-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SHBfWG3maBdPWyQTWJ0FS/v0UVpEOjow0V8U7DNekhG7iHYpjedLt+6Qa1M+RBHs //2eZtAklQ7z0KRqnWcfwQ== /in/edgar/work/20000814/0000856386-00-000012/0000856386-00-000012.txt : 20000921 0000856386-00-000012.hdr.sgml : 20000921 ACCESSION NUMBER: 0000856386-00-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20000701 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEHL CO CENTRAL INDEX KEY: 0000856386 STANDARD INDUSTRIAL CLASSIFICATION: [3523 ] IRS NUMBER: 390300430 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18110 FILM NUMBER: 701132 BUSINESS ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 BUSINESS PHONE: 4143349461 MAIL ADDRESS: STREET 1: 143 WATER STREET CITY: WEST BEND STATE: WI ZIP: 53095 10-Q 1 0001.txt GEHL COMPANY 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended July 1, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from . . . . . . . to . . . . . . . Commission file number 0-18110 GEHL COMPANY (Exact name of registrant as specified in its charter) Wisconsin 39-0300430 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 143 Water Street, West Bend, WI 53095 (Address of principal executive office) (Zip code) (262) 334-9461 (Registrant's telephone number, including area code) 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at July 1, 2000 Common Stock, $.10 Par Value 5,480,671 GEHL COMPANY FORM 10-Q July 1, 2000 REPORT INDEX Page No. PART I. FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Statements of Income for the Three- and Six-month periods Ended July 1, 2000 and July 3, 1999 . . . . . . . . . . . . 3 Condensed Consolidated Balance Sheets at July 1, 2000, December 31, 1999, and July 3, 1999 4 Condensed Consolidated Statements of Cash Flows for the Six-month period Ended July 1, 2000 and July 3, 1999 . . . . . . . . . . . . . . . . 5 Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . 12 PART II. OTHER INFORMATION: Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . 13 Item 6. Exhibits and Reports on Form 8-K . . . . . . . 14 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 15 PART I FINANCIAL INFORMATION Item 1. Financial Statements GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data; unaudited)
Three Months Ended Six Months Ended July 1, July 3, July 1, July 3, 2000 1999 2000 1999 NET SALES $ 77,510 $ 83,848 $ 148,206 $ 152,811 Cost of goods sold 56,037 59,733 107,451 109,920 -------- -------- --------- --------- GROSS PROFIT 21,473 24,115 40,755 42,891 Selling, general and administrative expenses 11,498 12,487 23,242 25,026 -------- -------- --------- --------- INCOME FROM OPERATIONS 9,975 11,628 17,513 17,865 Interest expense (1,391) (777) (2,264) (1,554) Interest income 445 425 825 838 Other expense, net (1,138) (777) (1,923) (1,217) -------- -------- --------- --------- INCOME BEFORE INCOME TAXES 7,891 10,499 14,151 15,932 Income tax provision 2,762 3,727 4,953 5,656 -------- -------- --------- --------- NET INCOME $ 5,129 $ 6,772 $ 9,198 $ 10,276 ======== ======== ========= ========= EARNINGS PER SHARE Diluted $ .90 $ 1.01 $ 1.60 $ 1.53 Basic $ .93 $ 1.05 $ 1.65 $ 1.59
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
July 1, December 31, July 3, 2000 1999 1999 (Unaudited) (Unaudited) ASSETS Cash $ 3,885 $ 1,010 $ 3,446 Accounts receivable-net 86,093 68,551 79,873 Finance contracts receivable-net 16,140 12,074 10,270 Inventories 41,109 35,206 28,764 Deferred tax assets 8,431 8,431 7,138 Other current assets 356 511 1,077 -------- -------- -------- Total Current Assets 156,014 125,783 130,568 Property, plant and equipment-net 43,090 37,028 33,681 Finance contracts receivable net, non-current 9,584 7,311 6,169 Intangible assets 15,334 15,706 16,080 Other assets 7,982 8,332 8,683 --------- -------- -------- TOTAL ASSETS $232,004 $194,160 $195,181 ========= ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current portion of long-term debt obligations $ 326 $ 519 $ 556 Accounts payable 27,146 25,077 25,312 Accrued liabilities 29,169 30,703 32,906 -------- -------- -------- Total Current Liabilities 56,641 56,299 58,774 -------- -------- -------- Line of credit facility 53,266 22,038 13,399 Long-term debt obligations 8,967 9,059 9,300 Other long-term liabilities 6,017 5,391 5,233 Deferred income taxes 3,949 3,949 3,943 -------- -------- -------- Total Long-Term Liabilities 72,199 40,437 31,875 -------- -------- -------- Common stock, $.10 par value, 25,000,000 shares authorized, 5,480,671, 5,645,620 and 6,483,244 shares outstanding, respectively 548 565 650 Preferred stock, $.10 par value 2,000,000 shares authorized, 250,000 shares designated as Series A Preferred Stock, no shares issued - - - Treasury stock - - (314) Capital in excess of par 7,853 11,294 28,789 Retained earnings 95,666 86,468 76,559 Accumulated other comprehensive loss (903) (903) (1,152) -------- -------- ------- Total Shareholders' Equity 103,164 97,424 104,532 -------- -------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $232,004 $194,160 $195,181 ======== ======== ========
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands; unaudited)
Six Months Ended July 1, July 3, 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 9,198 $ 10,276 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Depreciation 2,482 2,148 Amortization 438 393 Proceeds from sales of finance contracts 40,656 36,770 Increase in finance contracts receivable (49,112) (39,033) Cost of sales of finance contracts 2,117 1,414 Net change in working capital items (22,755) 1,032 --------- -------- Net cash (used for) provided by operating activities (16,976) 13,000 --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment additions, net (8,544) (1,687) Other assets 284 (2,449) Net cash (used for) investing --------- -------- activities (8,260) (4,136) --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from (repayments of) line of credit facility 31,228 (5,960) Proceeds from issuance of common stock 406 465 Treasury stock purchases (3,864) (314) Other 341 (496) -------- -------- Net cash provided by (used for) financing activities 28,111 (6,305) -------- -------- Net increase in cash 2,875 2,559 Cash, beginning of period 1,010 887 -------- -------- Cash, end of period $ 3,885 $ 3,446 ======== ======== Supplemental disclosure of cash flow information: Cash paid for the following: Interest $ 2,009 $ 1,517 Income Taxes $ 6,047 $ 4,574
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS July 1, 2000 (Unaudited) NOTE 1 BASIS OF PRESENTATION The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the information furnished for the three- and six-month periods ended July 1, 2000 and July 3, 1999 includes all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results of operations and financial position of the Company. Due in part to the seasonal nature of the Company's business, the results of operations for the six months ended July 1, 2000 are not necessarily indicative of the results to be expected for the entire year. It is suggested that these interim financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 as filed with the Securities and Exchange Commission. NOTE 2 INCOME TAXES The income tax provision is determined by applying an estimated annual effective income tax rate to income before income taxes. The estimated annual effective income tax rate is based on the most recent annualized forecast of pretax income, permanent book/tax differences, and tax credits. NOTE 3 INVENTORIES If all of the Company's inventories had been valued on a current cost basis, which approximated FIFO value, inventories by major classification would have been as follows (in thousands): July 1, 2000 December 31, 1999 July 3, 1999 Raw materials and supplies $ 17,304 $ 17,371 $ 17,068 Work-in-process 5,388 5,767 5,430 Finished machines and parts 37,612 31,263 25,662 --------- -------- -------- Total current cost value 60,304 54,401 48,160 Adjustment to LIFO basis (19,195) (19,195) (19,396) --------- -------- -------- $ 41,109 $ 35,206 $ 28,764 ======== ======== ======== NOTE 4 ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Investments and Hedging Activities" which was originally effective for fiscal quarters of fiscal years beginning after June 15, 1999. The statement, as amended by SFAS No. 137 and 138, will be effective January 1, 2001 for the Company. Due to the Company's current limited use of derivative instruments, the adoption of this statement is not expected to materially affect the Company's financial condition or results of operations. NOTE 5 EARNINGS PER SHARE AND COMPREHENSIVE INCOME Basic net income per common share is computed by dividing net income by the weighted- average number of common shares outstanding for the period. Diluted net income per common share is computed by dividing net income by the weighted-average number of common shares, and, if applicable, common stock equivalents which would arise from the exercise of stock options. A reconciliation of the shares used in the computation of earnings per share follows (in thousands): For the second quarter ended: July 1, 2000 July 3, 1999 ------------ ------------ Basic shares 5,520 6,467 Effect of options 165 262 ------------ ------------ Diluted shares 5,685 6,729 ============ ============ For the six months ended: July 1, 2000 July 3, 1999 ------------ ------------ Basic shares 5,560 6,461 Effect of options 177 248 ------------ ------------ Diluted shares 5,737 6,709 ============ ============ Accumulated other comprehensive loss is comprised entirely of minimum pension liability adjustments. Comprehensive income equaled net income for the six months ended July 1, 2000 and July 3, 1999, as the minimum pension liability amount did not change from the respective prior year-end amount. NOTE 6 STOCK REPURCHASE In March 2000, the Company's Board of Directors authorized a repurchase plan providing for the repurchase of up to an additional 325,000 shares of the Company's outstanding common stock. As of July 1, 2000, 102,400 shares had been repurchased in the open market under this authorization at an aggregate cost of $1.7 million. In March 1999, a repurchase plan relating to up to 325,000 shares of the Company's outstanding common stock was authorized. As of April 1, 2000, all of the authorized shares under that plan had been repurchased at an aggregate cost of $5.8 million. The treasury stock acquired by the Company has been cancelled and returned to the status of authorized but unissued shares. NOTE 7 BUSINESS SEGMENTS The Company operates in two business segments: Construction equipment and Agricultural equipment. The long-term financial performance of the Company's reportable segments are affected by separate economic conditions and cycles. The segments are managed separately based on the fundamental differences in their operations. Following is selected segment information (in thousands): Three Months Ended Six Months Ended July 1, 2000 July 3, 1999 July 1, 2000 July 3, 1999 Net Sales: Construction $48,892 $51,355 $ 89,195 $ 91,601 Agricultural 28,618 32,493 59,011 61,210 ------- ------- ------- ------- Consolidated $77,510 $83,848 $148,206 $152,811 ======= ======= ======== ======== Income from Operations: Construction $ 6,765 $ 7,599 $ 11,085 $ 12,393 Agricultural 3,210 4,029 6,428 5,472 ------- ------- -------- -------- Consolidated $ 9,975 $11,628 $ 17,513 $ 17,865 ======= ======= ======== ======== Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Three Months Ended July 1, 2000 Compared to Three Months Ended July 3, 1999 Net sales for the second quarter of 2000 of $77.5 million were 8% lower than the $83.8 million in the comparable period of 1999. Construction equipment net sales decreased 5% to $48.9 million in the second quarter of 2000 from $51.3 million in the second quarter of 1999. In general, the reduction in Construction equipment sales from the 1999 level was due primarily to the impact of higher interest rates on construction activity, especially in the U.S. housing sector; low equipment rental rates resulting in the deferral of purchases of equipment by some of the Company's customers; and changes in dealers' purchasing patterns, resulting in dealers deferring orders until closer to time of use. With respect to specific product lines, shipments of telescopic handlers for the second quarter of 2000 were below comparable levels of 1999. The Company believes that telescopic handler sales are more closely tied to the U.S. housing construction market than any other construction equipment product sold by the Company. Although Construction equipment sales were down, the Company did realize a positive contribution in the second quarter of 2000 from shipments of new equipment, primarily mini- excavators, introduced within the past twelve months. Agricultural equipment net sales decreased 12% in the second quarter of 2000 to $28.6 million from $32.5 million in the second quarter of 1999 due primarily to lower shipments of forage harvesting equipment and manure spreading equipment. Partially offsetting these reductions was an increased level of disc mower conditioner shipments as a result of new product offerings in 2000. Higher interest rates; the continuation of low milk prices; regional weather conditions; and the fact that dairy farmers purchased higher levels of equipment in 1998 and 1999, in part due to the more favorable milk prices experienced during those years, contributed to the overall decline in demand for agricultural equipment by farmers. Of the Company's total net sales reported for the second quarter of 2000, $9.5 million represented sales made outside of the United States compared with $11.8 million in the comparable period of 1999. The decrease in export sales was due primarily to a reduction in shipments into the Canadian agricultural market and decreased orders from Europe due to a decline in the value of the Euro versus the U.S. dollar. Gross profit decreased $2.6 million, or 11%, during the second quarter of 2000 versus the comparable period of 1999, due primarily to decreased sales volume. Gross profit as a percent of net sales decreased to 27.7% for the second quarter of 2000 from 28.8% in the comparable period of 1999. Gross profit as a percent of net sales for Construction equipment decreased to 25.6% in the second quarter of 2000 from 27.5% in the second quarter of 1999. The decrease in Construction equipment gross margin was a function of a) decreased telescopic handler sales, which sales are generally at higher gross margins than other construction equipment, b) increased industry competition which has resulted in overall gross margin compression, and c) increased mini-excavator shipments, which sales are generally at lower gross margins than other construction equipment. Gross profit as a percent of net sales for Agricultural equipment increased to 31.3% in the second quarter of 2000 from 30.8% in the comparable period of 1999. Selling, general and administrative expenses decreased $989,000, or 8%, during the second quarter of 2000 versus the comparable period of 1999, due primarily to lower sales related costs. As a percent of net sales, selling, general and administrative expenses decreased slightly to 14.8% during the second quarter of 2000 versus 14.9% in the comparable period of 1999. Income from operations in the second quarter of 2000 was $10.0 million versus $11.6 million in the second quarter of 1999. Interest expense increased $614,000 to $1,391,000 in the second quarter of 2000 from $777,000 in the second quarter of 1999. This resulted from an increase in average debt outstanding to $61.0 million in the second quarter of 2000 versus $36.2 million in the second quarter of 1999, and an increase in the average rate of interest paid by the Company to 8.6% in the second quarter of 2000 versus 7.6% in the comparable period of 1999. Other expense increased $361,000 to $1,138,000 in the second quarter of 2000 from $777,000 in the second quarter of 1999. This was caused by increased costs of sales of finance contracts which resulted from a) selling $4.3 million more receivables in the second quarter of 2000 versus the comparable period in 1999, b) lower finance rates offered to Gehl finance customers, and c) increased discount rates used in selling finance contracts to third parties resulting from the general trend of overall interest rates. Second quarter 2000 net income was $5.1 million versus $6.8 million in the second quarter of 1999. Diluted earnings were $.90 per share for the second quarter of 2000 versus $1.01 per share in the second quarter of 1999. Six Months Ended July 1, 2000 Compared to Six Months Ended July 3, 1999 Net sales for the first six months of 2000 of $148.2 million were $4.6 million, or 3%, lower than the $152.8 million of net sales in the comparable period of 1999. Construction equipment net sales decreased 3% to $89.2 million in the first six months of 2000 from $91.6 million in the first six months of 1999. In general, the reduction in Construction equipment sales from the 1999 level was due primarily to the impact of higher interest rates on construction activity, especially in the U.S. housing sector; low equipment rental rates resulting in the deferral of purchases of equipment by some of the Company's customers; and changes in dealers' purchasing patterns, resulting in dealers deferring orders until closer to time of use. With respect to specific product lines, shipments of telescopic handlers for the first six months of 2000 were below comparable levels of 1999 which was reflective of a reduction in retail sales activity of telescopic handers throughout the industry for the first six months of 2000. Although Construction equipment sales were down, the Company did realize a positive contribution in the first six months of 2000 from shipments of new equipment, primarily mini-excavators, introduced within the past twelve months. Agriculture equipment net sales decreased 4% to $59.0 million in the first six months of 2000 from $61.2 million in the first six months of 1999 due primarily to reduced shipments of forage harvesting equipment. Partially offsetting this reduction was an increased level of disc mower conditioner shipments as a result of new product offerings in 2000. Higher interest rates; continuation of low milk prices; regional weather conditions; and the fact that dairy farmers purchased higher levels of equipment in 1998 and 1999, in part due to the more favorable milk prices experienced during those years, contributed to the overall decline in demand for agricultural equipment by farmers. Of the Company's total net sales reported for the first six months of 2000, sales made outside the United States of $20.3 million were comparable to the level of international sales experienced in the first six months of 1999. As the Company has increased its sale of Construction equipment products, the Company has been successful in reducing the seasonality of its sales. However, some sales seasonality still remains, primarily in the Company's second quarter which historically has tended to be its strongest quarter for sales. Gross profit decreased $2.1 million, or 5%, in the first six months of 2000 versus the comparable period of 1999, due primarily to decreased sales volume. Gross profit as a percent of net sales decreased to 27.5% for the first six months of 2000 from 28.1% in the comparable period of 1999. Gross profit as a percent of net sales for Construction equipment decreased to 25.5% in the first six months of 2000 from 27.1% in the first six months of 1999. The decrease in Construction equipment gross margin was a function of a) decreased telescopic handler sales, which sales are generally at higher gross margins than other construction equipment, b) increased industry competition which has resulted in overall gross margin compression, and c) increased mini-excavator shipments, which sales are generally at lower gross margins than other construction equipment. Gross profit as a percent of net sales for Agriculture equipment increased to 30.6% for the first six months of 2000 from 29.5% for the first six months of 1999, due in part to improved efficiencies at the manufacturing plants. Selling, general and administrative expenses decreased $1.8 million, or 7%, during the first six months of 2000 versus the comparable period of 1999, due primarily to lower selling related costs in 2000 versus 1999. As a percent of net sales, selling, general and administrative expenses decreased to 15.7% during the first six months of 2000 versus 16.4% in the comparable period of 1999. Income from operations in the first six months of 2000 of $17.5 million was 2% lower than the $17.9 million for the comparable period of 1999. Interest expense increased $710,000 to $2.3 million in the first six months of 2000 from $1.6 million in the first six months of 1999. The increase was a result of an increase in average debt outstanding to $51.2 million in the first six months of 2000 versus $35.7 million in the comparable period of 1999 combined with an increase in the average rate of interest paid by the Company to approximately 8.5% in the first six months of 2000 versus 7.7% in the comparable period of 1999. Other expense increased $706,000 to $1,923,000 for the six months ended July 1, 2000 from $1,217,000 for the six months ended July 3, 1999. This was caused by increased costs of sales of finance contracts which resulted from a) selling $4.6 million more receivables in the first six months of 2000 versus the same period in 1999, b) lower finance rates offered to Gehl finance customers, and c) increased discount rates used in selling finance contracts to third parties resulting from the general trend of overall interest rates. Net income was $9.2 million for the six months ended July 1, 2000 versus $10.3 million for the six months ended July 3, 1999. Because of the reduced number of outstanding shares of Company stock as of July 1, 2000, compared to July 3, 1999, resulting from stock repurchased by the Company during the twelve month period, earnings per diluted share for the first six months of 2000 of $1.60 per share exceeded the $1.53 per diluted share reported for the first six months of 1999. Based upon the market conditions described above, the Company expects earnings for the year ended December 31, 2000 to be less than the earnings realized for the year ended December 31, 1999. Financial Condition The Company's working capital of $99.4 million at July 1, 2000 increased from $69.5 million at December 31, 1999, and $71.8 million at July 3, 1999 due primarily to increases in accounts and finance contracts receivable and inventory. The increase in inventories at July 1, 2000 compared to July 3, 1999 reflects the impact of new products offered since mid-1999 combined with an inventory build-up resulting from the slowing sales trend. The Company has adjusted production levels in an attempt to reduce inventory in accordance with current market demand. Capital expenditures for property, plant and equipment during the first six months of 2000 were approximately $8.5 million. The Company plans to make up to $15 million in capital expenditures in 2000. Outstanding capital expenditure commitments as of July 1, 2000 totaled approximately $3 million. As of July 1, 2000, the weighted-average interest rate paid by the Company on outstanding borrowings under its line of credit facility was 8.5%. The Company had available unused borrowing capacity of $19.8 million, $49.8 million and $60.2 million under the line of credit facility at July 1, 2000, December 31, 1999, and July 3, 1999, respectively. At July 1, 2000, December 31, 1999, and July 3, 1999, the borrowings outstanding under the line of credit facility were $53.3 million, $22.0 million and $13.4 million, respectively. The increased amounts outstanding under the line of credit facility at July 1, 2000 were primarily the result of borrowings used to repurchase Company stock, expand plant facilities and fund working capital increases. The sale of finance contracts is an important component of the Company's overall liquidity. The Company has arrangements with several financial institutions and financial service companies to sell, with recourse, its finance contracts receivable. The Company continues to service substantially all contracts whether or not sold. At July 1, 2000, the Company serviced $127.3 million of such contracts, of which $101.5 million were owned by other parties. The Company believes that it has sufficient capacity to sell its retail finance contracts for the foreseeable future. Shareholders' equity at July 1, 2000 was $103.2 million. This was $1.3 million lower than the $104.5 million of shareholders' equity at July 3, 1999, due primarily to the $22.1 million expended to repurchase Company stock from July 4, 1999 to July 1, 2000 which was substantially offset by income earned during the same period. In March 2000, the Company's Board of Directors authorized a repurchase plan providing for the repurchase of up to an additional 325,000 shares of the Company's outstanding common stock. As of July 1, 2000, 102,400 shares had been repurchased in the open market under this authorization at an aggregate cost of $1.7 million. In March 1999, a repurchase plan relating to up to 325,000 shares of the Company's outstanding common stock was authorized. As of April 1, 2000, all of the authorized shares under that plan had been repurchased at an aggregate cost of $5.8 million. Accounting Pronouncements The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Investments and Hedging Activities" which was originally effective for fiscal quarters of fiscal years beginning after June 15, 1999. The statement, as amended by SFAS No. 137 and 138, will be effective January 1, 2001 for the Company. Due to the Company's current limited use of derivative instruments, the adoption of this statement is not expected to materially affect the Company's financial condition or results of operations. Forward-Looking Statements Certain matters discussed in this Quarterly Report on Form 10-Q are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include such words as the Company "believes", "anticipates" or "expects", or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Such risks and uncertainties include competitive conditions in the markets served by the Company, changes in the Company's plans regarding capital expenditures, changes in housing starts and construction activity, general economic conditions, changes in commodity prices, especially milk, market acceptance of existing and new products offered by the Company, changes in the cost of raw materials and component parts purchased by the Company, and interest rate and foreign currency fluctuations. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward- looking statements and are cautioned not to place undue reliance on such forward-looking statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk There are no material changes to the information provided in response to this item as set forth in the Company's Form 10-K for the year ended December 31, 1999 as filed with the Securities and Exchange Commission. PART II OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders At the Company's annual meeting of shareholders held on April 20, 2000, John T. Byrnes, Richard J. Fotsch and Dr. Hermann Viets were elected as directors of the Company for terms expiring in 2003. The following table sets for certain information with respect to the election of directors at the annual meeting: Name of Nominee Shares Voted For Shares Withholding Authority John T. Byrnes 5,031,110 25,312 Richard J. Fotsch 5,021,838 34,584 Hermann Viets 5,031,047 25,375 The following table sets forth the other directors of the Company whose terms of office continued after the 2000 annual meeting: Name of Director Year in Which Term Expires Fred M. Butler 2001 William D. Gehl 2001 John W. Splude 2001 Nicholas C. Babson 2002 Thomas J. Boldt 2002 William P. Killian 2002 In addition, at the 2000 Annual Meeting, shareholders approved the Gehl Company 2000 Equity Incentive Plan. With respect to such approval, the number of shares voted For and Against were 3,066,068 and 1,207,405, respectively. The number of shares abstaining and the number of shares subject to broker non-votes were 43,992 and 738,957, respectively. Item 6. Exhibits and Report on Form 8-K (a) Exhibits 4.1 Ninth Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, Deutsche Financial Services, a division of Deutsche Bank Canada and Gehl Company and its subsidiaries, dated as of June 20, 2000. 10.1 Gehl Company 1995 Stock Option Plan, as amended 10.2 Gehl Company 2000 Equity Incentive Plan [Incorporated by reference to Appendix A to the Company's Proxy Statement for the 2000 Annual Meeting of Shareholders] 10.3 Form of Non-Qualified Stock Option Agreement used in conjunction with the Gehl Company 2000 Equity Incentive Plan [Incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-8 (Registration No. 333- 36102)] 10.4 Form of Stock Option Agreement for Non-Employee Directors used in conjunction with the Gehl Company 2000 Equity Incentive Plan [Incorporated by reference to Exhibit 4.6 to the Company's Registration Statement on Form S-8 (Registration No. 333- 36102)] 10.5 Amendments to Amended and Restated Employment Agreement between Gehl Company and William D. Gehl dated as of April 19, 2000 10.6 Amendment to Supplemental Retirement Agreement between Gehl Company and William D. Gehl dated as of April 20, 2000 10.7 Form of Supplemental Retirement Benefit Agreement between Gehl Company and each of Messrs. Hahn, Moore, Mulcahy and Semler 10.8 Form of Change in Control and Severance Agreement between Gehl Company and each of Messrs. Hahn, Moore, Mulcahy and Semler 10.9 Gehl Company Director Stock Grant Plan, as amended 27 Financial Data Schedule [EDGAR version only] (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended July 1, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GEHL COMPANY Date: August 14, 2000 By:/s/ William D. Gehl William D. Gehl Chairman of the Board, President and Chief Executive Officer Date: August 14, 2000 By:/s/ Kenneth P. Hahn Kenneth P. Hahn Vice President of Finance, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer) GEHL COMPANY FORM 10-Q July 1, 2000 EXHIBIT INDEX Exhibit Number Document Description 4.1 Ninth Amendment to Amended and Restated Loan and Security Agreement by and between Deutsche Financial Services Corporation, Deutsche Financial Services, a division of Deutsche Bank Canada and Gehl Company and its subsidiaries, dated as of June 20, 2000. 10.1 Gehl Company 1995 Stock Option Plan, as amended 10.2 Gehl Company 2000 Equity Incentive Plan [Incorporated by reference to appendix A to the Company's Proxy Statement for the 2000 Annual Meeting of Shareholders] 10.3 Form of Non-Qualified Stock Option Agreement used in conjunction with the Gehl Company 2000 Equity Incentive Plan [Incorporated by reference to Exhibit 4.5 to the Company's Registration Statement on Form S-8 (Registration No. 333-36102)] 10.4 Form of Stock Option Agreement for Non-Employee Directors used in conjunction with the Gehl Company 2000 Equity Incentive Plan [Incorporated by reference to Exhibit 4.6 to the Company's Registration Statement on Form S-8 (Registration No. 333-36102)] 10.5 Amendments to Amended and Restated Employment Agreement between Gehl Company and William D. Gehl dated as of April 19, 2000 10.6 Amendment to Supplemental Retirement Agreement between Gehl Company and William D. Gehl dated as of April 20, 2000 10.7 Form of Supplemental Retirement Benefit Agreement between Gehl Company and each of Messrs. Hahn, Moore, Mulcahy and Semler 10.8 Form of Change in Control and Severance Agreement between Gehl Company and each of Messrs. Hahn, Moore, Mulcahy and Semler 10.9 Gehl Company Director Stock Grant Plan, as amended 27 Financial Data Schedule [EDGAR version only] EX-4.1 2 0002.txt NINTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT THIS NINTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT ("Amendment") is entered into as of the 20th day of June, 2000 between DEUTSCHE FINANCIAL SERVICES CORPORATION ("DFSC"), DEUTSCHE FINANCIAL SERVICES a division of Deutsche Bank Canada ("DFS Canada") (DFSC and DFS Canada are collectively referred to as "DFS") and GEHL COMPANY ("Gehl") and its subsidiaries, including but not limited to Hedlund Martin, Inc., Gehl Power Products, Inc., Mustang Manufacturing Company, Inc. and Mustang Finance, Inc. (collectively with Gehl, "Gehl Company"). RECITALS: A. DFS and Gehl Company entered into that certain Amended and Restated Loan and Security Agreement dated as of October 1, 1994, as amended from time to time (the "Agreement") pursuant to which DFS is providing financing to Gehl Company. B. DFS and Gehl Company wish to modify the terms of such financing as set forth in this Amendment AGREEMENT: NOW, THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, DFS and Gehl Company hereby agree to as follows: 1. Section 6.3 captioned "Financial Covenants" of the Agreement is restated in its entirety as follows: "6.3 Financial Covenants. Beginning December 31, 1999 and continuing at all times thereafter, Gehl Company will maintain a tangible Net Worth and Subordinated Debt in the combined amount of not less than the sum of (a) FIFTY MILLION DOLLARS ($50,000,000.00), and (b) a ratio of Debt to Tangible Net Worth and Subordinated Debt of not more than three and six tenths to one (3.6:1). For purposes of this Section: (i) 'Debt' means the total sum of all creditor claims against Gehl Company minus Subordinated Debt; (ii) 'Tangible Net Worth' means the net book value of assets less liabilities determined on a consolidated basis and in accordance with generally accepted accounting principles ('GAAP') consistently applied, excluding from such assets all Intangibles; (iii) 'Intangibles' means and includes general intangibles (as that term is defined in the Uniform Commercial Code), accounts receivable from officers, directors and stockholders, and affiliated companies, leasehold improvements net of depreciation, licenses, good will, prepaid expenses, covenants not to compete, the excess of cost over book value of acquired assets, franchise fees, organizational costs, finance reserves held for recourse obligations, capitalized research and development costs, the categories of assets listed on Exhibit C attached hereto which are marked as 'intangible' and such similar intangible assets under GAAP; (iv) 'Subordinated Debt' means all of Gehl Company's indebtedness which is subordinated to the payment of its liabilities to DFS by an agreement in form and substance satisfactory to DFS. Gehl will report its Tangible Net Worth and Debt to Tangible Net Worth ratio to DFS quarterly, in accordance with Section 6.1(m)(2) of this Agreement. If Gehl Company violates any of the foregoing financial covenants to DFS, the parties agree: (a) that Gehl Company will pay interest to DFS, payable as provided in Section 2.1, on the average daily outstanding balance under the Credit Facility, at a rate that is the lesser of: (i)(A)in the case of U.S. Loans, four and one-half (4.5%) per annum higher than the U.S. LIBOR Rate then in effect, (B) in the case of Canadian Loans, five percent (5.0%) per annum higher than the Banker's Acceptance Rate then in effect, and (ii) the highest rate from time to time permitted by applicable law from the time when Gehl Company violates any of the financial covenants until such time as Gehl Company has cured its violation of its financial covenants to DFS; (b) DFS may elect in its sole discretion, to amend its eligibility formula of and its advance rate against the Accounts; and (c) DFS may elect to declare Gehl Company in default under this Agreement and exercise any of DFS' rights pursuant to Section 7 of this Agreement" 2. Except as expressly modified hereby, the Agreement remains unmodified and in full force and effect and the parties ratify and confirm the Agreement as modified hereby. Gehl Company reaffirms that the representations and warranties of Gehl Company as set forth in the Agreement are true and correct as of the date of the Agreement and as of the date of this Amendment. All terms defined herein shall have the meanings defined herein for all purposes under the Agreement. This Amendment shall be governed by the internal laws of the state whose law governs the Agreement. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute the same instrument. IN WITNESS WHEREOF, DFS and Gehl Company have executed this Amendment as of the date and year first above written. GEHL COMPANY HEDLUND MARTIN, INC. By: /s/ Kenneth P. Hahn By: /s/ Kenneth P. Hahn Name: Kenneth P. Hahn Name: Kenneth P. Hahn Title: Vice President Title: Treasurer GEHL POWER PRODUCTS, INC. MUSTANG MANUFACTURING COMPANY, INC. By: /s/ Kenneth P. Hahn By: /s/ Kenneth P. Hahn Name: Kenneth P. Hahn Name: Kenneth P. Hahn Title: Treasurer Title: Vice President MUSTANG FINANCE, INC. By: /s/ Kenneth P. Hahn Name: Kenneth P. Hahn Title: Vice President DEUTSCHE FINANCIAL SERVICES DEUTSCHE FINANCIAL SERVICES CORPORATION a division of Deutsche Bank Canada By: /s/ Thomas L. Meredith By: /s/ Wm. Blight Name: Thomas L. Meredith Name: Wm. Blight Title: President, Title: Senior Vice President Wholesale Finance Group EX-10.1 3 0003.txt GEHL COMPANY 1995 Stock Option Plan, as Amended Section 1. Purpose The purpose of the Gehl Company 1995 Stock Option Plan (the "Plan") is to promote the best interests of Gehl Company (together with any successor thereto, the "Company") and its shareholders by providing key employees of the Company and its Affiliates (as defined below) and members of the Company's Board of Directors who are not employees of the Company or its Affiliates with an opportunity to acquire a proprietary interest in the Company. It is intended that the Plan will promote continuity of management and increased incentive and personal interest in the welfare of the Company by those key employees who are primarily responsible for shaping and carrying out the long- range plans of the Company and securing the Company's continued growth and financial success. In addition, by encouraging stock ownership by directors who are not employees of the Company or its Affiliates, the Company seeks to attract and retain on its Board of Directors persons of exceptional competence and to provide a further incentive to serve as a director of the Company. Section 2. Definitions As used in the Plan, the following terms shall have the respective meanings set forth below: (a) "Affiliate" shall mean any entity that, directly or through one or more intermediaries, is controlled by, controls, or is under common control with, the Company. (b) "Award" shall mean any Option granted under the Plan. (c) "Stock Option Agreement" shall mean any written agreement, contract, or other instrument or document evidencing any Award under the Plan. (d) "Change of Control of the Company" shall mean any one of the following events: (i) securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding voting securities are acquired pursuant to a tender offer or exchange offer; (ii) the shareholders of the Company approve a merger or consolidation of the Company with any other Person as a result of which less than 50% of the outstanding voting securities of the surviving or resulting Person are owned by the former shareholders of the Company (other than a shareholder who is an Affiliate of any party to such consolidation or merger); (iii) the shareholders of the Company approve the sale of substantially all of the Company's assets to a Person which is not a wholly-owned subsidiary of the Company; (iv) any person becomes a beneficial owner (as such term is defined in Rule 13d-3 of the Exchange Act (or any successor provision thereto)), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding securities the effect of which (as determined by the Board of Directors of the Company and, in the case of Non- Qualified Stock Options granted to Non-Employee Directors under the Plan, to the extent permitted by Rule 16b-3) is to take over control of the Company; or (v) during any period of two consecutive years, individuals who, at the beginning of such period, constituted the Board of Directors of the Company cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by the vote of at least two-thirds of the directors of the Company then in office who were directors of the Company at the beginning of the period. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. (f) "Commission" shall mean the United States Securities and Exchange Commission or any successor agency. (g) "Committee" shall mean a committee of the Board of Directors of the Company designated by such Board to administer the Plan and comprised of not less than two directors, each of whom is a "disinterested person" within the meaning of Rule 16b-3 and each of whom is an "outside director" within the meaning of Section 162(m)(4)(C) of the Code (or any successor provision thereto). (h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. (i) "Fair Market Value" shall mean, with respect to any property (including, without limitation, any Shares or other securities), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. (j) "Incentive Stock Option" shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code (or any successor provision thereto). (k) "Key Employee" shall mean any officer or other key employee of the Company or of any Affiliate who is responsible for or contributes to the management, growth or profitability of the business of the Company or any Affiliate as determined by the Committee. (l) "Non-Employee Director" shall mean any member of the Company's Board of Directors who is not an employee of the Company or of any Affiliate. (m) "Non-Qualified Stock Option" shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option and shall mean any option granted to a Non-Employee Director under Section 6(b) of the Plan. (n) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock Option. (o) "Participating Key Employee" shall mean a Key Employee designated to be granted an Award under the Plan. (p) "Person" shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof. (q) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the Commission under the Exchange Act, or any successor rule or regulation thereto. (r) "Shares" shall mean shares of common stock of the Company, $.10 par value, and such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 4(b) of the Plan. Section 3. Administration The Plan shall be administered by the Committee; provided, however, that if at any time the Committee shall not be in existence, the functions of the Committee as specified in the Plan shall be exercised by a committee consisting of those members of the Board of Directors of the Company who qualify as "disinterested persons" under Rule 16b-3 and as "outside directors" under Section 162(m)(4)(C) of the Code (or any successor provision thereto). Subject to the terms of the Plan and without limitation by reason of enumeration, the Committee shall have full power and authority to: (i) designate Participating Key Employees; (ii) determine the type or types of Awards to be granted to each Participating Key Employee under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) Awards granted to Participating Key Employees; (iv) determine the terms and conditions of any Award granted to a Participating Key Employee; (v) determine whether, to what extent, and under what circumstances Awards granted to Participating Key Employees may be settled or exercised in cash, Shares, other securities, other Awards, or other property, and the method or methods by which Awards may be settled, exercised, cancelled, forfeited, or suspended; (vi) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan (including, without limitation, any Stock Option Agreement); (vii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and binding upon all Persons, including the Company, any Affiliate, any Participating Key Employee, any Non-Employee Director, any holder or beneficiary of any Award, any shareholder, and any employee of the Company or of any Affiliate. Notwithstanding the foregoing, Awards to Non-Employee Directors under the Plan shall be automatic and the amount and terms of such Awards shall be determined as provided in Section 6(b) of the Plan. Section 4. Shares Available for Award (a) Shares Available. Subject to adjustment as provided in Section 4(b): (i) Number of Shares Available. The number of Shares with respect to which Awards may be granted under the Plan shall be 600,000. If, after the effective date of the Plan, any Shares covered by an Award granted under the Plan, or to which any Award relates, are forfeited or if an Award otherwise terminates, expires or is cancelled prior to the delivery of all of the Shares or of other consideration issuable or payable pursuant to such Award, then the number of Shares counted against the number of Shares available under the Plan in connection with the grant of such Award, to the extent of any such forfeiture, termination, expiration or cancellation, shall again be available for granting of additional Awards under the Plan. (ii) Limitations on Awards to Individual Participants. During any one calendar year, no Participating Key Employee shall be granted Awards under the Plan that could result in such Participating Key Employee receiving Options for more than 100,000 Shares under the Plan. Such number of Shares as specified in the preceding sentence shall be subject to adjustment in accordance with the terms of Section 4(b) hereof. In all cases, determinations under this Section 4(a)(ii) shall be made in a manner that is consistent with the exemption for performance-based compensation provided by Section 162(m) of the Code (or any successor provision thereto) and any regulations promulgated thereunder. (iii) Accounting for Awards. The number of Shares covered by an Award under the Plan, or to which such Award relates, shall be counted on the date of grant of such Award against the number of Shares available for granting Awards under the Plan. (iv) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares. (b) Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee may, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares subject to the Plan and which thereafter may be made the subject of Awards under the Plan, (ii) the number and type of Shares subject to outstanding Awards, and (ii) the grant, purchase, or exercise price with respect to any Award, or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, however, in each case, that with respect to Awards of Incentive Stock Options no such adjustment shall be authorized to the extent that such authority would cause the Plan to violate Section 422(b) of the Code (or any successor provision thereto); and provided further that the number of Shares subject to an Award shall always be a whole number. Notwithstanding the foregoing, Non-Qualified Stock Options subject to grant or previously granted to Non-Employee Directors under Section 6(b) of the Plan at the time of any event described in the preceding sentence shall be subject to only such adjustments as shall be necessary to maintain the relative proportionate interest represented thereby immediately prior to any such event and to preserve, without exceeding, the value of such Options. Section 5. Eligibility Any Key Employee, including any executive officer or employee-director of the Company or of any Affiliate, who is not a member of the Committee shall be eligible to be designated a Participating Key Employee. All Non-Employee Directors shall receive Awards of Non-Qualified Stock Options as provided in Section 6(b). Section 6. Awards (a) Option Awards to Key Employees. The Committee is hereby authorized to grant Options to Key Employees with the terms and conditions as set forth below and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine. (i) Exercise Price. The exercise price per Share of an Option granted pursuant to this Section 6(a) shall be determined by the Committee; provided, however, that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such Option. (ii) Option Term. The term of each Option shall be fixed by the Committee; provided, however, that in no event shall the term of any Option exceed a period of ten years from the date of its grant. (iii)Exercisability and Method of Exercise. An Option shall become exercisable in such manner (including, without limitation, accelerated exercisability in the event of Change of Control of the Company) and within such period or periods and in such installments or otherwise as shall be determined by the Committee. Unless the Committee shall otherwise determine on or prior to the date of grant of an Option, such Option may be exercised, in whole or in part, from and after the date it was granted in accordance with the following schedule: Cumulative Percentage of Shares Subject to Option Which May be Purchased (which number of Shares shall be rounded Elapsed Period of Time down to the nearest whole After Date Option is Granted number) Less than One (1) Year 0% One (1) Year 33-1/3% Two (2) Years 66-2/3% Three (3) Years 100% The Committee also shall determine the method or methods by which, and the form or forms, including, without limitation, cash, Shares, other securities, other Awards, or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which payment of the exercise price with respect to any Option may be made or deemed to have been made. (iv) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code (or any successor provision thereto) and any regulations promulgated thereunder. Notwithstanding any provision in the Plan to the contrary, no Incentive Stock Option may be granted hereunder after the tenth anniversary of the adoption of the Plan by the Board of Directors of the Company. (b) Non-Qualified Stock Option Awards to Non-Employee Directors. (i) Eligibility. Each Non-Employee Director shall automatically be granted Non-Qualified Stock Options under the Plan in the manner set forth in this Section 6(b). A Non-Employee Director may hold more than one Non- Qualified Stock Option, but only on the terms and subject to any restrictions set forth herein. (ii) Annual Option Grants to Non-Employee Directors. Each Non- Employee Director (if he or she continues to serve in such capacity) shall, on the day following the annual meeting of shareholders in each year during the time the Plan is in effect, automatically be granted a Non-Qualified Stock Option to purchase 2,000 Shares (which number of Shares shall be subject to adjustment in the manner provided in Section 4(b) hereof);provided, however, that in no event shall Non-Qualified Stock Options be granted to Non-Employee Directors under this Section 6(b) after April 20, 2000. (iii) Grant Limitation. Notwithstanding the provisions of Section 6(b)(ii) hereof, Non-Qualified Stock Options shall be automatically granted to Non-Employee Directors under the Plan only for so long as the Plan remains in effect and a sufficient number of Shares are available hereunder for the granting of such Options. (iv) Exercise Price. The exercise price per Share for a Non- Qualified Stock Option granted to a Non-Employee Director under the Plan shall be equal to 100% of the "market value" of a Share on the date of grant of such Option. The "market value" of a Share on the date of grant to the Non- Employee Director shall be the last sale price per Share for the Shares on The Nasdaq Stock Market on the trading date next preceding such grant date; provided, however, that if the principal market for the Shares is then a national securities exchange, the "market value" shall be the closing price per Share for the Shares on the principal securities exchange on which the Shares are traded on the trading date next preceding the date of grant, or, in either case above, if no trading occurred on the trading date next preceding the date on which the Non-Qualified Stock Option is granted, then the "market price" per Share shall be determined with reference to the next preceding date on which the Shares were traded. (v) Exercisability of Options. Non-Qualified Stock Options granted to Non-Employee Directors under the Plan shall become exercisable in accordance with the following schedule: Cumulative Percentage of Shares Subject to Option Which May be Purchased (which number of Shares shall be rounded Elapsed Period of Time down to the nearest whole After Date Option is Granted number) Less than One (1) Year 0% One (1) Year 33-1/3% Two (2) Years 66-2/3% Three (3) Years 100% Notwithstanding the foregoing schedule, if a Non-Employee Director ceases to be a director of the Company by reason of death, disability or retirement within three (3) years after the date of grant or in the event of a Change of Control of the Company within three (3) years after the date of grant, the Option shall become immediately exercisable in full. (vi) Termination of Options. Non-Qualified Stock Options granted to Non-Employee Directors shall terminate on the earlier of: (A) ten years after the date of grant; or (B) twelve months after the Non-Employee Director ceases to be a director of the Company for any reason, including as a result of the Non-Employee Director's death, disability or retirement. (vii) Exercise of Options. A Non-Qualified Stock Option granted to a Non-Employee Director may be exercised, subject to its terms and conditions and the terms and conditions of the Plan, in full at any time or in part from time to time by delivery to the Secretary of the Company at the Company's principal office in West Bend, Wisconsin, of a written notice of exercise specifying the number of shares with respect to which the Option is being exercised. Any notice of exercise shall be accompanied by full payment of the exercise price of the Shares being purchased (x) in cash or its equivalent; (y) by tendering previously acquired Shares (valued at their "market value" [as determined in accordance with Section 6(b)(iv)] as of the date of exercise); or (z) by any combination of the means of payment set forth in subparagraphs (x) and (y). For purposes of subparagraphs (y) and (z) above, the term "previously acquired Shares" shall only include Shares owned by the Non-Employee Director prior to the exercise of the Option for which payment is being made and shall not include Shares which are being acquired pursuant to the exercise of said Option. No shares will be issued until full payment therefor has been made. (c) General. (i) No Consideration for Awards. Awards shall be granted to Participating Key Employees without the requirement of cash consideration unless otherwise determined by the Committee. Awards of Non-Qualified Stock Options granted to Non-Employee Directors under Section 6(b) of the Plan shall be granted for no cash consideration unless otherwise required by law. (ii) Award Agreements. Each Award granted under the Plan shall be evidenced by a Stock Option Agreement in such form (consistent with the terms of the Plan) as shall have been approved by the Committee. (iii) Awards May Be Granted Separately or Together. Awards to Participating Key Employees under the Plan may be granted either alone or in addition to, in tandem with, or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any other plan of the Company or any Affiliate, may be granted either at the same time as or at a different time from the grant of such other Awards or awards. (iv) Limits on Transfer of Awards. No Award, and no right under any such Award, shall be assignable, alienable, salable, or transferable by a Participating Key Employee or a Non-Employee Director otherwise than by will or by the laws of descent and distribution; provided, however, that a Participating Key Employee at the discretion of the Committee may, and a Non- Employee Director shall, be entitled, in the manner established by the Committee, to designate a beneficiary or beneficiaries to exercise his or her rights, and to receive any property distributable, with respect to any Award upon the death of the Participating Key Employee or the Non-Employee Director, as the case may be. Each Award, and each right under any Award, shall be exercisable, during the lifetime of the Participating Key Employee or the Non- Employee Director, only by such individual or, if permissible under applicable law, by such individual's guardian or legal representative. No Award, and no right under any such Award, may be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate. (v) Term of Awards. Except as otherwise provided in the Plan, the term of each Award shall be for such period as may be determined by the Committee but the expiration date of an Award shall be not later than ten years after the date such Award is granted. (vi) Share Certificates; Representation. All certificates for Shares delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Commission, any stock exchange or other market upon which such Shares are then listed or traded, and any applicable federal or state securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. The Committee may require each Participating Key Employee, Non- Employee Director or other Person who acquires Shares under the Plan by means of an Award originally made to a Participating Key Employee or a Non-Employee Director to represent to the Company in writing that such Participating Key Employee, Non-Employee Director or other Person is acquiring the Shares without a view to the distribution thereof. Section 7. Amendment and Termination of the Plan; Correction of Defects and Omissions (a) Amendments to and Termination of the Plan. The Board of Directors of the Company may at any time amend, alter, suspend, discontinue, or terminate the Plan; provided, however, that the provisions of Section 6(b) of the Plan shall not be amended more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended, or the rules promulgated thereunder; and provided further that shareholder approval of any amendment of the Plan shall also be obtained if otherwise required by: (i) the rules and/or regulations promulgated under Section 16 of the Exchange Act (in order for the Plan to remain qualified under Rule 16b-3), (ii) the Code or any rules promulgated thereunder (in order to allow for Incentive Stock Options to be granted under the Plan), or (iii) the quotation or listing requirements of The Nasdaq Stock Market or any principal securities exchange or market on which the Shares are then traded (in order to maintain the quotation or listing of the Shares thereon). Termination of the Plan shall not affect the rights of Participating Key Employees or Non-Employee Directors with respect to Awards previously granted to them, and all unexpired Awards shall continue in force and effect after termination of the Plan except as they may lapse or be terminated by their own terms and conditions. (b) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any defect, supply any omission, or reconcile any inconsistency in any Award or Stock Option Agreement in the manner and to the extent it shall deem desirable to carry the Plan into effect. Section 8. General Provisions (a) No Rights to Awards. No Key Employee, Participating Key Employee or other Person (other than a Non-Employee Director to the extent provided in Section 6(b) of the Plan) shall have any claim to be granted an Award under the Plan, and there is no obligation for uniformity of treatment of Key Employees, Participating Key Employees, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each Participating Key Employee. (b) Withholding. No later than the date as to which an amount first becomes includible in the gross income of a Participating Key Employee for federal income tax purposes with respect to any Award under the Plan, the Participating Key Employee shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Committee, withholding obligations arising with respect to Awards to Participating Key Employees under the Plan may be settled with Shares, including Shares that are part of, or are received upon exercise of, the Award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company and any Affiliate shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participating Key Employee. The Committee may establish such procedures as it deems appropriate for the settling of withholding obligations with Shares, including, without limitation, the establishment of such procedures as may be necessary to satisfy the requirements of Rule 16b-3. (c) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. (d) Rights and Status of Recipients of Awards. The grant of an Award shall not be construed as giving a Participating Key Employee the right to be retained in the employ of the Company or any Affiliate. Further, the Company or any Affiliate may at any time dismiss a Participating Key Employee from employment, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Stock Option Agreement. The grant of an Award to a Non-Employee Director pursuant to Section 6(b) of the Plan shall confer no right on such Non-Employee Director to continue as a director of the Company. Except for rights accorded under the Plan and under any applicable Stock Option Agreement, Participating Key Employees and Non- Employee Directors shall have no rights as holders of Shares as a result of the granting of Awards hereunder. (e) Unfunded Status of the Plan. Unless otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company and any Participating Key Employee, any Non-Employee Director or other Person. To the extent any Person holds any right by virtue of a grant under the Plan, such right (unless otherwise determined by the Committee) shall be no greater than the right of an unsecured general creditor of the Company. (f) Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Wisconsin and applicable federal law. (g) Severability. If any provision of the Plan or any Stock Option Agreement or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan, any Stock Option Agreement or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan, any Stock Option Agreement or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of the Plan, any such Stock Option Agreement and any such Award shall remain in full force and effect. (h) No Fractional Shares. No fractional Shares or other securities shall be issued or delivered pursuant to the Plan, any Stock Option Agreement or any Award, and the Committee shall determine (except as otherwise provided in the Plan) whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Shares or other securities, or whether such fractional Shares or other securities or any rights thereto shall be canceled, terminated, or otherwise eliminated. (i) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Section 9. Effective Date of the Plan The Plan shall be effective on the date of adoption of the Plan by the Board of Directors of the Company provided that the Plan is approved by the shareholders of the Company within twelve months following the date of adoption of the Plan by the Board of Directors. All Awards granted prior to shareholder approval of the Plan shall be subject to such approval and shall not be exercisable until after such approval. EX-10.5 4 0004.txt AMENDMENT 2 TO THE WILLIAM D. GEHL/GEHL COMPANY AMENDED AND RESTATED EMPLOYMENT AGREEMENT DATED AS OF DECEMBER 19, 1997. THIS AMENDMENT is made by and between Gehl Company ("GEHL"), a Wisconsin corporation with its principal place of business in West Bend, Wisconsin, and William D. Gehl, ("Employee") as of April 19, 2000. RECITALS WHEREAS, GEHL and Employee wish to amend the Employment Agreement between the parties dated December 19, 1997, previously amended as of December 18, 1998. NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows: Section 5, Change in Control, shall be revised as follows: A new Subsection "(e)" shall be added: "(e) The present value of the Employee's benefits under Section 2 of the Employee's most current Supplemental Retirement Benefit Agreement using a discount rate equal to the "GATT" interest rate that would be used by the Gehl Company Retirement Income Plan "B" to calculate the amount of a lump sum distribution to be made on the same date as the payment hereunder." IN WITNESS WHEREOF, GEHL has caused this Agreement to be executed by its duly authorized officers, and Employee has hereunto set his hand, all as of the date set forth above. GEHL COMPANY ___________________________________ Its Director ___________________________________ Employee EX-10.6 5 0005.txt AMENDMENT NO. 1 TO THE WILLIAM D. GEHL/GEHL COMPANY SUPPLEMENTAL RETIREMENT AGREEMENT DATED AS OF DECEMBER 15, 1995. THIS AMENDMENT is made by and between Gehl Company ("GEHL"), a Wisconsin corporation with its principal place of business in West Bend, Wisconsin, and William D. Gehl, ("Employee") as of April 20, 2000. RECITALS WHEREAS, GEHL and Employee wish to amend the Supplemental Retirement Agreement between the parties dated as of December 15, 1995. NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the parties agree as follows: Section 2, Supplemental Retirement Benefits (a) (i) shall be revised to read as follows: sixty percent (60%) of the Employee's Average Monthly Compensation, less . . . Section 3, Pre-Retirement Death Benefit (c) shall be revised to read as follows: The amount of each of the ten (10) payments shall be 3.6 times the Employee's Average Monthly Compensation as of the employee's date of death (i.e., forty percent (40%) of the Employee's Average Monthly compensation annualized). Section 11, Acceleration shall be added as follows: In the event that payment of the benefits provided by Section 2 hereunder is accelerated in a present value payment pursuant to the Change in Control Section of the Employee's Employment Agreement, all other benefits and provisions hereof shall be deemed terminated. IN WITNESS WHEREOF, GEHL has caused this Agreement to be executed by its duly authorized officers, and Employee has hereunto set his hand, all as of the date set forth above. GEHL COMPANY ___________________________________ Its Director ___________________________________ Employee EX-10.7 6 0006.txt GEHL COMPANY/_________________ 2000 SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT THIS AGREEMENT, made this _____ day of April, 2000, by and between GEHL COMPANY, West Bend, Wisconsin (hereinafter referred to as the "Company"), and __________________, of West Bend, Wisconsin (hereinafter referred to as the "Employee"): W I T N E S S E T H: WHEREAS, the Employee is currently employed by the Company in the capacity of Vice President and in such position can contribute materially to its continued growth and development and to its future financial success; and WHEREAS, the Company desires to insure insofar as possible that the Company will have the benefit of the Employee's full services and executive capacities for future years; NOW, THEREFORE, in consideration of services rendered by the Employee to the Company, it is agreed as follows: Section 1. Definitions. (a) "Average Monthly Compensation" means one-sixtieth (1/60th) of the Employee's base salary and cash bonus from the Company for the highest five (5) calendar years within the last ten (10) completed calendar years preceding the date of the Employee's termination of employment with the Company. In the event the Employee does not have five (5) calendar years of employment, only the number of full months from the date of hire through the December preceding termination of employment shall be used to determine Average Monthly Compensation. Cash bonus means the cash distributed to the Employee during a calendar year pursuant to the Company "SVA" Shareholder Value Added or similar incentive/bonus compensation program. Base salary and cash bonus for this purpose include any salary reduction deferrals pursuant to a cash or deferred arrangement or a cafeteria plan pursuant to Internal Revenue Code ("Code") Sections 401(k) or 125. (b) "Beneficiary" means the person, trust and/or other entity designated by the Employee on the form most recently filed with the Secretary of the Company prior to the Employee's death. In the absence of a valid designation, the Beneficiary shall be the Employee's estate. (c) "Disability means a physical or mental condition which totally and presumably permanently prevents the Employee from engaging in any substantially gainful activity as determined in accordance with Section 4.03 of the Gehl Company Retirement Income Plan "B". (d) "Vested Percentage" means the percentage of the supplemental retirement benefit in Section 2 earned by the Employee, subject in any event to the forfeiture provision of Section 4 and the change in control provision of Section 5. The Vested Percentage is one hundred percent (100%) in any of the following circumstances: (i) after the Employee completes five (5) years of Vesting Service; (ii) if the Employee suffers a Disability; or (iii) if the Employee retires from the Company after attainment of age sixty-two (62). In the event the Employee does not have a Vested Percentage of one hundred percent (100%), he shall receive ten percent (10%) vesting for each complete year of Vesting Service. (e) "Vesting Service" means the period of the Employee's consecutive employment with the Company from January 1, 1986, through the date of termination of employment. Section 2. Supplemental Retirement Benefits. (a) The amount of the monthly supplemental retirement benefit shall be the Employee's Vested Percentage times an amount equal to thirty percent (30%) of the Employee's Average Monthly Compensation. (b) The monthly supplement shall be payable to the Employee commencing as of the first day of the month following the earlier to occur of: (i) age sixty-five (65); or (ii) the later of termination of employment from the Company or age sixty two (62). The supplement shall continue to be paid to the Employee for a period of fifteen (15) years. (c) In the event the Employee commences receiving the supplement but dies prior to the end of the payment period, the remaining monthly payments in the fifteen (15)-year period shall be made to the Beneficiary. (d) In the event the Employee dies after termination of employment from the Company but prior to the commencement of benefits pursuant to (b) above, the monthly supplement calculated pursuant to subsection (a) above shall be paid to the Beneficiary for the fifteen (15)-year period commencing as of the first day of the month following the later to occur of the Employee's death or the date the Employee would have attained (or if applicable, did attain) age sixty-two (62). Section 3. Pre-Retirement Death Benefit. (a) In the event the Employee dies prior to commencement of the supplemental retirement benefit under Section 2(b) above and while employed by the Company, in lieu of any payment pursuant to Section 2 above, a pre- retirement death benefit shall be paid to the Beneficiary. (b) The death benefit shall be comprised of five (5) payments, the first being due as of the last day of the month following the Employee's death. Each succeeding payment shall be made on successive anniversaries of the first payment due date. (c) The amount of each of the five (5) payments shall be forty percent (40%) of the Employee's Average Monthly Compensation, annualized, as of the Employee's date of death. Section 4. Non-Competition Requirement. Employee agrees that for a period of two (2) years after termination of active employment hereunder, the Employee shall not, except as permitted by the Company's prior written consent, engage in, be employed by, or in any way advise or act for, or have any financial interest in any business which is a competitor of the Company. The ownership of minority and non-controlling shares of any corporation whose shares are listed on a recognized stock exchange or traded in an over-the- counter market shall not be deemed as constituting a financial interest in such corporation. If the Employee shall fail to comply with any of the foregoing conditions, he shall forfeit all right to any payments pursuant to Section 2 hereof which would otherwise be payable to him thereafter. Section 5. Change of Control. Notwithstanding the definition of Vested Percentage in Section 1 hereof, an Employee shall be one hundred percent (100%) vested, subject to Section 4, in the event there is a change of control of the Company. For purposes of this Agreement, a "change in control of the Company" occurs when: (i) securities of GEHL representing 25% or more of the combined voting power of GEHL's then outstanding voting securities are acquired pursuant to a tender offer or an exchange offer; or (ii) the shareholders of GEHL approve a merger or consolidation of GEHL with any other corporation as a result of which less than fifty percent (50%) of the outstanding voting securities of the surviving or resulting entity are owned by the former shareholders of GEHL (other than a shareholder who is an affiliate, as defined under rules promulgated under the Securities Act of 1933, as amended, of any party to such consolidation or merger); or (iii) the shareholders of GEHL approve the sale of substantially all of GEHL's assets to a corporation which is not a wholly-owned subsidiary of GEHL; or (iv) any person becomes the "beneficial owner," as defined under rules promulgated under the Securities Exchange Act of 1934, as amended, directly or indirectly, of securities of GEHL representing twenty- five percent (25%) or more of the combined voting power of GEHL's then outstanding securities the effect of which (as determined by the Board) is to take over control of GEHL; or (v) during any period of two consecutive years, individuals who, at the beginning of such period, constituted the Board of Directors of GEHL cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by the vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. Section 6. No Rights of Employment. Nothing herein contained shall be deemed to confer upon the Employee any right to continue in the employ of the Company nor to interfere with the right of the Company to terminate his employment at any time. Section 7. Employee's Rights Non-Assignable. Neither the Employee nor the Beneficiary shall have the power to transfer, assign, anticipate, mortgage, or otherwise encumber in advance any of the payments provided in this Agreement; nor shall any of said payments nor any assets of the Company, including any insurance policies owned by the Company, be subject to seizure for the payment of any of the recipient's debts, judgments or other obligations arising by operation of law or in the event of bankruptcy, insolvency or otherwise. Section 8. Company Not Required to Fund This Agreement. The Company is not obligated to set aside or credit the Employee or the Beneficiary with funds to provide for the payment of the amounts due under this Agreement, and nothing in this Agreement shall be construed as creating a trust fund of any kind for the benefit of the Employee or the Beneficiary. Section 9. Administration. This Agreement shall be administered by the Gehl Company Compensation and Benefits Committee (herein referred to as the "Committee"). If the Employee is also a Committee member, he shall abstain from any deliberations or vote on any matter in connection with this Agreement. Section 10. Successors and Assigns. This Agreement shall inure to and be binding upon the successors and assigns of the Company. Section 11. Acceleration. In the event that payment of the benefits provided by Section 2 hereunder is accelerated in a present value payment pursuant to the Employee's Change in Control and Severance Agreement, all other benefits and provisions hereof shall be deemed terminated. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. Attest: GEHL COMPANY __________________________ ___________________________ Its: President EMPLOYEE __________________________ ___________________________ Witness as to (Name) (Name) SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT BENEFICIARY DESIGNATION (Name) This is to certify that I wish to make the following beneficiary designation for any death benefit which may become payable under my Gehl Company Supplemental Retirement Benefit Agreement: Primary Beneficiary Name___________________________ ______________________________ (Please Print) Social Security Number Address _________________________ ______________________________ Relationship _________________________ Secondary Beneficiary Name______________________________ ______________________________ (Please Print) Social Security Number Address_________________________ _____________________________ Relationship _________________________ Date _________________________ ______________________________ Signature of __________________________ EX-10.8 7 0007.txt GEHL COMPANY/____________________ CHANGE IN CONTROL AND SEVERANCE AGREEMENT THIS AGREEMENT, made and entered into as of the _____ day of April, 2000, by and between Gehl Company, a Wisconsin corporation (hereinafter referred to as the "GEHL"), and _______________________ (hereinafter referred to as the "Executive"). W I T N E S S E T H : WHEREAS, the Executive is employed by GEHL in a key executive capacity, and the Executive's services are valuable to the conduct of the business of GEHL; WHEREAS, the Board of Directors of GEHL (the "Board") recognizes that circumstances may arise in which a change in control of GEHL occurs, through acquisition or otherwise, thereby causing uncertainty about the Executive's future employment with GEHL without regard to the Executive's competence or past contributions, which uncertainty may result in the loss of valuable services of the Executive to the detriment of GEHL and its shareholders, and GEHL and the Executive wish to provide reasonable security to the Executive against changes in the Executive's relationship with GEHL in the event of any such change in control; WHEREAS, GEHL and the Executive are desirous that any proposal for a change in control or acquisition of GEHL will be considered by the Executive objectively and with reference only to the best interests of GEHL and its shareholders; WHEREAS, the Executive will be in a better position to consider GEHL's best interests if the Executive is afforded reasonable security, as provided in this Agreement, against altered conditions of employment which could result from any such change in control or acquisition; and WHEREAS, GEHL deems it appropriate to provide the Executive with specified severance benefits, as provided in this Agreement, in the event of certain termination of the Executive other than in the context of a Change in Control or acquisition. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto mutually covenant and agree as follows: Section 1. Change in Control. In the event a Change in Control, as defined below, occurs while the Executive is employed by the company and this Agreement is in effect, the Executive shall automatically be entitled to employment by the company for two years after the occurrence of the Change in Control (such two-year term of employment is hereafter referred to as the "Change in Control Contract Term"). While employed by the Company during the Change in Control Contract Term, the Executive shall be entitled to a base salary, bonus opportunity and other employee benefits substantially equivalent to those the Executive was entitled to immediately prior to the Change in Control. In addition, upon the occurrence of a Change in Control, and assuming that the Executive is in the employ of the Company at such time or demonstrates that his prior termination was effected in anticipation of a Change in Control as contemplated by the succeeding paragraph, (i) the unvested stock options awarded to the Executive under the GEHL Stock Option Plans shall vest, (ii) the Executive's Bank Balance in the Bonus Bank under the GEHL Shareholder Value Added Management Incentive Compensation Plan shall vest and be paid and (iii) all restrictions limiting the exercise, transferability, entitlement or incidents of ownership of any outstanding award, including options, restricted stock, supplemental retirement and death benefits, deferred compensation, or other property or rights granted to the Executive after the date of this Agreement (other than pursuant to plans of general application to salaried employees such as tax-qualified retirement plans, life insurance and the health plan) shall lapse, and such awards shall become fully vested and be held by or for the Executive free and clear of all such restrictions. This provision shall apply to all such property or rights notwithstanding the provisions of any other plan or agreement. If the Executive's employment shall be terminated by GEHL without Cause (as defined below) or the Executive shall terminate his employment for Good Reason (as defined below) during the Change in Control Contract Term, or if GEHL shall terminate the Executive's employment without Cause within six (6) months before the execution of a definitive purchase agreement that ultimately results in a Change in Control and the Executive shall reasonably demonstrate that such termination was in connection with or in anticipation of the Change in Control, the Executive shall be entitled to the following paid in a lump sum within 30 days of the date of the Executive's termination of employment hereunder (the "Termination Date") or the date that the Executive demonstrates that such termination was in connection with or in anticipation of the Change in Control, whichever is applicable: (a) The Executive's base salary as in effect on the Termination Date ("Current Base Salary") through the Termination Date to the extent not theretofore paid; (b) The bonus which would be earned by the Executive through the Termination Date computed under GEHL's existing bonus plan, ignoring any requirement that the Executive be employed through the end of the fiscal year and not reduced for any deferrals which would otherwise be required under the bonus plan; (c) Any compensation previously deferred, including that deferred under any bonus plan as then in effect, which deferrals shall become immediately vested upon the Change in Control, to the extent not previously paid; and (d) Two (2) times the sum of the Current Base Salary. (e) The present value of the Executive's benefits under Section 2 of the Executive's most current Supplemental Retirement Benefit Agreement using a discount rate equal to the "GATT" interest rate that would be used by the Gehl Company Retirement Income Plan "B" to calculate the amount of a lump sum distribution to be made on the same date as the payment hereunder. In addition, for twenty-four (24) months after the Termination Date, GEHL shall provide to the Executive and his family medical benefits at least substantially equal on a pre-tax basis to those provided to him and his family just prior to the date of the Change in Control, whether pursuant to a group plan or individual coverage. Notwithstanding the foregoing, if the Executive obtains employment during the 24-month period and family medical benefits (substantially equivalent to those offered by GEHL just prior to the date of the Change in Control) are available from the new employer, GEHL's obligation to provide such family medical benefits shall cease for so long as the Executive remains employed. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under this Agreement and such amounts shall not be reduced (except to the extent set forth in the immediately preceding paragraph) whether or not the Executive obtains other employment. In addition, GEHL will not be entitled to reduce the amounts payable under this Agreement for any claims or rights it may have against the Executive. "Change in Control," for the purposes of this Agreement shall be defined as one of the following: i) Securities of GEHL representing 25% or more of the combined voting power of GEHL's then outstanding voting securities are acquired pursuant to a tender offer or an exchange offer; or ii) The shareholders of GEHL approve a merger or consolidation of GEHL with any other corporation as a result of which less than fifty percent (50%) of the outstanding voting securities of the surviving or resulting entity are owned by the former shareholders of GEHL (other than a shareholder who is an "affiliate," as defined under rules promulgated under the Securities Act of 1933, as amended, of any party to such consolidation or merger); or iii) The shareholders of GEHL approve the sale of substantially all of GEHL's assets to a corporation which is not a wholly-owned subsidiary of GEHL; or iv) Any person becomes the "beneficial owner," as defined under rules promulgated under the Securities Exchange Act of 1934, as amended, directly or indirectly of securities of GEHL representing twenty- five (25%) or more of the combined voting power of GEHL's then outstanding securities the effect of which (as determined by the Board) is to take over control of GEHL; or v) During any period of two consecutive years, individuals who, at the beginning of such period, constituted the Board cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by the vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. "Good Reason" for the purposes of this Agreement, shall be defined as the occurrence of any one of the following events or conditions after, or in anticipation of, the Change in Control: i) The removal of the Executive from, or any failure to re-elect or reappoint the Executive to, any of the positions held with GEHL on the date of the Change in Control or any other positions with GEHL to which the Executive shall thereafter be elected, appointed or assigned, except in connection with the termination of his employment for disability, Cause, as a result of his death or by the Executive other than for Good Reason; or ii) A good faith determination by the Executive that there has been a significant adverse change, without the Executive's written consent, in the Executive's working conditions or status with GEHL from such working conditions or status in effect immediately prior to the Change in Control, including but not limited to (A) a significant change in the nature or scope of the Executive's authority, powers, functions, duties or responsibilities, or (B) a significant reduction in the level of support services, staff, secretarial and other assistance, office space and accoutrements; or iii) Any material breach by GEHL of any provision of this Agreement; or iv) Any purported termination of the Executive's employment for Cause by GEHL which is determined under Section 14 not to be for conduct encompassed in the definition of Cause contained herein; or v) The failure of GEHL to obtain an agreement, satisfactory to the Executive, from any successor or assign of GEHL, to assume and agree to perform this Agreement, as contemplated in Section 3 hereof; or vi) GEHL's requiring the Executive to be based at any office or location which is not within a fifty (50) mile radius of West Bend, Wisconsin, except for travel reasonably required in the performance of the Executive's responsibilities hereunder, without the Executive's consent. For purposes of this Section, any good faith determination of Good Reason made by the Executive shall be conclusive. Section 2. Termination of Employment Other Than in the Context of a Change in Control/Severance. If the Executive's employment is involuntarily terminated by GEHL for any reason other than (i) Cause, (ii) circumstances under which the Executive would be entitled to the payments provided by Section 1 hereof or (iii) the Executive's death or disability, the Executive shall be entitled to receive, and GEHL shall be obligated to pay, the Executive's then Current Base Salary, as in effect immediately prior to such termination, for one (1) full year from the Executive's date of termination. During such year, the Executive shall also continue to participate in all group health and welfare benefit plans and programs of GEHL to the extent that such continued participation is possible under the general terms and provisions of such plans and programs. In the event that the Executive's continued participation in any such plans and programs is barred, and in lieu thereof, the Executive shall be entitled to receive for the above period an amount equal to the sum of the average annual contributions, payments, credits, or allocations made by GEHL to him, to his account, or on his behalf over the two (2) fiscal years (or fraction thereof) of GEHL preceding the termination of his employment under such plans and programs from which his continued participation is barred. Termination by GEHL for "Cause" shall mean termination by action of the Board because of the material failure of the Executive to fulfill his obligations as an officer of the Company or because of serious willful misconduct by the Executive in respect of his obligations as an officer of the Company as, for example, the commission by the Executive of a felony or the perpetration by the Executive of a common-law fraud against GEHL or any major material action (i.e., not procedural or operational differences )taken against the expressed directive of the Board. Section 3. Assigns and Successors. The rights and obligations of GEHL under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of GEHL and GEHL shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to expressly assume and agree to perform this Agreement in the same manner and to the same extent that GEHL would be required to perform if no such succession or assignment had taken place. Section 4. Construction. Section headings are for convenience only and shall not be considered a part of the terms and provisions of this Agreement. Section 5. Notices. All notices under this Agreement shall be in writing and shall be deemed effective when delivered in person (in GEHL's case, to its Secretary, or to its Chief Executive Officer if the Executive is then serving as Secretary) or by facsimile to the number provided for such purpose by the applicable party or forty-eight (48) hours after deposit thereof in the U.S. mails, postage prepaid, addressed, in the case of the Executive, to his last known address as carried on the personnel records of GEHL and, in the case of GEHL, to the corporate headquarters, attention of the Secretary, or to its Chief Executive Officer if the Executive is then serving as Secretary, or to such other address as the party to be notified may specify by notice to the other party. Section 6. Severability. Should it be determined that one or more of the clauses of this Agreement is (are) found to be unenforceable, illegal, contrary to public policy, etc., this Agreement shall remain in full force and effect except for the unenforceable, illegal, or contrary to public policy provisions. Section 7. Limitation on Payments. (a) Notwithstanding anything contained herein to the contrary, prior to the payment of any amounts pursuant to Sections 1 or 2 hereof, a national accounting firm designated by GEHL (the "Accounting Firm") shall compute whether there would be any "excess parachute payments" payable to the Executive, within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), taking into account the total "parachute payments," within the meaning of Section 280G of the Code, payable to the Executive by GEHL or any successor thereto under this Agreement and any other plan, agreement or otherwise. If there would be any excess parachute payments, the Accounting Firm will compute the net after-tax proceeds to the Executive, taking into account the excise tax imposed by Section 4999 of the Code, if (i) the payments hereunder were reduced, but not below zero, such that the total parachute payments payable to the Executive would not exceed three (3) times the "base amount" as defined in Section 280G of the Code, less One Dollar ($1.00) or (ii) the payments hereunder were not reduced. If reducing the payments hereunder would result in a greater after-tax amount to the Executive, such lesser amount shall be paid to the Executive. If not reducing the payments hereunder would result in a greater after- tax amount to the Executive, such payments shall not be reduced. The determination by the Accounting Firm shall be binding upon GEHL and the Executive. (b) As a result of the uncertainty in the application of Section 280G of the Code, it is possible that excess parachute payments will be paid when such payment would result in a lesser after-tax amount to the Executive; this is not the intent hereof. In such cases, the payment of any excess parachute payments will be void ab initio as regards any such excess. Any excess will be treated as a loan by GEHL to the Executive. The Executive will return the excess to GEHL, within fifteen (15) business days of any determination by the Accounting Firm that excess parachute payments have been paid when not so intended, with interest at an annual rate equal to the rate provided in Section 1274(d) of the Code (or 120% of such rate if the Accounting Firm determines that such rate is necessary to avoid an excise tax under Section 4999 of the Code) from the date the Executive received the excess until it is repaid to GEHL. (c) All fees, costs and expenses (including, but not limited to, the cost of retaining experts) of the Accounting Firm shall be borne by GEHL and GEHL shall pay such fees, costs and expenses as they become due. In performing the computations required hereunder, the Accounting Firm shall assume that taxes will be paid for state and federal purposes at the highest possible marginal tax rates which could be applicable to the Executive in the year of receipt of the payments, unless the Executive agrees otherwise. Section 8. Confidentiality. During and following the Executive's employment by GEHL, the Executive shall hold in confidence and not directly or indirectly disclose or use or copy or make lists of any confidential information or proprietary data of GEHL except to the extent authorized in writing by the Board or required by any court or administrative agency, other than to an employee of GEHL or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of his duties as an executive of GEHL. Confidential information shall not include any information known generally to the public or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that of GEHL. All records, files, documents and materials, or copies thereof, relating to the business of GEHL which the Executive shall prepare, or use, or come into contact with, shall be and remain the sole property of GEHL and shall be promptly returned to GEHL upon termination of employment with GEHL. Section 9. Expenses and Interest. If (i) a dispute arises with respect to the enforcement of the Executive's rights under this Agreement, (ii) any legal or arbitration proceeding shall be brought to enforce or interpret any provision contained herein or to recover damages for breach hereof, or (iii) any tax audit or proceeding is commenced that is attributable in part to the application of Section 4999 of the Code, in any case so long as the Executive is not acting in bad faith, then GEHL shall reimburse the Executive for any reasonable attorneys' fees and necessary costs and disbursements incurred as a result of such dispute, legal or arbitration proceeding or tax audit or proceeding ("Expenses"), and prejudgment interest on any money judgment or arbitration award obtained by the Executive calculated at the rate of interest announced by M&I Bank, Milwaukee, Wisconsin, from time to time as its prime or base lending rate from the date that payments to the Executive should have been made under this Agreement. Within ten days after the Executive's written request therefor, GEHL shall pay to the Executive, or such other person or entity as the Executive may designate in writing to GEHL, the Executive's reasonable Expenses in advance of the final disposition or conclusion of any such dispute, legal or arbitration proceeding. Section 10. Payment Obligations Absolute. GEHL's obligation to pay the Executive any amounts required hereunder and to make the benefit and other arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right which GEHL may have against the Executive or anyone else. Except as provided in Section 9, all amounts payable by GEHL hereunder shall be paid without notice or demand. Each and every payment made hereunder by GEHL shall be final, and GEHL will not seek to recover all or any part of such payment from the Executive, or from whomsoever may be entitled thereto, for any reason whatsoever. Section 11. No Waiver. The Executive's or GEHL's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or GEHL may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. Section 12. Headings. The headings herein contained are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement. Section 13. Governing Law; Resolution of Disputes. This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Wisconsin. Any dispute arising out of this Agreement shall, at the Executive's election, be determined by arbitration under the rules of the American Arbitration Association then in effect (in which case both parties shall be bound by the arbitration award) or by litigation. Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be West Bend, Wisconsin or, at the Executive's election, if the Executive is no longer residing or working in the West Bend, Wisconsin metropolitan area, in the judicial district encompassing the city in which the Executive resides; provided, that, if the Executive is not then residing in the United States, the election of the Executive with respect to such venue shall be either West Bend, Wisconsin or in the judicial district encompassing that city in the United States among the thirty cities having the largest population (as determined by the most recent United States Census data available at Termination Date) which is closest to the Executive's residence. The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices. Section 14. Amendment. No modification or amendment to this Agreement may be made without the written consent of the parties hereto. IN WITNESS WHEREOF, GEHL COMPANY has caused this Agreement to be executed by its duly authorized officer, and the Executive has hereunto set his hand, all as of the date set forth above. GEHL COMPANY _____________________________________ William D. Gehl Chairman, President & CEO _____________________________________ Executive EX-10.9 8 0008.txt GEHL COMPANY DIRECTOR STOCK GRANT PLAN (As Revised) 1. Purpose. The purpose of the Gehl Company Director Stock Grant Plan (the "Plan") is to promote the best interests of the Company and its shareholders by providing a means to attract and retain competent independent directors and to provide opportunities for additional stock ownership by such directors which will further increase their proprietary interest in the Company and, consequently, their identification with the interests with the interests of the Shareholders of the Company. 2. Administration. The Plan shall be administered by the Compensation and Benefits Committee of the Board of Directors of the Company (the "Administrator"), subject to review by the Board of Directors (the "Board"). The Administrator may adopt such rules and regulations for carrying out the Plan as it may deem proper and in the best interests of the Company. The interpretation by the Board of any provision of the Plan or any related documents shall be final. 3. Stock Subject to the Plan. Subject to adjustment in accordance with the provisions of paragraph 7, the total number of shares of common stock, $.10 par value, of the Company ("Common Stock") available for awards under the Plan shall be 25,000. Shares of Common Stock to be delivered under the Plan shall be made available from presently authorized but unissued Common Stock or authorized and issued shares of Common Stock reacquired and held as treasury shares, or a combination thereof. In no event shall the Company be required to issue fractional shares of Common Stock under the Plan. Whenever under the terms of the Plan a fractional share of Common Stock would otherwise be required to be issued, there shall be paid in lieu thereof one full share of Common Stock. 4. Director Grants. Each member of the Board who is not an employee of the Company or any subsidiary of the Company shall receive a grant of Common Stock (a "Director Grant") on the 31st day of December of each year in payment of a portion of his or her retainer fee for serving as a member of the Board. 5. Grant Amount. Each Director Grant shall consist of such number of shares of Common Stock whose value on the issue date equals $5,000.00. For purposes of the Plan, the value of the Common Stock as of the issue date shall equal the last sale price of a share of Common Stock on The Nasdaq Stock Market on the issue date (or if no sale took place on such exchange on such date, the last sale price on such exchange on the most recent preceding date on which a sale took place). 6. Restrictions on Transfer. Shares of Common Stock acquired under the Plan may not be sold or otherwise disposed of except pursuant to an effective registration statement under the Securities Act of 1933, as amended, or except in a transaction which, in the opinion of counsel, is exempt from registration under said Act. All certificates evidencing shares subject to Director Grants may bear an appropriate legend evidencing any such transfer restriction. The Administrator may require each person receiving a Director Grant under the Plan to represent in writing that such person is acquiring the shares of Common Stock without a view to the distribution thereof. All dividends and voting rights for shares awarded under the Plan shall accrue as of the issue date of the Director Grant. 7. Adjustment Provisions. In the event of any change in the Common Stock by reason of a declaration of a stock dividend (other than a stock dividend declared in lieu of an ordinary cash dividend), spin-off, merger, consolidation, recapitalization, or split-up, combination or exchange of shares, or otherwise, the aggregate number of shares available under this Plan shall be appropriately adjusted in order to prevent dilution or enlargement of the benefits intended to be made available under the Plan. 8. Amendment of Plan. The Board shall have the right to amend the Plan at any time or from time to time in any manner that it may deem appropriate, provided that such amendments shall not be made more than once every six months. 9. Governing Law. The Plan, all awards hereunder, and all determinations made and actions taken pursuant to the Plan shall be governed by the internal laws of the State of Wisconsin and applicable federal law. 10. Term of Plan. The Plan shall terminate on such date as may be determined by the Board. EX-27 9 0009.txt
5 This schedule contains summary financial information extracted from Gehl Company's condensed consolidated balance sheet at July 1, 2000 and condensed consolidated statements of income for the six-month period ended July 1, 2000 and is qualified in its entirety by reference to such financial statements. 1000 6-MOS DEC-31-2000 JAN-1-2000 JUL-01-2000 3885 0 102233 0 41109 156014 89322 46232 232004 56641 62233 548 0 0 102616 232004 148206 148206 107451 107451 0 0 2264 14151 4953 9198 0 0 0 9198 1.65 1.60 The Company presents receivables on a net basis in compliance with Article 10 of Regulation S-X. Includes all non-current portion of debt obligations The EPS under the "EPS-Primary" tag represents Basic Earnings Per Share.
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