-----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, FBKlqEr7M0LyH+NYApC1wPsnnk3dD4QmA5KM9r/cWK0/tdGG4EBd0BoXoZ+/QBbi 08RzzAIGz7V+kltTzV9TqQ== 0000856386-99-000006.txt : 19990513 0000856386-99-000006.hdr.sgml : 19990513 ACCESSION NUMBER: 0000856386-99-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990403 FILED AS OF DATE: 19990512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEHL CO CENTRAL INDEX KEY: 0000856386 STANDARD INDUSTRIAL CLASSIFICATION: FARM MACHINERY & EQUIPMENT [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: 99617996 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 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 April 3, 1999 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 (I.R.S. Employer incorporation or organization) Identification No.) 143 Water Street, West Bend, WI 53095 (Address of principal executive office) (Zip code) (414) 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 April 3, 1999 Common Stock, $.10 Par Value 6,468,411 GEHL COMPANY FORM 10-Q April 3, 1999 REPORT INDEX Page No. PART I. - FINANCIAL INFORMATION: Item 1. Financial Statements Condensed Consolidated Statements of Income for the Three-Month Periods Ended April 3, 1999 and March 28, 1998 . . . . . . . . . . . . . . 3 Condensed Consolidated Balance Sheets at April 3, 1999, December 31, 1998, and March 28, 1998 . . 4 Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended April 3, 1999 and March 28, 1998 . . . . . . . . . . . . . . 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 11 PART II. - OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K . . . 11 SIGNATURES . . . . . . . . . . . . . . . . . . . 12 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 April 3, March 28, 1999 1998 NET SALES $ 68,963 $ 61,288 Cost of goods sold 50,187 45,437 -------- -------- GROSS PROFIT 18,776 15,851 Selling, general and administrative expenses 12,539 10,873 -------- -------- INCOME FROM OPERATIONS 6,237 4,978 Interest expense (777) (1,176) Interest income 413 346 Other expense, net (440) (18) -------- -------- INCOME BEFORE INCOME TAXES 5,433 4,130 Income tax provision 1,929 1,466 -------- -------- NET INCOME $ 3,504 $ 2,664 ======== ======== EARNINGS PER SHARE Diluted $ .52 $ .40 Basic $ .54 $ .42
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
April 3, December 31, March 28, 1999 1998 1998 ----------- ------------- --------- ASSETS (Unaudited) (Unaudited) Cash $ 3,688 $ 887 $ 3,049 Accounts receivable-net 78,575 70,806 86,602 Finance contracts receivable-net 9,709 9,786 9,670 Inventories 36,015 32,093 32,793 Deferred tax assets 7,138 7,138 4,217 Other current assets 1,324 1,184 1,584 ---------- ----------- --------- Total Current Assets 136,449 121,894 137,915 Property, plant and equipment- net 33,910 34,142 34,941 Finance contracts receivable- net, non-current 5,805 5,804 3,531 Intangible assets 16,267 16,451 14,650 Other assets 6,998 6,256 5,546 ---------- ---------- -------- TOTAL ASSETS $ 199,429 $ 184,547 $ 196,583 LIABILITIES AND SHAREHOLDERS' EQUITY Current portion of long-term debt obligations $ 562 $ 597 $ 689 Accounts payable 26,447 23,562 26,555 Accrued liabilities 30,499 27,993 23,695 ----------- --------- ---------- Total Current Liabilities 57,508 52,152 50,939 Line of credit facility 25,329 19,359 49,252 Long-term debt obligations 9,445 9,588 9,515 Other long-term liabilities 5,372 5,400 1,929 Deferred income taxes 3,943 3,943 3,421 ----------- --------- ---------- Total Long-Term Liabilities 44,089 38,290 64,117 ----------- --------- ---------- Common stock, $.10 par value, 25,000,000 shares authorized, 6,468,411, 6,438,945 and 6,392,929 shares outstanding, respectively 647 644 640 Preferred stock, $.10 par value, 2,000,000 shares authorized, 250,000 shares designated as Series A Preferred Stock, no shares issued - - - Capital in excess of par 28,550 28,330 27,590 Retained earnings 69,787 66,283 53,679 Accumulated other comprehensive loss (1,152) (1,152) (382) ----------- --------- -------- Total Shareholders' Equity 97,832 94,105 81,527 ----------- --------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 199,429 $ 184,547 $196,583 =========== ========= ========
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands; unaudited) Three Months Ended April 3, March 28, 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 3,504 $ 2,664 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Depreciation 1,075 1,054 Amortization 199 178 Proceeds from sales of finance contracts 14,880 5,745 Increase in finance contracts receivable (15,310) (7,784) Cost of sales of finance contracts 506 79 Net changes in remaining working capital items (6,440) (10,210) ---------- -------- Net cash used for operating activities (1,586) (8,274) CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant and equipment additions, net (843) (918) Other assets (757) (100) ---------- -------- Net cash used for investing activities (1,600) (1,018) ---------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from line of credit facility 5,970 9,895 Proceeds from issuance of common stock 223 1,290 Other (206) (83) ---------- -------- Net cash provided by financing activities 5,987 11,102 ---------- -------- Net increase in cash 2,801 1,810 Cash, beginning of period 887 1,239 ---------- -------- Cash, end of period $ 3,688 $ 3,049 ========== ======== Supplemental disclosure of cash flow information: Cash paid for the following: Interest $ 703 $ 1,057 Income Taxes $ 796 $ 65
The accompanying notes are an integral part of the financial statements. GEHL COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS April 3, 1999 (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- month periods ended April 3, 1999 and March 28, 1998 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 three months ended April 3, 1999 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, 1998 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, estimated inventories by major classification would have been as follows (in thousands): April 3, December March 28, 1999 31, 1998 1998 Raw materials and supplies $16,390 $15,656 $15,934 Work in process 6,637 5,863 5,768 Finished machines and parts 32,384 29,970 30,341 ------- ------- ------- Total current cost value 55,411 51,489 52,043 Adjustment to LIFO basis (19,396) (19,396) (19,250) ------- ------- ------- $36,015 $32,093 $32,793 ======= ======= ======= 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 is effective for fiscal quarters of fiscal years beginning after June 15, 1999. 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 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 and warrants. A reconciliation of the shares used in the computation of earnings per share follows (in thousands): April 3, March 28, 1999 1998 ------- --------- Basic shares 6,456 6,274 Effect of warrants and options 233 393 ----- ------ Diluted shares 6,689 6,667 ===== ====== NOTE 6 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. Effective December 31, 1998, the Company adopted SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The Statement requires the Company to disclose selected segment information on an interim basis; this information is set forth below (in thousands): April 3, 1999 March 28, 1998 ------------- -------------- Net Sales: Construction $40,246 $34,054 Agricultural 28,717 27,234 -------- ------- Consolidated $68,963 $61,288 ======= ======= Income from Operations: Construction $ 4,794 $ 3,240 Agricultural 1,443 1,738 ------- ------- Consolidated $ 6,237 $ 4,978 ======= ======= NOTE 7 STOCK REPURCHASE In March 1999, the Company's Board of Directors authorized the repurchase of up to 325,000 shares of the Company's outstanding common stock. As of April 3, 1999, no shares had been repurchased under this authorization. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Three Months Ended April 3, 1999 Compared to Three Months Ended March 28, 1998 Net sales for the first quarter of 1999 of $69.0 million were $7.7 million, or 13%, higher than the $61.3 million in the comparable period of 1998. Construction equipment net sales increased 18% to $40.3 million in the first quarter of 1999 from $34.1 million in the first quarter of 1998. The increase in sales of construction equipment was due primarily to higher telescopic handler and service parts shipments. Agricultural equipment sales increased 5% to $28.7 million in the first quarter of 1999 from $27.2 million in the first quarter of 1998. The increase was due primarily to increased shipments of skid loaders and forage harvesting equipment. Of the Company's total net sales reported for the first quarter of 1999, $8.6 million were made outside of the United States compared with $9.7 million in the comparable period of 1998. The decrease was due to economic disruption in the Far East and Australia. As the Company has continued to increase its sales of Construction equipment products, the Company has been successful in reducing the seasonality of its sales. However, some seasonality still remains, primarily in the Company s second quarter which historically has tended to be its strongest quarter for sales, while sales levels have historically tended to be lower in the first and fourth quarters. Gross profit increased $2.9 million, or 18%, during the first quarter of 1999 versus the comparable period of 1998, due to increased sales volume and improved gross margin percentages. Gross profit as a percent of net sales increased to 27.2% for the first quarter of 1999 from 25.9% in the comparable period of 1998. Gross profit as a percent of net sales for Construction equipment increased to 26.6% in the first quarter of 1999 from 24.4% in the first quarter of 1998. The increase in Construction equipment gross margin was a function of increased telescopic handler and service parts sales, which sales are at higher gross margins than other Construction equipment, and improved efficiencies at the manufacturing plants. Gross profit as a percent of net sales for Agricultural equipment increased to 28.0% in the first quarter of 1999 from 27.7% for the first quarter of 1998. Selling, general and administrative expenses increased $1.7 million, or 15%, during the first quarter of 1999 versus the comparable period of 1998 due primarily to sales volume increases. As a percent of net sales, selling, general and administrative expenses increased to 18.2% of net sales during the first quarter of 1999 versus 17.7% in the comparable period of 1998. Income from operations in the first quarter of 1999 was $6.2 million, 25% higher than the $5.0 million for the first quarter of 1998. Interest expense decreased $399,000, to $777,000 in the first quarter of 1999 from $1,176,000 in the first quarter of 1998. The decrease was a result of a decrease in average debt outstanding to $35.2 million in the first quarter of 1999 versus $56.1 million in the first quarter of 1998. The average rate of interest paid by the Company decreased to 7.7% in the first quarter of 1999 from 8.1% for the first quarter of 1998. Other expense increased $422,000, to $440,000 in the first quarter of 1999 from $18,000 in the first quarter of 1998. This was caused by selling $9 million more retail finance contracts to third parties in the first quarter of 1999 versus the comparable period of 1998 resulting in an increase in the cost of sales of finance contracts. First quarter 1999 net income of $3.5 million was a 32% increase from $2.7 million in the first quarter of 1998. Diluted earnings were $.52 per share for the first quarter of 1999 versus $.40 per share in 1998. Financial Condition The Company's working capital was $78.9 million at April 3, 1999, as compared to $69.7 million at December 31, 1998, and $87.0 million at March 28, 1998. The increase since December 31, 1998 resulted primarily from seasonal increases in accounts receivable. The working capital decrease from March 28, 1998 was due primarily to decreases in accounts receivable. Capital expenditures for property, plant and equipment during the first quarter of 1999 were approximately $843,000. The Company plans to make a total of approximately $10.6 million of capital expenditures in 1999, which includes $4.5 million related to plant expansion activities at the two South Dakota construction equipment manufacturing facilities. The capital expenditures are expected to be funded with proceeds borrowed under the Company's existing revolving credit agreement. Outstanding commitments as of April 3, 1999 totaled approximately $220,000. As of April 3, 1999, the weighted average interest rate paid by the Company on outstanding borrowings under its line of credit facility was 7.0%. The Company had available unused borrowing capacity of $47.9 million, $53.1 million and $24.1 million under the line of credit facility at April 3, 1999, December 31, 1998, and March 28, 1998, respectively. At April 3, 1999, December 31, 1998, and March 28, 1998, the borrowings outstanding under the line of credit facility were $25.3 million, $19.4 million and $49.3 million, respectively. 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 April 3, 1999, the Company serviced $88.0 million of such contracts, of which $72.5 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 April 3, 1999 was $97.8 million. This was $16.3 million higher than the $81.5 million of shareholders' equity at March 28, 1998, due primarily to income earned from March 29, 1998 through April 3, 1999. In March 1999, the Company's Board of Directors authorized the repurchase of up to 325,000 shares of the Company's outstanding common stock. As of April 3, 1999, no shares had been repurchased under this authorization. The repurchase of the Company's common stock, if any, is expected to be funded with proceeds borrowed under the Company's existing revolving credit arrangement. 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 is effective for fiscal quarters of fiscal years beginning after June 15, 1999. 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. Year 2000 The Year 2000 issue refers to computer systems which use two digits rather than four to define a given year and which therefore might read a date using "00" as the year 1900 rather than the Year 2000. As the Year 2000 approaches, such systems may be unable to process certain date-based information. This could result in system failure or miscalculations causing disruptions of operations and the potential inability to engage in normal business activities. In 1995, a Company-wide program was initiated to prepare its Information Technology (IT) systems and applications for the Year 2000. The initial focus of the Company's program contained the following steps: assessment of the relevant issues; planning the conversion; implementing the conversion; and testing. Those systems determined to be at risk were prioritized and plans were put in place to upgrade systems by remediation, replacement or outsourcing. Through March 1999, the assessment and planning phases have been completed for all IT systems and applications. The Company's objective is to become Year 2000 compliant with its mission critical IT activities and systems by mid-1999, allowing substantial time for further testing, verification and the final completion of less important systems in the second half of 1999. In addition to the IT systems review noted above, the Company has initiated processes to review and to modify, where appropriate, other areas impacted by Year 2000. These areas include, but are not limited to, personal computer hardware and software, remote location access to IT systems, facility management and certain non-IT issues, such as the extent to which embedded chips are used in machinery and equipment used in operations. The Company has completed assessments in all of the above areas and testing in all of these areas, except the testing of personal computer hardware and software, which is expected to be completed by the second quarter of 1999. The Company is in the process of communicating with its significant vendors to determine the extent to which the Company is vulnerable to those third parties failure to remediate their own Year 2000 compliance issues. The Company cannot guarantee that the failure of another company to be Year 2000 compliant will not have an adverse effect on the Company. The Company believes that it has no exposure to contingencies related to the Year 2000 issue for products it has sold. The Company has evaluated its major customers and believes that the failure of these entities to adequately prepare for Year 2000 issues will not have a material adverse effect on the Company. The Company expects to incur consulting and other expenses related to its Year 2000 program. The cost of testing and the conversion of existing and replacement system applications are not expected to exceed $400,000, the majority of which expense has already been incurred. These costs have been and will continue to be treated as period costs and expensed as incurred. Based upon the progress to date, the Company does not believe that either future costs of modifications or the consequences of any unsuccessful modifications being implemented by the Company will have a material adverse effect on its financial position or results of operations. Nevertheless, since it is not possible to anticipate all possible future situations, especially when third parties are involved, the Company believes that the most reasonably likely worst case Year 2000 scenario could result in circumstances in which the Company may be unable to take customer orders, manufacture and ship products, invoice customers or collect payments. The Company continues to evaluate whether a contingency plan to deal with any expected Year 2000 related failures is warranted. No assurances can be given that Year 2000 compliance failures, if any, particularly as they relate to third parties, will not have a material adverse effect on the Company's financial position or results of operations. Forward Looking Statements Certain matters discussed in the Quarterly Report on Form 10-Q are "forward-looking statements" intended to qualify for the safe harbor 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 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, general economic conditions, unanticipated events related to resolving Year 2000 issues, market acceptance of existing and new products manufactured by the Company, changes in the cost of raw materials and component parts purchased by the Company, and interest 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, 1998 as filed with the Securities and Exchange Commission. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 Form of Supplemental Retirement Benefit Arrangement between Gehl Company and each of Messrs. Hahn, Mulcahy and Semler 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 April 3, 1999. 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: May 11, 1999 By: /s/ William D. Gehl William D. Gehl Chairman of the Board, President and Chief Executive Officer Date: May 11, 1999 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 April 3, 1999 EXHIBIT INDEX Exhibit Number Document Description 10.1 Form of Supplemental Retirement Benefit Arrangement between Gehl Company and each of Messrs. Hahn, Mulcahy and Semler. 27 Financial Data Schedule [EDGAR version only] EX-10.1 2 GEHL COMPANY 1998 SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT THIS AGREEMENT, made this 16th day of December, 1998, 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 _______________________, 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 twenty percent (20%) 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 thirty percent (30%) of the Employee's annual salary 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 of1934, 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. 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 SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT BENEFICIARY DESIGNATION 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 Employee EX-27 3
5 This schedule contains summary financial information extracted from Gehl Company's condensed consolidated balance sheet at April 3, 1999 and condensed consolidated statements of income for the three-month period ended April 3, 1999 and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1999 JAN-1-1999 APR-03-1999 3688 0 88284 0 36015 136449 76364 42454 199429 57508 34774 647 0 0 97185 199429 68963 68963 50187 50187 0 0 777 5433 1929 3504 0 0 0 3504 .54 .52 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.
-----END PRIVACY-ENHANCED MESSAGE-----