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))
[X] 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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<PAGE>
GEHL COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 21, 1999
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 21, 1999, 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:
To elect one director to hold office until the annual meeting of shareholders
in 2000 and until his successor is duly elected and qualified and to elect
three directors to hold office until the annual meeting of shareholders in
2002 and until their successors are duly elected and qualified.
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 19, 1999, 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 8, 1999
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 21, 1999
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 8, 1999, in connection with a solicitation of proxies by the Board
for use at the Annual Meeting of Shareholders to be held on Wednesday, April
21, 1999, at 3:00 P.M., local time, at the Cedar Theatre, Cedar Lake Campus,
5595 Highway Z, West Bend, Wisconsin 53095, and at 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 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 19, 1999, are
entitled to notice of and to vote at the Annual Meeting. On that date, the
Company had outstanding and entitled to vote 6,456,978 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 one director to hold office until the annual meeting
of shareholders in 2000 and until his successor is duly elected and qualified
and three directors to hold office until the annual meeting of shareholders in
2002 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 four 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, 1999, 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
Term expiring April, 2000
Dr. Hermann Viets, 56, has served as President and Chief Executive Officer of
the Milwaukee School of Engineering (a university located in Milwaukee,
Wisconsin focused primarily on engineering education) since 1991. Dr. Viets
is also a director of Astro Med, Inc. (an electronic equipment manufacturer),
Milwaukee County Research Park Corp. (an organization responsible for the
development of a high technology industrial park in western Milwaukee County)
and Competitive Wisconsin, Inc. (an association of business, education and
labor leaders promoting the State of Wisconsin) and is a member of the Greater
Milwaukee Committee (an organization of civic leaders promoting the economic
development and social improvement of the City of Milwaukee). Dr. Viets is a
new nominee for election as a director of the Company.
Terms expiring April, 2002
Nicholas C. Babson, 52, has served as Chairman of the Board and President
since 1984 and as Chief Executive Officer since 1996 of Babson Bros. Co. (a
full-line manufacturer and distributor of dairy equipment and sanitation
supplies in domestic and international markets). Mr. Babson is also a
director of Center Point Properties Trust (a real estate investment trust
investing in industrial real estate primarily in the Chicago area), a director
and member of the executive committee of the Equipment Manufacturers Institute
(a Chicago-based trade association of agricultural and construction equipment
manufacturers) and a trustee of the Farm Foundation (an association of
agricultural educators, economists and business leaders). Mr. Babson is a new
nominee for election as a director of the Company.
Thomas J. Boldt, 46, has served as President of The Boldt Group, Inc. (a
holding company with subsidiaries involved in general construction, program
and construction management and real estate development) 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, 63, 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).
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, 2000
John W. Gehl, 57, served as Vice President, International, of the Company from
1992 until his retirement in 1998. Mr. Gehl has served as a director of the
Company since 1974.
Arthur W. Nesbitt, 71, 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 from those positions in December, 1997. Mr. Nesbitt has
served as a director of the Company since 1983. Mr. Nesbitt is also a
director of 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).
Terms expiring April, 2001
Fred M. Butler, 63, was President and Chief Executive Officer of The Manitowoc
Company, Inc. (a manufacturer of cranes and commercial ice cube machines) from
1990 until his retirement in 1998. Mr. Butler has served as a director of the
Company since 1995.
William D. Gehl, 52, 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 past 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), Wisconsin Manufacturers and Commerce (a business
association promoting the improvement of the economic climate of the State of
Wisconsin) and Mason Wells, Inc. (a Milwaukee, Wisconsin-based management
company). Mr. Gehl is a member of the Florida and Wisconsin Bar Associations.
John W. Splude, 53, has served as Chairman, President and Chief Executive
Officer of HK Systems, Inc. (an integrator of material handling systems and a
provider of supply chain software solutions) 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 a member of the Material Handling Institute Round Table (a trade
association of material handling equipment manufacturers), a director of
Advance Separation and Process Systems, Inc. (a manufacturing and software
company) and a Regent of the Milwaukee School of Engineering.
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, J. W. Gehl and Splude
(Chairman) are members of the Audit Committee. The Audit Committee held two
meetings in 1998.
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 two meetings in
1998, are Messrs. Butler (Chairman), Killian, Nesbitt and Splude.
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 1998, are Roger E. Secrist and
Messrs. Boldt, W. D. Gehl, Killian and Nesbitt (Chairman). Mr. Secrist will
retire as a director of the Company effective as of the time of the Annual
Meeting. 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, J. W. Gehl, Killian, Nesbitt, Secrist and Splude automatically
received an option to purchase 2,000 shares of Common Stock at a per share
exercise price of $18.50 on April 30, 1998 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 1998.
The Board held five meetings in 1998. Each director 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 1998.
PRINCIPAL SHAREHOLDERS
Management
The following table sets forth certain information, as of February 1, 1999,
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 . . . . . . . . . . . . 176,230 2.7%
Nicholas C. Babson . . . . . . . . . . 0 *
Thomas J. Boldt . . . . . . . . . . . . 3,614 *
Fred M. Butler . . . . . . . . . . . . 3,114 *
John W. Gehl . . . . . . . . . . . . . 272,500 (2) 4.2%
William P. Killian . . . . . . . . . . 3,614 *
Arthur W. Nesbitt . . . . . . . . . . . 5,139 *
Roger E. Secrist . . . . . . . . . . . 2,914 (3) *
John W. Splude . . . . . . . . . . . . 2,914 *
Hermann Viets . . . . . . . . . . . . . 0 *
Victor A. Mancinelli . . . . . . . . . 142,688 2.2%
Kenneth P. Hahn . . . . . . . . . . . . 24.699 *
Michael J. Mulcahy . . . . . . . . . . 24,477 *
All directors, nominees and executive
officers as group
(14 persons) . . . . . . . . . . . . . 681,788 10.2%
* The amount shown is less than 1% of the outstanding shares.
(1)Includes shares subject to exercisable options as of February 1, 1999, and
options exercisable within 60 days of such date, as follows: Mr. W. D. Gehl,
77,000 shares; Mr. Boldt, 1999 shares; Mr. Butler, 1999 shares; Mr. J. W.
Gehl, 1999 shares; Mr. Killian, 1999 shares; Mr. Nesbitt, 1999 shares; Mr.
Secrist, 1999 shares; Mr. Splude, 1999 shares; Mr. Mancinelli, 73,666 shares;
Mr. Hahn, 23,999 shares; and Mr. Mulcahy, 21,499 shares; and all directors,
nominees and executive officers as a group, 226,157 shares.
(2)Includes 47,754 shares held by the Mark M. Gehl Family Trust over which Mr.
J.W. Gehl has sole voting power but no dispositive power.
(3)Mr. Secrist will retire as a director effective at the time of the Annual
Meeting.
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 Sole Shared Sole Shared Aggregate Percent of
of Beneficial Class
Owner
FMR Corp.
82 Devonshire
Street
Boston, MA
02109 . . . . -0- -0- 636,700 -0- 636,700 9.9%
James H. Dahl
1200
Riverplace
Blvd.
Suite 902
Jacksonville,
FL 32207 . . 582,800 -0- 582,800 -0- 582,800 9.0%
Heartland
Advisors, Inc.
790 N.
Milwaukee St.
Milwaukee, WI
53202 . . . . 173,200 -0- 461,200 -0- 461,200 7.1%
Dimensional
Fund
Advisors Inc.
1299 Ocean
Avenue
Santa Monica,
CA 90401 . . . 322,424 -0- 322,424 -0- 322,424 5.0%
EXECUTIVE COMPENSATION
Summary Compensation Information
The following table sets forth certain information regarding compensation
awarded to, earned by or paid to the Company's Chief Executive Officer and
each of the three other executive officers of the Company whose salary and
bonus in fiscal 1998 exceeded $100,000. The executive officers named in the
table below are sometimes referred to herein as the "named executive
officers."
SUMMARY COMPENSATION TABLE
Annual Long Term Compensation
Compensation Awards Payouts
Securities
Name and Salary Bonus Underlying LTIP All Other
Principal Year ($) ($)(a) Options Payouts Compensation
Position ($)(b)
William D. Gehl 1998 300,000 166,450 25,000 20,320 10,391 (c)
Chairman, President 1997 236,473 132,921 21,000 12,311 7,243
and Chief 1996 200,000 118,467 --- --- 4,955
Executive Officer
Officer
Victor A. 1998 225,000 124,838 15,000 17,285 10,008 (e)
Mancinelli 1997 197,824 110,875 11,000 10,772 8,197
Executive Vice 1996 175,000 103,658 --- --- 5.777
President and
Chief Operating
Officer (d)
Kenneth P. Hahn 1998 114,400 44,431 7,500 4,684 5,346 (f)
Vice President of 1997 96,796 38,154 5,000 1,810 3,195
Finance, 1996 73,674 17,623 5,000 --- 1,551
Treasurer and Chief
Financial Officer
Michael J. Mulcahy 1998 98.800 32,891 5,000 4,614 4,968 (g)
Vice President, 1997 87,452 29,375 2,000 2,906 3,918
Secretary 1996 78,565 27,964 --- 2,334
And General Counsel
(a)The amounts shown in this column 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 1998 (i) $4,839 in life insurance premiums paid by the Company,
(ii) $552 paid to Mr. W. D. Gehl for the purchase of long-term disability
insurance and (iii) a matching contribution of $5,000 under the Gehl
Savings Plan, a 401(k) Plan.
(d) Mr. Mancinelli has submitted his resignation, effective April 9, 1999,
and will leave the Company.
(e)Includes for 1998 (i) $4.456 in life insurance premiums paid by the Company,
(ii) $552 paid to Mr. Mancinelli for the purchase of long-term disability
insurance and (iii) a matching contribution of $5,000 under the Gehl
Savings Plan, a 401(k) Plan.
(f)Includes for 1998 (i) $573 in life insurance premiums paid by the Company,
(ii) $517 paid to Mr. Hahn for the purchase of long-term disability
insurance and (iii) a matching contribution of $4,256 under the Gehl Savings
Plan, a 401(k) Plan.
(g)Includes for 1998 (i) $761 in life insurance premiums paid by the Company,
(ii) $448 paid to Mr. Mulcahy for the purchase of long-term disability
insurance and (iii) a matching contribution of $3,759 under the Gehl Savings
Plan, a 401(k) Plan.
Long - Term Incentive Plan -- Awards in Last Fiscal Year
Bonus amounts in excess of a specified level for each of the named executive
officers as well as other participants are credited to a "bonus bank" pursuant
to the Company's "Shareholder Value Added" plan. The "bonus bank" is an "at
risk" deferred account for each plan participant that is subject to loss
pursuant to the terms of the plan. The maximum annual payout for any
individual participant is one-third of the aggregate balance in his "bonus
bank" account and is contingent on Company performance and the participant
continuing to be employed by the Company. Set forth below under the heading
"Maximum" is the amount credited to the "bonus bank" for each of the named
executive officers during fiscal 1998. The amount under the heading
"Threshold" reflects the fact that the amount credited to an individual's
"bonus bank" account is subject to total loss.
Long Term Incentive Plan Awards in 1998 Fiscal Year
Estimated Future Payouts under the Plan
Name Threshold($) Maximum ($)
William D. Gehl 0 32,900
Victor A. Mancinelli 0 24,675
Kenneth P. Hahn 0 8,782
Michael J. Mulcahy 0 6,501
Stock Options
The Company has in effect the 1995 Plan pursuant to which options to purchase
Common Stock may be granted to key employees (including executive officers) of
the Company and its subsidiaries. The following table presents
certain information as to grants of stock options made during fiscal 1998 to
each of the named executive officers.
Option Grants in 1998 Fiscal Year
Potential
Realizable Value
At Assumed Annual
Individual Grants Rates of Stock
Price Appreciation for
Option Term(2)
Percentage
Number of of
Securities Total
Underlying Options Exercise At 5% At 10%
Options Granted to or Expiratio Annual Annual
Name Granted(1) Employees Base n Growth Growth
in Price Date Rate Rate
Fiscal ($/share)
Year
William D.
Gehl . . . 25,000 24.1% $14.00 12/17/08 $96,750 $220,000
Victor A.
Mancinelli 15,000 14.5% $14.00 12/17/08 $58,050 $132,000
Kenneth P.
Hahn . . . 7,500 7.2% $14.00 12/17/08 $29,025 $66,000
Michael J.
Mulcahy . . 5,000 4.8% $14.00 12/17/08 $19,350 $44,000
______________
(1)The options reflected in the table for each of the named executive officers
(which are non-qualified options for purposes of the Internal Revenue Code)
were granted under the 1995 Plan and vest ratably over the three-year period
from the date of grant. Vesting of the options will be accelerated in the
event of the optionee's death or disability or in the event of a change in
control of the Company.
(2)This presentation is intended to disclose a potential value which would
accrue to the optionee if the option were exercised the day before it would
expire and if the per share value had appreciated at the compounded annual
rate indicated in each column. The assumed rates of appreciation of 5% and
10% are prescribed by the rules of the Securities and Exchange Commission
regarding disclosure of executive compensation. The assumed annual rates of
appreciation are not intended to forecast possible future appreciation, if
any, with respect to the price of the Common Stock.
The following table sets forth information regarding the exercise of stock
options by each of the named executive officers during the 1998 fiscal year
and the fiscal year-end value of unexercised options held by the named
executive officers.
Aggregated Option Exercises in 1998 Fiscal Year
And
Fiscal Year-End Option Values
Number of Securities Value of
Shares Value Underlying Unexercised
Acquired Realized Unexercised In-the-Money
on ($) (1) Options at Fiscal Options at
Exercise Year-End
Exercisable Fiscal Year-
Unexercisable End ($)(1)
Exercisable
Unexercisable
Name
William D.
Gehl 30,000 152,876 77,000 39,000 481,250 34,375
Victor A.
Mancinelli --- --- 73,666 22,334 560,000 20,625
Kenneth P.
Hahn --- --- 23,999 12,501 189,033 20,315
Michael J.
Mulcahy --- --- 20,833 8,000 177,470 16,877
(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, 1998 that will be
recognized for Messrs. W. D. Gehl, Mancinelli, Hahn, and Mulcahy is 6.2 years,
6.2 years, 10.7 years, and 23.6 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, 1998, 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 and Mulcahy will receive a monthly retirement benefit
for fifteen years. Under the agreements, the monthly benefit to be received
by Messrs. Hahn 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 and Mulcahy during a
consecutive five-year period and (ii) 20%. 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 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 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 and Mulcahy under the supplemental retirement benefit
agreements based upon their current compensation would be $249,684 (less any
amounts Mr. W. D. Gehl would be entitled to receive under the Retirement Plan
or pursuant to Social Security), $74,904, $33,528 and $27,648, respectively.
Employment Agreement
The Company has an employment agreement with Mr. W. D. Gehl, which agreement
was amended and restated effective December 18, 1998. Pursuant to his
agreement, Mr. W. D. Gehl is to serve as the Chairman of the Board, President
and Chief Executive Officer of the Company through December 31, 2001. During
the term of his employment agreement, Mr. W. D. Gehl will be paid a minimum
annual base salary of $350,000. The base salary paid to Mr. W. D. Gehl under
his employment agreement will be 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 salary described above. The current base salary of Mr. W. D.
Gehl is $350,000.
If, for any reason other than cause or Mr. W. D. Gehl's death or disability
and other than in connection with a "change in control" of the Company (as
defined in his agreement), the employment of Mr. W. D. Gehl is terminated
before the term of employment has been completed, Mr. W. D. Gehl will be
entitled to receive his 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 his 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 the terms of his employment
agreement, Mr. W. D. Gehl is also entitled to receive, among other benefits,
an annual cash bonus and certain life insurance coverage. Under his
employment agreement, Mr. W. D. Gehl is subject to a covenant not to compete
following termination of his employment with the Company.
Severance Agreements
The Company has in effect severance agreements with each of Messrs. Hahn and
Mulcahy. Pursuant to the terms of their respective severance agreements, in
the event of a "change in control" of the Company (as defined in the
agreements), Messrs. Hahn and Mulcahy will be granted two-year employment
terms with the Company and will be entitled to such base salaries, bonus
opportunities and other benefits substantially equivalent to those to which
they were entitled immediately prior to the change in control. In addition,
upon the change in control, the unvested stock options held by Messrs. Hahn
and Mulcahy will automatically vest and the amounts they have outstanding
under their respective "bonus banks" under the "Shareholder Value Added" plan
will become payable immediately. If, during the two-year employment period
following a change in control, the Company terminates the executive officer's
employment (other than for cause) or if the officer terminates his employment
for "good reason" (as defined in the severance agreements), including as a
result of significant changes in the executive officer's working conditions or
status without his consent, the officer will receive all accrued but unpaid
benefits to the date of termination plus a lump-sum termination payment equal
to two times the sum of his current base salary as well as family medical
benefits for two years. The severance agreements also provide that the
benefits described above may be payable in connection with certain
terminations which are effected in anticipation of a change in control. In
addition, the severance agreements provide that if the executive officer's
employment is involuntarily terminated by the Company other than for cause or
upon the officer's death or disability and other than in connection with a
change in control, the officer will be entitled to receive his 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. The foregoing termination 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. Hahn or Mr. Mulcahy, as the case may be.
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 1998. The members of the
Compensation and Benefits Committee during fiscal 1998 were Messrs. Butler
(Chairman), Killian, Nesbitt and Splude.
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 Company's stock
option plans. 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 Company's stock option plans, which grants are at
the sole discretion of the Committee) is the responsibility of the Board.
During fiscal 1998, the Board adopted the recommendations of the Compensation
and Benefits Committee without material modification.
Executive Compensation and Stock Option 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,
including stock options, 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 as well as the overall financial
performance of the Company. In fixing salary levels, the Committee also
considers data regarding salaries paid by companies similarly situated to the
Company. The Compensation and Benefits Committee did not, however, formally
engage an outside compensation consultant in connection with establishing
salary levels for the Company's executive officers for fiscal 1998.
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 1998 performance under the
SVA plan are reflected in the "Bonus" and "LTIP Payouts" columns of the
Summary Compensation Table.
To provide an additional performance incentive for its executive officers and
other key management personnel, the Company makes equity-based awards,
comprised of awards of stock options. The Company currently has in effect
stock option plans (including the 1995 Plan) under which awards of stock
options have been made to the executive officers and other key employees. The
general purpose of these plans 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 57,500 shares of Common Stock (including an option
grant for 25,000 shares made to the Company's Chief Executive Officer) were
awarded to the executive officers in 1998.
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 1998, Mr. W. D. Gehl, the Company's Chief Executive Officer, was
paid a salary of $300,000. In December, 1998, Mr. Gehl's employment agreement
was amended to increase his annual base salary to $350,000 effective
January 1, 1999. See "Executive Compensation-Employment Agreement." Pursuant
to Mr. Gehl's amended employment agreement, his 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 $350,000. In fixing the base salary for
Mr. W. D. Gehl for fiscal 1998 as well as under the amended 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 $12.8 million and $15.3
million for the years ended December 31, 1997 and 1998, respectively. The
Committee also noted the significant improvement in shareholder value with the
Company's shareholders' equity increasing from $40.4 million at December 31,
1992 to $77.6 million and $94.1 million at December 31, 1997 and 1998,
respectively. 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 1998 performance, Mr. W. D. Gehl also received a cash bonus of $166,450
and a "bonus bank" payment of $20,320 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 December 18, 1998 an option to purchase
25,000 shares of Common Stock at an exercise price of $14.00 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)
William P. Killian
Arthur W. Nesbitt
John W. Splude
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, 1993 in each of the three alternatives.
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, 1993 with dividends reinvested)
(graph)
December December December December December December
31, 1993 31, 1994 31, 1995 31, 1996 31, 1997 31, 1998
S&P
Composite 500 $100.00 $98.46 $132.05 $158.80 $208.05 $262.28
S&P Diversified
Machinery $100.00 $95.56 $115.38 $141.00 $183.42 $158.29
Gehl $100.00 $103.14 $117.66 $179.46 $346.53 $253.71
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 PricewaterhouseCoopers LLP as the Company's
independent auditors for 1999. PricewaterhouseCoopers LLP acted as the
independent auditors for the Company for the year ended December 31, 1998.
Representatives of PricewaterhouseCoopers 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 of shareholders pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended ("Rule 14a-8"), that are intended to be presented at
the 2000 annual meeting of shareholders must be received by the Company no
later than November 9, 1999 to be included in the Company's proxy materials
for that meeting. Further, a shareholder who otherwise intends to present
business at the 2000 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, complying
with the By-laws, to the Secretary of the Company not less than 60 days and
not more than 90 days prior to the last Thursday in the month of April,
provided that the date of the annual meeting is not advanced by more than 30
days or delayed by more than 60 days from the last Thursday in the month of
April. The 2000 annual meeting of shareholders is tentatively scheduled to be
held on April 27, 2000. Under the By-laws, if the Company does not receive
notice of a shareholder proposal submitted otherwise than pursuant to Rule
14a-8 (i.e., a proposal a shareholder intends to present at the 2000 annual
meeting of shareholders but does not intend to have included in the Company's
proxy materials) on or prior to February 27, 2000 (assuming an April 27, 2000
meeting date), then the notice will be considered untimely and the Company
will not be required to present such proposal at the 2000 annual meeting. If
the Board nonetheless chooses to present such proposal at the 2000 annual
meeting, then the persons named in proxies solicited by the Board for the 2000
annual meeting may exercise discretionary voting power with respect to such
proposal.
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 8, 1999
<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 19, 1999 at the annual meeting of shareholders to be held on April
21, 1999, 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 1999 ANNUAL MEETING
1. ELECTION OF DIRECTORS (terms expiring at the 2000 Annual Meeting)
1-Hermann Viets,
(terms expiring at the 2002 Annual Meeting)
2-Nicholas C. Babson
3-Thomas J. Boldt 4-William P. Killian
____ 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.
