SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as
permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Gehl Company
-------------------------------------------------
(Name of Registrant as Specified in its Charter)
_____________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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<PAGE>
GEHL COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 29, 1998
To the Shareholders of Gehl Company:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of
Gehl Company will be held on Wednesday, April 29, 1998 at 3:00 P.M., local
time, at the Cedar Theatre, Cedar Lake Campus, 5595 Highway Z, West Bend,
Wisconsin 53095, for the following purposes:
1. To elect three directors to hold office until the annual meeting
of shareholders in 2001 and until their successors are duly elected and
qualified.
2. To consider and act upon such other business as may properly
come before the meeting or any adjournment or postponement thereof.
The close of business on February 27, 1998 has been fixed as the
record date for the determination of shareholders entitled to notice of, and
to vote at, the meeting and any adjournment or postponement thereof.
A proxy for the meeting and a proxy statement are enclosed herewith.
A map showing the location of the Cedar Theatre accompanies this
notice and proxy statement.
By Order of the Board of Directors
GEHL COMPANY
Michael J. Mulcahy
Secretary
West Bend, Wisconsin
March 13, 1998
YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. YOU
ARE URGED TO DATE, SIGN AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON. IF
YOU ATTEND THE ANNUAL MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY
DO SO BY REVOKING YOUR PROXY AT ANY TIME PRIOR TO THE VOTING THEREOF.
GEHL COMPANY
143 Water Street
West Bend, Wisconsin 53095
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 29, 1998
This proxy statement is being furnished to shareholders by the Board
of Directors (the "Board") of Gehl Company (the "Company") beginning on or
about March 13, 1998, in connection with a solicitation of proxies by the
Board for use at the Annual Meeting of Shareholders to be held on Wednesday,
April 29, 1998, at 3:00 P.M., local time, at the Cedar Theatre, Cedar Lake
Campus, 5595 Highway Z, West Bend, Wisconsin 53095, and all adjournments or
postponements thereof (the "Annual Meeting"), for the purposes set forth in
the attached Notice of Annual Meeting of Shareholders.
Execution of a proxy given in response to this solicitation will not
affect a shareholder's right to attend the Annual Meeting and to vote in
person. Presence at the Annual Meeting of a shareholder who has signed a
proxy does not in itself revoke a proxy. Any shareholder giving a proxy may
revoke it at any time before it is voted by giving notice thereof to the
Company in writing or in open meeting.
A proxy, in the enclosed form, which is properly executed, duly
returned to the Company and not revoked will be voted in accordance with the
instructions contained therein. The shares represented by executed but
unmarked proxies will be voted FOR the three persons nominated for election as
directors referred to herein, and on such other business or matters which may
properly come before the Annual Meeting in accordance with the best judgment
of the persons named as proxies in the enclosed form of proxy. Other than the
election of directors, the Board has no notice of any matters to be presented
for action by the shareholders at the Annual Meeting.
Only holders of record of the Company's Common Stock, $.10 par value
per share (the "Common Stock"), at the close of business on February 27, 1998
are entitled to notice of and to vote at the Annual Meeting. On that date,
the Company had outstanding and entitled to vote 6,243,480 shares of Common
Stock, each of which is entitled to one vote per share.
ELECTION OF DIRECTORS
The Company's By-laws provide that the directors shall be divided
into three classes, with staggered terms of three years each. At the Annual
Meeting, the shareholders will elect three directors to hold office until the
annual meeting of shareholders in 2001 and until their successors are duly
elected and qualified. Unless shareholders otherwise specify, the shares
represented by the proxies received will be voted in favor of the election as
directors of the three persons named as nominees herein. The Board has no
reason to believe that any of the listed nominees will be unable or unwilling
to serve as a director if elected. However, in the event that any one or more
nominees should be unable to serve or for good cause will not serve, the
shares represented by proxies received will be voted for other nominees
selected by the Board.
Directors are elected by a plurality of the votes cast (assuming a
quorum is present). An abstention from voting will be tabulated as a vote
withheld on the election and will be included in computing the number of
shares present for purposes of determining the presence of a quorum, but will
not be considered in determining whether each of the nominees has received a
plurality of the votes cast at the Annual Meeting. A broker or nominee voting
shares registered in its name, or in the name of its nominee, which are
beneficially owned by another person and for which it has not received
instructions as to voting from the beneficial owner, has the discretion to
vote the beneficial owner's shares with respect to the election of
directors.
The following sets forth certain information, as of February 1,
1998, about each of the Board's nominees for election at the Annual Meeting
and each director of the Company whose term will continue after the Annual
Meeting.
Nominees for Election at the Annual Meeting
Terms expiring April, 2001
Fred M. Butler, 62, has served as President and Chief Executive Officer of The
Manitowoc Company, Inc. (a manufacturer of cranes and commercial ice cube
machines) since 1990. Mr. Butler has held various management positions with
The Manitowoc Company, Inc. since 1988. Mr. Butler has served as a director
of the Company since 1995. Mr. Butler is also a director of Wisconsin
Manufacturers and Commerce (a business association promoting the improvement
of the economic climate of the State of Wisconsin).
William D. Gehl, 51, has served as Chairman since April, 1996 and as President
and Chief Executive Officer of the Company since November, 1992. From
January, 1990 until joining the Company, Mr. Gehl was Executive Vice
President, Chief Operating Officer, General Counsel and Secretary of The
Ziegler Companies, Inc. (a financial services holding company). Mr. Gehl held
various management positions with The Ziegler Companies from 1978 to 1990. Mr.
Gehl has served as a director of the Company since 1987. Mr. Gehl is also a
director and Chairman of the Board of the Equipment Manufacturers Institute (a
Chicago-based trade association of agricultural and construction equipment
manufacturers), and a director of West Bend Savings Bank (a state financial
institution) and Wisconsin Manufacturers and Commerce (a business association
promoting the improvement of the economic climate of the State of Wisconsin).
Mr. Gehl is a member of the Florida and Wisconsin Bar Associations.
John W. Splude, 52, has served as Chairman, President and Chief Executive
Officer of HK Systems, Inc. (an integrator and manufacturer of material
handling systems and the successor to Harnischfeger Engineers, Inc.) since
October, 1993. Prior to joining HK Systems, Inc., Mr. Splude served as
President of Harnischfeger Engineers, Inc., a wholly-owned subsidiary of
Harnischfeger Industries, Inc. Mr. Splude has served as a director of the
Company since 1995. Mr. Splude is also Vice Chairman of the Material Handling
Institute (a trade association of material handling equipment manufacturers)
and a Regent of the Milwaukee School of Engineering.
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND
URGES EACH SHAREHOLDER TO VOTE "FOR" ALL NOMINEES. SHARES OF COMMON STOCK
REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" ALL NOMINEES.
Directors Continuing in Office
Terms expiring April, 1999
Thomas J. Boldt, 45, has served as President of The Boldt Group, Inc. (a
holding company with subsidiaries involved in general construction,
construction management, real estate development and management) since 1988.
Mr. Boldt held various management positions with various subsidiaries of The
Boldt Group, Inc. from 1976 to 1988. Mr. Boldt has served as a director of
the Company since 1996. Mr. Boldt is also a director of M&I Bank, Fox Valley
(a national bank) and Wisconsin Manufacturers and Commerce (a business
association promoting the improvement of the economic climate of the State of
Wisconsin) and a Regent of St. Olaf College.
William P. Killian, 62, has served as Vice President, Corporate Development
and Strategy, of Johnson Controls, Inc. (a global market leader in automotive
systems and building controls) since 1987. Mr. Killian has served as a
director of the Company since 1996. Mr. Killian is also a director and past
National President of the Association for Corporate Growth (a professional
organization comprised of individuals interested in corporate growth and
mergers and acquisitions), and a director of Aqua-Chem, Inc. (a manufacturer
of industrial boilers and water purification equipment), Interstate Battery
Systems of America, Inc. (a distributor of automotive and industrial
batteries) and Q.E.P. Co., Inc. (a manufacturer and distributor of specialty
tools for the home improvement market).
Roger E. Secrist, 58, was Chairman and Chief Executive Officer of ANGUS
Chemical Company (an international specialty chemical company and a wholly-
owned subsidiary of Alberta Natural Gas Company Ltd.) until his retirement in
1994. Mr. Secrist has served as a director of the Company since 1991.
Terms expiring April, 2000
John W. Findley, 51, has served as Chairman and President of Vine and Branches
Foundation, Inc. (a private philanthropic foundation) since 1995 and has
served as Chairman and President of Cedars of Nemahbin Foundation, Inc. (a
private philanthropic foundation) since June, 1996. Mr. Findley was Chairman,
President, Chief Executive Officer and a director of Findley Adhesives, Inc.
(a manufacturer of various types of adhesives) from 1988 until the time of its
acquisition by Elf Autochem S.A. in January, 1996. Pursuant to the terms of
the sale agreement with Elf Autochem S.A., Mr. Findley remained an employee of
Findley Adhesives, Inc. until his retirement in January, 1997. Mr. Findley
had held various other management positions with Findley Adhesives, Inc. from
1975 to 1988. Mr. Findley has served as a director of the Company since 1993.
John W. Gehl, 56, served as Vice President, International, of the Company from
1992 until his retirement on March 1, 1998. Mr. Gehl joined the Company in
1962 and served in a variety of positions in marketing, manufacturing and
strategic planning. Mr. Gehl had been a Vice President of the Company since
1977. Mr. Gehl has served as a director of the Company since 1974.
Arthur W. Nesbitt, 70, has served as director and Vice Chairman of ABC School
Supply, Inc. (a supplier of teaching aids and equipment) since January, 1998.
Mr. Nesbitt was Chairman, President, Chief Executive Officer and a director of
Nasco International (a mail order and metal fabrication company) from 1974
until his retirement in December, 1997. Mr. Nesbitt has served as a director
of the Company since 1983. Mr. Nesbitt is also a director of American Medical
Security, Inc. (a medical insurance company), International Association of
Food Industry Equipment Suppliers, Inc. (an organization which sponsors a
trade show for food and milk processing equipment), Wisconsin Manufacturers
and Commerce (a business association promoting the improvement of the economic
climate of the State of Wisconsin) and Competitive Wisconsin, Inc. (an
association of business, education and labor leaders promoting the State of
Wisconsin).
BOARD OF DIRECTORS
The Board has standing Audit, Compensation and Benefits, and
Nominating Committees. The Audit Committee reviews the scope, timing and
results of the audit of the Company's financial statements by the Company's
independent auditors and reviews with the independent auditors management's
policies and procedures with respect to auditing and accounting controls. The
Audit Committee also reviews and evaluates the independence of the Company's
independent auditors, approves services rendered by such auditors and
recommends to the Board the engagement, continuation or discharge of the
Company's independent auditors. Messrs. Boldt, Findley and Splude (Chairman)
are members of the Audit Committee. The Audit Committee held two meetings in
1997.
The Compensation and Benefits Committee determines (subject to Board
approval) compensation levels for the Company's executive officers, reviews
management's recommendations as to the compensation to be paid to other key
personnel and administers the Gehl Company 1995 Stock Option Plan (the "1995
Plan"). The members of the Compensation and Benefits Committee, which held
four meetings in 1997, are Messrs. Butler (Chairman), Findley, Nesbitt and
Secrist.
The functions of the Nominating Committee include recommending those
persons to be nominated by the Board for election as directors of the Company
and recommending persons to fill vacancies on the Board. The members of the
Nominating Committee, which held one meeting in 1997, are Messrs. J. W. Gehl,
W. D. Gehl, Killian, Nesbitt (Chairman) and Secrist. The Nominating Committee
will consider nominees recommended by shareholders, but has no established
procedures which must be followed to make a recommendation. The Company's
By-laws set forth certain requirements for shareholders wishing to nominate
director candidates for consideration by shareholders. With respect to an
election of directors to be held at an annual meeting, a shareholder must,
among other things, give written notice of an intent to make such a nomination
to the Secretary of the Company in advance of the meeting in compliance with
the terms and within the time period specified in the By-laws.
Directors who are officers or employees of the Company receive no
compensation as such for service as members of the Board or committees
thereof. Non-employee directors receive an annual retainer fee of $10,000
($3,000 of which is payable in Common Stock), plus a fee of $1,000 for each
Board meeting and a fee of $750 ($1,000 for the committee chairman) for each
committee meeting attended.
In addition to the compensation described above, each of Messrs.
Boldt, Butler, Findley, Killian, Nesbitt, Secrist and Splude automatically
received an option to purchase 2,000 shares of Common Stock at a per share
exercise price of $10.875 on April 17, 1997 in accordance with the terms of
the 1995 Plan. Under the 1995 Plan, each non-employee director (if he
continues to serve in such capacity) will, on the day after the annual meeting
of shareholders in each year, automatically be granted an option to purchase
2,000 shares of Common Stock. Options granted to non-employee directors under
the 1995 Plan have a per share exercise price equal to 100% of the market
value of a share of Common Stock on the date of grant and become exercisable
ratably over the three-year period following the date of grant, except that if
the non-employee director ceases to be a director by reason of death,
disability or retirement within three years after the date of grant or in the
event of a "change of control of the Company" (as defined in the 1995 Plan)
within three years after the date of grant, the option will become immediately
exercisable in full. Options granted to non-employee directors terminate on
the earlier of (a) ten years after the date of grant or (b) twelve months
after the non-employee director ceases to be a director of the Company. No
options granted under the 1995 Plan were exercised by non-employee directors
during fiscal 1997.
The Board held six meetings in 1997. Each director, except for Mr.
Findley, attended at least 75% of the aggregate of (i) the total number of
meetings of the Board and (ii) the total number of meetings held by all
committees of the Board on which he served during 1997.
PRINCIPAL SHAREHOLDERS
Management
The following table sets forth certain information, as of February
1, 1998, regarding beneficial ownership of Common Stock by each director,
nominee, each of the executive officers named in the Summary Compensation
Table set forth below and all directors, nominees and executive officers as a
group. Except as otherwise indicated in the footnotes, all of the persons
listed below have sole voting and investment power over the shares of Common
Stock identified as beneficially owned.
Name of Individual
or Number in Group Shares of
Common Percent
Stock Beneficially of
Owned(1) Class
William D. Gehl . . . . . . . . . . . . 165,896 2.6%
Thomas J. Boldt . . . . . . . . . . . . 2,085 *
Fred M. Butler . . . . . . . . . . . . 1,585 *
John W. Findley . . . . . . . . . . . . 2,085 *
John W. Gehl . . . . . . . . . . . . . 313,470 (2) 5.0%
William P. Killian . . . . . . . . . . 2,085 *
Arthur W. Nesbitt . . . . . . . . . . . 3,610 *
Roger E. Secrist . . . . . . . . . . . 1,385 *
John W. Splude . . . . . . . . . . . . 1,385 *
Victor A. Mancinelli 115,688 1.8%
Kenneth P. Hahn . . . . . . . . . . . . 18,866 *
Michael J. Mulcahy . . . . . . . . . . 19,629 *
All directors, nominees and executive
officers as group 665,094 10.3%
(13 persons) . . . . . . . . . . . . .
* The amount shown is less than 1% of the outstanding shares.
(1) Includes shares subject to exercisable options as of February 1,
1998, and options exercisable within 60 days of such date, as
follows: Mr. W. D. Gehl, 66,666 shares; Mr. J. W. Gehl, 16,166
shares; Mr. Mancinelli, 46,666 shares; Mr. Hahn, 18,166 shares; and
Mr. Mulcahy, 16,666 shares; and all directors, nominees and
executive officers as a group, 183,491 shares.
(2) Includes 62,754 shares held by the Mark M. Gehl Family Trust over
which Mr. J. W. Gehl has sole voting power but no dispositive power.
In connection with his retirement and subsequent to February 1,
1998, Mr. J. W. Gehl sold 26,167 of the shares reflected in the
table as beneficially owned by him. The total set forth in the
table does not include 2,000 shares held by Mr. J. W. Gehl's wife,
which shares were sold after February 1, 1998. Mr. J. W. Gehl's
address is 143 Water Street, West Bend, Wisconsin 53095.
Other Beneficial Owners
The following table sets forth certain information regarding
beneficial ownership by the only other persons known to the Company to own
more than 5% of the outstanding Common Stock. The beneficial ownership
information set forth below has been reported in filings made by the
beneficial owners with the Securities and Exchange Commission.
Amount and Nature of
Beneficial Ownership
Voting Power
Investment
Power
Name and
Address
of Beneficial Percent
Owner Sole Shared Sole Shared Aggregate of Class
FMR Corp.
82 Devonshire
Street
Boston, MA
02109 -0- -0- 625,700 -0- 625,700 10.0%
James H. Dahl
1200
Riverplace
Blvd.
Suite 902
Jacksonville,
FL 32207 484,000 -0- 484,000 -0- 484,000 7.6%
Heartland
Advisors, Inc.
790 N.
Milwaukee St.
Milwaukee, WI
53202 . . . . 409,900 -0- 426,400 -0- 426,400 6.8%
EXECUTIVE COMPENSATION
Summary Compensation Information
The following table sets forth certain information regarding
compensation awarded to, earned by or paid to each of the Company's Chief
Executive Officer and the four most highly compensated executive officers
other than the Chief Executive Officer. The executive officers named in the
table below are sometimes referred to herein as the "named executive
officers."
SUMMARY COMPENSATION TABLE
Annual Long Term Compensation
Compensation Awards Payouts
Name and Securities LTIP
Principal Salary Bonus Underlying Payouts All Other
Position Year ($) ($)(a) Options ($)(b) Compensation
William D. Gehl 1997 236,473 132,921 21,000 12,311 7,243 (c)
Chairman, 1996 200,000 118,467 --- --- 4,955
President and 1995 173,077 --- 100,000 --- 3,748
Chief Executive
Officer
Victor A. 1997 197,824 110,875 11,000 10,772 8,197 (d)
Mancinelli 1996 175,000 103,658 --- --- 5.777
Executive Vice 1995 147,404 --- 70,000 --- 3,993
President and
Chief Operating
Officer
Kenneth P. Hahn 1997 96,796 38,154 5,000 1,810 3,195 (e)
Vice President, 1996 73,674 17,623 5,000 --- 1,551
Finance and 1995 69,942 9,000 7,500 --- 665
Treasurer
John W. Gehl (f) 1997 91,426 34,049 --- 3,687 5,242 (g)
Vice President, 1996 85,473 35,479 3,500 --- 3,428
International 1995 82,983 9,000 7,500 --- 2.595
Michael J. Mulcahy 1997 87,452 29,375 2,000 2,906 3,918 (h)
Vice President, 1996 78,565 27,964 5,000 --- 2,334
Secretary 1995 76,306 10,000 7,500 --- 1,432
And General
Counsel
(a) The amounts shown in this column for 1996 and 1997 do not include bonus
amounts in excess of target which are credited to a "bonus bank"
maintained for each of the named executive officers. Such bonus amounts
in the bonus bank for each of the named executive officers are scheduled
to be paid out over time, but remain "at risk" and subject to loss
pursuant to the Company's "Shareholder Value Added" plan.
(b) The amounts shown in this column include payments out of the "bonus bank"
for each of the named executive officers paid pursuant to the Company's
"Shareholder Value Added" plan.
(c) Includes for 1997 (i) $2,608 in life insurance premiums paid by the
Company, (ii) an amount of $552 paid to Mr. W. D. Gehl for the purchase
of long-term disability insurance and (iii) a matching contribution of
$4,083 under the Gehl Savings Plan, a 401(k) Plan.
(d) Includes for 1997 (i) $2,895 in life insurance premiums paid by the
Company, (ii) an amount of $552 paid to Mr. Mancinelli for the purchase
of long-term disability insurance and (iii) a matching contribution of
$4,750 under the Gehl Savings Plan, a 401(k) Plan.
(e) Includes for 1997 (i) $111 in life insurance premiums paid by the
Company, (ii) an amount of $407 paid to Mr. Hahn for the purchase of
long-term disability insurance and (iii) a matching contribution of
$2,677 under the Gehl Savings Plan, a 401(k) Plan.
(f) Mr. J. W. Gehl retired as an executive officer of the Company on March 1,
1998.
(g) Includes for 1997 (i) $1,628 in life insurance premiums paid by the
Company, (ii) an amount of $405 paid to Mr. J. W. Gehl for the purchase
of long-term disability insurance and (iii) a matching contribution of
$3,209 under the Gehl Savings Plan, a 401(k) Plan.
(h) Includes for 1997 (i) $730 in life insurance premiums paid by the
Company, (ii) an amount of $372 paid to Mr. Mulcahy for the purchase of
long-term disability insurance and (iii) a matching contribution of
$2,816 under the Gehl Savings Plan, a 401(k) Plan.
Long - Term Incentive Plan -- Awards in Last Fiscal Year
Bonus amounts in excess of a specified level for each of the named executive
officers as well as other participants are credited to a "bonus bank" pursuant
to the Company's "Shareholder Value Added" plan. The "bonus bank" is an "at
risk" deferred account for each plan participant that is subject to loss
pursuant to the terms of the plan. The maximum annual payout for any
individual participant is one-third of the aggregate balance in his "bonus
bank" account and is contingent on Company performance and the participant
continuing to be employed by the Company. Set forth below under the heading
"Maximum" is the amount credited to the "bonus bank" for each of the named
executive officers during fiscal 1997. The amount under the heading
"Threshold" reflects the fact that the amount credited to an individual's
"bonus bank" account is subject to total loss.
Long - Term Incentive Plan - Awards in 1997 Fiscal Year
Estimated future payouts under the plan
Name Threshold($) Maximum ($)
William D. Gehl 0 36,933
Victor A. Mancinelli 0 32,316
Kenneth P. Hahn 0 5,430
John W. Gehl 0 11,061
Michael J. Mulcahy 0 8,718
Stock Options
The Company has in effect the 1995 Plan pursuant to which options to
purchase Common Stock may be granted to key employees (including executive
officers) of the Company and its subsidiaries. The following table presents
certain information as to grants of stock options made during fiscal 1997 to
each of the named executive officers.
Option Grants in 1997 Fiscal Year
Potential
Realizable Value
At Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term(2)
Percentage
of Total
Number of Options
Securities Granted to Exercise At 5% At 10
Underlying Employees or Base Annual Annual
Options in Fiscal Price Expiration Growth Growth
Name Granted(1) Year ($/share) Date Rate Rate
William D.
Gehl 21,000 25.6% $20.8125 10/16/07 $274,866 $696,564
Victor A.
Mancinelli 11,000 13.4% $20.8125 10/16/07 $143,977 $364,867
Kenneth P.
Hahn 5,000 6.1% $21.25 12/18/07 $ 66,820 $169,335
John W. Gehl --- --- --- --- --- ---
Michael J.
Mulcahy 2,000 2.4% $21.25 12/18/07 $ 26,728 $ 67,734
______________
(1) The options reflected in the table for each of the named executive
officers (which are non-qualified options for purposes of the
Internal Revenue Code) were granted under the 1995 Plan and vest
ratably over the three-year period from the date of grant. Vesting
of the options will be accelerated in the event of the optionee's
death or disability or in the event of a change in control of the
Company.
(2) This presentation is intended to disclose a potential value which
would accrue to the optionee if the option were exercised the day
before it would expire and if the per share value had appreciated at
the compounded annual rate indicated in each column. The assumed
rates of appreciation of 5% and 10% are prescribed by the rules of
the Securities and Exchange Commission regarding disclosure of
executive compensation. The assumed annual rates of appreciation are
not intended to forecast possible future appreciation, if any, with
respect to the price of the Common Stock.
The following table sets forth information regarding the exercise of
stock options by each of the named executive officers during the 1997 fiscal
year and the fiscal year-end value of unexercised options held by the named
executive officers.
Aggregated Option Exercises in 1997 Fiscal Year
And
Fiscal Year-End Option Values
Number of Securities
Underlying Value of Unexercised
Shares Unexercised In-the-Money Options
Acquired Value Options at Fiscal at Fiscal
on Realized Year End Year End ($) (1)
Exercise ($) (1) Exercisable Unexercisable Exercisable Unexercisable
Name
William D.
Gehl --- --- 66,666 54,334 833,325 420,612
Victor A.
Mancinelli --- --- 46,666 34,334 635,824 319,988
John W.
Gehl 1,000 13,913 16,166 4,834 235,245 61,353
Kenneth P.
Hahn 500 3,078 18,166 10,834 261,057 72,978
Michael J.
Mulcahy 1,000 14,375 16,666 7,834 241,057 72,978
(1) The dollar values are calculated by determining the difference between
the fair market value of the underlying Common Stock and the exercise
price of the options at exercise or fiscal year-end, as the case may be.
Retirement Plan
The Company maintains a defined benefit pension plan (the
"Retirement Plan") to provide retirement benefits to certain employees,
including the named executive officers. The following table estimates various
annual benefits payable at age 65 to participants with the years of service
and average compensation levels set forth below:
Final Estimated Annual Benefits Payable at Age 65
Annual For Indicated Years of Credited Service
Average
Compensation
5 Years 10 Years 15 Years 20 Years 25 Years 35+ Years
$ 75,000 . $ 3,750 $ 7,500 $11,250 $15,000 $18,750 $26,250
100,000 . 5,000 10,000 15,000 20,000 25,000 35,000
130,000 . 6,500 13,000 19,500 26,000 32,500 45,500
160,000 . 8,000 16,000 24,000 32,000 40,000 56,000
A participant may elect one of several single life or joint and
survivor annuity payment options which provide monthly retirement benefits
calculated on an actuarial basis. Benefits under the Retirement Plan are not
reduced by a participant's Social Security benefits. The Retirement Plan
provides for reduced early retirement and pre-retirement benefits.
Compensation covered by the Retirement Plan for each of the named
executive officers is such person's salary as shown in the Summary
Compensation Table subject to a $160,000 maximum as provided in the Internal
Revenue Code. The number of years of credited service as of December 31, 1997
that will be recognized for Messrs. W. D. Gehl, Mancinelli, Hahn, J. W. Gehl,
and Mulcahy is 5.2 years, 5.2 years, 9.7 years, 34.8 years, and 22.6 years,
respectively.
Supplemental Retirement Benefit Agreements
The Company has entered into a supplemental retirement benefit
agreement under which Mr. W. D. Gehl will receive a monthly retirement benefit
for fifteen years. Under the agreement, the monthly benefit to be received by
Mr. W. D. Gehl is computed by multiplying the percentage by which benefits
have vested by an amount equal to 50% of average monthly compensation computed
by reference to the base salary and cash bonus earned for the highest five (5)
calendar years within the last ten (10) completed calendar years of service
preceding termination, less any amounts Mr. W. D. Gehl would be entitled to
receive under the Retirement Plan or pursuant to Social Security. Mr.
Mancinelli has entered into a similar supplemental retirement benefit
agreement with the Company. This agreement is identical to Mr. W. D. Gehl's
agreement, except that the percentage of average monthly compensation used in
computing the monthly supplemental retirement benefit is 20% and does not
include an offset for Retirement Plan and Social Security benefits. The
supplemental retirement benefit agreements provide for a pre-retirement death
benefit consisting of ten annual payments in the amount of 30% of the average
annual compensation computed by reference to the five highest annual base
salaries and cash bonuses earned within the last ten calendar years preceding
the date of death. Benefits vest under the supplemental retirement benefit
agreements at a rate of 10% per year for the first four years of service with
the Company and are deemed to be fully vested after five years. In the event
there is a "change of control" of the Company, as defined in the supplemental
retirement benefit agreements, or in the event of the executive's disability,
benefits become 100% vested. As of December 31, 1997, Messrs. W. D. Gehl and
Mancinelli were fully vested under their respective agreements. The
supplemental retirement benefit agreements also contain covenants not to
compete which cover Messrs. W. D. Gehl and Mancinelli for a two-year period
following their termination of employment. Failure to comply with such
provisions will result in a forfeiture of benefits under the agreements.
The Company has also entered into supplemental retirement benefit
agreements under which Messrs. Hahn, J. W. Gehl and Mulcahy will receive a
monthly retirement benefit for fifteen years. Under the agreements, the
monthly benefit to be received by Messrs. Hahn, J. W. Gehl and Mulcahy is
computed by multiplying a vesting percentage by the product of (i) a monthly
amount computed by reference to the highest base salaries and cash bonuses
earned by Messrs. Hahn, J. W. Gehl and Mulcahy during a consecutive five-year
period and (ii) 10%. The supplemental retirement benefit agreements provide
for a pre-retirement death benefit consisting of five annual payments in the
amount of 30% of the average annual salary computed by reference to the
highest base salaries and cash bonuses earned during a consecutive five-year
period preceding the date of death. Messrs. Hahn, J. W. Gehl and Mulcahy are
fully vested under their respective supplemental retirement benefit
agreements. The supplemental retirement benefit agreements also contain a
covenant not to compete which covers Messrs. Hahn, J. W. Gehl and Mulcahy for
a two-year period following termination of employment. Failure to comply with
such provisions will result in a forfeiture of benefits under the agreements.
Assuming full vesting, the estimated annual benefits payable to
Messrs. W. D. Gehl, Mancinelli, Hahn, J. W. Gehl and Mulcahy under the
supplemental retirement benefit agreements based upon their current
compensation would be $234,636 (less any amounts Mr. W. D. Gehl would be
entitled to receive under the Retirement Plan or pursuant to Social Security),
$73,238, $14,544, $13,188 and $12,486, respectively.
Employment Agreements
The Company has an employment agreement with Mr. W. D. Gehl, which
agreement was amended and restated in December, 1997, and with Mr. Mancinelli.
Pursuant to their respective agreements. Mr. W. D. Gehl is to serve as the
Chairman of the Board, President and Chief Executive Officer of the Company
through December 31, 1998 and Mr. Mancinelli is to serve as the Executive Vice
President and Chief Operating Officer of the Company through September 30,
1998. During the term of their respective employment agreements, Mr. W. D.
Gehl and Mr. Mancinelli will be paid minimum annual base salaries of $300,000
and $175,000, respectively. The base salaries paid to Messrs. W. D. Gehl and
Mancinelli under their respective employment agreements are reviewed at least
annually by the Board or a committee thereof and may be increased or decreased
at that time subject to the minimum base salaries described in the preceding
sentence. The current base salaries of Messrs. W. D. Gehl and Mancinelli are
$300,000 and $225,000, respectively.
If, for any reason other than cause or the executive officer's death
or disability and other than in connection with a "change in control" of the
Company (as defined in the respective agreements), the employment of Mr. W. D.
Gehl or Mr. Mancinelli is terminated before the term of employment has been
completed, the terminated executive officer will be entitled to receive his
full base salary for one (1) full year from the date of termination as well as
the opportunity to continue to participate in the Company's employee benefit
plans for such period. Pursuant to Mr. W. D. Gehl's agreement, in the event
of a change in control of the Company, the term of Mr. W. D. Gehl's employment
will automatically be extended to a date which is two years after the change
in control. In the event that during this two-year period the Company
terminates Mr. W. D. Gehl's employment (other than for cause) or if Mr. W. D.
Gehl terminates his employment for "good reason" (as defined in the employment
agreement), including as a result of significant changes in his working
conditions or status without his consent, Mr. W. D. Gehl will receive all
accrued but unpaid benefits to the date of his termination plus a lump-sum
termination payment equal to three times the sum of his current base salary
and the highest bonus he earned during the preceding five years. Mr. W. D.
Gehl's agreement also provides that he will receive family medical benefits
for two years following his termination as well as immediate vesting of
unvested stock options and other benefits. Mr. W. D. Gehl's employment
agreement also provides the benefits described above in connection with
certain terminations which are effected in anticipation of a change in
control. The foregoing termination payment and other benefits may be reduced
to the extent necessary to avoid an "excess parachute payment" under the
Internal Revenue Code, but only if such reduction would result in a greater
after-tax benefit to Mr. W. D. Gehl. Under Mr. Mancinelli's agreement, in the
event a change in control occurs during the term of employment and he is
terminated without cause thereafter, Mr. Mancinelli will receive his base
salary and fringe benefits for a one-year period after the termination. Under
the terms of their respective employment agreements, Messrs. W. D. Gehl and
Mancinelli are also entitled to receive, among other benefits, an annual cash
bonus and certain life insurance coverage. Under their respective employment
agreements, Messrs. W. D. Gehl and Mancinelli are subject to certain covenants
not to compete following termination of their employment with the Company.
Report on Executive Compensation
This Report on Executive Compensation describes the policies
employed generally by the Compensation and Benefits Committee for the
development of the Company's executive compensation program and the
application of these policies to executive compensation during fiscal 1997.
The members of the Compensation and Benefits Committee during fiscal 1997 were
Messrs. Butler (Chairman), Findley, Nesbitt and Secrist.
Function of the Compensation and Benefits Committee:
The Compensation and Benefits Committee is responsible for the
various aspects of the Company's compensation program for its executive
officers. The Committee develops the compensation program for the Company's
executive officers, including the award of stock options under the 1995 Plan.
Final approval of the Company's executive compensation package as recommended
by the Compensation and Benefits Committee (other than the grant of options
under the 1995 Plan, which grants are at the sole discretion of the Committee)
is the responsibility of the Board. During fiscal 1997, the Board adopted the
recommendations of the Compensation and Benefits Committee without material
modification.
Executive Compensation Policies:
The basic policy of the Compensation and Benefits Committee is to
provide a competitive compensation program for executive officers sufficient
to attract and retain those executive officers considered crucial to the
attainment of the Company's long-term strategic goals, including the
enhancement of shareholder value. The compensation package for executive
officers consists of base salary, opportunities for cash bonuses and equity-
based awards, and participation in other employee benefits plans offered by
the Company.
In determining salary levels for executive officers of the Company,
the Compensation and Benefits Committee takes into consideration each
individual's level of expertise and experience and his performance in his
particular area of responsibility during the past fiscal year. Based upon the
continued improvement of the financial performance of the Company throughout
fiscal 1996, when compared with fiscal 1995, the Compensation and Benefits
Committee accepted management's proposal and in turn recommended and the Board
approved a general 3% salary increase effective January 1, 1997 for all
salaried employees, including executive officers. In fixing salary levels,
the Committee considered data regarding salaries paid by companies similarly
situated to the Company. The Compensation and Benefits Committee did not,
however, seek the advice of an outside compensation consultant in connection
with its recommendation to increase salary levels.
In addition to base salaries, the Company's compensation package
includes an opportunity for key employees (including the executive officers)
to earn cash bonuses. The Company has in effect a program for its officers
and other key managers that awards incentive compensation based upon a
calculation of "Shareholder Value Added" or SVA. The Company's SVA plan
emphasizes economic value creation which occurs when a business generates a
financial return that exceeds the total cost of capital employed.
Specifically, the Company's plan defines SVA as the difference between (a) net
operating profit after tax and (b) the charge for capital employed in the
business. The Company's SVA plan is designed to reward those executive
officers and key managers who use Company assets most productively, reduce
costs, and create efficiencies throughout the Company's organization. Under
the Company's SVA plan, target bonuses calculated as a percent of salary are
fixed by the Compensation and Benefits Committee. Awards paid to participants
serving in an identified "value center" (e.g., a specific manufacturing
facility) under the SVA plan are based 30% (as a minimum) on total Company
performance with the remainder of the award based on the performance of the
respective value center(s). Awards to participants with corporate
responsibilities (including the Company's Chief Executive Officer) are based
entirely on Company performance. Target SVA levels were initially established
by the Compensation and Benefits Committee at the time the SVA plan was
adopted and adjust automatically on an annual basis by a predetermined
improvement factor. The Company's plan also incorporates a "bonus bank" into
which bonuses in excess of a target bonus level are credited. Such bonus
amounts are thereafter scheduled to be paid out over time, but remain "at
risk" and subject to loss depending on future Company and value center
performance as determined under the SVA plan. Bonuses paid to the named
executive officers for 1997 performance under the SVA plan are reflected in
the "Bonus" column of the Summary Compensation Table.
To provide an additional performance incentive for its executive
officers and other key management personnel, the Company has also continued to
make equity-based awards, comprised of awards of stock options. The Company
currently has in effect the 1995 Plan under which awards of stock options may
be made to the executive officers and other key employees. The general
purpose of the 1995 Plan is consistent with the basic policy of the Company's
executive compensation program which is designed to promote the achievement of
the long-range strategic goals of the Company and to enhance shareholder
value. Stock options granted by the Company have a per share exercise price
of 100% of the fair market value of a share of Common Stock on the date of
grant and, accordingly, the value of the option will be dependent on the
future market value of the Common Stock. Stock options awarded by the Company
generally vest over a three-year period. Consideration is given to the
financial performance of the Company in determining whether in the first
instance to grant stock options and in determining the size of any stock
option award. In addition, consideration is given to the level of
responsibility of the individual executive officer within the Company, the
performance of such officer in his area of responsibility and the officer's
salary grade in recommending the size of stock option awards. Although these
factors are considered, no specific weight is assigned to one factor as
compared to the others in making an option grant determination. Options
relating to an aggregate of 41,000 shares of Common Stock (including an option
grant for 21,000 shares made to the Company's Chief Executive Officer) were
awarded to the executive officers in 1997.
In addition to base salary, cash bonus opportunity and the potential
for equity-based awards, all executive officers of the Company are eligible to
participate in the various employee benefit plans offered to employees of the
Company. The Company's policy with respect to these plans (including the
Company's retirement plan, savings plan and life insurance program) is to
provide competitive benefits to its employees, including executive officers,
to encourage their continued service with the Company and to attract qualified
individuals for available Company positions.
CEO Compensation:
During fiscal 1997, Mr. W. D. Gehl, the Company's Chief Executive
Officer, was paid a salary of $236,473. In connection with entering into an
amended and restated employment agreement in December 1997, Mr. W. D. Gehl's
annual base salary was increased to $300,000 retroactive to October 1, 1997.
See "Executive Compensation-Employment Agreements." Pursuant to the
employment agreement, this base salary is subject to review on at least an
annual basis and may be increased or decreased as determined to be
appropriate, provided that Mr. W. D. Gehl's annual base salary may not be
decreased below $300,000. In initially fixing the 1997 base salary and in
increasing such salary in connection with the execution of the amended and
restated employment agreement, the Compensation and Benefits Committee
considered the qualifications and experience Mr. W. D. Gehl brings to the
Company and the Company's performance during his tenure with the Company as
Chief Executive Officer, and also reviewed salaries paid by comparable
companies. The Compensation and Benefits Committee noted that during Mr.
W. D. Gehl's tenure as Chief Executive Officer (which began in November 1992)
the Company's performance has improved significantly from a net loss of $17.9
million for the year ended December 31, 1992 to net income of $9.6 million and
$12.8 million for the years ended December 31, 1996 and 1997, respectively.
The Committee also noted the significant improvement in shareholder value with
the Company's market capitalization increasing from $18.4 million at
December 31, 1992 to $67.0 million and $130.4 million at December 31, 1996 and
1997, respectively. With the increase in salary under the amended and
restated employment agreement, the Compensation and Benefits Committee
believes that Mr. W. D. Gehl's base salary is within the average range for
salaries paid to chief executive officers of companies similarly situated to
the Company. For fiscal 1997 performance, Mr. W. D. Gehl also received a cash
bonus of $132,921 and a "bonus bank" payment of $12,311 pursuant to the terms
of the Company's SVA plan as described above. In addition, based on the
factors described above, Mr. W. D. Gehl received on October 17, 1997 an option
to purchase 21,000 shares of Common Stock at an exercise price of $20.8125 per
share.
Deductibility of Executive Compensation:
Under Section 162(m) of the Internal Revenue Code, a tax deduction
by certain corporate taxpayers, such as the Company, is limited with respect
to the compensation of specified executive officers unless such compensation
is based upon performance objectives meeting certain regulatory criteria or is
otherwise excluded from the limitation. The Compensation and Benefits
Committee intends to qualify compensation paid to the Company's executive
officers for deductibility by the Company under Section 162(m).
COMPENSATION AND BENEFITS COMMITTEE
Fred M. Butler (Chairman)
John W. Findley
Arthur W. Nesbitt
Roger E. Secrist
PERFORMANCE INFORMATION
The following graph compares the cumulative total return (change in
stock price plus reinvested dividends) during the last five years of the
Common Stock with the Standard & Poor's 500 Composite Index and the Standard &
Poor's Machinery-Diversified Index. The graph assumes $100 was invested on
December 31, 1992 in each of the three alternatives.
<TABLE>
Comparison of Five Year Cumulative Market Performance
Among S&P 500 Index, S&P Diversified Machinery Index, and the Company
(Assumes $100 invested December 31, 1992 with dividends reinvested)
[Performance Graph]
<CAPTION>
December December December December December December
31, 1992 31, 1993 31, 1994 31, 1995 31, 1996 31, 1997
<S> <C> <C> <C> <C> <C> <C>
S&P Composite 500 $100.00 $107.06 $105.41 $141.36 $170.01 $222.72
S&P Diversified
Machinery $100.00 $145.31 $138.85 $167.65 $204.88 $266.52
Gehl $100.00 $193.61 $199.68 $227.80 $347.44 $670.93
</TABLE>
Although the companies included in the S & P Machinery-Diversified
Index generally have a larger market capitalization than the Company, such
companies are believed to provide the closest peer group representation with
respect to the industries served by the Company (agricultural implements and
light construction equipment).
MISCELLANEOUS
Independent Auditors
The Board has appointed Price Waterhouse LLP as the Company's
independent auditors for 1998. Price Waterhouse LLP acted as the independent
auditors for the Company for the year ended December 31, 1997.
Representatives of Price Waterhouse LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they so desire.
Such representatives are also expected to be available to respond to
appropriate questions.
Shareholder Proposals
Proposals which shareholders of the Company intend to present at the
1999 annual meeting and have included in the Company's proxy statement must be
received by the Company by the close of business on November 13, 1998. In
addition, a shareholder who otherwise intends to present business at the 1999
annual meeting must comply with the requirements set forth in the Company's
By-laws. Among other things, to bring business before an annual meeting, a
shareholder must give written notice thereof to the Secretary of the Company
in advance of the meeting in compliance with the terms and within the time
period specified in the By-laws.
Other Matters
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokers and other nominees for their expenses in
communicating with the persons for whom they hold Common Stock. The Company
expects to solicit proxies primarily by mail. Proxies may also be solicited
personally and by telephone by certain officers and regular employees of the
Company.
The Company will provide without charge a copy of its Annual Report
on Form 10-K (including financial statements and financial schedules, but not
including exhibits thereto), as filed with the Securities and Exchange
Commission, to each person who is a record or beneficial holder of Common
Stock as of the record date for the Annual Meeting. A written request for a
Form 10-K should be addressed to Gehl Company, Attention: Secretary, 143
Water Street, West Bend, Wisconsin 53095.
By Order of the Board of Directors
GEHL COMPANY
Michael J. Mulcahy
Secretary
March 13, 1998
<PAGE>
GEHL COMPANY
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints William D. Gehl and Michael J. Mulcahy, or
either of them (with full power of substitution in each of them), as Proxies
and hereby authorizes them to represent and to vote as designated below all of
the shares of Common Stock of Gehl Company held of record by the undersigned
on February 27, 1998 at the annual meeting of shareholders to be held on April
29, 1998, or any adjournment or postponement thereof.
This proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted "FOR" the election of the Board's nominees.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
GEHL COMPANY 1998 ANNUAL MEETING
1. ELECTION OF DIRECTORS (terms expiring at the 2001 Annual Meeting)
1-Fred M. Butler, 2-William D. Gehl, 3-John W. Splude
____ FOR all nominees ____WITHHOLD AUTHORITY
listed to the left to vote for all nominees
(except as specified below). listed to the left.
(Instructions: To withhold authority to vote for any indicated nominee, write
the number(s) of the nominee(s) in the box provided to the right.) _______
2. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Date________________ No. of shares ______________
Check appropriate box
Indicate changes below:
Address Change? ____ Name Change? ____
_________________________________________________________
______________________________________________________________________
Signature(s) in Box
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
<PAGE>
FOR EDGAR FILING
- ----------------
March 13, 1998
Our 139th Year
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
RE: Gehl Company (File No. 0-18110)
Definitive Proxy Statement
for 1998 Annual Meeting
Gentlemen:
On behalf of Gehl Company (the "Company"), transmitted herewith for filing
under the Securities Exchange Act of 1934, as amended, is the Company's
definitive 1998 Proxy Statement for its 1998 annual meeting of shareholders.
This filing is being effected by direct transmission to the EDGAR System. The
Company currently intends to mail proxy materials to its shareholders
beginning on or about March 13, 1998.
Please contact the undersigned at (414) 334-6643 if you have any questions or
comments regarding the foregoing matter.
Sincerely,
Laurence M. Schwartz
Corporate Attorney
<PAGE>
