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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For fiscal year ended NOVEMBER 30, 1995
Commission file number 1-6018
TOKHEIM CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
INDIANA 35-0712500
- ------------------------------ ------------------------------
(State of Incorporation) (I.R.S. Employer I.D. No.)
10501 CORPORATE DR., P.O. BOX 360, FORT WAYNE, INDIANA 46801
- ---------------------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (219) 470-4600
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
-------------------------- -------------------------
COMMON STOCK, NO PAR VALUE NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section l2(g) of the Act: NONE
--------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
As of February 2, 1996, 7,937,988 shares of voting common stock were
outstanding. The aggregate market value of shares held by non-affiliates was
$61.1 million (based on the closing price of these shares on the New York Stock
Exchange).
In addition, 808,620 shares of convertible preferred stock were held by the
Trustee of the Retirement Savings Plan for Employees of Tokheim Corporation and
Subsidiaries. The liquidation value is $25 per share with an aggregate
liquidation value of $20.2 million. For a complete discussion regarding the
attributes of this preferred stock see Item 5 on page 7.
Documents Incorporated by Reference
-----------------------------------
Document Form 10-K
--------------- ------------------------
Proxy Statement Part III, Item(s) 10-13
The Table of Contents is located on the following page. The Exhibit Index is
located on Page 39.
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TOKHEIM CORPORATION
1995 FORM 10-K/A ANNUAL REPORT
TABLE OF CONTENTS
PART I
Item 1. Business ........................................................ 3
Item 2. Properties ...................................................... 6
Item 3. Legal Proceedings ............................................... 6
Item 4. Submission of Matters to a Vote of Security Holders ............. 6
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters ............................................. 7
Item 6. Selected Financial Data ......................................... 7
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations ........................................... 11
Item 8. Financial Statements and Supplementary Data ..................... 14
Item 9. Disagreements on Accounting and Financial Disclosure ............ 36
PART III
Item 10. Directors and Executive Officers of the Registrant .............. 36
Item 11. Executive Compensation .......................................... 38
Item 12. Security Ownership of Certain Beneficial Owners and Management .. 38
Item 13. Certain Relationships and Related Transactions .................. 38
PART IV
Item l4. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K ........................................................ 39
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PART I
ITEM 1. BUSINESS.
(a) General:
Tokheim Corporation and its subsidiaries (the "Company") are engaged in the
design and manufacture of electronic and mechanical petroleum dispensing
marketing systems, including service station equipment, point-of-sale (POS)
control systems, and card- and cash-activated transaction systems for customers
around the world.
Sales of the Company's products can be affected by a variety of factors, such as
environmental regulations, retail petroleum construction, the price of oil,
interest rates, weather conditions, political stability in foreign markets, and
general economic conditions.
RECENT DEVELOPMENTS
The information that follows should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Consolidated Financial Statements and related notes thereto included
elsewhere in this Form 10-K.
The continuing improvement during 1995 in industry demand for petroleum
marketing equipment was driven by the development of emerging markets,
compliance with U.S. Federal Clean Air Act amendments requiring Stage II vapor
recovery, and the desire for increased automation equipment, including dispenser
payment terminals and point-of-sale systems. In addition, Tokheim's operating
performance continued to benefit from new product introductions, strengthened
distribution channels, increased international market penetration, and cost-
reduction programs which more than offset price deterioration.
The Board of Directors recently approved capital expenditures of approximately
$12.8 million for important improvements in plant productivity and capacity,
product design, and quality of both products and processes which should enhance
future operating results.
During the year, the Fort Wayne facility achieved a quality milestone--ISO 9000
certification. This was an important accomplishment for the Fort Wayne plant,
which now joins the plants in the U.K. and South Africa which are also ISO
certified. ISO 9000 will help the Company to continue its expansion into markets
recognizing this certification, especially European markets.
The International Standards Organization (ISO), in Geneva, Switzerland, was
founded in 1946 to develop a common set of standards in manufacturing, trade and
communications. It is composed of the national standards institutes and
organizations of 97 countries worldwide. First published in 1987, the standards
have been rapidly adopted by organizations in Europe, Asia and North America. In
addition, there is a movement by several industries in the European Union where
ISO certification is now a prerequisite to product certification. The standards
have been endorsed by the American Society of Quality Control, the European
Standards Institutes, and by the Japanese Industrial Standards Committee.
The standards are designed to: establish consistent language and terminology;
provide baseline quality practices that are accepted internationally; and reduce
the need for costly on-site supplier assessments.
The standards require: a standard language for documenting quality practices; a
system to track and manage evidence that these practices are instituted
throughout the organization; and a third-party auditing model to review, certify
and maintain certification of organizations.
In 1995 the Company introduced a number of new products, including the
Windows(R) PC-based Columbus point-of-sale (POS) system. In addition, the
existing POS system was expanded to include 15 major oil company networks, with
plans to expand to 20 networks, covering virtually the entire industry, by the
end of 1996. Another significant product introduction in 1995 was the new line
of retrofit dispenser heads which enable installed Tokheim equipment to have the
same electronics and functionality as our newest designs.
(b) Financial Information About Business and Geographical Segments:
Financial information about business and geographical segments for the years
ended November 30, 1995, 1994, and 1993, is set forth in Item 8 of this Report
in Note 12 to the Consolidated Financial Statements captioned "Business and
Geographical Segments."
3
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(c) Narrative Description of Business:
PETROLEUM DISPENSING EQUIPMENT AND SYSTEMS
This market is served by: (a) Tokheim Corporation, United States; Tokheim Europe
B.V.,The Netherlands; Tokheim and Gasboy of Canada Limited, Canada; Tokheim
GmbH, Germany; Tokheim Limited, The United Kingdom; and Tokheim South Africa
(Proprietary) Limited, South Africa, which are involved in the design,
manufacture, and marketing of petroleum dispensing equipment and services,
point-of-sale systems, card- and cash-activated transaction systems, and
commercial dispensers, and (b) Gasboy International, Inc., United States, which
designs, manufactures, and distributes petroleum dispensing equipment for the
consumer, fleet, and commercial markets. Gasboy also designs and manufactures
vehicle fleet management and control systems and point-of-sale terminals for
dual purpose, retail, and fleet applications.
In 1995, 1994, and 1993, the petroleum industry accounted for all of the
Company's sales. Approximately 85%, 83%, and 81%, respectively, of the Company's
sales were derived from the sale of service station gasoline dispensers, parts,
accessories, and service contracts, which are sold to major oil companies for
their own gasoline stations and to independent retail station owners through the
Company's distributor and manufacturers' representative organization.
International sales by foreign subsidiaries and exports from the U.S.
approximated 43%, 41%, and 42% of consolidated net sales in 1995, 1994, and
1993, respectively. While risks attendant to operations in foreign countries
vary widely from country to country, the Company is of the opinion that,
considered in the aggregate, the risks attendant to its operations in foreign
countries are not significantly greater than the risks attendant to operations
in the United States.
Products are distributed in the United States by a sales organization which
operates from national account offices, district sales offices, petroleum
equipment firms, industrial suppliers, and distributors in major cities across
the United States. In areas outside the United States, product distribution is
accomplished by the International Division through foreign subsidiaries,
distributors, and special sales representatives. In addition to its widespread
sales organization, there are more than 1,400 trained field service
representatives acting as independent contractors, many of whom maintain service
parts inventory. The Company's Customer Service Division maintains a Help Desk
which is open 24 hours a day, 365 days a year for immediate responsiveness to
service needs. Additionally, the Customer Service Division maintains a
continuing program of service clinics for personnel of customers and
distributors, both in the field and at the Company's training centers. The
business is somewhat seasonal, primarily relating to the construction season and
increased purchase activity by major oil companies toward the end of the
calendar year.
The market for these products is highly competitive. The Company and its
subsidiaries all compete with a number of companies, some of which have greater
sales and assets than the Company. The Company competes domestically against
four manufacturers of service station dispensers.
Environmental regulations and service station automation are expected to
continue to favorably impact the future growth of the Company's business both
domestically and internationally. The Company's belief that environmental
regulations will have a favorable impact is based upon experience, analysis, and
a study of the proposed Vapor Recovery Market published by an independent
consultant to the Company. That study concludes that a significant number of
retail service stations across the United States will be impacted by Stage II
Vapor Recovery Control regulations effective in stages through 1996. The study
further indicates that while the majority of service stations will retrofit
existing dispensers, requiring purchase of a retrofit kit from a dispenser
manufacturer, a large number of older dispensers will be replaced.
4
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With respect to service station automation, a separate independent study has
estimated that approximately 30,000 stations will install point-of-sale systems
between 1993 and 1999. It is therefore expected that overall market demand may
be on the rise throughout this period.
The Company's conclusions regarding international markets arise from its sales
experience suggesting that international markets tend to follow the lead of the
United States in addressing environmental issues and automation opportunities.
Strong demand from emerging markets during the past year is expected to continue
into and favorably impact 1996.
The dollar amount of backlog considered to be firm as of the end of fiscal year
1995 was approximately $21.0 million, compared to approximately $16.6 million
and $23.0 million at the end of fiscal years 1994 and 1993, respectively. The
Company expects that the entire backlog will be filled in fiscal year 1996.
Backlog amounts at any fiscal year-end are not an indicator of sales during the
forthcoming year. Factors impacting backlog levels at any point in time include
such events as the timing of purchases by the major oil companies, announcements
of price adjustments, sales promotions, and production delays, which mitigate
against comparisons of one period to another.
In fiscal 1995, no one customer accounted for as much as ten percent of the
Company's consolidated sales. The principal raw materials essential to the
Company's business are flat sheet steel, aluminum, copper tubing, iron castings,
and electronic components, all of which are available through several
competitive sources of supply.
The Company holds a number of patents, no one of which is considered essential
to its overall operations. The Company relies primarily on its engineering,
production, marketing, and service capabilities to maintain its established
position within the industry it now serves. At November 30, 1995, the Company
employed approximately 1,700 persons at its various locations.
NEW PRODUCTS
The Company spent approximately $12.7 million in 1995; $10.2 million in 1994;
and $8.6 million in 1993 on activities related to the support and improvement of
existing products, manufacturing methods, the development of new products, and
other applied research and development. Last year, a major investment was made
to upgrade our engineering facility with an advanced CAD/CAM system. Not only
was the Company successful in implementing the system, but also in applying it
to new product introductions. Research and development projects are evaluated on
the basis of cash payback and return on investment.
A number of new products were introduced by the Company during 1995. Major
enhancements were made to the POS systems product line including introduction of
the Windows(R) PC-based Columbus system, an island payment terminal, a card
reader upgrade for the Multi-Modular Dispenser, a retrofit head for Tokheim
Convenience Systems, and installation of the Tokheim POS system in 15 major oil
company networks by the end of 1995.
Products introduced in the commercial and fleet market segments include ASTRA, a
unique electronic commercial dispenser with a remote display designed
specifically for the above-ground market; Fuel Point, a fully automated fuel
management system which captures vehicle identification and odometer information
at the dispenser nozzle; and Oilex, a fully automated oil change device capable
of changing the oil in a commercial truck in less than ten minutes through a
single connection.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales:
Financial information about foreign and domestic operations and export sales for
the years ended November 30, 1995, 1994, and 1993 is set forth in Item 8 of this
Report in Note 12 to the Consolidated Financial Statements captioned "Business
and Geographical Segments."
5
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ITEM 2. PROPERTIES.
The Company owns properties located in: Fort Wayne, Indiana; Fremont, Indiana;
Washington, Indiana; Lansdale, Pennsylvania; Brighton, Ontario, Canada;
Leiderdorp, The Netherlands; Kya Sand, Randburg, South Africa; Glenrothes,
Scotland; Weilheim, Germany; Jasper, Tennessee; and Atlanta, Georgia. Due to
plant consolidations and the sale of the Controls segment, the following
properties were sold in 1993: Newbern, Tennessee; Dallas, Texas; and London,
Ontario, Canada. The Jasper, Tennessee and Atlanta, Georgia facilities are
currently being held for sale. The above properties are all manufacturing
oriented except as noted below:
The Company owns an engineering and design center and corporate office building
and an adjacent 116-acre tract of unimproved land located north of Fort Wayne,
Indiana. The building in Leiderdorp, The Netherlands, which previously housed a
distribution facility, was sold subsequent to November 30, 1995. The Company now
leases space in Leiderdorp, The Netherlands for a sales and technical support
facility.
ITEM 3. LEGAL PROCEEDINGS.
As more fully described in Item 8 of this report in Note 16 to the Consolidated
Financial Statements captioned "Contingent Liabilities", the Company is
defending various claims and legal actions, including environmental and product
liability actions, which are common to its operations. These legal actions
primarily involve claims for damages arising out of the Company's manufacturing
operations, the use of the Company's products, and allegations of patent
infringement.
In the opinion of the Company's management, amounts accrued for awards or
assessments in connection with environmental, product liability and other legal
matters are adequate, and ultimate resolution of these matters will not have a
material effect on the Company's consolidated financial position, results of
operations or cash flow.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
6
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's common stock is traded on the New York Stock Exchange under the
symbol "TOK". The approximate number of stockholders of the Company's common
stock as of November 30, 1995, was 7,000. No dividends were paid on common stock
in 1995, 1994, and 1993 in accordance with restrictive covenants under the
Company's loan agreement. The high-low sales prices for the Company's common
stock are set forth as follows:
QUARTERLY HIGH-LOW SHARE PRICES
1995 1994
-------------- ----------------
Share Price Share Price
Quarter High-Low High-Low
------- -------------- ----------------
1 9 5/8 -- 7 1/4 15 1/8 -- 11
2 9 1/4 -- 7 1/2 14 -- 11
3 9 -- 6 1/2 12 1/8 -- 8 5/8
4 7 3/4 -- 6 3/8 9 5/8 -- 8 1/4
In September 1993, the Company issued an additional 1,283,000 shares of common
stock through a private placement offering, resulting in net proceeds of
approximately $11.5 million.
On July 10, 1989, the Company sold 960,000 shares of convertible cumulative
preferred stock to the Trust of the Company's Retirement Savings Plan (RSP) at
the liquidation value of $25 per share, or $24 million. The preferred shares
have a dividend rate of 7.75%. The Trustee, who holds the preferred shares, may
elect to convert each preferred share to one common share in the event of
redemption by Tokheim, certain consolidations or mergers of Tokheim, or a
redemption by the Trustee which is necessary to provide for distributions under
the RSP. A participant may elect to receive a distribution from the RSP in cash
or common stock. If redeemed by the Trustee, the Company is responsible for
purchasing the preferred shares at the $25 floor value. The Company may elect to
pay the redemption price in cash or an equivalent amount of common stock. Due to
the redemption characteristics of the stock, the aggregate amount of future
redemptions for the next five years cannot be determined.
ITEM 6. SELECTED FINANCIAL DATA.
The following selected financial data is not covered by the Auditor's Report,
but should be read in conjunction with the Consolidated Financial Statements and
related Notes and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
7
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SELECTED FINANCIAL DATA
TOKHEIM CORPORATION AND SUBSIDIARIES
(Amounts in thousands except amounts per share)
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
OPERATING RESULTS:
Net sales ............................................. $221,573 $202,134 $172,306
Cost of products sold (2) ............................. 167,329 154,652 133,326
Equity in net loss of unconsolidated affiliate ........ -- -- --
Earnings (loss) before income taxes, cumulative effect
of accounting change, and discontinued operations ... 2,915 2,119 (5,745)
Earnings (loss) before income taxes, cumulative effect
of accounting change, and discontinued operations
percent of sales .................................... 1.3% 1.0% (3.3)%
Income taxes........................................... 39 257 122
Earnings (loss) before cumulative effect of accounting
change and discontinued operations .................. 2,876 1,862 (5,867)
Cumulative effect of accounting change ................ -- (13,416) --
Earnings (loss) from continuing operations ............ 2,876 (11,554) (5,867)
Total earnings from discontinued operations ........... -- -- --
Net earnings (loss) ................................... 2,876 (11,554) (5,867)
Net earnings (loss) percent of sales .................. 1.3% (5.7)% (3.4)%
Dividends paid common ................................. -- -- --
Dividends paid preferred .............................. 1,580 1,617 1,663
PRIMARY PER SHARE:
Earnings (loss) from continuing operations before
cumulative effect of accounting change .............. .16 .03 (1.09)
Cumulative effect of accounting change ............... -- (1.72) --
Discontinued operations ............................... -- -- --
Net earnings (loss) ................................... .16 (1.69) (1.09)
FULLY DILUTED PER SHARE:
Earnings (loss) from continuing operations before
cumulative effect of accounting change .............. .13 .03 (1.09)
Cumulative effect of accounting change ................ -- (1.72) --
Discontinued operations ............................... -- -- --
Net earnings (loss) ................................... .13 (1.69) (1.09)
Dividends paid per common share ....................... -- -- --
FINANCIAL POSITION:
Current assets ........................................ 86,798 80,408 83,139
Current liabilities ................................... 39,545 36,114 53,725
Current ratio ......................................... 2.2 to 1 2.2 to 1 1.5 to 1
Working capital ....................................... 47,253 44,294 29,414
Term debt ............................................. 21,321(5) 18,941(5) 5,374
Guaranteed Employees' Stock Ownership Plan (RSP)
obligation .......................................... 14,576 16,975 19,206
Property, plant, and equipment, net ................... 28,558 27,425 29,004
Total assets .......................................... 121,232 113,505 117,065
Stockholders' equity .................................. 27,123 25,116 33,640
Return on average equity .............................. 10.4% (41.8)% (21.3)%
Term debt percent of equity ........................... 78.6% 75.4% 16.0%
Term debt percent of equity with Guaranteed
Employees' Stock Ownership Plan (RSP) obligation .... 132.3% 143.0% 73.1%
Primary average number of common shares ............... 7,911 7,801 6,940
Fully diluted average number of common shares ......... 9,820 9,223 8,236
CAPITAL EXPENDITURES AND DEPRECIATION:
Capital expenditures .................................. 5,559 2,757 2,503
Depreciation .......................................... 4,216 4,405 4,813
</TABLE>
See footnote explanations on page 10.
8
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SELECTED FINANCIAL DATA
TOKHEIM CORPORATION AND SUBSIDIARIES
(AMOUNTS IN THOUSANDS EXCEPT AMOUNTS PER SHARE)
<TABLE>
<CAPTION>
1992 (1) 1991 (1)
-------- --------
<S> <C> <C>
OPERATING RESULTS:
Net sales ............................................. $162,089 $167,522
Cost of products sold (2) ............................. 128,690 131,903
Equity in net loss of unconsolidated affiliate ........ -- 754
Earnings (loss) before income taxes, cumulative effect
of accounting change, and discontinued operations ... (33,801) (21,954)
Earnings (loss) before income taxes, cumulative
effect of accounting change, and discontinued
operations percent of sales ......................... (20.8)% (13.1)%
Income taxes .......................................... 1,383 1,194
Earnings (loss) before cumulative effect of accounting
change and discontinued operations .................. (35,184) (23,148)
Cumulative effect of accounting change ................ -- --
Earnings (loss) from continuing operations ............ (35,184) (23,148)
Total earnings from discontinued operations ........... 10,278 1,402
Net earnings (loss) ................................... (24,906) (21,746)
Net earnings (loss) percent of sales .................. (15.4)% (13.0)%
Dividends paid common ................................. -- 2,649
Dividends paid preferred .............................. 1,790 1,831
PRIMARY PER SHARE:
Earnings (loss) from continuing operations before
cumulative effect of accounting change .............. (5.86) (3.96)
Cumulative effect of accounting change ................ -- --
Discontinued operations ............................... 1.63 .22
Net earnings (loss) ................................... (4.23) (3.74)
FULLY DILUTED PER SHARE:
Earnings (loss) from continuing operations before
cumulative effect of accounting change .............. (5.86) (3.96)
Cumulative effect of accounting change ............... -- --
Discontinued operations ............................... 1.63 .22
Net earnings (loss) ................................... (4.23) (3.74)
Dividends paid per common share ....................... -- .42
FINANCIAL POSITION:
Current assets ........................................ 83,306 117,586
Current liabilities ................................... 57,752 99,803
Current ratio ......................................... 1.4 to 1 1.2 to 1
Working capital ....................................... 25,554 17,783
Term debt ............................................. 7,674 11,087
Guaranteed Employees' Stock Ownership Plan (RSP)
obligation .......................................... 21,280 --(3)
Property, plant, and equipment, net ................... 32,851 47,490
Total assets .......................................... 121,588 178,525
Stockholders' equity .................................. 28,621 60,554
Return on average equity .............................. (50.0)% (27.7)%
Term debt percent of equity ........................... 26.8% 20.1%(4)
Term debt percent of equity with Guaranteed Employees'
Stock Ownership Plan (RSP) obligation ............... 101.2% 58.4%(4)
Primary average number of common shares ............... 6,307 6,307
Fully diluted average number of common shares ......... 7,236 7,255
CAPITAL EXPENDITURES AND DEPRECIATION:
Capital expenditures .................................. 2,045 6,910
Depreciation .......................................... 6,089 6,854
</TABLE>
See footnote explanations on page 10.
9
<PAGE>
(1) Represents fiscal years' financial information reclassified for
discontinued operations
(2) Includes product development expenses and excludes depreciation and
amortization
(3) A component of long-term obligations in technical default in the amount of
$23,209 classified as current in 1991
(4) Term debt percent of equity and term debt percent of equity with
Guaranteed Employees' Stock Ownership Plan (RSP) includes $1,200
and $24,409 of term obligations in technical default classified as current
in 1991
(5) Includes $16,700 in 1995 and $14,700 in 1994 of domestic notes payable
classified as long-term
10
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The continuing improvement during fiscal 1995 in industry demand for petroleum
marketing equipment was driven by the development of emerging markets,
compliance with U.S. Federal Clean Air Act amendments requiring Stage II vapor
recovery, and the desire for increased automation equipment including dispenser
payment terminals and point-of-sale systems. In addition, Tokheim's operating
performance continued to benefit from new product introductions, strengthened
distribution channels, increased international market penetration, and cost-
reduction programs which more than offset price deterioration.
Net earnings in 1995 were $2.9 million, or $0.13 per fully diluted share, versus
$1.9 million, or $0.03 per share, in 1994 before the cumulative effect of a
change in accounting, or a 1994 net loss of $11.6 million, or $1.69 net loss per
share. In 1993, the net loss amounted to $5.9 million, or $1.09 net loss per
share. Fiscal 1995 operating earnings were favorably impacted principally by a
$19.4 million increase in sales and improved gross margin on product sales
resulting from cost control measures, new product introductions, and product mix
improvements. Fiscal 1994 operating earnings were favorably impacted
principally by a $29.8 million increase in sales and improved gross margin on
product sales. Fiscal 1993 operating earnings were principally impacted by a
$10.2 million increase in sales; an improved gross margin on product sales; and
lower selling, general, and administrative expenses.
Consolidated sales were $221.6 million, an increase of 10% from $202.1 million
in 1994 and an increase of 29% from 1993 sales of $172.3 million. Both domestic
and international sales contributed to this gain. Domestic sales of petroleum
dispensing equipment and systems increased 6% from $119.8 million in fiscal 1994
to $126.7 million in fiscal 1995. International sales were $94.8 million in
fiscal 1995, up 15% from fiscal 1994 sales of $82.4 million.
The gross margin on product sales for 1995 was 24.5% which was up from the prior
year's 23.5% due primarily to higher sales volume and actions taken to improve
the Company's cost structure offset, in part, by lower price realization. The
gross margin on product sales for 1994 had increased from the 1993 level of
22.6% due primarily to higher sales volume and the impact of cost reduction
programs. Selling, general, and administrative expenses as a percentage of net
sales in each of the past three years were 19.7% in 1995, compared to 18.9% in
1994 and 20.9% in 1993. The increase in 1995 was attributable to sales
promotion efforts to penetrate new markets, costs incurred in connection with
reorganization of the European operations, and improvements in information
systems. The decrease in 1994 was due to cost reduction efforts and higher
sales levels.
The combined domestic and international operations incurred operating income of
$5.8 million in 1995 compared to $4.6 million in 1994 and an operating loss of
$2.3 million in 1993.
Net interest expense of $3.3 million increased over 1994 interest of $2.8
million reflecting increased borrowings throughout the year to support higher
levels of sales, as well as slightly higher rates. Interest expense in 1994 was
$0.6 million less than 1993 reflecting the Company's debt reduction program.
Amortization of debt restructuring changes included in interest expense was $0.5
million in 1995 and 1994 and $0.6 million in 1993.
A net foreign currency exchange gain of $0.1 million earned in fiscal 1995 was
about the same as fiscal 1994. A net foreign currency exchange loss of $0.5
million was incurred in fiscal 1993. The foreign currency gains and losses
during these years were primarily a result of fluctuations in the exchange rates
on intercompany balances between the Tokheim Corporation parent company and its
foreign subsidiaries. The Company's long-term investment in foreign
subsidiaries, when translated at fiscal 1995 conversion rates, resulted in a
translation adjustment reflected as a $3.5 million charge to stockholders'
equity in both 1995 and 1994 versus the comparable 1993 amount of $4.0 million.
11
<PAGE>
In fiscal 1995, the Company sold a noncore product line and related assets.
Net proceeds were $0.5 million, and a net gain of $0.5 million was realized.
The gain has been included in other expense, net in the statement of earnings
and retained earnings.
Fully diluted net earnings were $0.13 per share in 1995 versus 1994 earnings per
share before accounting change of $0.03 and a 1994 net loss of $1.69 per share
after accounting change, and a net loss of $1.09 per share incurred in fiscal
1993. The weighted average shares outstanding used in computing fully diluted
earnings per share were 9,820,000 in 1995; 7,801,000 in 1994; and 6,940,000 in
1993.
No dividends were paid on common stock during fiscal years 1993 through 1995 in
accordance with restrictive covenants under the Company's loan agreement. The
number of stockholders as of November 30, 1995 was approximately 7,000.
Inflation has not had a significant impact on the Company's results of
operations.
LITIGATION AND ENVIRONMENTAL MATTERS
Claims have been brought against the Company and its subsidiaries for various
legal matters. In addition, the Company's operations are subject to federal,
state, and local environmental laws and regulations. For further details, see
Notes to Consolidated Financial Statements No. 16, "Contingent Liabilities."
OTHER
In the first quarter of 1994, the Company adopted a mandatory noncash accounting
change pursuant to Statement of Financial Accounting Standards (SFAS) No. 106
which governs accounting for nonpension retiree benefit costs. SFAS No. 106
requires companies to project the future cost of providing retiree medical,
dental, and life insurance benefits and recognize that cost as benefits are
earned during the employee's career. Tokheim's actuarially determined liability
was $13.4 million which the Company elected to record as a one-time noncash
accounting adjustment versus the alternative of amortizing the amount over a
period not to exceed 20 years. At November 30, 1995, the Company's accrual was
$14.8 million. Adoption of the new accounting standard had no cash flow effect
nor did it represent a change with respect to previous fiscal years in the
benefit levels provided to employees.
The Company adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," in the first quarter of 1995. This statement requires an accrual
method of accounting for the expected cost of benefits to be paid to former or
inactive employees and their covered dependents after employment but prior to
retirement. Adoption of the new accounting standard did not have a material
impact on the Company's financial position, cash flows, or results of
operations, nor did it represent a change in the benefit levels provided to
employees.
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," is effective for the year ending November
30, 1997. In the opinion of management, this statement is not expected to impact
the Company's financial position or results of operations. SFAS No. 123,
"Accounting for Stock-Based Compensation," is effective for the year ending
November 30, 1997. The Company has not decided how it intends to apply the
accounting and disclosure provisions of this statement.
LIQUIDITY AND CAPITAL RESOURCES
The Company has available to it a variety of sources of liquidity and capital
resources, both internal and external. These resources provide funds required
for current operations, debt retirement, capital expenditures, and other
requirements.
On April 22, 1994, the Company completed a refinancing of its loan agreement
which was to have matured on December 1, 1994. The three-year domestic
revolving credit agreement which matures on April 21, 1997 is collateralized by
substantially all of the unencumbered domestic assets of the Company and its
subsidiaries. In addition, the Company in 1994 completed a refinancing of the
previous loan agreement for its German subsidiary.
12
<PAGE>
Availability of revolving credit under these agreements is subject to borrowing
base requirements and compliance with covenants as described below. The Company
was in full compliance with all covenants as of November 30, 1995.
Restrictions and financial covenants of the agreements include those related to
indebtedness, net worth, cash flow coverage, and the ratio of current assets to
current liabilities. The domestic credit facility prohibited the payment of
cash dividends on common stock through fiscal year 1994. Beyond fiscal 1994,
dividends on common stock are limited by a cash flow coverage test and a net
income test. In 1995, dividends on common stock were prohibited by these tests.
Cash provided from operations was $3.2 million in 1995 compared to $2.4 million
in 1994 and a deficit of $5.0 million in 1993. The increases in 1995 and 1994,
relative to the previous year, reflect the increase in operating earnings and
continued improvement in working capital management.
The Company's investing activities are generally for capital expenditures which
amounted to $5.6 million in 1995, $2.8 million in 1994, and $2.5 million in
1993. In 1995, the Company received proceeds from sales of property, plant, and
equipment of $0.6 million versus $0.2 million and $2.4 million in 1994 and 1993,
respectively. At November 30, 1995, no significant contractual commitments
existed for future capital expenditures. Prior to fiscal 1995 year-end, the
Board of Directors approved capital expenditures of approximately $12.8 million
for improvements in plant productivity and capacity, product design, and quality
of both products and processes. The Company is evaluating various sources to
fund these expenditures and does not foresee any difficulty obtaining adequate
funding.
Financing activities in 1995 were limited to normal business transactions.
Financing activities in 1994 primarily resulted in a $5.7 million reduction in
debt which aggregated $38.8 million at November 30, 1994 versus $44.5 million at
November 30, 1993. Financing activities in 1993 included the issuance of
1,283,000 shares of common stock in a private placement with institutional
investors, raising a net of $11.5 million of new equity capital. The Company
reduced its debt during 1993 by $13.4 million from November 30, 1992. Peak
short-term borrowings were $19.9 million in 1995, $18.4 million in 1994, and
$25.0 million in 1993. The weighted average interest rate for these borrowings
was approximately 8.6% in 1995, 8.1% in 1994, and 8.9% in 1993. Preferred stock
dividends paid were $1.6 million, $1.6 million, and $1.7 million in fiscal years
1995, 1994, and 1993, respectively.
Cash and cash equivalents at November 30, 1995 aggregated $3.0 million versus
$3.9 million at November 30, 1994. Working capital at November 30, 1995
increased $3.0 million over the prior year as a result of higher accounts
receivable, partially offset by an increase in current liabilities and a
decrease in cash and cash equivalents. The Company's current ratio at November
30, 1995 and 1994 was 2.2.
The Company has guaranteed loans to its Retirement Savings Plan in the amounts
of $14.6 million and $17.0 million at November 30, 1995 and 1994, respectively.
The Company has guaranteed a $25 per share value for its convertible preferred
stock. If redeemed by the Trustee, the Company is responsible for purchasing the
preferred shares at the $25 floor value. The Company may elect to pay the
redemption price in cash or an equivalent amount of Common Stock.
Total interest-bearing debt as a percent of equity for 1995 was 142% compared to
155% for 1994. The decrease in 1995 is primarily due to a reduction in
Guaranteed Employees' Stock Ownership Plan Obligation, reduction in common
treasury stock, and increased retained earnings.
In summary, the Company believes that it has adequate financial resources, both
from internal and external sources, to meet its liquidity needs over the next 12
months and on a long-term basis.
13
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CONSOLIDATED STATEMENT OF EARNINGS AND RETAINED EARNINGS
TOKHEIM CORPORATION AND SUBSIDIARIES
FOR THE YEARS ENDED NOVEMBER 30, 1995, 1994, AND 1993
(Amounts in thousands except amounts per share)
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net sales................................................... $221,573 $202,134 $172,306
Cost of sales, exclusive of items listed below.............. 167,329 154,652 133,326
Selling, general, and administrative expenses............... 43,631 38,193 36,071
Depreciation and amortization............................... 4,857 4,672 5,233
Interest expense (net of interest income of
$269, $252, and $369, respectively)....................... 3,319 2,806 3,443
Foreign currency (gains) losses............................ (143) (172) 453
Other income, net........................................... (335) (136) (475)
-------- -------- --------
Earnings (loss) before income taxes and cumulative
effect of change in accounting.......................... 2,915 2,119 (5,745)
Income taxes................................................ 39 257 122
-------- -------- --------
Earnings (loss) before cumulative effect of change
in accounting............................................ 2,876 1,862 (5,867)
Cumulative effect of change in method of accounting for
postretirement benefits other than pensions.............. -- (13,416) --
-------- -------- --------
Net earnings (loss)......................................... 2,876 (11,554) (5,867)
Preferred stock dividends ($1.94 per share)................. (1,580) (1,617) (1,663)
-------- -------- --------
Earnings (loss) applicable to common stock.................. 1,296 (13,171) (7,530)
Retained earnings, beginning of year........................ 9,279 22,829 31,733
Treasury stock transactions................................. (860) (379) (1,374)
-------- -------- --------
Retained earnings, end of year.............................. $ 9,715 $ 9,279 $ 22,829
======== ======== ========
Earnings (loss) per common share:
Primary:
Before cumulative effect of change in method
of accounting..................................... $ .16 $ .03 $ (1.09)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions...... -- (1.72) --
-------- -------- --------
Net earnings (loss).................................. $ .16 $ (1.69) $ (1.09)
======== ======== ========
Weighted average shares outstanding.................. 7,911 7,801 6,940
======== ======== ========
Fully Diluted:
Before cumulative effect of change in method
of accounting..................................... $ .13 $ .03 $ (1.09)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions...... -- (1.72) --
-------- -------- --------
Net earnings (loss).................................. $ .13 $ (1.69) $ (1.09)
======== ======== ========
Weighted average shares outstanding.................. 9,820 7,801 6,940
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
TOKHEIM CORPORATION AND SUBSIDIARIES
FOR THE YEARS ENDED NOVEMBER 30, 1995, 1994, AND 1993
(Amounts in thousands)
<TABLE>
<CAPTION>
1995 1994 1993
------- -------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)........................................ $ 2,876 $(11,554) $(5,867)
Adjustments to reconcile net earnings (loss) to net cash
provided from (used in) operations:
Cumulative effect of change in method of
accounting for postretirement benefits other
than pensions........................................ -- 13,416 --
Depreciation and amortization............................. 4,857 4,672 5,233
(Gain) loss on sale of property, plant, and equipment..... (436) (23) 446
Deferred income taxes..................................... (33) (903) (830)
Changes in assets and liabilities:
Receivables, net...................................... (6,140) (1,260) (7,999)
Inventories........................................... 444 (300) (590)
Prepaid expenses...................................... (877) 229 (202)
Accounts payable...................................... 1,648 (3,694) 7,277
Accrued expenses...................................... 2,132 2,486 (4,223)
U.S. and foreign income taxes......................... (349) 55 759
Other................................................. (900) (716) 957
------- -------- -------
Net cash provided from (used in) operations................ 3,222 2,408 (5,039)
------- -------- -------
CASH FLOWS FROM INVESTING AND OTHER ACTIVITIES:
Property, plant, and equipment additions................... (5,559) (2,757) (2,503)
Proceeds from sale of property, plant, and equipment....... 649 195 2,427
------- -------- -------
Net cash used in investing and other activities............ (4,910) (2,562) (76)
------- -------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from term debt.................................... 2,122 485 --
Payments on term debt...................................... (819) (3,889) (2,176)
Net increase (decrease) notes payable, banks............... 559 (522) (9,166)
Proceeds from issuance of common stock..................... -- 49 11,485
Treasury stock, net........................................ 273 431 427
Preferred stock dividends.................................. (1,580) (1,617) (1,663)
------- -------- -------
Net cash provided from (used in) financing activities..... 555 (5,063) (1,093)
------- -------- -------
EFFECT OF TRANSLATION ADJUSTMENT ON CASH.................... 166 53 (212)
------- -------- -------
CASH AND CASH EQUIVALENTS:
Decrease in cash........................................... (967) (5,164) (6,420)
Beginning of year.......................................... 3,933 9,097 15,517
------- -------- -------
End of year................................................ $ 2,966 $ 3,933 $ 9,097
======= ======== =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
CONSOLIDATED BALANCE SHEET
TOKHEIM CORPORATION AND SUBSIDIARIES
AS OF NOVEMBER 30, 1995 AND 1994
(Amounts in thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
1995 1994
------- --------
Current assets:
Cash and cash equivalents.................................. $ 2,966 $ 3,933
Accounts receivable, less allowance for doubtful accounts
of $1,150 and $1,295, respectively....................... 45,649 38,812
Inventories:
Raw materials and supplies................................ 7,649 7,697
Work in process........................................... 25,535 25,675
Finished goods............................................ 4,911 4,729
-------- -------
38,095 38,101
Less amounts necessary to reduce certain inventories
to LIFO method........................................... 3,100 2,746
-------- -------
34,995 35,355
Prepaid expenses........................................... 3,188 2,308
-------- -------
Total current assets...................................... 86,798 80,408
Property, plant, and equipment, at cost:
Land and land improvements................................ 3,311 3,232
Buildings and building improvements....................... 22,716 22,150
Machinery and equipment................................... 57,138 55,268
Construction in progress.................................. 2,867 1,166
-------- -------
86,032 81,816
Less accumulated depreciation............................. 57,474 54,391
-------- -------
28,558 27,425
Other noncurrent assets and deferred charges............... 5,876 5,672
-------- --------
$121,232 $113,505
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
CONSOLIDATED BALANCE SHEET (CONTINUED)
TOKHEIM CORPORATION AND SUBSIDIARIES
AS OF NOVEMBER 30, 1995 AND 1994
(Amounts in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt.......................... $ 351 $ 1,248
Notes payable to banks........................................ 2,364 1,661
Accounts payable.............................................. 18,689 16,215
Accrued expenses.............................................. 18,141 16,990
-------- --------
Total current liabilities................................... 39,545 36,114
Long-term debt, less current maturities........................ 21,321 18,941
Guaranteed Employees' Stock Ownership Plan (RSP)
obligation.................................................... 14,576 16,975
Postretirement benefit liability............................... 13,882 13,512
Minimum pension liability...................................... 3,868 1,906
Other long-term liabilities.................................... 110 150
Deferred income taxes.......................................... 807 791
-------- --------
94,109 88,389
-------- --------
Redeemable convertible preferred stock, at liquidation value
of $25 per share, 1,700 shares authorized, 960 shares issued.. 24,000 24,000
Guaranteed Employees' Stock Ownership Plan (RSP)
obligation.................................................... (13,790) (15,733)
Treasury stock, at cost, 151 and 130 shares, respectively...... (3,784) (3,262)
-------- --------
6,426 5,005
-------- --------
Preferred stock, no par value; 3,300 shares authorized and
unissued...................................................... -- --
Common stock, no par value; 30,000 shares authorized,
7,949 shares issued........................................... 19,409 19,410
Guaranteed Employees' Stock Ownership Plan (RSP)
obligation.................................................... (786) (1,242)
Minimum pension liability...................................... (3,868) (1,906)
Foreign currency translation adjustments....................... (3,542) (3,543)
Retained earnings.............................................. 9,715 9,279
-------- --------
20,928 21,998
Treasury stock, at cost, 13 and 106 shares, respectively....... (231) (1,887)
-------- --------
20,697 20,111
-------- --------
$121,232 $113,505
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands except dollars per share)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include the
accounts of Tokheim Corporation and its subsidiaries. All intercompany accounts
and transactions have been eliminated in consolidation.
TRANSLATION OF FOREIGN CURRENCY -- The financial position and results of
operations of the Company's foreign subsidiaries are measured using local
currency as the functional currency. Revenues and expenses of such subsidiaries
have been translated at average exchange rates. Assets and liabilities have
been translated at year-end rates of exchange. Translation gains and losses are
being deferred as a separate component of stockholders' equity, unless there is
a sale or liquidation of the underlying foreign investments. The Company has no
present plans for the sale or liquidation of significant investments to which
these deferrals relate. Aggregate foreign currency transaction gains and losses
are included in determining net earnings.
INVENTORY VALUATION -- Inventories are valued at the lower of cost or market.
Cost is determined using the last-in, first-out (LIFO) method for the major
portion of United States inventories and the first-in, first-out (FIFO) method
for most other inventories.
Inventories valued using the LIFO method amounted to approximately $28,590 and
$27,988 on a FIFO basis and $25,490 and $25,242 on a LIFO basis at November 30,
1995 and 1994, respectively.
PROPERTY AND DEPRECIATION -- Depreciation of plant and equipment is determined
generally on a straight-line basis over the estimated useful lives of the
assets. Upon retirement or sale of assets, the cost of the disposed assets and
the related accumulated depreciation are removed from the accounts and any
resulting gain or loss is credited or charged to income. These gains and losses
are accumulated and shown as a component of other expense, net in the statement
of earnings and retained earnings.
SOFTWARE DEVELOPMENT COSTS -- Amortization of capitalized software costs is
provided over the estimated economic useful life of the software product on a
straight-line basis, generally three years. Unamortized software costs included
in other noncurrent assets were $543 and $76 at November 30, 1995 and 1994,
respectively. The amounts amortized and charged to expense in 1995, 1994, and
1993 were $109, $220, and $382, respectively.
All other product development expenditures are charged to research and
development expense in the period incurred. These expenses amounted to $12,746;
$10,239; and $8,625 in 1995, 1994, and 1993, respectively.
INCOME TAXES -- The Company adopted Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes," effective December 1, 1993. In 1993,
the Company accounted for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 96, "Accounting for Income
Taxes."
The provision for income taxes includes federal, foreign, state, and local
income taxes currently payable and those deferred because of temporary
differences between the financial statement and tax bases of assets and
liabilities. No additional U.S. income taxes or foreign withholding taxes have
been provided on earnings of foreign subsidiaries which are expected to be
reinvested indefinitely. A determination of the tax liability associated with
repatriation of these earnings has not been made as it is not practical.
Additional income and withholding taxes are provided, however, on planned
repatriations of foreign earnings.
18
<PAGE>
POSTEMPLOYMENT BENEFITS -- The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 112, "Employers' Accounting for Postemployment Benefits,"
in the first quarter of 1995. This statement requires an accrual method of
accounting for the expected cost of benefits to be paid to former or inactive
employees and their covered dependents after employment but prior to retirement.
The adoption of this statement did not have a material impact on the Company's
financial position, cash flows, or results of operations.
PRODUCT WARRANTY COSTS -- Anticipated costs related to product warranty are
expensed in the period of sales.
CASH FLOWS -- For purposes of the statement of cash flows, the Company considers
all highly liquid investments purchased with a maturity of 90 days or less to be
cash equivalents.
Supplemental disclosures of cash flow information:
<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
Cash paid during the year for:
<S> <C> <C> <C>
Interest.................................................. $3,060 $2,441 $3,273
Income taxes.............................................. 926 894 1,352
Noncash transactions primarily related to the issuance
of treasury stock in settlement of Retirement Savings
Plan distributions..................................... 976 612 1,374
Noncash adjustments to certain assets and liabilities
in connection with the settlement of the corporate
reorganization......................................... 383 224 1,400
</TABLE>
ACCOUNTING PRONOUNCEMENTS
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," is effective for the year ending November
30, 1997. In the opinion of management, this statement is not expected to impact
the Company's financial position or results of operations. SFAS No. 123,
"Accounting for Stock-Based Compensation," is effective for the year ending
November 30, 1997. The Company has not decided how it intends to apply the
accounting and disclosure provisions of this statement.
RECLASSIFICATION -- Certain prior year amounts in these financial statements
have been reclassified to conform with current year presentation.
2. ACCRUED EXPENSES
Accrued expenses consisted of the following at November 30, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Salaries, wages, and commissions.......................... $ 4,308 $ 3,930
Compensated absences...................................... 3,480 3,391
Retirement plan contributions............................. 516 915
Postretirement benefits................................... 887 697
Warranty.................................................. 2,821 2,506
Legal and professional.................................... 1,525 1,274
Taxes, other than United States and foreign income taxes.. 1,304 1,487
Insurance................................................. 440 651
Other..................................................... 2,860 2,139
------- -------
$18,141 $16,990
======= =======
</TABLE>
19
<PAGE>
3. NOTES PAYABLE TO BANKS
Notes payable to banks represent short-term borrowings under domestic and
foreign credit lines. In 1995, aggregate amounts outstanding under these lines
were $19,064 of which $16,700 has been classified as long-term debt since the
Company has the ability, under the terms of the agreement, and the intent to
finance these obligations beyond one year. Domestic and foreign credit lines
totaled approximately $30,458 of which $11,394 was unused at November 30, 1995.
Availability of revolving credit under these agreements is subject to borrowing
base requirements and compliance with covenants. The weighted average annual
interest rate was 8.6% and 8.1% for 1995 and 1994, respectively. The range of
domestic and foreign rates at November 30, 1995 and 1994 was 7.1% to 9.8% and
7.3% to 11.8%, respectively.
On April 22, 1994, the Company completed a refinancing of its domestic loan
agreement which was to have matured on December 1, 1994. The three-year
domestic revolving credit agreement which matures on April 21, 1997 is
collateralized by substantially all of the unencumbered domestic assets of the
Company and its subsidiaries. In July 1994, the Company completed a
refinancing of the previous loan agreement for its German subsidiary. The
credit agreement which matures on March 31, 1996 is collateralized by
substantially all of the assets of the subsidiary. Each of the debt agreements
contains various restrictions relating to, among other things, net worth,
leverage, cash flow coverage, incurrance of additional debt, and transactions in
the Company's own stock. In addition, the domestic credit facility prohibited
the payment of cash dividends on common stock through 1994. Beyond 1994,
dividends on common stock are limited by a cash flow coverage test and a net
income test. In 1995, dividends on common stock were prohibited by these tests.
20
<PAGE>
4. TERM DEBT AND GUARANTEED EMPLOYEES' STOCK OWNERSHIP PLAN (RSP) OBLIGATION
Term debt at November 30, 1995 and 1994 consisted of the following:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Industrial Revenue Bonds, variable rate, maturing in 2006,
rate of 4.1% at November 30, 1995 (a)(b).............................. $ 4,000 $ 4,500
3.5% German Bonds, due in $49 semiannual
installments through 1998 (a)......................................... 292 359
Note payable, variable rate, due in monthly installments ranging from
$4 to $8 through 1999, rate of 18.5% at November 30, 1995(a).......... 253 313
Capital lease obligations, variable rate, due in $1 monthly
installments through 1998, rate of 18.5% at November 30, 1995(a)...... 168 --
9.2% Capital lease obligation, due in $4 monthly
installments through 1997 (a)......................................... 70 114
10.9% Capital lease obligation, due in $2 monthly
installments though 1997(a)........................................... 44 --
Revolving credit facility, variable rate, maturing April 21, 1997,
rates ranging from 8.8% to 9.8% at November 30, 1995(b)............... 16,700 14,700
Other, 3% to 14% (a)................................................... 145 203
------- -------
21,672 20,189
Less: Current maturities.............................................. 351 1,248
------- -------
$21,321 $18,941
======= =======
</TABLE>
Guaranteed Employees' Stock Ownership Plan (RSP) obligation at November 30, 1995
and 1994 consisted of the following:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Guaranteed Employees' Stock Ownership Plan (RSP) obligation, variable
rate, annual maturities of $1,506 to $2,845, due in quarterly
installments through 2001, rate of 7.5% at November 30, 1995(b)........ $13,790 $15,733
Guaranteed Employees' Stock Ownership Plan (RSP) obligation, variable
rate, annual maturities of $484 to $303, through 1997, rate of 8.5% at
November 30, 1995(b).................................................... 786 1,242
------- -------
$14,576 $16,975
======= =======
</TABLE>
(a) Aggregate cost of plant and equipment pledged as collateral under revenue
bonds and lease obligations is $10,558.
(b) Per the domestic revolving credit agreement as described in Note 3, the
term obligation matures on April 21, 1997. Any extension of the facility
beyond April 21, 1997 is at the discretion of the lenders.
Aggregate scheduled maturities of the above term debt and Guaranteed Employees'
Stock Ownership Plan (RSP) obligation during the ensuing four years approximate
$2,932; $29,128; $140; and $48, respectively.
21
<PAGE>
5. OPERATING LEASES
The Company leases certain manufacturing equipment, office equipment, vehicles,
and office and warehousing space under operating leases. These leases generally
expire in periods ranging from one to five years. In 1995 the Company leased a
CAD/CAM system. The lease is effective for a term of three years with an
interest rate of 12% and monthly rentals ranging from $55 to $68. The lease
contains a fair market value purchase option at the end of the lease term.
Amounts charged to expenses under operating leases in 1995, 1994, and 1993 were
$1,986; $1,077; and $1,144, respectively. Minimum rental payments under
noncancelable operating leases during the ensuing five years approximate $1,448;
$1,211; $307; $145; and $190, respectively.
6. STOCK OPTION PLANS
The Company has three separate Stock Option Plans, as outlined below:
1992 Stock Incentive Plan (SIP)
- -------------------------------
The Plan contains both incentive stock options (ISOs) and nonqualified stock
options (NSOs). The price of each share under this Plan for an ISO or NSO shall
not be less than the fair market value of Tokheim Common Stock on the date the
option is granted.
Options granted under this Plan become exercisable at the rate of approximately
25% of the total options granted per year beginning one year after the grant
date. No option expires later than 10 years from the date on which it was
granted.
In addition, the Plan provides for the granting of Stock Appreciation Rights
(SARs) and Restricted Stock Awards (RSAs). At November 30, 1995, no SARs or
RSAs had been granted.
1982 Incentive Stock Option Plan (ISOP) and
1982 Unqualified Stock Option Plan (USOP)
- -----------------------------------------
Effective January 21, 1992, no additional shares could be granted under these
plans. No option expires later than 10 years from the date on which it was
granted.
The price of each share under the ISOP was not less than the fair market value
of Tokheim Common Stock on the date the option was granted and under the USOP
was not less than 85% of the fair market value of Tokheim Common Stock on the
date the option was granted.
Options granted under the SIP during 1995, 1994, and 1993 are as follows:
<TABLE>
<CAPTION>
1992 Stock Incentive Plan
Year of -------------------------
Grant ISO NSO
- ----------- --- ---
<S> <C> <C>
1995 35,000 --
1994 19,000 --
1993 275,162 41,288
</TABLE>
Subsequent to November 30, 1995, an additional 43,000 ISO shares were granted
under the SIP at an option price of $7.125 per share. These shares become
exercisable starting in 1997.
22
<PAGE>
The following table sets forth the status of all outstanding options at November
30, 1995:
<TABLE>
<CAPTION>
Option Exercisable Total
Price Per Options In The Next One Options
Share Exercisable To Four Years Outstanding
------------ ------------ --------------- -----------
<S> <C> <C> <C>
$20.0000 28,225 -- 28,225
$12.3750 3,000 -- 3,000
$12.2500 1,000 -- 1,000
$11.9375 2,875 8,625 11,500
$ 9.3750 12,500 12,500 25,000
$ 8.8800 107,470 -- 107,470
$ 8.5000 -- 35,000 35,000
$ 7.8750 15,000 -- 15,000
$ 7.7500 30,000 -- 30,000
$ 6.8750 15,000 -- 15,000
$ 6.8125 95,070 116,076 211,146
------- ------- -------
310,140 172,201 482,341
======= ======= =======
Transactions in stock options under these plans are summarized as follows:
Shares
Under
Option Price Range
------- ---------------
Outstanding, November 30, 1992...... 344,750 $ 6.88 - $20.00
Granted............................. 316,450 $ 6.81 - $ 9.38
Exercised........................... (14,797) $ 8.88 - $ 8.88
Canceled or expired................. (80,675) $ 7.75 - $20.00
-------
Outstanding, November 30, 1993...... 565,728 $ 6.81 - $20.00
Granted............................. 19,000 $10.75 - $11.94
Exercised........................... (29,950) $ 6.81 - $ 8.88
Canceled or expired................. (12,250) $ 8.88 - $20.00
-------
Outstanding, November 30, 1994...... 542,528 $ 6.81 - $20.00
Granted............................. 35,000 $ 8.50
Exercised........................... --
Canceled or expired................. (95,187) $ 6.81 - $20.00
-------
Outstanding, November 30, 1995...... 482,341 $ 6.81 - $20.00
=======
Reserved for options: Shares
- -------------------------- -------
November 30, 1993........ 112,550
November 30, 1994........ 98,550
November 30, 1995........ 95,462
</TABLE>
23
<PAGE>
7. COMMON AND PREFERRED STOCK
Changes in common stock and common treasury stock are shown below:
<TABLE>
<CAPTION>
Common Stock Common Treasury Stock
-------------------------------- ---------------------------
Shares Amount Shares Amount
-------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C>
Balance, November 30, 1992..................................... 6,659,000 $ 8,258 352,000 $ 6,335
Shares issued in private placement............................. 1,283,000 11,485 -- --
Shares purchased............................................... -- -- 7,000 81
Stock options exercised........................................ -- (149) (15,000) (265)
Redemption of preferred stock.................................. -- -- (132,000) (2,368)
Employee termination benefits.................................. -- -- (21,000) (380)
--------- ------- -------- -------
Balance, November 30, 1993..................................... 7,942,000 19,594 191,000 3,403
Shares purchased............................................... -- -- -- 3
Stock options exercised........................................ 7,000 (184) (22,000) (405)
Redemption of preferred stock.................................. -- -- (48,000) (852)
Employee termination benefits.................................. -- -- (13,000) (230)
Other.......................................................... -- -- (2,000) (32)
--------- ------- -------- -------
Balance, November 30, 1994..................................... 7,949,000 19,410 106,000 1,887
Redemption of preferred stock.................................. -- -- (67,000) (1,196)
Employee termination benefits.................................. -- -- (24,000) (427)
Other.......................................................... -- (1) (2,000) (33)
--------- ------- -------- -------
Balance, November 30, 1995..................................... 7,949,000 $19,409 13,000 $ 231
========= ======= ======== =======
</TABLE>
Changes in preferred stock and preferred treasury stock are shown below:
<TABLE>
<CAPTION>
Preferred
Preferred Stock Treasury Stock
------------------------- ----------------------
Shares Amount Shares Amount
-------------- ---------- --------- --------
<S> <C> <C> <C> <C>
Balance, November 30, 1992..................................... 960,000 $24,000 66,000 $ 1,658
Shares redeemed................................................ -- -- 46,000 1,131
--------- ------- ------- -------
Balance, November 30, 1993..................................... 960,000 24,000 112,000 2,789
Shares redeemed................................................ -- -- 22,000 562
RSP contributions............................................. -- -- (4,000) (89)
--------- ------- -------- -------
Balance, November 30, 1994..................................... 960,000 24,000 130,000 3,262
Shares redeemed................................................ -- -- 29,000 720
RSP contributions.............................................. -- -- (8,000) (197)
--------- ------- ------- ------
Balance, November 30, 1995..................................... 960,000 $24,000 151,000 $3,785
========= ======= ======= ======
</TABLE>
24
<PAGE>
In September 1993, the Company issued an additional 1,283,000 shares of common
stock through a private placement offering, resulting in net proceeds of
approximately $11,485.
On July 10, 1989, the Company sold 960,000 shares of convertible cumulative
preferred stock to the Trust of the Company's Retirement Savings Plan (RSP) at
the liquidation value of $25 per share or $24,000. The preferred shares have a
dividend rate of 7.75%. The Trustee, who holds the preferred shares, may elect
to convert each preferred share to one common share in the event of redemption
by Tokheim, certain consolidations or mergers of Tokheim, or a redemption by the
Trustee which is necessary to provide for distributions under the RSP. A
participant may elect to receive a distribution from the RSP in cash or common
stock. If redeemed by the Trustee, the Company is responsible for purchasing the
preferred shares at the $25 floor value. The Company may elect to pay the
redemption price in cash or an equivalent amount of common stock. Due to the
redemption characteristics of the stock, the aggregate amount of future
redemptions for the next five years cannot be determined. See footnote 14 for
further discussion on the preferred stock.
8. EARNINGS PER SHARE
Primary earnings per share are based on the weighted average number of shares
outstanding during each year and the assumed exercise of dilutive employees'
stock options less the number of treasury shares assumed to be purchased from
the proceeds using the average market price of the Company's common stock.
The following table presents information necessary to calculate earnings (loss)
per share for fiscal years ended November 30, 1995, 1994, and 1993:
<TABLE>
<CAPTION>
Primary
-----------------------------
1995 1994 1993
-------- --------- --------
<S> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding......................... 7,893 7,801 6,891
Share equivalents.................................... 18 -- 49
------- -------- -------
Adjusted outstanding................................. 7,911 7,801 6,940
======= ======== =======
Net earnings (loss):
Before cumulative effect of change in method
of accounting.................................... $ 2,876 $ 1,862 $(5,867)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions.. -- (13,416) --
------- -------- -------
Net earnings (loss).................................. 2,876 (11,554) (5,867)
Preferred stock dividends............................ (1,580) (1,617) (1,663)
------- -------- -------
Earnings (loss) applicable to common stock........... $ 1,296 $(13,171) $(7,530)
======= ======== =======
Net earnings (loss) per common share:
Before cumulative effect of change in method of
accounting....................................... $ .16 $ .03 $ (1.09)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions.. -- (1.72) --
------- -------- -------
Net earnings (loss).................................. $ .16 $ (1.69) $ (1.09)
======= ======== =======
</TABLE>
25
<PAGE>
For 1994 and 1993, fully diluted earnings per share is considered to be the same
as primary earnings per share, since the effect of certain potentially dilutive
securities would be antidilutive.
<TABLE>
<CAPTION>
Fully Diluted
--------------------------------
1995 1994 1993
------- -------- -------
<S> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding......................................... 7,893 7,801 6,891
Share equivalents.................................................... 18 -- 49
Weighted conversion of preferred stock............................... 1,909 -- --
------- -------- -------
Adjusted outstanding................................................. 9,820 7,801 6,940
======= ======== =======
Net earnings (loss):
Before cumulative effect of change in method of
accounting.......................................................... $ 2,876 $ 1,862 $(5,867)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions.................... -- (13,416) --
------- -------- -------
Net earnings (loss).................................................. 2,876 (11,554) (5,867)
Incremental RSP expense.............................................. (1,580) (1,617) (1,663)
------- -------- -------
Earnings (loss) applicable to common stock.......................... $ 1,296 $(13,171) $(7,530)
======= ======== =======
Net earnings (loss) per common share:
Before cumulative effect of change in method of
accounting.......................................................... $ .13 $ 0.03 $ (1.09)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions..................... -- (1.72) --
------- -------- -------
Net earnings (loss).................................................. $ .13 $ (1.69) $ (1.09)
======= ======== =======
9. FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
Consolidated foreign currency translation adjustments are as follows:
1995 1994
------- --------
Foreign currency translation adjustments, beginning of year............ $(3,543) $ (4,037)
Current year adjustments............................................... 1 494
------- --------
Foreign currency translation adjustments, end of year.................. $(3,542) $ (3,543)
======= ========
</TABLE>
The adjustments represent principally the effect of changes in the current rate
of exchange from the beginning of the year to the end of the year in translating
the net assets, including certain intercompany amounts of foreign subsidiaries.
26
<PAGE>
10. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial information for 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
-------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
1995
- ----
Net sales.................................. $ 45,845 $54,127 $52,935 $68,666 (D) $221,573
Cost of products sold(A)................... 36,413 40,554 40,577 49,785 167,329
Net earnings (loss)........................ (1,363) 526 (941) (B) 4,654 (C) 2,876
Earnings (loss) per share:
Primary:
Net earnings (loss)................... (.22) .02 (.17) .54 .16
Fully diluted:
Net earnings (loss)................... (.22) .01 (.17) .42 .13
1994
- ------
Net sales.................................. $ 45,236 $49,908 $47,931 $59,059 (D) $202,134
Cost of products sold(A)................... 34,511 37,246 37,610 45,285 154,652
Earnings (loss) before cumulative effect
of change in accounting................. 155 1,151 (1,473) 2,029 1,862
Cumulative effect of change in method of
accounting for postretirement benefits
other than pensions..................... (13,416) -- -- -- (13,416)
Net earnings (loss)........................ (13,261) 1,151 (1,473) 2,029 (11,554)
Earnings (loss) per share:
Primary:
Before cumulative effect of change
in accounting....................... (.03) .10 (.24) .21 .03
Cumulative effect of change in method
of accounting for postretirement
benefits other than pensions........ (1.73) -- -- -- (1.72)
Net earnings (loss).................... (1.76) .10 (.24) .21 (1.69)
Fully diluted:
Before cumulative effect of change
in accounting....................... (.03) .08 (.24) .17 .03
Cumulative effect of change in method
of accounting for postretirement
benefits other than pensions........ (1.73) -- -- -- (1.72)
Net earnings (loss).................... (1.76) .08 (.24) .17 (1.69)
</TABLE>
(A) Includes product development expenses and excludes depreciation and
amortization.
(B) Includes $0.5 million nonrecurring operating expense in connection with
developing and implementing an earnings improvement plan for the Company's
international operations.
(C) Includes a net gain of $0.5 million on the sale of a noncore product line
and related assets.
(D) Sales of petroleum dispenser equipment have historically been seasonal.
Approximately 30% of Tokheim's annual net sales volume is recorded in the
fourth quarter of its fiscal year, with no significant variation among the
other three quarters.
27
<PAGE>
11. INCOME TAXES
Effective December 1, 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes."
SFAS No. 109 requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of events that have been included in the
Company's financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
Financial statements for the prior years have not been restated as the
cumulative effect of the accounting change was not material to net earnings.
Earnings (loss) before income taxes consist of the following:
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Domestic................................................... $ 8,591 $ 6,456 $(5,842)
Foreign.................................................... (5,676) (4,337) 97
------- ------- -------
$ 2,915 $ 2,119 $(5,745)
======= ======= =======
Income tax provision (benefit) consists of the following:
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Current:
Federal................................................... $ (272) $ -- $ --
State..................................................... 249 673 723
Foreign................................................... 132 409 49
Deferred:
Foreign................................................... (70) (825) (650)
------- ------- -------
$ 39 $ 257 $ 122
======= ======= =======
</TABLE>
A reconciliation of the reported tax expense and the amount computed by applying
the statutory United States federal income tax rate of 35% for November 30, 1995
and 34% for November 30, 1994 and 1993 to earnings before income taxes is as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- ---------
<S> <C> <C> <C>
Computed "expected" tax expense (benefit).......... $ 1,020 $ 721 $(1,953)
Increase (decrease) in taxes resulting from:
State income taxes net of federal tax benefit... 162 444 477
Tax effect of dividends paid on stock held in
Retirement Savings Plan (RSP)................ (553) (550) (565)
Settlement of prior income tax returns and
adjustments to prior year accruals........... (599) 237 --
Difference in foreign and U.S. tax rates........ (6) (104) (37)
Decrease in valuation allowance................. (2,099) (1,492) --
Earnings with no current tax benefit(expense):
Domestic..................................... -- -- 1,339
Foreign...................................... 1,985 1,089 (219)
Repatriation of foreign earnings................ 41 (162) 677
Miscellaneous items, net........................ 88 74 403
------- ------- -------
$ 39 $ 257 $ 122
======= ======= =======
</TABLE>
28
<PAGE>
Prior to the change in accounting method, the nature of temporary differences
giving rise to deferred income taxes (benefit) and the tax effect of each during
1993 was as follows:
<TABLE>
<CAPTION>
1993
--------
<S> <C>
Federal:
Depreciation............................................ $ 149
Warranty costs.......................................... (14)
Provision for doubtful accounts......................... 38
Pension costs........................................... (37)
Inventory reserves...................................... (717)
Insurance reserves...................................... (54)
Restructuring charge.................................... 1,060
Software development costs.............................. (112)
Other................................................... (313)
--------
Deferred federal income taxes (benefit) from
continuing operations.............................. $ --
========
Foreign:
Repatriation of foreign earnings........................ $ (500)
Other................................................... (150)
--------
$ (650)
========
</TABLE>
The components of the deferred tax asset and liability as of November 30, 1995
and 1994 were as follows:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Gross deferred tax assets:
Accounts receivable..................................... $ 187 $ 322
Employee compensation and benefit accruals.............. 6,198 5,949
Workers' compensation and other claims.................. 153 215
Other................................................... 58 184
Warranty accrual........................................ 946 818
EPA accrual............................................. 315 308
Net operating loss carryforwards........................ 9,430 12,171
General business credit................................. 295 5
Valuation allowance..................................... (15,654) (17,753)
-------- --------
Total deferred tax asset.............................. $ 1,928 $ 2,219
-------- --------
Gross deferred tax liabilities:
Property, plant, and equipment.......................... $ 1,424 $ 1,479
Pension assets.......................................... 253 151
Inventory............................................... (217) 201
Investment in property.................................. 214 208
Foreign earnings not permanently invested............... 202 161
Foreign exchange........................................ 236 236
Export sales provision.................................. 623 574
-------- --------
Total deferred tax liability.......................... 2,735 3,010
-------- --------
Net deferred tax liability................................ $ (807) $ (791)
======== ========
</TABLE>
For domestic federal income tax purposes, the Net Operating Loss (NOL) carryover
amounts to $26,942 and will expire from 2006 to 2008. For purposes of the
Alternative Minimum Tax (AMT), the NOL carryover is $13,626 and the credit
carryforwards total $295.
29
<PAGE>
12. GEOGRAPHICAL SEGMENTS
Domestic and foreign operations information for 1995, 1994, and 1993 is as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
Net sales--unaffiliated customers:
<S> <C> <C> <C>
Domestic............................. $126,738 $119,774 $ 99,317
Export............................... 36,238 28,848 25,036
Foreign: Europe...................... 35,829 34,534 22,858
Other....................... 22,768 18,978 25,095
-------- -------- --------
$221,573 $202,134 $172,306
======== ======== ========
Inter-area sales eliminations:
Domestic............................. $ 17,732 $ 16,904 $ 11,098
======== ======== ========
Foreign, principally Europe.......... $ 47 $ 207 $ 120
======== ======== ========
Operating income (loss):
Domestic............................. $ 8,945 $ 7,156 $ (4,295)
Foreign: Europe..................... (4,232) (2,971) (1,025)
Other...................... (399) (882) 1,393
Adjustments and eliminations......... 1,442 1,314 1,603
-------- -------- --------
$ 5,756 $ 4,617 $ (2,324)
======== ======== ========
Identifiable assets:
Domestic............................. $107,445 $ 94,466 $102,743
Foreign: Europe..................... 22,914 25,189 21,090
Other...................... 14,071 13,102 12,776
Adjustments and eliminations......... (23,198) (19,252) (19,544)
-------- -------- --------
$121,232 $113,505 $117,065
======== ======== ========
</TABLE>
The Company's foreign operations are located in Canada, Germany, The
Netherlands, Scotland, and South Africa. A substantial amount of European sales
to unaffiliated customers are made to geographical areas outside of Europe.
Transfers between geographical areas are at cost plus an incremental amount
intended to provide a reasonable profit margin to the selling enterprises.
Amounts relating to foreign operations included in the consolidated financial
statements are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Working capital................................................. $ 14,717 $14,828 $15,982
Property, plant, and equipment (net) and other.................. 5,997 5,717 5,187
Noncurrent liabilities.......................................... (12,666) (6,683) (3,128)
-------- ------- -------
Net foreign assets.............................................. $ 8,048 $13,862 $18,041
======== ======= =======
Net earnings (loss) of foreign operations....................... $ (5,620) $(4,438) $ 161
======== ======= =======
13. ALLOWANCE FOR DOUBTFUL ACCOUNTS
Changes in the allowance for doubtful accounts are as follows:
1995 1994 1993
-------- -------- -------
Balance, beginning of year...................................... $ 1,295 $ 1,267 $ 1,795
Charged to operations........................................... 367 291 381
Uncollectible accounts written off, less recoveries............. (519) (278) (879)
Foreign currency translation adjustments........................ 7 15 (30)
-------- ------- -------
Balance, end of year............................................ $ 1,150 $ 1,295 $ 1,267
======== ======= =======
</TABLE>
30
<PAGE>
14. RETIREMENT PLANS
The Company and its subsidiaries have several retirement plans covering most of
their employees, including certain employees in foreign countries. Charges to
operations for the cost of the Company's retirement plans including the
Retirement Savings Plan (RSP) were $3,054 in 1995; $2,421 in 1994; and $2,675 in
1993.
Defined Benefit Plans (U.S.) -- The Company maintains two noncontributory
defined benefit pension plans which cover certain union employees. The
Company's funding to the plans is equal to the minimum contribution required by
the Internal Revenue Code. The benefits are based upon a fixed benefit rate and
years of service. Future benefits under these plans were frozen as of December
31, 1990. The participants under these plans became eligible to participate in
the Retirement Savings Plan (RSP) beginning January 1, 1991.
The following table sets forth the aggregate defined benefit plans' funded
status and amounts reflected in the accompanying consolidated balance sheets as
of November 30, 1995 and 1994:
<TABLE>
<CAPTION>
Assets Exceed Accumulated
Accumulated Benefits
Benefits Exceed Assets
------------- ---------------
1995 1994 1995 1994
------ ------ ------- -------
<S> <C> <C> <C> <C>
Actuarial present value of accumulated
plan benefits:
Vested.............................. $1,599 $1,196 $10,226 $ 8,720
Nonvested........................... 57 -- 769 --
------ ------ ------- -------
Accumulated benefit obligations..... $1,656 $1,196 $10,995 $ 8,720
====== ====== ======= =======
Projected benefit obligations........ $1,656 $1,196 $10,995 $ 8,720
Plan assets at fair value,
principally common stocks, bonds,
and GIC funds, including $409 in
1995 and $437 in 1994 of the
Company's common stock.............. 1,924 1,765 7,325 6,790
------ ----- ------- -------
Plan assets in excess of (less than)
projected benefit obligations....... 268 569 (3,670) (1,930)
Unrecognized net loss................ 516 189 4,002 2,063
Unrecognized net assets at December
1, 1991 and 1990 being recognized
over 15 years....................... (260) (288) (134) (157)
Adjustment required to
recognize minimum liability........ -- -- (3,868) (1,906)
------ ------ ------- -------
Prepaid pension cost (pension
liability) recognized in the
consolidated balance sheet.......... $ 524 $ 470 $(3,670)$(1,930)
====== ====== ======= =======
The net periodic pension expense amounts were based on actuarial assumptions
as follows:
1995 1994 1995 1994
----- ----- ----- -----
Discount rate on plan liabilities.... 7.00% 8.50% 7.00% 8.50%
Rate of return on plan assets........ 8.00% 8.00% 8.00% 8.00%
</TABLE>
31
<PAGE>
In accordance with Statement of Financial Accounting Standards (SFAS) No. 87,
"Employers' Accounting for Pensions," the Company has recorded an additional
minimum pension liability for the underfunded plan of $3,868 and $1,906 at
November 30, 1995 and 1994, respectively, representing the excess of unfunded
accumulated benefit obligations over previously recorded pension cost
liabilities.
The net periodic pension cost of U.S. defined benefit plans for 1995, 1994, and
1993 includes the following components:
<TABLE>
<CAPTION>
1995 1994 1993
-------- ------ ------
<S> <C> <C> <C>
Interest cost on projected benefit obligations.. $ 857 $ 849 $ 851
Return on plan assets........................... (1,138) 82 (896)
Net amortization and deferral................... 558 (625) 335
------- ----- -----
Net periodic pension expense.................... $ 277 $ 306 $ 290
======= ===== =====
</TABLE>
The Company's foreign retirement plans are an insignificant portion of the
Company's total retirement plans and are not required to report to certain
governmental agencies pursuant to ERISA. These plans do not otherwise determine
actuarial value of accumulated benefits or net assets available for benefits and
are omitted from the above table.
Defined Contribution Plan (U.S.) -- The RSP covers substantially all employees
of Tokheim and its U.S. subsidiary. Through the RSP, employee ownership of the
Company is increased approximately 11%. The RSP includes a common stock ESOP and
a preferred stock ESOP which provide a retirement contribution of 1.5% of salary
to all employees in the plan and a matching contribution of at least two-thirds
of the first 6% of employee contributions. The matching contribution can
increase to 150% of the first 6% of contributions, depending on the performance
of the Company.
The Accounting Standards Division of the American Institute of Certified Public
Accountants issued Statement of Position (SOP) 93-6, Employers' Accounting for
Employee Stock Ownership Plans, in November, 1993. As allowed by that statement,
the Company has elected to continue its current practices which are based on SOP
76-3 and subsequent consensuses of the Emerging Issues Task Force of the
Financial Accounting Standards Board. Dividends paid on ESOP shares are
reflected as a reduction of retained earnings. All ESOP shares are considered
outstanding for earnings per share computations. Preferred ESOP shares which
have not been allocated to participants' accounts are assumed to be outstanding
based on the stated conversion ratio of one-for-one. Preferred ESOP shares which
have been allocated to participants' accounts are included in the computation of
earnings per share based on the weighted average market value of the Company's
common stock relative to the $25 liquidation value of the preferred stock. The
number of allocated preferred ESOP and common ESOP shares at November 30, 1995
was 365,843 and 118,366, respectively. 442,777 preferred shares and 27,179
common shares were held in suspense by the ESOPs at November 30, 1995. At
November 30, 1995, the value of the shares allocated to participants was
$9,988,550.
The number of preferred shares in the RSP at November 30, 1995 and 1994 was
808,620 and 829,534, respectively, at a cost of $25 per share. The number of
common shares in the RSP at November 30, 1995 and 1994 was 145,545 and 153,478,
respectively, at an average cost of $21.09 and $21.05 per share. The dividend
yield on the preferred stock is 7.75%, and the conversion rate is one share of
preferred stock to one share of common stock. Each year, approximately 8% of the
preferred stock held by the plan is released from suspense, based on the ratio
of the current year's debt service (principal and interest) to the sum of
current year and remaining debt service, and allocated to participants'
accounts. The Company has guaranteed the RSP loans as described in Note 4. A
like amount entitled "Guaranteed Employees' Stock Ownership Plan (RSP)
obligation" is recorded as a reduction of stockholders' equity. As the Company
makes contributions to the RSP, these contributions, plus the dividends paid on
the Company's preferred and common stock held by the RSP, are used to repay the
loans. As the principal amounts of the loans are repaid, the "Guaranteed
Employees' Stock Ownership Plan (RSP) obligation" in the equity and liability
sections of the balance sheet is reduced accordingly. Company contributions in
excess of dividends are allocated to interest and compensation expense on a
basis proportional to the required debt service on RSP loans. Compensation
expense is calculated as the debt service on the RSP debt, less dividends paid
to the ESOP, plus additional amounts required to meet the obligations under the
RSP, net of the amounts allocated to interest.
32
<PAGE>
The table below sets forth the interest expense, the amounts contributed to the
RSP (excluding preferred stock dividends), and the amount of dividends on
preferred stock used for debt service by the RSP:
<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Interest expense incurred by the Plan Trust(s) on RSP debt........... $1,265 $1,367 $1,595
Company contributions to the RSP..................................... 2,300 1,719 2,030
Dividends on preferred stock used for service by the RSP............. 1,580 1,617 1,663
Compensation Expense................................................. 1,531 977 1,157
Interest Expense..................................................... 832 746 887
</TABLE>
15. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company provides defined benefit postretirement health and life insurance
benefits to most of its U.S. employees. Covered employees become eligible for
these benefits at retirement after meeting minimum age and service requirements.
Effective December 1, 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." This statement requires that the
costs of future benefits be accrued during an employee's active working career.
The cost of providing these benefits was previously recognized as claims were
incurred. The Company continues to fund benefits on a pay-as-you-go basis, with
some retirees paying a portion of the costs.
The Company recorded the discounted value of expected future benefits earned as
of December 1, 1993 as a cumulative effect of accounting change. This one-time,
noncash accounting change resulted in a charge to earnings of $13,416, or $1.72
per share. Due to the Company's net operating loss carryforward position (see
Note 11), the Company established a valuation allowance to offset the deferred
tax asset created by this charge to operations.
The accumulated postretirement benefit obligation as of November 30, 1995 and
1994 consisted of unfunded obligations related to the following:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Retirees and dependents............................... $ 8,333 $ 4,903
Fully eligible active plan participants............... 1,114 1,274
Other active plan participants........................ 5,631 6,935
------- -------
Total accumulated postretirement
benefit obligation.................................. 15,078 13,112
Unrecognized net gain (loss).......................... (309) 1,101
------- -------
Accrued postretirement benefit cost................... 14,769 14,213
Less current portion.................................. (887) (701)
------- -------
$13,882 $13,512
======= =======
</TABLE>
Postretirement benefit cost for 1995 and 1994 includes the following components:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Service cost.......................................... $ 422 $ 582
Interest cost on accumulated postretirement
benefit obligation................................... 1,034 916
Amortization (gain) loss.............................. (25) --
------- -------
Net postretirement benefit cost.................... $ 1,431 $ 1,498
======= =======
</TABLE>
The assumptions used to develop the net postretirement benefit expense and the
present value of benefit obligations are as follows:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Discount rate......................................... 7.00% 8.50%
Health care cost trend rate for the next year........ 10.00% 11.00%
</TABLE>
The health care cost trend rate used to value the accumulated postretirement
benefit obligation is assumed to decrease gradually to an ultimate rate of 5% in
2005. A 1% increase in this annual trend rate would increase the accumulated
postretirement benefit obligation as of November 30, 1995 by approximately
$2,063 and the combined service and interest components of the annual net
postretirement health care cost by approximately $263.
33
<PAGE>
16. CONTINGENT LIABILITIES
The Company is defending various claims and legal actions, including
environmental actions, which are common to its operations. These legal actions
primarily involve claims for damages arising out of the Company's manufacturing
operations, the use of the Company's products, and allegations of patent
infringement.
Environmental Matters -- Total amounts included in accrued expenses related to
environmental matters were $872 and $847 at November 30, 1995 and 1994,
respectively. The Company has been designated as a "potentially responsible
party" (PRP), in conjunction with other parties, in five governmental actions
associated with hazardous waste sites falling under the Comprehensive
Environmental Response Compensation and Liability Act (CERCLA). Such actions
seek recovery of certain cleanup costs. Dates upon which the Company received
notice as a PRP range from January 1988 to January 1992. The Company has
attempted, where possible, to develop a reasonable estimate of the cost or range
of costs which may accrue from these actions. Likewise, the Company has
attempted, where possible, to assess the likelihood of an unfavorable outcome to
the Company as a result of these actions. Legal counsel has been retained to
assist the Company in making these determinations, and cleanup costs are accrued
when an unfavorable outcome is determined to be probable and a reasonable
estimate can be made.
The Company is a "de minimis" party in two of these sites. One matter was
settled for $14. The second matter will cost the Company approximately $6 for
its share of the pro rated clean up costs.
During 1995, the Company settled two additional actions with the Environmental
Protection Agency (EPA). One matter the Company settled in the amount of $627
as part of a global settlement with other PRPs and has recorded the liability in
full at November 30, 1995. The accrued amount will be paid over a two year
period. In the other settlement, the Company has settled as a participating
generator as part of a global settlement. The Company paid $192 as part of its
past costs and operating maintenance of the site. The Company provided a letter
of credit in the amount of $148 to cover its projected future costs.
With respect to the fifth site, involving potential groundwater contamination,
the Company and other PRPs are negotiating with the EPA as to the testing to be
performed on the property to determine if contamination has occurred; and, if
so, the specific tracts of property affected. The Company cannot determine the
extent of its liability in the event its property is deemed to be contaminated;
and the method of allocation of liability, if any, among the PRPs who may
ultimately be found liable remains uncertain.
The Company is also involved in one lawsuit with respect to environmental
liabilities under an indemnity provision of a sale agreement concerning the sale
of a subsidiary die casting facility to a third party. The Company believes it
has fulfilled its obligations under the sale agreement and it cannot at this
time quantify the liabilities that are alleged in the litigation.
Product Liability and Other Matters -- The Company is subject to various other
legal actions arising out of the conduct of its business, including those
relating to product liability, patent infringement, and claims for damages
alleging violations of federal, state, or local statutes or ordinances dealing
with civil rights. Total amounts included in accrued expenses related to these
actions were $156 and $265 at November 30, 1995 and 1994, respectively.
In the opinion of the Company's Management, amounts accrued for awards or
assessments in connection with these matters are adequate and ultimate
resolution of environmental, product liability and other legal matters will not
have a material effect on the Company's consolidated financial position, results
of operations, or cash flow.
34
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Stockholders and Directors,
Tokheim Corporation:
We have audited the accompanying consolidated balance sheets of Tokheim
Corporation and Subsidiaries as of November 30, 1995 and 1994, and the related
consolidated statements of earnings and retained earnings, and cash flows for
each of the three years in the period ended November 30, 1995. These statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Tokheim
Corporation and Subsidiaries as of November 30, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended November 30, 1995, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Fort Wayne, Indiana
January 24, 1996
35
<PAGE>
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
DIRECTORS OF THE REGISTRANT
The information required by this Item is set forth on page 1 through 4 in the
registrant's Proxy Statement for the 1995 Annual Meeting of Stockholders, which
information is incorporated herein by reference.
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to item 401 of Regulation S-K, the following information is presented
herein in lieu of presenting such information in a definitive Proxy Statement to
be filed as described under Part III.
The names, ages, and positions of all of the executive officers of the Company
are listed below along with their business experience during the past five
years. Officers are appointed annually by the Board of Directors at the meeting
of Directors immediately following the Annual Meeting of Stockholders.
There are no family relationships among any of the officers of the Company, nor
any arrangement or understanding between any such officer and any other person
pursuant to which he was elected as an officer.
NAME, AGE, AND POSITION BUSINESS EXPERIENCE DURING PAST 5 YEARS
- ---------------------------- --------------------------------------------
GERALD H. FRIELING, JR., 65 Elected Chairman of the Board in 1991;
Chairman of the Board during the last 5 years, also served as
Chief Executive Officer of the Company.
DOUGLAS K. PINNER, 55 Joined Tokheim as President and Chief
President and Chief Executive Officer in 1992; during the last
Executive Officer 5 years, also served as President of
Slater Steels Fort Wayne Specialty Alloys.
WILLIAM M. ANDERSON, 49 Elected Vice President, Planning and
Vice President, Planning Human Resources in 1995; during the
and Human Resources last 5 years, also served as Vice President,
Human Resources, of the Company and as
Senior Vice President of NordicTrack, Inc.
and as Director, Total Quality
Management/Human Resources of FMC
Corporation.
CONDELL B. ELLIS, 63 Elected Vice President, Domestic Sales in
Vice President, 1995; during the last 5 years, also served
Domestic Sales as Vice President, as Vice President, Sales
of CANMAX; served in various executive sales
officer positions of Tokheim Corporation;
and as Vice President, Sales, Wayne Division
of Dresser Industries, Inc.
36
<PAGE>
NAME, AGE, AND POSITION BUSINESS EXPERIENCE DURING PAST 5 YEARS
- ----------------------------- --------------------------------------------
TERRY M. FULMER, 52 Elected Vice President, Global
Vice President, Manufacturing in 1995; during the last 5
Global Manufacturing years, also served as Vice President,
Corporate Operations and Planning; Vice
President, Corporate Planning; General
Manager, Small Pumps Division; and Manager
of Manufacturing, Newbern Plant of the
Company.
JOHN A. NEGOVETICH, 50 Joined Tokheim as Vice President and Chief
Vice President and Financial Officer in 1995; during the last 5
Chief Financial Officer years, also served as Vice President,
Finance, Chief Financial Officer and
Director of Ardco, Inc. and as Vice
President, Finance, Hawker Siddeley, Inc.
ARTHUR C. PREWITT, 54 Elected Vice President, Technology and
Vice President, Technology Venture Development in 1995; during the last
and Venture Development five years, also served as Vice President,
Technology; Vice President, Corporate
Engineering and Marketing; and Vice
President, Product Engineering, of the
Company; and as Manager, Technical Products
of Gilbarco, Inc.
NORMAN L. ROELKE, 46 Elected Vice President, Secretary and
Vice President, Secretary General Counsel in 1995; during the last 5
and General Counsel years, also served as Vice President and
General Counsel and as Corporate Counsel of
the Company.
SCOTT A. SWOGGER, 43 Elected Vice President, Quality Systems in
Vice President, 1995; during the last 5 years, also served
Quality Systems as Director, Quality Assurance, of the
Company; Corporate Quality Engineer and
Senior Quality Engineer of DePuy, Inc.; and
as Senior Manager, Quality Assurance of
Tokheim Corporation.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive (and certain other) officers, and persons who own more than
10% of the Company's common stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the New York Stock
Exchange. Directors, officers, and greater-than-10% stockholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on review of copies of such forms furnished to the
Company, or written representations that no Forms 5 were required, the Company
believes that during fiscal year 1995 all Section 16(a) filing requirements
applicable to its directors, officers and greater-than-10% stockholders were
held in compliance.
37
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item is set forth on page 4 through 6 in the
registrant's Proxy Statement for the 1995 Annual Meeting of Stockholders, which
information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this Item is set forth on page 9 through 11 in the
registrant's Proxy Statement for the 1995 Annual Meeting of Stockholders, which
information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this Item is set forth on page 9 through 11 in the
registrant's Proxy Statement for the 1995 Annual Meeting of Stockholders, which
information is incorporated herein by reference.
38
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. FINANCIAL STATEMENTS:
<TABLE>
<CAPTION>
<S> <C>
Included as outlined in Item 8 of Part II of this report:
Consolidated Statement of Earnings and Retained Earnings for
each of the three years in the period ended November 30, 1995...... Page 14
Consolidated Statement of Cash Flows for each of the three years
in the period ended November 30, 1995.............................. Page 15
Consolidated Balance Sheet as of November 30, 1995 and 1994........ Page 16
Notes to Consolidated Financial Statements......................... Page 18
Report of Independent Accountants.................................. Page 35
(a) 2. SUPPLEMENTARY DATA AND FINANCIAL STATEMENT SCHEDULES:
Included as outlined in Item 8 of Part II of this report:
Quarterly Financial Information (Unaudited) in Note 10 to the
Consolidated Financial Statements.................................. Page 27
</TABLE>
There are no schedules included in Part IV of this report as they are not
required, are not applicable, or the information is shown in the Notes to the
Consolidated Financial Statements.
(a) 3. EXHIBITS:
<TABLE>
Exhibit
Number Description
------- -----------
<S> <C>
3.1 Restated Articles of Incorporation of the Registrant, as filed with the Indiana Secretary of State on August 17,
1990.
3.2 Bylaws of the Registrant, as restated on July 12, 1995.
4 Rights Agreement, dated as of January 28, 1987, between the Registrant and Harris Trust and Savings Bank,, as Rights
Agent (incorporated by reference to the Registrant's Registration Statement on Form 8-A, File No. 1-6018, dated
February 10, 1987).
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established December 15, 1992 (incorporated by reference to the
Registrant's Registration Statement on Form S-8, File No. 33-52167, dated February 4, 1994).
10.2 Retirement Savings Plan for Employees of Tokheim Corporation and Subsidiaries (incorporated by reference to Amendment
No. 1 to the Registrant's Registration Statement on Form S-8, File No. 33-29710, dated August 1, 1989).
10.3 Employment Agreement, dated September 22, 1995, between the Registrant and Douglas K. Pinner.
10.4 Employment Agreement dated September 22, 1995, between the Registrant and Terry M. Fulmer.
11 Statement re: Computation of Per Share Earnings.
21 List of the Subsidiaries of the Registrant.
23 Consent of Coopers & Lybrand L.L.P.
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K:
None.
</TABLE>
39
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
November 20, 1996 TOKHEIM CORPORATION
----------------------------------------------
(Registrant)
By: Douglas K. Pinner
----------------------------------------------
Chairman of the Board,
President and Chief Executive Officer
and Director
By: John A. Negovetich
----------------------------------------------
President, Tokheim, North America and
Acting Chief Financial Officer
40
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
<S> <C>
3.1 Restated Articles of Incorporation of the Registrant, as filed with the Indiana Secretary of State on August 17,
1990.
3.2 Bylaws of the Registrant, as restated on July 12, 1995.
4 Rights Agreement, dated as of January 28, 1987, between the Registrant and Harris Trust and Savings Bank,, as Rights
Agent (incorporated by reference to the Registrant's Registration Statement on Form 8-A, File No. 1-6018, dated
February 10, 1987).
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established December 15, 1992 (incorporated by reference to the
Registrant's Registration Statement on Form S-8, File No. 33-52167, dated February 4, 1994).
10.2 Retirement Savings Plan for Employees of Tokheim Corporation and Subsidiaries (incorporated by reference to Amendment
No. 1 to the Registrant's Registration Statement on Form S-8, File No. 33-29710, dated August 1, 1989).
10.3 Employment Agreement, dated September 22, 1995, between the Registrant and Douglas K. Pinner.
10.4 Employment Agreement dated September 22, 1995, between the Registrant and Terry M. Fulmer.
11 Statement re: Computation of Per Share Earnings.
21 List of the Subsidiaries of the Registrant.
23 Consent of Coopers & Lybrand L.L.P.
27 Financial Data Schedule
</TABLE>
<PAGE>
Exhibit 3.1
RESTATED ARTICLES OF INCORPORATION
OF
TOKHEIM CORPORATION
------------------------
Tokheim Corporation (hereinafter referred to as the "Corporation"), having
duly elected to be governed by IC 23-1-18 through IC 23-1-54 (except for IC
23-1-18-3, IC 23-1-21 and IC 23-1-53-3) effective April 10, 1986, and desiring
to amend and restate its Articles of Incorporation effective the date of filing
hereof with the office of the Indiana Secretary of State, pursuant to the
provisions of the Indiana Business Corporation Law (hereinafter referred to as
the "Corporation Law"), submits the following Restated Articles of
Incorporation:
ARTICLE I
Name
The name of the Corporation is Tokheim Corporation.
ARTICLE II
Purposes and Powers
Section 2.1. Purposes of the Corporation. The purposes for which the
Corporation is formed are (a) to engage in the general business of manufacturing
and selling any and all devices, appliances and/or articles of every kind and
description, for whatever purpose or use and of whatever material or substance
made, and to carry on such activities of every kind or nature as may be allied
or incidental to such general business and (b) to engage in the transaction of
any or all lawful business for which corporations may now or hereafter be
incorporated under the Corporation Law.
Section 2.2. Powers of the Corporation. The Corporation shall have (a) all
powers now or hereafter authorized by or vested in corporations pursuant to the
provisions of the Corporation Law, (b) all powers now or hereafter vested in
corporations by common law or any other statute or act and (c) all powers
authorized by or vested in the Corporation by the provisions of these Restated
Articles of Incorporation or by the provisions of its Bylaws as from time to
time in effect.
ARTICLE III
Term of Existence
The period during which the Corporation shall continue is perpetual.
1
<PAGE>
ARTICLE IV
Registered Office and Agent
The street address of the Corporation's registered office at the time
of adoption of these Restated Articles of Incorporation is 1602 Wabash Avenue,
Fort Wayne, Indiana 46803 and the name of its Resident Agent at such office at
the time of adoption of these Restated Articles of Incorporation is Randolph J.
Straka.
ARTICLE V
Shares
Section 5.1. Authorized Classes and Number of Shares. The total
number of shares which the Corporation has authority to issue shall be
35,000,000 shares, consisting of 30,000,000 common shares (the "Common Shares")
and 5,000,000 special shares (the "Special Shares"). The Corporation's shares do
not have any par or stated value, except that, solely for the purpose of any
statute or regulation imposing any tax or fee based upon the capitalization of
the Corporation, each of the Corporation's shares shall be deemed to have a par
value of $1.00 per share.
Section 5.2. General Terms of All Shares. The Corporation shall
have the power to acquire (by purchase, redemption or otherwise), hold, own,
pledge, sell, transfer, assign, reissue, cancel or otherwise dispose of the
shares of the Corporation in the manner and to the extent now or hereafter
permitted by the laws of the State of Indiana (but such power shall not imply an
obligation on the part of the owner or holder of any share to sell or otherwise
transfer such share to the Corporation), including the power to purchase, redeem
or otherwise acquire the Corporation's own shares, directly or indirectly, and
without pro rata treatment of the owners or holders of any class or series of
shares, unless, after giving effect thereto, the Corporation would not be able
to pay its debts as they become due in the usual course of business or the
Corporation's total assets would be less than its total liabilities (and without
regard to any amounts that would be needed, if the Corporation were to be
dissolved at the time of the purchase, redemption or other acquisition, to
satisfy the preferential rights upon dissolution of shareholders whose
preferential rights are superior to those of the holders of the shares of the
Corporation being purchased, redeemed or otherwise acquired, unless otherwise
expressly provided with respect to a series of Special Shares in the provisions
of these Restated Articles of Incorporation adopted by the Board of Directors
pursuant to Section 5.5 hereof describing the terms of such series). Shares of
the Corporation purchased, redeemed or otherwise acquired by it shall constitute
authorized but unissued shares, unless prior to any such purchase, redemption or
other acquisition, or within thirty (30) days thereafter, the Board of Directors
adopts a resolution providing that such shares constitute authorized and issued
but not outstanding shares.
2
<PAGE>
The Board of Directors of the Corporation may dispose of, issue and
sell shares in accordance with, and in such amounts as may be permitted by, the
laws of the State of Indiana and the provisions of these Restated Articles of
Incorporation and for such consideration, at such price or prices, at such time
or times and upon such terms and conditions (including the privilege of
selectively repurchasing the same) as the Board of Directors of the Corporation
shall determine, without the authorization or approval by any shareholders of
the Corporation. Shares may be disposed of, issued and sold to such persons,
firms or corporations as the Board of Directors may determine, without any
preemptive or other right on the part of the owners or holders of other shares
of the Corporation of any class or kind to acquire such shares by reason of
their ownership of such other shares.
When the Corporation receives the consideration specified in a
subscription agreement entered into before incorporation, or for which the Board
of Directors authorized the issuance of shares, as the case may be, the shares
issued therefor shall be fully paid and nonassessable.
The Corporation shall have the power to declare and pay dividends or
other distributions upon the issued and outstanding shares of the Corporation,
subject to the limitation that a dividend or other distribution may not be made
if, after giving it effect, the Corporation would not be able to pay its debts
as they become due in the usual course of business or the Corporation's total
assets would be less than its total liabilities (and without regard to any
amounts that would be needed, if the Corporation were to be dissolved at the
time of the dividend or other distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
of the holders of shares receiving the dividend or other distribution, unless
otherwise expressly provided with respect to a series of Special Shares in the
provisions of these Restated Articles of Incorporation adopted by the Board of
Directors pursuant to Section 5.5 hereof describing the terms of such series).
The Corporation shall have the power to issue shares of one class or series as a
share dividend or other distribution in respect of that class or series or one
or more other classes or series.
Section 5.3 Voting Rights of Shares.
(a) Common Shares. Except as otherwise provided by the Corporation Law
and subject to such shareholder disclosure and recognition procedures (which may
include voting prohibition sanctions) as the Corporation may by action of its
Board of Directors establish, the Common Shares have unlimited voting rights and
each outstanding Common Share shall, when validly issued by the Corporation,
entitle the record holder thereof to one vote at all shareholders' meetings on
all matters submitted to a vote of the shareholders of the Corporation.
(b) Special Shares. Except as required by the Corporation Law or by
the provisions of these Restated Articles of Incorporation adopted by the Board
of Directors pursuant to Section 5.5 hereof describing the terms of Special
Shares or a series thereof, the holders of Special Shares shall have no voting
rights or powers. Special Shares shall, when validly issued by the Corporation,
entitle the record holder thereof to vote as and on such matters, but only as
3
<PAGE>
and on such matters, as the holders thereof are entitled to vote under the
Corporation Law or under the provisions of these Restated Articles of
Incorporation adopted by the Board of Directors pursuant to Section 5.5 hereof
describing the terms of Special Shares or a series thereof (which provisions may
provide for special, conditional, limited or unlimited voting rights, including
multiple or fractional votes per share, or for no right to vote, except to the
extent required by the Corporation Law) and subject to such shareholder
disclosure and recognition procedures (which may include voting prohibition
sanctions) as the Corporation may by action of the Board of Directors establish.
Section 5.4. Other Terms of Common Shares. The Common Shares shall be
equal in every respect insofar as their relationship to the Corporation is
concerned, but such equality of rights shall not imply equality of treatment as
to redemption or other acquisition of shares by the Corporation. Subject to the
rights of the holders of any outstanding Special Shares issued under Section 5.5
hereof, the holders of Common Shares shall be entitled to share ratably in such
dividends or other distributions (other than purchases, redemptions or other
acquisitions of shares by the Corporation), if any, as are declared and paid
from time to time on the Common Shares at the discretion of the Board of
Directors. In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, after payment shall have been made
to the holders of the Special Shares of the full amount to which they shall be
entitled under this Article V, the holders of Common Shares shall be entitled,
to the exclusion of the holders of the Special Shares of any and all series, to
share, ratably according to the number of shares of Common Shares held by them,
in all remaining assets of the Corporation available for distribution to its
shareholders.
Section 5.5. Other Terms of Special Shares.
(a) Special Shares may be issued from to time in one or more series,
each such series to have such distinctive designation and such preferences,
limitations and relative voting and other rights as shall be set forth in these
Restated Articles of Incorporation. Subject to the requirements of the
Corporation Law and subject to all other provisions of these Restated Articles
of Incorporation, the Board of Directors of the Corporation may create one or
more series of Special Shares and may determine the preferences, limitations and
relative voting and other rights of one or more series of Special Shares before
the issuance of any shares of that series by the adoption of an amendment to the
Restated Articles of Incorporation that specifies the terms of the series of
Special Shares. All shares of a series of Special Shares must have preferences,
limitations and relative voting and other rights identical with those of other
shares of the same series and, if the description of the series set forth in
these Restated Articles of Incorporation so provides, no series of Special
Shares need have preferences, limitations or relative voting or other rights
identical with those of any other series of Special Shares.
4
<PAGE>
Before issuing any shares of a series of Special Shares, the Board of
Directors shall adopt an amendment to these Restated Articles of Incorporation,
which shall be effective without any shareholder approval or other action that
sets forth the preferences, limitations and relative voting and other rights of
the series, and authority is hereby expressly vested in the Board of Directors,
by such amendment:
(i) To fix the distinctive designation of such series and the number
of shares which shall constitute such series, which number may be increased
or decreased (but not below the number of shares thereof then outstanding)
from time to time by action of the Board of Directors;
(ii) To fix the voting rights of such series, which may consist of
special, conditional, limited or unlimited voting rights, including
multiple or fractional votes per share, or no right to vote (except to the
extent required by the Corporation Law);
(iii) To fix the dividend or distribution rights of such series and
the manner of calculating the amount and time for payment of dividends or
distributions, including, but not limited to:
(A) the dividend rate, if any, of such series;
(B) any limitations, restrictions or conditions on the payment
of dividends or other distributions, including whether dividends or
other distributions shall be noncumulative or cumulative or partially
cumulative and, if so, from which date or dates;
(C) the relative rights of priority, if any, of payment of
dividends or other distributions on shares of that series in relation
to Common Shares and shares of any other series of Special Shares;
and
(D) the form of dividends or other distributions, which may be
payable at the option of the Corporation, the shareholder or another
person (and in such case to prescribe the terms and conditions of
exercising such option), or upon the occurrence of a designated event
in cash, indebtedness, stock or other securities or other property,
or in any combination thereof,
and to make provisions, in the case of dividends or other distributions
payable in stock or other securities, for adjustment of the dividend or
distribution rate in such events as the Board of Directors shall determine;
(iv) To fix the price or prices at which, and the terms and
conditions on which, the shares of such series may be redeemed or
converted, which may be:
(A) at the option of the Corporation, the shareholder or
another person or upon the occurrence of a designated event;
(B) for cash, indebtedness, securities, or other property or
any combination thereof; and
5
<PAGE>
(C) in a designated amount or in an amount determined in
accordance with a designated formula or by reference to extrinsic
data or events;
(v) To fix the amount or amounts payable upon the shares of such
series in the event of any liquidation, dissolution or winding up of the
Corporation and the relative rights of priority, if any, of payment upon
shares of such series in relation to Common Shares and shares of any other
series of Special Shares; and to determine whether or not any such
preferential rights upon dissolution need be considered in determining
whether or not the Corporation may make dividends, repurchases or other
distributions;
(vi) To determine whether or not the shares of such series shall be
entitled to the benefit of a sinking fund to be applied to the purchase or
redemption of such series and, if so entitled, the amount of such fund and
the manner of its application;
(vii) To determine whether or not the issue of any additional shares
of such series or of any other series in addition to such series shall be
subject to restrictions in addition to restrictions, if any, on the issue
of additional shares imposed in the provisions of these Restated Articles
of Incorporation fixing the terms of any outstanding series of Special
Shares theretofore issued pursuant to this Section 5.5 and, if subject to
additional restrictions, the extent of such additional restrictions; and
(viii) Generally to fix the other preferences or rights, and any
qualifications, limitations or restrictions of such preferences or rights,
of such series to the full extent permitted by the Corporation Law;
provided, however, that no such preferences, rights, qualifications,
limitations or restrictions shall be in conflict with these Restated
Articles of Incorporation or any amendment hereof.
(b) Special Shares of any series that have been redeemed (whether through
the operation of a sinking fund or otherwise) or purchased by the Corporation,
or which, if convertible, have been converted into shares of the Corporation of
any other class or series, may be reissued as a part of such series or of any
other series of Special Shares, subject to such limitations (if any) as may be
fixed by the Board of Directors with respect to such series of Special Shares in
accordance with subsection (a) of this Section 5.5.
ARTICLE VI
Directors
Section 6.1. Number. The Board of Directors at the time of adoption of
these Restated Articles of Incorporation is composed of nine (9) members, and
the number of Directors shall be fixed by the By-Laws and may be changed from
time to time by amendment to the By-Laws, provided, however, that the number of
Directors fixed in the By-Laws shall not be less than nine (9) nor more than
thirteen (13). If the By-Laws do not specify the number of Directors, the Board
of Directors shall be composed of nine (9) members. The Board of Directors shall
be divided into two (2) or three (3) groups (with each group containing one-half
(1/2) or one-third
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(1/3) of the total, as near as may be) whose terms of office expire at different
times, as provided in the By-Laws.
Notwithstanding the first sentence of this Section 6.1, any amendment to
the By-Laws that would affect any increase in the number of Directors over such
number as then in effect or any elimination or modification of the groups or
terms of office of the Directors as the By-Laws then in effect may provide,
shall also be approved by the affirmative vote of a majority of the entire
number of Directors of the Corporation who then qualify as Continuing Directors
with respect to all Related Persons (as such terms are defined for purposes of
Article VIII hereof).
Section 6.2. Qualifications. Directors need not be shareholders of the
Corporation or residents of this or any other state in the United States.
Section 6.3. Vacancies. Vacancies occurring in the Board of Directors shall
be filled in the manner provided in the By-Laws or, if the By-Laws do not
provide for the filling of vacancies, in the manner provided by the Corporation
Law. The By-Laws may also provide that in certain circumstances specified
therein, vacancies occurring in the Board of Directors may be filled by vote of
the shareholders at a special meeting called for that purpose or at the next
annual meeting of shareholders.
Section 6.4. Liability of Directors. A Director's responsibility to the
Corporation shall be limited to discharging his duties as a Director, including
his duties as a member of any Committee of the Board of Directors upon which he
may serve, in good faith, with the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and in a manner the
Director reasonably believes to be in the best interests of the Corporation, all
based on the facts then known to the Director.
In discharging his duties, a Director is entitled to rely on information,
opinions, reports, or statements, including financial statements and other
financial data, if prepared or presented by:
(a) One (1) or more officers or employees of the Corporation whom the
Director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants or other persons as to matters the
Director reasonably believes are within such person's professional or expert
competence; or
(c) A Committee of the Board of which the Director is not a member if the
Director reasonably believes the Committee merits confidence;
but a Director is not acting in good faith if the Director has knowledge
concerning the matter in question that makes reliance otherwise permitted by
this Section 6.4 unwarranted. A Director may, in considering the best interests
of the Corporation, consider the effects of any action on shareholders,
employees, suppliers and customers of the Corporation, and communities in which
offices or other facilities of the Corporation are located, and any other
factors the Director considers pertinent.
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A Director shall not be liable for any action taken as a Director, or any
failure to take any action, unless (a) the Director has breached or failed to
perform the duties of the Director's office in compliance with this Section 6.4,
and (b) the breach or failure to perform constitutes willful misconduct or
recklessness.
Section 6.5. Removal of Directors. Any or all of the members of the Board
of Directors may be removed, with or without cause, only at a meeting of the
shareholders called for that purpose, by the affirmative vote of the holders of
outstanding shares representing at least seventy-five percent (75%) of all the
votes then entitled to be cast at an election of Directors.
Section 6.6. Election of Directors by Holders of Special Shares. The
holders of one (1) or more series of Special Shares may be entitled to elect all
or a specified number of Directors, but only to the extent and subject to
limitations as may be set forth in the provisions of these Restated Articles of
Incorporation adopted by the Board of Directors pursuant to Section 5.5 hereof
describing the terms of the series of Special Shares.
ARTICLE VII
Provisions for Regulation of Business and
Conduct of Affairs of Corporation
Section 7.1. Meetings of Shareholders. Meetings of the shareholders of the
Corporation shall be held at such time and at such place, either within or
without the State of Indiana, as may be stated in or fixed in accordance with
the By-Laws of the Corporation and specified in the respective notices or
waivers of notice of any such meetings.
Section 7.2. Special Meetings of Shareholders. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed by the
Corporation Law, may be called at any time by the Board of Directors or the
person or persons authorized to do so by the By-Laws and shall be called by the
Board of Directors if the Secretary of the Corporation receives one (1) or more
written, dated and signed demands for a special meeting, describing in
reasonable detail the purpose or purposes for which it is to be held, from the
holders of shares representing at least twenty-five percent (25%) of all the
votes entitled to be cast on any issue proposed to be considered at the proposed
special meeting. If the Secretary receives one (1) or more proper written
demands for a special meeting of shareholders, the Board of Directors may set a
record date for determining shareholders entitled to make such demand.
Section 7.3. Meetings of Directors. Meetings of the Board of Directors of
the Corporation shall be held at such place, either within or without the State
of Indiana, as may be authorized by the By-Laws and specified in the respective
notices or waivers of notice of any such meetings or otherwise specified by the
Board of Directors. Unless the By-Laws provide otherwise (a) regular meetings of
the Board of Directors may be held without notice of the date,
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time, place or purpose of the meeting and (b) the notice for a special meeting
need not describe the purpose or purposes of the special meeting.
Section 7.4. Action Without Meeting. Any action required or permitted to be
taken at any meeting of the Board of Directors or shareholders, or of any
committee of such Board, may be taken without a meeting, if the action is taken
by all members of the Board or all shareholders entitled to vote on the action,
or by all members of such committee, as the case may be. The action must be
evidenced by one (1) or more written consents describing the action taken,
signed by each Director, or all the shareholders entitled to vote on the action,
or by each member of such committee, as the case may be, and, in the case of
action by the Board of Directors or a committee thereof, included in the minutes
or filed with the corporate records reflecting the action taken or, in the case
of action by the shareholders, delivered to the Corporation for inclusion in the
minutes or filing with the corporate records. Action taken under this Section
7.4 is effective when the last director, shareholder or committee member, as the
case may be, signs the consent, unless the consent specifies a different prior
or subsequent effective date, in which case the action is effective on or as of
the specified date. Such consent shall have the same effect as a unanimous vote
of all members of the Board, or all shareholders, or all members of the
committee, as the case may be, and may be described as such in any document.
Section 7.5. Bylaws. The Board of Directors shall have the exclusive power
to make, alter, amend or repeal, or to waive provisions of, the Bylaws of the
Corporation by the affirmative vote of a majority of the entire number of
Directors at the time, except as expressly provided in Section 6.1 hereof and as
provided by the Corporation Law. All provisions for the regulation of the
business and management of the affairs of the Corporation not stated in these
Restated Articles of Incorporation shall be stated in the Bylaws. The Board of
Directors may adopt Emergency Bylaws of the Corporation and shall have the
exclusive power (except as may otherwise be provided therein) to make, alter,
amend or repeal, or to waive provisions of, the Emergency Bylaws by the
affirmative vote of both (a) a majority of the entire number of Directors at the
time and (b) a majority of the entire number of Directors who then qualify as
Continuing Directors with respect to all Related Persons (as such terms are
defined for purposes of Article VIII hereof).
Section 7.6. Interest of Directors.
(a) A conflict of interest transaction is a transaction with the
Corporation in which a Director of the Corporation has a direct or indirect
interest. A conflict of interest transaction is not voidable by the Corporation
solely because of the Director's interest in the transaction if any one (1) of
the following is true:
(i) The material facts of the transaction and the Director's interest
were disclosed or known to the Board of Directors or a Committee of the Board of
Directors and the Board of Directors or Committee authorized, approved, or
ratified the transaction.
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(ii) The material facts of the transaction and the Director's
interest were disclosed or known to the shareholders entitled to vote and
they authorized, approved, or ratified the transaction.
(iii) The transaction was fair to the Corporation.
(b) For purposes of this Section 7.6, a Director of the Corporation
has an indirect interest in a transaction if:
(i) Another entity in which the Director has material
financial interest or in which the Director is a general partner is party
to the transaction; or
(ii) Another entity of which the Director is a director,
officer, or trustee in a party to the transaction and the transaction is,
or is required to be, considered by the Board of Directors of the
Corporation.
(c) For purposes of Section 7.6(a)(i), a conflict of interest
transaction is authorized, approved, or ratified if it receives the affirmative
vote of a majority of the Directors on the Board of Directors (or on the
Committee) who have no direct or indirect interest in the transaction vote to
authorize, approve or ratify the transaction, a quorum shall be deemed present
for the purpose of taking action under this Section 7.6. The presence of, or a
vote cast by, a Director with a direct or indirect interest in the transaction
does not affect the validity of any action taken under Section 7.6(a)(i), if the
transaction is otherwise authorized, approved or ratified as provided in such
subsection.
(d) Shares owned by or voted under the control of a Director who has
a direct or indirect interest in the transaction, and shares owned by or voted
under the control of an entity described in Section 7.6(b), may be counted in a
vote of shareholders to determine whether to authorize, approve or ratify a
conflict of interest transaction under Section 7.6(a)(ii).
Section 7.7. Nonliability of Shareholders. Shareholders of the
Corporation are not personally liable for the acts or debts of the Corporation,
nor is private property of shareholders subject to the payment of corporate
debts.
Section 7.8. Indemnification of Officers, Directors and Other
Eligible Persons.
(a) Every Eligible Person, as a matter of right, shall be indemnified
by the Corporation against all Liability and reasonable Expense that may be
incurred by such Eligible Person in connection with or resulting from any Claim,
(i) if such Eligible Person is Wholly Successful with respect
to the Claim, or
(ii) if not Wholly Successful, then if such Eligible Person is
determined, as provided in either Section 7.8(f) or 7.8(g), with respect to
the Claim, or any count, issue or matter of the Claim, to have acted in
good faith; and he reasonably believed: (A) in the case of conduct in his
official capacity with the Corporation, that his conduct was in its best
interests, and (B) in all other cases, that his conduct was at least not
opposed to
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its best interests; and, in the case of any Claim of a criminal nature, he
either (A) had reasonable cause to believe his conduct was lawful, or (B)
had no reasonable cause to believe his conduct was unlawful.
The termination of any Claim, by judgment, order, settlement (whether
with or without court approval), or conviction or upon a plea of guilty or of
nolo contendere, or its equivalent, shall not be determinative nor create a
presumption that an Eligible Person did not meet the standards of conduct set
forth in clause (ii) of this subsection (a). The actions of an Eligible Person
with respect to an employee benefit plan subject to the Employee Retirement
Income Security Act of 1974 shall be deemed to have been taken in what the
Eligible Person reasonably believed to be the best interests of the Corporation
or at least not opposed to its best interests if the Eligible Person reasonably
believed he was acting in conformity with the requirements of such Act or he
reasonably believed his actions to be in the interests of the participants in or
beneficiaries of the plan.
(b) The term "Claim" as used in this Section 7.8 shall include every
pending, threatened or completed claim, action, suit or proceeding and all
appeals thereof (whether brought by or in the right of this Corporation, any
other corporation, partnership, joint venture, trust, enterprise, organization,
association, governmental agency, person or otherwise), civil, criminal,
administrative or investigative, formal or informal, in which an Eligible Person
may become or is threatened to become involved, as a party or otherwise: (i) by
reason of his being or having been an Eligible Person or (ii) by reason of any
action taken or not taken by him in his capacity as an Eligible Person, whether
or not he continued in such capacity at the time such Liability or Expense shall
have been incurred, and further whether or not the action taken or not taken
antedated the adoption of this Section 7.8.
(c) The term "Eligible Person" as used in this Section 7.8 shall mean
every person (and the estate, heirs, executors, administrators, and personal
representatives of such person) who is or was a Director or officer of the
Corporation or a Director or officer of the Corporation who is or was serving at
the request of the Corporation as a director, officer, employee, agent or
fiduciary of another foreign or domestic corporation, partnership, joint
venture, trust employee benefit plan or other organization or entity, whether
for profit or not. An Eligible Person shall also be considered to have been
serving an employee benefit plan at the request of the Corporation if his duties
to the Corporation also imposed duties on, or otherwise involved services by,
him to the plan or to participants in or beneficiaries of the plan.
(d) The terms "Liability" and "Expense" as used in this Section 7.8
shall include, but shall not be limited to, amounts of judgments, fines or
penalties against (including excise taxes assessed with respect to an employee
benefit plan), and amounts paid in settlement by or on behalf of, an Eligible
Person, attorney fees, accountant fees, investment banker fees, and any other
professional fees, disbursements, travel, expert witness fees, and any other
expense reasonably incurred in defense of any Claim.
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(e) The term "Wholly Successful" as used in this Section 7.8 shall
mean:
(i) Termination of any claim against the Eligible Person in
question without a finding of liability against him, or guilt in a criminal
Claim against him;
(ii) Approval by a court of a settlement of any Claim, with a
concurrent approval by the court of indemnification pursuant to this
Section 7.8; or
(iii) The expiration of the applicable statute of limitations
regarding the Claim.
(f) Every Eligible Person claiming indemnification hereunder (other
than one who has been Wholly Successful with respect to any Claim) shall be
entitled to indemnification if a disinterested person or persons selected by the
Board of Directors (the "Referee") shall determine that such Eligible Person
has met the standards of conduct set forth in Section 7.8(a)(ii). In the event
an Eligible Person is found to be entitled to indemnification pursuant to the
preceding sentence, the Referee shall also determine the reasonableness of the
Eligible Person's Expenses. The Eligible Person claiming indemnification shall,
if requested, appear before the Referee, answer questions that the Referee deems
relevant and shall be given ample opportunity to present to the Referee evidence
upon which he relies for indemnification. The Corporation shall, at the request
of the Referee, make available facts, opinions or other evidence in any way
relevant to the Referee's determination that are within the possession or
control of the Corporation. The Referee shall not incur any liability as a
result of his decision.
(g) If an Eligible Person claiming indemnification pursuant to
Section 7.8(f) is found not to be entitled thereto, or if the Board of Directors
fails to select a Referee under Section 7.8(f) within a reasonable amount of
time following a written request of an Eligible Person for the selection of a
Referee, or if the Referee fails to make a determination under Section 7.8(f)
within a reasonable amount of time following the selection of the Referee, the
Eligible Person may apply for indemnification with respect to a Claim or any
count, issue or matter of a Claim to any court of competent jurisdiction,
including a court in which the Claim is pending against the Eligible Person. On
receipt of an application, the court, after giving notice to the Corporation,
may order indemnification if it determines either that:
(i) The Eligible Person is entitled to indemnification with
respect to the Claim because such Eligible Person met the standards of
conduct set forth in Section 7.8(a)(ii); or
(ii) The Eligible Person is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not
the Eligible Person has met the standard of conduct set forth in Section
7.8(a)(ii).
If the court determines that the Eligible Person is entitled to indemnification,
the court shall also determine the reasonableness of the Eligible Person's
Expenses.
(h) The rights of indemnification provided in this Section 7.8 shall
not be exclusive and shall be in addition to any rights to which any Eligible
Person may otherwise be entitled
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under any statute, agreement, resolution of the Board of Directors of the
Corporation or otherwise. Irrespective of the provisions of this Section 7.8,
the Board of Directors may, at any time and from time to time:
(i) Approve indemnification of any Eligible Person to the full
extent permitted by the provisions of applicable law at the time in effect,
whether on account of past or future transactions; and
(ii) Authorize the Corporation to purchase and maintain
insurance on behalf of any Eligible Person against any Liability asserted
against him or Liability or Expense incurred by him in any such capacity,
or arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such Liability or Expense.
(i) Expenses incurred by an Eligible Person with respect to any
Claim may be advanced by the Corporation (by action of the Board of Directors,
whether or not a disinterested quorum exists) prior to the final disposition
thereof upon receipt of any undertaking by or on behalf of the recipient to
repay such amount unless he is determined to be entitled to indemnification.
(j) In the event the Claim is the result of any action taken, any
action not taken or any alleged breach of duty or obligation by the Board of
Directors related to a proposed or actual tender offer for shares of
the Corporation; change in control of the Corporation; merger, business
combination or consolidation in which the Corporation is a party; or the
election of Directors of the Corporation, the Expense incurred by an Eligible
Person with respect to such Claim shall as a matter of right be advanced to the
Eligible Person by the Corporation prior to final disposition of such Claim if:
(i) The Eligible Person furnishes the Corporation a written
affirmation of the Eligible Person's good faith belief that he has met the
standard of conduct described in clause (ii) of Section 7.8(a); and
(ii) The Eligible Person furnishes the Corporation a written
undertaking, executed personally or on his behalf, to repay the advance if
it is ultimately determined that the Eligible Person did not meet such
standard of conduct.
(k) The indemnification provisions of this Section 7.8 shall be
deemed to be a contract between the Corporation and each Eligible Person.
(l) The provisions of this Section 7.8 shall be applicable to all
acts or failures to act occurring prior to the adoption of this Section 7.8 or
during the term of this Section 7.8 irrespective of when the Claim relating to
the occurrence is made or commenced.
(m) The Board of Directors shall have power on behalf of the
Corporation to grant indemnification in a manner consistent with this Section
7.8 to any person other than an Eligible Person to such extent as the Board of
Directors may from time to time and at any time determine.
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(n) If any provision of this Section 7.8 is adjudged to be beyond the
powers of the Corporation under the Indiana Business Corporation Law, as
amended, or any other applicable law, then such identification shall
nevertheless remain available, but shall be limited, amended or construed only
to the extent necessary to be within the powers of the Corporation under the
Indiana Business Corporation Law, as amended, or any other applicable law, and
such indemnification so limited, amended or construed shall be available and
provided pursuant to this Section 7.8.
ARTICLE VIII
Approval of Business Combinations
Section 8.1. Supermajority Vote. Except as provided in Section 8.2
hereof, neither the Corporation nor its Subsidiaries, if any, shall become a
party to any Business Combination with a Related Person without the prior
affirmative vote at a meeting of the Corporation's shareholders:
(a) Of not less than seventy-five percent (75%) of all the votes
entitled to be cast by the holders of the outstanding shares of all classes of
Voting Stock of the Corporation considered for purposes of this Article VIII as
a single class, and
(b) Of an Independent Majority of Shareholders.
Such favorable votes shall be in addition to any shareholder vote which would be
required without reference to this Section 8.1 and shall be required
notwithstanding the fact that no vote may be required, or that some lesser
percentage may be specified by law or elsewhere in these Restated Articles of
Incorporation or the By-Laws of the Corporation or otherwise.
Section 8.2. Exceptions. The provisions of Section 8.1 hereof shall
not apply to a Business Combination if:
(a) The Continuing Directors of the Corporation by not less than a
seventy-five percent (75%) vote:
(i) Have expressly approved a memorandum of understanding with
the Related Person with respect to the Business Combination prior to the
time that the Related Person became a Related Person and the Business
Combination is effected on substantially the same terms and conditions as
are provided by the memorandum of understanding; or
(ii) Have otherwise approved the Business Combination (this
provision is incapable of satisfaction unless there is at least one
Continuing Director); or
(b) The Business Combination is solely between the Corporation and
another corporation, one hundred percent (100%) of the Voting Stock of
which is owned directly or indirectly by the Corporation.
Section 8.3. Definitions. For purposes of this Article VIII:
(a) A "Business Combination" means:
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(i) The sale, exchange, lease, transfer or other disposition
to or with a Related Person or any Affiliate or Associate of such Related
Person by the Corporation or any Subsidiaries (in a single transaction or a
Series of Related Transactions) of all or substantially all, or any
Substantial Part, of its or their assets or business (including, without
limitation, securities issued by a Subsidiary, if any);
(ii) The purchase, exchange, lease or other acquisition by the
Corporation or any Subsidiaries (in a single transaction or a Series of
Related Transactions) of all or substantially all, or any Substantial Part,
of the assets or business of a Related Person or any Affiliate or Associate
of such Related Person;
(iii) Any merger or consolidated of the Corporation or any
Subsidiary thereof into or with a Related Person or any Affiliate or
Associate of such Related Person or into or with another Person which,
after such merger or consolidation, would be an Affiliate or an Associate
of a Related Person, in each case irrespective of which Person is the
surviving entity in such merger or consolidation;
(iv) Any reclassification of securities, recapitalization or
other transaction (other than a redemption in accordance with the terms of
the security redeemed) which has the effect, directly or indirectly, of
increasing the proportionate amount of shares of Voting Stock of the
Corporation or any Subsidiary thereof which are Beneficially Owned by a
Related Person, or any partial or complete liquidation, spin-off or split-
up of the Corporation or any Subsidiary thereof; provided, however, that
this Section 8.3(a)(iv) shall not relate to any transaction that has been
approved by a majority of the Continuing Directors; or
(v) The acquisition upon the issuance thereof of Beneficial
Ownership by a Related Person of shares of Voting Stock or securities
convertible into shares of Voting Stock or any voting securities or
securities convertible into voting securities of any Subsidiary of the
Corporation, or the acquisition upon the issuance thereof of Beneficial
Ownership by a Related Person of any rights, warrants or options to acquire
any of the foregoing or any combination of the foregoing shares of Voting
Stock or voting securities of a Subsidiary, if any.
(b) A "Series of Related Transactions" shall be deemed to include
not only a series of transactions with the same Related Person but also a series
of separate transactions with a Related Person or any Affiliate or Associate of
such Related Person.
(c) A "Person" shall mean any individual, firm, corporation or
other entity and any partnership, syndicate or other group.
(d) "Related Person" shall mean any Person (other than the
Corporation or any Subsidiary of the Corporation or the Continuing Directors,
singly or as a group) who or that at any time described in the last sentence of
this first paragraph of this subsection (d):
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(i) Is the Beneficial Owner, directly or indirectly, of more
than ten percent (10%) of the voting power of the outstanding shares of
Voting Stock and who has not been the Beneficial Owner, directly or
indirectly, of more than ten percent (10%) of the voting power of the
outstanding shares of Voting Stock for a continuous period of two years
prior to the date in question; or
(ii) Is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question (but not
continuously during such two-year period) was the Beneficial Owner,
directly or indirectly, of ten percent (10%) or more of the voting power of
the then outstanding shares of Voting Stock; or
(iii) Is an assignee of or has otherwise succeeded to any shares
of the Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by any
Related Person, if such assignment or succession shall have occurred
within the meaning of the Securities Act of 1933, as amended.
A Related Person shall be deemed to have acquired a share of the Corporation at
the time when such Related Person became the Beneficial Owner thereof. For the
purposes of determining whether a Person is the Beneficial Owner of ten percent
(10%) or more of the voting power of the then outstanding Voting Stock, the
outstanding Voting Stock shall be deemed to include any Voting Stock that may be
issuable to such Person pursuant to a right to acquire such Voting Stock and
that is therefore deemed to be Beneficially Owned by such Person pursuant to
Section 8.3(e)(ii)(A). A person who is a Related Person at:
(i) The time any definitive agreement relating to a Business
Combination is entered into;
(ii) The record date for the determination of shareholders
entitled to notice of and to vote on a Business Combination; or
(iii) The time immediately prior to the consummation of a
Business Combination shall be deemed a Related Person.
A Related Person shall not include the Board of Directors of the
Corporation acting as a group. In addition, a Related Person shall not include
any Person who possesses more than ten percent (10%) of the voting power of the
outstanding shares of Voting Stock of the Corporation at the time of filing
these Restated Articles of Incorporation.
(e) A Person shall be a "Beneficial Owner" of any shares of Voting
Stock:
(i) Which such Person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(ii) Which such Person or any of its Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of
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conversion rights, exchange rights, warrants or options, or otherwise, or
(B) the right to vote pursuant to any agreement, arrangement or
understanding; or
(iii) Which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of Voting Stock.
(f) An "Affiliate" of, or a person Affiliated with, a specific Person,
means a Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.
(g) The term "Associate" used to indicate a relationship with any Person,
means:
(i) Any corporation or organization (other than this Corporation or
a majority-owned Subsidiary or this Corporation) of which such Person is an
officer or partner or is, directly or indirectly, the Beneficial Owner of
five percent (5%) or more of any class of equity securities;
(ii) Any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee
or in a similar fiduciary capacity;
(iii) Any relative or spouse of such Person, or any relative of such
spouse, who has the same home as such Person; or
(iv) Any investment company registered under the Investment Company
Act of 1940, as amended, for which such Person or any Affiliate of such
Person serves as investment advisor.
(h) "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of Related Person set forth in
Section 8.3(d) hereof, the term "Subsidiary" shall mean only a corporation of
which a majority of each class of equity security is owned, directly or
indirectly, by the Corporation.
(i) "Continuing Director" means any member of the Board of Directors of
the Corporation (the "Board") who is not associated with the Related Person and
was a member of the Board prior to the time that the Related Person became a
Related Person, and any successor of a Continuing Director who is not associated
with the Related Person and is recommended to succeed a Continuing Director by
not less than two-thirds of the Continuing Directors then on the Board.
(j) "Independent Majority of Shareholders" shall mean the holders of the
outstanding shares of Voting Stock representing a majority of all the votes
entitled to be cast by all shares of Voting Stock other than shares Beneficially
Owned or controlled, directly or indirectly, by a Related Person.
(k) "Voting Stock" shall mean all outstanding shares of capital stock of
the Corporation or another corporation entitled to vote generally on the
election of Directors, and each
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reference to a proportion of shares of Voting Stock shall refer to such
proportion of the votes entitled to be cast by such shares.
(l) "Substantial Part" means properties and assets involved in any single
transaction or a Series of Related Transactions having an aggregate fair market
value of more than ten percent (10%) of the total consolidated assets of the
Person in question as determined immediately prior to such transaction or Series
of Related Transactions.
Section 8.4. Director Determinations. A majority of the Continuing
Directors shall have the power to determine for the purposes of this Article
VIII, on the basis of information known to them:
(a) The number of shares of Voting Stock of which any Person is the
Beneficial Owner;
(b) Whether a Person is an Affiliate or Associate of another;
(c) Whether a Person has an agreement, arrangement or understanding with
another as to the matters referred to in the definition of "Beneficial Owner";
(d) Whether the assets subject to any Business Combination constitute a
Substantial Part;
(e) Whether two or more transactions constitute a Series of Related
Transactions; and
(f) Such other matters with respect to which a determination is required
under this Article VIII.
Section 8.5. Nonmonetary Factors in Acquisition Proposals. In connection
with the exercise of its judgment in determining what is in the best interests
of the Corporation and its shareholders when evaluating a proposal by another
person or persons to acquire some material part or all of the business or
properties of the Corporation (whether by merger, consolidation, purchase of
assets, stock reclassification or recapitalization, spin-off, liquidation or
otherwise) or to acquire some material part or all of the stock of the
Corporation (whether by a tender or exchange offer or some other means), the
Board of Directors of the Corporation shall, in addition to considering the
adequacy of the consideration to be paid in connection with any such
transaction, consider all of the following factors and any other factors that it
deems relevant:
(a) The social and economic effects of the transaction on the Corporation
and its subsidiaries and their employees, customers, creditors and communities
in which the Corporation and its subsidiaries operate or are located;
(b) The business and financial condition and earnings prospects of the
acquiring person or persons, including, but not limited to, debt service and
other existing or likely financial obligations of the acquiring person or
persons and their affiliates and associates, and the possible effect of such
conditions upon the Corporation and its subsidiaries and the communities in
which the Corporation and its subsidiaries operate or are located; and
(c) The competence, experience, and integrity of the acquiring person or
persons and its or their management and affiliates and associates.
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<PAGE>
Section 8.6. Amendment of Article VIII or Certain Other Provisions. Any
amendment, change or repeal of this Article VIII, or of Sections 6.1, 6.5, 7.2,
7.5, 9.2 or 9.3, or any other amendment of these Restated Articles of
Incorporation which would have the effect of modifying or permitting
circumvention of this Article VIII or such other provisions of these Restated
Articles of Incorporation, shall require the affirmative vote, at a meeting of
shareholders of the Corporation:
(a) Of at least seventy-five percent (75%) of the votes entitled to be
cast by the holders of the outstanding shares of all classes of Voting Stock of
the Corporation considered for purposes of this Article VIII as a single class;
and
(b) Of an Independent Majority of Shareholders;
provided, however, that this Section 8.6 shall not apply to, and such vote shall
not be required for, any such amendment, change or repeal recommended to
shareholders by the favorable vote of not less than seventy-five percent (75%)
of the Directors who then qualify as Continuing Directors with respect to all
Related Persons and any such amendment, change or repeal so recommended shall
require only the vote, if any, required under the applicable provisions of the
Corporation Law.
Section 8.7. Fiduciary Obligations Unaffected. Nothing in this Article
VIII shall be construed to relieve any Related Person from any fiduciary duty
imposed by law.
Section 8.8. Article VIII Nonexclusive. The provisions of this Article
VIII are nonexclusive and are in addition to any other provisions of law or
these Restated Articles of Incorporation or the By-Laws of the Corporation
relating to Business Combinations, Related Persons or similar matters.
ARTICLE IX
Miscellaneous Provisions
Section 9.1. Amendment or Repeal. Except as otherwise expressly provided
for in these Restated Articles of Incorporation, the Corporation shall be
deemed, for all purposes, to have reserved the right to amend, alter, change or
repeal any provision contained in these Restated Articles of Incorporation to
the extent and in the manner now or hereafter permitted or prescribed by
statute, and all rights herein conferred upon shareholders are granted subject
to such reservation.
Section 9.2. Redemption of Shares Acquired in Control Share Acquisitions.
If and whenever the provisions of IC 23-1-42 apply to the Corporation, it is
authorized to redeem its securities pursuant to IC 23-1-42-10.
Section 9.3. Election to be Subject to Five-Year Freeze Statute. Unless
the Corporation's By-Laws provide that it elects not be governed by IC 23-1-43,
the Corporation elects to have the provisions of IC 23-1-43 apply to it
regardless of whether or not it has a class of
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voting securities registered with the Securities and Exchange Commission under
Section 12 of the Securities Exchange Act of 1934.
Section 9.4. Captions. The captions of the Articles and Sections of these
Restated Articles of Incorporation have been inserted for convenience of
reference only and do not in any way define, limit, construe or describe the
scope or intent of any Article or Section hereof.
ARTICLE X
Terms of ESOP Convertible Voting Preferred Stock
The designation, preferences, limitations and relative voting and other
rights of the first series of the authorized Special Shares of the Corporation
in addition to those set forth elsewhere in these Restated Articles of
Incorporation which are applicable to all series of Special Shares are hereby
fixed as follows:
Section 10.1. Designation and Amount; Special Purpose Restricted Transfer
Issue.
(a) The shares of such series shall be designated as "ESOP Convertible
Voting Preferred Stock" ("ESOP Preferred Stock") and the number of shares
constituting such series shall be 1,700,000.
(b) Shares of ESOP Preferred Stock shall be issued only to Fort Wayne
National Bank, Lincoln National Bank and Trust Company of Fort Wayne, and Summit
Bank, as trustees (the "Trustee") of the Retirement Savings Plan for Employees
of Tokheim Corporation and Subsidiaries (the "Plan"). All references to the
holder of shares of ESOP Preferred Stock shall mean the Trustee or any successor
trustee under the Plan. In the event of any transfer of record ownership of
shares of ESOP Preferred Stock to any person other than any successor trustee
under the Plan, the shares of ESOP Preferred Stock so transferred, upon such
transfer and without any further action by the Corporation or the holder
thereof, shall be automatically converted into shares of Common Shares on the
terms otherwise provided for the conversion of shares of ESOP Preferred Stock
into shares of Common Shares pursuant to Section 10.5 hereof and no such
transferee shall have any of the preferences, limitations and relative voting
and other rights, ascribed to shares of ESOP Preferred Stock hereunder but,
rather, only the powers and rights pertaining to the Common Shares into which
such shares of ESOP Preferred Stock shall be so converted. In the event of such
a conversion, the transferee of the shares of ESOP Preferred Stock shall be
treated for all purposes as the record holder of the shares of Common Shares
into which such shares of ESOP Preferred Stock have been automatically converted
as of the date of such transfer. Certificates representing shares of ESOP
Preferred Stock shall bear a legend to reflect the foregoing provisions.
Notwithstanding the foregoing provisions of this paragraph (b) of Section 10.1,
shares of ESOP Preferred Stock:
(i) May be converted into shares of Common Shares as provided by
Section 10.5 hereof and the shares of Common Shares issued upon such
conversion may be transferred by the holder thereof as permitted by law;
and
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<PAGE>
(ii) Shall be redeemable by the Corporation upon the terms and
conditions provided by Sections 10.6, 10.7 and 10.8 hereof.
Section 10.2. Dividends and Distributions.
(a) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of ESOP Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available
therefor, cash dividends ("Preferred Dividends") in an amount per share equal to
$1.9375 per share per annum, and no more, payable quarterly in arrears,
one-fourth on the first day of March, June, September, and December of each year
(each a "Dividend Payment Date") commencing on September 1, 1989, to holders of
record at the start of business on such Dividend Payment Date. In the event
that any Dividend Payment shall fall on any day other than a "Business Day" (as
hereinafter defined), the dividend payment due on such Dividend Payment Date
shall be paid on the Business Day immediately preceding such Dividend Payment
Date. Preferred Dividends shall begin to accrue on outstanding shares of ESOP
Preferred Stock from the date of issuance of such shares of ESOP Preferred
Stock. Preferred Dividends shall accrue on a daily basis whether or not the
Corporation shall have earnings or surplus at the time, but Preferred Dividends
accrued after issuance on the shares of ESOP Preferred Stock for any period less
than a full quarterly period between Dividend Payment Dates shall be computed on
the basis of a 360-day year of 12 30-day months. Accrued but unpaid Preferred
Dividends shall cumulate as of the Dividend Payment Date on which they first
become payable, but not interest shall accrue on accumulated but unpaid
Preferred Dividends.
(b) So long as any shares of ESOP Preferred Stock shall be outstanding, no
dividend shall be declared or paid or set apart for payment on any other series
of stock ranking on a parity with the ESOP Preferred Stock as to dividends,
unless there shall also be or have been declared and paid or set apart for
payment on the ESOP Preferred Stock, dividends for all dividend payment periods
of the ESOP Preferred Stock ending on or before the Dividend Payment Date of
such parity stock, ratably in proportion to the respective amounts of dividends
accumulated and unpaid through such dividend period on the ESOP Preferred Stock
and accumulated and unpaid on such parity stock through the dividend payment
period on such parity stock next preceding such Dividend Payment Date. In the
event that full cumulative dividends on the ESOP Preferred Stock have been
declared and paid or set apart for payment when due, the Corporation shall not
declare or pay or set apart for payment any dividends or make any other
distributions on, or make any payment on account of the purchase, redemption or
other retirement of any other class of stock or series thereof of the
Corporation ranking, as to dividends or as to distributions in the event of a
liquidation, dissolution or windup of the Corporation, junior to the ESOP
Preferred Stock until full cumulative dividends on the ESOP Preferred Stock
shall have been paid or declared and set apart for payment; provided, however,
that the foregoing shall not apply to (i) any dividend payable solely in any
shares of any stock ranking, as to dividends and as to distributions in the
event of a liquidation, dissolution or windup of the Corporation, junior to
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<PAGE>
the ESOP Preferred Stock or (ii) the acquisition of shares of any stock
ranking, as to dividends or as to distributions in the event of a liquidation,
dissolution or windup of the Corporation, junior to the ESOP Preferred Stock
in exchange solely for shares of any other stock ranking, as to dividends and as
to distributions in the event of a liquidation, dissolution or windup of the
Corporation, junior to the ESOP Preferred Stock.
Section 10.3. Voting Rights. The holders of shares of ESOP Preferred
Stock shall have the following voting rights:
(a) The holders of ESOP Preferred Stock shall be entitled to vote on all
matters submitted to a vote of the shareholders of the Corporation, voting
together with the holders of Common Shares as one class. The holder of each
share of ESOP Preferred Stock shall be entitled to a number of votes equal to
the number of shares of Common Shares into which such share of ESOP Preferred
Stock could be converted on the record date for determining the shareholders
entitled to vote, rounded to the nearest one-tenth of a vote; it being
understood that whenever the "Conversion Price" (as defined in Section 10.5
hereof) is adjusted as provided in Section 10.9 hereof, the voting rights of the
ESOP Preferred Stock shall also be similarly adjusted.
(b) Except as otherwise required by law or set forth herein, holders of
ESOP Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with holders of
Common Shares as set forth herein) for the taking of any corporate action;
provided, however, that the vote of at least 66-2/3% of the outstanding shares
of ESOP Preferred Stock, voting separately as a series, shall be necessary to
adopt any alteration, amendment or repeal of any provision of these Restated
Articles of Incorporation of the Corporation, as amended (including any such
alteration, amendment or repeal effected by any merger or consolidation in which
the Corporation is the surviving or resulting corporation), if such amendment,
alteration or repeal would alter or change the preferences, limitations, or
relative voting or other rights of the shares of ESOP Preferred Stock so as to
affect them adversely.
Section 10.4. Liquidation, Dissolution or Windup.
(a) Upon any voluntary or involuntary liquidation, dissolution or windup
of the Corporation, the holders of ESOP Preferred Stock shall be entitled to
receive out of assets of the Corporation which remain after satisfaction in full
of all valid claims of creditors of the Corporation and which are available for
payment to shareholders, and subject to the rights of the holders of any stock
of the Corporation ranking senior to or on a parity with the ESOP Preferred
Stock in respect of distributions upon liquidation, dissolution or windup of the
Corporation, before any amount shall be paid or distributed among the holders of
Common Shares or any other shares ranking junior to the ESOP Preferred Stock in
respect of distributions upon liquidation, dissolution or windup of the
Corporation, liquidating distributions in the amount of $25.00 per share, plus
an amount equal to all accrued and unpaid dividends thereon to the date fixed
for distribution, and no more. If upon any liquidation, dissolution or windup of
the
22
<PAGE>
Corporation, the amounts payable with respect to the ESOP Preferred Stock and
any other stock ranking as to any such distribution on a parity with the ESOP
Preferred Stock are not paid in full, the holders of the ESOP Preferred Stock
and such other stock shall share ratably in any distribution of assets in
proportion to the full respective preferential amounts to which they are
entitled. After payment of the full amount to which they are entitled as
provided by the foregoing provisions of this paragraph 10.4(a), the holders of
shares of ESOP Preferred Stock shall not be entitled to any further right or
claim to any of the remaining assets of the Corporation.
(b) Neither the merger or consolidation of the Corporation with or into
any other corporation, nor the merger or consolidation of any other corporation
with or into the Corporation, nor the sale, lease, exchange or other transfer of
all or any portion of the assets of the Corporation, shall be deemed to be a
dissolution, liquidation or windup of the affairs of the Corporation for
purposes of this Section 10.4, but the holders of the ESOP Preferred Stock shall
nevertheless be entitled in the event of any such merger or consolidation to the
rights provided by Section 10.8 hereof.
(c) Written notice of any voluntary or involuntary liquidation,
dissolution or windup of the Corporation, stating the payment date or dates
when, and the place or places where, the amounts distributable to holders of
ESOP Preferred Stock in such circumstances shall be payable, shall be given by
first-class mail, postage prepaid, mailed not less than twenty (20) days prior
to any payment date stated therein, to the holders of ESOP Preferred Stock, at
the address shown on the books of the Corporation or any transfer agent for the
ESOP Preferred Stock.
Section 10.5. Conversion into Common Shares.
(a) A holder of shares of ESOP Preferred Stock shall be entitled, at any
time prior to the close of business on the date fixed for redemption of such
shares pursuant to Sections 10.6, 10.7 and 10.8 hereof, to cause any or all of
such shares to be converted into shares of Common Shares, initially at a
conversion rate equal to the ratio of $25.00 to the amount which initially shall
be $25.00 and which shall be adjusted as hereinafter provided (and, as so
adjusted, is hereinafter sometimes referred to as the "Conversion Price") (that
is, a conversion rate initially equivalent to one share of Common Shares for
each share of ESOP Preferred Stock so converted, which is subject to adjustment
as the Conversion Price is adjusted as hereinafter provided).
(b) Any holder of shares of ESOP Preferred Stock desiring to convert such
shares into shares of Common Shares shall surrender the certificate or
certificates representing the shares of ESOP Preferred Stock being converted,
duly assigned or endorsed for transfer to the Corporation (or accompanied by
duly executed stock powers relating thereto), at the principal executive office
of the Corporation or the offices of the transfer agent for the ESOP Preferred
Stock or such office or offices in the continental United States of an agent for
conversion as may from time to time be designated by notice to the holders of
the ESOP Preferred Stock by the Corpora-
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<PAGE>
tion or the transfer agent for the ESOP Preferred Stock, accompanied by written
notice of conversion. Such notice of conversion shall specify (i) the number of
shares of ESOP Preferred Stock to be converted and the name or names in which
such holder wishes the certificate or certificates for Common Shares and for any
shares of ESOP Preferred Stock not to be so converted to be issued and (ii) the
address to which such holder wishes delivery to be made of such new certificates
to be issued upon such conversion.
(c) Upon surrender of a certificate representing a share or shares of
ESOP Preferred Stock for conversion, the Corporation shall issue and send by
hand delivery (with receipt to be acknowledged) or by first class mail, postage
prepaid, to the holder thereof or to such holder's designee, at the address
designated by such holder, a certificate or certificates for the number of
shares of Common Shares to which such holder shall be entitled upon conversion.
In the event that there shall have been surrendered a certificate or
certificates representing shares of ESOP Preferred Stock, only part of which are
to be converted, the Corporation shall issue and deliver to such holder or such
holder's designee a new certificate or certificates representing the number of
shares of ESOP Preferred Stock which shall not have been converted.
(d) The issuance by the Corporation of shares of Common Shares upon a
conversion of shares of ESOP Preferred Stock into shares of Common Shares made
at the option of the holder thereof shall be effective as of the earlier of (i)
the delivery to such holder or such holder's designee of the certificates
representing the shares of Common Shares issued upon conversion thereof or (ii)
the commencement of business on the second business day after the surrender of
the certificate or certificates for the shares of ESOP Preferred Stock to be
converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto) as provided herein.
On and after the effective day of conversion, the person or persons entitled to
receive the Common Shares issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Shares, but no
allowance or adjustment shall be made in respect of dividends payable to holders
of Common Shares in respect of any period prior to such effective date. The
Corporation shall not be obligated to pay any dividends which shall have been
declared and shall be payable to holders of shares of ESOP Preferred Stock on a
Dividend Payment Date if such Dividend Payment Date for such dividend is
subsequent to the effective date of conversion of such shares.
(e) The Corporation shall not be obligated to deliver to holders of
ESOP Preferred Stock any fractional share or shares of Common Shares issuable
upon any conversion of such shares of ESOP Preferred Stock, but in lieu thereof
may make a cash payment in respect thereof in any manner permitted by law.
(f) The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Shares, solely for issuance upon the
conversion of shares of ESOP Preferred Stock as herein provided, free from any
preemptive rights, such number of shares of Common Shares as shall from time to
time be issuable upon the conversion of all the shares of ESOP
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<PAGE>
Preferred Stock then outstanding. Nothing contained herein shall preclude the
Corporation from issuing shares of Common Shares held in its treasury upon the
conversion of shares of ESOP Preferred Stock into Common Shares pursuant to the
terms hereof. The Corporation shall prepare and shall use its best efforts to
obtain and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all requirements
as to registration or qualification of the Common Shares, in order to enable the
Corporation lawfully to issue and deliver to each holder of records of ESOP
Preferred Stock such number of shares of its Common Shares as shall from time to
time be sufficient to effect the conversion of all shares of ESOP Preferred
Stock then outstanding and convertible into shares of Common Shares.
SECTION 10.6. REDEMPTION AT THE OPTION OF THE CORPORATION.
(a) The ESOP Preferred Stock shall be redeemable, in whole or in part, at
the option of the Corporation at any time after December 1, 1989, or at any time
after the date of issuance, if permitted by paragraph (d) of this Section 10.6,
at the following redemption prices per share:
<TABLE>
<CAPTION>
During the Twelve-Month Period Price Per
Beginning December 1 Share
-------------------- -----
<S> <C>
1989 $26.94
1990 26.75
1991 26.55
1992 26.36
1993 26.17
1994 25.97
1995 25.78
1996 25.59
1997 25.39
1998 25.20
</TABLE>
and thereafter at $25.00 per share, plus, in each case, an amount equal to all
accrued and unpaid dividends thereon to the date fixed for redemption. Payment
of the redemption price shall be made by the Corporation in cash or shares of
Common Shares, or a combination thereof, as permitted by paragraph (f) of this
Section 10.6. From and after the date fixed for redemption, dividends on shares
of ESOP Preferred Stock called for redemption will cease to accrue, such shares
will no longer be deemed to be outstanding and all rights in respect of such
shares of the Corporation shall cease, except the right to receive the
redemption price. If less than all of the outstanding shares of ESOP Preferred
Stock are to be redeemed, the Corporation shall either redeem a portion of the
shares of each holder determined pro rata based on the number of shares held by
each holder or shall select the shares to be redeemed by lot, as may be
determined by the Board of Directors of the Corporation.
(b) Unless otherwise required by law, notice of redemption will be sent to
the holders of ESOP Preferred Stock at the address shown on the books of the
Corporation or any transfer agent for the ESOP Preferred Stock by first class
mail, postage prepaid, mailed not less than
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twenty (20) days nor more than sixty (60) days prior to the redemption date.
Each such notice shall state: (i) the redemption date; (ii) the total number of
shares of the ESOP Preferred Stock to be redeemed and, if fewer than all the
shares held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (iii) the redemption price; (iv) the place or places
where certificates for such shares are to be surrendered for payment of the
redemption price; (v) that dividends on the shares to be redeemed will cease to
accrue on such redemption date; and (vi) the conversion rights of the shares to
be redeemed, the period within which conversion rights may be exercised, and the
Conversion Price and number of shares of Common Shares issuable upon conversion
of a share of ESOP Preferred Stock at the time. Upon surrender of the
certificate for any shares so called for redemption and not previously converted
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the date fixed for redemption and at the
redemption price set forth in this Section 10.6.
(c) In the event of a change in the federal tax law of the United States of
America which has the effect of precluding the Corporation from claiming any of
the tax deductions for dividends paid on the ESOP Preferred Stock when such
dividends are used as provided under Section 404(k)(2) of the Internal Revenue
Code of 1986, as amended and in effect on the date shares of ESOP Preferred
Stock are initially issued, the Corporation may, in its sole discretion and
notwithstanding anything to the contrary in paragraph (a) of this Section 10.6,
elect to redeem any or all of such shares for the amount payable in respect of
the shares upon liquidation of the Corporation pursuant to Section 10.4 hereof.
(d) Notwithstanding anything to the contrary in paragraph (a) of this
Section 10.6, the Corporation may elect to redeem any or all of the shares of
ESOP Preferred Stock at any time on or prior to December 1, 1989, on the terms
and conditions set forth in paragraphs (a) and (b) of this Section 10.6, if the
last reported sales price, regular way, of a share of Common Shares, as reported
on the New York Stock Exchange Composite-Tape, or, if the Common Shares is not
listed or admitted to trading on the New York Stock Exchange, on the principal
national securities exchange on which such stock is listed or admitted to
trading or, if the Common Shares is not listed or admitted to trading on any
national securities exchange, on the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or, if Common Shares is not quoted on such National Market System, the average
of the closing bid and asked prices in the over-the-counter market as reported
by NASDAQ, for at least twenty (20) trading days within a period of thirty (30)
consecutive trading days ending within five (5) days of the notice of
redemption, equals or exceeds one hundred fifty percent (150%) of the Conversion
Price (giving effect in making such calculation to any adjustments required by
Section 10.9 hereof).
(e) In the event that the Plan is terminated in accordance with its terms,
and notwithstanding anything to the contrary in paragraph (a) of this Section
10.6, the Corporation
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<PAGE>
shall, as soon thereafter as practicable, call for redemption all then
outstanding shares of ESOP Preferred Stock for the amount payable in respect of
the shares upon liquidation of the Corporation pursuant to Section 10.4 hereof.
(f) The Corporation, at its option, may make payment of the redemption
price required upon redemption of shares of ESOP Preferred Stock in cash or in
shares of Common Shares, or in a combination of such shares and cash, any such
shares of Common Shares to be valued for such purposes at their Fair Market
Value (as defined in paragraph (f) of Section 10.9 hereof).
Section 10.7. Other Redemption Rights. Shares of ESOP Preferred Stock shall
be redeemed by the Corporation except to the extent prohibited by law for shares
of Common Shares, or if the Corporation so elects, in cash, or a combination of
such shares and cash, any such shares of Common Shares to be valued for such
purpose as provided by paragraph (f) of Section 10.6, at a redemption price of
$25.00 per share plus accrued and unpaid dividends thereon to the date fixed for
redemption, at the option of the holder, at any time and from time to time upon
notice to the Corporation given not less than five (5) business days prior to
the date fixed by the holder in such notice for such redemption, upon
certification by such holder to the Corporation that redemption is necessary for
such holder to provide for distributions required to be made to participants
under, or to satisfy an investment election provided to participants in
accordance with, the Plan, or any successor plan.
Section 10.8. Consolidation, Merger, etc.
(a) In the event that the Corporation shall consummate any consolidation or
merger or similar business combination, pursuant to which the outstanding shares
of Common Shares are by operation of law exchanged solely for or changed,
reclassified or converted solely into stock of any successor or resulting
corporation (including the Corporation) that constitutes "qualifying employer
securities" with respect to a holder of ESOP Preferred Stock within the meaning
of Section 4975(e)(8) of the Internal Revenue Code of 1986, as amended, and
Section 407(d)(5) of the Employee Retirement Income Security Act of 1974, as
amended, or any successor provisions of law, and, if applicable, for a cash
payment in lieu of fractional shares, if any, the shares of ESOP Preferred Stock
of such holder shall, in connection with such consolidation, merger or similar
business combination, be assumed by and shall become preferred stock of such
successor or resulting corporation, having in respect of such corporation,
insofar as possible, the same powers, preferences and relative, participating,
optional or other special rights (including the redemption rights provided by
Sections 10.6, 10.7 and 10.8 hereof), and the qualifications, limitations or
restrictions thereon, that the ESOP Preferred Stock had immediately prior to
such transaction, except that after such transaction each share of the ESOP
Preferred Stock shall be convertible, otherwise on the terms and conditions
provided by Section 10.5 hereof, into the number and kind of qualifying employer
securities so receivable by a holder of the number of shares of Common Shares
into which such shares of ESOP Preferred Stock could have been converted
immediately prior to such transaction; provided, however, that if by virtue of
the structure of
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<PAGE>
such transaction, a holder of Common Shares is required to make an election with
respect to the nature and kind of consideration to be received in such
transaction, which election cannot practicably be made by the holders of the
ESOP Preferred Stock, then the shares of ESOP Preferred Stock shall, by virtue
of such transaction and on the same terms as apply to the holders of Common
Shares, be converted into or exchanged for the aggregate amount of stock,
securities, cash or other property (payable in kind) receivable by a holder of
the number of shares of Common Shares into which such shares of ESOP Preferred
Stock could have converted immediately prior to such transaction if such holder
of Common Shares failed to exercise any rights of election to receive any kind
or amount of stock, securities, cash or other property (other than such
qualifying employer securities and a cash payment, if applicable, in lieu of
fractional shares) receivable upon such transaction (provided that, if the kind
or amount of qualifying employer securities receivable upon such transaction is
not the same for each nonelecting share, then the kind and amount so receivable
upon such transaction for each nonelecting share shall be the kind and amount so
receivable per share by the plurality of the nonelecting shares). The rights of
the ESOP Preferred Stock as preferred stock of such successor or resulting
corporation shall successively be subject to adjustment pursuant to Section 10.9
hereof after any such transaction as nearly equivalent as practicable to the
adjustment provided for by such Section prior to such transaction. The
Corporation shall not consummate any such merger, consolidation or similar
transaction unless all then outstanding shares of ESOP Preferred Stock be
assumed and authorized by the successor or resulting corporation as aforesaid.
(b) In the event that the Corporation shall consummate any consolidation or
merger or similar business combination, pursuant to which the outstanding shares
of Common Shares are by operation of law exchanged for or changed, reclassified
or converted into other stock or securities or cash or any other property, or
any combination thereof, other than any such consideration which is constituted
solely of qualifying employer securities (as referred to in paragraph (a) of
this Section 10.8) and cash payments, if applicable, in lieu of fractional
shares, outstanding shares of ESOP Preferred Stock shall, without any action on
the part of the Corporation or any holder thereof (but subject to paragraph (c)
of this Section 10.8), be automatically converted by virtue of such merger,
consolidation or similar transaction immediately prior to such consummation into
the number of shares of Common Shares into which such shares of ESOP Preferred
Stock could have been converted at such time so that each share of ESOP
Preferred Stock shall, by virtue of such transaction and on the same terms as
apply to the holders of Common Shares, be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property (payable in like
kind) receivable by a holder of the number of shares of Common Shares into which
such shares of ESOP Preferred Stock could have been converted immediately prior
to such transaction; provided, however, that if by virtue of the structure of
such transaction, a holder of Common Shares is required to make an election with
respect to the nature and kind of consideration to be received in such
transaction, which election cannot practi-
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<PAGE>
cably be made by the holders of the ESOP Preferred Stock, then the shares of
ESOP Preferred Stock, by virtue of such transaction and on the same terms as
apply to the holders of Common Shares, be converted into or exchanged for the
aggregate amount of stock, securities, cash or other property (payable in kind)
receivable by a holder of the number of shares of Common Shares into which such
shares of ESOP Preferred Stock could have been converted immediately prior to
such transaction if such holder of Common Shares failed to exercise any rights
of election as to the kind or amount of stock, securities, cash or other
property receivable upon such transaction (provided that, if the kind or amount
of stock, securities, cash or other property receivable upon such transaction is
not the same for each nonelection share, then the kind and amount of stock,
securities, cash or other property receivable upon such transaction for each
nonelecting share shall be the kind and amount so receivable per share by a
plurality of the nonelecting shares).
(c) In the event the Corporation shall enter into any agreement providing
for any consolidation or merger or similar business combination described in
paragraph (b) of this Section 10.8, then the Corporation shall as soon as
practicable thereafter (and in any event at least ten (10) Business Days before
consummation of such transaction) give notice of such agreement and the material
terms thereof to each holder of ESOP Preferred Stock and each such holder shall
have the right to elect, by written notice to the Corporation, to receive, upon
consummation of such transaction (if and when such transaction is consummated),
from the Corporation or the successor of the Corporation, in redemption and
retirement of such ESOP Preferred Stock, a cash payment equal to the amount
payable in respect of shares of ESOP Preferred Stock upon liquidation of the
Corporation pursuant to Section 10.4 hereof. No such notice of redemption shall
be effective unless given to the Corporation prior to the close of business on
the fifth business day prior to consummation of such transaction, unless the
Corporation or the successor of the Corporation shall waive such prior notice,
but any notice of redemption so given prior to such time may be withdrawn by
notice of withdrawal given to the Corporation prior to the close of business on
the fifth Business Day prior to consummation of such transaction.
Section 10.9 Anti-dilution Adjustments.
(a) In the event the Corporation shall, at any time or from time to time
while any of the shares of the ESOP Preferred Stock are outstanding, (i) pay a
dividend or make a distribution in respect of the Common Shares in shares of
Common Shares, (ii) subdivide the outstanding shares of Common Shares, or (iii)
combine the outstanding shares of Common Shares into a smaller number of shares,
in each case whether by reclassification of shares, recapitalization of the
Corporation (including a recapitalization effected by a merger or consolidation
to which Section 10.8 hereof does not apply) or otherwise, the Conversion Price
in effect immediately prior to such action shall be adjusted by multiplying such
Conversion Price by a fraction, the numerator of which is the number of shares
of Common Shares outstanding immediately before such event, and the denominator
of which is the number of shares of Common Shares outstanding immediately after
29
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such event. An adjustment made pursuant to this paragraph 10.9(a) shall be given
effect, upon payment of such a dividend or distribution, as of the record date
for the determination of stockholders entitled to receive such dividend or
distribution (on a retroactive basis and in the case of a subdivision or
combination shall become effective immediately as of the effective date thereof.
(b) In the event the Corporation shall, at any time or from time to time
while any of the shares of ESOP Preferred Stock are outstanding, issue to
holders of shares of Common Shares as a dividend or distribution, including by
way of a reclassification of shares on a recapitalization of the Corporation,
any right or warrant to purchase shares of Common Shares (but not including as
such a right or warrant any security convertible into or exchangeable for shares
of Common Shares) at a purchase price per share less than the Fair Market Value
(as hereinafter defined) of a share of Common Shares on the date of issuance of
such right or warrant, then, subject to the provisions of paragraphs (d) and (e)
of this Section 10.9, the Conversion Price shall be adjusted by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Shares outstanding immediately before such issuance of rights
or warrants plus the number of shares of Common Shares which could be purchased
at the Fair Market Value of a share of Common Shares at the time of such
issuance for the maximum aggregate consideration payable upon exercise in full
of all such rights or warrants, and the denominator of which shall be the number
of shares of Common Shares outstanding immediately before such issuance of
rights or warrants plus the maximum number of shares of Common Shares that could
be acquired upon exercise in full of all such rights and warrants.
(c) In the event the Corporation shall, at any time or from time to time
while any of the shares of ESOP Preferred Stock are outstanding, make an
Extraordinary Distribution (as hereinafter defined) in respect of the Common
Shares, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (including a recapitalization or
reclassification effected by a merger or consolidation to which Section 10.8
hereof does not apply) or effect a Pro Rata Repurchase (as hereinafter defined)
of Common Shares, the Conversion Price in effect immediately prior to such
Extraordinary Distribution or Pro Rata Repurchase shall, subject to paragraphs
(d) and (e) of this Section 10.9, be adjusted by multiplying such Conversion
Price by the fraction the numerator of which is (i) the product of (x) the
number of shares of Common Shares outstanding immediately before such
Extraordinary Distribution or Pro Rata Repurchase multiplied by (y) the Fair
Market Value of a share of Common Shares on the day before the ex-dividend date
with respect to an Extraordinary Distribution which is paid in cash and on the
distribution date with respect to an Extraordinary Distribution which is paid
other than in cash, or on the applicable expiration date (including all
extensions thereof) of any tender offer which is a Pro Rata Repurchase, or on
the date of purchase with respect to any Pro Rata Repurchase which is not a
tender offer, as the case may be, minus (ii) the Fair Market Value of the
Extraordinary Distribution or the aggregate purchase price of the Pro Rata
Repur-
30
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chase, as the case may be, and the denominator of which shall be the product of
(a) the number of shares of Common Shares outstanding immediately before such
Extraordinary Dividend or Pro Rata Repurchase minus, in the case of a Pro Rata
Repurchase, the number of shares of Common Shares repurchased by the Corporation
multiplied by (b) the Fair Market Value of a share of Common Shares on the day
before the ex-dividend date with respect to an Extraordinary Distribution which
is paid in cash and on the distribution date with respect to an Extraordinary
Distribution which is paid other than in cash, or on the applicable expiration
date (including all extensions thereof) of any tender offer which is a Pro Rata
Repurchase or on the date of purchase with respect to any Pro Rata Repurchase
which is not a tender offer, as the case may be. The Corporation shall send each
holder of ESOP Preferred Stock (i) notice of its intent to make any dividend or
distribution and (ii) notice of any offer by the Corporation to make a Pro Rata
Repurchase, in each case at the same time as, or as soon as practicable after,
such offer is first communicated (including by announcement of a record date in
accordance with the rules of any stock exchange on which the Common Shares is
listed or admitted to trading) to holders of Common Shares. Such notice shall
indicate the intended record date and the amount and nature of such dividend or
distribution, or the number of shares subject to such offer for a Pro Rata
Repurchase and the purchase price payable by the Corporation pursuant to such
offer, as well as the Conversion Price and the number of shares of Common Shares
into which a share of ESOP Preferred Stock may be converted at such time.
(d) Notwithstanding any other provisions of this Section 10.9, the
Corporation shall not be required to make any adjustment to the Conversion Price
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Conversion Price. Any lesser adjustment shall be carried
forward and shall be made no later than the time of, and together with, the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least one percent
(1%) in the Conversion Price.
(e) If the Corporation shall make any dividend or distribution on the
Common Shares or issue any Common Shares, other capital stock or other security
of the Corporation or any rights or warrants to purchase or acquire any such
security, which transaction does not result in an adjustment to the Conversion
Price pursuant to the foregoing provisions of this Section 10.9, the Board of
Directors of the Corporation shall consider whether such action is of such a
nature that an adjustment to the Conversion Price should equitably be made in
respect of such transaction. If in such case the Board of Directors of the
Corporation determines that an adjustment to the Conversion Price should be
made, an adjustment shall be made effective as of such date, as determined by
the Board of Directors of the Corporation. The determination of the Board of
Directors of the Corporation as to whether an adjustment to the Conversion Price
should be made pursuant to the foregoing provisions of this paragraph 10.9(e)
and, if so, as to what adjustment should be made and when, shall be final and
binding on the Corporation and all share-
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holders of the Corporation. The Corporation shall be entitled to make such
additional adjustments in the Conversion Price, in addition to those required by
the foregoing provisions of this Section 10.9, as shall be necessary in order
that any dividend or distribution in shares of capital stock of the Corporation,
subdivision, reclassification or combination of shares of stock of the
Corporation or any recapitalization of the Corporation shall not be taxable to
the holders of the Common Shares.
(f) As used herein, the following definitions shall apply:
"Business Day" shall mean each day that is not a Saturday, Sunday or a day
on which state or federally chartered banking institutions in New York, New York
are not required to be open.
"Current Market Price" of publicly traded shares of Common Shares or any
other class of Capital Stock or other security of the Corporation or any other
issuer for any day shall mean the last reported sales price, regular way, or, in
the event that no sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in either case as reported on the New
York Stock Exchange Composite Tape or, if such security is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which such security is listed or admitted to trading or,
if not listed or admitted to trading on any national securities exchange, on the
NASDAQ National Market System or, if such security is not quoted on such
National Market System, the average of the closing bid and asked prices on each
such day in the over-the-counter market as reported by NASDAQ or, if bid and
asked prices for such security on each such day shall not have been reported
through NASDAQ, the average of the bid and asked prices for such day as
furnished by any New York Stock Exchange member firm regularly making a market
in such security selected for such purpose by the Board of Directors of the
Corporation or a committee thereof, in each case, on each trading day during the
Adjustment Period. "Adjustment Period" shall mean the period of five (5)
consecutive trading days preceding, and including, the date as of which the Fair
Market Value of a security is to be determined. The "Fair Market Value" of any
security which is not publicly traded or of any other property shall mean the
fair value thereof as determined by an independent investment banking or
appraisal firm experienced in the valuation of such securities or property
selected in good faith by the Board of Directors of the Corporation or a
committee thereof, or, if no such investment banking or appraisal firm is in
good faith judgment of the Board of Directors or such committee available to
make such determination, as determined in good faith by the Board of Directors
of the Corporation or such committee.
"Extraordinary Distribution" shall mean any dividend or other distribution
to holders of Common Shares (effected while any of the shares of ESOP Preferred
Stock are outstanding) (i) of cash, where the aggregate amount of such cash
dividend or distribution, together with the amount of all cash dividends and
distributions made during the preceding period of 12 months, when combined with
the aggregate amount of all Pro Rata Repurchases (for this purpose, including
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<PAGE>
only that portion of the aggregate purchase price of such Pro Rata
Repurchase which is in excess of the Fair Market Value of the Common Shares
repurchased as determined on the applicable expiration date (including all
extensions thereof) of any tender offer or exchange offer which is a Pro
Rata Repurchase, or the date of purchase with respect to any other Pro Rata
Repurchase which is not a tender offer or exchange offer made during such
period), exceeds fifteen percent (15%) of the aggregate Fair Market Value
of all shares of Common Shares outstanding on the day before the ex-
dividend date with respect to such Extraordinary Distribution which is paid
in cash and on the distribution date with respect to an Extraordinary
Distribution which is paid other than in cash, and/or (ii) of any shares of
capital stock of the Corporation (other than shares of Common Shares),
other securities of the Corporation (other than securities of the type
referred to in paragraph (b) or (c) of this Section 10.9), evidences of
indebtedness of the Corporation or any other person or any other property
(including shares of any subsidiary of the Corporation) or any combination
thereof. The Fair Market Value of an Extraordinary Distribution for
purposes of paragraph (d) of this Section 10.9 shall be equal to the sum of
the Fair Market Value of such Extraordinary Distribution plus the amount of
any cash dividends which are not Extraordinary Distributions made during
such 12-month period and not previously included in the calculation of an
adjustment pursuant to paragraph (d) of this Section 10.9.
"Fair Market Value" shall mean, as to shares of Common Shares or any
other class of capital stock or securities of the Corporation or any other
issuer which are publicly traded, the average of the Current Market Prices
of such shares or securities for each day of the Adjustment Period.
"Non-Dilutive Amount" in respect of an issuance, sale or exchange by
the Corporation of any right or warrant to purchase or acquire shares of
Common Shares (including any security convertible into or exchangeable for
shares of Common Shares) shall mean the remainder of:
(i) The product of the Fair Market Value of a share of Common
Shares on the day preceding the first public announcement of such
issuance, sale or exchange multiplied by the maximum number of shares
of Common Shares which could be acquired on such date upon the exercise
in full of such rights and warrants (including upon the conversion or
exchange of all such convertible or exchangeable securities), whether
or not exercisable (or convertible or exchangeable) at such date, minus
(ii) The aggregate amount payable pursuant to such right or
warrant to purchase or acquire such maximum number of shares of Common
Shares;
provided, however, that in no event shall the Non-Dilutive Amount be less
than zero. For purposes of the foregoing sentence, in the case of a
security convertible into or exchangeable for shares of Common Shares, the
amount payable pursuant to a right or warrant to purchase or acquire shares
of Common Shares shall be the Fair Market Value of such security on the
date of the issuance, sale or exchange of such security by the Corporation.
33
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"Pro Rata Repurchase" shall mean any purchase of shares of Common Shares by
the Corporation or any subsidiary thereof, whether for cash, shares of capital
stock of the Corporation, other securities of the Corporation, evidences of
indebtedness of the Corporation or any other person or any other property
(including shares of a subsidiary of the Corporation), or any combination
thereof, effected while any of the shares of ESOP Preferred Stock are
outstanding, pursuant to any tender offer or exchange offer subject to Section
13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor provision of law, or pursuant to any other offer available to
substantially all holders of Common Shares; provided, however, that no purchase
of shares by the Corporation, or any subsidiary thereof made in open market
transactions shall be deemed a Pro Rata Repurchase. For purposes of this
paragraph 10.9(f), shares shall be deemed to have been purchased by the
Corporation or any subsidiary thereof "in open market transactions" if they have
been purchased substantially in accordance with the requirements of Rule 10b-18
as in effect under the Exchange Act, on the date shares of ESOP Preferred Stock
are initially issued by the Corporation or on such other terms and conditions as
the Board of Directors of the Corporation or a committee thereof shall have
determined are reasonably designed to prevent such purchases from having a
material effect on the trading market for the Common Shares.
(g) Whenever an adjustment to the Conversion Price and the related
voting rights of the ESOP Preferred Stock is required hereunder, the
Corporation shall forthwith place on file with the transfer agent for the Common
Shares and the ESOP Preferred Stock, and with the Secretary of the Corporation,
a statement signed by two officers of the Corporation stating the adjusted
Conversion Price determined as provided herein and the resulting conversion
ratio, and the voting rights (as appropriately adjusted), of the ESOP Preferred
Stock. Such statement shall set forth in reasonable detail such facts as shall
be necessary to show the reason and the manner of computing such adjustment,
including any determination of Fair Market Value involved in such computation.
Promptly after each adjustment to the Conversion Price and the related voting
rights of the ESOP Preferred Stock, the Corporation shall mail a notice thereof
and of the then prevailing conversion ratio to each holder of shares of the ESOP
Preferred Stock.
Section 10.10 Ranking; Retirement of Shares.
(a) The ESOP Preferred Stock shall rank senior to the Common Shares as to
the payment of dividends and the distribution of assets on liquidation,
dissolution and windup of the Corporation, and, unless otherwise provided in
these Restated Articles of Incorporation of the Corporation, as the same may be
amended, relating to a subsequent series of Preferred Stock of the Corporation,
the ESOP Preferred Stock shall rank junior to all subsequent series of the
Corporation's Preferred Stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or windup.
(b) Any shares of ESOP Preferred Stock acquired by the Corporation by
reason of the conversion or redemption of such shares as provided herein, or
otherwise so acquired, shall be
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retired as shares of ESOP Preferred Stock and restored to the status of
authorized but unissued shares of Special Shares of the Corporation,
undesignated as to series, and may thereafter be reissued as part of a new
series of such Special Shares as permitted by law.
Section 10.11. Miscellaneous.
(a) All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three (3) business days after the mailing thereof if sent by registered mail
(unless first-class mail shall be specifically herein permitted for such notice)
with postage prepaid, addressed: (i) if to the Corporation, to its office at
10501 Corporate Drive, Fort Wayne, Indiana 46845 (Attention: Secretary), or to
the transfer agent for the ESOP Preferred Stock, or other agent of the
Corporation designated as permitted herein or (ii) if to any holder of the ESOP
Preferred Stock or Common Shares, as the case may be, to such holder at the
address of such holder as listed in the stock record books of the Corporation
(which may include the records of any transfer agent for the ESOP Preferred
Stock or Common Shares, as the case may be) or (iii) to such other address as
the Corporation or any such holder, as the case may be, shall have designated by
notice similarly given.
(b) The term "Common Shares" as used in this Resolution means the
Corporation's Common Shares, as the same exists at the date of filing the
Amendment to these Restated Articles of Incorporation relating to the ESOP
Preferred Stock. In the event that, at any time as a result of an adjustment
made pursuant to Section 10.9, the holder of any shares of the ESOP Preferred
Stock upon thereafter surrendering such shares for conversion, shall become
entitled to receive any shares or other securities of the Corporation other than
shares of Common Shares, the Conversion Price in respect of such other shares or
securities so receivable upon conversion of shares of ESOP Preferred Stock shall
thereafter be adjusted, and shall be subject to further adjustment from time to
time, in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Shares contained in Section 10.9 hereof, and
the provisions of Sections 10.1 through 10.8, 10.10 and 10.11 hereof with
respect to the Common Shares shall apply on like or similar terms to any such
other shares or securities.
(c) The Corporation shall pay any and all stock transfer and documentary
stamp taxes that may be payable in respect of any issuance or delivery of shares
of ESOP Preferred Stock or shares of Common Shares or other securities issued on
account of ESOP Preferred Stock pursuant hereto or certificates representing
such shares or securities. The Corporation shall not, however, be required to
pay any such tax which may be payable in respect of any transfer involved in the
issuance or delivery of shares of ESOP Preferred Stock or Common Shares or other
securities in a name other than that in which the shares of ESOP Preferred Stock
with respect to which such shares or other securities are issued or delivered
were registered, or in respect of any payment to any person with respect to any
such shares or securities other than a payment, to the registered holder
thereof, and shall not be required to make any such issuance, delivery or
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<PAGE>
payment unless and until the person otherwise entitled to such issuance,
delivery or payment has paid to the Corporation the amount of any such tax or
has established, to the satisfaction of the Corporation, that such tax has been
paid or is not payable.
(d) In the event that a holder of shares of ESOP Preferred Stock shall not
by written notice designate the name in which shares of Common Shares to be
issued upon conversion of such shares should be registered or to whom payment
upon redemption of shares of ESOP Preferred Stock should be made or the address
to which the certificate or certificates representing such shares, or such
payment, should be sent, the Corporation shall be entitled to register such
shares, and make such payment, in the name of the holder of such ESOP Preferred
Stock as shown on the records of the Corporation and to send the certificate or
certificates representing such shares, or such payment, to the address of such
holder shown on the records of the Corporation.
(e) Unless otherwise provided in these Restated Articles of Incorporation,
as the same may be amended, of the Corporation, all payments in the form of
dividends, distributions on voluntary or involuntary dissolution, liquidation or
windup or otherwise made upon the shares of ESOP Preferred Stock and any other
stock ranking on a parity with the ESOP Preferred Stock with respect to such
dividend or distribution shall be pro rata, so that amounts paid per share on
the ESOP Preferred Stock and such other stock shall in all cases bear to each
other the same ratio that the required dividends, distributions or payments, as
the case may be, then payable per share on the shares of the ESOP Preferred
Stock and such other stock bear to each other.
(f) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the ESOP Preferred Stock. Upon any such appointment
or discharge of a transfer agent, the Corporation shall send notice thereof by
first-class mail, postage prepaid, to each holder of record of ESOP Preferred
Stock.
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Exhibit 3.2
BYLAWS
OF
TOKHEIM CORPORATION
(Restated July 12, 1995)
ARTICLE I
---------
Meetings of Shareholders
------------------------
Section 1.1. Annual Meetings. Annual meetings of the shareholders of
the Corporation shall be held in March of each year, on such date and at such
hour and place within or without the State of Indiana as shall be designated by
the Board of Directors. The Board of Directors may, by resolution, change the
date, time or place of such annual meeting. If the day fixed for any annual
meeting of shareholders shall fall on a legal holiday, then such annual meeting
shall be held on the first following day that is not a legal holiday.
Section 1.2. Special Meetings. Special meetings of the shareholders of
the Corporation may be called at any time by a majority of the Board of
Directors, the Chairman of the Board or the President and shall be called by the
Board of Directors if the Secretary receives written, dated and signed demands
for a special meeting, describing in reasonable detail the purpose or purposes
for which it is to be held, from the holders of shares representing at least
twenty-five percent (25%) of all votes entitled to be cast on any issue proposed
to be considered at the proposed special meeting. If the Secretary receives one
(1) or more proper written demands for a special meeting of shareholders, the
Board of Directors may set a record date for determining shareholders entitled
to make such demand. The Board of Directors or the Chairman of the Board, as the
case may be, calling a special meeting of shareholders shall set the date, time
and place of such meeting, which may be held within or without the State of
Indiana.
Section 1.3. Notices. A written notice, stating the date, time and
place of any meeting of the shareholders, and in the case of a special meeting
the purpose or purposes for which such meeting is called, shall be delivered or
mailed by the Secretary of the Corporation, to each shareholder of record of the
Corporation entitled to notice of or to vote at such meeting no fewer than ten
(10) nor more than sixty (60) days before the date of the meeting. In the event
of a special meeting of shareholders required to be called as the result of a
demand therefor made by shareholders, such notice shall be given no later than
the sixtieth (60th) day after the Corporation's receipt of the demand requiring
the meeting to be called. Notice of shareholders' meetings, if mailed, shall be
mailed, postage prepaid, to each shareholder at his address shown in the
Corporation's current record of shareholders.
Notice of a meeting of shareholders shall be given to shareholders not
entitled to vote, but only if a purpose for the meeting is to vote on any
amendment to the Corporation's Restated Articles of Incorporation, merger or
share exchange to which the Corporation would be a party, sale of the
Corporation's assets, dissolution of the Corporation, or consideration of voting
rights to be accorded to
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shares acquired or to be acquired in a "control share acquisition" (as such term
is defined in the Indiana Business Corporation Law). Except as required by the
foregoing sentence or as otherwise required by the Indiana Business Corporation
Law or the Corporation's Restated Articles of Incorporation, notice of a meeting
of shareholders is required to be given only to shareholders entitled to vote at
the meeting.
A shareholder or his proxy may at any time waive notice of a meeting
if the waiver is in writing and is delivered to the Corporation for inclusion in
the minutes or filing with the Corporation's records. A shareholder's
attendance at a meeting, whether in person or by proxy, (a) waives objection to
lack of notice or defective notice of the meeting, unless the shareholder or his
proxy at the beginning of the meeting objects to holding the meeting or
transacting business at the meeting, and (b) waives objection to consideration
of a particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the shareholder or his proxy objects to
considering the matter when it is presented. Each shareholder who has in the
manner above provided waived notice or objection to notice of a shareholders'
meeting shall be conclusively presumed to have been given due notice of such
meeting, including the purpose or purposes thereof.
If an annual or special shareholders' meeting is adjourned to a
different date, time or place, notice need not be given of the new date, time or
place if the new date, time or place is announced at the meeting before
adjournment, unless a new record date is or must be established for the
adjourned meeting.
Section 1.4. Voting. Except as otherwise provided by the Indiana
Business Corporation Law or the Corporation's Restated Articles of
Incorporation, each share of the capital stock of any class of the Corporation
that is outstanding at the record date established for any annual or special
meeting of shareholders and is outstanding at the time of and represented in
person or by proxy at the annual or special meeting, shall entitle the record
holder thereof, or his proxy, to one (1) vote on each matter voted on at the
meeting.
Section 1.5. Quorum. Unless the Corporation's Restated Articles of
Incorporation or the Indiana Business Corporation Law provide otherwise, at all
meetings of the shareholders a majority of the votes entitled to be cast on a
matter, represented in person or by proxy, constitutes a quorum for action on
the matter. Action may be taken at a shareholders' meeting only on matters with
respect to which a quorum exists; provided, however, that any meeting of
shareholders, including annual and special meetings and any adjournments
thereof, may be adjourned to a later date although less than a quorum is
present. Once a share is represented for any purpose at a meeting it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjournment meeting.
Section 1.6. Vote Required to Take Action. If a quorum exists as to
a matter to be considered at a meeting of shareholders, action on such matter
(other than the election of Directors) is approved if the votes properly cast
favoring the action exceed the votes properly cast opposing the action, except
as the Corporation's Restated Articles of Incorporation or the Indiana Business
Corporation Law require a greater number of affirmative votes. Directors shall
be elected by a plurality of the votes properly cast.
Section 1.7. Record Date. Only those persons shall be entitled to
notice of or to vote, in person or by proxy, at any shareholders' meeting who
shall appear as shareholders upon the books of the Corporation as of the record
date for such meeting set by the Board of Directors, which date may not
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be earlier than the date seventy (70) days immediately preceding the meeting.
In the absence of such determination, the record date shall be the fiftieth
(50th) day immediately preceding the date of such meeting. Unless otherwise
provided by the Board of Directors, shareholders shall be determined as of the
close of business on the record date.
Section 1.8. Proxies. A shareholder may vote his shares either in
person or by proxy. A shareholder may appoint a proxy to vote or otherwise act
for the shareholder (including authorizing the proxy to receive, or to waive,
notice of any shareholders' meetings within the effective period of such proxy)
by signing an appointment form either personally or by the shareholder's
attorney-in-fact. An appointment of a proxy is effective when received by the
Secretary or other officer or agent authorized to tabulate votes and is
effective for eleven (11) months unless a shorter or longer period is expressly
provided in the appointment form. The proxy's authority may be limited to a
particular meeting or may be general and authorize the proxy to represent the
shareholder at any meeting of shareholders held within the time provided in the
appointment form. Subject to the Indiana Business Corporation Law and to any
express limitation on the proxy's authority appearing on the face of the
appointment form, the Corporation is entitled to accept the proxy's vote or
other action as that of the shareholder making the appointment.
Section 1.9. Removal of Directors. Any or all of the members of the
Board of Directors may be removed, with or without cause, only at a meeting of
the shareholders called expressly for that purpose, by a vote of the holders of
shares representing seventy-five percent (75%) of the votes then entitled to be
cast at an election of Directors.
Section 1.10. Participation by Conference Telephone. The Chairman of
the Board or the Board of Directors may permit any or all shareholders to
participate in an annual or special meeting of shareholders by, or through the
use of, any means of communication, such as conference telephone, by which all
shareholders participating may simultaneously hear each other during the
meeting. A shareholder participating in a meeting by such means shall be deemed
to be present in person at the meeting.
Section 1.11. Notice of Shareholder Business.
(a) At any meeting of the shareholders, only such business may be
conducted as shall have been properly brought before the meeting, and as shall
have been determined to be lawful and appropriate for consideration by
shareholders at the meeting. To be properly brought before a meeting, business
must be:
(1) specified in the notice of meeting given in accordance
with Section 1.3 of this Article I,
(2) otherwise properly brought before the meeting by or at the
direction of the Board of Directors or the Chief Executive Officer, or
(3) otherwise properly brought before the meeting by a
shareholder.
(b) For business to be properly brought before a meeting by a
shareholder pursuant to clause (c) above, the shareholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal office of the Corporation, not less than 50 days nor more than 90 days
prior to the meeting; provided, however, that in the event that less than 60
days' notice of the date of the meeting is given to shareholders, notice by the
shareholder to be timely must be so received not later than the close of
business on the tenth day following the day on which such notice of the date of
the meeting was given. A
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shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the meeting:
(1) a brief description of the business desired to be brought
before the meeting,
(2) the name and address, as they appear on the Corporation's
stock records, of the shareholder proposing such business,
(3) the class and number of shares of the Corporation which
are beneficially owned by the shareholder, and
(4) any interest of the shareholder in such business.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at a meeting except in accordance with the procedures set forth in
this Section 1.11. The person presiding at the meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting in accordance with the Bylaws, or that business was
not lawful or appropriate for consideration by shareholders at the meeting, and
if he should so determine, he shall so declare to the meeting and any such
business shall not be transacted.
Section 1.12. Notice of Shareholder Nominees. Nominations of persons
for election to the Board of Directors of the Corporation may be made at any
meeting of shareholders by or at the direction of the Board of Directors or by
any shareholder of the Corporation entitled to vote for the election of
directors at the meeting. Shareholder nominations shall be made pursuant to
timely notice given in writing to the Secretary of the Corporation in accordance
with Section 1.11 of this Article I. Such shareholder's notice shall set forth,
in addition to the information required by Section 1.11, as to each person whom
the shareholder proposes to nominate for election or reelection as a Director:
(a) the name, age, business address and residence address of such
person,
(b) the principal occupation or employment of such person,
(c) the class and number of shares of the Corporation which are
beneficially owned by such person,
(d) any other information relating to such person that is required to
be disclosed in solicitation of proxies for election of Directors, or is
otherwise required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (including without limitation such person's
written consent to being named in the proxy statement as a nominee and to
serving as a Director if elected), and
(e) the qualifications of the nominee to serve as a Director of the
Corporation. No shareholder nomination shall be effective unless made in
accordance with the procedures set forth in this Section 1.12. The person
presiding at the meeting shall, if the facts warrant, determine and declare to
the meeting that a shareholder nomination was not made in accordance with the
Bylaws, and if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.
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ARTICLE II
----------
Directors
---------
Section 2.1. Number and Terms. The business and affairs of the
Corporation shall be managed under the direction of a Board of Directors
consisting of nine (9) Directors.
The Directors shall be divided into three (3) groups consisting of
three (3) Directors in each group, with the term of office of the first group to
expire at the 1988 annual meeting of shareholders, the term of office of the
second group to expire at the 1989 annual meeting of shareholders, and the term
of office of the third group to expire at the 1990 annual meeting of
shareholders; and at each annual meeting of shareholders, the Directors chosen
to succeed those whose terms then expire shall be identified as being of the
same group as the Directors they succeed and shall be elected for a term
expiring at the third succeeding annual meeting of shareholders.
Despite the expiration of a Director's term, the Director shall
continue to serve until his successor is elected and qualified, or until the
earlier of his death, resignation, disqualification or removal, or until there
is a decrease in the number of Directors. Any vacancy occurring in the Board of
Directors, from whatever cause arising, shall be filled by selection of a
successor by a majority vote of the remaining members of the Board of Directors
(although less than a quorum); provided, however, that if such vacancy or
vacancies leave the Board of Directors with no members or if the remaining
members of the Board are unable to agree upon a successor or determine not to
select a successor, such vacancy may be filled by a vote of the shareholders at
a special meeting called for that purpose or at the next annual meeting of
shareholders. The term of a Director elected or selected to fill a vacancy
shall expire at the end of the term for which such Director's predecessor was
elected. In the event the Board of Directors shall increase the total number of
its members within the limits provided in the Articles of Incorporation, the
Board of Directors shall be authorized to assign such additional member or
members to such class of Directors as it deems appropriate and to fill such
vacancy for the term of that class to which such additional member or members
are assigned.
The Directors and each of them shall have no authority to bind the
Corporation except when acting as a Board.
Section 2.2. Quorum and Vote Required to Take Action. A majority of
the whole Board of Directors shall be necessary to constitute a quorum for the
transaction of any business, except the filling of vacancies. If a quorum is
present when a vote is taken, the affirmative vote of a majority of the
Directors present shall be the act of the Board of Directors, unless the act of
a greater number is required by the Indiana Business Corporation Law, the
Corporation's Restated Articles of Incorporation or these Bylaws.
Section 2.3. Annual and Regular Meetings. The Board of Directors
shall meet annually, without notice, immediately following the annual meeting of
the shareholders, for the purpose of transacting such business as properly may
come before the meeting. Other regular meetings of the Board of Directors, in
addition to said annual meeting, shall be held on such dates, at such times and
at such places as shall be fixed by resolution adopted by the Board of Directors
and specified in a notice of each such regular meeting, or otherwise
communicated to the Directors. The Board of Directors may at any time alter the
date for the next regular meeting of the Board of Directors.
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Section 2.4. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the President or a majority of the
members of the Board of Directors upon not less than twenty-four (24) hours'
notice given to each Director of the date, time and place of the meeting, which
notice need not specify the purpose or purposes of the special meeting. Such
notice may be communicated in person (either in writing or orally), by
telephone, telegraph, teletype or other form of wire or wireless communication,
or by mail, and shall be effective at the earlier of the time of its receipt or,
if mailed, five (5) days after its mailing. Notice of any meeting of the Board
may be waived in writing at any time if the waiver is signed by the Director
entitled to the notice and is filed with the minutes or corporate records. A
Director's attendance at or participation in a meeting waives any required
notice to the Director of the meeting, unless the Director at the beginning of
the meeting (or promptly upon the Director's arrival) objects to holding the
meeting or transacting business at the meeting and does not thereafter vote for
or assent to action taken at the meeting.
Section 2.5. Written Consents. Any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a meeting if
the action is taken by all members of the Board. The action must be evidenced by
one (1) or more written consents describing the action taken, signed by each
Director, and included in the minutes or filed with the corporate records
reflecting the action taken. Action taken under this Section 2.5 is effective
when the last Director signs the consent, unless the consent specifies a
different prior or subsequent effective date, in which case the action is
effective on or as of the specified date. A consent signed under this Section
2.5 shall have the same effect as a unanimous vote of all members of the Board
and may be described as such in any document.
Section 2.6. Participation by Conference Telephone. The Board of Directors
may permit any or all Directors to participate in a regular or special meeting
by, or through the use of, any means of communication, such as conference
telephone, by which all Directors participating may simultaneously hear each
other during the meeting. A Director participating in a meeting by such means
shall be deemed to be present in person at the meeting.
Section 2.7. Committees.
(a) The Board of Directors shall appoint an Audit Committee comprised only
of nonofficer members of the Board of Directors, which shall arrange the details
of the annual audit of the Corporation and shall recommend to the Board of
Directors independent auditors to be presented for consideration by the
shareholders. The Board of Directors shall also appoint a Compensation
Committee, comprised only of nonofficer members of the Board of Directors, which
shall make recommendations to the Board of Directors concerning officers'
salaries and other compensation.
(b) The Board of Directors may create one (1) or more other committees and
appoint members of the Board of Directors to serve on them, by resolution of the
Board of Directors adopted by a majority of all the Directors in office when the
resolution is adopted. Each committee may have one (1) or more members, and all
the members of a committee shall serve at the pleasure of the Board of
Directors.
(c) To the extent specified by the Board of Directors in the resolution
creating a committee, each committee may exercise all of the authority of the
Board of Directors; provided, however, that a committee may not:
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(1) authorize dividends or other distributions, except a
committee (or a senior executive officer of the Corporation) may
authorize or approve a reacquisition of shares or other distribution
if done according to a formula or method or within a range prescribed
by the Board of Directors;
(2) approve or propose to shareholders action that is required
to be approved by shareholders;
(3) fill vacancies on the Board of Directors or on any of its
committees;
(4) amend the Corporation's Restated Articles of Incorporation
under IC 23-1-38-2;
(5) adopt, amend, repeal, or waive provisions of these Bylaws;
(6) approve a plan of merger not requiring shareholder approval;
or
(7) authorize or approve the issuance or sale or a contract for
sale of shares, or determine the designation and relative rights,
preferences, and limitations of a class or series of shares, except
that the Board of Directors may authorize a committee (or a senior
executive officer of the Corporation) to do so within limits
prescribed by the Board of Directors.
(d) Except to the extent inconsistent with the resolutions creating a
committee, Sections 2.1 through 2.6 of these Bylaws, which govern meetings,
action without meetings, notice and waiver of notice, quorum and voting
requirements and telephone participation in meetings of the Board of Directors,
apply to each committee and its members as well.
Section 2.8. Compensation. The Board of Directors may fix fees and
expenses paid to Directors for attending meetings, and any other compensation
paid to Directors by resolution.
ARTICLE III
-----------
Officers
--------
Section 3.1. Designation, Selections and Terms. The officers of the
Corporation shall consist of a Chief Executive Officer (CEO) and/or President,
one or more Vice Presidents, Chief Financial Officer or Treasurer, and
Secretary. The Board of Directors may also elect such other officers or
assistant officers as it may from time to time determine by resolution creating
the office and defining the duties thereof. In addition, the CEO or the
President may, by a certificate of appointment creating the office and defining
the duties thereof delivered to the Secretary for inclusion with the corporate
records, from time to time create and appoint such assistant officers as they
deem desirable. The officers of the Corporation shall be elected by the Board of
Directors (or appointed by the CEO or the President as provided above) and need
not be selected from among the members of the Board of Directors, except for the
Chairman of the Board, the CEO and/or President, who shall be members of the
Board of Directors. Any two (2) or more offices may be held by the same person.
All officers shall serve at the pleasure of the Board of Directors and, with
respect to officers appointed by the CEO or the President, also at the pleasure
of such officers. The election or appointment of an officer does not itself
create contract rights.
Section 3.2. Removal. The Board of Directors may remove any officer at
any time with or without cause. An officer appointed by the Chairman of the
Board or the President may also be removed at any time, with or without cause,
by either of such officers. Vacancies in such offices, however
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occurring, may be filled by the Board of Directors at any meeting of the Board
of Directors (or by appointment by the Chairman of the Board or the President to
the extent provided in Section 3.1 of these Bylaws).
Section 3.3. Chairman of the Board. The Chairman of the Board shall be
the chief executive and principal policy-making officer of the Corporation.
Subject to the authority of the Board of Directors, he shall formulate the major
policies to be pursued in the administration of the Corporation's affairs. He
shall study and make reports and recommendations to the Board of Directors with
respect to major problems and activities of the Corporation and shall see that
the established policies are placed into effect and carried out under the
direction of the President. The Chairman of the Board shall, if present, preside
at all meetings of the shareholders and of the Board of Directors.
Section 3.4. President. Subject to the provisions of Section 3.3, the
President shall be the chief operating officer of the Corporation, shall
exercise the powers and perform the duties which ordinarily appertain to that
office and shall manage and operate the business and affairs of the Corporation
in conformity with the policies established by the Board of Directors and by the
Chairman of the Board, or as may be provided for in these Bylaws. In connection
with the performance of his duties, he shall keep the Chairman of the Board
fully informed as to all phases of the Corporation's activities. In the absence
of the Chairman of the Board, the President shall preside at meetings of the
shareholders and of the Board of Directors.
Section 3.5. Executive Vice President. The Executive Vice President shall
perform such duties as are assigned by the Board of Directors or the President,
shall perform the duties of the President in case of the absence of the
President and Chairman of the Board, and shall report to the President regarding
his official activities.
Section 3.6. Vice Presidents. Each Vice President shall have such powers
and perform such duties as the Board of Directors may, from time to time,
prescribe and as the President may, from time to time, delegate to him, and
shall report to the President regarding his official activities. The Board of
Directors shall also be empowered to specifically designate said Vice President
as "Group Vice President," "Senior Vice President," or with any other title
descriptive of the Vice President's position.
Section 3.7. Chief Financial Officer. The Chief Financial Officer shall
have charge of the Corporation's fiscal affairs and keep and hold all moneys,
bonds and securities belonging to the Corporation as ordered by the Board of
Directors. He shall keep or cause to be kept a correct account and record of the
financial affairs of the Corporation in proper books. He shall report to the
President regarding his official activities. He shall also be responsible for
causing the Corporation to furnish financial statements to its shareholders
pursuant to IC 23-1-53-1.
Section 3.7.1. Treasurer. If the Board of Directors shall not elect a
Chief Financial Officer, then it shall elect a Treasurer in lieu of a Chief
Financial Officer.
Section 3.8. Secretary. The Secretary shall be the custodian of the books,
papers and records of the Corporation and of its corporate seal, if any, and
shall be responsible for seeing that the Corporation maintains the records
required by IC 23-1-52-1 (other than accounting records) and that the
Corporation files with the Indiana Secretary of State the annual report required
by IC 23-1-53-3. The Secretary shall be responsible for preparing minutes of the
meetings of the shareholders of the Board
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of Directors and the authenticating records of the Corporation, and he shall
perform all of the other duties usual in the office of Secretary of a
corporation. The Secretary shall report to the President regarding his official
activities.
Section 3.9. Assistant Officers. An assistant officer shall have and
perform the duties and powers of his principal in cash of the principal's
absence or inability to act, and his duties shall be such as to properly
supplement the duties, powers, and functions of the principal officer and as
directed by such principal officer and the Board of Directors; and such
assistant officer shall report to his superior officer and to the President as
to his official activities.
Section 3.10. Salary. The Board of Directors may, at its discretion,
from time to time, fix the salary of any officer by resolution included in the
minute book of the Corporation.
ARTICLE IV
----------
Checks
------
All checks, drafts or other orders for payment of money shall be
signed in the name of the Corporation by such officers or persons as shall be
designated from time to time by resolution adopted by the Board of Directors and
included in the minute book of the Corporation; and in the absence of such
designation, such checks, drafts or other orders for payment shall be signed by
either the President or the Chief Financial Officer. If no Chief Financial
Officer position exists, then said responsibilities shall be performed by the
Treasurer.
ARTICLE V
---------
Loans
-----
Any two of the Chairman of the Board, Chief Executive Officer and/or
President, Executive Vice President, or any Vice President, Secretary, and/or
Chief Financial Officer or Treasurer, are authorized and empowered to negotiate
and make any loan for money from any bank or banking institution or other
corporation or person, and to make, deliver and fully execute any promissory
note, or other evidence of indebtedness for or on account of said borrowed
money, and to accept the proceeds of said loan.
ARTICLE VI
----------
Execution of Documents
----------------------
The Chairman of the Board or the President may, in the Corporation's
name, sign all deeds, leases, contracts or similar documents that may be
authorized by the Board of Directors unless otherwise directed by the Board of
Directors or otherwise provided herein or in the Corporation's Restated Articles
of Incorporation, or as otherwise required by law.
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ARTICLE VII
-----------
Stock
-----
Section 7.1. Execution. Certificates for shares of the capital stock of the
Corporation shall be signed by the Chairman of the Board, President, Executive
Vice President or a Vice President, and by the Secretary or an Assistant
Secretary and the seal of the Corporation (or a facsimile thereof), if any, may
be thereto affixed. Where any such certificate is also signed by a transfer
agent or a registrar, or both, the signatures of the officers of the Corporation
may be facsimiles. The Corporation may issue and deliver any such certificate
notwithstanding that any such officer who shall have signed, or whose facsimile
signature shall have been imprinted on, such certificate shall have ceased to be
such officer.
Section 7.2. Contents. Each certificate shall state on its face the name of
the Corporation and that it is organized under the laws of the State of Indiana,
the name of the person to whom it is issued, and the number and class of shares
and the designation of the series, if any, the certificate represents, and shall
state conspicuously on its front or back that the Corporation will furnish the
shareholder, upon his written request and without charge, a summary of the
designations, relative rights, preferences and limitations applicable to each
class and the variations in rights, preferences and limitations determined for
each series (and the authority of the Board of Directors to determine variations
for future series).
Section 7.3. Transfers. Except as otherwise provided by law or by
resolution of the Board of Directors, transfers of shares of the capital stock
of the Corporation shall be made only on the books of the Corporation by the
holder thereof in person or by duly authorized attorney, on payment of all taxes
thereon and surrender for cancellation of the certificate or certificates for
such shares (except as hereinafter provided in the case of loss, destruction or
mutilation of certificates) properly endorsed by the holder thereof or
accompanied by the proper evidence of succession, assignment or authority to
transfer, and delivered to the Secretary or an Assistant Secretary.
Section 7.4. Stock Transfer Records. There shall be entered upon the stock
records of the Corporation the number of each certificate issued, the name and
address of the registered holder of such certificate, the number, kind and class
of shares represented by such certificate, the date of issue, whether the shares
are originally issued or transferred, the registered holder from whom
transferred and such other information as is commonly required to be shown by
such records. The stock records of the Corporation shall be kept at its
principal office, unless the Corporation appoints a transfer agent or registrar,
in which case the Corporation shall keep at its principal office a complete and
accurate shareholders' list giving the names and addresses of all shareholders
and the number and class of shares held by each. If a transfer agent is
appointed by the Corporation, shareholders shall give written notice of any
changes in their addresses from time to time to the transfer agent.
Section 7.5. Transfer Agents and Registrars. The Board of Directors may
appoint one or more transfer agents and one or more registrars and may require
each stock certificate to bear the signature of either or both.
Section 7.6. Loss, Destruction or Mutilation of Certificates. the holder of
any of the capital stock of the Corporation shall immediately notify the
Corporation of any loss, destruction or mutilation of the certificate therefor,
and the Board of Directors may, in its discretion, cause to be issued to him a
new certificate or certificates of stock, upon the surrender of the mutilated
certificate, or, in the
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case of loss or destruction, upon satisfactory proof of such loss or
destruction. The Board of Directors may, in its discretion, require the holder
of the lost or destroyed certificate or his legal representative to give the
Corporation a bond in such sum and in such form, and with such surety or
sureties as it may direct, to indemnify the Corporation, its transfer agents and
registrars, if any, against any claim that may be made against them or any of
them with respect to the capital stock represented by the certificate or
certificates alleged to have been lost or destroyed, but the Board of Directors
may, in its discretion, refuse to issue a new certificate or certificates, save
upon the order of a court having jurisdiction in such matters.
Section 7.7. Form of Certificates. The form of the certificates for shares
of the capital stock of the Corporation shall conform to the requirements of
Section 7.2 of these Bylaws and be in such printed form as shall from time to
time be approved by resolution of the Board of Directors.
ARTICLE VIII
Seal
The corporate seal of the Corporation shall, if the Corporation elects to
have one, be circular in form, with the words "Tokheim Corporation, Fort Wayne,
Indiana" on the periphery thereof and the word "SEAL" in the center.
ARTICLE IX
Miscellaneous
Section 9.1. Indiana Business Corporation Law. The provisions of the
Indiana Business Corporation Law, as amended, applicable to all matters relevant
to, but not specifically covered by, these Bylaws are hereby, by reference,
incorporated in and made a part of these Bylaws.
Section 9.2. Fiscal Year. The fiscal year of the Corporation shall end on
the 30th day of November of each year.
Section 9.3. Redemption of Shares Acquired in Control Share Acquisitions.
If and whenever the provisions of IC 23-1-42 apply to the Corporation, any or
all control shares acquired in a control share acquisition shall be subject to
redemption by the Corporation, if either:
(a) no acquiring person statement has been filed with the Corporation with
respect to such control share acquisition in accordance with IC 23-1-42-6, or
(b) the control shares are not accorded full voting rights by the
Corporation's shareholders as provided in IC 23-1-42-9.
A redemption pursuant to Section 9.3(a) may be made at any time during the
period ending sixty (60) days after the lost acquisition of control shares by
the acquiring person. A redemption pursuant to Section 9.3(b) may be made at any
time during the period ending two (2) years after the shareholder vote with
respect to the granting of voting rights to such control shares. Any redemption
pursuant to this Section 9.3 shall
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be made at the fair value of the control shares and pursuant to such procedures
for such redemption as may be set forth in these Bylaws or adopted by resolution
of the Board of Directors.
As used in this Section 9.3, the terms "control shares," "control share
acquisition," "acquiring person statement" and "acquiring person" shall have the
meanings ascribed to such terms in IC 23-1-42.
Section 9.4. Amendments. These Bylaws may be rescinded, changed or
amended, and provisions hereof may be waived, at any meeting of the Board of
Directors by the affirmative vote of a majority of the entire number of
Directors at the time, provided such proposed amendment is described in the
notice of such meeting and except as otherwise required by the Corporation's
Restated Articles of Incorporation or by the Indiana Business Corporation Law.
Section 9.5. Selection of Auditors. Independent auditors shall be elected
each year at the annual meeting of shareholders, for the purpose of auditing the
accounts and records of this Corporation, to report on the financial position of
this Corporation, and to perform such other appropriate accounting services as
may be required by the Board of Directors.
Section 9.6. Definition of Articles of Incorporation. The term "Articles
of Incorporation" as used in these Bylaws means the Amended or Restated Articles
of Incorporation of the Corporation as from time to time in effect.
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Exhibit 10.3
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (hereinafter "Agreement"), dated this 22nd day of
September, 1995, by and between TOKHEIM CORPORATION, an Indiana corporation
(hereinafter "the Company"), and Douglas K. Pinner (hereinafter "the Employee"),
which Agreement shall be deemed to replace any and all previously existing
Employment Agreements between the parties.
WHEREAS, the Company desires to employ the Employee in an executive
capacity and the Employee desires to be so employed, all upon the following
terms and conditions.
NOW, THEREFORE, in consideration of the premises hereinafter set forth, it
is mutually agreed as follows:
1. The Company agrees to employ the Employee, and the Employee agrees to
serve the Company, on a full-time basis in the capacity hereinafter designated
and upon the terms hereinafter specified. Said employment shall continue from
this date forward for an indefinite period and until such time as it may be
terminated by one or more of the parties, it being expressly recognized that
either party may terminate this Agreement, with cause, upon the giving of thirty
(30) days' written notice to the other, and in such event, the parties shall
each be entitled only to such continuing rights as may be provided in this
Agreement or as may otherwise be available to them in law or equity. In the
event Employee is terminated without cause, Employee shall be entitled to
severance pay equal to twelve (12) months of the Employee's base monthly salary.
2. The Employee shall serve in the capacity of President & CEO.
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The Employee shall have such duties and responsibilities and shall supply
such services in the carrying out of such duties and responsibilities as the
Company, through the Board of Directors, the duly appointed Committees of the
Board, the Chief Executive Officer of the Company or such other Executive
Officers as may be designated by the Board, shall, from time to time, direct,
and said parties shall be free to alter or amend the position, responsibilities,
duties or services to be performed by the Employee in such manner as to them
shall be deemed to be in the best interests of the Company. During the term of
employment, the Employee shall devote his best efforts and skills to the
business interests of the Company and shall not engage in any commercial
enterprise or activity, either directly or indirectly, in conflict with the
Company's business, or which may in any way interfere with his employment,
without the consent of the Company.
3. The Employee hereby recognizes the Company's proprietary rights in the
tangible and intangible property of the Company and acknowledges that
notwithstanding the relationship of employment, the Employee will not obtain or
acquire through such employment any personal property rights in any of the
property of the Company, including, but not limited to, any writings,
communications, manuals, documents, instruments, contracts, agreements, files,
literature, data, technical information, know-how secrets, formulas, products,
methods, procedures, processes, devices, apparatuses, trademarks, tradenames,
trade styles, service marks, logos, copyrights, patents or other matters which
are properly the property of the Company.
4. The Employee shall, during the term of employment, use his best
efforts and exercise his utmost diligence to protect and safeguard the
confidential information of the Company, including, but not limited to, trade
secrets, know-how, product formulas, recipes,
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methods, procedures, processes, devices, apparatuses, materials or other matters
which are confidential to the Company. The Employee further agrees that he
shall not, during the term of employment or thereafter, personally use or
disclose to others information which shall be confidential to the Company,
except as such use or disclosure may be required during the course of employment
with the Company or as may be consented to by the Company.
5. The Employee agrees that during the term of his employment, any and
all inventions and discoveries, whether or not patentable, which the Employee
may conceive or make, either alone or in conjunction with others and related or
in any way connected with the business of the Company, shall be the sole and
exclusive property of the Company. The Employee shall, without further
compensation or consideration, but at the expense of the Company, and as and
when requested to do so by the Company, promptly execute and assign any and all
applications, assignments and other instruments which the Company shall deem
necessary in order to apply for and obtain letters patent of the United States
and of foreign countries for said inventions and discoveries, and in order to
assign and convey to the Company, or to the Company's nominee the sole and
exclusive right, title and interest in and to said inventions, discoveries or
any applications or patents thereon. As promptly as known or possessed by the
Employee, the Employee shall disclose to the Company all information with
respect to said inventions and discoveries. The Employee further agrees that
during the term of employment, trademarks, tradenames, service marks, trade
styles, logos, emblems, labels, slogans and writings, whether or not
copyrighted, originated by the Employee, alone or in conjunction with others,
and related or in any way connected with the business of the Company, shall be
the sole and exclusive property of the Company.
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6. The Employee shall be entitled to compensation as follows:
A. The Employee shall be entitled to a monthly base salary of Twenty Two
Thousand Nine Hundred Seventeen Dollars ($22,917.00). The Base Pay will be
reviewed annually. Such Base Pay will be payable in such semi-monthly or
monthly installments as is consistent with the policy of the Company in such
matters. The Employee shall also be eligible for the officer's bonus program, a
copy of which has been supplied to the Employee.
B. The Employee shall be granted participation in all employee benefit
plans applicable to executive officers of the Company, including, but not
limited to, medical plans, disability plans, life insurance plans, savings
plans, stock option plans and such other plans as may from time to time be made
available and applicable to the Employee, consistent with the policies of the
Company and the terms and conditions of such plans. Nothing herein shall be
deemed to alter the terms and conditions of such plans or the policy of the
Company with respect thereto, and nothing herein shall be deemed to entitle the
Employee to any rights therein which would not otherwise be made available to
the Employee pursuant to the implementations of such plans in accordance with
the terms, conditions and provisions set forth therein. It shall be further
understood that nothing herein shall prevent the Company, through its Board of
Directors, the duly appointed Committees of the Board or such other Executive
Officers of the Company as the Board may designate, from altering or amending
any of the aforesaid plans or eliminating or adding to them as they shall from
time to time deem appropriate and in the interests of the Company.
C. Except as may otherwise be expressly provided herein, the Employee
shall be granted, upon his termination from the Company, such rights as may be
available to him
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pursuant to any plan or plans hereinabove referred to, and, in addition thereto,
any termination benefits accorded terminated executives, consistent with any
existing policy or practice of the Company with respect to such termination. In
the event there shall be no such policy or practice with respect to termination,
then such termination benefits, if any, as may be deemed appropriate to the
Board of Directors, its duly appointed Committees or such other Executive
Officers as may be directed by the Board to act in such matters.
7. In the event there shall occur (i) a merger, consolidation or other
combination of the Company with or into any other corporation, (ii) the
acquisition, subsequent to the date of this Agreement, directly or indirectly,
by any person, entity or group of persons of ownership of the power to vote in
excess of twenty percent (20%) of the voting securities of the Company followed
by the election by said party of one or more representatives to the Board of
Directors, (iii) the acquisition, subsequent to the date of this Agreement,
directly or indirectly, by any person, entity or group of persons of ownership
of the power to vote in excess of fifty percent (50%) of the voting securities
of the Company, whether or not followed by the election by said party or parties
of one or more representatives to the Board of Directors or (iv) any other
event, including, but not limited to, the matters set forth in (i) through (iii)
above which shall have the effect of vesting effective control of the business
and affairs of the Company in a person, entity or group of persons other or
different than the present stockholders of the Company, or which shall have the
effect of causing a change in management of the Company, then and in that event,
the right of the Company and the Employee to unilaterally terminate this
employment upon thirty (30) days' written notice as provided in Paragraph 1
above shall continue, but shall be subject to the following express provision:
If such termination shall occur as a result of notice
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given by either party within thirty-six (36) months of any of the events
described in (i), (ii), (iii) or (iv) of this Paragraph above, then upon the
effective date of termination, the Employee shall be entitled to the termination
benefits set forth in this Paragraph 7 in addition to any other termination
rights which may have accrued to him during his employment; provided, however,
that the following provisions with respect to direct severance pay (i.e., salary
and bonus payments) shall be exclusive and shall replace any other rights of the
Employee to direct severance payments:
A. The Employee shall be entitled to receive the greater of 299.99% of the
base salary or twice the Employee's total compensation at the same rate at which
it existed at the date of the event referenced in (i) through (iv) of this
Paragraph 7 above. The Employee shall further be entitled to receive as direct
severance pay, bonuses during the subsequent twenty-four (24) months on the same
dates that he would otherwise have been entitled to them had his employment
continued; provided, however, that the amount of such bonuses shall not be
contingent upon any matters arising after the date of termination, but shall on
an annual basis be equal to the average annual sum paid in bonuses to the
Employee during the last three (3) bonus periods preceding his termination, or
the average annual bonuses of such lesser bonus periods if his employment was
for less than three (3) bonus periods prior to termination. In the event that
during any part of such twenty-four (24) month period, the executive officer's
activities involved returning the corporation to profitability which limited
bonus potential, the bonus shall be paid for such twenty-four month period as if
the company had been profitable. To the extent the twenty-four (24) months
shall expire in the middle of a bonus period, then for such partial year the
Employee shall be entitled to that percentage of the average annual bonus that
the partial year bears to a total year, and he
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shall be paid any remaining and unpaid bonus amounts due him at the expiration
of said twenty-four (24) month period. In the event the Employee is terminated
within said 36 month period, severance shall be payable. In the event the
Employee shall die during any period in which payments shall be due hereunder,
the balance of any salary and bonus payments shall be paid to the Employee's
estate within six (6) months of the date of his death.
B. The Employee shall immediately be paid a lump sum amount equal to the
value of any outstanding stock options which by their terms cannot be exercised
the day following the Employee's termination of employment (the value of each
option shall be equal to the average of the high and low price of a share of
stock, as quoted on the composite transactions table covering transactions on
the New York Stock Exchange on the first date that the stock was traded on that
Exchange which next precedes the date the Employee's employment terminated minus
the stock option's exercise price). The Executive shall immediately be paid a
lump sum amount equal to the value of any unvested shares of restricted stock as
if all restrictions had been removed the day preceding the Change of Control;
C. In addition to the continuation of his base salary and bonus as
provided above, the Employee shall further be entitled for twenty-four (24)
months following termination to receive medical insurance, life insurance and
disability insurance benefits from the Company on terms comparable to the
benefits provided by the Company to the Employee in such matters as of the date
of the event referenced in (i) through (iv) of this Paragraph 7 above; provided,
that any severance payments provided for hereinabove shall be reduced by the
amount of any disability benefits paid pursuant to this Paragraph 7B for the
period that such disability payments shall continue; and, provided further, that
notwithstanding anything hereinabove set forth, any medical,
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life and disability benefits shall terminate automatically at any time that the
Employee shall secure and begin alternate employment. The employee may elect in
writing at the time of severance to receive the cash value of any or all of
these benefits in lieu of coverage.
D. If the Employee shall be fifty (50) years of age or older at the time
of any termination governed by the terms of this Paragraph 7, and if the twenty-
four (24) months of continued salary and bonus shall expire prior to the
Employee's sixtieth (60th) birthday, then the Employee shall additionally be
entitled to receive his base salary and bonus from the date of expiration of the
twenty-four (24) months until the date of his sixtieth (60th) birthday at one-
half (1/2) the rate of salary and bonus payable to him during the first twenty-
four (24) months following his termination.
E. If the Employee shall be sixty-three (63) years of age or older at the
time of any termination governed by the terms of this Paragraph 7, then all
benefits provided for above shall run not for a period of twenty-four (24)
months as hereinabove set forth, but rather for that number of months occurring
between the date of termination and the date of the Employee's sixty-fifth
(65th) birthday and all benefits otherwise running for twenty-four (24) months
shall run for that period of time.
F. It is expressly understood and agreed that if the receipt or the right
to receive all or any part of the payments contemplated by this Paragraph 7,
either alone or with other payments, which the Employee has received or has the
right to receive from the Company and which are "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code, as amended, would result
in some or all of the payments contemplated by this Paragraph 7 or the parachute
payments being "excess parachute payments," as defined in Section 280G of
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the Internal Revenue Code, and/or if such payments would result in the Employee
suffering an excise tax or other extraordinary tax upon the receipt thereof, the
Company shall make such additional payments to the Employee as shall be
necessary to cause the net after-tax benefit to the Employee to be the same as
would have been the case had there been no excise or extraordinary tax applied
to such payments.
G. In the event the Employee shall be required to employ counsel or bring
suit to enforce any of the terms or conditions of this Paragraph 7 and shall be
successful in securing enforcement of any of such terms and conditions, the
Employee shall be entitled to all reasonable expenses, including, but not
limited to, attorneys' fees incurred in such enforcement efforts.
8. Nothing contained herein shall be construed as conferring upon the
Employee the right to continue in the employ of the Company as an executive or
in any other capacity.
9. All payments provided under this Agreement shall be paid in cash from
the general funds of the Company and no special or separate fund shall be
established and no other segregation of assets shall be made to assure payment.
The Employee shall have no right, title or interest whatever in or to any
investments which the Company may make to aid the Company in meeting its
obligations hereunder. Nothing contained in this Agreement, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind or a fiduciary relationship, between the Company and the Employee or
any other person. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right shall be no greater than the
right of an unsecured creditor of the Company.
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10. The Company may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
11. Neither this Agreement nor any right or interest hereunder shall be
assignable by the Employee, his beneficiaries or legal representatives, without
the Company's prior written consent; provided however, that nothing in this
Paragraph shall preclude the Employee from designating a beneficiary to receive
any benefit payable hereunder upon his death, or the executors, administrators
or other legal representatives of the Employee or his estate from assigning any
rights hereunder to the person or persons entitled thereunto.
12. Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, communication, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
13. This Agreement shall be binding upon and inure to the benefit of the
Employee and the Company and their respective permitted successors and assigns.
In the event the Company merges or consolidates with or into any other
corporation or corporations or sells or otherwise transfers substantially all
its assets to another corporation, the provisions of this Agreement shall be
binding upon and inure to the benefit of the corporation surviving or resulting
from the merger or consolidation or to which such assets are sold or
transferred. All references herein to the Company refer with equal force and
effect to any corporate or other successor of the
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Company which acquires, directly or indirectly, by merger, consolidation,
purchase or otherwise, all or substantially all of the assets or stock of the
Company.
14. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any
provisions of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
15. If, for any reason, any provisions of this Agreement is held invalid,
such invalidity shall not affect any other provision of this Agreement not held
so invalid, and each such other provision shall to the full extent consistent
with law continue in full force and effect. If any provision of this Agreement
shall be held invalid in part, such invalidity shall in no way affect the rest
of such provision not held so invalid, and the rest of such provision, together
with all other provisions of this Agreement, shall to the full extent consistent
with law continue in full force and effect.
16. This Agreement has been executed and delivered in the State of
Indiana, and its validity, interpretation, performance and enforcement shall be
governed by the laws of said State.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and the Employee has signed this Agreement, all as of the day and year first
above written.
TOKHEIM CORPORATION
By /s/ Walter S. Ainsworth
________________________________
Walter S. Ainsworth
Chairman, Compensation Committee
ATTEST:
"the Company"
_____________________________
Its _________________________
/s/ Douglas K. Pinner
________________________________
Douglas K. Pinner
President & CEO
"the Employee"
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Exhibit 10.4
EMPLOYMENT AGREEMENT
FOR VICE PRESIDENTS
THIS EMPLOYMENT AGREEMENT (hereinafter "Agreement"), dated this 22nd day of
September, 1995, by and between TOKHEIM CORPORATION, an Indiana corporation
(hereinafter "the Company"), and Terry M. Fulmer (hereinafter "the Employee"),
which Agreement shall be deemed to replace any and all previously existing
Employment Agreements between the parties.
WHEREAS, the Company desires to employ the Employee in an executive
capacity and the Employee desires to be so employed, all upon the following
terms and conditions.
NOW, THEREFORE, in consideration of the premises hereinafter set forth, it
is mutually agreed as follows:
1. The Company agrees to employ the Employee, and the Employee agrees to
serve the Company, on a full-time basis in the capacity hereinafter designated
and upon the terms hereinafter specified. Said employment shall continue from
this date forward for an indefinite period and until such time as it may be
terminated by one or more of the parties, it being expressly recognized that
either party may terminate this Agreement, with cause, upon the giving of thirty
(30) days' written notice to the other, and in such event, the parties shall
each be entitled only to such continuing rights as may be provided in this
Agreement or as may otherwise be available to them in law or equity. In the
event Employee is terminated without cause, Employee shall be entitled to
severance pay equal to twelve (12) months of the Employee's base monthly salary.
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2. The Employee shall serve in the capacity of VP, Corporate Operations &
Planning.
The Employee shall have such duties and responsibilities and shall supply
such services in the carrying out of such duties and responsibilities as the
Company, through the Board of Directors, the duly appointed Committees of the
Board, the Chief Executive Officer of the Company or such other Executive
Officers as may be designated by the Board, shall, from time to time, direct,
and said parties shall be free to alter or amend the position, responsibilities,
duties or services to be performed by the Employee in such manner as to them
shall be deemed to be in the best interests of the Company. During the term of
employment, the Employee shall devote his best efforts and skills to the
business interests of the Company and shall not engage in any commercial
enterprise or activity, either directly or indirectly, in conflict with the
Company's business, or which may in any way interfere with his employment,
without the consent of the Company.
3. The Employee hereby recognizes the Company's proprietary rights in the
tangible and intangible property of the Company and acknowledges that
notwithstanding the relationship of employment, the Employee will not obtain or
acquire through such employment any personal property rights in any of the
property of the Company, including, but not limited to, any writings,
communications, manuals, documents, instruments, contracts, agreements, files,
literature, data technical information, know-how secrets, formulas, products,
methods, procedures, processes, devices, apparatuses, trademarks, tradenames,
trade styles, service marks, logos, copyrights, patents or other matters which
are properly the property of the Company.
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4. The Employee shall, during the term of employment, use his best efforts
and exercise his utmost diligence to protect and safeguard the confidential
information of the Company, including, but not limited to, trade secrets, know-
how, product formulas, recipes, methods, procedures, processes, devices,
apparatuses, materials or other matters which are confidential to the Company.
The Employee further agrees that he shall not, during the term of employment or
thereafter, personally use or disclose to others information which shall be
confidential to the Company, except as such use or disclosure may be required
during the course of employment with the Company or as may be consented to by
the Company.
5. The Employee agrees that during the term of his employment, any and all
inventions and discoveries, whether or not patentable, which the Employee may
conceive or make, either alone or in conjunction with others and related or in
any way connected with the business of the Company, shall be the sole and
exclusive property of the Company. The Employee shall, without further
compensation or consideration, but at the expense of the Company, and as and
when requested to do so by the Company, promptly execute and assign any and all
applications, assignments and other instruments which the Company shall deem
necessary in order to apply for and obtain letters patent of the United States
and of foreign countries for said inventions and discoveries, and in order to
assign and convey to the Company, or to the Company's nominee the sole and
exclusive right, title and interest in and to said inventions, discoveries or
any applications or patents thereon. As promptly as known or possessed by the
Employee, the Employee shall disclose to the Company all information with
respect to said inventions and discoveries. The Employee further agrees that
during the term of employment, trademarks, tradenames, service marks, trade
styles, logos, emblems, labels, slogans and writings, whether or not
copyrighted,
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originated by the Employee, alone or in conjunction with others, and related or
in any way connected with the business of the Company, shall be the sole and
exclusive property of the Company.
6. The Employee shall be entitled to compensation as follows:
A. The Employee shall be entitled to a monthly base salary of Fourteen
Thousand One Hundred Sixty Seven Dollars ($14,167.00). The Base Pay will be
reviewed annually. Such Base Pay will be payable in such semi monthly or monthly
installments as is consistent with the policy of the Company in such matters.
The Employee shall also be eligible for the officer's bonus program, a copy of
which has been supplied to the Employee.
B. The Employee shall be granted participation in all employee benefit
plans applicable to executive officers of the Company, including but not limited
to, medical plans, disability plans, life insurance plans, savings plans, stock
option plans and such other plans as may from time to time be made available and
applicable to the Employee, consistent with the policies of the Company and the
terms and conditions of such plans. Nothing herein shall be deemed to alter the
terms and conditions of such plans or the policy of the Company with respect
thereto, and nothing herein shall be deemed to entitle the Employee to any
rights therein which would not otherwise be made available to the Employee
pursuant to the implementations of such plans in accordance with the terms,
conditions and provisions set forth therein. It shall be further understood that
nothing herein shall prevent the Company, through its Board of Directors, the
duly appointed Committees of the Board or such other Executive Officers of the
Company as the Board may designate, from altering or amending any of the
aforesaid plans or eliminating or
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adding to them as they shall from time to time deem appropriate and in the
interests of the Company.
C. Except as may otherwise be expressly provided herein, the Employee
shall be granted, upon his termination from the Company, such rights as may be
available to him pursuant to any plan or plans hereinabove referred to, and, in
addition thereto, any termination benefits accorded terminated executives,
consistent with any existing policy or practice of the Company with respect to
such termination. In the event there shall be no such policy or practice with
respect to termination, then such termination benefits, if any, as may be deemed
appropriate to the Board of Directors, its duly appointed Committees or such
other Executive Officers as may be directed by the Board to act in such matters.
7. In the event there shall occur (i) a merger, consolidation or other
combination of the Company with or into any other corporation, (ii) the
acquisition, subsequent to the date of this Agreement, directly or indirectly,
by any person, entity or group of persons of ownership of the power to vote in
excess of twenty percent (20%) of the voting securities of the Company followed
by the election by said party of one or more representatives to the Board of
Directors, (iii) the acquisition, subsequent to the date of this Agreement,
directly or indirectly, by any person, entity or group of persons of ownership
of the power to vote in excess of fifty percent (50%) of the voting securities
of the Company, whether or not followed by the election by said party or parties
of one or more representatives to the Board of Directors or (iv) any other
event, including, but not limited to, the matters set forth in (i) through (iii)
above which shall have the effect of vesting effective control of the business
and affairs of the Company in a person, entity or group of persons other or
different than the present stockholders of the Company, or
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which shall have the effect of causing a change in management of the Company,
then and in that event, the right of the Company and the Employee to
unilaterally terminate this employment upon thirty (30) days' written notice as
provided in Paragraph 1 above shall continue, but shall be subject to the
following express provision: If such termination shall be initiated by the
Company within thirty-six (36) months of any of the events described in (i),
(ii), (iii) or (iv) of this Paragraph; or if such termination shall be initiated
by the employee within thirty six (36) months of any of the events described in
(i), (ii), (iii), (iv) of this Paragraph, and any one of the following also
occurs; (a) a change of the Chief Executive Officer, (b) change of job, (c)
change of salary, or (d) move of job responsibilities to a distance greater than
fifty (50) miles from the current office location, then upon the effective date
of termination, the Employee shall be entitled to the termination benefits set
forth in this Paragraph 7 in addition to any other termination rights which may
have accrued to him during his employment; provided, however, that the following
provisions with respect to direct severance pay (i.e., salary and bonus
payments) shall be exclusive and shall replace any other rights of the Employee
to direct severance payments:
A. The Employee shall be entitled to receive the greater of 299.99% of the
base salary or twice the employees total compensation at the same rate at which
it existed at the date of the event referenced in (i) through (iv) of this
Paragraph 7 above. The Employee shall further be entitled to receive as direct
severance pay, bonuses during the subsequent twenty-four (24) months on the same
dates that he would otherwise have been entitled to them had his employment
continued; provided, however, that the amount of such bonuses shall not be
contingent upon any matters arising after the date of termination, but shall on
an annual basis be equal to the average annual sum paid in bonuses to the
Employee during the last three (3) bonus periods preceding his
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termination, or the average annual bonuses of such lesser bonus periods if his
employment was for less than three (3) bonus periods prior to termination. In
the event that during any part of such twenty-four (24) month period, the
executive officer's activities involved returning the corporation to
profitability which limited bonus potential, the bonus shall be paid for such
twenty-four month period as if the company had been profitable. To the extent
the twenty-four (24) months shall expire in the middle of a bonus period, then
for such partial year, the Employer shall be entitled to that percentage of the
average annual bonus that the partial year bears to a total year, and he shall
be paid any remaining and unpaid bonus amounts due him at the expiration of said
twenty-four (24) month period. In the event the Employee is terminated within
said 36 month period, severance shall be payable in a single lump sum. In the
event the Employee shall die during any period in which payments shall be due
hereunder, the balance of any salary and bonus payments shall be paid to the
Employee's estate within six (6) months of the date of his death.
B. The Employee shall immediately be paid a lump sum amount equal to the
value of any outstanding stock options which by their terms cannot be exercised
the day following the Employee's termination of employment (the value of each
option shall be equal to the average of the high and low price of a share of
stock, as quoted on the composite transactions table covering transactions on
the New York Stock Exchange on the first date that the stock was traded on that
Exchange which next precedes the date the Employee's employment terminated minus
the stock option's exercise price). The Executive shall immediately be paid a
lump sum amount equal to the value of any unvested shares of restricted stock as
if all restrictions had been removed the day preceding the Change of Control;
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C. In addition to the continuation of his base salary and bonus as
provided above, the Employee shall further be entitled for twenty-four (24)
months following termination to receive medical insurance, life insurance and
disability insurance benefits from the Company on terms comparable to the
benefits provided by the Company to the Employee in such matters as of the date
of the event referenced in (i) through (iv) of this Paragraph 7 above; provided,
that any severance payments provided for hereinabove shall be reduced by the
amount of any disability benefits paid pursuant to this Paragraph 7B for the
period that such disability payments shall continue: and provided further, that
notwithstanding anything hereinabove set forth, any medical, life and disability
benefits shall terminate automatically at any time that the Employee shall
secure and begin alternate employment. The employee may elect in writing at the
time of severance to receive the cash value of any or all of these benefits in
lieu of coverage.
D. If the Employee shall be fifty (50) years of age or older at the time
of any termination governed by the terms of this Paragraph 7, and if the
twenty-four (24) months of continued salary and bonus shall expire prior to the
Employee's sixtieth (60th) birthday, then the Employee shall additionally be
entitled to receive his base salary and bonus from the date of expiration of the
twenty-four (24) months until the date of his sixtieth (60th) birthday at
one-half (1/2) the rate of salary and bonus payable to him during the first
twenty-four (24) months following his termination.
E. If the Employee shall be sixty-three (63) years of age or older at the
time of any termination governed by the terms of this Paragraph 7, then all
benefits provided for above shall run not for a period of twenty-four (24)
months as hereinabove set forth, but rather for that number of months occurring
between the date of termination and the date of the Employee's sixty-
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fifth (65th) birthday and all benefits otherwise running for twenty-four (24)
months shall run for that period of time.
F. It is expressly understood and agreed that if the receipt or the right
to receive all or any part of the payments contemplated by this Paragraph 7,
either alone or with other payments, which the Employee has received or has the
right to receive from the Company and which are "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code, as amended, would result
in some or all of the payments contemplated by this Paragraph 7 or the parachute
payments being "excess parachute payments", as defined in Section 280G of the
Internal Revenue Code, and/or if such payments would result in the Employee
suffering an excise tax or other extraordinary tax upon the receipt thereof, the
Company shall make such additional payments to the Employee as shall be
necessary to cause the net after-tax benefit to the Employee to be the same as
would have been the case had there been no excise or extraordinary tax applied
to such payments.
G. In the event the Employee shall be required to employ counsel or bring
suit to enforce any of the terms or conditions of this Paragraph 7 and shall be
successful in securing enforcement of any of such terms and conditions, the
Employee shall be entitled to all reasonable expenses, including, but not
limited to, attorneys' fees incurred in such enforcement efforts.
8. Nothing contained herein shall be construed as conferring upon the
Employee the right to continue in the employ of the Company as an executive or
in any other capacity.
9. All payments provided under this Agreement shall be paid in cash from
the general funds of the Company and no special or separate fund shall be
established and no other
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segregation of assets shall be made to assure payment. The Employee shall have
no right, title or interest whatever in or to any investments which the Company
may make to aid the Company in meeting its obligations hereunder. Nothing
contained in this Agreement, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind or a fiduciary
relationship, between the Company and the Employee or any other person. To the
extent that any person acquires a right to receive payments from the Company
hereunder, such right shall be no greater than the right of an unsecured
creditor of the Company.
10. The Company may withhold from any benefits payable under this Agreement
all federal, state, city or other taxes as shall be required pursuant to any law
or governmental regulation or ruling.
11. Neither this Agreement or any right or interest hereunder shall be
assignable by the Employee, his beneficiaries or legal representatives, without
the Company's prior written consent; provided however, that nothing in this
Paragraph shall preclude the Employee from designating a beneficiary to receive
any benefit payable hereunder upon his death, or the executors, administrators
or other legal representatives of the Employee or his estate from assigning any
rights hereunder to the person or persons entitled thereunto.
12. Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, communication, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
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13. This Agreement shall be binding upon and inure to the benefit of the
Employee and the Company and their respective permitted successors and assigns.
In the event the Company merges or consolidates with or into any other
corporation or corporations or sells or otherwise transfers substantially all
its assets to another corporation, the provisions of this Agreement shall be
binding upon and inure to the benefit of the corporation surviving or resulting
from the merger or consolidation or to which such assets are sold or
transferred. All references herein to the Company refer with equal force and
effect to any corporate or other successor of the Company which acquires,
directly or indirectly, by merger, consolidation, purchase of otherwise, all or
substantially all of the assets or stock of the Company.
14. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any
provisions of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
15. If, for any reason, any provisions of this Agreement is held invalid,
such invalidity shall not affect any other provision of this Agreement not held
so invalid, and each such other provision shall to the full extent consistent
with law continue in full force and effect. If any provision of this Agreement
shall be held invalid in part, such invalidity shall in no way affect the rest
of such provision not held so invalid, and the rest of such provision, together
with all other
11
<PAGE>
provisions of this Agreement, shall to the full extent consistent with law
continue in full force and effect.
16. This Agreement has been executed and delivered in the State of
Indiana, and its validity, interpretation, performance and enforcement shall be
governed by the laws of said State.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereunto by its officers thereunto duly authorized,
and the Employee has signed this Agreement, all as of the day and year first
above written.
TOKHEIM CORPORATION
By /s/ Douglas K. Pinner
-----------------------------------
Douglas K. Pinner, President and
Chief Executive Officer
ATTEST:
/s/
- -----------------------------
Its
-------------------------
"the Company"
/s/ Terry M. Fulmer
-----------------------------------
Terry M. Fulmer
VP, Corporate Operations & Planning
"the Employee"
12
<PAGE>
Exhibit 11
TOKHEIM CORPORATION AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
FOR THE YEARS ENDED NOVEMBER 30, 1995, 1994, AND 1993
(AMOUNTS IN THOUSANDS EXCEPT AMOUNTS PER SHARE)
Primary earnings per share are based on the weighted average number of shares
outstanding during each year and the assumed exercise of dilutive stock options
less the number of treasury shares assumed to be purchased from the proceeds
using the average market price of the Company's common stock.
The following table presents information necessary to calculate earnings per
share for fiscal years ended November 30, 1995, 1994, and 1993:
<TABLE>
<CAPTION>
Primary
-----------------------------
<S> <C> <C> <C>
1995 1994 1993
------ -------- -------
Shares outstanding:
Weighted average outstanding......................... 7,893 7,801 6,891
Share equivalents.................................... 18 -- 49
------ -------- -------
Adjusted outstanding................................. 7,911 7,801 6,940
====== ======== =======
Earnings (loss):
Continuing operations before cumulative effect
of change in accounting............................. $2,876 $ 1,862 $(5,867)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions..... -- (13,416) --
------ -------- -------
Net earnings (loss).................................. 2,876 (11,554) (5,867)
Preferred stock dividends............................ (1,580) (1,617) (1,663)
------ -------- -------
Earnings (loss) applicable to common stock........... $1,296 $(13,171) $(7,530)
====== ======== =======
Earnings (loss) per common share:
Continuing operations before cumulative effect of
change in accounting................................ $ .16 $ .03 $ (1.09)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions..... -- (1.72) --
------ -------- -------
Net earnings (loss) per common share................. $ 0.16 $ (1.69) $ (1.09)
====== ======== =======
</TABLE>
<PAGE>
TOKHEIM CORPORATION AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
FOR THE YEARS ENDED NOVEMBER 30, 1995, 1994, AND 1993
(CONTINUED)
(AMOUNTS IN THOUSANDS EXCEPT AMOUNTS PER SHARE)
For 1995, 1994, and 1993, fully diluted earnings per share is considered to be
the same as primary earnings per share, since the effect of certain potentially
dilutive securities would be antidilutive.
<TABLE>
<CAPTION>
Fully Diluted
-----------------------------
1995 1994 1993
------ -------- -------
<S> <C> <C> <C>
Shares outstanding:
Weighted average outstanding.......................... 7,893 7,801 6,891
Share equivalents..................................... 18 60 49
Weighted conversion of preferred stock................ 1,909 1,362 1,296
------ -------- -------
Adjusted outstanding.................................. 9,820 9,223 8,236
====== ======== =======
Earnings (loss):
Continuing operations before cumulative effect of
change in accounting.............................. $2,876 $ 1,862 $(5,867)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions... -- (13,416) --
------ -------- -------
Net earnings (loss)................................... 2,876 (11,554) (5,867)
Incremental RSP expense............................... (1,580) (1,617) (1,663)
------ -------- -------
Earnings (loss) applicable to common stock............ $1,296 $(13,171) $(7,530)
====== ======== =======
Earnings (loss) per common share:
Continuing operations before cumulative effect of
change in accounting.............................. $ 0.13 $ 0.03 $ (0.91)
Cumulative effect of change in method of accounting
for postretirement benefits other than pensions... -- (1.45) --
------ -------- -------
Net earnings (loss) per common share.................. $ 0.13 $ (1.42) $ (0.91)
====== ======== =======
</TABLE>
<PAGE>
Exhibit 21
TOKHEIM CORPORATION AND SUBSIDIARIES
LIST OF SUBSIDIARIES OF THE REGISTRANT
NOVEMBER 30, 1995
The Company has no corporate parent. Tokheim Corporation, an Indiana
corporation, owns all of the issued and outstanding stock of each of the
following corporations:
State or Country
Subsidiary of Incorporation
------------------- ---------------------
Tokheim GmbH Germany
Tokheim Investment Corporation Texas
In addition, Tokheim Investment Corporation owns all of the issued and
outstanding stock (other than directors' qualifying shares, if any, with respect
to certain foreign subsidiaries) of each of the following corporations, except
as noted:
State or Country
Subsidiary of Incorporation
------------------- ---------------------
Sunbelt Hose & Petroleum Equipment, Inc. (A) Georgia
Tokheim and Gasboy of Canada Limited (B) Canada
Tokheim Europe B.V. The Netherlands
Tokheim Limited Scotland
Tokheim South Africa (Proprietary) Limited (C) South Africa
Tokheim Properties (Proprietary) Limited (C) South Africa
Gasboy International, Inc. Pennsylvania
(A) In February 1990, the Company sold substantially all of the assets of this
subsidiary.
(B) Owned 35% by Gasboy International, Inc. and 65% by Tokheim Investment
Corporation.
(C) Owned 100% by Tokheim and Gasboy of Canada Limited.
<PAGE>
Exhibit 23
TOKHEIM CORPORATION AND SUBSIDIARIES
CONSENT OF COOPERS & LYBRAND L.L.P.
NOVEMBER 30, 1995
We consent to the Incorporation by Reference in the registration statement of
Tokheim Corporation on Form S-8 (file No. 1-6018) of our report dated January
24, 1996, on our audits of the consolidated financial statements of Tokheim
Corporation and Subsidiaries as of November 30, 1995 and 1994, and for the years
ended November 30, 1995, 1994, and 1993, which report is included in this Annual
Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Fort Wayne, Indiana
February 23, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Tokheim Corporation's November 30, 1995, annual financial statements and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000098559
<NAME> TOKHEIM CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> NOV-30-1995
<CASH> 2966
<SECURITIES> 0
<RECEIVABLES> 46799
<ALLOWANCES> 1150
<INVENTORY> 34995<F1>
<CURRENT-ASSETS> 86798
<PP&E> 86032<F2>
<DEPRECIATION> 57474
<TOTAL-ASSETS> 121232
<CURRENT-LIABILITIES> 39545
<BONDS> 0
<COMMON> 18392<F4>
6426<F3>
0
<OTHER-SE> 2305<F5>
<TOTAL-LIABILITY-AND-EQUITY> 121232
<SALES> 221573
<TOTAL-REVENUES> 221573
<CGS> 167329<F6>
<TOTAL-COSTS> 167329<F6>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3319
<INCOME-PRETAX> 2915
<INCOME-TAX> 39
<INCOME-CONTINUING> 2876
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2876
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.13
<FN>
<F1> Represents gross inventory net of LIFO and loss reserves.
<F2> Represents gross PP&E.
<F3> Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of
$13,790 and treasury stock of $3,784.
<F4> Represents common stock of $19,409 less Guaranteed ESOP of $786 and
treasury stock of $231.
<F5> Represents retained earnings of $9,715 less minimum pension liability of
$3,868 and foreign currency translation adjustments of $3,542.
<F6> Includes product development expenses and excludes depreciation and
amortization.
</FN>
</TABLE>
