-----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, WsG/KTrHmE6ZkArSZy4zhcjE8ScN7+XiSUph4Ju+NHhVOZrxGNWMOF6pAWTL/GJz E30bzXtdqPLOuNfZmhgMNw== 0000950124-96-003303.txt : 20030406 0000950124-96-003303.hdr.sgml : 20030406 19960801105346 ACCESSION NUMBER: 0000950124-96-003303 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960801 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BADGER METER INC CENTRAL INDEX KEY: 0000009092 STANDARD INDUSTRIAL CLASSIFICATION: TOTALIZING FLUID METERS & COUNTING DEVICES [3824] IRS NUMBER: 390143280 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06706 FILM NUMBER: 96602193 BUSINESS ADDRESS: STREET 1: 4545 WEST BROWN DEER ROAD STREET 2: C/O CORPORATE SECRETARY CITY: MILWAUKEE STATE: WI ZIP: 53223-0099 BUSINESS PHONE: 4143550400 FORMER COMPANY: FORMER CONFORMED NAME: BADGER METER MANUFACTURING CO DATE OF NAME CHANGE: 19710729 10-Q 1 10-Q 1 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 June 30, 1996 ------------- 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 1-6706 ------ BADGER METER, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Wisconsin 39-0143280 --------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4545 West Brown Deer Road, Milwaukee, Wisconsin 53223 - - ----------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (414) 355-0400 -------------- None ------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) 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 25, 1996 - - ---------------------------- ---------------------------- Common Stock, $1.00 par value 1,211,017 Class B Common Stock, $.10 par value 562,785 2 BADGER METER, INC. INDEX
Page No. -------- Part I. Financial Information: Item 1 Financial Statements: Consolidated Condensed Balance Sheets - - June 30, 1996 and December 31, 1995 3 Consolidated Condensed Statements of Operations - - Three and Six Months Ended June 30, 1996 and 1995 4 Consolidated Condensed Statements of Cash Flows - - Six Months Ended June 30, 1996 and 1995 5 Notes to Consolidated Condensed Financial Statements 6 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information Item 4 Submission of Matters to a Vote of Security Holders 8 Item 6(a) Exhibits 8 Item 6(b) Reports on Form 8-K 8 Exhibit Index 10
-2- 3 Part I - Financial Information BADGER METER, INC. Item 1 Financial Statements CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands)
June 30, December 31, 1996 1995 ---- ---- Assets (Unaudited) ------ ----------- Current assets: Cash $ 159 $ 1,177 Receivables 16,415 13,661 Inventories: Finished goods 3,814 3,403 Work in process 7,721 6,750 Raw materials and purchased parts 5,558 5,681 -------- --------- Total inventories 17,093 15,834 Prepaid expenses 756 745 -------- --------- Total current assets 34,423 31,417 Property, plant and equipment 54,524 55,101 Less accumulated depreciation (37,065) (37,714) -------- --------- 17,459 17,387 Intangible assets, at cost less accumulated amortization 1,047 1,217 Pension asset 5,993 5,821 Deferred income taxes 1,527 1,536 Deferred charges and other assets 3,300 3,149 -------- --------- Total assets $ 63,749 $ 60,527 ======== ========= Liabilities and Shareholders' Equity ------------------------------------ Current liabilities: Short-term debt $ 4,211 $ 5,515 Payables 7,452 4,922 Accrued liabilities 4,343 4,577 Income taxes 386 226 -------- --------- Total current liabilities 16,392 15,240 Accrued non-pension postretirement benefits 8,208 8,396 Other accrued employee benefits 4,094 3,728 Long-term debt 1,000 1,000 Shareholders' equity: Common Stock 1,568 1,552 Less: Treasury stock (358) (358) -------- --------- 1,210 1,194 Class B Common Stock 56 56 Capital in excess of par value 8,114 7,832 Reinvested earnings 26,111 24,552 Less: Employee benefit stock (1,067) (1,102) Pension liability adjustment (369) (369) -------- --------- Total shareholders' equity 34,055 32,163 -------- --------- Total liabilities and shareholders' equity $ 63,749 $ 60,527 ======== =========
See accompanying notes to consolidated condensed financial statements. -3- 4 BADGER METER, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in Thousands Except Per Share Amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------- -------- 1996 1995 1996 1995 ---- ---- ---- ---- Net sales $ 30,542 $ 28,579 $ 57,177 $ 56,508 Operating costs and expenses: Cost of sales 19,739 18,588 36,453 36,779 Marketing and administrative 6,841 6,407 13,640 12,822 Research and engineering 1,568 1,588 3,127 3,173 --------- --------- --------- --------- 28,148 26,583 53,220 52,774 --------- --------- --------- --------- Operating earnings 2,394 1,996 3,957 3,734 Interest expense 103 237 221 486 Other deductions 62 123 116 229 --------- --------- --------- --------- Earnings before income taxes 2,229 1,636 3,620 3,019 Provision for income taxes 840 585 1,343 1,111 --------- --------- --------- --------- Net earnings $ 1,389 $ 1,051 $ 2,277 $ 1,908 ========= ========= ========= ========= Per share amounts: Net earnings * $ .76 $ .60 $ 1.25 $ 1.09 ========= ========= ========= ========= Dividends declared - Common Stock $ .2200 $ .2000 $ .4200 $ .3815 ========= ========= ========= ========= Dividends declared - Class B Common Stock $ .200 $ .182 $ .382 $ .347 ========= ========= ========= ========= Weighted average shares outstanding 1,769,489 1,754,092 1,765,138 1,752,792 ========= ========= ========= =========
*1996 Earnings Per Share include the effect of dilutive stock options. See accompanying notes to consolidated condensed financial statements. -4- 5 BADGER METER, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (Dollars in Thousands) (Unaudited)
Six Months Ended June 30, -------- 1996 1995 ---- ---- Operating activities: Net earnings $ 2,277 $ 1,908 Adjustments to reconcile net earnings to net cash provided by (used for) operations: Depreciation 1,927 1,831 Amortization 425 390 Noncurrent employee benefits 31 55 Deferred income taxes 9 (237) Other 14 10 Changes in: Receivables (2,754) (2,231) Inventory (1,259) (1,130) Current liabilities 2,439 1,205 Prepaid expenses (11) 51 ---------- ------------ Total adjustments 821 (56) ---------- ------------ Net cash provided by operations 3,098 1,852 ---------- ------------ Investing activities: Property, plant and equipment (2,013) (1,836) Other - net (388) (150) ---------- ------------ Net cash used for investing activities (2,401) (1,986) ---------- ------------ Financing activities: Bank borrowings (repayments) (1,304) 520 Treasury stock 5 -- Dividends (718) (649) Exercised stock options 302 57 ---------- ------------ Net cash provided by (used for) financing activities (1,715) (72) ---------- ------------ Increase (decrease) in cash (1,018) (206) Beginning of year 1,177 365 ---------- ------------ End of period $ 159 $ 159 ========== ============ Supplemental disclosures of cash flow information: Cash paid during the period for: Income taxes $ 1,174 $ 896 ========== ============ Interest $ 177 $ 477 ========== ============
See accompanying notes to consolidated condensed financial statements. -5- 6 BADGER METER, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated condensed financial position at June 30, 1996 and the results of operations for the three and six-month periods ended June 30, 1996 and 1995 and the cash flows for the six-month periods ended June 30, 1996 and 1995. The results of operations for the six-month period ended June 30, 1996 are not necessarily indicative of the results to be expected for the full year. The consolidated condensed balance sheet at December 31, 1995 was derived from amounts included in the Annual Report to Shareholders which was incorporated by reference in the Company's annual report on Form 10-K for the year ended December 31, 1995. 2. In October, 1995, the Financial Accounting Standards Board issued Financial Accounting Standard No. 123 "Accounting for Stock-Based Compensation" (FAS 123), effective for fiscal years beginning after December 15, 1995. As allowed by FAS 123, the company intends to use prior standards (APB 25) for determining annual compensation charges and will disclose the impact of fair value. -6- 7 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Condition Record sales caused receivables to increase 20%, or $2,754,000, from the seasonally low December 31, 1995 balance. Inventories increased 8%, or $1,259,000, primarily to support future sales needs. Payables increased 51%, or $2,530,000, due to increased inventory purchases and other trade payables since December 31, 1995. Reduced cash balances of $1,018,000, combined with funds generated by net earnings, were used to pay down short-term debt by $1,304,000 and also to fund the net working capital requirements. As of June 30,1996, the company had approximately $27,000,000 of credit lines with domestic and foreign banks of which $4,211,000 was in use. This compares to $10,957,000 in use at June 30, 1995 and $5,515,000 at December 31, 1995. The company believes that the present lines of credit are adequate to meet operating requirements. Results of Operations Net sales for the second quarter of 1996 of $30,542,000 reflect a 6.9% increase over sales of $28,579,000 for the same period in 1995. The increase was primarily related to pricing and product mix. For the first six months of 1996, sales were $57,177,000, a 1.2% increase over sales of $56,508,000 for the same period in 1995. The gross profit margin improved from 34.9% for the first six months of 1995 to 36.2% for the same period in 1996. This increase was due primarily to increased manufacturing efficiencies and favorable pricing. Marketing and administrative costs increased 6.8% for the quarter and 6.4% for the six months ended June 30, 1996 as compared to the same periods of 1995. The increase was primarily due to the development of an international group and the provision for a new long-term compensation plan. Research and engineering expenses were comparable between the periods. Interest expense decreased $134,000 for the quarter and $265,000 for the six months ended June 30, 1996 as compared to the same periods of 1995, due to lower interest rates and lower debt balances outstanding. Other deductions decreased due primarily to favorable foreign exchange transactions. The effective tax rate for the second quarter of 1996 was estimated to be 37.7%, which is higher than the 35.8% used for the second quarter of 1995, due to changes in estimated deductions and tax credits for 1996. These same factors caused the 1996 year-to-date tax rate of 37.1% to increase over the 36.8% rate used for the same period of 1995. Earnings for the second quarter of 1996 of $1,389,000 have increased 32.2% over second quarter 1995 earnings of $1,051,000, due primarily to the higher sales, improved margins and lower interest costs. The 1996 year-to-date earnings of $2,277,000 increased 19.3% over the same period of 1995 earnings of $1,908,000 due primarily to improved margins and lower interest expense. Earnings per share percentage increases were slightly lower for both periods due to the impact of dilutive options in 1996. No risks or uncertainties were identified that could have a material impact on operations and no long-lived assets have become permanently impaired in value. -7- 8 Part II - Other Information Item 4 Submission of Matters to a Vote of Security Holders (a) The Annual Meeting of Shareholders was held April 19, 1996. (b) Proxies were solicited for the election of eight directors. There was no solicitation in opposition to management's nominees and all nominees were re-elected. As of the record date, February 29, 1996, the total number of votes represented by shares of Common Stock and Class B Common Stock was 6,827,357 votes. (c) 1. The Badger Meter, Inc. 1995 Stock Option Plan (as amended) ("Option Plan") was approved. The Option Plan provides for the grant of options representing up to an aggregate of 100,000 shares of Common Stock to approximately 250 employees eligible to participate in the Option Plan. The option price will not be less than 50% (100% in the case of Incentive Stock Options) of fair market value on the date of grant.
Votes Votes Votes Broker FOR AGAINST ABSTAIN Non-Votes --- ------- ------- --------- STOCK OPTION PLAN 6,351,608 48,184 8,743 131,941
(c) 2. The following table represents the aggregate votes related to the election of directors:
Votes Votes NAME FOR WITHHELD Not Voted - - ---- --- -------- --------- James L.Forbes 6,531,834 7,642 287,881 Robert M. Hoffer 6,530,634 8,842 287,881 Charles F. James, Jr. 6,530,834 8,642 287,881 Donald J. Schuenke 6,530,634 8,842 287,881 John J. Stollenwerk 6,531,884 7,592 287,881 Pamela B. Strobel 6,530,634 8,842 287,881 James O. Wright 6,531,834 7,642 287,881 James O. Wright, Jr. 6,531,834 7,642 287,881
(d) Not applicable. Item 6 Exhibits and Reports on Form 8-K (a) Exhibits: (10.0) The Badger Meter, Inc. 1995 Stock Option Plan (as amended) (11.0) Computation of fully diluted earnings per share (27.0) Financial Data Schedule (b) Reports on Form 8-K: There were no reports on Form 8-K filed for the three months ended June 30, 1996. -8- 9 SIGNATURE 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. BADGER METER, INC. ------------------ Dated: July 29, 1996 By /s/ Richard A. Meeusen ---------------------- Richard A. Meeusen Vice President - Finance and Treasurer Chief Financial Officer By /s/ William J. Shinners ----------------------- William J. Shinners Vice President - Controller -9- 10 EXHIBIT INDEX
Page Number (10.0) The Badger Meter, Inc. 1995 Stock Option Plan (as amended) 11 (11.0) Computation of fully diluted earnings per share 15 (27.0) Financial Data Schedule
-10- EX-10 2 THE BADGER METER STOCK PLAN 1 Exhibit (10.0) BADGER METER, INC. 1995 STOCK OPTION PLAN (AS AMENDED) 1. PURPOSE The purpose of the Badger Meter, Inc. 1995 Stock Option Plan as amended April 19, 1996 (the "Plan") is to promote the best interests of Badger Meter, Inc. (the "Company") and its shareholders by encouraging directors and key employees of the Company and its subsidiaries to secure or increase on reasonable terms their stock ownership in the Company. The Board of Directors of the Company believes the Plan will promote continuity of management, increased incentive and personal interest in the welfare of the Company by those who are primarily responsible for shaping and carrying out the long-range plans of the Company and its subsidiaries and securing their continued growth and financial success. It is intended that certain of the options issued under the Plan may constitute incentive stock options within the meaning of Section 422 of the Internal Revenue Code ("Incentive Stock Options") and the remainder of the options issued under the Plan will constitute non-qualified stock options ("Non-qualified Stock Options"). 2. EFFECTIVE DATE The Plan shall become effective on the date of adoption by the Board of Directors of the Company (the "Board"), subject to the approval and ratification of the Plan by the shareholders of the Company within twelve (12) months of the date of adoption by the Board, and all options granted prior to such shareholder approval shall be subject to such approval. 3. ADMINISTRATION (a) The Plan shall be administered by the Compensation Committee of the Board (the "Committee") as such Committee may be constituted from time to time. The Committee shall consist of not less than two members of the Board selected by the Board, each of whom shall be a "disinterested person" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 ("Exchange Act"), or any successor rule or regulation thereto. A majority of the members of the Committee shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by all of the members of the Committee shall be fully effective as if it had been made by a majority vote at a meeting duly called and held. (b) Subject to the express provisions of the Plan, the Committee shall have complete authority to select the key employees to whom options shall be granted, to determine the number of shares subject to each option, the time at which the option is to be granted, the type of option, the option period, the option price and the manner in which options become exercisable, and shall establish such other terms and conditions of the options as the Committee may deem necessary or desirable. In making such determinations, the Committee may take into account the nature of the services rendered by the respective employees, their present and potential contribution to the success of their respective organizations and such other factors as the Committee in its discretion shall deem relevant. Subject to the express provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to prescribe, amend and rescind the rules and regulations relating to it, and to make all other determinations necessary or advisable for the administration of the Plan. The determinations of the Committee on the matters referred to in this paragraph 3 shall be conclusive. 4. ELIGIBILITY Any non-employee director ("Director") or key employee ("Employee") of the Company or its present and future subsidiaries, as defined in Section 424(f) of the Internal Revenue Code ("Subsidiaries"), whose judgment, initiative and efforts contribute materially to the successful performance of the Company or its Subsidiaries, shall be eligible to receive options under the Plan. -11- 2 5. SHARES SUBJECT TO THE PLAN The shares which may be issued pursuant to options under the Plan shall be shares of the Company's Common Stock, $1.00 par value ("Stock"), and may be either authorized and unissued or treasury shares. The total number of shares for which options may be granted and which may be purchased pursuant to options under the Plan shall not exceed an aggregate of 100,000 shares, subject to adjustment as provided in the following sentence and in paragraph 12 hereof. If an option granted under the Plan expires, is canceled or terminates unexercised as to any shares of Stock subject thereto, or if shares of Stock are used to satisfy the Company's withholding tax obligations, such shares shall again be available for the granting of additional options under the Plan. 6. OPTION PRICE The option price per share of Stock shall be fixed by the Committee, but shall be not less than 50% (100% in the case of Incentive Stock Options) of the fair market value of the Stock on the date the option is granted. Unless otherwise determined by the Committee, the "fair market value" of Stock on the date of grant shall be the closing price for a share of Stock on such date, or, if such date is not a trading date, the next preceding trading date as quoted on the American Stock Exchange Transaction Reporting System. 7. GRANT OF OPTIONS (a) Subject to the terms and conditions of the Plan, the Committee may, from time to time, grant to Employees options to purchase such number of shares of Stock and on such terms and conditions as the Committee may determine. More than one option may be granted to the same Employee. The day on which the Committee approves the granting of an option shall be considered as the date on which such option is granted. (b) Notwithstanding the foregoing, each Director of the Company who is not an employee of the Company or any subsidiary or affiliate thereof, and who first became or becomes a Director after April 23, 1993, shall, upon approval of the Plan by the shareholders of the Company, or at the time of their first election to the Board, subject to adjustments as provided in paragraph 12, automatically receive an option to purchase 3,000 shares of Stock on that date. Any date on which a Director receives an option shall be referred to as a "Grant Date". Such options shall be Non-qualified Stock Options with an expiration date ten (10) years after the Grant Date. The option price per share shall be the closing price for a share of Stock on the Grant Date, or if such day is not a trading day, the next preceding trading day as quoted on the American Stock Exchange Transaction Reporting System. (c) Notwithstanding the foregoing, each Director or future Director of the Company who is not an employee of the Company or any subsidiary or affiliate thereof shall upon approval of the Plan by the shareholders of the Company, or at the time of their first election to the Board, be entitled to receive an option to purchase 1,000 shares of Stock on that date in order to increase the Directors' stake in the future of the Company. Any date on which a Director receives an option shall be referred to as a Grant Date. Such options shall be Non-qualified Stock Options with an expiration date ten (10) years after the Grant Date. The option price per share shall be the closing price for a share of Stock on the Grant Date, or if such day is not a trading day, the next preceding trading day as quoted on the American Stock Exchange Transaction Reporting System. 8. OPTION PERIOD Except as set forth in paragraph 7, the Committee shall determine the expiration date of each option, but in the case of Incentive Stock Options such expiration date shall be not later than ten (10) years after the date such option is granted. -12- 3 9. MAXIMUM PER PARTICIPANT The aggregate fair market value (determined at the time the option is granted pursuant to paragraph 7) of the Stock with respect to which any Incentive Stock Options are exercisable for the first time by an Employee during any calendar year under the Plan or any other such plan of the Company or any Subsidiary shall not exceed $100,000. 10. EXERCISE OF OPTIONS An option 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 Company at its principal office 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 option price of the shares being purchased (a) in cash or its equivalent; or (b) with the consent of the Committee, by delivering to the Company shares of Stock (valued at their fair market value as of the date of exercise, as determined by the Committee consistent with the method of valuation set forth in paragraphs 6 and 7); or (c) with the consent of the Committee, by any combination of (a) and (b). 11. TRANSFERABILITY To the extent required in order to comply with Rule 16b-3 or unless otherwise determined by the Committee, no option shall be assignable or transferable by a Director or an Employee other than by will or the laws of descent and distribution, and may be exercised during the life of the Director or Employee only by the Director or Employee or his guardian or legal representative. 12. CAPITAL ADJUSTMENTS AFFECTING COMMON STOCK In the event of a capital adjustment resulting from a stock dividend, stock split, reorganization, recapitalization, merger, consolidation, combination or exchange of shares or the like, the number of shares of Stock subject to the Plan and the aggregate number and class of shares under option in outstanding option agreements shall be adjusted in a manner consistent with such capital adjustment; provided, however, that no such adjustment shall require the Company to sell any fractional shares. The determination of the Committee as to any adjustment shall be final. Notwithstanding the foregoing, options subject to grant or previously granted to Directors under the Plan at the time of any capital adjustments shall be subject only to such adjustments as shall be necessary to maintain the relative proportionate interest of each Director and preserve, without exceeding, the value of such options. 13. CORPORATE MERGERS AND OTHER CONSOLIDATIONS The Committee may also grant options having terms and provisions which vary from those specified in the Plan provided that any options granted pursuant to this paragraph are granted in substitution for, or in connection with the assumption of, existing options granted by another company and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a transaction involving a corporate merger, consolidation, acquisition or other reorganization to which the Company is a party. 14. OPTION AGREEMENTS All options granted under the Plan shall be evidenced by written agreement (which need not be identical) in such form as the Committee shall determine. Each option agreement shall specify whether the option granted thereunder is intended to constitute an Incentive Stock Option or a Non-qualified Stock Option. -13- 4 15. TRANSFER RESTRICTIONS Shares of Stock purchased under the Plan and held by any person who is an officer or Director of the Company, or who directly or indirectly controls the Company, may not be sold or otherwise disposed of except pursuant to an effective registration statement under the Securities Act of 1933 or except in a transaction which, in the opinion of counsel for the Company, is exempt from registration under such Act. The Committee may waive the foregoing restrictions in whole or in part in any particular case or cases, or may terminate such restrictions, whenever the Committee determines that such restrictions afford no substantial benefit to the Company. 16. AMENDMENT OF PLAN Shareholder approval of any amendment of the Plan shall 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 Internal Revenue Code of 1986, as amended, or any rules promulgated thereunder (in order to allow for Incentive Stock Options to be granted under the Plan); or (iii) the listing requirements of the American Stock Exchange or any principal securities exchange or market on which the Stock is then traded (in order to maintain the quotation or listing of the Stock thereon). The provisions of paragraphs 7(b) and 7(c) cannot be amended more than once every six (6) months other than to comport with changes in the Internal Revenue Code of 1986, as amended, the Employee Retirement Income Security Act of 1974, as amended, or the rules and regulations thereunder. 17. TERMINATION OF PLAN The Board shall have the right to suspend or terminate the Plan at any time; provided, however, that no Incentive Stock Options may be granted after the tenth (10th) anniversary of the effective date of the Plan as described in paragraph 2 hereof. Termination of the Plan shall not affect the rights of Employees or Directors under options previously granted to them, and all unexpired options shall continue in force and operation after termination of the Plan except as they may lapse or be terminated by their own terms and conditions. 18. TAX WITHHOLDING (a) The Company may deduct and withhold from any cash otherwise payable to an Employee such amount as may be required for the purpose of satisfying the Company's obligation to withhold federal, state or local taxes as the result of the exercise of an option. In the event the amount so withheld is insufficient for such purpose, the Company may require that the Employee pay to the Company upon its demand or otherwise make arrangements satisfactory to the Company for payment of such amount as may be requested by the Company in order to satisfy its obligation to withhold any such taxes. (b) With the consent of the Committee, an Employee may be permitted to satisfy the Company's withholding tax requirements by electing to have the Company withhold shares of Stock otherwise issuable to the Employee or to deliver to the Company shares of Stock having a fair market value on the date income is recognized pursuant to the exercise of an option equal to the amount required to be withheld. The election shall be made in writing and shall be made according to such rules and procedures as the Committee may determine, including, without limitation, such procedures as may be necessary to satisfy the requirements of Rule 16b-3. 19. RIGHTS AS A SHAREHOLDER A Director or an Employee shall have no rights as a shareholder with respect to any shares subject to any option until the date the options shall have been exercised, the shares shall have been fully paid and a stock certificate shall have been issued. -14- EX-11 3 COMPUTATION OF FULLY DILUTED EARNING PER SHARE 1 Exhibit (11.0) BADGER METER, INC. COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE (Dollars in thousands except per share amounts)
Three Months Ended Six Months Ended ------------------ ---------------- June 30, June 30, -------- -------- 1996 1995 1996 1995 ---- ---- ---- ---- (1) (2) (1) (2) PRIMARY - - ------- Shares - - ------ Average shares outstanding 1,769,489 1,754,092 1,765,138 1,752,792 Shares issuable upon exercise of stock options 55,232 37,277 58,722 32,589 --------- --------- --------- --------- Total 1,824,721 1,791,369 1,823,860 1,785,381 ========= ========= ========= ========= Earnings - - -------- Net earnings applicable to adjusted common shares $1,389 $1,051 $2,277 $1,908 ====== ====== ====== ====== Per share amounts - - ----------------- Net earnings per share $.76 $.59 $1.25 $1.07 ==== ==== ===== ===== FULLY DILUTED - - ------------- Shares - - ------ Average shares outstanding 1,769,489 1,754,092 1,765,138 1,752,792 Shares issuable upon exercise of stock options 55,494 37,277 62,932 32,835 --------- --------- --------- --------- Total 1,824,983 1,791,369 1,828,070 1,785,627 ========= ========= ========= ========= Earnings - - -------- Earnings applicable to adjusted common shares $1,389 $1,051 $2,277 $1,908 ====== ====== ====== ====== Per share amounts - - ----------------- Net earnings per share $.76 $.59 $1.25 $1.07 ==== ==== ===== ===== Percentage dilution (1) 3.0% 2.0% 3.4% 1.8% ==== ==== ==== ====
(1) In 1996, earnings per share for financial statement purposes includes Common Stock equivalents since dilution is 3%. (2) In 1995, earnings per share for financial statement purposes does not include Common Stock equivalents since dilution is less than 3%. -15- EX-27 4 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE COMPANY'S QUARTERLY REPORT ON FORM 10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10Q 1,000 6-MOS DEC-31-1996 JUN-30-1996 159 0 16,415 0 17,093 34,423 54,524 (37,065) 63,749 16,392 0 0 0 1,266 32,789 63,749 57,177 57,177 36,453 53,220 116 0 221 3,620 1,343 2,277 0 0 0 2,277 1.25 1.25
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