator may establish. Deposits may be
suspended entirely at any time by thirty (30) days written notice to the
Administrator.
(c) Payment: Deposits shall be made by the Company through regular
payroll deduction in lieu of payment as Compensation to the Participants.
Deposits so received by the Company shall be remitted to the Trustee as soon
as practicable thereafter.
(d) No Participant shall contribute Deposits in excess of $9,240 in
any calendar year (or such higher amount permitted pursuant to Code Section
402(g)) less the amount of any elective deferrals under all other plans,
contracts or arrangements maintained by the Company. In addition, the Plan is
subject to the limitations of Code Section 401(k) which are incorporated
herein by this reference. Accordingly, the actual deferral percentage for
highly compensated employees as defined in Code Section 414(q) shall not
exceed the greater of:
(i) the actual deferral percentage of the nonhighly
compensated employees multiplied by 1.25, or
(ii) the lesser of (A) the actual deferral percentage of the
nonhighly compensated employees plus two percentage
points, or (B) the actual deferral percentage of the
nonhighly compensated employees multiplied by 2.0,
subject to such other applicable limit as may be prescribed by the Secretary
of the Treasury to prevent the multiple use of this alternative limitation.
In order to ensure the favorable tax treatment of Deposits hereunder pursuant
to Code Section 401(k) or to ensure compliance with Code Section 402(g) or
415, the Administrator in its discretion may prospectively decrease the rate
of Deposits of any Participant at any time and, to the extent permitted by
applicable regulations, may direct the Trustee to refund Deposits to any
Participant. Any excess contributions, determined (i) after application of
the family aggregation rules, any recharacterization of deferrals as after-tax
contributions if applicable and use of qualified nonelective contributions
and/or qualified matching contributions as helpful in the actual deferral
percentage test, and (ii) by leveling the highest deferral ratios until the
test is satisfied, and excess deferrals shall be distributed including
applicable income determined pursuant to applicable regulations, including gap
period income after 1988, together with any applicable matching contribution.
Such distributions shall be made during the Plan Year following the year the
excess contributions were made, and the amount shall be determined based on
the respective portions attributable to each highly compensated employee as
defined in Code Section 414(q) and based on compensation as defined in Code
Section 415(c)(3). Testing hereunder shall be done separately for nonunion
Employees and each group of Employees represented by a collective bargaining
unit.
Section 3.03. Company Matching Contributions. (a) Subject to the
Company's right to amend or terminate the Plan as herein provided, the Company
shall contribute to the Trust Fund such amount from time to time as it
determines. Such contributions are not intended to be nor shall they be
treated as part of a "cash or deferred arrangement" under Section 401(k) of
the Code.
(b) The Plan is subject to the limitations of Code Section 401(m)
which are incorporated herein by this reference. Accordingly, the actual
contribution percentage of employer contributions for highly compensated
employees as defined in Code Section 414(q) shall not exceed the greater of:
(i) the actual contribution percentage of the nonhighly
compensated employees multiplied by 1.25, or
(ii) the lesser of (A) the actual contribution percentage of
the nonhighly compensated employees plus two percentage
points, or (B) the actual contribution percentage of the
nonhighly compensated employees multiplied by 2.0,
subject to such other applicable limit as may be prescribed by the Secretary
of the Treasury to prevent the multiple use of this alternative limitation.
In order to ensure compliance with Code Section 401(m), any excess aggregate
contributions, determined (i) after application of the family aggregation
rules, any recharacterization of deferrals as after-tax contributions if
applicable and use of qualified nonelective contributions and/or qualified
matching contributions as helpful in the actual deferral percentage test, and
(ii) by leveling the highest contribution ratios until the test is satisfied,
shall be distributed if vested or forfeited if forfeitable, including
applicable income determined pursuant to applicable regulations, including gap
period income after 1988, together with any applicable matching contribution.
Such distributions shall be made during the plan year following the year the
excess aggregate contributions were made, and the amount shall be determined
based on the respective portions attributable to each highly compensated
employee as defined in Code Section 414(q) and based on compensation as
defined in Code Section 415(c)(3). Testing hereunder shall be done separately
for nonunion Employees and each group of Employees represented by a collective
bargaining unit.
Section 3.04. No Liability for Future Company Contributions. The
benefits under the Plan shall be only such as can be provided by the assets of
the Trust Fund, and there shall be no liability or obligation to make future
profit sharing contributions hereunder or to make any further contributions in
the event of termination of the Plan.
Section 3.05. Time Period for Payment of Company Contributions.
The Company's contributions for any Plan Year shall be paid to the Trustee not
later than the time prescribed by law, including any extensions thereof, for
filing the Company's federal income tax return with respect to such year.
ARTICLE IV.
INVESTMENTS
Section 4.01. Direction of Investment. (a) Each Participant shall
direct, on such a form and in the manner the Administrator prescribes, the
percentage of Deposits and allocable share of Company contributions which
shall be invested in each fund described in Section 4.03 hereof. A
Participant who is a former Employee or a Beneficiary, other than the deceased
Participant's spouse, may not direct the investment of his account. Such
account shall remain in the funds in which it was invested as of the date of
the Participant's termination of employment or date of death, whichever is
applicable.
(b) In the event a Participant fails to direct investment of any
part of the account, such amount shall be invested on the Participant's behalf
in the Balanced Fund described in Section 4.03(a)(i) hereof.
(c) A Participant's direction of investment may be changed as of
the first day of any quarter (i.e., January 1, April 1, July 1 or October 1)
pursuant to such rules as the Administrator may establish. The election of
investments designates the percentage of future contributions to be allocated
to a particular fund. No reallocation shall be made due to differences in
investment results between various funds except as provided in Section 4.02
hereof.
Section 4.02. Reallocation of Accounts. Each Participant may
direct the Trustee, on such a form and in the manner the Administrator
prescribes, to reallocate the Participant's accounts as of the first day of
any quarter (i.e., January 1, April 1, July 1 or October 1) pursuant to such
rules as the Administrator may establish. Except to the extent permitted by
the Administrator, no Participant's direction to the Trustee for reallocation
of the Participant's account may include a reallocation to the Gehl Company
Stock Fund. Such direction may include a reallocation out of the Gehl Company
Stock Fund.
Section 4.03. Description of Funds. (a) There shall be four (4)
investment funds entitled and with the investment characteristics described
below:
(i) Balanced Fund: This shall be a fund to be invested
primarily in assets from a diversified portfolio of
stocks, bonds and short-term money market
instruments.
(ii) Equity Fund: This shall be a fund primarily invested
in assets such as common and preferred stocks issued
by any corporate entity.
(iii) Capital Preservation Fund: This shall be a fund
invested primarily in any guaranteed interest
contract issued by an insurance company and various
money-market securities.
(iv) Gehl Company Stock Fund: This fund is invested in
Gehl Company Common Stock. The value of this
investment will fluctuate with the value of Gehl
Company Common Stock. There is no limit on the
percentage of Plan assets that may be invested in
this fund.
Any or all of the investment funds may be invested in common funds of the
Trustee or in mutual funds in the discretion of the Investment Manager and
pursuant to the provisions hereof.
(b) Pending investment in securities of a character described for
the fund, any part of a fund may be invested in savings accounts or other
deposits with a bank, commercial paper or other short-term securities,
including any common funds of the Trustee utilizing similar investments but
excluding any securities of the Company.
(c) Additional funds shall be established in the discretion of the
Administrator, with such titles and investment characteristics as shall be
determined by the Administrator and communicated to Participants. Any fund
identified in subsection (a) or any additional fund may be eliminated in the
discretion of the Administrator after notice to Participants and reallocation
of such amounts to remaining funds.
(d) Each Participant's Deposits and allocable share of Company
contributions shall be invested in the various funds as directed by the
Participant pursuant to Sections 4.01 and 4.02 hereof.
Section 4.04. Funding Policy. The funding policy for the Plan is
that Deposits and Company contributions shall be managed in a manner
consistent with ERISA and the general investment objectives for the applicable
funds and for the purpose of defraying the reasonable expenses of
administering the Plan. The Administrator shall have primary responsibility
for carrying out the funding policy, and in addition to its specific
responsibilities set forth elsewhere in the Plan, shall establish and
communicate to the Trustee and/or other Investment Manager the general
investment policy and objectives for the funds designated pursuant to Section
4.03 hereof.
ARTICLE V.
PARTICIPANT ACCOUNTS
Section 5.01. Participant Accounts. The Trustee shall establish
and maintain an account in the name of each Participant for his allocated
share of Company contributions and Participant Deposits. As soon as
practicable following each Plan Year, the Trustee shall prepare for each
Participant an annual statement reflecting the status of the Participant's
account as of the end of the Plan Year.
Section 5.02. Allocation of Participant Deposits. As soon as
practicable following each June 30 and December 31, the Trustee shall allocate
each Participant's deposits for the payroll deduction periods ending in such
semi-annual period to the applicable Participant's account.
Section 5.03. Allocation of Company Matching Contributions. As
soon as practicable following each June 30 and December 31, and such other
date as may be provided by the Company, the Trustee shall allocate the
Company's matching contribution for the semi-annual period, if any, and any
allocable forfeitures under Section 5.04 hereof among the Participants on a
pro rata basis with respect to Participant Deposits for the applicable period,
up to a maximum Deposit of six percent (6%) of Compensation for such period.
Notwithstanding the foregoing, Participants who are employed in West Bend,
Wisconsin, represented by a collective bargaining unit shall not be eligible
for any Company matching contributions.
Section 5.04. Disposition of Forfeitures. The Trustee shall
establish a special account known as the "Suspense Account" and shall enter
into such account amounts as are forfeited by any former Participant under
Section 6.01 hereof. Amounts in the Suspense Account shall be allocated with
the Company matching contribution pursuant to Section 5.03 hereof as soon as
practicable.
Section 5.05. Allocation of Changes in Value. As of each June 30
and December 31, the Trustee shall value each investment fund under Section
4.03 hereof and proportionately adjust each Participant's account invested in
such fund to reflect the effect of income received, any change in fair market
value (whether realized or unrealized), expenses and all other transactions
during the preceding quarter period respecting such fund. Such valuation and
adjustment shall be accomplished by recognizing the beginning balances, any
distributions, and one-half of any Participant Deposits and Company
contributions during such quarter period.
Section 5.06. Maximum Allocation Limitations. The Plan is subject
to the limitations on benefits and contributions imposed by Code Section 415
which are incorporated herein by this reference. The limitation year shall be
the Plan Year. In the event that there are multiple plans, and the sum of the
defined benefit plan fraction and the defined contribution plan fraction, as
defined in Code Section 415, exceeds applicable limits, then such
Participant's benefit under the defined benefit plan shall be reduced until
such limits are satisfied. Any amounts not allocable to a Participant by
reason of the limitations incorporated herein shall be allocated and
reallocated during the limitation year among all other eligible Participants
to the extent permitted by the limitations. Any amounts which cannot be
allocated or reallocated due to the limitations shall be credited to a
suspense account subject to the following conditions: (i) amounts in the
suspense account shall be allocated as a forfeiture among all eligible
Participants hereunder at such time, including termination of the Plan or
complete discontinuance of Company contributions, as the foregoing limitations
permit, (ii) no investment gains or losses shall be allocated to the suspense
account, (iii) no further Company contributions shall be permitted until the
foregoing limitations permit their allocation to Participants' accounts, and
(iv) upon termination of the Plan any unallocated amounts in the suspense
account shall revert to the Company.
ARTICLE VI.
BENEFITS
Section 6.01. Eligibility for Benefits and Vesting. (a) A
Participant shall be fully vested and entitled pursuant to Section 6.03 hereof
to receive upon termination of employment the total amount credited to his
account if he:
(i) attains age sixty-five (65);
(ii) terminates employment under circumstances eligible
for early retirement under a Company-sponsored,
qualified defined benefit plan in which the
Participant is covered;
(iii) terminates employment on account of Total and
Permanent Disability; or
(iv) incurs a layoff without recall which results in his
termination of employment pursuant to Company policy.
If a Participant's employment is terminated under any other circumstances
(except by reason of death which is provided for in Section 6.02 hereof), he
shall be entitled pursuant to Section 6.03 hereof to receive the entire
balance of the account attributable to his Deposits, plus that percentage of
the balance in his account attributable to Company contributions which
represents his vested interest determined in accordance with the following
table, and the remainder of his account balance attributable to Company
contributions shall be subject to forfeiture pursuant to subsection (b) below.
Percentage of Account
Balance Attributable
to Company Contributions
Years of Vesting Service Representing Vested Interest
Less than 1 10%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
(b) Any amounts in a Participant's account which are not payable
under subsection (a) above when his employment with the Company is severed
shall remain in such account and shall continue to share in allocations under
Section 5.05 hereof until such former Participant incurs a six-year break in
service as defined in Section 2.04 hereof, whereupon they shall be forfeited
and administered pursuant to Section 5.04 hereof. Notwithstanding the
foregoing, if a Participant whose employment with the Company terminates prior
to his becoming one hundred percent (100%) vested in the portion of his
account balance attributable to Company contributions receives a distribution
or distributions of his entire vested interest in his account, such
Participant's nonvested interest in the Company contributions credited to his
account shall be forfeited; provided, however, that if such Participant is
reemployed prior to incurring a six-year break in service, any forfeited
amounts shall be reinstated from current forfeitures if available or a special
Company contribution. Any amounts that are reinstated pursuant to the
previous sentence shall continue to vest according to the schedule in
subsection (a) above taking into consideration any distributed amount. In any
such event, the Participant's vested portion of his remaining account shall
not be less than an amount "X" determined by the formula X = P(AB+D)-D, where
P is the vested percentage at the relevant time, AB is the account balance at
the relevant time, and D is the amount of the distribution. A Participant
whose entire vested interest in his account has been distributed or who has no
vested interest shall be deemed cashed out of the Plan.
(c) Benefits payable in installments to a former Participant shall
be suspended upon his reemployment by the Company. Any undistributed amount
shall be maintained in his account and shall continue to share in allocations
under Section 5.05 hereof until he again terminates his employment with the
Company.
Section 6.02. Death. Upon the death of a Participant before his
termination of employment with the Company, the total amount then credited to
his account shall be fully vested and payable to the Participant's
Beneficiary. Upon the death of a Participant after his termination of
employment, the vested portion of his account shall be payable to the
Participant's Beneficiary.
Section 6.03. Form and Time of Payment. (a) All amounts payable
to a Participant who terminates employment with the Company on account of
Total and Permanent Disability or after attainment of age sixty-five (65)
shall be paid as the Participant shall determine in one of the following ways:
(i) in lump sum; or
(ii) in substantially equivalent installments over a period
determined by the Participant not to exceed up to ten (10)
years.
In any case where the Participant has determined payment to be on an
installment basis, payment of all or any portion of the unpaid balance may be
accelerated in the Participant's sole discretion.
(b) All amounts payable to a Beneficiary shall be paid as the
Beneficiary shall determine in one of the following ways:
(i) in lump sum; or
(ii) in substantially equivalent installments over a period
determined by the Beneficiary not exceeding five (5) years
from the Participant's death; provided, however, that if
payment to the Participant has begun in installments prior
to his death, the balance of his account shall be
distributed at least as rapidly as that method selected
prior to his death.
(c) All amounts not payable pursuant to subsection (a) or (b) above
shall be paid in lump sum.
(d) Payment, under whichever method is determined, shall commence
at such time as the particular Participant or Beneficiary involved shall
determine. Notwithstanding the foregoing,
(i) except with respect to death benefits payable to a
nonspouse Beneficiary, no lump sum cash distribution
shall be made without the consent of the Participant
or deceased Participant's spouse, to the extent
required by law, where the nonforfeitable portion of
such Participant's or spouse's, in case of the
Participant's death, account exceeds, or has ever
exceeded, $3,500; but
(ii) benefits shall not commence later than sixty (60)
days after the end of the Plan Year in which the
Participant attains or would have attained, in the
case of death benefits payable to a deceased
Participant's spouse, age sixty-five (65) or incurs a
termination of employment, whichever shall last
occur; but
(iii) notwithstanding the foregoing, effective April 1,
1990, benefits payable to a Participant shall be paid
or commenced no later than the April 1 following the
calendar year in which the Participant attains age
seventy and one-half (70-1/2), even if the
Participant is still employed; with respect to
benefits payable to a deceased Participant's spouse,
benefits shall be paid or commenced no later than the
later of (A) December 31 of the calendar year
immediately following the calendar year in which the
Participant died and (B) December 31 of the calendar
year in which the Participant would have attained age
seventy and one-half (70-1/2).
(e) For purposes of any distribution or withdrawal pursuant to this
Article, the value of the Participant's account balances shall be determined
as of the June 30 or December 31 coincident or immediately following the date
on which the Trustee receives the direction from the Administrator to make
such payment. At the election of the Participant or deceased Participant's
spouse, the direction to the Trustee shall include a direction to pay a
percentage of the anticipated balance, not in excess of eighty percent (80%),
prior to the applicable June 30 or December 31, with a final payment after the
valuation for such June 30 or December 31 has been completed; provided,
however, that if the Participant or spouse makes such an election, the
Participant or spouse shall pay all costs incurred to effect the early
valuation necessitated by his election.
(f) The provisions of the Plan are intended to comply with Code
Section 401(a)(9) which prescribes certain rules regarding minimum
distributions and requires that death benefits be incidental to retirement
benefits. All distributions under the Plan shall be made in conformance with
Section 401(a)(9) and the regulations thereunder which are incorporated herein
by reference. The provisions of the Plan governing distributions are intended
to apply in lieu of any default provisions prescribed in regulations;
provided, however, that Code Section 401(a)(9) and the regulations thereunder
override any Plan provisions inconsistent with such Code Section and
regulations.
Section 6.04. Payments to Minor or Incompetent Person. In the
event that any amount is payable under the Plan to any person who is a minor
or is deemed by the Administrator to be incompetent, either mentally or
physically, or for any other reason incapable of receiving such payment, the
Administrator may, in its sole discretion, make such payment for the benefit
of such person in any of the following ways that the Administrator may select:
(i) to such person's legal representative appointed by proceedings
satisfactory to the Administrator; (ii) directly to such person even though he
is not then able to exercise control over such payment; and/or (iii) to any
custodian under the Uniform Gifts to Minors Act or similar statutes or
guardian of such person or of his property with whom such person is making his
home. The Administrator shall not be required to see to the proper
application of any such payment made for such person's benefit pursuant to the
provisions of this Section, and any such payment shall satisfy in full such
person's entitlement to that payment.
Section 6.05. Direct Transfer of Eligible Rollover Distributions.
(a) This section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this section, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover as such
terms are defined herein.
(b) An eligible rollover distribution is any distribution of all or
any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is required under
Section 401(a) (9) of the Code; and the portion of any distribution that is
not includible in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer securities).
(c) An eligible retirement plan is an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
(d) A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
(e) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
Section 6.06. Withdrawals. (a) Upon a showing of substantial
hardship, a Participant may withdraw any portion of the balance in his account
which is attributable to his Participant Deposits upon written request to and
approval of the Administrator. For purposes of this Section, substantial
hardship shall mean:
(i) unreimbursed medical expenses described in Code
Section 213(d) incurred by the Participant, the
Participant's spouse or any dependents of the
Participant (as defined in Code Section 152) or
necessary for these individuals to obtain medical
care;
(ii) costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Participant;
(iii) payment of tuition and related educational fees for
the next 12 months of post-secondary education for
the Participant or the Participant's spouse, children
or dependents; or
(iv) payments necessary to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
The hardship withdrawal (i) shall be limited to the amount of the
immediate and heavy financial need, (ii) including to the extent permitted by
rules established by the Administrator any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably anticipated to
result from the withdrawal. (iii) shall be made only after the Participant
takes all permitted loans and distributions hereunder and pursuant to any
other plan maintained by the Employers and (iv) shall not include any net
earnings credited after December 31, 1988 to the balance in the Participant's
account derived from Deposits.
Any Participant who makes a withdrawal under this Section, shall
have his Deposits and any other elective contributions or employee
contributions under this Plan or any other plan maintained by the Employer
(both qualified and nonqualified) automatically suspended for a period of
twelve (12) months following such withdrawal. The amount which such a
Participant may contribute as Deposits for the calendar year following such
withdrawal shall not exceed the amount described in Section 402(g) for such
year, reduced by the amount of such Participant's actual Deposits for the
calendar year in which the withdrawal occurred.
(b) After attainment of age fifty-nine and one-half (59-1/2), a
Participant may withdraw any portion of the balance in his account which is
attributable to his Participant Deposits upon written request to the
Administrator. No more than two (2) such withdrawals may be made by a
Participant during any twelve (12) month period.
Section 6.07. Erroneous Overpayments. In the event any payments
hereunder to a Participant, former Participant, surviving spouse or any other
Beneficiary hereunder exceed the amounts to which such person was entitled,
the Administrator may withhold or reduce subsequent payments, or may take such
other action as it deems necessary or appropriate.
ARTICLE VII.
PLAN ADMINISTRATION
Section 7.01. Appointment of Administrator. The Plan shall be
administered by an individual, or a committee of individuals appointed by the
Board and serving at its pleasure. An Administrator position may, but need
not, be filled by an officer, director or employee of the Company. Any
vacancy in an Administrator position, whether caused by death, resignation,
removal or other cause, shall be filled by the Board and the President of the
Company shall act as Administrator until such vacancy is filled. If the
Administrator is a committee, such vacancy shall not affect the
Administrator's authority to carry out its duties and responsibilities under
the Plan. Also, if the Administrator is a committee, it may select from its
committee members a chairman and such other officers as it deems appropriate,
and Administrator action may be taken on vote of at least a majority of the
committee members present at any meeting or upon unanimous written consent of
all members without a meeting. Such Administrator meetings shall be scheduled
to be held at least annually and minutes of such meetings shall be kept. All
actions of the Administrator shall be recorded in such minutes or other
appropriate written form. The Administrator may establish such other
procedures and operating rules as it deems appropriate. Any party serving in
an Administrator position may serve in similar capacities under other employee
retirement and welfare benefit plans established and maintained by the
Company. The Administrator shall be deemed the Plan's administrator for all
purposes of ERISA.
Section 7.02. Responsibility and Authority of the Administrator.
The Administrator shall have and exercise all discretionary and other
authority to control and manage the operation and administration of the Plan
as it may be amended by the Board from time to time, except such authority as
is specifically allocated otherwise by or under the terms hereof. Without
limiting the foregoing and in addition to the authority and duties specified
elsewhere herein, the Administrator shall have exclusive authority to:
(a) interpret and apply all provisions hereof, including without
limitation, the power to determine who is a Participant in the Plan, and
the amount of Vesting Service and Compensation to be recognized for each
such Participant;
(b) formulate, issue and apply rules and regulations, which are
consistent with the terms and provisions hereof and the requirements of
applicable law;
(c) make appropriate determinations and calculations and direct the
Trustee to pay benefits accordingly;
(d) prescribe and require the use of appropriate forms;
(e) prepare all reports which may be required by law;
(f) determine the existence of Total and Permanent Disability and,
in this connection, to require any Participant to submit to a physical
examination by a licensed physician, in accordance with uniform rules and
procedures consistently applied to similarly situated individuals;
(g) approve or deny all applications under Article VI hereof and
direct the Trustee as to the timing of any distribution;
(h) transmit to the Trustee the investment elections of
Participants pursuant to Article IV hereof; and
(i) appoint any Investment Managers or otherwise direct investments
pursuant to Section 9.02 hereof.
Section 7.03. Use of Professional Services. The Administrator may
engage the services of and/or consult with any legal counsel, independent
qualified public accountant or other persons as may be deemed appropriate.
Such persons may be employed for the purpose of rendering advice to the
Administrator concerning the Administrator's responsibilities hereunder and
may be persons who render services to the Company and/or the Trustee. In any
case in which such services are utilized, the Administrator shall retain
exclusive discretionary authority and control over the management and
administration of the Plan.
Section 7.04. Fees and Expenses. No employee of the Company shall
receive compensation for services rendered in an Administrator capacity but
shall be reimbursed for all reasonable expenses incurred in that capacity.
Any other person or entity serving in an Administrator capacity shall be
entitled to such reasonable compensation therefor as may be mutually agreed
upon with the Company. Where services are utilized as provided in Section
7.03 hereof, the Administrator shall review and approve fees and other costs
for those services. Such fees and costs and any other expenses incurred in
the administration of the Plan and Trust Fund shall be paid out of the
principal or income of the Trust Fund unless voluntarily paid by the Company.
Section 7.05. Delegation of Authority and Responsibility. The
Administrator may direct other employees to perform duties and functions
relating to the administration of the Plan under the Administrator's
supervision. It is expressly provided, however, that in any such case, the
Administrator retains full and exclusive authority and responsibility for and
respecting any such activities by other employees, and nothing contained in
this Section 7.05 shall be construed to confer upon such other employees any
discretionary authority or control in and respecting the management and
administration of the Plan.
Section 7.06. Requirement to Furnish Information and to Use
Administrator's Forms. Each person entitled to benefits under the Plan shall
furnish to the Administrator such evidence, dates or information as the
Administrator considers necessary or desirable in order to properly administer
the Plan. Any designation of Beneficiary, benefit application, notification
or other writing to be submitted hereunder to the Administrator must be filed
pursuant to the procedure and on the appropriate form prescribed, and its
receipt acknowledged by the Administrator in order to be valid and effective.
Section 7.07. Claims Procedure. (a) A Participant or Beneficiary
who believes that he is then entitled to benefits hereunder in an amount
greater than he is receiving or has received, may file a claim for such
benefits by writing directly to the Administrator. Every claim which is
properly filed shall be decided and answered in writing within ninety (90)
days (or one hundred eighty (180) days if additional time is needed and the
claimant is so notified prior to the commencement of the extension) of its
receipt by the Administrator, stating whether the claim is granted or denied.
If the claim is wholly or partially denied, the specific reasons for denial
and reference to the pertinent Plan provisions shall be set forth in a written
notice to the claimant. Such notice shall also describe any information
necessary for the claimant to perfect an appeal and an explanation of the
Plan's claims appeal procedure as set forth in subsection (b) below.
(b) Within sixty (60) days of notice that a claim is denied, the
claimant may file a written appeal to the Administrator, including any
comments, statements or documents the claimant may wish to provide. Every
appeal shall be decided and answered within sixty (60) days (or one hundred
twenty (120) days if additional time is needed and the claimant is so notified
prior to the commencement of the extension) of its receipt by the
Administrator. If a Committee is serving as Administrator, the appeal shall
be considered and decided by the entire body at its next regularly scheduled
meeting occurring at least thirty (30) days after the appeal is timely filed
unless an extension of time is required to process the appeal, in which case a
written notice thereof shall be given to the claimant prior to the start of
such extension which shall not go beyond the third such regularly scheduled
meeting occurring after such filing. In the event the claim is denied upon
appeal, the specific reasons for denial and reference to the pertinent Plan
provisions shall be set forth in a written decision which shall be sent to the
claimant. The Administrator shall comply with any reasonable request from a
claimant for documents or information relevant to his claim prior to his
filing an appeal. The Administrator shall have discretionary authority to
determine eligibility for benefits and to construe the terms of the Plan; any
such determination or construction shall be final and binding on all parties
unless arbitrary and capricious.
Section 7.08. Agent for Service of Process. The Administrator is
designated as the agent for service of legal process with respect to all
matters pertaining to the Plan and the Trust Fund.
ARTICLE VIII.
TRUSTEE
Section 8.01. Successor Trustee. Any Trustee may be removed by
action of the Board at any time, with or without cause, upon thirty (30) days'
written notice. Any Trustee may resign at any time upon thirty (30) days'
written notice to the Company. Upon such removal or resignation of a Trustee
the Board may appoint or designate a successor trustee or trustees and all the
monies and other property then constituting the Trust Fund shall be assigned,
transferred and paid over to such successor trustee or trustees.
Section 8.02. General Powers. In addition to any powers or
authority otherwise granted to the Trustee hereunder, the Trustee is
authorized and empowered:
(a) to act as complete and absolute owner of all assets in the
Trust Fund;
(b) to sell, exchange, convey, transfer or dispose of, or to grant
options with respect to, any asset in the Trust Fund and to apply the
proceeds of any such transaction in any manner consistent with the
purposes of the Trust Fund, including any loans authorized pursuant to
Section 6.06 hereof;
(c) to borrow or raise monies for the purposes of the Trust Fund in
such amount and upon such terms and conditions as the Trustee in its
discretion may deem advisable;
(d) to make, execute, acknowledge and deliver any and all
assignments, documents of transfer or conveyance and any and all other
instruments or documents that may be necessary or appropriate to carry
out the powers herein granted;
(e) to cause any asset in the Trust Fund to be registered in or
transferred to its name as Trustee or the name of its nominee or nominees
or to retain same unregistered or in form permitting transferability by
delivery, but the books and records of the Trustee shall at all times
show that all such assets are part of the Trust Fund;
(f) to execute any option, right or privilege appurtenant to or
respecting any asset of the Trust Fund or any contract with an insurance
company, including the right to vote in person or by proxy as to any
security in the Trust Fund;
(g) to employ such legal counsel, independent qualified public
accountant and other persons as may be deemed necessary for administering
the Trust Fund, which assistants may be those consulted by the Company,
any Investment Manager and/or the Administrator;
(h) to enforce, compromise, settle or abstain from same in its
discretion, any right, obligation or claim, whether asserted by or
against the Trustee and in general to protect in any way the interests of
the Trust Fund;
(i) to do all other acts which the Trustee may deem necessary or
proper and to exercise any and all powers of the Trustee upon such terms
and conditions as is deemed to be for the best interests of the Trust
Fund; and
(j) to employ or appoint investment advisors or managers to manage
any or all of the assets comprising the Trust, including any advisor or
manager which is a member of an affiliated group of which Bank One
Wisconsin Trust Company, N.A., or any successor trustee, is a member. To
effectuate such appointment, the Trustee shall have the power to execute
any documents as are necessary and to appoint such advisor or manager as
co-fiduciary.
Section 8.03. Payments from the Trust Fund. The Trustee shall make
payments from the Trust Fund to such persons, and in such manner and amounts
as may be specified in written directions to the Trustee from the
Administrator. Should any such payment be unclaimed, the Trustee shall notify
the Administrator thereof, and shall dispose of same in accordance with the
Administrator's further directions.
Section 8.04. Trustee Accounting. The Trustee shall keep accurate
and detailed accounts of all investments, receipts and disbursements and other
transactions hereunder, and all accounts, books and records relating thereto
shall be open to inspection and audit at reasonable times by any person or
persons designated by the Administrator or the Company. Within ninety (90)
days following the last day of each Plan Year, or following the close of such
other annual period as may be agreed upon between the Trustee and the Company,
and within ninety (90) days after the removal or resignation of the Trustee,
the Trustee shall file with the Company a written report setting forth all
investments, receipts and disbursements, and other transactions effected by it
during the period ending as of such date or to the date of such removal or
resignation, as the case may be, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales, and showing all cash, securities and other property held at the end
of such period.
Section 8.05. Settlement of Trustee Accounts. In case of any
disapproval of any statement of accounts of the Trustee submitted by the
Company in writing within ninety (90) days of receipt of such statement, an
audit of such statement shall be made by an independent certified public
accountant appointed by the Company unless a corrected statement shall have
been rendered to the Company and approved in writing by the Company. Upon
completion of such audit, the inaccuracies in such statement so audited, if
any, shall be corrected to conform to such audit and a corrected statement
shall be delivered by the Trustee to the Company. Any such corrected
statement shall stand approved as the statement of account of the Trustee as
to all matters embraced therein, without further approval. An approved or
corrected statement of account shall constitute an account stated between the
Trustee and the Company as to all matters embraced in such statement, and
shall be binding and conclusive upon all persons interested in the Trust Fund
to the same extent as if the account of the Trustee had been settled and
allowed in a proceeding for judicial settlement of its accounts in any court
of competent jurisdiction, to which all such persons had been made parties;
provided, however, that no such statement of accounts nor the Company's
approval thereof shall be deemed to relieve the Trustee of any liability which
may be imposed upon it for violation of a specific provision of the Code or
ERISA; provided further that nothing contained herein shall be deemed to
deprive the Trustee and/or the Company of the right to have a judicial
settlement of the Trustee's accounts.
Section 8.06. Reliance on Written Communications. The Trustee
shall be fully protected in relying upon any written notice, certification or
other document or writing received from the Company, the Board, any Investment
Manager and/or the Administrator and believed to be genuine and shall be under
no duty to make an investigation or inquiry as to statements contained in any
such notice, certification or other document or writing, and may accept the
same as conclusive. Except when otherwise expressly provided herein, any
instrument to be delivered or furnished by the Company or the Board to the
Trustee shall be sufficiently executed if executed in the name of the Company
or Board by any appropriate officer of the former and any instrument to be
delivered or furnished by the Administrator to the Trustee shall be
sufficiently executed in the Administrator's name. The Trustee shall be fully
protected in relying upon a resolution of the Board, duly certified by the
Company's secretary or assistant secretary, as to the identity of any party
serving in the Administrator capacity until a subsequent resolution is filed
with the Trustee by the Board. The Company shall furnish to the Trustee the
name and signature of any person serving in the Administrator capacity and
such other person who shall be entitled to act on behalf of the Company in
dealing with the Trustee. Each Investment Manager appointed pursuant to
Section 9.02 hereof shall, from time to time, furnish the Trustee with the
name and specimen signature of any person authorized to direct the Trust on
its behalf under this Agreement. The Trustee shall have the right to request
that all directions and orders from the Investment Manager be in writing and
shall assume no liability hereunder for failure to act pursuant to such
directions and orders unless and until they are received in a form
satisfactory to it.
Section 8.07. Trustee Fees and Expenses. The Trustee shall be
entitled to reimbursement of any reasonable expenses properly incurred in the
performance of its duties hereunder and any Trustee who is not an employee of
the Company shall be entitled to such reasonable compensation as shall be
mutually agreed upon with the Company. Such compensation and expenses shall
be paid from the Trust Fund unless paid by the Company.
ARTICLE IX.
INVESTMENT OF TRUST FUND
Section 9.01. Trustee Investment of Trust Fund. The Trust Fund
shall be invested and reinvested without distinction between principal and
income in such manner as the Trustee or any Investment Manager appointed
pursuant to Section 9.02 shall determine to be consistent and in accord with
the applicable requirements of ERISA and the Code and the provisions of
Article IV. Subject to the foregoing requirements, such investments and
reinvestments shall not be restricted to those of the character authorized for
fiduciaries under any present or future laws or administrative regulations or
pursuant to any rule of court, nor shall any investments be limited to any
amount or type in relation to the amount or type of investments of the Trust
Fund as a whole. The Trustee may hold all or any part of the Trust Fund in
cash, and shall not be liable for interest on monies so held. Such cash or
cash balances may be deposited with any bank or similar financial institution,
including the Trustee, in savings accounts earning a reasonable rate of
interest. The Trustee may, from time to time, invest and reinvest in
interests in common, pooled, diversified, or consolidated funds created and
maintained by any bank, insurance company or other financial institution,
including the Trustee, for the collective investment of assets in trusts of
employee retirement plans qualified under the applicable provisions of the
Code whereupon, during the effective period of such investment and
reinvestment in such a fund, any instrument governing such fund shall be
deemed to be incorporated in and made a part of this Agreement as fully and to
all intents and purposes as if set forth herein at length.
Section 9.02. Appointment of Investment Manager. The Administrator
may appoint one or more Investment Managers to manage the investment and
reinvestment of all or any portion of the investment funds in Section 4.03.
Any such Investment Manager shall serve at the pleasure of the Administrator.
Each Investment Manager shall acknowledge in writing that it is a
fiduciary with respect to the Plan. To the extent that Investment Managers
have been appointed to manage the investment and reinvestment of any assets of
the Trust Fund, then with respect to such assets, the Trustee shall be charged
with responsibility only to execute with reasonable diligence and care the
instructions of such Investment Manager and the Trustee shall not be liable in
any way for depreciation or loss incurred by reason or in respect of any
investments made or assets held pursuant to such instructions. To the extent
that no Investment Manager is appointed with respect to all or any portion of
an investment fund, the Administrator shall be deemed the Investment Manager.
ARTICLE X.
FIDUCIARIES AND ALLOCATION OF RESPONSIBILITIES
Section 10.01. Fiduciaries. The Board, the Administrator, any
Investment Manager and the Trustee shall be deemed to be the only fiduciaries,
named and otherwise, of the Plan and Trust Fund for all purposes of ERISA. No
named fiduciary designated in this Section 10.01 shall be required to give any
bond or other security for the faithful performance of its duties and
responsibilities with respect to the Plan and/or Trust Fund, except as may be
required from time to time under ERISA.
Section 10.02. Allocation of Fiduciary Responsibilities. The
fiduciary responsibilities (within the meaning of ERISA) allocated to each
named fiduciary designated in Section 10.01 hereof shall consist of the
responsibilities, duties, authority and discretion of such named fiduciary
which are expressly provided herein and in any related documents. Each such
named fiduciary may obtain the services of such legal, actuarial, accounting
and other assistants as it deems appropriate, any of whom may be assistants
who also render services to any other named fiduciary, the Plan and/or the
Company; provided, however, that where such services are obtained, the named
fiduciary shall not be deemed to have delegated any of its fiduciary
responsibilities to any such assistant but shall retain full and complete
authority over and responsibility for any activities of such assistant. The
Board, Trustee, any Investment Manager, Administrator and any individual
members thereof shall not be responsible for any act or failure to act of any
other one of them except as may be otherwise specifically provided under
ERISA.
Section 10.03. General Limitation on Liability. Neither the Board,
the Administrator, the Trustee, any Investment Manager nor any other person or
entity, including the Company and its shareholders, directors and employees,
guarantees the Trust Fund in any manner against loss or depreciation and none
of them shall be jointly or severally liable for any act or failure to act or
for anything whatever in connection with the Plan and the Trust Fund, or the
administration thereof, except and only to the extent of liability imposed
because of a breach of fiduciary responsibility specifically prohibited under
ERISA.
Section 10.04. Multiple Fiduciary Capacities. Any person or group
of persons may serve in more than one fiduciary capacity with respect to the
Plan and/or the Trust Fund.
ARTICLE XI.
AMENDMENT AND TERMINATION
Section 11.01. Amendment. The Company shall have the right by
action of the Board to amend this Agreement and/or the Plan at any time and in
any manner consistent with the Code and ERISA; provided, however, that any
amendment which increases the duties or responsibilities of the Trustee shall
be effective only with the Trustee's consent. In addition, the Administrator
may adopt such amendments to the Plan as may be requested by the Internal
Revenue Service in order to comply with the requirements for qualification
under Sections 401(a) and 501(a) of the Code. Any amendment may be
retroactive to the extent permitted by applicable law. Notwithstanding the
foregoing, no amendment to the Plan shall decrease a Participant's accrued
benefit or vested percentage or eliminate an optional form of distribution for
a previously accrued benefit.
Section 11.02. Termination. The Company shall have the right to
terminate the Plan, in whole or in part, by action of the Board at any time
and in such event, upon any other termination or partial termination, or upon
termination due to permanent discontinuance of all Company contributions, the
Trust Fund shall be fully vested and nonforfeitable to the extent of the
termination. Distribution of benefits shall be in the discretion of the
Administrator pursuant to Section 6.03 hereof.
ARTICLE XII.
GENERAL PROVISIONS
Section 12.01. Non-Guarantee of Continued Employment or Other
Benefits. Neither the establishment of the Plan, nor any modification or
amendment thereof, nor the payment of any benefit hereunder shall be construed
as giving any Participant or other person whomsoever any legal or equitable
right against the Company, its individual officers and employees, the Board or
its members, any Investment Manager, the Administrator or any Trustee, or the
right to the payment of any benefits hereunder (unless the same shall be
specifically provided herein) or as giving any employee the right to continue
his employment with the Company or as affecting the Company's right to sever
such employment.
Section 12.02. Mergers, Consolidations and Transfers of Plan
Assets. In the case of any merger, consolidation with, or transfer of assets
or liabilities to any other plan, each Participant must be entitled to receive
a benefit immediately after the merger, consolidation, or transfer (if the
applicable plan were then to terminate) which is equal to or greater than the
benefit he would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the applicable plan were then to terminate).
Section 12.03. Spendthrift Clause. No Participant or Beneficiary
shall have the right to transfer, assign, alienate, anticipate, pledge or
encumber any part of such benefits, nor shall such benefits, or any part of
the Trust Fund from which such benefits are payable, be subject to seizure by
legal process by any creditor of such Participant or Beneficiary. Any attempt
to effect such a diversion or seizure as aforedescribed shall be deemed null
and void for all purposes hereunder to the extent permitted by ERISA and the
Code. Notwithstanding the foregoing, the Trustee may recognize a qualified
domestic relations order with respect to child support, alimony payments or
marital property rights if such order contains sufficient information for the
Administrator to determine that it meets the applicable requirements of
Section 414(p) of the Code. The Administrator shall establish written
procedures concerning the notification of interested parties and the
determination of the validity of such orders; if any such order so directs,
distribution of benefits to the alternate payee may be made at a time not
permitted for distributions to the Participant.
Section 12.04. Exclusive Benefit. Anything in the Plan which might
be construed to the contrary notwithstanding, it shall be impossible at any
time prior to the satisfaction of all liabilities with respect to Participants
and their Beneficiaries under the Plan for any part of the Trust Fund assets
to be used for, or diverted to, purposes other than the exclusive benefit of
such Participants or their Beneficiaries and defraying the reasonable expenses
of administering the Plan and the Trust Fund. In no event shall the Company
receive at any time any amounts from such assets except as provided in Section
5.06 or 12.09 hereof or the event of a mistake of fact pursuant to the
directions of the Administrator within one year after such mistake is made.
Notwithstanding any provision herein to the contrary, employer contributions
hereunder are conditioned upon their deductibility under Code Section 404. To
the extent a deduction is disallowed, contributions may be returned to the
Employer within one year after such disallowance.
Section 12.05. Full Satisfaction of Claims. Any payment or
distribution to any Participant or Beneficiary shall be in full satisfaction
of all claims against the Trust Fund, the Trustee, the Administrator, any
Investment Manager and the Company and shall give rise to no claim or
liability notwithstanding it shall later appear that such payment or
distribution was made under a mistake of fact or law, except as otherwise
specifically provided by the Code or ERISA. No payment shall be made
hereunder which would be in violation of any applicable law or governmental
regulation as determined by the Administrator.
Section 12.06. Indemnification. The Company shall indemnify any
director and/or employee of the Company who acts with respect to the Plan as a
member of the Board, in an Administrator capacity or as a Trustee and shall
hold any such director and/or employee harmless from the consequences of his
acts or conduct in connection with the Plan except to the extent that such
consequences are the result of willful misconduct or bad faith shown on the
part of such director and/or employee.
Section 12.07. Counterparts. This Agreement may be executed in a
number of counterparts, each of which shall be deemed an original, and such
counterparts shall constitute but one and the same instrument. This Agreement
may be sufficiently evidenced by any one counterpart.
Section 12.08. Successors and Assigns. This Agreement and the Plan
herein contained shall be binding upon the successors and assigns of the
Company and the Trustee.
Section 12.09. IRS Approval. Any other provision to the contrary
notwithstanding, the effectiveness of this Agreement is subject to the
condition subsequent of the Company obtaining a determination from the
Internal Revenue Service that the Plan meets the requirements for
qualification contained in Code Section 401(a) and that the Trust Fund is
exempt from tax under Code Section 501(a).
Section 12.10. Top-Heavy Restrictions. (a) Notwithstanding any
provision to the contrary herein, in accordance with Code Section 416, if the
Plan is a top-heavy plan for any Plan Year, then the provisions of this
Section shall be applicable. The Plan is "top-heavy" for a Plan Year if as of
its "determination date" (i.e. the last day of the preceding Plan Year or the
last day of the Plan's first Plan Year, whichever is applicable), the total
present value of the accrued benefits of key employees (as defined in Code
Section 416(i)(1) and applicable regulations) exceeds sixty percent (60%) of
the total present value of the accrued benefits of all employees under the
plan (excluding those of former key employees and employees who have not
performed any services during the preceding five (5) year period) (as such
amounts are computed pursuant to Section 416(g) and applicable regulations
using a five percent (5%) interest assumption and a 1971 GAM mortality
assumption) unless such plan can be aggregated with other plans maintained by
the applicable controlled group in either a permissive or required aggregation
group and such group as a whole is not top-heavy. Any nonproportional
subsidies for early retirement and benefit options are counted assuming
commencement at the age at which they are most valuable. In addition, a plan
is top-heavy if it is part of a required aggregation group which is top-heavy.
Any plan of a controlled group may be included in a permissive aggregation
group as long as together they satisfy Code Section 401(a)(4) and 410
discrimination requirements. Plans of a controlled group which must be
included in a required aggregation group include any plan in which a key
employee participates or participated at any time during the determination
period (regardless of whether the plan has terminated) and any plan which
enables such a plan to meet Code Section 401(a)(4) or 410 discrimination
requirements. The present values of aggregated plans are determined
separately as of each plan's determination date and the results aggregated for
the determination dates which fall in the same calendar year. A "controlled
group" for purposes of this Section includes any group employers aggregated
pursuant to Code Sections 414(b), (c) or (m). The calculation of the present
value shall be done as of a valuation date which for a defined contribution
plan is the determination date and for a defined benefit plan is the date as
of which funding calculations are generally made within the twelve-month
period ending on the determination date. Solely for the purpose of
determining if the Plan, or any other plan included in a required aggregation
group of which this Plan is a part, is top-heavy (within the meaning of
Section 416(g) of the Code) the accrued benefit of an Employee other than a
key employee (within the meaning of Section 416(i)(1) of the Code) shall be
determined under (i) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Affiliates, or (ii) if there is no
such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Code.
(b) If a defined contribution plan is top-heavy in a Plan Year,
non-key employee participants who have not separated from service at the end
of such Plan Year will receive allocations of employer contributions and
forfeitures at least equal to the lesser of three percent (3%) of compensation
(as defined in Code Section 415) for such year or the percentage of
compensation allocated on behalf of the key employee for whom such percentage
was the highest for such year (including any salary reduction contributions).
If a defined benefit plan is top-heavy in a Plan Year and no defined
contribution plan is maintained, the employer-derived accrued benefit on a
life-only basis commencing at the normal retirement age of each non-key
employee shall be at least equal to a percentage of the highest average
compensation for five consecutive years, excluding any years after such Plan
permanently ceases to be top-heavy, such percentage being the lesser of (i)
twenty percent (20%) or (ii) two percent (2%) times the years of service after
December 31, 1983 in which a Plan Year ends in which the Plan is top-heavy.
If the controlled group maintains both a defined contribution plan and a
defined benefit plan which cover the same non-key employee, such employee will
be entitled to the defined benefit plan minimum and not to the defined
contribution plan minimum.
(c) If the controlled group maintains a defined benefit plan and a
defined contribution plan which both cover one or more of the same key
employees, and if such plans are top-heavy, then the limitation stated in a
separate provision of this Plan with respect to the Code Section 415(e)
maximum benefit limitations shall be amended so that a 1.0 adjustment on the
dollar limitation applies rather than a 1.25 adjustment. This provision shall
not apply if the Plan is not "super top-heavy" and if the minimum benefit
requirements of this Section are met when two percent (2%) is changed to three
percent (3%) and twenty percent (20%) is changed to an amount not greater than
thirty percent (30%) which equals twenty percent (20%) plus one percent (1%)
for each year such plan is top-heavy. A plan is "super top-heavy" if the
ratio referred to in subsection (a) above results in a percentage in excess of
ninety percent (90%) rather than a percentage in excess of sixty percent
(60%).
Section 12.11. Retroactive Effective Date.
(a) The following provisions shall apply retroactively from and
after the Plan Year beginning in 1987:
(i) leased employees in Section 1.01(1);
(ii) contribution limitations in Sections 3.02(d), 3.03(b)
and 5.06; and
(iii) top-heavy rules in Section 12.10.
(b) The provision describing the direct transfer of eligible
rollover distributions in Section 6.05 shall apply retroactively from and
after January 1, 1993.
(c) The following provisions shall apply retroactively from and
after January 1, 1994:
(i) The maximum annual compensation considered under the Plan
in Section 1.01(g); and
(ii) The description of substantial hardship in Section
6.06(a).
ARTICLE XIII.
TRUSTEE ACCEPTANCE
Section 13.01. Effective Date of Acceptance. Effective as of
January 1, 1995, the Trustee accepts the Trust hereby established and agrees
to be bound by all of the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on this 20th day of December, 1994.
GEHL COMPANY
By: K. F. Kaplan
Vice President
Attest: M. Mulcahy
Secretary
[Corporate Seal]
BANK ONE WISCONSIN TRUST COMPANY, N.A.,
TRUSTEE
By: Ellen B. Roberts
Assistant Vice President
Attest: Michael E. Horning
Trust Officer
[Corporate Seal]
GEHL COMPANY
RETIREMENT INCOME PLAN "B"
As Amended and Restated By the Board of Director's as of December 16, 1994
GEHL COMPANY
RETIREMENT INCOME PLAN "B"
INDEX
Page
ARTICLE I. PURPOSE
ARTICLE II. DEFINITIONS AND CONSTRUCTION
Section 2.01. Definitions . . . . . . . . . . . . . . . . . . . . . 1
Section 2.02. Construction . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III. PARTICIPATION AND SERVICE
Section 3.01. Participation . . . . . . . . . . . . . . . . . . . . 5
Section 3.02. Benefit Accrual Service . . . . . . . . . . . . . . . 5
Section 3.03. Vesting Service . . . . . . . . . . . . . . . . . . . 5
Section 3.04. Break in Service . . . . . . . . . . . . . . . . . . 6
Section 3.05. Hour of Service . . . . . . . . . . . . . . . . . . . 7
Section 3.06. Transfer of Employment . . . . . . . . . . . . . . . 7
ARTICLE IV. REQUIREMENTS FOR RETIREMENT BENEFITS
Section 4.01. Normal Retirement . . . . . . . . . . . . . . . . . . 8
Section 4.02. Early Retirement . . . . . . . . . . . . . . . . . . 8
Section 4.03. Disability Retirement . . . . . . . . . . . . . . . . 8
Section 4.04. Deferred Vested Pension . . . . . . . . . . . . . . . 9
Section 4.05. Pre-Retirement Surviving Spouse Annuity
Pension . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V. BENEFIT ACCRUAL; AMOUNT OF BENEFIT
Section 5.01. Benefit Accrual . . . . . . . . . . . . . . . . . . . 11
Section 5.02. Normal Retirement Pension . . . . . . . . . . . . . . 11
Section 5.03. Deferred Retirement Pension . . . . . . . . . . . . . 11
Section 5.04. Early Retirement Pension . . . . . . . . . . . . . . 11
Section 5.05. Deferred Vested Pension . . . . . . . . . . . . . . . 12
Section 5.06. Pre-Retirement Surviving Spouse Annuity
Pension . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.07. Disability Pension . . . . . . . . . . . . . . . . . 13
Section 5.08. Small Pension Payments . . . . . . . . . . . . . . . 13
Section 5.09. Actuarial Equivalents . . . . . . . . . . . . . . . . 13
ARTICLE VI. MANNER AND FORM OF PAYMENT AND OPTIONAL
BENEFITS
Section 6.01. Participant's Retirement Benefit . . . . . . . . . . 14
Section 6.02. Eligible Spouse Benefit . . . . . . . . . . . . . . . 14
Section 6.03. Life Annuity . . . . . . . . . . . . . . . . . . . . 14
Section 6.04. Joint and Survivor Life Annuity . . . . . . . . . . . 14
Section 6.05. Period Certain Life Annuity . . . . . . . . . . . . . 15
Section 6.06. Annuity Election Conditions . . . . . . . . . . . . . 15
Section 6.07. Disability Pension . . . . . . . . . . . . . . . . . 15
Section 6.08. Beneficiary Designations . . . . . . . . . . . . . . 16
Section 6.09. Reemployment After Termination of
Employment . . . . . . . . . . . . . . . . . . . . . 16
Section 6.10. Early Retirement Window . . . . . . . . . . . . . . . 17
Section 6.11. Early Retirement Window . . . . . . . . . . . . . . . 18
Section 6.12. Early Retirement Window . . . . . . . . . . . . . . . 18
Section 6.13. Direct Transfer of Eligible Rollover
Distributions . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII. PLAN FINANCING: CONTRIBUTIONS AND FUNDING
Section 7.01. Purpose of Funding . . . . . . . . . . . . . . . . . 20
Section 7.02. Contributions . . . . . . . . . . . . . . . . . . . . 20
Section 7.03. Management Form . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII. ADMINISTRATION
Section 8.01. Allocation of Responsibility Among
Fiduciaries for Plan Administration . . . . . . . . . 20
Section 8.02. Appointment of Committee . . . . . . . . . . . . . . 21
Section 8.03. Claims Procedure . . . . . . . . . . . . . . . . . . 21
Section 8.04. Records and Reports . . . . . . . . . . . . . . . . . 21
Section 8.05. Other Committee Powers and Duties . . . . . . . . . . 21
Section 8.06. Rules and Decisions. . . . . . . . . . . . . . . . 22
Section 8.07. Committee Procedures . . . . . . . . . . . . . . . . 22
Section 8.08. Authorization of Benefit Payments . . . . . . . . . . 23
Section 8.09. Application and Forms for Pension . . . . . . . . . . 23
Section 8.10. Facility of Payment . . . . . . . . . . . . . . . . . 23
ARTICLE IX. AMENDMENT AND TERMINATION OF THE PLAN
Section 9.01. Amendment of the Plan . . . . . . . . . . . . . . . . 23
Section 9.02. Termination of the Plan . . . . . . . . . . . . . . . 23
Section 9.03. Allocation of Assets Upon Plan
Termination . . . . . . . . . . . . . . . . . . . . . 24
Section 9.04. Merger or Consolidation . . . . . . . . . . . . . . . 24
ARTICLE X. MISCELLANEOUS PROVISIONS
Section 10.01. Evidence of Survival . . . . . . . . . . . . . . . . 24
Section 10.02. Misstated Information . . . . . . . . . . . . . . . 24
Section 10.03. Action by Company . . . . . . . . . . . . . . . . . 24
Section 10.04. Nonguarantee of Employment . . . . . . . . . . . . . 25
Section 10.05. Rights of Plan Assets . . . . . . . . . . . . . . . 25
Section 10.06. Non-alienation of Benefits . . . . . . . . . . . . . 25
Section 10.07. Notice of Change of Address . . . . . . . . . . . . 25
Section 10.08. Canadian Law . . . . . . . . . . . . . . . . . . . . 25
Section 10.09. Top-Heavy Restrictions . . . . . . . . . . . . . . . 26
Section 10.10. Maximum Benefit . . . . . . . . . . . . . . . . . . 28
Section 10.11. Limitations on Benefits for Highly
Compensated Employees . . . . . . . . . . . . . . . 28
Section 10.12. Retroactive Effective Date . . . . . . . . . . . . . 29
ARTICLE I. PURPOSE
Effective as of May 1, 1957, GEHL COMPANY, a Wisconsin corporation
with its principal place of business located in West Bend, Wisconsin, adopted
the GEHL COMPANY RETIREMENT INCOME PLAN "B" to provide retirement benefits for
eligible employees.
The Plan was subsequently amended, restated as of May 1, 1976,
January 1, 1984, January 1, 1989 and January 1, 1991. This restatement is
effective December 16, 1994.
The Plan is intended to meet the requirements of Sections 401(a) and
501(a) of the Internal Revenue Code of 1986, as amended (the "Code").
The provisions of this Plan shall apply only to an employee who
terminates employment on or after the Effective Date. The rights and
benefits, if any, of a former employee shall be determined in accordance with
the prior provisions of the Plan in effect on the date his employment
terminated.
The cost of the Plan shall be paid entirely by the Company. The
benefits provided under the Plan are in addition to the benefits one shall
receive from Social Security.
ARTICLE II. DEFINITIONS AND CONSTRUCTION
Section 2.01. Definitions. Where the following words and phrases
appear in this Plan, they shall have the respective meanings set forth below,
unless the context clearly indicates to the contrary:
(a) Accrued Benefit: The amount determined in accordance with
Section 5.01 for Retirement at Normal Retirement Date.
(b) Actuary: The individual actuary or firm of actuaries selected
by the Committee to provide actuarial services in connection with the
administration of the Plan.
(c) Authorized Leave of Absence: Any absence authorized by the
Company under the Company's standard personnel practices, provided that all
persons under similar circumstances must be treated alike in the granting of
such Authorized Leaves of Absence, and provided further that the Participant
returns within the period specified in the Authorized Leave of Absence.
(d) Average Monthly Compensation: One-sixtieth (1/60th) of a
Participant's Compensation received from the Company for the highest five (5)
consecutive calendar years within the last ten (10) calendar years preceding
the date of his termination of employment with the Company. For any period of
authorized absence, an Employee shall be deemed to have received compensation
at the rate in effect immediately preceding such absence.
(e) Beneficiary: The person designated in writing to receive any
benefits upon the death of a Participant. If no such designation is made or
if the designated person is not living at the death of a Participant, the
Beneficiary shall be the deceased Participant's spouse at his date of death,
if living, otherwise the estate of the Participant.
(f) Benefit Accrual Service: The period of a Participant's
employment considered in determining the amount of benefit payable to or on
behalf of a Participant in accordance with Section 3.02.
(g) Board: The Board of Directors of the Company.
(h) Committee: The persons appointed under the provisions of
Article VIII to administer the Plan.
(i) Company: Gehl Company, a corporation organized and existing
under the laws of the State of Wisconsin, or its successor or successors.
(j) Compensation: An Employee's basic wages or salary from the
Company before deductions, including any salary reduction deferrals pursuant
to a cash or deferred arrangement or a cafeteria plan pursuant to Internal
Revenue Code Sections 401(k) or 125, but exclusive of bonuses, overtime,
long-term disability benefits or other additional compensation as determined
in accordance with uniform rules, regulations and standards as may be
prescribed by the Company; provided, however, that in the case of a
salary-plus-commission Employee, the term "compensation" shall mean
seventy-five percent (75%) of such Employee's aggregate guaranteed salary and
commission from the Company. With respect to any Employee terminating
employment on or after January 1, 1984, (other than an officer of the Company)
who during 1982 or 1983, due to adverse business conditions, received a salary
reduction or was temporarily laid off, the term "compensation" for such
applicable calendar years shall mean the Employee's base monthly salary prior
to such reduction or layoff times twelve (12).
The maximum annual compensation taken into account hereunder for
purposes of calculating any Participant's accrued benefit (including the right
to any optional benefit) and for all other purposes under the Plan shall be
$150,000 (or such higher amount permitted pursuant to Code Section
401(a)(17)). For purposes of calculating this maximum for any 5 percent owner
or highly compensated employee who is in the group of ten employees paid the
greatest compensation during the year, pursuant to Code Section 414(q)(6), the
compensation of a spouse or a lineal descendant under age nineteen before the
end of the Plan Year shall be treated as if paid to the employee.
(k) Deferred Retirement Date: The first day of the month after the
Normal Retirement Date coinciding with or next following the date a
Participant actually retires from employment with the Company.
(l) Disability: A physical or mental condition which totally and
presumably permanently prevents a Participant from engaging in any
substantially gainful activity as determined in accordance with the provisions
of Section 4.03.
(m) Early Retirement Date: The first day of any month before his
Normal Retirement Date in which a Participant elects to retire, provided he
has completed five (5) years of Vesting Service and has attained his 55th
birthday.
(n) Effective Date: December 16, 1994, the date on which the
provisions of this amended and restated Plan became effective.
(o) Eligible Spouse: The person to whom a Participant is legally
married on the date his benefits hereunder commence, or if benefits have not
previously commenced, the person to whom the Participant is legally married at
his date of death and has been so married during the 12-month period
immediately preceding his date of death.
(p) Employee: Any person who:
(i) is employed on other than a temporary basis;
(ii) is receiving remuneration for personal services rendered
to the Company (or would be receiving such remuneration
except for an Authorized Leave of Absence) and is not
covered under any other defined benefit retirement plan
qualified under the Internal Revenue Code to which the
Company contributes; and
(iii) is either employed in Canada or at the West Bend,
Wisconsin facility or as of December 31, 1989 was employed
in a salaried position exempt from the Fair Labor
Standards Act at the Madison, South Dakota facility.
Persons working at Company facilities which are acquired or otherwise made
operational after the Effective Date shall become Employees only upon specific
action of the Board. A person who is a "leased employee" within the meaning
of Code Section 414(n) and (o) shall not be eligible to participate in the
Plan, but in the event such a person was participating or subsequently becomes
eligible to participate herein, credit shall be given for the person's service
as a leased employee toward completion of the Plan's eligibility and vesting
requirements, including any service for a member of the controlled group or
affiliated service group, if applicable.
(q) ERISA: Public Law No. 93-406, the Employee Retirement Income
Security Act of 1974, as amended from time to time.
(r) Fund: The assets held under the Plan by the Trustee.
(s) Normal Retirement Date: The first day of the calendar month
coincident with or immediately following the Participant's 65th birthday.
(t) Participant: An Employee participating in the Plan in
accordance with the provisions of Section 3.01.
(u) Plan: Gehl Company Retirement Income Plan "B," the Plan set
forth herein, as amended from time to time.
(v) Plan Year: The 12-month period commencing on January 1 and
ending on December 31.
(w) Retirement: Termination of employment for reason other than
death after a Participant has fulfilled all requirements for a Normal, Early
or Disability Retirement Pension. Retirement shall be considered as
commencing on the day immediately following a Participant's last day of
employment (or Authorized Leave of Absence, if later).
(x) Trustee: First Bank (N.A.) or any other duly appointed
successor trustee.
(y) Vesting Service: The period of a Participant's employment
considered in the determination of his eligibility for benefits under the
Plan, in accordance with Section 3.03.
Section 2.02. Construction. The masculine gender, where appearing
in the Plan, shall be deemed to include the feminine gender, and the singular
may include the plural, unless the context clearly indicates to the contrary.
The words "hereof," "herein," "hereunder" and other similar compounds of the
word "here" shall mean and refer to the entire Plan, not to any particular
provision or section.
ARTICLE III. PARTICIPATION AND SERVICE
Section 3.01. Participation. Each Employee shall become a
Participant in the Plan as follows:
(a) Any Employee included under the prior provisions of the Plan as
of the Effective Date shall continue to participate in accordance with the
provisions of this amended and restated Plan.
(b) The participation of any other eligible Employee shall commence
on his date of employment.
After a Break in Service, the provisions of Section 3.04 shall be
applicable.
Section 3.02. Benefit Accrual Service. A Participant shall receive
credit for a full year Benefit Accrual Service, or fraction thereof, based on
the Months of Service completed during each Plan Year in accordance with the
following schedule:
Months of Service Benefit Accrual Service
12 1 year
11 9/10 of a year
10 8/10 of a year
9 8/10 of a year
8 7/10 of a year
7 6/10 of a year
6 5/10 of a year
5 4/10 of a year
4 3/10 of a year
3 2/10 of a year
2 2/10 of a year
1 1/10 of a year
Years of Benefit Accrual Service shall be the sum of each year of
Benefit Accrual Service not forfeited due to a Break in Service in accordance
with Section 3.04. For all purposes of the Plan, a Month of Service is
credited for any calendar month in which a Participant completes at least one
(1) Hour of Service.
Section 3.03. Vesting Service. (a) Prior to May 1, 1976, an
Employee shall be credited with "Continuous Service" in accordance with the
terms of the Plan in effect on April 30, 1976.
(b) For service after May 1, 1976, the following schedule shall
apply based on the number of hours credited during the Plan Year:
Months of Service Vesting Service
6 1 year
5 4/10 of a year
4 3/10 of a year
3 2/10 of a year
2 2/10 of a year
1 1/10 of a year
For all purposes of the Plan, a Month of Service is credited for any
calendar month in which a Participant completes at least one (1) Hour of
Service. In crediting years of service, the Plan shall take into account
service with any member of a controlled group of corporations, a group of
trades or businesses under common control or an affiliated service group
member as defined in Code Sections 414(b), (c) and (m) that includes the
Company.
(c) Years of Vesting Service shall be the sum of each year of
Vesting Service not forfeited due to a Break in Service in accordance with
Section 3.04.
Section 3.04. Break in Service. A one (1) year Break in Service
occurs when a Participant does not complete any Hours of Service during a Plan
Year. However, a one (1) year Break in Service shall not occur during periods
of military service or an Authorized Leave of Absence during which the
Employee's rights were covered by law. A six (6) year Break in Service occurs
when a Participant incurs six (6) one year Breaks in Service consecutively.
Prior to January 1, 1985, if an Employee incurs a one year Break in
Service before he completes ten (10) years of Vesting Service, and the number
of consecutive one year Breaks in Service equals or exceeds his years of
Vesting Service prior to such Break in Service, he shall be treated upon
reemployment as a new Employee for all purposes of the Plan. For any Employee
whose Vesting Service had not been canceled pursuant to such rule as of
December 31, 1984, an Employee shall only be treated as a new Employee upon
reemployment if he incurs a six (6) year Break in Service before he completes
ten (10) years of Vesting Service and the number of consecutive one year
Breaks in Service equals or exceeds the sum of one (1) plus his years of
Vesting Service prior to such Break in Service. Any Employee whose Vesting
Service had not been canceled as of December 31, 1988 and who has one (1) Hour
of Service on or after January 1, 1989, shall only be treated as a new
Employee upon reemployment if he incurs a six (6) year Break in Service before
he completes five (5) years of Vesting Service.
For purposes of crediting an Employee's service for vesting prior to
May 1, 1976, termination of employment shall be considered a Break in Service
which caused the Employee to lose all non-vested credit under the Plan and be
treated as a new Employee upon rehire.
Section 3.05. Hour of Service. For purposes of this Plan, an
Employee shall receive credit for an Hour of Service for each hour the
Employee is directly or indirectly paid or entitled to payment by the Company
including any hour for which back pay is awarded irrespective of mitigation of
damages; provided, however, for any single continuous period during which no
work is performed, no credit shall be given for any hours in excess of five
hundred one (501). Any Participant, however, with a compensable injury will
be credited for time lost from work for a maximum of eighteen (18) months. In
determining the number of hours for which no work was performed, the method of
determination shall be in accordance with the Department of Labor Regulation,
Section 2530.200b-2(b) and (c).
Section 3.06. Transfer of Employment. (a) In the event an
individual employed by the Company and covered by Gehl Company Retirement
Income Plan "A" or Gehl Company Retirement Income Plan "C" transfers after May
1, 1980, in the case of Plan "A," or between May 1, 1980 and December 31,
1989, in the case of Plan "C," into the status of an Employee for a period of
at least one (1) year, as defined in Section 2.01(p) hereof, such Employee
shall commence participation in this Plan as of the date of transfer. For any
such individual who remains in the status of an Employee, his Benefit Accrual
Service under Section 3.02, Vesting Service under Section 3.03, and
Compensation under Section 2.01(j) shall be calculated including all years of
his employment with the Company both before and after the date of transfer,
subject, however, to an offset under Section 5.01 hereof for the value of any
monthly benefit payable under any other qualified defined benefit pension plan
sponsored by the Company for service counted hereunder.
(b) In the event an individual employed by the Company but not
covered by Plan "A" or Plan "C" transfers after December 31, 1988 into the
status of an Employee, such Employee shall commence participation in this Plan
as of the date of transfer. For any such individual, his Benefit Accrual
Service under Section 3.02 and Compensation under Section 2.01(j) shall be
calculated from the date of transfer, but Vesting Service under Section 3.03
shall include all years of his employment with the Company.
(c) In the event that a Participant herein transfers after May 1,
1980, his employment with the Company to a status not covered by Section
2.01(p) hereof, his Accrued Benefit as defined in Section 2.01(a) shall be
frozen as of the date of transfer out of the status of an Employee. Vesting
Service under Section 3.03 shall continue to be credited after the date of
transfer pursuant to the rules of Section 3.03. As soon as administratively
feasible following each Plan Year end, the assets and liabilities for any
frozen Accrued Benefit of a Participant, who is covered under another defined
benefit pension plan sponsored by the Company, shall be transferred to such
pension plan to the extent that no more than a pro rata share of excess plan
assets would be required to be transferred as determined by the Actuary.
ARTICLE IV. REQUIREMENTS FOR RETIREMENT BENEFITS
Section 4.01. Normal Retirement. A Participant shall be eligible
for a Normal Retirement Pension if his employment is terminated on or after
his attainment of age 65. Payment of a Normal Retirement Pension shall
commence as of the first day of the month coinciding with or next following
the date of Retirement. Notwithstanding the foregoing, effective April 1,
1990, benefits shall be paid or commence no later than the April 1 after the
end of the calendar year in which the Participant attains age 70-1/2, even if
the Participant is still employed. Such benefits shall be calculated
initially as of the initial commencement date and recalculated annually during
continued employment. The benefit resulting from any such recalculation shall
be the greater of the monthly benefit from the preceding year or the
recalculated benefit minus the actuarial equivalent (as defined in Section
5.09) of the benefits distributed to the Participant in prior years.
Section 4.02. Early Retirement. A Participant shall be eligible
for an Early Retirement Pension if his employment is terminated on or after
his 55th birthday and after he has completed five (5) or more years of Vesting
Service. Payment of an Early Retirement Pension shall commence as of the
Participant's Normal Retirement Date. However, if a Participant requests the
Committee to authorize the commencement of his Early Retirement Pension as of
the first day of the month coinciding with or next following his Retirement,
or as of the first day of any subsequent month which precedes his Normal
Retirement Date, his Pension shall commence as of the beginning of the month
so requested, but the amount thereof shall be reduced as provided in Section
5.04.
Section 4.03. Disability Retirement. A Participant shall be
eligible for a Disability Retirement Pension if his employment is terminated
by reason of Disability after he (a) has completed five (5) or more years of
Vesting Service, (b) has not attained age 65 and (c) has been disabled for a
period of six consecutive months. Payment of a Disability Retirement Pension
shall commence as of the first day of the 7th month coinciding with or next
following the date employment terminates by reason of Disability.
"Disability" under the Plan shall mean a physical or mental
condition which totally and presumably permanently prevents a Participant from
engaging in any substantially gainful activity, based on a medical examination
by a doctor or clinic appointed by the Committee.
Notwithstanding any other provision of this section, no Participant
shall qualify for a Disability Retirement Pension if the Committee determines
that his Disability results from (a) an injury suffered while engaged in a
felonious or criminal act or enterprise or (b) service in the armed forces of
the United States which entitles the Participant to a veteran's disability
pension; but this provision shall not prevent the Participant from qualifying
for a Pension under another provision of the Plan.
Disability shall be considered to have ended and entitlement to a
Disability Retirement Pension shall cease if, prior to his Normal Retirement
Date, the Participant (a) is reemployed by the Company, (b) engages in any
substantially gainful activity, except for such employment as is found by the
Committee to be for the primary purpose of rehabilitation or not incompatible
with a finding of total and permanent disability, or (c) has sufficiently
recovered, in the opinion of the Committee based on a medical examination by a
doctor or clinic appointed by the Committee, to be able to engage in regular
employment with the Company and refuses an offer of employment of the Company,
or (d) refuses to undergo any medical examination requested by the Committee,
provided that a medical examination shall not be required more frequently than
twice in any calendar year. If entitlement to a Disability Retirement Pension
ceases in accordance with the provisions of this paragraph, such a Participant
shall not be prevented from qualifying for a Pension under another provision
of the Plan based on his Vesting and Benefit Accrual Service prior to
Disability Retirement, and the Disability Pension payments received shall be
disregarded.
Section 4.04. Deferred Vested Pension. Effective for Participants
who complete at least one Hour of Service on or after January 1, 1989, a
Participant shall be eligible for a Deferred Vested Pension in accordance with
the provisions of Section 5.05 if his employment is terminated before death or
Retirement after he has completed at least five (5) years of Vesting Service.
Section 4.05. Pre-Retirement Surviving Spouse Annuity Pension. (a)
Unless an election to the contrary is made as described below, if (i) an
active Participant with five (5) years of Vesting Service, (ii) a Participant
who terminated from employment with the Company on or after August 23, 1984
and before January 1, 1989 with ten (10) years of Vesting Service or (iii) a
Participant who terminated from employment with the Company on or after
January 1, 1989 and is eligible for a deferred vested benefit pursuant to
Section 4.04, dies prior to commencement of retirement benefits, his Eligible
Spouse, if any, will be entitled to a Pre-Retirement Surviving Spouse Annuity
Benefit. If a Participant fails to waive the surviving spouse benefit
coverage as provided in this Section, any benefit payable to or on behalf of
the Participant or any beneficiary shall be subject to a percentage reduction
(in addition to any other applicable reductions under the Plan) for each Plan
Year during which such pre-retirement survivor coverage is in effect,
commencing with Plan Years after December 31, 1984. The percentage reduction
for a particular year shall be based upon the age of the Participant at his
birthday during that year, as determined under the following schedule:
Attained Age Percentage Reduction
Under 35 0.0%
35-44 0.1%
45-54 0.2%
55-65 0.5%
Prior to a Participant's attainment of age fifty-five (55), the full
percentage reduction for pre-retirement survivor coverage shall be charged for
any Plan Year in which the coverage is in effect for at least one day. Once a
Participant attains age fifty-five (55), the percentage reduction shall be
reduced to a monthly cost, which shall be charged for each month in which the
pre-retirement survivor coverage is in effect for at least one day; provided,
however, that the annual percentage reduction for any such Participant shall
not exceed one-half percent (0.5%).
A Participant may elect in writing on a form provided by and filed
with the Committee to waive the surviving spouse benefit provided in this
Section. Such election may be made (or revoked) at any time during a period
commencing with the first day of the Plan Year during which the Participant
attains age thirty-five (35) and ending on the date of the Participant's
death. Elections filed by a Participant pursuant to this Section to waive the
surviving spouse benefit coverage will be deemed invalid unless either his
Eligible Spouse has executed the election form and has acknowledged the effect
of the waiver and such consent is witnessed by a notary public or a Plan
representative appointed by the Committee or the Participant has demonstrated
to the Committee that he has no spouse of whom consent is required, his spouse
cannot be located or he is excused because of other circumstances approved in
federal regulations. If a Participant marries after filing an election under
this Section, such election shall be void unless a new election accompanied by
the aforementioned consent and acknowledgement of his Spouse is filed with the
Committee. The Committee shall provide to the Participant general information
with respect to the terms and conditions and the general effect of the
surviving spouse benefit which may be waived pursuant to this Section pursuant
to applicable regulations and in any event at least ninety (90) days prior to
the commencement of the election period specified above.
(b) If a Participant separated from employment with the Company
after December 31, 1975 but prior to August 23, 1984 with a deferred vested
benefit and as of August 23, 1984 was alive and had not begun to receive
benefits under this Plan, the Participant may elect to have the surviving
spouse benefit of this section apply by submitting a written election to the
Committee on or after August 23, 1984, and prior to the commencement of his
benefits under the Plan or, if earlier, his death.
ARTICLE V. BENEFIT ACCRUAL; AMOUNT OF BENEFIT
Section 5.01. Benefit Accrual. The accrued monthly benefit of a
Participant terminating employment on or after January 1, 1994, commencing on
his Normal Retirement Date shall be equal to the greater of either paragraph
(a) or (b) following:
(a) One percent (1%) of his Average Monthly Compensation multiplied
by the number of years (including fractions of a year to the nearest
one-tenth) of his Benefit Accrual Service, to a maximum of thirty-five (35)
years.
(b) Twenty dollars ($20.00) per month multiplied by the number of
years (including fractions of a year to the nearest one-tenth) of his Benefit
Accrual Service.
Notwithstanding any other provision herein to the contrary, the accrued
benefit, including early retirement supplements, of a Participant shall not be
less than the amount accrued as of the day preceding the Plan Year beginning
in 1989.
Section 5.02. Normal Retirement Pension. Subject to the following
paragraph, a Participant's Normal Retirement Benefit shall be the amount
determined in either (a) or (b).
(a) A Participant who retires on the Life Annuity form described in
Section 6.03 shall receive a monthly benefit equal to the total benefit
accrued in Section 5.01.
(b) A Participant who retires on a form of annuity other than the
Life Annuity form shall receive a monthly benefit equal to the amount
determined in Section 5.01 reduced to the actuarial equivalent in accordance
with Section 5.09.
Section 5.03. Deferred Retirement Pension. A Participant's
Deferred Retirement Benefit shall be computed as in 5.02 above.
Section 5.04. Early Retirement Pension. (a) A Participant who
elects to retire at an Early Retirement Date shall receive a monthly pension
equal to the amount of his Normal Retirement Pension, reduced in accordance
with the applicable schedule below if benefits commence prior to the Normal
Retirement Date.
(b) For benefits commencing on or after January 1, 1985, for
Participants who on such date are under age fifty-five (55), the schedule is:
Percentage to Apply to
Employee's Age at Normal Retirement
Benefit Commencement Pension Otherwise Payable
65 100.0%
64 95.0
63 90.0
62 85.0
61 80.0
60 75.0
59 70.0
58 65.0
57 60.0
56 55.0
55 50.0
(c) For benefits commencing on or after January 1, 1985, for
Participants who on such date are at least age fifty-five (55), the schedule
of reduction factors is based on the Participant's age on January 1, 1985; the
table below indicates the age at which full, unreduced benefits could commence
and any earlier commencement will result in a reduction of five percent (5%)
for each twelve (12) month period:
Age on 1-1-85 Unreduced Benefits at Age
60 or over 62
59 62-1/2
58 63
57 63-1/2
56 64
55 64-1/2
Notwithstanding the above, however, effective after December 31, 1989, any
Participant otherwise covered by (c) above, due to his age of fifty-five (55)
or over as of January 1, 1985, shall not be covered by (c) but shall be
covered by (b) if he was a highly compensated employee, as defined in Code
Section 414(q), on any date after December 31, 1983.
Section 5.05. Deferred Vested Pension. The amount of a
Participant's Deferred Vested Pension, commencing as of his Normal Retirement
Date, shall be computed in accordance with Section 5.02 above. A Participant
may elect pursuant to rules established by the Committee to receive his
Deferred Vested Pension at any time after his attainment of age fifty-five
(55), subject to the appropriate reductions described in Section 5.04 above.
Section 5.06. Pre-Retirement Surviving Spouse Annuity Pension. The
Pre-Retirement Surviving Spouse Annuity Pension payable to a Participant's
Eligible Spouse shall be equal to the amount which would have been payable to
the Eligible Spouse had the Participant (i) ceased earning Benefit Accrual
Service and Compensation, (ii) commenced a retirement benefit at the later of
his death or the day he would have been fifty-five (55) having elected Option
"B" of the Joint and Survivor Life Annuity described in Section 6.04 with his
Eligible Spouse as the joint annuitant, and (iii) died the next day.
The benefit shall commence to the Eligible Spouse on the first day
of the month next following the later of (i) the Participant's death or (ii)
the earlier of (A) the day he would have been fifty-five (55) (if he completed
five (5) years of service prior to his death) or (B) the day he would have
been sixty-five (65), and end with the payment due on the first day of the
month in which the Eligible Spouse dies. If applicable, the eligible spouse
may elect to defer commencement of such benefit until a date between the two
dates in item (ii) above, subject to adjustment for the later commencement in
accordance with the terms of Section 5.04 above.
Section 5.07. Disability Pension. A Participant who becomes
totally and permanently disabled shall be entitled at his Disability
Retirement Date to a monthly benefit of $150 (One Hundred Fifty Dollars). If
an Employee who is receiving disability benefits attains age sixty-five (65),
he shall then receive, in lieu of a disability benefit, an amount equal to the
amount which would have been payable as a normal retirement benefit if he had
attained his sixty-fifth birthday on the date his permanent disability
commenced. A Participant may elect, pursuant to rules established by the
Committee, to receive his Normal Retirement Pension in lieu of a Disability
Pension at any time after his attainment of age fifty-five (55), subject to
the appropriate reductions described in Section 5.04 above.
Section 5.08. Small Pension Payments. In the case of any
retirement or death benefit with an actuarial equivalent (determined under
Section 5.09) which has never exceeded $3,500, the Trustee shall pay such
benefit in lump sum as soon as practicable after the end of the Plan Year in
which occurs the Participant's termination of employment. A Participant whose
vested benefit has been distributed or who has no vested interest shall be
deemed cashed out from the Plan. No such single sum settlement shall be
available to an Ontario, Canada Employee.
Section 5.09. Actuarial Equivalents. "Actuarial equivalent" means
a benefit of equivalent value calculated using the following interest and
mortality rates:
(a) Except as otherwise provided herein, for purposes of converting
from one periodic form of payment to another, the interest rate shall be seven
and one-half percent (7-1/2%) per annum compounded annually and the mortality
rate shall be based on the 1971 Group Annuity Mortality Table for Males; and
(b) For purposes of converting from a periodic form of payment to a
lump sum form of payment under Section 5.08 or 10.06 hereof, the interest and
mortality rates shall be those specified by the Pension Benefit Guaranty
Corporation (hereinafter "PBGC") for valuing immediate and deferred annuities
for healthy males for a plan terminating on January l prior to the date the
distribution occurs.
ARTICLE VI. MANNER AND FORM OF PAYMENT AND OPTIONAL BENEFITS
Section 6.01. Participant's Retirement Benefit. A Participant's
Retirement Pension or Deferred Vested Pension shall, except as provided under
Sections 5.04, 5.05, 5.07 or 5.08, be payable in a form of annuity commencing
as of the first day of the month coinciding with or next following the
Participant's attainment of age sixty-five (65) or termination of employment,
whichever is later, subject to the requirements of Section 4.01.
Section 6.02. Eligible Spouse Benefit. A Participant who has an
Eligible Spouse at his benefit commencement date shall be deemed to have
automatically elected to have his Pension paid pursuant to Option "B" of the
Joint and Survivor Life Annuity under Section 6.04 with his Eligible Spouse as
the joint annuitant. Prior to his benefit commencement date, a Participant,
after first receiving a written explanation of the terms and conditions of
Option "B", may elect to rescind the automatic election. Subject to the
conditions and restrictions of Section 6.06, such Participant may elect to
have his benefit paid in accordance with a form of annuity cited in Sections
6.03, 6.04 or 6.05, each of which shall be actuarially equivalent to the Life
Annuity form determined pursuant to Section 5.09. Any election under this
Section will be deemed invalid unless either (i) the Participant's Eligible
Spouse has executed the election form and has acknowledged the effect of the
waiver and such consent is witnessed by a notary public or a Plan
representative appointed by the Committee or (ii) the Participant has
demonstrated to the Committee that he has no spouse of whom consent is
required, his spouse cannot be located or he is excused because of other
circumstances approved in federal regulations.
Section 6.03. Life Annuity. Life Annuity form provides for monthly
payments to the Participant continuing to the last day of the month in which
his death occurs.
Section 6.04. Joint and Survivor Life Annuity. Joint and Survivor
Life Annuity form provides for reduced monthly payments during the lifetime of
the Participant and ending after the payment for the last day of the month in
which the survivor of the Participant and his joint annuitant dies. The
monthly payments shall be made in accordance with one of the following
options.
Option "A" - a monthly Pension payable during the lifetime of the
Participant and following his death such monthly Pension payable to his
surviving annuitant for the annuitant's lifetime.
Option "B" - a monthly Pension payable during the lifetime of the
Participant and upon his death 50% of such monthly Pension payable to his
surviving annuitant for the annuitant's lifetime.
Section 6.05. Period Certain Life Annuity. Period Certain Life
Annuity form provides for reduced monthly payments continuing to the first day
of the month in which the Participant's death occurs or the end of the certain
period (60 to 120 months, whichever duration is elected), whichever is later.
If the Participant dies before the end of the certain period, payments in the
same amount shall be continued to his Beneficiary to the end of such period.
Section 6.06. Annuity Election Conditions. The following
conditions and restrictions are applicable to the election of a form of
annuity.
(a) A Participant shall make his election on a form provided by the
Committee or its designee.
(b) An election must be filed with the Committee or its designee
during the 90-day period prior to the Participant's benefit commencement date.
(c) Any election previously made may be changed as provided herein
prior to the expiration of the 90-day period referenced in paragraph (b) above
by notifying the Committee in writing and fulfilling the applicable Plan
requirements.
(d) Except as provided in the last sentence of Section 6.04, if a
Participant has elected the Joint and Survivor Life Annuity and either the
Participant or his joint annuitant dies before his benefit commencement date,
the election will be canceled.
(e) The provisions of the Plan are intended to comply with Code
Section 401(a)(9) which prescribes certain rules regarding minimum
distributions and requires that death benefits be incidental to retirement
benefits. All distributions under the Plan shall be made in conformance with
Section 401(a)(9) and the regulations thereunder which are incorporated herein
by reference. The provisions of the Plan governing distributions are intended
to apply in lieu of any default provisions prescribed in regulations;
provided, however, that Code Section 401(a)(9) and the regulations thereunder
override any Plan provisions inconsistent with such Code Section and
regulations.
Section 6.07. Disability Pension. A Participant who retires at his
Disability Retirement Date shall receive monthly payments beginning on such
Retirement Date and ending on the earliest of his Early Retirement Date, his
Normal Retirement Date, his recovery from Disability or his death. If a
Participant remains disabled until his Normal Retirement Date, or he elects an
Early Retirement Date pursuant to Section 4.02, he shall at such Retirement
Date begin to receive annuity payments as described in this Article. These
benefits shall not be cumulative and the benefit commencement date for
Retirement Pension shall be the day after Disability Pension ceases.
Section 6.08. Beneficiary Designations. Subject to the spouse
consent requirements in Section 6.02, each Participant who has elected a Joint
and Survivor or Period Certain Life Annuity Option shall have the right at any
time prior to Retirement (and thereafter with respect to the Period Certain
Life Annuity Option) to designate, and rescind or change any designation of, a
joint annuitant or a primary and a contingent Beneficiary or Beneficiaries to
receive a Pension in the event of his death. If there is no designated
Beneficiary alive when such benefit becomes payable, the Pension under the
Period Certain form shall be paid to the estate of the last to die of the
Participant and his designated Beneficiaries. If a primary Beneficiary dies
before receiving the Pension benefits to which he is entitled, the balance of
such payments shall be paid to the contingent Beneficiary. If there is no
contingent Beneficiary, or if the contingent Beneficiary dies before receiving
all Pension benefit payments to which he is entitled, the balance of such
payments shall be paid to the estate of the last to die of such Beneficiaries.
Neither the Company nor the Trustee (in its capacity as such) shall be named
as Beneficiary. A designation or change of joint annuitant Beneficiary shall
be made in writing on such form or forms as the Committee may require.
Section 6.09. Reemployment After Termination of Employment. (a)
In the event a Participant is reemployed by the Company after he becomes
entitled to benefits, any benefit payments which may have commenced shall be
suspended during the period of reemployment, effective with the first payment
due after the date of the Participant's reemployment. Upon his subsequent
termination of employment, the Participant shall be entitled to benefits based
upon his prior Benefit Accrual Service, his Benefit Accrual Service during the
period of reemployment, his Average Monthly Compensation as of his last date
of termination of employment and other relevant factors, but reduced by the
actuarial equivalent of any benefits paid to him prior to age sixty-five (65)
as determined under Section 5.09, provided that the Participant's accrued
benefit prior to any reduction for benefits previously paid shall not be less
than the amount of his accrued benefit prior to his reemployment. Such
benefits shall be payable in the form determined under Article VI. For
purposes of computing his Average Monthly Compensation, the period of absence
from his prior termination date to the date of his reemployment shall be
excluded in determining the applicable five (5) and ten (10) calendar year
periods.
(b) Notwithstanding subsection (a) of this Section, a Participant
who has attained age sixty-five (65) and receives payment for fewer than forty
(40) Hours of Service as defined in Section 3.05 for any calendar month during
his period of reemployment shall be deemed to have again terminated employment
and shall be entitled to benefit payments hereunder for such month. However,
such a Participant shall be deemed to have been reemployed, and his benefits
shall be suspended in accordance with subsection (a) of this Section as of the
first day of any subsequent month for which he actually receives payment for
forty (40) or more Hours in a calendar month.
(c) If a Participant whose benefits have been suspended under this
Section dies while in the employment of the Company, then the only benefits
payable hereunder on the Participant's account shall be the benefits under
Section 4.05 hereof if applicable.
(d) The Committee shall adopt appropriate rules for the
administration of this Section which may include rules (i) relating to the
notification of affected Participants, (ii) requiring that affected
Participants notify the Committee of any termination of employment and of any
reemployment, and (iii) providing for the offset from future benefit payments
of any benefits actually paid hereunder for a month in which such benefits
should have been suspended. Such rules shall be in compliance with ERISA and
the applicable regulations issued thereunder.
Section 6.10 Early Retirement Window.
(a) Participants listed in subsection (b) below who on December 31,
1991 are at least age fifty-seven (57) may elect during the period November
15, 1991 through December 31, 1991 to retire as of January 1, 1992 and receive
the special benefits provided in this Section. For electing eligible
participants,
(i) no early commencement reduction shall be applied in
Section 5.04(b);
(ii) no pre-retirement surviving spouse annuity election
reduction shall be applied in Section 4.05(a);
(iii) until attainment of age 62, a special supplement of
$600 shall be paid each month;
(iv) until attainment of age 65, a special supplement
shall be paid each month of $171 for a participant
with single health coverage as of December 31, 1991
and of $436 for a participant with family health
coverage as of such date; and
(v) for Gehl Agriculture Division sales personnel, the
definition of Compensation in Section 2.01(j) shall
not be subject to the seventy-five percent (75%)
limitation on aggregate guaranteed salary and
commission.
(b) The Participants eligible for this early retirement window
option are:
Bandy, John C. Haas, Lawrence J. Schmeling, Marvin M.
Bobholz, Maurice G. Hadler, Howard N. Smith, Richard M.
Boone, James H. Klein, Ralph E. Spaeth, Charles J.
Bowling, John R. Kloke, Ellen M. Stotesbery, Darrell L.
Bruesewitz, Leroy W. Koth, Keith K. Stotesbery, Gerald L.
Cline, Paul A. Leverenz, John H. Thelen, Norbert W.
Cudnohoske, Kenneth C. Luckert, Gerald J. Weber, Ira W.
Dell, Arthur P. Nonhof, Loren D. Whiting, James
Ecker, Joseph J. Raabe, Gertrude B. Wiedenfield, Donald H.
Fiebig, Robert D. Salter, Daniel A. Woelke, Wayne
Fischer, Herbert M. Scheffler, David R. Yanna, Roger E.
Givens, James G. Scheffner, George J.
Groeneveld, Wilbur Schellinger, Laverne
Section 6.11. Early Retirement Window.
(a) Participants listed in subsection (b) below who on December 31,
1992, are at least age fifty-seven (57) may elect during the period November
14, 1992 through December 30, 1992, to retire as of December 31, 1992 and
receive the special benefits provided in this Section. For electing eligible
participants, the supplemental benefit shall be equal to the sum of:
(i) 2.5% of current salary time years of service,
plus
(ii) 30% of current salary.
Such supplemental payment shall be made in the form of a lump sum
payment or in the form of a joint and survivor life annuity using Option "B"
of Section 6.04 with an actuarial equivalent monthly benefit determined
pursuant to 5.09(b). The annuity form shall apply unless the Participant and
spouse consent to the lump sum payment in accordance with procedures of
Sections 6.02 and 6.06.
(b) The Participants eligible for this early retirement window
option are:
Kluever, Lou Ann Klupper, Robert J.
Section 6.12. Early Retirement Window.
(a) Participant listed in subsection (b) below who on July 31,
1993, is at least age fifty-seven (57) may elect during the period April 28,
1993 through June 28, 1993, to retire as of August 1, 1993, and receive the
special benefits provided in this Section. For electing eligible
participants,
(i) until attainment of age sixty-two (62), a special
supplement of $500 shall be paid each month as a
Social Security supplement;
(ii) until attainment of age sixty-five (65), a special
supplement shall be paid each month of $450 as a
health and dental insurance supplement; and
(iii) in lieu of the normal accrued benefit, the life only
accrued benefit (subject to adjustment for optional
forms of payment pursuant to the terms of the Plan
using the participant's actual age) shall be
increased so that it is equal to the benefit which
would have been payable if the participant worked
until age sixty-two (62) with no salary reduction
since 9/1/91 and received three percent (3%) salary
increases annually.
(b) The Participant eligible for this early retirement window
option is:
Erwin G. Koepp, Jr.
Section 6.13. Direct Transfer of Eligible Rollover Distributions.
(a) This section applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this section, a distributee may
elect, at the time and in the manner prescribed by the Committee, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover as such
terms are defined herein.
(b) An eligible rollover distribution is any distribution of all or
any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(c) An eligible retirement plan is an individual retirement account
described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described in Section 401(a) of the
code, that accepts the distributee's eligible rollover distribution. However,
in the case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
(d) A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
(e) A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
ARTICLE VII. PLAN FINANCING: CONTRIBUTIONS AND FUNDING
Section 7.01. Purpose of Funding. The Plan shall be funded for the
exclusive purpose of providing Pensions to Participants and their
Beneficiaries and for defraying reasonable expenses in administering the Plan.
Section 7.02. Contributions. The Company shall bear the total
costs of the Plan. Such costs will include the amounts necessary to provide
Pension payments to Plan Participants and their Beneficiaries and the payment
of administrative expenses.
Section 7.03. Management Form. Initially, all contributions to the
Plan and all Pension payments from the Plan shall be made under the Trust
Agreement.
ARTICLE VIII. ADMINISTRATION
Section 8.01. Allocation of Responsibility Among Fiduciaries for
Plan Administration. The Fiduciaries shall have only those specific powers,
duties, responsibilities and obligations as are specifically given them under
this Plan. In general, the Board shall have the sole authority to appoint and
remove members of the Committee and any Investment Manager and to amend or
terminate the Plan, in whole or in part. The Committee shall have the sole
responsibility for the administration of this Plan, which responsibility is
specifically described in this Plan. The Trustee shall have the
responsibility for the proper administration and management of the Fund
assets. Each Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan, authorizing or providing for such direction, information or action.
Furthermore, each Fiduciary may rely upon any such direction, information or
action of another Fiduciary as being proper under this Plan, and is not
required under this Plan in inquire into the propriety of any such direction,
information or action. It is intended under this Plan that each Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under this Plan and shall not be responsible
for any act or failure to act of another Fiduciary. No Fiduciary guarantees
the Fund in any manner against investment loss or depreciation in asset value.
Section 8.02. Appointment of Committee. The Plan shall be
administered by the Committee consisting of at least three persons who shall
be appointed by and serve at the pleasure of the Board. All usual and
reasonable expenses of the Committee may be paid in whole or in part by the
Company, and any expenses not paid by the Company shall be paid out of the
principal or income of the Fund. Any members of the Committee who are
Employees shall not receive Compensation with respect to their services for
the Committee.
Section 8.03. Claims Procedure. All claims for benefits under the
Plan shall be directed to the attention of the Committee. If the Committee
determines that any individual who has claimed a right to receive benefits
under the Plan is not entitled to receive all or any of the benefits claimed,
the claimant shall be informed of the reasons for the denial, with specific
reference to pertinent Plan provisions and with a description of the review
procedures set forth below.
The claimant may within sixty days thereafter submit to the
Committee by certified or registered mail such further information as will, in
the claimant's opinion, establish his rights to such benefits. If, upon
receipt of this further information, the Committee determines that the
claimant is not entitled to the benefits claimed, it shall afford the claimant
or his representative reasonable opportunity to appear personally before it,
to submit issues and comments in writing, and to review pertinent documents.
The Committee shall render its final decision with the specific reasons
therefor in writing and shall transmit it to the claimant by certified mail
within sixty days of any such appearance. The Committee shall have
discretionary authority to determine eligibility for benefits and to construe
the terms of the Plan; any such determination or construction shall be final
and binding on all parties unless arbitrary and capricious.
Section 8.04. Records and Reports. The Committee shall exercise
such authority and responsibility as it deems appropriate in order to comply
with ERISA and governmental regulations issued thereunder relating to:
records of Participants' service, Accrued Benefits and the percentage of such
Pensions which are nonforfeitable under the Plan, notifications to
Participants, and any and all reports to the appropriate governmental agencies
as required by law.
Section 8.05. Other Committee Powers and Duties. The Committee
shall have such duties and powers as may be necessary to discharge its duties
hereunder, including, but not by way of limitation, the following:
(a) to construe and interpret the Plan, decide all questions of
eligibility and determine the amount, manner and time of payment of any
Pensions hereunder;
(b) to prescribe procedures to be followed by Participants or
Beneficiaries filing applications for Pensions;
(c) to prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) to receive from the Company and from Participants such
information as shall be necessary for the proper administration of the Plan;
(e) to furnish the Company, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and appropriate;
(f) to receive and review the periodic valuation of the Plan made
by the Actuary;
(g) to receive, review and keep on file (as it deems convenient or
proper) reports of the financial condition, and of the receipts and
disbursements, of the Fund from the Trustee;
(h) to appoint or employ individuals to assist in the
administration of the Plan and any other agents it deems advisable, including
legal and actuarial counsel.
The Committee shall have no power to add to, subtract from or modify
any of the terms of the Plan, or to change or add to any Pensions provided by
the Plan, or to waive or fail to apply any requirements of eligibility for a
Pension under the Plan.
Section 8.06. Rules and Decisions. The Committee may adopt such
rules and actuarial tables as it deems necessary, desirable or appropriate.
All rules and decisions of the Committee shall be uniformly and consistently
applied to all Participants in similar circumstances. When making a
determination or calculation, the Committee shall be entitled to rely upon
information furnished by a Participant or Beneficiary, the Company, the legal
counsel of the Company, the Actuary, or the Trustee.
Section 8.07. Committee Procedures. The Committee may act at a
meeting or in writing without a meeting. The Committee shall elect one of its
members as chairman, appoint a secretary, who may or may not be a Committee
member. The secretary shall keep a record of all meetings. The Committee may
adopt such bylaws and regulations as it deems desirable for the conduct of its
affairs.
All decisions of the Committee shall be made by the vote of the
majority including actions in writing taken without a meeting. A dissenting
Committee member who, within a reasonable time after he has knowledge of any
action or failure to act by the majority, registers his dissent in writing
delivered to the other Committee members, the Company and the Trustee shall
not be responsible for any such action or failure to act.
Section 8.08. Authorization of Benefit Payments. The Committee
shall issue directions to the Trustee concerning all benefits which are to be
paid from the Fund pursuant to the provisions of the Plan, and warrants that
all such directions are in accordance with this Plan.
Section 8.09. Application and Forms for Pension. The Committee may
require a Participant to complete and file with the Committee an application
for Pension and all other forms approved by the Committee, and to furnish all
pertinent information requested by the Committee. The Committee may rely upon
all such information so furnished it, including the Participant's current
mailing address.
Section 8.10. Facility of Payment. Whenever, in the Committee's
opinion, a person entitled to receive any payment of a Pension or installment
thereof hereunder is under a legal Disability or is incapacitated in any way
so as to be unable to manage his financial affairs, the Committee may direct
the Trustee to make payments to such person or to his legal representative, or
the Committee may direct the Trustee to apply the payment for the benefit of
such person in such manner as the Committee considers advisable. Any payment
of a Pension or installment thereof in accordance with the provisions of this
Section shall be a complete discharge of any liability for the making of such
payment under the provisions of the Plan.
ARTICLE IX. AMENDMENT AND TERMINATION OF THE PLAN
Section 9.01. Amendment of the Plan. The Company reserves the
right to modify or amend this Plan from time to time and to any extent that it
may deem advisable including any amendment deemed necessary to ensure the
continued qualification of this Plan under the provisions of the Internal
Revenue Code. Any amendment shall be made pursuant to a resolution duly
adopted by the Board. No amendment shall have the effect of revesting in the
Company the whole or any part of the assets of this Plan or of diverting any
part of the assets of this Plan to purposes other than the exclusive benefit
of the Participants and their Beneficiaries and defraying reasonable expenses
of administering the Plan at any time prior to the satisfaction of all the
liabilities under this Plan with respect to such persons. Employer
contributions hereunder are conditioned upon their deductibility under Code
Section 404. Notwithstanding any provision herein to the contrary, to the
extent a deduction is disallowed, contributions may be returned to the
Employer within one year after such disallowance. No amendment shall
adversely affect the Vested Deferred Pension of a Participant nor decrease a
Participant's accrued benefit or vested percentage nor eliminate an optional
form of distribution for a previously accrued benefit.
Section 9.02. Termination of the Plan. This Plan may be terminated
by the Company upon action of the Board at any time for any reason.
Benefits are Non-Forfeitable: Upon full or partial termination of
the Plan, the rights of all Participants to their Accrued Benefits in
accordance with Section 5.01, to the date of termination shall be
non-forfeitable, subject to the extent the Pension is funded.
Section 9.03. Allocation of Assets Upon Plan Termination. Upon
termination of the Plan in accordance with the provisions of Section 9.02, the
Plan's assets shall be allocated in accordance with the requirements of the
Pension Benefit Guaranty Corporation.
Any residual assets of the Plan remaining after the satisfaction of
all liabilities of the Plan shall be distributed to the Company.
Section 9.04. Merger or Consolidation. No merger or consolidation
with, or transfer of assets or liabilities to, any other Plan shall be made
unless,
(a) each Participant in this Plan would receive a Pension, if the
Plan then terminated immediately after the merger, consolidation or transfer,
which is equal to or greater than the Pension he would have been entitled to
receive immediately before the merger, consolidation or transfer if this Plan
had then terminated, and
(b) such other Plan is qualified under Sections 401(a) and 501(a)
of the Internal Revenue Code.
ARTICLE X. MISCELLANEOUS PROVISIONS
Section 10.01. Evidence of Survival. Where a Pension payment is
contingent upon the survival of any person, evidence of such person's survival
must be furnished either by personal endorsement of the check drawn for such
payment or by other evidence satisfactory to the Committee or its designee.
Section 10.02. Misstated Information. If any information has been
misstated on which a Pension under the Plan with respect to a person was
based, such benefit shall not be invalidated, but the amount of the Pension
shall be adjusted to the proper amount as determined on the basis of the
correct information. Overpayments, if any, with interest as determined by the
Committee or its designee shall be charged against any payments accruing with
respect to the person. The Committee or its designee reserves the right to
require proof of age of any person entitled to a Pension under this Plan.
Section 10.03. Action by Company. Any action by the Company under
this Plan may be by resolution of its Board or by any person or persons duly
authorized by resolution of said Board to take such action.
Section 10.04. Nonguarantee of Employment. Nothing contained in
this Plan shall be construed as a contract of employment between the Company
and any Employee, as a right of any Employee to be continued in the employment
of the Company, or as a limitation of the right of the Company to discharge
any of its Employees, with or without cause.
Section 10.05. Rights of Plan Assets. No Employee shall have any
right to, or interest in, any assets of the Fund upon termination of his
employment or otherwise, except as provided from time to time under this Plan,
and then only to the extent of the Pensions payable under the Plan to such
Employees out of the assets of the Fund. Except as otherwise may be provided
under Title IV of ERISA, all payments of Pensions as provided for in this Plan
shall be made solely out of the assets of the Fund and none of the Fiduciaries
shall be liable therefor in any manner. At the direction of the Committee,
expenses of the Plan shall be paid from the Plan assets.
Section 10.06. Non-alienation of Benefits. Pensions payable under
this Plan shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, charge, garnishment,
execution, or levy of any kind, either voluntary or involuntary, including any
such liability which is for alimony or other payments for the support of a
spouse or former spouse, or for any other relative of the Participant, prior
to actually being received by the person entitled to the Pension under the
terms of the Plan; and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, charge or otherwise dispose of any right to benefits
payable hereunder, shall be void. The Fund shall not in any manner be liable
for, or subject to, the debts, contracts, liabilities, engagements or torts of
any person entitled to a Pension hereunder. Notwithstanding the foregoing,
the Trustee may recognize a qualified domestic relations order with respect to
child support, alimony payments or marital property rights if such order
contains sufficient information for the Committee to determine that it meets
the applicable requirements of Section 414(p) of the Code. The Committee
shall establish written procedures concerning the notification of interested
parties and the determination of the validity of such orders. As necessary,
the Committee shall determine the actuarial equivalent of applicable benefits
in order to comply with any such order in accordance with Section 5.09; if any
such order so directs, distribution of benefits to the alternate payee may be
made at a time not permitted for distributions to the Participant and may be
made in a lump sum subject to the limitation in Section 5.08.
Section 10.07. Notice of Change of Address. It shall be the
responsibility of the Deferred Vested Plan Participant to notify the Company
of his current address.
Section 10.08. Canadian Law. Notwithstanding any other provision
of the Plan to the contrary, the Plan will comply in all respects with any
applicable Canadian federal or provincial governmental laws and/or
regulations.
Section 10.09. Top-Heavy Restrictions. (a) Notwithstanding any
provision to the contrary herein, in accordance with Code Section 416, if the
Plan is a top-heavy plan for any Plan Year, then the provisions of this
Section shall be applicable. The Plan is "top-heavy" for a Plan Year if as of
its "determination date" (i.e. the last day of the preceding Plan Year or the
last day of the Plan's first Plan Year, whichever is applicable), the total
present value of the accrued benefits of key employees (as defined in Code
Section 416(i)(1) and applicable regulations) exceeds sixty percent (60%) of
the total present value of the accrued benefits of all employees under the
plan (excluding those of former key employees and employees who have not
performed any services during the preceding five (5) year period) (as such
amounts are computed pursuant to Section 416(g) and applicable regulations
using a five percent (5%) interest assumption and a 1971 GAM mortality
assumption) unless such plan can be aggregated with other plans maintained by
the applicable controlled group in either a permissive or required aggregation
group and such group as a whole is not top-heavy. Any nonproportional
subsidies for early retirement and benefit options are counted assuming
commencement at the age at which they are most valuable. In addition, a plan
is top-heavy if it is part of a required aggregation group which is top-heavy.
Any plan of a controlled group may be included in a permissive aggregation
group as long as together they satisfy the Code 401(a)(4) and 410
discrimination requirements. Plans of a controlled group which must be
included in a required aggregation group include any plan in which a key
employee participates or participated at any time during the determination
period (regardless of whether the plan has terminated) and any plan which
enables such a plan to meet the Section 401(a)(4) or 410 discrimination
requirements. The present values of aggregated plans are determined
separately as of each plan's determination date and the results aggregated for
the determination dates which fall in the same calendar year. A "controlled
group" for purposes of this Section includes any group employers aggregated
pursuant to Code Sections 414(b), (c) or (m). The calculation of the present
value shall be done as of a valuation date which for a defined contribution
plan is the determination date and for a defined benefit plan is the date as
of which funding calculations are generally made within the twelve month
period ending on the determination date. Solely for the purpose of
determining if the Plan, or any other plan included in a required aggregation
group of which this Plan is a part, is top-heavy (within the meaning of
Section 416(g) of the Code) the accrued benefit of an Employee other than a
key employee (within the meaning of Section 416(i)(1) of the Code) shall be
determined under (i) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Affiliates, or (ii) if there is no
such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Code.
(b) If a defined contribution plan is top-heavy in a Plan Year,
non-key employee participants who have not separated from service at the end
of such Plan Year will receive allocations of employer contributions and
forfeitures at least equal to the lesser of three percent (3%) of compensation
(as defined in Code Section 415) for such year or the percentage of
compensation allocated on behalf of the key employee for whom such percentage
was the highest for such year (including any salary reduction contributions).
If a defined benefit plan is top-heavy in a Plan Year and no defined
contribution plan is maintained, the employer-derived accrued benefit on a
life only basis commencing at the normal retirement age of each non-key
employee shall be at least equal to a percentage of the highest average
compensation for five consecutive years, excluding any years after such Plan
permanently ceases to be top-heavy, such percentage being the lesser of (i)
twenty percent (20%) or (ii) two percent (2%) times the years of service after
December 31, 1983 in which a Plan Year ends in which the Plan is top-heavy.
If the controlled group maintains both a defined contribution plan and a
defined benefit plan which cover the same non-key employee, such employee will
be entitled to the defined benefit plan minimum and not to the defined
contribution plan minimum.
(c) If the controlled group maintains a defined benefit plan and a
defined contribution plan which both cover one or more of the same key
employees, and if such plans are top-heavy, then the limitation stated in a
separate provision of this Plan with respect to the Code Section 415(e)
maximum benefit limitations shall be amended so that a 1.0 adjustment on the
dollar limitation applies rather than a 1.25 adjustment. This provision shall
not apply if the Plan is not "super top-heavy" and if the minimum benefit
requirements of this Section are met when two percent (2%) is changed to three
percent (3%) and twenty percent (20%) is changed to an amount not greater than
thirty percent (30%) which equals twenty percent (20%) plus one percent (1%)
for each year such plan is top-heavy. A plan is "super top-heavy" if the
ratio referred to in subsection (a) above results in a percentage in excess of
ninety percent (90%) rather than a percentage in excess of sixty percent
(60%).
(d) If the Plan is top-heavy in a Plan Year, the vesting schedule
shall automatically be amended for any employee employed on the first day of
such year or thereafter so that the vested percentage for employer-derived
benefits is equal to the greater of the vesting provided under other
provisions of the Plan or the following schedule:
Years of Service Nonforfeitable Percentage
1 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
where "years of service" means the years credited for vesting purposes under
the Plan or, if greater, the years required to be counted under Code Section
411 and applicable regulation thereto. If the Plan thereafter ceases to be
top-heavy for a Plan Year, the vesting schedule above shall be disregarded and
the original schedule applied, except with respect to any Participant with
three (3) or more years of service and except that no Participant's vested
percentage as of the end of the prior year shall be decreased. Any non-vested
Participant who acquires a vested interest in the employer-derived benefit by
operation of the amended vesting schedule shall not be subject thereafter to a
cancellation of service. Notwithstanding anything in this Section to the
contrary, the amendment of the vesting schedule pursuant to this subsection
shall not affect the calculation of benefit amounts or the determination of
benefit commencement dates hereunder.
Section 10.10. Maximum Benefit. The Plan is subject to the
limitations on benefits and contributions imposed by Code Section 415 which
are incorporated herein by this reference. The limitation year shall be the
Plan Year. In the event that there are multiple plans and the sum of the
defined benefit plan fraction and the defined contribution plan fraction, as
defined in Code Section 415, exceeds applicable limits for a Participant as of
any December 31, then such Participant's benefit under this Plan shall be
reduced until such limits are satisfied.
Section 10.11. Limitations on Benefits for Highly Compensated
Employees.
(a) Notwithstanding any provision herein to the contrary, in the
event the Plan is terminated, the benefit of any Participant or former
Participant who is a highly compensated employee or highly compensated former
employee, within the meaning of Code Section 414(q), shall be limited to a
benefit that is nondiscriminatory under Code Section 401(a)(4).
(b) Notwithstanding any provision herein to the contrary, the
annual payments from the Plan to a Participant or former Participant described
in Subsection (c) below shall not exceed an amount equal to the payments which
would have been made on behalf of such Participant under a single life annuity
which is the Actuarial Equivalent of the sum of such Participant's Accrued
Benefit and other benefits under the Plan. However, such restrictions shall
not apply if:
(i) After payment to such Participant of all benefits, the
value of Plan assets equals or exceeds one hundred ten
percent (110%) of the value of the Plan's current
liabilities, as defined in Code Section 412(l)(7); or
(ii) The value of the benefits for such Participant is less
than one percent (1%) of the value of the plan's current
liabilities, as defined in Code Section 412(l)(7), before
distribution.
For purposes of this subsection (b), the term "benefits" shall include any
loans in excess of the amounts set forth in Code Section 72(p)(2)(A), any
periodic income, any withdrawal values payable to a living Participant, and
any death benefits not provided for by insurance on the Participant's life.
(c) The Participants and former Participants who are affected by
the restriction in subsection (b) above in any Plan Year shall be limited to
the twenty-five (25) highly compensated employees or highly compensated former
employees of the Companies (as defined in Code Section 414(q)) whose
compensation was highest in the earlier of (i) the immediately preceding Plan
Year, or (ii) the last full Plan Year of such Participant's employment by the
Companies.
Section 10.12. Retroactive Effective Date.
(a) The following provisions shall apply retroactively from and
after the Plan Year beginning in 1987:
(i) leased employees in Section 2.01,
(ii) benefit limitations in Section 10.10,
(iii) top-heavy rules in Section 10.09, and
(iv) deletion of mandatory retirement requirement in Sections
2.01 and 4.01.
(b) The following provision shall apply retroactively from and
after the Plan Year beginning in 1988 for Participants earning an Hour of
Service in such period (i) deletion of age sixty (60) minimum age
participation rule in Sections 3.01 and 3.06.
(c) The limitations on benefits for highly compensated employees
described in Section 10.11 shall apply retroactively from and after January 1,
1989.
(d) The provision describing the direct transfer of eligible
rollover distributions in Section 6.13 shall apply retroactively from and
after January 1, 1993.
(e) The maximum annual compensation considered under the Plan as
described in Section 2.01(j) shall apply retroactively from and after January
1, 1994.
[Page 8 of the Annual Report]
Report of Management
The management of Gehl Company is responsible for the preparation and
integrity of all financial statements and other information contained in this
annual report. The financial statements have been prepared by the Company in
conformity with generally accepted accounting principles appropriate in the
circumstances. Such statements necessarily include amounts based on the best
estimates and judgments of management after giving due consideration to
materiality.
The Company maintains an internal control system designed to provide
reasonable assurance that transactions are properly recorded and executed in
accordance with management's authorization and that assets are safeguarded
from loss or unauthorized use. The internal control system is augmented by
careful selection and training of qualified employees, proper division of
responsibilities, and the development and dissemination of written policies
and procedures.
The Board of Directors elects, from among its members, an Audit
Committee, consisting entirely of outside directors, which is responsible for
reviewing and evaluating the overall performance of the Company's financial
reporting and accounting practices and for recommending appointment of the
independent accountants. The Audit Committee meets periodically with
management and the independent accountants to discuss any and all matters
within the Committee's responsibilities. The independent accountants have
free access to the Committee, without the presence of management if so
requested.
The Company's financial statements have been audited by Price Waterhouse,
independent accountants, whose report also appears on this page. Included in
the audit process was a review of the Company's system of internal controls.
Price Waterhouse annually provides to management and the Audit Committee a
supplemental report which includes comments on the adequacy of the system and
recommendations for any improvements.
William D. Gehl
President and Chief Executive Officer
Kenneth F. Kaplan
Vice President and Chief Financial Officer
Report of Independent Accountants
Price Waterhouse LLP
To the Board of Directors and Shareholders of Gehl Company
In our opinion, the statements appearing on pages 14 through 25 of this
report present fairly, in all material respects, the financial position of
Gehl Company and its subsidiaries at December 31, 1994 and 1993, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1994, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in the Notes to Consolidated Financial Statements, the
Company changed its method of accounting for income taxes and postretirement
benefits other than pensions effective January 1, 1993.
Milwaukee, Wisconsin
February 10, 1995
<PAGE>
[Pages 9 through 13 of the Annual Report]
Management's Discussion and Analysis
Overview
Gehl Company's net income in 1994 was $5.0 million, or $.82 per share, up
from $241,000, or $.04 per share, in 1993. Net sales of $146.6 million in
1994 were 7% higher than 1993's $137.2 million. Gehl Agriculture 1994 net
sales increased 1% over 1993 while Gehl Construction 1994 net sales were up
20% from 1993.
The Company's operating margins improved significantly in 1994 from 1993,
as shown in the following table.
Operating Margins:
(as a percent of net 1994 1993
sales)
Gross Profit 29.5% 28.3%
S, G & A Expenses 20.7% 23.0%
Income from Operations 8.8% 5.3%
Income before Income Taxes 3.4% .3%
Net Income 3.4% .2%
The Company reduced its net accounts receivable by $12.6 million, or 15%,
in 1994 to $72.4 million. This reduction followed a $16.2 million decrease in
net accounts receivable in 1993. Cash flow from operating activities, led by
the accounts receivable reductions, was $19.5 million in 1994, which followed
a $26.1 million positive cash flow from operating activities in 1993.
Cash flow generated in 1994 was used to reduce debt, as it was in 1993.
The Company reduced its debt by $17.9 million to $54.9 million at year-end
1994. The Company has reduced its debt a combined $42.8 million during the
last two years. The Company's ratio of debt to total capital was 54.2% at
December 31, 1994, as compared with 64.0% and 70.7% at December 31, 1993 and
1992, respectively.
Results of Operations
1994 vs. 1993
Net Sales:
1994 1993 1992 1991 1990
($ millions)
Gehl Agriculture $ 94.8 $ 93.9 $ 91.2 $ 90.3 $132.6
Gehl Construction 51.8 43.3 38.5 37.0 42.3
------- ------- ------- ------- ------
Total $146.6 $137.2 $129.7 $127.3 $174.9
(% of total)
Gehl Agriculture 64.7% 68.5% 70.3% 70.9% 75.8%
Gehl Construction 35.3% 31.5% 29.7% 29.1% 24.2%
Net sales for 1994 of $146.6 million increased 7% from $137.2 million in
1993. Gehl Agriculture sales in 1994 were $94.8 million, slightly greater
than 1993's $93.9 million. The Company continued during 1994 to reduce dealer
field inventories by shipping to its agricultural dealers (wholesale sales) at
levels below sales by such dealers to their customers (retail sales). In each
of the last two years Gehl Agriculture retail sales by dealers exceeded
wholesale sales to dealers by approximately $10 million. Overall demand for
the Company's agricultural products in 1994 was about the same as in 1993.
Gehl Construction 1994 net sales were $51.8 million, a 20% increase from
1993's $43.3 million. The sales increase was attributable to strong demand in
the residential and non-residential construction markets. The Company's
rough-terrain telescoping-boom forklifts and skid steer loaders were the
primary beneficiaries of the strong markets.
Gross Profit:
Gross profit in 1994 increased 11% to $43.3 million as compared to $38.9
million in 1993. The increase was due primarily to higher sales volume,
changes in the product mix of shipments, and a reduction in the Company's
overall cost structure relating to the move, in January 1994, of asphalt paver
manufacturing to Gehl's Yankton, South Dakota plant from the Lithonia, Georgia
leased plant which was closed in January 1994. Gross profit as a percent of
net sales rose to 29.5% in 1994 from 28.3% in 1993. Gross profit as a percent
of net sales of Gehl Agriculture decreased to 30.0% from 30.3% in 1993. The
slight decrease was due primarily to the establishment of an inventory reserve
for discontinued agriculture products which offset a favorable change in the
mix of products shipped in 1994 versus 1993. (See "Selling, General and
Administrative Expenses" following.) Gross profit as a percent of net sales
for Gehl Construction increased to 28.6% in 1994 from 24.1% in 1993. The
primary reasons for this increase were: 1) lower product cost due to
productivity improvements and increased overhead absorption at higher
production levels; 2) savings resulting from the transfer of asphalt paver
production to the Yankton, South Dakota plant; 3) the discontinuance of
several low or no margin construction products; 4) a reduction in sales
discounts; and 5) export sales, typically made at a lower gross margin than
domestic sales, constituting a smaller portion of sales in 1994 than in 1993.
Selling, General, and Administrative Expenses:
Selling, general and administrative expenses decreased $1.2 million, or
4%, in 1994 as compared to 1993. As a percent of sales, selling, general and
administrative expenses decreased to 20.7% in 1994 from 23.0% in 1993. In the
last three years the combined expense reductions total nearly $15 million and
the percent of sales has been reduced to 20.7% in 1994 from 35% in 1991. The
decrease in 1994 from 1993 resulted primarily from reduced charges for
allowances for doubtful accounts, lower sales promotional costs, and lower
warranty costs, partially offset by the establishment of a reserve for
discontinued agriculture products. In 1993, the Company had accrued $1.0
million for allowances for doubtful accounts relating to a European
distributor. The Company accrued an additional $650,000 for this matter during
the first half of 1994. By the end of 1994, the distributor was current in
all obligations and the distributor's liquidity problems had been resolved.
Accordingly, the Company reversed to income the $1.65 million reserve in the
fourth quarter of 1994.
In 1994, the Company charged $1.8 million to selling, general and
administrative expenses, and another $800,000 to cost of goods sold, to
establish a $2.6 million reserve for discontinued agriculture products. Of
this reserve, $2.2 million was recorded in the fourth quarter of 1994. The
Company, in order to focus its engineering, manufacturing, and sales efforts
on its more profitable core products, has identified several products or
product models to prune from its product offering. In each instance the
product to be discontinued has a low margin, low market share, and is near the
end of its product life. The reserve established provides primarily for costs
associated with retailing such products in dealer inventories at year-end 1994
and for factory inventory valuation adjustments. In 1994, the Company's sales
of the discontinued products were approximately $7.5 million.
Income (Loss) from Operations:
($ millions) 1994 1993 1992 1991 1990
Gehl Agriculture $4.4 $5.5 $(4.4) $(8.6) $13.9
Gehl Construction 8.6 1.8 (2.5) (4.8) 3.1
----- ---- ------ ------ -----
Total $13.0 $7.3 $(6.9) $(13.4) $17.0
Income from operations in 1994 of $13.0 million increased 77% from $7.3
million in 1993. The improvement in 1994 was due to increased sales volume,
improved gross profit as a percent of sales and lower selling, general and
administrative expenses. Gehl Construction income from operations increased
367% from $1.8 million in 1993 to $8.6 million in 1994. This increase in
income from operations resulted primarily from increased sales volume and
gross margin improvement. While Gehl Agriculture income from operations
decreased from $5.5 million in 1993 to $4.4 million in 1994, without the
establishment of a $2.6 million reserve for discontinued products (See
"Selling, General and Administrative Expenses" preceding), income from
operations would have increased to $7.0 million in 1994.
Interest Expense:
Interest expense decreased $1.7 million, or 20%, in 1994. The decrease
resulted from a reduction in average debt outstanding in 1994 to $68.4
million, a 22% decrease from $87.2 million in 1993. The average rate of
interest paid by the Company in 1994 rose to 9.6% from 9.5% in 1993 due to
increases in the prime rate which serves as the base for Gehl's debt under its
line of credit facility. This increase was partially offset by the impact of
retiring the Company's $10 million, 12.6% subordinated debt in November 1994,
and by a decrease in the mark-up over the prime rate on the Company's loans
under its line of credit facility (effective October 1994).
Other Income (Expense), Net:
Other expense rose to $2.9 million in 1994 from $161,000 in 1993. The
increase in expense was due primarily to: 1) a $1.3 million increase in the
cost of selling finance contracts receivable to third parties in 1994 due to
rising interest rates; 2) one-time gains on the sale of a paid-up patent
license and a favorable lawsuit settlement, together totalling $755,000, which
positively impacted 1993 results, and 3) a $400,000 prepayment fee on the
early retirement in November 1994 of the Company's $10 million, 12.6%
subordinated debt.
Provision (Benefit) for Income Taxes:
Under generally accepted accounting principles, the Company was not
required to record a federal income tax provision related to either its 1994
or 1993 pre-tax income due to the existence of net operating loss
carryforwards.
Net Income (Loss):
Net income in 1994 of $5.0 million compares to $241,000 in 1993. The
1994 earnings per common share of $.82 improved from $.04 per share for 1993.
No dividends were declared in either 1994 or 1993 on the Company's common
stock.
1993 vs. 1992
Net Sales:
Sales for 1993 of $137.2 million were 6% higher than the $129.7 million
of sales in 1992. Gehl Agriculture sales in 1993 were $93.9 million, 3%
higher than the sales of $91.2 million in 1992. Demand in the Company's
agricultural market improved modestly during 1993, despite difficult weather
conditions experienced in some regions of the United States. The Company
continued to reduce dealer field inventories by shipping to its dealers at
levels below sales by such dealers to their customers. Gehl Construction
sales in 1993 were $43.3 million, 12% higher than sales of $38.5 million in
1992. The increase from 1992 levels was primarily due to increased shipments
of skid loaders, both domestically and to the Company's European distributor,
and of rough-terrain telescoping-boom forklifts. After two years of
recession, the Company's domestic construction market started recovering, with
conditions improving as 1993 progressed.
Gross Profit:
During 1993 gross profit increased 18% to $38.9 million as compared to
1992, primarily due to increased sales volume and a reduction in the Company's
overall cost structure. Gross profit as a percent of net sales increased to
28.3% for 1993 from 25.4% in 1992. Gross profit as a percent of net sales of
Gehl Agriculture increased to 30.3% in 1993 from 26.1% in 1992. The
improvement reflects the impact of numerous actions taken by the Company to
reduce its overall cost structure, as well as certain one-time costs incurred
in 1992 not being repeated in 1993. One-time costs incurred in 1992 included,
among others, 1) manufacturing start-up costs of a new skid loader model in
Madison, South Dakota, 2) continued manufacturing start-up costs related to
the Lebanon, Pennsylvania manufacturing facility opened in November 1991, and
3) manufacturing start-up costs related to new products manufactured at the
West Bend, Wisconsin facility. Gross profit as a percent of net sales for
Gehl Construction increased slightly to 24.1% in 1993 from 23.9% in 1992.
Selling, General and Administrative Expenses:
Selling, general and administrative expenses decreased $8.3 million, or
21%, during 1993 as compared with 1992. As a percent of sales, selling,
general and administrative expenses decreased to 23% in 1993 from 31% in 1992.
These decreases were due primarily to a reduction in sales promotion expenses
(such as rebate programs to purchasers of Gehl equipment) from 1992 levels.
Weaker demand in the Company's agricultural markets in 1992 required increased
promotion costs to meet competitive sales incentive programs, and to
accelerate the sale of older units in dealers' inventories in order to enhance
cash flow. During 1993, a moderately improved agricultural market combined
with a decrease in the number of older units held by dealers in inventory
enabled the Company to reduce promotion costs significantly. The decrease in
selling, general and administrative expenses in 1993 was also due to 1) the
non-recurrence in 1993 of severance costs associated with the departure during
1992 of certain executive officers, 2) reduced salary and benefit costs
associated with a decline from the December 31, 1992 employment levels and 3)
tighter control of spending in areas such as advertising, professional fees,
travel and rental costs. These decreases were offset, in part, by increased
product liability and warranty provisions and by increased allowances for
doubtful accounts relating to a European distributor.
Income (Loss) from Operations:
Income from operations of $7.3 million in 1993 compared to a loss of $6.9
million from operations in 1992. The improvement was due primarily to lower
selling, general and administrative expenses in 1993, improved gross profit as
a percent of sales and increased sales volume. Gehl Agriculture's income from
operations of $5.5 million in 1993 compared to a loss of $4.4 million in 1992.
Gehl Construction's income from operations of $1.8 million in 1993 compared to
a loss of $2.5 million in 1992.
Interest Expense:
Interest expense decreased by $1.7 million in 1993. The decrease was a
result of a reduction in average debt outstanding in 1993 to $87.2 million
from $102.0 million in 1992 combined with a reduction in the average rate of
interest paid by the Company to 9.5% in 1993 from 9.8% in 1992.
Other Income (Expense), Net:
A decrease in other expense from $2.9 million in 1992 to $161,000 in 1993
was due primarily to a reduction in Canadian foreign exchange losses from $1.2
million in 1992 to $123,000 in 1993, a $505,000 gain associated with granting
a paid-up patent license agreement on one of the Company's products, a
$550,000 reduction in the costs of selling finance contracts, and a $250,000
gain related to a favorable patent litigation settlement. The reduction in
Canadian foreign exchange losses was due to two factors. First, in 1992 the
Canadian dollar weakened significantly against the U.S. dollar, while in 1993
the exchange rate was more stable. Second, in April 1993 the Company
commenced direct borrowing in Canadian dollars to finance approximately 65% of
Gehl's Canadian agricultural receivables, which has provided a hedge against
exchange rate fluctuation.
Provision (Benefit) for Income Taxes:
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes." The adoption of
this statement had no significant effect on the Company's financial position
or results of operations.
Under generally accepted accounting principles, the Company was not
required to record a federal income tax provision related to its 1993
operating income nor was it permitted to record a deferred tax benefit related
to its 1992 operating loss.
Net Income (Loss):
The 1993 net income of $241,000 compares with a net loss of $17.9 million
in 1992. The 1993 earnings per common share of $.04 compares to a loss per
common share of $3.05 for 1992. No dividends were declared in either 1993 or
1992.
Liquidity and Capital Resources
Working Capital
($ thousands) - 1994 1993
December 31,
Current assets $102,621 $114,355
Current liabilities (28,710) (30,328)
---------- ----------
Working capital $ 73,911 $ 84,027
Current ratio 3.6 to 1 3.8 to 1
Working Capital:
The Company's working capital declined in 1994 by $10 million, which
resulted in a decrease in the current ratio to 3.6:1. The reduction was due
primarily to a $12.6 million decline in net accounts receivable. Cash on hand
at December 31, 1994 was $2.6 million versus $1.5 million a year earlier.
Cash Flow:
In 1994 cash flow provided by operating activities was $19.5 million as
compared to $26.1 million provided in 1993. While the 1994 cash flow was
strong, cash provided by changes in working capital items, though still
positive, was reduced from the levels generated in 1993. The major components
of the 1994 cash flow were a reduction in accounts receivable, primarily field
inventories at dealers, of $12.6 million and net income before depreciation
and amortization of $8.8 million. The 1994 cash flow was used primarily to
repay $17.9 million of debt.
Floor Plan Financing:
The Company provides standard interest-free floor plan financing to its
dealers, in Gehl Agriculture generally for up to one year and in Gehl
Construction for varying periods of time generally up to nine months. Under
special order programs occasionally offered to Gehl Agriculture dealers,
longer interest-free periods may be available. At the end of the interest-
free period, if the equipment remains unsold to retail customers, the Company
generally charges interest to the dealer at rates between 1.5% and 3.0% above
the prime rate, or on occasion provides interest-free extensions of up to six
months upon payment by the dealer of curtailments generally between 10% and
20% of the original invoice price. This type of floor plan equipment
financing accounts for approximately 90% of Gehl's accounts receivable, with
all such floor planned receivables required to be secured with a first
priority security interest in the equipment sold.
Accounts Receivable:
The Company's net accounts receivable decreased $12.6 million, or 15%,
from $85.0 million at December 31, 1993 to $72.4 million at December 31, 1994.
This reduction was due to the Company shipping to Gehl dealers at a level
below the sales by Gehl dealers to their customers. During the last two years
Gehl has reduced its net accounts receivable by nearly $29 million, or 29%,
from $101.2 million at December 31, 1992. Gehl Agriculture accounts
receivable at December 31, 1994 decreased $10.2 million, or 14%, from a year
earlier, while Gehl Construction accounts receivable declined $2.4 million, or
21%, over the same period.
Finance Contracts Receivable:
Finance contracts receivable decreased $1.2 million to $5.6 million at
December 31, 1994. The combined portfolio of owned and sold-but-serviced
finance contracts receivable was $57.7 million as compared to $60.2 million at
year-end 1993. (See "Sales of Finance Contracts Receivable" following.)
Capital Expenditures
($ thousands) 1994 1993 1992 1991 1990
Capital expenditures $2,505 $809 $1,473 $10,766 $5,127
Depreciation $2,692 $2,940 $3,093 $2,682 $2,052
Capital Expenditures:
The Company expended $2.5 million for property, plant, and equipment in
1994. Included in the 1994 total was $900,000 spent in June 1994 to exercise
the Company's option to purchase its previously leased Yankton, South Dakota
manufacturing facility. The remaining expenditures in 1994 were for machinery
and equipment for basic upkeep, to enhance capability, to improve
productivity, or to improve product quality. At December 31, 1994, Gehl had
no significant outstanding commitments for capital items. The Company plans
to make approximately $3.5 million in capital expenditures in 1995.
Facilities:
The Company's present facilities are sufficient to provide adequate
capacity for its operations in 1995. On January 31, 1994, the Company closed
its leased facility in Lithonia, Georgia. The asphalt paver product line
formerly manufactured in Lithonia was transferred to the Company's Yankton,
South Dakota manufacturing facility.
Contingencies:
The Company has received informal notification that it may have some
financial responsibility for environmental remediation at a landfill site in
the City of West Bend, Wisconsin. The amount of the Company's potential
obligation, if any, is not presently determinable.
Capitalization
Debt and Equity:
($ millions) - 1994 1993 1992 1991 1990
December 31
Total Debt $54.9 $72.8 $97.7 $103.0 $85.4
Shareholders' Equity $46.3 $40.9 $40.4 $58.2 $77.9
% Total Debt to
Total Capitalization 54.2% 64.0% 70.7% 63.9% 52.3%
At December 31, 1994, shareholders' equity had risen to $46.3 million
from $40.9 million a year earlier. Cash flow from operations of $19.5 million
enabled the Company to reduce its debt by $17.9 million in 1994, and with $5.0
million of net income, the capitalization ratio was reduced to 54.2% at
December 31, 1994.
Borrowing Arrangements (See also Note 5 of Notes to Consolidated Financial
Statements):
In the fourth quarter of 1994, the Company entered into an Amended and
Restated Loan and Security Agreement (the "Facility"), effective retroactively
to October 1, 1994, with its primary lender. The revised agreement extended
the term of the Facility through December 31, 1997, lowered interest rates,
and changed other terms and conditions. Total borrowing capacity of $75
million is available under the Facility, subject to a borrowing base related
to the Company's accounts receivable, finance contracts receivable, and
inventories. Under the terms of the Facility, the interest rate Gehl pays on
U.S. dollar loans was lowered to .50% above, from 1.65% above, the U.S. prime
rate. In Canada, where the Company may borrow up to $7.5 million, the
interest rate was lowered to 1.5% above, from 2.25% above, the Canadian prime
rate. Additionally, advance ratios and eligible assets under the borrowing
base were increased. The Facility has a net worth covenant and a debt to
equity covenant which were also revised in the agreement. The Company is
operating within the requirements of these covenants. At December 31, 1994,
the Company had unused borrowing capacity of $19.2 million under the Facility.
Management believes that the Facility provides sufficient borrowing capacity
for the Company to finance its operations for the foreseeable future.
On November 4, 1994, the Company prepaid in its entirety $10 million of
12.6% subordinated debt. The prepayment required the Company to pay a
$400,000 fee to the lender. Principal repayments on the subordinated debt
were to have been made quarterly for 8 years, commencing December 31, 1994.
The Company also has outstanding $8.4 million of 9% industrial
development bonds ("IDB") with a 2010 final maturity; repayments commence in
2005. On February 1, 1994, the Company and the IDB holders amended the IDB
agreement to adjust the two financial covenants, net worth and debt to equity
ratio, for the remainder of the IDB agreement. The Company is operating
within the requirements of the covenants.
Sales of Finance Contracts Receivable:
The sale of finance contracts is an important component of the Company's
overall liquidity. Gehl has arrangements with several financial institutions
and financial service companies to sell, with recourse, its finance contracts
receivable. The Company continues to service all contracts whether or not
sold. At December 31, 1994, Gehl serviced $57.7 million of such contracts, of
which $51.6 million were owned by other parties. Losses on finance contacts
due to customer nonperformance were $570,000 in 1994 as compared to $381,000
in 1993. As a percentage of outstanding serviced contracts, the loss ratios
were 1.0% and .6% in 1994 and 1993, respectively.
The Company incurred $1.1 million of costs in selling approximately $34
million of its finance contracts in 1994, as compared to $294,000 of costs in
selling $41 million of such contracts in 1993. The costs arise primarily from
the difference between the weighted average interest rate on the contracts
being sold and the interest rate required by the purchaser of the contracts.
Historically, the Company's costs of selling its finance contracts have risen
in periods of rising and high interest rates and decreased in periods of
decreasing and low interest rates. This trend was repeated again in 1994.
Additionally, due to competitive pressures, the range of interest rates the
Company charges its customers has historically been narrower than the
fluctuations in interest rate requirements of the purchasers of Gehl's finance
contracts. The Company also incurred $492,000 of additional costs on the sale
of finance contracts made under several variable rate agreements between June
1993 and February 1994. These costs were due to increasing interest rates in
the economy.
Management believes it has sufficient capacity to meet the Company's 1995
requirements to sell its finance contracts.
<PAGE>
[Pages 14 through 25 of the Annual Report]
GEHL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
In Thousands, Except Per Share Data -
Year Ended December 31, 1994 1993 1992
Net sales $146,620 $137,218 $129,694
Cost of goods sold 103,346 98,335 96,723
________ ________ ________
Gross profit 43,274 38,883 32,971
Selling, general and administrative
expenses 30,313 31,544 39,837
________ ________ ________
Income (loss) from operations 12,961 7,339 (6,866)
Interest expense (6,711) (8,364) (10,103)
Interest income 1,715 1,552 1,730
Other income (expense), net (2,930) (161) (2,911)
________ ________ ________
Income (loss) before income taxes 5,035 366 (18,150)
Provision (benefit) for income taxes --- 125 (250)
________ ________ ________
Net income (loss) $ 5,035 $ 241 $(17,900)
======== ======== ========
Net Income (loss) per common share $ .82 $ .04 $(3.05)
======= ======= =======
The accompanying notes are an integral part of the financial statements.
<PAGE>
GEHL COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
In Thousands, Except Share Data - December 31, 1994 1993
Assets
Cash $ 2,570 $ 1,458
Accounts receivable - net 72,393 84,969
Finance contracts receivable - net 3,389 4,223
Inventories 21,452 21,633
Prepaid expenses and other assets 2,817 2,072
________ ________
Total current assets 102,621 114,355
________ ________
Property, plant and equipment - net 20,433 20,088
Finance contracts receivable - net, non-current 2,258 2,624
Other assets 5,715 7,213
________ ________
Total assets $131,027 $144,280
======== ========
Liabilities and Shareholders' Equity
Current portion of long-term debt obligations $ 180 $ 549
Accounts payable 14,477 15,784
Accrued liabilities 14,053 13,995
________ ________
Total current liabilities 28,710 30,328
________ ________
Line of credit facility 45,879 53,979
Long-term debt obligations 8,821 18,280
Other long-term liabilities 1,334 798
________ ________
Total long-term liabilities 56,034 73,057
________ ________
Common stock, $.10 par value, 25,000,000 shares
authorized, 6,169,523 and 6,132,443 shares
outstanding at December 31, 1994 and 1993,
respectively 617 613
Preferred stock, $.10 par value, 2,000,000
shares authorized, no shares issued -- --
Capital in excess of par 26,133 25,820
Retained earnings 19,533 14,462
________ ________
Total shareholders' equity 46,283 40,895
________ ________
Total liabilities and shareholders' equity $131,027 $144,280
======== ========
Contingencies (Notes 2 and 11)
The accompanying notes are an integral part of the financial statements.
<PAGE>
GEHL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
In Thousands, Except Per Share Capital In
Data Common Excess of Retained
Stock Par Earnings Total
Balance at January 1, 1992 $586 $25,331 $32,300 $58,217
Net loss -- -- (17,900) (17,900)
Exercise of stock options 2 34 -- 36
Amortization of unearned
compensation related to
restricted stock grants -- 52 -- 52
____ _______ ________ ________
Balance at December 31, 1992 588 25,417 14,400 40,405
Net income -- -- 241 241
Exercise of stock options 3 120 -- 123
Issuance of stock 4 119 -- 123
Issuance of restricted stock
grants and related
amortization of unearned
compensation - net 18 164 -- 182
Minimum liability adjustment -- -- (179) (179)
_____ _______ _______ ______
Balance at December 31, 1993 613 25,820 14,462 40,895
Net income -- -- 5,035 5,035
Exercise of stock options 4 131 -- 135
Amortization of unearned
compensation related to
restricted stock grants -- 182 -- 182
Minimum liability adjustment -- -- 36 36
____ _______ _______ _______
Balance at December 31, 1994 $617 $26,133 $19,533 $46,283
==== ======= ======= =======
The accompanying notes are an integral part of the financial statements.
<PAGE>
GEHL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands - Year Ended
December 31, 1994 1993 1992
Cash Flows from Operating Activities
Net income (loss) $ 5,035 $ 241 $(17,900)
Adjustments to reconcile net income
(loss) to net cash provided by
(used for) operating activities:
Depreciation and amortization 3,767 4,191 4,361
(Gain) loss on sale of equipment 8 (5) (11)
Cost of sales of finance contracts 1,142 294 845
Deferred income taxes (900) -- 14
Proceeds from sales of finance
contracts 31,935 39,331 35,575
Increase (decrease) in cash
due to changes in:
Restricted cash -- 1,548 (1,548)
Accounts receivable - net 12,576 16,212 11,380
Finance contracts receivable -
net (33,241) (38,265) (33,780)
Inventories 181 2,450 3,316
Refundable income taxes -- 2,422 1,724
Prepaid expenses and other
assets 155 (462) 2,250
Other assets 113 (164) (65)
Accounts payable (1,307) (935) (8,051)
Accrued liabilities 58 (745) 1,728
________ ________ _________
Net cash provided by (used
for) operating activities 19,522 26,113 (162)
________ ________ _________
Cash Flows from Investing Activities
(Increase) decrease in unexpended
plant construction fund (7) (5) 674
Proceeds from sale of equipment 42 28 18
Property, plant and equipment
additions (2,505) (809) (1,473)
Increase (decrease) in
other assets 1,100 (998) (823)
Other 217 126 162
________ ________ _________
Net cash (used for) investing
activities (1,153) (1,658) (1,442)
________ _________ _________
Cash Flows from Financing Activities
Decrease in other long-term
obligations (9,828) (20,965) (63,164)
(Repayment of) proceeds from
revolving credit loans (8,100) (3,903) 57,882
Increase (decrease) in other long-
term liabilities 536 113 (73)
Proceeds from issuance of common
stock 135 123 36
________ ________ _________
Net cash (used for)
financing activities (17,257) (24,632) (5,319)
________ ________ _________
Net increase (decrease) in cash 1,112 (177) (6,923)
Cash, beginning of year 1,458 1,635 8,558
________ ________ _________
Cash, end of year $ 2,570 $ 1,458 $ 1,635
======== ======== =========
The accompanying notes are an integral part of the financial statements.
<PAGE>
GEHL COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994
Note 1 - Significant Accounting Policies
Consolidation: Gehl Company is engaged in the manufacture and
distribution of farm equipment and machinery primarily for the dairy,
livestock and poultry agricultural sector, and in the manufacture and
distribution of equipment and machinery for the construction market.
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries: Hedlund Manufacturing
Company, Inc.; Hedlund Martin, Inc.; Gehl Power Products, Inc.; and Gehl
International, Inc., a foreign sales corporation. All significant
intercompany transactions and balances are eliminated.
Revenue Recognition: Revenue is recorded upon the shipment of products
to dealers and distributors; these dealers and distributors have no
right of return, except as provided by law.
Accounts Receivable: The Company provides financing for its dealers in
both the agricultural and construction markets. The financing
agreements provide for, in certain instances, interest-free periods
which generally range from 4 to 12 months.
Finance Contracts Receivable: The Company offers financing for its
products to retail customers and to its dealers through its finance
division. Finance contracts require periodic installments of principal
and interest over periods of up to 60 months. Unearned interest is
recognized over the life of the contracts using the sum of the digits
method. Principal expected to be collected within twelve months of the
balance sheet date is classified as a current asset; the remainder is
classified as a non-current asset.
Inventories: Inventories are valued at the lower of cost or market.
Cost is determined by the last-in, first-out (LIFO) method for
substantially all of the Company's inventories.
Properties and Depreciation: Properties are stated at cost. When
properties are sold or otherwise disposed of, cost and accumulated
depreciation are removed from the respective accounts and any gain or
loss is included in income. The Company provides for depreciation of
assets generally using the straight-line method for financial reporting
purposes and accelerated methods for income tax purposes. Expenditures
which substantially increase value or extend asset lives are
capitalized. Expenditures for maintenance and repairs are charged
against income as incurred.
Debt Issue Costs: Costs incurred in conjunction with incurrence of
indebtedness are capitalized and subsequently amortized over the related
periods of the obligations.
Foreign Currency Transactions: Foreign currency transaction gains and
losses are included in the determination of income. Foreign currency
losses were $181,000, $124,000 and $1,165,000 in 1994, 1993 and 1992,
respectively.
Income Taxes: Effective January 1, 1993, the Company adopted Statement
of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes," which requires that the Company follow the liability
method in accounting for income taxes. The liability method provides
that deferred tax assets and liabilities be recorded based on the
difference between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes. The principal items
that result in such differences are the recognition of sales on the
installment method for income tax purposes, the recording of certain
accruals for financial reporting purposes which are not deductible until
paid, and the use of accelerated depreciation methods for income tax
purposes.
Product Liability Costs: The Company directly assumes all liability for
costs associated with claims up to specified limits in any policy year.
Known incidents involving the Company's products are investigated and
reserves are established for any estimated liability.
Product Warranty Costs: In general, the Company provides warranty on
equipment for a period of up to twelve months or for a specified period
of use after sale or rental by the dealer. Reserves for estimated
warranty costs are established at the time of sale.
Research and Development Costs: Costs for research activities relating
to product development and improvement are charged against income as
incurred. Such costs amounted to approximately $1,172,000, $1,042,000,
and $1,675,000 in 1994, 1993 and 1992, respectively.
Other Income (Expense): Other income (expense) is comprised primarily
of foreign currency transaction gains (losses), cost of sales of finance
contracts, amortization of debt issue costs, and royalty and license
income (expense). During 1993, the Company recognized a gain of
$505,000 associated with granting a paid up patent license agreement on
one of its products.
Net Income (Loss) Per Common Share: Net income (loss) per common share
is computed by dividing net income (loss) by the weighted average number
of common shares and, if applicable, common stock equivalents which
would arise from the exercise of stock options and warrants. The
weighted average number of shares used in the computations was
6,174,476, 6,097,472 and 5,873,264 for 1994, 1993 and 1992,
respectively.
Note 2 - Accounts Receivable and Finance Contracts Receivable
Accounts receivable and finance contracts receivable were comprised of
the following (in thousands):
December 31, 1994 1993
Accounts receivable $76,737 $89,035
Less allowances for:
doubtful accounts (639) (1,843)
returns and dealer
discounts (3,705) (2,223)
_______ _______
$72,393 $84,969
======= =======
Finance contracts receivable $ 6,556 $ 8,053
Less: unearned interest (405) (556)
allowance for doubtful
accounts (504) (650)
_______ _______
5,647 6,847
Less: non-current portion (2,258) (2,624)
_______ _______
Current portion $ 3,389 $ 4,223
======= =======
In 1994, the Company established a reserve for discontinued products.
The allowance for returns and dealer discounts was increased by $1.6
million to reflect the anticipated costs of retailing such products in
dealer inventory at December 31, 1994.
The finance contracts receivable at December 31, 1994 have a weighted
average interest rate of 8.3% which approximates fair value.
The Company has entered into various agreements with third parties to
sell with recourse certain finance contracts receivable. The recourse
provisions of certain of these agreements require that the Company
provide additional collateral in the form of cash withheld at the time
of sale or unsold finance contracts. At December 31, 1994, $299,000 of
unsold finance contracts and $2.4 million of cash previously withheld by
third party buyers were provided as additional collateral. The finance
contracts require periodic installments of principal and interest over
periods of up to 60 months; interest rates are based on market
conditions. The Company has retained the servicing of these contracts
which generally have maturities of 36 to 48 months. Amounts to cover
potential losses on these sold receivables are included in the allowance
for doubtful accounts.
The following summarizes the Company's sales of retail finance contracts
receivable during 1994 and 1993 (in thousands):
1994 1993
Value of contracts sold
- net of $4.6 million and
$5.5 million, respectively,
of unearned interest $34,437 $41,211
Cash received on sales of
contracts 31,935 39,331
Cash withheld as additional
collateral 1,360 1,586
_______ _______
Cost of sales of finance
contracts $ 1,142 $ 294
======= =======
Net receivables outstanding
at December 31 relating
to finance contracts sold $51,593 $52,686
======= =======
The Company retains as collateral a security interest in the equipment
associated with accounts receivable and finance contracts receivable.
The Company also maintains certain levels of dealer recourse deposits as
additional security associated with finance contracts receivable.
Note 3 - Inventories
If all of the Company's inventories had been valued on a current cost
basis, which approximates FIFO value, estimated inventories by major
classification would have been as follows (in thousands):
December 31, 1994 1993
Raw materials and supplies $ 3,711 $ 3,598
Work-in-process 10,252 10,091
Finished machines and
parts 24,346 23,935
________ ________
Total current cost value 38,309 37,624
Adjustment to LIFO basis (16,857) (15,991)
________ ________
$ 21,452 $ 21,633
======== ========
In 1994, the Company established a reserve for discontinued products.
An inventory valuation adjustment of $800,000 was recorded to reflect
the net realizable value of such products in inventory at December 31,
1994.
Note 4 - Property, Plant and Equipment - Net
Property, plant and equipment consisted of the following (in thousands):
December 31, 1994 1993
Land $ 1,411 $ 1,303
Buildings 16,800 15,128
Machinery and equipment 25,675 25,213
Autos and trucks 461 481
Office furniture and fixtures 7,216 7,118
_________ _________
51,563 49,243
Less: accumulated
depreciation (31,130) (29,155)
_________ _________
Property, plant and
equipment - net $ 20,433 $ 20,088
========= =========
Note 5 - Debt Obligations
A summary of the Company's debt obligations, and related current
maturities, is as follows (in thousands):
December 31, 1994 1993
Line of credit facility $45,879 $53,979
12.6% junior note - 10,000
9.0% industrial
development bonds 8,400 8,400
Other debt obligations 601 429
_______ _______
54,880 72,808
Less: current portion (180) (549)
_______ _______
Long-term debt obligations $54,700 $72,259
======= =======
Effective October 1, 1994, the Company's $75 million line of credit
facility (the "Facility") was amended. Interest is paid monthly on
outstanding borrowings under the amended Facility as follows:
borrowings in Canadian denominated dollars up to a $7.5 million credit
line are at 1.50% above the Canadian prime rate; the remainder of the
borrowings are at .5% above the U.S. prime rate. Prior to the October
1, 1994 amendment, borrowings in Canadian denominated dollars were at
2.25% above the Canadian prime rate and the U.S. borrowings were at
1.65% above the U.S. prime rate for the first $50 million of such
borrowings and 2.75% above the U.S. prime rate for such borrowings
outstanding above $50 million. The term of the Facility was extended
one additional year to December 31, 1997. Under the amended agreement,
$15 million of the total $75 million Facility continues to be tied to a
borrowing base related to the Company's finance contracts receivable and
inventories. The remaining availability is tied to a borrowing base
related to the Company's accounts receivable. Borrowings under the
Facility are secured by finance contracts receivable, inventories and
accounts receivable. At December 31, 1994, the Company had unused
borrowing capacity of approximately $19.2 million under the Facility.
The Facility also includes financial covenants requiring the maintenance
of minimum tangible net worth levels and a maximum debt to equity ratio.
On November 4, 1994, the Company prepaid, in its entirety, $10 million
of the then outstanding 12.6% junior note and paid related accrued
interest and a $400,000 prepayment fee.
The 9% industrial development bonds are secured by the Company's
Lebanon, Pennsylvania manufacturing facility and require principal
repayment in six equal annual installments of $1.4 million commencing in
2005. The Company has established a debt reserve fund of approximately
$480,000 until the first mandatory bond redemption period in 2003. The
debt reserve fund was established with remaining funds in the
trustee-controlled unexpended plant construction fund. Financial
covenants related to the industrial development bonds require the
maintenance of minimum tangible net worth levels and a maximum debt to
equity ratio.
Annual maturities of debt obligations are as follows (in thousands):
1995 $ 180
1996 166
1997 45,978
1998 108
1999 48
Later years 8,400
-------
$54,880
=======
Interest paid on total debt obligations was $6.9 million, $8.4 million
and $9.2 million in 1994, 1993 and 1992, respectively.
Note 6 - Accrued Liabilities
Accrued liabilities were comprised of the following (in thousands):
December 31, 1994 1993
Accrued salaries and wages $ 2,644 $ 2,677
Dealer recourse deposits 2,192 2,233
Accrued warranty costs 1,872 2,226
Accrued product liability costs 2,134 1,953
Other 5,211 4,906
------- -------
$14,053 $13,995
======= =======
Note 7 - Income Taxes
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes." SFAS
No. 109 requires the use of the liability method of accounting for
income taxes. The adoption of this statement did not have a material
effect on the Company's financial position or results of operations.
The income tax provision (benefit) recorded for the years ended December
31, 1994, 1993 and 1992 consisted of the following (in thousands):
December 31, Federal State and Total
Foreign
1994 Current $ 900 $ 78 $ 978
Deferred (900) (78) (978)
________ ________ ________
Total $ - $ - $ -
======== ======== ========
1993 Current $ -- $ 125 $ 125
Deferred -- -- --
________ ________ ________
Total $ -- $ 125 $ 125
======== ======== ========
1992 Current $ (300) $ 36 $ (264)
Deferred 14 -- 14
________ ________ ________
Total $ (286) $ 36 $ (250)
======== ======== ========
Deferred income taxes are recorded based on the difference between the
tax bases of assets and liabilities and the carrying amounts for
financial reporting purposes offset by net operating loss and credit
carryforwards.
In 1994 and 1993, the Company was not required, under generally accepted
accounting principles, to record a federal income tax provision due to
the existence of net operating loss carryforwards. In 1992, the Company
was not permitted, under generally accepted accounting principles, to
record a deferred benefit related to its 1992 net operating loss.
A reconciliation between the reported income tax provision (benefit)
and the federal statutory rate follows (as a percent of pre-tax income
(loss)):
Year Ended December 31, 1994 1993 1992
Federal statutory rate 34.0% 34.0% (34.0%)
Net operating loss (utilized)
not utilized (34.0) (34.0) 32.4
State income taxes, net of
Federal income tax effect - 26.5 .2
Other, net - 7.5 --
_______ _______ _______
- 34.0% ( 1.4%)
======= ======= =======
The Company's temporary differences and carryforwards which give rise to
deferred tax assets and liabilities consisted of the following (in
thousands):
December 31, 1994 1993
Deferred Tax Assets:
Accrued expenses and reserves $ 2,983 $ 2,852
Asset valuation reserves 2,739 2,752
Operating loss carryforwards 3,506 6,012
Tax credit carryforwards 1,783 869
Other 280 338
________ ________
11,291 12,823
Valuation allowance (4,472) (5,881)
________ ________
Deferred Tax Asset $ 6,819 $ 6,942
======== ========
Deferred Tax Liabilities:
Installment sales $ 3,547 $ 4,173
Property, plant and equipment 1,309 1,359
Prepaid pension asset 869 875
Other 194 535
________ _________
Deferred Tax Liability $ 5,919 $ 6,942
======== =========
During 1994, the Company, in accordance with the provisions of SFAS No.
109, recorded a deferred tax benefit of $900,000 based upon the
estimated recoverability of its net operating loss carryforwards as of
December 31, 1994. During 1993, due to its operating loss history, the
Company was unable, under generally accepted accounting principles, to
record deferred tax assets in excess of deferred tax liabilities. The
Company recorded valuation allowances of $4.5 million and $5.9 million
against deferred tax assets at December 31, 1994 and 1993, respectively.
At December 31, 1994, for income tax purposes, the Company had federal
net operating loss carryforwards of approximately $10.3 million and tax
credit carryforwards of approximately $1.8 million. The net operating
loss carryforwards expire in the years 2006 through 2008 and the
majority of the credit carryforwards consist of minimum tax credits
which can be carried forward indefinitely.
Cash paid (received) related to income taxes during 1994, 1993 and 1992
was $61,000, ($2,520,000) and ($4,110,000) respectively.
Note 8 - Employee Retirement Plans
The Company maintains non-contributory defined benefit pension plans
covering the majority of its employees. The benefits provided by
certain of the plans are based on a defined monthly multiplier applied
to the employee's length of service, with the remaining plans providing
benefits based primarily on years of service and average compensation.
Net pension expense (benefit) includes the following components (in
thousands):
Year Ended December 31, 1994 1993 1992
Service cost $ 643 $ 486 $ 507
Interest cost on projected
benefit obligation 1,726 1,660 1,599
Actual return on plan
assets 4 (2,611) (2,159)
Net amortization and
deferral (2,260) 301 (72)
_______ _______ _______
Net periodic pension
expense (benefit) $ 113 $ (164) $ (125)
======= ======= =======
The following schedule details (in thousands) the funded status of the
plans. For all plans, the fair value of assets exceeds the accumulated
benefit obligation.
December 31, 1994 1993 1992
Actuarial present value
of benefit obligation:
Vested $19,299 $20,567 $19,323
Nonvested 1,607 1,732 171
_______ _______ _______
Accumulated benefit
obligation 20,906 22,299 19,494
Effect of projected
salary increases 1,316 1,769 1,236
_______ _______ _______
Total projected benefit
obligation 22,222 24,068 20,730
Plan assets at fair
value 21,754 23,152 21,402
_______ _______ _______
Plan assets in excess
of (less than)
projected benefit
obligation (468) (916) 672
Unrecognized
transitional (asset) (1,579) (2,015) (2,450)
Prior service cost not
yet recognized in net
periodic pension cost 1,190 1,265 647
Unrecognized net loss 3,154 4,046 2,748
_______ _______ _______
Prepaid pension asset $ 2,297 $ 2,380 $ 1,617
======= ======= =======
The projected benefit obligation was determined using assumed discount
rates of 8.5% in 1994, 7.5% in 1993 and 8.25% in 1992, and assumed
long-term rates of compensation increase of 4% in 1994, 1993, and 1992.
The annual long-term rate of return on plan assets was assumed to be
9.0% in 1994 and 1993 and 9.5% in 1992. Plan assets consist principally
of preferred and common stocks and fixed income investments. Funding
for the plans equals or exceeds the minimum requirements of the
Employee Retirement Income Security Act of 1974.
In addition, the Company maintains an unfunded supplemental retirement
benefit plan for certain management employees. The accumulated benefit
obligation for this plan was $841,000 and $606,000 at December 31, 1994
and 1993, respectively, using a discount rate of 8.5% and 7.5%,
respectively.
The Company maintains a savings and profit sharing plan under Section
401(k) of the Internal Revenue Code. Effective January 1, 1994,
bargaining unit employees were added to the plan which now covers
substantially all employees who have completed sixty (60) days of
service with the Company. Through June 30, 1992, the Company matched
25% of non-bargaining unit employee contributions to the plan not to
exceed 6% of the employee's annual compensation, at which time the
Company indefinitely suspended the matching of contributions. Vesting
of Company contributions occurs at the rate of 20% per year. The
contribution for the year ended December 31, 1992 approximated $70,000.
The Company maintains a defined contribution plan that covers
substantially all employees not included under a defined benefit plan.
The Company contributes various percentages of eligible employee
compensation (as defined therein); the plan does not allow employee
contributions. The Company has contributed approximately $194,000,
$165,000, and $151,000 in connection with this plan for 1994, 1993 and
1992, respectively.
The Company only provides postretirement benefits to retirees in two
areas: a $2,500 life insurance policy for retired office employees and
subsidized health insurance benefits for early retirees prior to their
attaining age 65. The number of retirees associated with postretirement
benefit costs is approximately 140. Prior to 1993, the cost of these
benefits was recognized on a cash basis. Effective January 1, 1993, the
Company adopted Statement of Financial Accounting Standards No. 106
"Employers' Accounting for Postretirement Benefits Other Than Pensions,"
which requires employers to account for the cost of these benefits on an
accrual basis.
The Company elected to recognize this change in accounting principle
using the delayed recognition method. Under this method, the Company's
accumulated postretirement benefit obligation of $451,000 as of January
1, 1993 will be amortized to expense over a twenty-year period.
Net postretirement benefit expense included the following components (in
thousands):
Year Ended December 31, 1994 1993
Service cost $ 49 $ 19
Interest cost on projected benefit obligation 106 37
Net amortization and deferral 70 23
---- ----
Net postretirement benefit expense $225 $ 79
==== ====
The difference between net postretirement benefit expense on a cash
versus accrual basis was not material for the years ended December 31,
1994 and 1993.
The Company's postretirement benefit plans are not funded. The status
of the Company's plans was as follows (in thousands):
December 31, 1994 1993
Actuarial present value of accumulated
postretirement benefit obligation $1,355 $507
Unrecognized transitional obligation (405) (428)
Unrecognized net loss (646) -
------- -----
Accrued postretirement benefit liability $ 304 $ 79
======= =====
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefit obligation at December 31, 1994 was
12% decreasing to 6% over seven years. The discount rate used in
determining the accumulated postretirement benefit obligation was 8.5%
at December 31, 1994 and 7.5% at December 31, 1993. A one point
percentage increase in the health care cost trend rate would increase
the accumulated postretirement benefit obligation by approximately
$242,000 and would increase the net postretirement benefit expense by
approximately $38,000.
Note 9 - Shareholders' Equity
Pursuant to the terms of employment agreements entered into with the
Company's chief executive officer and chief operating officer, effective
November 1992, an aggregate of 41,103 shares of the Company's common
stock were issued to the two executives in February 1993 at no cost to
the executives. Under the same employment agreements, an aggregate of
182,142 restricted shares of the Company's common stock were issued at
no cost, in February 1993, to the two executives. Such restricted stock
is subject to agreements with the two executives requiring forfeiture of
their respective shares in the event of certain types of termination of
employment prior to January 3, 1996.
During April 1987, the Board of Directors of the Company adopted the
1987 Stock Option Plan as approved by the shareholders (the "1987
Plan"), which authorized the granting of options for up to 375,000
shares of the Company's common stock. In October 1989, the Company
increased the number of shares issuable under the 1987 Plan to 530,000.
The 1987 Plan provides that options be granted at an exercise price not
less than fair market value on the date the options are granted and that
the option period shall not be more than seven years after the grant
date. The options vest ratably over a period not exceeding three years
after the grant date.
Following is a summary of activity in the stock option plan for 1993 and
1994:
Shares Weighted
Subject Average
to Option Option
Price
Outstanding, January 1, 1993 362,674 $ 6.07
Granted 122,000 5.30
Exercised (34,088) 3.60
Cancelled (218,334) 5.95
_________ _______
Outstanding, December 31, 1993 232,252 $ 6.14
========= =======
Outstanding, January 1, 1994 232,252 $ 6.14
Granted 58,500 6.25
Exercised (37,080) 3.63
Cancelled (12,753) 5.58
_________ _______
Outstanding, December 31, 1994 240,919 $6.58
========= ========
Exercisable, December 31, 1994 112,738 $7.43
========= ========
At December 31, 1994, a warrant to purchase 180,000 shares of the
Company's common stock for $7 per share, subject to certain adjustments
as provided in the agreement, was outstanding to the former junior note
holder. The warrant can be exercised at any time through March 5, 1998.
Note 10 - Leases
The Company occupies certain warehouse facilities and uses certain
equipment under operating lease arrangements. Rent expense under such
arrangements amounted to $1,606,000, $2,093,000 and $2,383,000 in 1994,
1993 and 1992, respectively.
The Company maintains non-cancellable operating leases for certain
facilities and equipment. Future minimum lease payments under such
leases at December 31, 1994, are as follows (in thousands):
1995 $1,061
1996 892
1997 179
1998 40
1999 20
------
Total $2,192
======
Note 11 - Contingencies
The Company is involved in litigation of which the ultimate outcome and
liability to the Company, if any, is not presently determinable.
Management believes, based on opinion of counsel, that final disposition
of such litigation will not have a material impact on the Company's
results of operations or financial position.
The Company has received informal notification from the City of West
Bend, Wisconsin that it may have some financial responsibility with
respect to the closure of a landfill site used by the City of West Bend
from the mid-1960's through 1984. The amount of the Company's potential
obligation, if any, is not presently determinable. The City of West
Bend is currently taking remedial action with respect to the landfill
site.
During 1993, the Company recorded a gain of approximately $250,000
related to the favorable settlement of a patent litigation matter. The
gain was recorded as other income (expense) in the 1993 consolidated
statement of income.
Note 12 - Segment Information
The Company manufactures and distributes products into two industry
segments.
Gehl Agriculture is engaged in the manufacture and distribution of farm
equipment and machinery for the dairy and livestock agricultural sector.
As of December 31, 1994, 87% of the Company's accounts receivable were
from customers in the agricultural sector.
Gehl Construction is engaged in the manufacture and distribution of
equipment and machinery for the construction market. As of December 31,
1994, 13% of the Company's accounts receivable were from customers in
the construction market.
Unallocated assets are cash, refundable income taxes and other
nonallocable assets.
Segments of business by industry are presented below (in thousands):
Year Ended December 31, 1994 1993 1992
Net Sales
Agriculture $ 94,824 $ 93,931 $ 91,223
Construction 51,796 43,287 38,471
________ ________ ________
Consolidated $146,620 $137,218 $129,694
======== ======== ========
Income (Loss) from
Operations
Agriculture $ 4,419 $ 5,509 $ (4,393)
Construction 8,542 1,830 (2,473)
________ ________ ________
Consolidated $ 12,961 $ 7,339 $ (6,866)
======== ======== ========
Assets (Year-end)
Agriculture $97,730 $109,989 $123,861
Construction 24,029 26,952 37,093
Unallocated 9,268 7,339 9,271
________ ________ ________
Consolidated $131,027 $144,280 $170,225
======== ======== ========
Depreciation/
Amortization
Agriculture $2,273 $ 2,421 $ 2,521
Construction 1,076 1,377 1,575
Unallocated 418 393 265
________ ________ ________
Consolidated $ 3,767 $ 4,191 $ 4,361
======== ======== ========
Capital Expenditures
Agriculture $ 1,083 $ 764 $ 1,255
Construction 1,422 45 218
________ ________ ________
Consolidated $ 2,505 $ 809 $ 1,473
======== ======== ========
Exports of U.S. produced products were approximately $25.9 million,
$28.1 million and $26.6 million in 1994, 1993 and 1992, respectively.
Note 13 - Quarterly Financial Data (Unaudited)
In Thousands,
Except Per First Second Third Fourth
Share Data -- Quarter Quarter Quarter Quarter Total
1994
Net sales $34,242 $41,916 $37,592 $32,870 $146,620
Gross profit 9,693 12,854 11,257 9,470 43,274
Net income
(loss) (262) 1,755 2,511 1,031 5,035
Net income
(loss) per
common share (.04) .28 .41 .17 .82
1993
Net sales $29,717 $37,569 $35,860 $34,072 $137,218
Gross profit 7,934 10,661 10,113 10,175 38,883
Net income
(loss) (1,497) 950 597 191 241
Net income
(loss) per
common share (.25) .16 .10 .03 .04
<PAGE>
[Page 26 of the Annual Report]
<TABLE>
GEHL COMPANY AND SUBSIDIARIES
FIVE-YEAR FINANCIAL SUMMARY
<CAPTION>
Dollars in
Thousands,
Except Per
Share Data 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Summary of
Operations
Net sales $146,620 $137,218 $129,694 $127,290 $174,920
Gross profit 43,274 38,883 32,971 31,700 55,361
Income (loss)
from
operations 12,961 7,339 (6,866) (13,374) 17,006
Interest
expense 6,711 8,364 10,103 8,973 6,914
Income (loss)
before income
taxes 5,035 366 (18,150) (25,398) 11,209
Net income
(loss) 5,035 241 (17,900) (19,284) <F1> 7,318
Financial
Position at
December 31
Current assets $102,621 $114,355 $138,193 $163,824 $159,983
Current
liabilities 28,710 30,328 128,717 55,196 31,298
Working
capital 73,911 84,027 9,476 108,628 128,685
Accounts
receivable 72,393 84,969 101,181 112,561 115,567
Finance
contracts
receivable 5,647 6,847 9,793 12,433 19,085
Inventories 21,452 21,633 24,083 27,399 29,209
Property,
plant and
equipment, net 20,433 20,088 22,242 23,852 14,015
Total assets 131,027 144,280 170,225 199,701 196,019
Long-term debt 54,700 72,259 418 86,043 83,937
Total debt 54,880 72,808 97,676 102,958 85,389
Shareholders'
equity 46,283 40,895 40,405 58,217 77,919
Common Share
Summary
Net income
(loss) per
share $.82 $.04 $(3.05) $(3.29)<F1> $1.21
Dividends per
share -- -- -- .08 .16
Book value per
share 7.50 6.67 6.88 9.93 13.30
Shares
outstanding at
year-end 6,169,523 6,132,443 5,875,110 5,865,110 5,860,360
Other
Financial
Statistics
Capital
expenditures $2,505 $809 $1,473 $10,766 $5,127
Depreciation 2,692 2,940 3,093 2,682 2,052
Current ratio 3.6 to 1 3.8 to 1 1.1 to 1 3.0 to 1 5.1 to 1
Percent total
debt to total
capitalization 54.2% 64.0% 70.7% 63.9% 52.3%
Net income
(loss) as a
percent of net
sales 3.4% .2% (13.8%) (15.1%) 4.2%
After-tax
return on
average
shareholders'
equity 11.6% .6% (36.3%) (28.3%) 9.8%
Employees at
year-end 928 946 1,001 1,150 1,340
Common stock
price range
8-1/2 - 7-3/8 - 6 - 9-3/4 - 16-3/4 -
5-3/8 3 2-1/4 3 6-1/2
<FN>
<F1>
Includes $2,325,000 ($.40 per share) extraordinary loss on extinguishment of
debt, net of tax.
</FN>
</TABLE>
Investor Information
Price Range Dividends
1994 1993 1994 1993
Stock Prices
and Dividends
First quarter $7-3/4 - 5-3/8 $3-7/8 - 3 $ -- $ --
Second quarter 6-3/4 - 5-1/2 5-3/8 - 3-1/4 -- --
Third quarter 7 - 5-3/8 6-7/8 - 4-1/4 -- --
Fourth quarter 8-1/2 - 5-1/2 7-3/8 - 5-1/2 -- --
______________ ______________ ______________ _____________
Year $8-1/2 - 5-3/8 $7-3/8 - 3 $ -- $ --
============== ============== ============== =============
<PAGE>
[Pages 27 and 28 of the Annual Report]
Directors and Officers
Board of Directors
John W. Findley
Chairman, President, Chief Executive Officer and a Director, Findley
Adhesives, Inc. (1,2)
Peter A. Fischer
Director of, and retired President and Chief Executive Officer, Medalist
Industries, Inc. (1,2)
John W. Gehl
Vice President, International (3)
William D. Gehl
President and Chief Executive Officer (3)
Arthur W. Nesbitt
Chairman of the Board, Gehl Company, and President, Chief Executive
Officer and a Director, Nasco International (2,*3)
Roger E. Secrist
Retired Chairman and Chief Executive Officer, ANGUS Chemical Company
(*2,3)
Richard G. Sim
Chairman, President, Chief Executive Officer and a Director,
Applied Power Inc. (*1)
(*) Chairman
(1) Audit Committee
(2) Compensation and Benefits Committee
(3) Nominating Committee
Executive Officers
William D. Gehl
President and Chief Executive Officer
Victor A. Mancinelli
Executive Vice President and Chief Operating Officer
John W. Gehl
Vice President, International
Kenneth F. Kaplan
Vice President, Finance and Treasurer
Michael J. Mulcahy
Vice President, Secretary and General Counsel
Richard J. Semler
Vice President, Data Systems
Kenneth P. Hahn
Corporate Controller
Information of Interest
Annual Meeting
All shareholders are invited to attend our annual meeting which will be
held on Thursday, April 27, 1995, at 3:00 p.m. at the West Bend Inn,
2520 West Washington Street, West Bend, Wisconsin.
Locations
Gehl Company is headquartered in West Bend, Wisconsin, with
manufacturing facilities in West Bend; Lebanon, Pennsylvania; and
Madison and Yankton, South Dakota.
Form 10-K and Other Company Information
Shareholders and prospective investors are welcome to call or write Gehl
Company with questions or requests for additional information including
obtaining a copy of Gehl Company's Form 10-K for 1994, as filed with the
Securities and Exchange Commission. Please direct inquiries to:
Michael J. Mulcahy
Corporate Secretary
Gehl Company
143 Water Street
West Bend, Wisconsin 53095
414-334-6663
Transfer Agent
Shareholders with a change of address or related needs should contact:
Firstar Trust Company
615 E. Michigan Street, 4th Floor
P.O. Box 2077
Milwaukee, Wisconsin 53201
800-637-7549
Stock Market Information
Gehl Company common stock is traded on the NASDAQ National Market System
under the symbol GEHL.
Independent Accountants
Price Waterhouse LLP
Milwaukee, Wisconsin
Exhibit 21
The following are wholly-owned subsidiaries of Gehl Company:
- Gehl International, Inc.
- Gehl Power Products, Inc.
- Hedlund Martin, Inc.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statements listed below of Gehl Company of our report dated
February 10, 1995 appearing on page 8 of the 1994 Annual Report to
Shareholders which is incorporated in this Annual Report on Form 10-K. We
also consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page 16 of this Form 10-K.
1. Registration Statement on Form S-8 (Registration No. 33-38392)
2. Registration Statement on Form S-8 (Registration No. 33-39150)
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
March 7, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Gehl
Company's consolidated balance sheet at December 31, 1994 and consolidated
statements of income for the twelve month period ended December 31, 1994 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<CASH> 2570
<SECURITIES> 0
<RECEIVABLES> 80630
<ALLOWANCES> 4848
<INVENTORY> 21452
<CURRENT-ASSETS> 102621
<PP&E> 51563
<DEPRECIATION> 31130
<TOTAL-ASSETS> 131027
<CURRENT-LIABILITIES> 28710
<BONDS> 54700<F1>
<COMMON> 617
0
0
<OTHER-SE> 45666
<TOTAL-LIABILITY-AND-EQUITY> 131027
<SALES> 146620
<TOTAL-REVENUES> 146620
<CGS> 103346
<TOTAL-COSTS> 103346
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6711
<INCOME-PRETAX> 5035
<INCOME-TAX> 0
<INCOME-CONTINUING> 5035
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5035
<EPS-PRIMARY> .82
<EPS-DILUTED> 0<F2>
<FN>
<F1>Includes all non-current portion of debt obligations
<F2>Not reported
</FN>
</TABLE>
