UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 0-21220
ALAMO GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE
74-1621248
(State of incorporation)
(I.R.S. Employer Identification Number)
1502 E. Walnut, Seguin, Texas 78155
(Address of principal executive offices)
(210) 379-1480
(Telephone number)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirement
for the past 90 days.
Yes X No ___
At April 30, 1997, 9,589,851 shares of common stock, $.10 par
value, of the Registrant were outstanding.
Alamo Group Inc. and Subsidiaries
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Interim Condensed Consolidated Financial Statements
(Unaudited)
Interim Condensed Consolidated Statements of Income -
Three months ended March 31, 1997 and March 30, 1996 3
Interim Condensed Consolidated Balance Sheets -
March 31, 1997 and December 31, 1996 4
Interim Condensed Consolidated Statements of Cash Flows -
Three months ended March 31, 1997 and March 30, 1996 5
Notes to Interim Condensed Consolidated Financial Statements
6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. None
Item 3. None
Item 4. None
Item 5. None
Item 6. Exhibits and Reports on Form 8-K
9-10
SIGNATURES
11
Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Three Months
Ended
March March
31, 30,
1997 1996
Net sales $51,643 $45,046
Cost of Sales 38,907 34,829
Gross profit 12,736 10,217
Selling, general and 7,141 6,362
administrative expense
Income from operations 5,595 3,855
Interest expense (531) (614)
Interest income 131 99
Other income (net) 6 293
Income before income taxes 5,201 3,633
Provision for income taxes 1,923 1,307
Net income $3,278 $2,326
Net income per common share $0.34 $0.24
Weighted average common shares 9,668 9,660
and equivalents .............
See accompanying notes.
Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
(Unaudited)
March Decemb
31, er 31,
1997 1996
ASSETS
Current assets:
Cash and cash equivalents $(39) $2,228
Accounts receivable 58,055 43,925
Inventories 60,147 60,171
Deferred income taxes 2,206 2,206
Prepaid expenses and other 2,064 1,327
Total current assets 122,433 109,857
Property, plant and equipment 48,677 48,932
Less: Accumulated depreciation (27,058) (26,546)
21,619 22,386
Goodwill 13,595 14,237
Other assets 7,450 7,382
Total assets $165,097 $153,862
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 16,215 $ 11,066
Income taxes payable 2,480 930
Accrued liabilities 7,240 6,725
Current maturities of long-term debt 885 1,031
Total current liabilities 26,820 19,752
Long-term debt, net of current 38,546 35,299
maturities
Deferred income taxes 1,560 1,561
Stockholders' equity:
Common stock, $.10 par
value, 20,000,000 shares
authorized; 9,589,851
issued and outstanding at
March 31, 1997 and December 31,1996 959 959
Additional paid-in capital 49,545 49,592
Retained earnings 47,390 45,071
Translation adjustment 277 1,628
Total stockholders' equity 98,171 97,250
Total liabilities
and stockholders' equity $165,097 $153,862
See accompanying notes.
Alamo Group Inc. and Subsidiaries
Interim Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months
Ended
March March
31, 30,
1997 1996
Operating Activities
Net income $ 3,278 $ 2,326
Adjustments to reconcile net
income to net cash provided
(used) by operating activities:
Provision for doubtful accounts 275 106
Depreciation 937 880
Amortization 323 224
Provision for deferred (9) 20
income tax benefit
Realized gain on mrkt securities - (167)
Gain on sale of equipment (96) (67)
Changes in operating assets and
liabilities:
Accounts receivable (15,007) (5,175)
Inventories (606) (4,716)
Prepaid exenses and other assets (1,769) (216)
Trade accounts payable and 6,969 2,900
accrued liabilities
Income taxes payable 1,633 1,270
Net cash provided (used) by (4,072) (2,615)
operating activities
Investing Activities
Purchase of property, plant and (740) (786)
equipment
Proceeds from sale of property, 122 99
plant and equipment
Proceeds from sale of marketable - 204
securities
Net cash (used) by investing (618) (483)
activities
Financing Activities
Net change in bank revolving 3,700 3,850
credit facility
Principal payments on long-term (200) (791)
debt and capital leases
Dividends paid (959) (959)
Proceeds from sale of common - 27
stock
Net cash provided by financing 2,541 2,128
activities
Effect of exchange rate changes (118) (24)
on cash
Net change in cash and cash (2,267) (994)
equivalents
Cash and cash equivalents at 2,228 1,839
beginning of the period
Cash and cash equivalents at
end of the period $ (39) $ 845
Cash paid during the period
for:
Interest $ 582 $ 681
Income taxes - -
See accompanying notes.
Alamo Group Inc. and Subsidiaries
Notes to Interim Condensed Consolidated Financial Statements -
(Unaudited)
March 31, 1997
1. Basis of Financial Statement Presentation
The accompanying unaudited interim condensed consolidated
financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10
of Regulations S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the periods presented
are not necessarily indicative of the results that may be
expected for the year ended December, 1997. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1996.
2 Accounts Receivable
Accounts Receivable is shown less allowance for doubtful accounts
of $1,569,000 and $1,521,000 at March 31, 1997 and December 31,
1996, respectively.
3. Inventories
Inventories valued at LIFO cost represented 80% of total
inventory at each of March 31, 1997 and December 31, 1996. The
excess of current costs over LIFO valued inventories was
$3,221,000 at each of March 31, 1997 and December 31, 1996.
Inventory obsolescence reserves were $4,117,000 at March 31, 1997
and $4,110,000 at December 31, 1996. Net inventories consist of
the following (in thousands):
March December
31, 31,
1997 1996
Finished goods . . . . . . . $ $
. . . . . . . . . . . . . . 51,169 53,748
.
Work in process . . . . . . 4,608 2,858
. . . . . . . . . . . . . .
.
Raw materials. . . . . . . . 4,370 3,565
. . . . . . . . . . . . . .
.
$ $
60,147 60,171
An actual valuation of inventory under the LIFO method can be
made only at the end of each year based on the inventory levels
and costs at that time. Accordingly, interim LIFO must
necessarily be based on management's estimates of expected year-
end inventory levels and costs. Because these are subject to
many forces beyond management's control, interim results are
subject to the final year-end LIFO inventory valuation.
Alamo Group Inc. and Subsidiaries
Notes to Interim Condensed Consolidated Financial Statements -
(Unaudited)
March 31, 1997 - (Continued)
4. Common Stock and Dividends
Dividends declared and paid on a per share basis were as follows:
Three Months Ended
March March
31, 30,
1997 1996
Dividends declared . . . . . $ 0.10 $ 0.10
. . . . . . . . . . . . . .
Dividends paid . . . . . . . $ 0.10 $ 0.10
. . . . . . . . . . . . . .
.
5. Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be
adopted on December 31, 1997. At that time, the Company will be
required to change the method currently used to compute earnings
per share and to restate all prior periods. The impact of
Statement 128 on the calculation of the Company's earnings per
share for these quarters is not expected to be material.
6. Contingent Matters
The Company is subject to various unresolved legal actions which
arise in the ordinary course of its business. The most
prevalent of such actions relate to product liability which are
generally covered by insurance. While amounts claimed may be
substantial and the ultimate liability with respect to such
litigation cannot be determined at this time, the Company
believes that the ultimate outcome of these matters will not have
a material adverse effect on the Company's consolidated
financial position.
The Company has been named in a suit by the former owner of Rhino
International which includes aggregate claims totaling $8
million. The Company believes it has meritorious defenses
against these matters and will vigorously defend the pending
claims and prosecute appropriate counterclaims. While the
ultimate outcome of this litigation cannot be determined at this
time, the Company believes this matter will not have a material
adverse effect on the Company's consolidated financial position.
Alamo Group Inc. and Subsidiaries
Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following tables set forth, for the periods indicated,
certain financial data:
Three Months
Ended
Sales Data In Thousands March March
31, 30,
1997 1996
American
Agricultural . . . $ $
. . . . . . . . . . . . . . 26,616 22,617
. .
Industrial . . . . 12,658 11,221
. . . . . . . . . . . . . .
. .
European . . . . . . . 12,369 11,208
. . . . . . . . . . . . . .
.
Total sales, net . . . . . $ $
. . . . . . . . . . . . . . 51,643 45,046
.
Three Months
Ended
Cost Trends and Profit March March
Margins, as Percentages of 31, 30,
Net Sales 1997 1996
Gross margin . . . . . . . 24.7 % 22.7 %
. . . . . . . . . . . . . .
.
Income from operations . . 10.8 % 8.6 %
. . . . . . . . . . . .
Income before income taxes 10.1 % 8.1 %
. . . . . . . . . . . .
Net income . . . . . . . . 6.3 % 5.2 %
. . . . . . . . . . . . . .
.
Results of Operations
Three Months Ended March 31, 1997 Compared to Three Months Ended
March 30, 1996
Net sales increased $6,597,000, up 15% over 1996's first quarter.
First quarter results benefited from the return of more
normalized domestic weather and operating conditions.
Accordingly, Alamo's American agricultural and industrial markets
achieved results more in-line with the Company's traditional
levels of profitability as both its wholegoods and replacement
parts sales increased. Sales in Alamo's European operations
increased 10%. The period's results were also favorably impacted
by the continued integration of the Company's 1995 acquisitions.
Expense increases were in line with Company growth.
Liquidity and Capital Resources
Cash used by operations was $4,072,000 for the three-month period
ended March 31, 1997, with the net income cash flows for the
period offset by a net increase in working capital accounts
related primarily to seasonal effects.
As of March 31, 1997, $34,318,000 was utilized under the
Company's $40,000,000 bank revolving credit facility, of which
$3,118,000 was for standby letters of credit and $31,200,000 was
borrowed. The Company's borrowings are seasonal in nature with
the greatest utilization generally occurring in the first
quarter and early spring.
The bank credit facility and the Company's ability to internally
generate funds from operations should be sufficient to meet the
Company's cash requirements in the near future.
This report may be deemed to contain forward-looking statements
which involve known and unknown risks and uncertainties which may
cause the Company's actual results in future periods to differ
materially from forecasted results. Among those factors which
could cause actual results to differ materially are the
following: market demand, competition, weather, and other risk
factors listed from time to time in the Company's SEC reports.
Alamo Group Inc. and Subsidiaries
PART II. OTHER INFORMATION
Item 1.Legal Proceedings
The Company is subject to various unresolved legal
actions which arise in the ordinary course of its
business. The most prevalent of such actions relate to
product liability which are generally covered by
insurance. While amounts claimed may be substantial and
the ultimate liability with respect to such litigation
cannot be determined at this time, the Company believes
that the ultimate outcome of these matters will not have
a material adverse effect on the Company's consolidated
financial position.
Item 6.Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are included herein:
(10.1) Form of indemnification agreements with
Directors of the Company
(10.2) Form of indemnification agreements with
certain executive officers of the Company
(11.1) Statement Re: Computation of Per Share
Earnings
(27.1) Financial Data Schedule
(b) Reports on Form 8-K
None
Alamo Group Inc. and Subsidiaries
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Alamo
Group Inc.
(Registrant)
/s/ Jim A. Smith
Jim A. Smith
Executive Vice President and
CFO
(Principal Accounting and
Financial Officer)
Exhibit 10.1
FORM OF INDEMNIFICATION
WITH DIRECTORS OF THE COMPANY
THIS INDEMNIFICATION AGREEMENT (the "Agreement") dated as
of_________, 199___, is by and between ALAMO GROUP INC., a
Delaware corporation (the "Company"), and
_________________________ ("Director").
R E C I T A L S:
A. Director is a member of the Board of Directors of the
Company and in such capacity is performing a valuable service to
the Company.
B. The Company's By-Laws (the "By-Laws") provide for the
indemnification of the directors, officers, employees and agents
of the Company to the extent set forth in the Certificate of
Incorporation of the Company (the "Certificate").
C. The Certificate provides that the Company shall
indemnify the directors, officers, employees and agents of the
Company to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law, as amended to date (the
"Corporation Law").
D. The Corporation Law specifically provides that
indemnification and advancement of expenses provided in such
statute shall not be exclusive of any other rights under any
agreement, and thereby contemplates that agreements may be
entered into between the Company and members of the Board of
Directors of the Company with respect to the indemnification of
such directors.
E. The general availability of directors' and officers'
liability insurance ("Insurance") covering certain liabilities
which may be incurred by the Company's directors and officers in
the performance of their services to the Company and the
applicability, amendment and enforcement of statutory and by-law
provisions have raised questions concerning the adequacy and
reliability of the protection afforded to directors.
F. In order to induce Director to serve as a member of the
Board of Directors of the Company for the current term and for
any subsequent term to which he is elected by the stockholders of
the Company, the Company has deemed it to be in its best interest
to enter into this Agreement with Director.
NOW, THEREFORE, in consideration of Director's agreement to
serve as a member of the Board of Directors of the Company after
the date hereof, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have
the following meanings:
(a) Change in Control. A "Change in Control" shall be
deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange
Act Of 1934, as amended), other than a trustee or other
fiduciary holding securities under an employee benefit plan
of the Company, is or becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 under the Act), directly
or indirectly, of securities of the Company representing 25%
or more of the combined voting power of the outstanding
securities of the Company, or (ii) during any period of two
consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company and
any new director whose election by the Board of Directors or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for election was previously so approved, cease for any
reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve (x) a merger or
consolidation of the Company with any other entity (other
than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) at least 80% of the combined voting
power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger
or consolidation), (y) a plan of complete liquidation of the
Company or (z) an agreement or agreements for the sale or
disposition, in a single transaction or series of related
transactions, by the Company of all or substantially all of
the property and assets of the Company. Notwithstanding the
foregoing, events otherwise constituting a Change in Control
in accordance with the foregoing shall not constitute a
Change in Control if such events are solicited by the
Company and are approved, recommended or supported by the
Board of Directors of the Company in actions taken prior to,
and with respect to, such events.
(b) Reviewing Party. A "Reviewing Party" means (i)
the Board of Directors or a committee of directors of the
Company, who are not officers, appointed by the Board of
Directors, provided that a majority of such directors are
not parties to the claim, or (ii) special, independent
counsel selected and appointed by the Board of Directors or
by a committee of directors of the Company who are not
officers.
2. Indemnification of Director.
The Company hereby agrees that it shall hold harmless and
indemnify Director to the fullest extent authorized and permitted
by the provisions of the Certificate and By-Laws and the
provisions of the Corporation Law, or by any amendment thereof,
but in the case of any such amendment, only to the extent that
such amendment permits the Company to provide broader
indemnification rights than the Certificate, By-Laws or
Corporation Law permitted the Company to provide prior to such
amendment, or other statutory provisions authorizing or
permitting such indemnification which is adopted after the date
hereof.
3. Insurance.
3.1 Insurance Policies. So long as Director may be subject
to any possible claim or threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Director is or was a
director, to the extent that the Company maintains one or more
insurance policy or policies providing directors' and officers'
liability insurance, Director shall be covered by such policy or
policies in accordance with its or their terms, to the maximum
extent of the coverage applicable to any director or officer then
serving the Company.
3.2 Maintenance of Insurance. The Company shall not be
required to maintain such insurance or any policy or policies of
comparable insurance, as the case may be, if such insurance is
not reasonably available or if, in the reasonable business
judgment of the Board of Directors of the Company which shall be
conclusively established by such determination by the Board of
Directors, or any appropriate committee thereof: (i) the premium
cost for such insurance is disproportionate to the amount of
coverage thereunder, (ii) the coverage provided by such insurance
is so limited by exclusions that there is insufficient benefit
from such insurance; or (iii) such insurance is deemed
unnecessary. To the extent the Company elects not to renew
existing insurance or acquire comparable insurance, the Company
shall provide Director with written notice of such determination
immediately following the determination, but in any event prior
to the expiration of coverage under existing policies of
insurance.
4. Additional Indemnification.
Subject only to the exclusions set forth in Section 5
hereof, the Company hereby agrees that it shall hold harmless and
indemnify Director:
(a) against any and all expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by Director in connection
with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, including an action by or on behalf of
stockholders of the Company or by or in the right of the
Company, to which Director is, was or at any time becomes a
party, or is threatened to be made a party, by reason of the
fact that Director is, was or at any time becomes a
director, officer, employee or agent of the Company, or is
or was serving or at any time serves at the request of the
Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise; and
(b) otherwise to the fullest extent as may be provided
to Director by the Company under the non-exclusivity
provisions of the Corporation Law.
5. Limitations on Additional Indemnification.
No indemnification pursuant to this Agreement shall be paid
by the Company:
(a) in respect to any transaction if it shall be
determined by the Reviewing Party, or by final judgment or
other final adjudication, that Director derived an improper
personal benefit;
(b) in respect to the return by Director of any
remuneration paid to Director if it shall be determined by
the Reviewing Party, or by final judgment or other final
adjudication, that such remuneration was not approved by the
stockholders of the Company and was thereby in violation of
law;
(c) on account of Director's conduct which is
determined by the Reviewing Party, or by final judgment or
other final adjudication, to have involved acts or omissions
not in good faith, intentional misconduct, a knowing
violation of law, or gross negligence; or
(d) if the Reviewing Party or a court having
jurisdiction in the matter shall determine that such
indemnification is in violation of the Certificate, the
ByLaws or the law.
6. Advancement of Expenses.
In the event of any threatened or pending action, suit or
proceeding in which Director is a party or is involved and which
may give rise to a right of indemnification under this Agreement,
following written request to the Company by Director, the Company
shall promptly pay to Director amounts to cover expenses incurred
by Director in such proceeding in advance of its final
disposition upon the receipt by the Company of (i) a written
undertaking executed by or on behalf of Director to repay the
advance if it shall ultimately be determined that Director is not
entitled to be indemnified by the Company as provided in this
Agreement, and (ii) satisfactory evidence as to the amount of
such expenses.
7. Repayment of Expenses.
Director agrees that Director shall reimburse the Company
for all reasonable expenses paid by the Company in defending any
civil, criminal, administrative or investigative action, suit or
proceeding against Director in the event and only to the extent
that it shall be determined by final judgment or other final
adjudication that Director is not entitled to be indemnified by
the Company for such expenses under the provisions of the
Corporation Law or any applicable law.
8. Determination of Indemnification; Burden of Proof.
With respect to all matters concerning the rights of
Director to indemnification and payment of expenses under this
Agreement or under the provisions of the Certificate and By-Laws
now or hereafter in effect, the Company shall appoint a Reviewing
Party and any determination by the Reviewing Party shall be
conclusive and binding on the Company and Director. If under
applicable law, the entitlement of Director to be indemnified
under this Agreement depends on whether a standard of conduct has
been met, the burden of proof of establishing that Director did
not act in accordance with such standard of conduct shall rest
with the Company. Director shall be presumed to have acted in
accordance with such standard and entitled to indemnification or
advancement of expenses hereunder, as the case may be, unless,
based upon a preponderance of the evidence, it shall be
determined by the Reviewing Party that Director did not meet such
standard. For purposes of this Agreement, unless otherwise
expressly stated herein, the termination of any action, suit or
proceeding by judgment, order, settlement, whether with or
without court approval, or conviction, or upon a plea of nolo
contendere or its equivalent shall not create a presumption that
Director did not meet any particular standard of conduct or have
any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
9. Effect of Change in Control.
If there has not been a Change in Control after the date of
this Agreement, the determination of (i) the rights of Director
to indemnification and payment of expenses under this Agreement
or under the provisions of the Certificate and the By-Laws, (ii)
standard of conduct and (iii) evaluation of the reasonableness of
amounts claimed by Director shall be made by the Reviewing Party
or such other body or persons as may be permitted by the
Corporation Law. If there has been a Change in Control after the
date of this Agreement, such determination and evaluation shall
be made by a special, independent counsel who is selected by
Director and approved by the Company, which approval shall not be
unreasonably withheld, and who has not otherwise performed
services for Director or the Company within the ten (10) years
immediately preceding the selection.
10. Continuation of Indemnification.
All agreements and obligations of the Company contained
herein shall continue during the period that Director is
director, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, and shall continue thereafter
so long as Director shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by
reason of the fact that Director was a director of the Company or
serving in any other capacity referred to herein.
11. Notification and Defense of Claim.
Promptly after receipt by Director of notice of the
commencement of any action, suit or proceeding, Director shall,
if a claim in respect hereof is to be made against the Company
under this Agreement, notify the Company of the commencement
thereof; provided, however, that delay in so notifying the
Company shall not constitute a waiver or release by Director of
rights hereunder and that omission by Director to so notify the
Company shall not relieve the Company from any liability which it
may have to Director otherwise than under this Agreement unless
such failure has materially and adversely affected the rights of
the Company. With respect to any such action, suit or proceeding
as to which Director notifies the Company of the commencement
thereof:
(a) The Company shall be entitled to participate
therein at its own expense; and
(b) Except as otherwise provided below, to the extent
that it may wish, the Company, jointly with any other
indemnifying party similarly notified, shall be entitled to
assume the defense thereof and to employ counsel reasonably
satisfactory to Director. After notice from the Company to
Director of its election to so assume the defense thereof,
the Company shall not be liable to Director under this
Agreement for any legal or other expenses subsequently
incurred by Director in connection with the defense thereof
other than reasonable costs of investigation or as otherwise
provided below. Director shall have the right to employ
counsel of his own choosing in such action, suit or
proceeding but the fees and expenses of such counsel
incurred after notice from the Company of assumption by the
Company of the defense thereof shall be at the expense of
Director unless (i) the employment of counsel by Director
has been specifically authorized by the Company, such
authorization to be conclusively established by action by
disinterested members of the Board of Directors though less
than a quorum; (ii) representation by the same counsel of
both Director and the Company would, in the reasonable
judgment of Director and the Company, be inappropriate due
to an actual or potential conflict of interest between the
Company and Director in the conduct of the defense of such
action, such conflict of interest to be conclusively
established by an opinion of counsel to the Company to such
effect; (iii) the counsel employed by the Company and
reasonably satisfactory to Director has advised Director in
writing that such counsel's representation of Director would
likely involve such counsel in representing differing
interests which could adversely affect the judgment or
loyalty of such counsel to Director, whether it be a
conflicting, inconsistent, diverse or other interest; or
(iv) the Company shall not in fact have employed counsel to
assume the defense of such action, in each of which cases
the fees and expenses of counsel shall be paid by the
Company. The Company shall not be entitled to assume the
defense of any action, suit or proceeding brought by or on
behalf of the Company or as to which a conflict of interest
has been established as provided in (ii) hereof.
Notwithstanding the foregoing, if an insurance company has
supplied directors' and officers' liability insurance
covering an action, suit or proceeding, then such insurance
company shall employ counsel to conduct the defense of such
action, suit or proceeding unless Director and the Company
reasonably concur in writing that such counsel is
unacceptable.
(c) The Company shall not be liable to indemnify
Director under this Agreement for any amounts paid in
settlement of any action or claim effected without its
written consent. The Company shall not settle any action or
claim in any manner which would impose any liability or
penalty on Director without Director's written consent.
Neither the Company nor Director shall unreasonably withhold
consent to any proposed settlement.
12. Enforcement.
(a) The Company expressly confirms and agrees that it
has entered into this Agreement and assumed the obligations
imposed on the Company hereby in order to induce Director to
serve as a director of the Company and acknowledges that
Director is relying upon this Agreement in continuing in
such capacity.
(b) If a claim for indemnification or advancement of
expenses is not paid in full by the Company within thirty
(30) days after a written claim by Director has been
received by the Company, Director may at any time assert the
claim and bring suit against the Company to recover the
unpaid amount of the claim. In the event Director is
required to bring any action to enforce rights or to collect
moneys due under this Agreement and is successful in such
action, the Company shall reimburse Director for all of
Director's reasonable attorneys' fees and expenses in
bringing and pursuing such action.
13. Proceedings by Director.
The Company shall not be liable to make any payment under
this Agreement in connection with any action, suit or proceeding,
or any part thereof, initiated by Director unless such action,
suit or proceeding, or part thereof, (i) was authorized by the
Company, such authorization to be conclusively established by
action by disinterested members of the Board of Directors though
less than a quorum, or (ii) was brought by Director pursuant to
Section 12(b) hereof.
14. Effectiveness.
This Agreement is effective for, and shall apply to, (i) any
claim which is asserted or threatened before, on or after the
date of this Agreement but for which no action, suit or
proceeding has been brought prior to the date hereof, and (ii)
any action, suit or proceeding which is threatened before, on or
after the date of this Agreement but which is not pending prior
to the date hereof. This Agreement shall not apply to any
action, suit or proceeding which was brought before the date of
this Agreement. So long as the foregoing is satisfied, this
Agreement shall be effective for, and be applicable to, acts or
omissions occurring prior to, on or after the date hereof.
15. Non-exclusivity.
The rights of Director under this Agreement shall not be
deemed exclusive, or in limitation of, any rights to which
Director may be entitled under any applicable common or statutory
law, or pursuant to the Certificate, the By-Laws, vote of
stockholders or otherwise.
16. Other Payments.
The Company shall not be liable to make any payment under
this Agreement in connection with any action, suit or proceeding
against Director to the extent Director has otherwise received
payment of the amounts otherwise payable by the Company
hereunder.
17. Subrogation.
In the event the Company makes any payment under this
Agreement, the Company shall be subrogated, to the extent of such
to all rights of recovery of Director with respect payment,
thereto, and Director shall execute all agreements, instruments,
certificates or other documents and do or cause to be done all
things necessary or appropriate to secure such recovery rights to
the Company including, without limitation, executing such
documents as shall enable the Company to bring an action or suit
to enforce such recovery rights.
18. Survival; Continuation.
The rights of Director under this Agreement shall inure to
the benefit of Director, his heirs, executors, administrators,
personal representatives and assigns, and this Agreement shall be
binding upon the Company, its successors and assigns. The rights
of Director under this Agreement shall continue so long as
Director may be subject to any action, suit or proceeding because
of the fact that Director is or was, a director, officer,
employee or agent of the Company or is or was serving at the
request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or
other enterprise.
19. Amendment and Termination.
No amendment, modification, termination or cancellation of
this Agreement shall be effective unless made in writing signed
by both parties hereto.
20. Headings.
Section headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only
and do not constitute a part of this Agreement.
21. Notices.
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered
personally, mailed by certified mail (return receipt requested)
or sent by overnight delivery service, cable, telegram, facsimile
transmission or telex to the parties at the following addresses
or at such other addresses as shall be specified by the parties
by like notice:
(a) if to the Company: Alamo Group Inc.
1502 E. Walnut
Seguin, Texas 78155
Attn: Secretary to the
Board of Directors
(b) if to the Director:
__________________________
__________________________
__________________________
Notice so given shall, in the case of notice so given by mail, be
deemed to be given and received on the fourth calendar day after
posting, in the case of notice so given by overnight delivery
service, on the date of actual delivery and, in the case of
notice so given by cable, telegram, facsimile transmission, telex
or personal delivery, on the date of actual transmission or, as
the case may be, personal delivery.
22. Severability.
If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable under any applicable law, then
such contravention or invalidity shall not invalidate the entire
Agreement. Such provision shall be deemed to be modified to the
extent necessary to render it legal, valid and enforceable, and
if no such modification shall render it legal valid and
enforceable, then this Agreement shall be construed as if not
containing the provision held to be invalid, and the rights and
obligations of the parties shall be construed and enforced
accordingly.
23. Complete Agreement.
This Agreement, those documents expressly referred to herein
and other documents of even date herewith y the complete
agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
24. Counterparts.
This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, with
the same effect as if all parties had signed the same document.
All such counterparts shall be deemed an original, shall be
construed together and shall constitute one and the same
instrument.
25. CHOICE OF LAW.
THIS AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT
THE LAW OF CONFLICTS, OF THE STATE OF DELAWARE.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
COMPANY:
ALAMO GROUP INC.
By:_______________________________
DIRECTOR:
___________________________________
Exhibit 10.2
FORM OF INDEMNIFICATION AGREEMENT
WITH CERTAIN EXECUTIVE OFFICERS OF THE COMPANY
This Indemnification Agreement (the ``Agreement'') is dated
as of the ____ day of _______________, 199___, by and between
Alamo Group Inc., a Delaware corporation (the ``Company'') and
_______________________ (``Officer'').
1. The Officer is a duly elected officer of the Company
and/or direct or indirect subsidiaries and affiliates of the
Company.
2. The Company hereby agrees that it shall hold harmless
and indemnify Officer to the fullest extent authorized and
permitted by the provisions of the Company's Certificate of
Incorporation and Bylaws and the provisions of Section 145 of the
Delaware General Corporation Law, as amended, but in the case of
any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights
than the Certificate of Incorporation, Bylaws or Delaware law
permitted the Company to provide prior to such amendment, or
other statutory provisions authorizing or permitting such
indemnification which is adopted after the date hereof.
3. No indemnification pursuant to this Agreement shall be
paid by the Company:
(a) in respect to any transaction if it shall be
determined by the Board of Directors of the Company or by final
judgment or other final adjudication, that Officer derived an
improper personal benefit; or
(b) on account of Officer's conduct which is
determined by the Board of Directors of the Company, or by final
judgment or other final adjudication, to have involved acts or
omissions not in good faith, intentional misconduct, a knowing
violation of law, or gross negligence.
4. In the event of any threatened or pending action, suit
or proceeding in which Officer is a party or is involved and
which may give rise to a right of indemnification under this
Agreement, following written request to the Company by Officer,
the Company shall promptly pay to Officer amounts to cover
reasonable expenses incurred by Officer in such proceeding in
advance of its final disposition upon the receipt by the Company
of (i) a written undertaking executed by or on behalf of Officer
to repay the advance if it shall ultimately be determined that
Officer is not entitled to be indemnified by the Company as
provided in this Agreement, and (ii) satisfactory evidence as to
the amount of such expenses.
5. Officer agrees that he shall reimburse the Company for
all reasonable expenses paid by the Company in defending any
civil, criminal, administrative or investigative action, suit or
proceeding against Officer in the event and only to the extent
that it shall be determined by final judgment or other final
adjudication that Officer is not entitled to be indemnified by
the Company for such expenses under the provisions of this
Agreement or under applicable law.
6. All agreements and obligations of the Company contained
herein shall continue during the period that Officer is a
director, officer, employee or agent of the Company, or is or was
serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, and shall continue thereafter
so long as Officer shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by
reason of the fact that Officer was serving in a capacity
referenced herein.
7. All notices and other communications hereunder shall be
in writing and shall be delivered to the parties at the addresses
provided below.
8. This Agreement shall be governed by the internal law,
and not the law of conflicts, of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
COMPANY:
ALAMO GROUP INC.
Address:
1502 E. Walnut
By:____________________________________
Seguin, Texas 78155
___________________, its ______________
OFFICER:
Address:
_____________________
_______________________________________
_____________________ Signature
Printed Name:
___________________________
Alamo Group Inc. and Subsidiaries
Exhibit (11.1) - Statement Re: Computation of Per Share Earnings
Three Months
Ended
March March
31 30,
1997 1996
(ooo's omited,
except per share
data)
Primary
Average shares outstanding . . . . 9,590 9,577
. . . . . . . . . . . . . . . . . .
Net effect of dilutive stock
options and warrants --
based on the treasury stock
method using
average market price . . . . . 78 83
. . . . . . . . . . . . . . . . . .
.
Total . . . . . . . . . . . . . . . 9,668 9,660
. . . . . . . . . . . . . . . . . .
. . .
Net Income . . . . . . . . . . . . $ $
. . . . . . . . . . . . . . . . . . 3,278 2,326
. .
Per share amount . . . . . . . . . $ $
. . . . . . . . . . . . . . . . . . 0.34 0.24
.
Fully Diluted
Average shares outstanding . . . .
. . . . . . . . . . . . . . . . . .
Net effect of dilutive stock
options and warrants --
based on the treasury stock
method using the
year-end market price, if
higher than
average market price . . . . .
. . . . . . . . . . . . . . . . . .
.
Total . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
. . .
Net Income . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . .
. .
Per share amount . . . . . . . . . (1)
. . . . . . . . . . . . . . . . . . (1)
.
(1) Not applicable as price at end of the period
was lower than the average for the period.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> (39)
<SECURITIES> 0
<RECEIVABLES> 58,055
<ALLOWANCES> 0
<INVENTORY> 60,147
<CURRENT-ASSETS> 122,433
<PP&E> 48,677
<DEPRECIATION> 27,058
<TOTAL-ASSETS> 165,097
<CURRENT-LIABILITIES> 26,820
<BONDS> 0
0
0
<COMMON> 959
<OTHER-SE> 97,212
<TOTAL-LIABILITY-AND-EQUITY> 165,097
<SALES> 51,643
<TOTAL-REVENUES> 51,643
<CGS> 38,907
<TOTAL-COSTS> 38,907
<OTHER-EXPENSES> 7,004
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 531
<INCOME-PRETAX> 5,201
<INCOME-TAX> 1,923
<INCOME-CONTINUING> 3,278
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,278
<EPS-PRIMARY> .34
<EPS-DILUTED> 0
</TABLE>
