SCHEDULE 14A
Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]
Preliminary
Proxy Statement
[ ]
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X]
Definitive
Proxy Statement
[ ]
Definitive
Additional Materials
[ ]
Soliciting
Material Pursuant to § 240.14a-11(c) or § 240.14a-12
GEHL COMPANY
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the
appropriate box):
[X]
No
fee required.
[ ]
Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)
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of each class of securities to which transaction applies:
2)
Aggregate
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3)
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calculated and state how it was determined):
4)
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maximum aggregate value of transaction:
5)
Total
fee paid:
[ ]
Fee
paid previously with preliminary materials.
[ ]
Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
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Filed:
GEHL COMPANY
143 Water Street
West Bend, Wisconsin 53095
Notice of Annual Meeting of Shareholders
To Be Held April 22,
2005
To the Shareholders of
Gehl Company:
Notice
is hereby given that the annual meeting of shareholders of Gehl Company will be held at
the Cedar Theatre, located on the Cedar Lake Campus of Cedar Community, 5595 Highway Z,
West Bend, Wisconsin 53095, on Friday, April 22, 2005, at 3:00 P.M. (CDT), for the
following purposes:
1.
To
elect one director to hold office until the annual meeting of shareholders in
2007 and until his successor is duly elected and qualified and to elect
three directors to hold office until the annual meeting of shareholders in
2008 and until their successors are duly elected and qualified.
2.
To
consider the approval of the appointment of PricewaterhouseCoopers LLP as the
Company’s independent registered public accounting firm for fiscal
year 2005.
3.
To
transact such other business as may properly come before the meeting or any
adjournment or postponement thereof.
The
Board of Directors has fixed the close of business on February 28, 2005 as the record date
for the determination of shareholders entitled to notice of, and to vote at, the annual
meeting.
A
proxy for the meeting and a proxy statement are enclosed herewith.
A map
showing the location of the Cedar Theatre accompanies this notice and proxy statement.
Whether
or not you expect to attend the annual meeting, you are requested to vote your shares by
signing, dating and mailing the enclosed proxy card in the envelope provided, which is
postage-paid if mailed in the United States.
By Order of the Board of Directors
GEHL COMPANY
/s/ Michael J. Mulcahy
Michael J. Mulcahy
Secretary
West Bend, Wisconsin
March 7, 2005
GEHL COMPANY
143 WATER STREET
WEST BEND, WISCONSIN
53095
PROXY STATEMENT
FOR
ANNUAL MEETING OF
SHAREHOLDERS
To Be Held April 22,
2005
GENERAL INFORMATION
Annual Meeting and
Submission of Proxy
This
proxy statement and the accompanying proxy card are being furnished to shareholders by the
Board of Directors (the “Board”) of Gehl Company (the “Company” or
“Gehl”) beginning on or about March 7, 2005, in connection with a solicitation
of proxies by the Board for use at the Annual Meeting of Shareholders to be held on
Friday, April 22, 2005, at 3:00 P.M. (CDT), at the Cedar Theatre, located on the Cedar
Lake Campus of Cedar Community, 5595 Highway Z, West Bend, Wisconsin 53095, and at all
adjournments or postponements thereof (the “Annual Meeting”), for the purposes
set forth in the attached Notice of Annual Meeting of Shareholders. The Board has fixed
the close of business on February 28, 2005 as the record date for determining shareholders
entitled to notice of, and to vote at, the Annual Meeting. On that date, the Company had
outstanding and entitled to vote 6,644,632 shares of the Company’s Common Stock, $.10
par value per share (the “Common Stock”), each of which is entitled to one vote
per share.
Whether
or not you attend the Annual Meeting, your vote is important. Accordingly, regardless of
the number of shares of Common Stock you own, please vote by signing, dating and promptly
mailing the accompanying proxy card.
Voting Procedures
A
proxy, in the enclosed form, that is properly executed, duly returned to the Company and
not revoked, will be voted in accordance with the instructions contained therein. The
shares represented by executed but unmarked proxies will be voted FOR the persons
nominated by the Board for election as directors, FOR the approval of the appointment of
PricewaterhouseCoopers LLP as the independent registered public accounting firm for fiscal
year 2005, and on such other business or matters that may properly come before the Annual
Meeting in accordance with the best judgment of the persons named as proxies in the
enclosed form of proxy. Other than the election of directors and the approval of the
appointment of the Company’s independent registered public accounting firm, the Board
has no notice of any matters to be presented for action by the shareholders at the Annual
Meeting.
Execution
of a proxy given in response to this solicitation will not affect a shareholder’s
right to attend the Annual Meeting and to vote in person. Presence at the Annual Meeting
of a shareholder who has signed a proxy does not in itself revoke a proxy. Any shareholder
giving a proxy may revoke it at any time before it is voted by giving notice thereof to
the Company in writing or by submitting another duly executed proxy bearing a later date.
1
Matters to be Considered
at the Annual Meeting
At
the Annual Meeting, shareholders will consider and vote on (1) the election of one
director to hold office until the annual meeting of shareholders in 2007 and until his
successor is duly elected and qualified and the election of three directors to hold office
until the annual meeting of shareholders in 2008 and until their successors are duly
elected and qualified and (2) the approval of the appointment of PricewaterhouseCoopers
LLP as the Company’s independent registered public accounting firm for fiscal year
2005. The Board has, upon the recommendation of the Nominating and Corporate Governance
Committee of the Board, nominated Marcel-Claude Braud for election as a director of the
Company and Nicholas C. Babson, Thomas J. Boldt and Hans Neunteufel for re-election as
directors of the Company (collectively, the “Company Nominees”).
ELECTION OF DIRECTORS
The
Company’s By-laws provide that the directors shall be divided into three classes,
with staggered terms of three years each. At the Annual Meeting, the shareholders will
elect one director to hold office until the annual meeting of shareholders in 2007 and
until his successor is duly elected and qualified and three directors to hold office until
the annual meeting of shareholders in 2008 and until their successors are duly elected and
qualified. Unless shareholders otherwise specify, the shares represented by the proxies
received will be voted in favor of the election as directors of the Company Nominees. The
Board has no reason to believe that any of the Company Nominees will be unable or
unwilling to serve as a director if elected. However, in the event that any of the Company
Nominees should be unable to serve or for good cause will not serve, the shares
represented by proxies received will be voted for other nominees selected by the Board in
the exercise of its best judgment.
Directors
are elected by a plurality of the votes cast (assuming a quorum is present). A majority of
the votes entitled to be cast on the election of directors must be represented in person
or by proxy at the Annual Meeting in order for a quorum to be present. An abstention from
voting will be included in computing the number of shares present for purposes of
determining the presence of a quorum, but will not be considered in determining whether
each of the nominees has received a plurality of the votes cast at the Annual Meeting. A
broker or nominee voting shares registered in its name, or in the name of its nominee,
which are beneficially owned by another person and for which it has not received
instructions as to voting from the beneficial owner, will have the discretion to vote the
beneficial owner’s shares with respect to the election of directors.
The
following sets forth certain information, as of February 1, 2005, about each of the
Company Nominees for election at the Annual Meeting and each director of the Company whose
term will continue after the Annual Meeting.
Nominees for Election at
the Annual Meeting
Term expiring in 2007
Marcel-Claude Braud
, 52, has
served as President and Chief Executive Officer of the Manitou Group, which includes
Manitou BF S.A., since 1998. Mr. Braud held various management positions with various
subsidiaries of the Manitou Group prior to 1998. Mr. Braud is a nominee for election
as a director of the Company.
2
Terms expiring in 2008
Nicholas C. Babson,
58, is
President of Babson Holdings, Inc. (an investment management company). Prior to assuming
that position, Mr. Babson was Chairman of the Board, Chief Executive Officer and President
from 1984 and Chairman of the Board and Chief Executive Officer from 1996 of Babson Bros.
Co. (a global manufacturer and distributor of dairy equipment and consumable supplies)
until his retirement from that company in 1999. Mr. Babson has served as a director of the
Company since 1999. Mr. Babson is also a director of CenterPoint Properties Trust (a
NYSE-listed real estate investment trust investing in industrial real estate primarily in
the Chicago area), a director of SunTx Capital Partners (a private equity investment firm
located in Dallas, Texas), a trustee and Chairman of the Farm Foundation (an association
of agricultural educators, economists and business leaders) and Chairman of the Board of
Regents of the University of the South, Sewanee, Tennessee.
Thomas J. Boldt,
52, has
served as Chief Executive Officer of The Boldt Company (a consulting service, program and
construction management, general construction and real estate development services firm)
since 2000. Mr. Boldt has served as a director of the Company since 1996. Mr. Boldt is
also a director of M&I Bank, Fox Valley (a national bank) and a director of Wisconsin
Manufacturers and Commerce (a business association promoting the improvement of the
economic climate of the State of Wisconsin), a trustee of the State of Wisconsin
Investment Board and a Regent of St. Olaf College.
Hans Neunteufel,
54, has
served as Chief Executive Officer of Neuson-Kramer Baumaschinen AG (a holding company
located in Linz-Leonding, Austria) since 2003. Mr. Neunteufel was Executive Vice President
of Neuson Baumaschinen GmbH (a holding company located in Linz-Leonding, Austria) from
1997 to 2003. Mr. Neunteufel has served as a director of the Company since July, 2004. Mr.
Neunteufel has also served as Managing Director of Neuson Hydraulik GmbH (producer of
hydraulic components in Linz, Austria) since 1981. Mr. Neunteufel is also a Member of the
Board of Sparkasse-Oberösterreich Bank AG (a bank located in Linz, Austria) and a
Member of the Board of Industriellenvereinigung Oberösterreich (an Upper Austrian
Manufacturers and Commerce Organization) and a Member of the Board of Rat für
Forschung und Technologie (a state organization for improvement of the economy of the
Upper Austrian country).
THE BOARD UNANIMOUSLY RECOMMENDS
THE FOREGOING COMPANY NOMINEES FOR ELECTION AS DIRECTORS AND URGES EACH SHAREHOLDER TO
VOTE “FOR” ALL COMPANY NOMINEES.
Directors Continuing in
Office
Terms expiring in 2006
John T. Byrnes
, 58, has served
as President and Executive Managing Director of Mason Wells, Inc. (a Milwaukee,
Wisconsin–based private equity investment firm) since May, 1998. Mr. Byrnes was
President and a director of M&I Capital Markets Group (the private equity arm of the
Marshall & Ilsley Corporation) from 1985 to 1998. Mr. Byrnes has served as a director
of the Company since 1999. Mr. Byrnes is also a director of the Medical College of
Wisconsin Research Foundation and a director of numerous private companies.
3
Richard J. Fotsch
, 49, has
served as President of the Global Power Group of Kohler Company (a manufacturer of engines
and generators distributed and rented worldwide) since February, 2004. Mr. Fotsch was
President of the Engine Group of Navistar International Corporation (the largest
U.S.-based truck and mid-range diesel engine manufacturer) from 2002 to 2004. Mr. Fotsch
had previously served in various management positions with Briggs & Stratton
Corporation (the world’s largest manufacturer of air-cooled gasoline engines for the
outdoor power equipment industry). Mr. Fotsch has served as a director of the Company
since 2000. Mr. Fotsch is a member of the Board of Trustees of Marquette University.
Dr. Hermann
Viets
, 62, has served as President and Chief Executive Officer of the
Milwaukee School of Engineering (a university located in Milwaukee, Wisconsin
focused primarily on engineering education) since 1991. Dr. Viets has served as
a director of the Company since 1999. Dr. Viets is also a director of Astro
Med, Inc. (an electronic equipment manufacturer), Public Policy Forum (an
independent reviewer of public policy issues) and Competitive Wisconsin, Inc.
(an association of business, education and labor leaders promoting the State of
Wisconsin) and is a member of the Greater Milwaukee Committee (an organization
of civic leaders promoting the economic development and social improvement of
the City of Milwaukee).
Terms expiring in 2007
William D. Gehl,
58, has
served as Chairman and Chief Executive Officer of the Company since April, 2003. Prior to
that time he had served as President and Chief Executive Officer of the Company since
November, 1992 and as Chairman of the Company since April, 1996. From January, 1990 until
joining the Company in 1992, Mr. Gehl was Executive Vice President, Chief Operating
Officer, General Counsel and Secretary of The Ziegler Companies, Inc. (a financial
services holding company). Mr. Gehl held various management positions with The Ziegler
Companies from 1978 to 1990. Mr. Gehl has served as a director of the Company since 1987.
Mr. Gehl is also a director and Chairman of the Board of Wisconsin Manufacturers and
Commerce (a business association promoting the improvement of the economic climate of the
State of Wisconsin), a director and past Chairman of the Board of the Association of
Equipment Manufacturers (a national trade association of agricultural and construction
equipment manufacturers), and a director of West Bend Savings Bank (a state financial
institution), Mason Wells, Inc., Milwaukee, Wisconsin (a private equity investment firm)
and ASTEC Industries, Inc., Chattanooga, Tennessee (a manufacturer of equipment for
aggregate processing, asphalt road building and pipeline and utility trenching). Mr. Gehl
is a member of the Florida and Wisconsin Bar Associations.
John W. Splude,
59, has served
as Chairman and Chief Executive Officer of HK Systems, Inc. (an integrator of material
handling systems and a provider of supply chain software solutions) since October, 1993.
Mr. Splude has served as a director of the Company since 1995. Mr. Splude is also a member
of the Material Handling Institute Roundtable (a trade association of material handling
equipment manufacturers), a director of U.S. Bank-Wisconsin, National Association (a
national bank), and Ladish Co., Inc. (an aerospace manufacturer), and a Regent of the
Milwaukee School of Engineering (a university located in Milwaukee, Wisconsin focused
primarily on engineering education). Mr. Splude serves on the Board of Directors of Big
Brothers / Big Sisters and on the Special Advisory Board of Notre Dame Middle School.
4
BOARD OF DIRECTORS
The
Company’s Board of Directors is currently comprised of eight members. The Board has
determined that the following directors are independent directors as defined under Nasdaq
Stock Market, Inc. (“Nasdaq”) rules: Nicholas C. Babson, Thomas J. Boldt, John
T. Byrnes, Richard J. Fotsch, John W. Splude and Hermann Viets. The Board has standing
Audit, Compensation, and Nominating and Corporate Governance Committees to assist it in
discharging its duties. Each of these committees has the responsibilities set forth in
written charters adopted by the Board. The Company makes available on its website located
at
www.gehl.com
copies of each of these charters free of charge. The Company is not
including the information contained on or available through its website as a part of, or
incorporating such information by reference into, this proxy statement. Each Committee is
comprised solely of independent directors.
The
Audit Committee appoints, retains and, when appropriate, terminates the Company’s
independent registered public accounting firm. The Audit Committee’s primary purpose
is to provide oversight regarding the accounting and financial reporting process, the
system of internal control, the audit process, and the Company’s process for
monitoring compliance with laws and regulations. The Audit Committee reviews the scope,
timing and results of the audit of the Company’s financial statements by the
Company’s independent registered public accounting firm and reviews with the
independent registered public accounting firm management’s policies and procedures
with respect to auditing and accounting controls. The Audit Committee also reviews and
evaluates the independence of the Company’s independent registered public accounting
firm and approves services rendered by such auditors. Messrs. Babson, Boldt, Byrnes and
Splude (Chairman) are members of the Audit Committee. The Audit Committee held four
meetings in 2004. Each member of the Audit Committee meets the audit committee member
independence requirements of the Nasdaq rules and is independent under the rules of the
Securities and Exchange Commission. The Board has determined that John W. Splude qualifies
as an “audit committee financial expert,” as defined in the rules of the
Securities and Exchange Commission.
The
Compensation Committee determines (subject to Board approval for officers other than the
Company’s Chief Executive Officer) compensation levels for the Company’s
executive officers, reviews management’s recommendations as to the compensation to be
paid to other key personnel and administers the Company’s equity-based incentive
compensation plans. Messrs. Babson (Chairman), Boldt, Splude and Viets are members of the
Compensation Committee. The Compensation Committee held three meetings in 2004.
The
functions of the Nominating and Corporate Governance Committee include recommending those
persons to be nominated by the Board for election as directors of the Company and
recommending persons to fill vacancies on the Board. In addition, the Nominating and
Corporate Governance Committee oversees the governance procedures of the Company. The
members of the Nominating and Corporate Governance Committee are Messrs. Byrnes, Fotsch
and Viets (Chairman), each of whom meets the nominating committee independence
requirements of the Nasdaq rules. The Nominating and Corporate Governance Committee held
two meetings in 2004. The Nominating and Corporate Governance Committee will consider
nominees recommended by shareholders. Recommendations for consideration by the Nominating
and Corporate Governance Committee should be sent to the Chairman of the Board of the
Company and the Chairman of the Nominating and Corporate Governance Committee in writing
together with appropriate biographical information concerning each proposed nominee. The
Company’s By-laws set forth certain requirements for shareholders wishing to nominate
director candidates for consideration by shareholders. With respect to an election of
directors to be held at an annual meeting, a shareholder must, among other things, give
written notice of an intent to make such a nomination to the Secretary of the Company in
advance of the meeting in compliance with the terms and within the time period specified
in the By-laws.
5
Nominations of Directors
The
Nominating and Corporate Governance Committee recommends to the full Board the director
nominees to stand for election at the Company’s annual meetings of shareholders and
to fill vacancies occurring on the Board.
In
making recommendations to the Board of nominees to serve as directors, the Nominating and
Corporate Governance Committee will examine each director nominee on a case-by-case basis
regardless of who recommended the nominee and take into account all factors it considers
appropriate, which may include those set forth in the Company’s corporate governance
guidelines. However, the Board believes the following minimum qualifications must be met
by a director nominee to be recommended by the Nominating and Corporate Governance
Committee:
•
Each
director must display high personal and professional ethics, integrity and values.
•
Each
director must have the ability to exercise sound business judgment.
•
Each
director must be highly accomplished in his or her respective field, with broad
experience at the administrative and/or policy-making level in business, government,
education, technology or public interest.
•
Each
director must have relevant expertise and experience, and be able to offer advice and
guidance based on that expertise and experience.
•
Each
director must be independent of any particular constituency, be able to represent all
shareholders of the Company and be committed to enhancing long-term shareholder value.
•
Each
director must have sufficient time available to devote to activities of the Board and to
enhance his or her knowledge of the Company’s business.
The Board also believes the following
qualities or skills are necessary for one or more directors to possess:
•
One
or more of the directors generally should be active or former chief executive officers of
public or private companies or leaders of major complex organizations, including
commercial, scientific, government, educational and other similar institutions.
•
Directors
should be selected so that the Board is a diverse body.
Communications with
Board of Directors
Shareholders
may communicate with the full Board, or individual directors, by submitting such
communications in writing to Gehl Company, Attention: Board of Directors (or the
individual director(s)), 143 Water Street, West Bend, WI 53095. Such communications will
be delivered directly to the director or directors to whom the correspondence is
addressed.
6
Compensation of Directors
Directors
who are officers or employees of the Company receive no compensation as such for service
as members of the Board or committees thereof. Each of the non-employee directors receive
an annual retainer fee of $20,000. In addition, the Chairman of the Audit Committee
receives a $5,000 annual retainer fee, and the Chairman of the Compensation Committee
receives a $3,000 annual retainer fee. Each non-employee director receives a fee of $1,250
for each Board meeting attended and a fee for each committee meeting attended according to
the following schedule:
Committee
Chairman
Member
Audit
$
2,500
$
1,500
Compensation
$
1,500
$
1,000
Nominating and Corporate Governance
$
1,000
$
750
In
addition to the compensation described above, and in accordance with the terms of the Gehl
Company 2004 Equity Incentive Plan (the “2004 Plan”), each of the non-employee
directors on April 26, 2004 (the next business day after the 2004 annual meeting),
automatically received options to purchase 2,000 shares of Common Stock at a per share
exercise price of $17.30. Under the 2004 Plan, each non-employee director (if he continues
to serve in such capacity) will, on the day after the annual meeting of shareholders in
each year, automatically be granted options to purchase 2,000 shares of Common Stock.
Options granted to non-employee directors under the 2004 Plan have a per share exercise
price equal to 100% of the market value of a share of Common Stock on the date of grant
and become exercisable ratably over the three-year period following the date of grant,
except that if the non-employee director ceases to be a director by reason of death,
disability or retirement within three years after the date of grant or in the event of a
“change of control of the Company” (as defined in the 2004 Plan) within three
years after the date of grant, then the option will become immediately exercisable in
full. Options granted to non-employee directors 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.
Meetings
The
Board held six meetings in 2004. Each director, except for Mr. Neunteufel (who became a
director in July, 2004), attended at least 75% of the aggregate of (i) the total number of
meetings of the Board and (ii) the total number of meetings held by all committees of the
Board on which he served during 2004. Directors are expected to attend each annual meeting
of the shareholders of the Company. All of the Company’s then current Directors
attended the 2004 annual meeting of shareholders.
7
PRINCIPAL SHAREHOLDERS
Directors and Management
The
following table sets forth certain information, as of February 11, 2005, regarding
beneficial ownership of Common Stock by each director, Company Nominee, each of the
executive officers named in the Summary Compensation Table set forth below and all
directors, Company Nominees and executive officers as a group. Except as otherwise
indicated in the footnotes, all of the persons listed below have sole voting and
investment power over the shares of Common Stock identified as beneficially owned.
Name of Individual or Number in Group
Shares of Common
Stock Beneficially
Owned(1)(2)
Percent
of Class
William D. Gehl
277,230
4.0
%
Nicholas C. Babson
11,009
*
Thomas J. Boldt
17,624
*
Marcel-Claude Braud
0
(3)
*
John T. Byrnes
12,856
*
Richard J. Fotsch
9,842
*
Hans Neunteufel
108
(4)
*
John W. Splude
16,924
*
Hermann Viets
12,009
*
Malcolm F. Moore
82,467
1.2
%
Daniel M. Keyes
13,019
*
Michael J. Mulcahy
34,174
*
Thomas M. Rettler
5,660
*
Kenneth P. Hahn
24
(5)
*
All directors, nominees and executive
officers as group (15 persons)
507,120
7.2
%
*
The
amount shown is less than 1% of the outstanding shares.
(1)
Total
shares of Common Stock outstanding as of February 11, 2005 were 6,635,947.
(2)
Includes
shares subject to exercisable options as of February 11, 2005, and options
exercisable within 60 days of such date, as follows: Mr. Gehl, 231,000
shares; Mr. Babson, 7,999 shares; Mr. Boldt, 9,999 shares; Mr. Byrnes,
5,999 shares; Mr. Fotsch, 5,999 shares; Mr. Splude, 13,999 shares;
Dr. Viets, 7,999 shares; Mr. Moore, 74,667 shares; Mr. Keyes, 10,999
shares; Mr. Mulcahy, 25,166 shares; and all directors, Company Nominees
and executive officers as a group, 407,492 shares.
(3)
Manitou
BF S.A. owns 961,768 shares of Common Stock. See “Principal
Shareholders – Other Beneficial Owners.” Mr. Braud is President
and Chief Executive Officer of the Manitou Group, the parent company of
Manitou BF S.A.
(4)
Neuson
Kramer Baumaschinen AG and certain affiliated entities beneficially own
767,349 shares of Common Stock. See “Principal Shareholders – Other
Beneficial Owners.” Mr. Neunteufel is a director and a trustee of the
affiliated entities.
(5)
Mr.
Hahn resigned as Vice President of Finance and Chief Financial Officer of
the Company on August 20, 2004.
8
Other Beneficial Owners
The
following table sets forth certain information regarding beneficial ownership by the only
other persons known to the Company to own more than 5% of the outstanding Common Stock.
The beneficial ownership information set forth below has been reported in filings made by
the beneficial owners with the Securities and Exchange Commission.
Amount and Nature of Beneficial Ownership
Name and Address of
Voting Power
Investment Power
Percent
Beneficial Owner
Sole
Shared
Sole
Shared
Aggregate
of Class
Manitou BF S.A
21 430 Route l'Aubiniere
BP 249
Ancenis Cedex
France
961,768
-0-
961,768
-0-
961,768
14.5
%
Neuson Kramer
Baumaschinen AG
Haidfeldstrasse 37
4060 Leonding, Austria
767,349
-0-
767,349
-0-
767,349
11.6
%
FMR Corporation
82 Devonshire Street
Boston, MA 02109
-0-
-0-
635,000
-0-
635,000
9.6
%
Dimensional Fund Advisors Inc.
1299 Ocean Avenue
Santa Monica, CA 90401
488,234
-0-
488,234
-0-
488,234
7.4
%
9
EXECUTIVE COMPENSATION
Summary Compensation
Information
The
following table sets forth certain information regarding compensation awarded to, earned
by or paid to the Company’s Chief Executive Officer and each of certain executive
officers of the Company. The executive officers named in the table below are sometimes
referred to herein as the “named executive officers.”
Annual Compensation
Long Term Compensation Awards
Name and Principal Position
Year
Salary
($)
Bonus
($)(a)
Restricted
Stock
Awards (b)
Securities
Underlying
Options
All Other
Compensation
($)
William D. Gehl
2004
432,300
379,579
299,400
36,000
17,929
(c)
Chairman and Chief
2003
393,000
50,835
30,000
17,467
Executive Officer
2002
393,000
281,250
30,000
16,967
Malcolm F. Moore
2004
322,269
248,147
169,660
24,500
15,407
(d)
President and
2003
294,000
45,423
24,000
14,426
Chief Operating Officer
2002
293,462
210,000
20,000
14,141
Thomas M. Rettler
2004
80,096
44,854
106,617
17,350
838
(f)
Vice President and Chief
Financial Officer
Daniel M. Keyes
2004
167,168
83,083
45,534
6,800
9,430
(g)
Vice President Sales and
2003
158,346
16,470
5,000
8,968
Marketing
2002
154,327
112,500
4,000
8,868
Michael J. Mulcahy
2004
128,450
62,916
0
2,000
8,600
(h)
Vice President, Secretary
2003
124,800
11,007
2,000
8,219
and General Counsel
2002
124,800
93,600
3,000
8,600
Kenneth P. Hahn
2004
166,530
101,262
0
0
5,900
(j)
2003
183,000
18,190
2,000
10,209
2002
182,692
131,250
4,000
10,219
(a)
The
amounts shown in this column for 2004 relate to bonuses earned by the named
executive officers pursuant to the Company’s 2004 Incentive Bonus Plan.
The 2004 Incentive Bonus Plan was approved by the Board of Directors and is
focused on both net income and operating asset return. The amounts shown in
this column for 2002 relate to one-time retention bonuses paid to the named
executive officers. The retention bonus arrangement was approved by the Board
of Directors in conjunction with the Company’s strategic review process
undertaken in 2001. To be eligible to receive a bonus, the officer was required
to remain in the employ of the Company during the strategic review process and
through March 31, 2002.
10
(b)
The
amounts shown in this column represent the market value of the restricted stock
based upon the closing price of the Common Stock on the restricted stock grant
date. Restricted stock awarded under the 2004 Plan generally will be subject to
a three year restriction period (except for restricted stock awarded to Mr.
Rettler upon his joining the Company, which has a five year restriction
period).
(c)
Includes
for 2004 (i) $2,610 in life insurance premiums paid by the Company, (ii) $8,919
in long-term disability insurance premiums paid by the Company, (iii) $6,419 in
extended care insurance premiums paid by the Company, and (iv) a matching
contribution of $6,400 under the Gehl Savings Plan, a 401(k) Plan.
(d)
Includes
for 2004 (i) $2,252 in life insurance premiums paid by the Company, (ii) $6,657
in long-term disability insurance premiums paid by the Company and (iii) a
matching contribution of $6,468 under the Gehl Savings Plan, a 401(k) Plan.
(e)
Mr.
Rettler became Vice President and Chief Financial Officer of the Company on
August 23, 2004.
(f)
Includes
for 2004 (i) $590 in life insurance premiums paid by the Company and (ii) $248
in long-term disability insurance premiums paid by the Company.
(g)
Includes
for 2004 (i) $1,166 in life insurance premiums paid by the Company, (ii) $3,141
in long-term disability insurance premiums paid by the Company and (iii) a
matching contribution of $5,123 under the Gehl Savings Plan, a 401(k) Plan.
(h)
Includes
for 2004 (i) $898 in life insurance premiums paid by the Company, (ii) $3,667
in long-term disability insurance premiums paid by the Company and (iii) a
matching contribution of $4,035 under the Gehl Savings Plan, a 401(k) Plan.
(i)
Mr.
Hahn resigned as Vice President of Finance and Chief Financial Officer of the
Company on August 20, 2004. In connection with his resignation, Mr. Hahn
received a severance payment of $43,498, which is reflected in the
“Bonus” column above.
(j)
Includes
for 2004 (i) $888 in life insurance premiums paid by the Company, (ii) $558 in
long-term disability insurance premiums paid by the Company and (iii) a
matching contribution of $4,454 under the Gehl Savings Plan, a 401 (k) Plan.
11
Stock Options
The
Company has in effect equity-based incentive plans pursuant to which options to purchase
Common Stock may be granted to key employees (including executive officers) of the Company
and its subsidiaries. The following table presents certain information as to grants of
stock options made during fiscal 2004 to each of the named executive officers.
Option Grants in 2004
Fiscal Year
Individual Grants
Potential Realizable
Value At Assumed Annual
Rates of Stock Price
Appreciation for Option
Term(2)
Name
Number of
Securities
Underlying
Options
Granted (#)(1)
Percent of
Total Options
Granted to
Employees in
Fiscal Year
Exercise
or Base
Price
($/share)
Expiration
Date
At 5%
Annual
Growth Rate
At 10%
Annual
Growth Rate
William D. Gehl
36,000
36.9
%
$
24.95
12/15/14
$
564,840
$
1,431,360
Malcolm F. Moore
24,500
25.1
%
$
24.95
12/15/14
$
384,405
$
974,120
Daniel M. Keyes
6,800
7.0
%
$
24.95
12/15/14
$
106,692
$
270,368
Michael J. Mulcahy
2,000
2.0
%
$
24.95
12/15/14
$
31,380
$
79,520
Thomas M. Rettler
15,000
$
18.03
08/22/14
$
170,100
$
430,950
2,350
17.8
%
$
24.95
12/15/14
$
36,871
$
93,436
Kenneth P. Hahn
0
0
--
--
0
0
(1)
The
options reflected in the table for each of the named executive officers (which
are non-qualified options for purposes of the Internal Revenue Code) vest
ratably over the three-year period from the date of grant. Vesting of the
options will be accelerated in the event of the optionee’s death or
disability or in the event of a change in control of the Company.
(2)
This
presentation is intended to disclose a potential value which would accrue to
the optionee if the option were exercised the day before it would expire and if
the per share value had appreciated at the compounded annual rate indicated in
each column. The assumed rates of appreciation of 5% and 10% are prescribed by
the rules of the Securities and Exchange Commission regarding disclosure of
executive compensation. The assumed annual rates of appreciation are not
intended to forecast possible future appreciation, if any, with respect to the
price of the Common Stock.
12
The
following table sets forth information regarding the exercise of stock options by each of
the named executive officers during the 2004 fiscal year and the fiscal year-end value of
unexercised options held by the named executive officers.
Aggregated Option
Exercises in 2004 Fiscal Year
And
Fiscal Year-End
Option Values
Shares
Acquired
on
Value
Realized
Number of Securities Underlying
Unexercised Options
at Fiscal Year-End
Value of Unexercised
In-the-Money Options
at Fiscal Year-End($)(1)
Name
Exercise
($)(1)
Exercisable
Unexercisable
Exercisable
Unexercisable
William D. Gehl
60,000
$
531,675
231,000
66,000
$
2,063,030
$
340,000
Malcolm F. Moore
10,000
$
52,966
74,667
47,167
$
491,072
$
252,672
Daniel M. Keyes
13,333
$
82,027
10,999
11,468
$
103,092
$
51,580
Michael J. Mulcahy
7,000
$
63,965
25,166
4,334
$
236,343
$
27,507
Thomas M. Rettler
0
0
0
17,350
0
$
79,650
Kenneth P. Hahn
65,166
$
273,995
0
0
0
0
(1)
The
dollar values are calculated by determining the difference between the fair
market value of the underlying Common Stock and the exercise price of the
options at exercise or fiscal year-end, as the case may be.
Retirement Plan
The
Company maintains a defined benefit pension plan (the “Retirement Plan”) to
provide retirement benefits to certain employees, including the named executive officers.
The following table estimates various annual benefits payable at age 65 to participants
with the years of service and average compensation levels set forth below:
Estimated Annual Benefits Payable at Age 65
For Indicated Years of Credited Service
Final Annual Average
Compensation
5 Years
10 Years
15 Years
20 Years
25 Years
35+ Years
$ 75,000
$
3,750
$
7,500
$
11,250
$
15,000
$
18,750
$
26,250
100,000
5,000
10,000
15,000
20,000
25,000
35,000
130,000
6,500
13,000
19,500
26,000
32,500
45,500
170,000
8,500
17,000
25,500
34,000
42,500
59,500
205,000
10,250
20,500
30,750
41,000
51,250
71,750
A
participant may elect one of several single life or joint and survivor annuity payment
options which provide monthly retirement benefits calculated on an actuarial basis.
Benefits under the Retirement Plan are not reduced by a participant’s Social Security
benefits. The Retirement Plan provides for reduced early retirement and pre-retirement
death benefits.
13
Compensation
covered by the Retirement Plan for each of the named executive officers is such
person’s salary as shown in the Summary Compensation Table subject to the maximum
provided in the Internal Revenue Code. The maximum was $205,000 for 2004. The number of
years of credited service as of December 31, 2004 that will be recognized for Messrs.
Gehl, Moore, Keyes, Mulcahy and Rettler is 12.2 years, 5.3 years, 4.1 years and 29.6 years
and .4 years respectively.
Supplemental Retirement
Benefit Agreements
The
Company has entered into a supplemental retirement benefit agreement under which
Mr. Gehl will receive a monthly retirement benefit for fifteen years. Under the
agreement, the monthly benefit to be received by Mr. Gehl is computed by multiplying the
percentage by which benefits have vested by an amount equal to 60% of average monthly
compensation computed by reference to the highest base salary and cash bonus earned for
any five calendar years within the last ten completed calendar years of service preceding
termination, less any amounts Mr. Gehl would be entitled to receive under the Retirement
Plan or pursuant to Social Security. The agreement provides for a pre-retirement death
benefit consisting of ten annual payments in the amount of 40% of the average annual
compensation computed by reference to the five highest annual base salaries and cash
bonuses earned within the last ten calendar years preceding the date of death. Benefits
vest under the agreement at a rate of 10% per year for the first four years of service
with the Company and are deemed to be fully vested after five years. Mr. Gehl is
fully vested under his agreement. In the event of a “change of control” of the
Company, the present value of the benefit is payable in a lump sum. The supplemental
retirement benefit agreement also contains a covenant not to compete that covers Mr. Gehl
for a two-year period following his termination of employment. Failure to comply with such
provision will result in a forfeiture of benefits under the agreement.
The
Company has also entered into supplemental retirement benefit agreements under which
Messrs. Moore, Keyes, Mulcahy and Rettler will receive a monthly retirement benefit for
fifteen years. Under the agreements, the monthly benefit to be received by each of Messrs.
Moore, Keyes, Mulcahy and Rettler is computed by multiplying a vesting percentage by the
product of (i) the average monthly compensation computed by reference to the highest base
salary and cash bonus earned by the executive for any five calendar years within the last
ten completed calendar years of service preceding termination and (ii) for Mr. Moore: 50%;
for Mr. Rettler: 40%; and for Messrs. Keyes and Mulcahy: 30%. The supplemental retirement
benefit agreements provide for a pre-retirement death benefit consisting of five annual
payments in the amount of 40% of the average annual salary computed by reference to the
highest base salaries and cash bonuses earned during a consecutive five-year period
preceding the date of death. Benefits vest under the supplemental retirement benefit
agreement at a rate of 10% per year for the first four years following execution and are
deemed to be fully vested after five years. In the event there is a “change in
control” of the Company as defined in the supplemental retirement benefit agreement,
benefits become 100% vested and the present value of each benefit is payable in a lump
sum. As of December 31, 2004, Mr. Keyes had 4.1 years of credited service, Mr. Rettler had
.4 years of credited service and Messrs. Moore and Mulcahy were fully vested under their
respective supplemental retirement benefit agreements. The supplemental retirement benefit
agreements also contain a covenant not to compete which covers Messrs. Moore, Keyes,
Mulcahy and Rettler for a two-year period following termination of employment. Failure to
comply with such provisions will result in a forfeiture of benefits under the agreements.
14
Assuming
full vesting, the estimated annual benefits payable to Messrs. Gehl, Moore, Keyes, Mulcahy
and Rettler under the supplemental retirement benefit agreements based upon their current
compensation would be $487,128 (less any amounts Mr. Gehl would be entitled to receive
under the Retirement Plan or pursuant to Social Security), $285,204 (less any amounts Mr.
Moore would be entitled to receive under the Retirement Plan or pursuant to Social
Security), $75,072, $57,444 and $115,944, respectively.
Employment Agreement
The
Company has an employment agreement with Mr. Gehl pursuant to which Mr. Gehl is to serve
as the Chairman of the Board and Chief Executive Officer of the Company through June 14,
2008. During the term of his employment agreement, Mr. Gehl will be paid a minimum annual
base salary of $432,300. The base salary paid to Mr. Gehl under his employment agreement
is reviewed at least annually by the Board or a committee thereof and may be increased or
decreased at that time subject to the minimum base salary described above. Mr. Gehl’s
current base salary is $432,300.
If,
for any reason other than cause or Mr. Gehl’s death or disability and other than in
connection with a “change in control” of the Company (as defined in his
agreement), the employment of Mr. Gehl is terminated before the term of employment has
been completed, Mr. Gehl will be entitled to receive his base salary for two full years
from the date of termination as well as the opportunity to continue to participate in the
Company’s employee benefit plans for such period. Pursuant to his agreement, in the
event of a change in control of the Company, the term of Mr. Gehl’s employment will
automatically be extended to a date which is two years after the change in control. In
addition, upon the change in control, Mr. Gehl’s unvested stock options shall
immediately vest and any restrictions on any other benefits granted to Mr. Gehl shall
terminate and those benefits shall become immediately exercisable or payable, as the case
may be. If, during the two-year period following a change in control, the Company
terminates Mr. Gehl’s employment (other than for cause) or if Mr. Gehl terminates his
employment for “good reason” (as defined in the employment agreement), including
as a result of significant changes in his working conditions or status without his consent
or after his continued employment for six months following the change in control, then Mr.
Gehl will receive all accrued but unpaid benefits to the date of his termination plus a
lump-sum termination payment equal to three times the sum of his current base salary and
the highest bonus he earned during the preceding five years, the present value of his
benefits under his most current Supplemental Retirement Benefit Agreement and outplacement
services or, in lieu thereof, receive a lump sum cash payment of $15,000. Mr. Gehl’s
agreement also provides that he will receive family medical benefits for two years
following such termination. Mr. Gehl’s employment agreement also provides the
benefits described above in connection with certain terminations which are effected in
anticipation of a change in control. The foregoing termination payment and other benefits
may be reduced to the extent necessary to avoid an “excess parachute payment”
under the Internal Revenue Code, but only if such reduction would result in a greater
after-tax benefit to Mr. Gehl. Under the terms of his employment agreement, Mr. Gehl is
also eligible to receive, among other benefits, an annual cash bonus and certain life
insurance coverage. Under his employment agreement, Mr. Gehl is subject to a covenant not
to compete following termination of his employment with the Company.
15
Severance Agreements
The
Company has in effect severance agreements with each of Messrs. Moore, Keyes, Mulcahy, and
Rettler. Pursuant to the terms of their respective severance agreements, in the event of a
“change in control” of the Company (as defined in the agreements), Messrs.
Moore, Keyes, Mulcahy, and Rettler will be granted two-year employment terms with the
Company and will be entitled to such base salaries, bonus opportunities and other benefits
substantially equivalent to those to which they were entitled immediately prior to the
change in control. In addition, upon the change in control, their unvested stock options
will automatically vest and any restrictions on any other benefits granted to them shall
terminate and those benefits shall become fully vested. If, during the two-year employment
period following a change in control, the Company terminates the executive officer’s
employment (other than for cause) or if the officer terminates his employment for
“good reason” (as defined in the severance agreements), including as a result of
significant changes in the executive officer’s working conditions or status without
his consent, then the officer will receive all accrued but unpaid benefits to the date of
termination, family medical benefits for two years after such termination, a lump-sum
termination payment equal to two times the sum of his current base salary and the highest
bonus amount earned by each in any of the five (5) fiscal years preceding the year in
which the date of termination occurs (for Mr. Rettler, until the first full year bonus has
been earned, the bonus shall be based on the “targeted” amount of 40% of base
salary), the present value of his benefits under his most current Supplemental Retirement
Benefit Agreement with the Company and outplacement services or, in lieu thereof, receive
a lump sum cash payment of $15,000. The severance agreements also provide that the
benefits described above may be payable in connection with certain terminations which are
effected in anticipation of a change in control. In addition, the severance agreements
provide that, if the executive officer’s employment is involuntarily terminated by
the Company other than for cause or upon the officer’s death or disability and other
than in connection with a change in control, the officer will be entitled to receive his
base salary for one (1) full year from the date of termination and to participate in the
Company’s group health and welfare plans for one year after such termination.
The
foregoing termination and other benefits may be reduced to the extent necessary to avoid
an “excess parachute payment” under the Internal Revenue Code, but only if such
reduction would result in a greater after-tax benefit to the executive officer.
REPORT ON EXECUTIVE
COMPENSATION
This
Report on Executive Compensation describes the policies employed generally by the
Compensation Committee for the development of the Company’s executive compensation
program and the application of these policies to executive compensation during fiscal
2004. The members of the Compensation Committee during fiscal 2004 were
Messrs. Babson (Chairman), Boldt, Splude and Viets.
Function of the
Compensation Committee
The
Compensation Committee develops the compensation program for the Company’s executive
officers, including the grant of equity awards under the Company’s equity-based
plans. Final approval of the Company’s executive compensation package as recommended
by the Compensation Committee (other than the grant of equity awards under the
Company’s equity-based plans and the salary, bonus and other benefits of the
Company’s Chief Executive Officer, which grants, salary, bonus and benefits are at
the sole discretion of the Committee) is the responsibility of the Board. During fiscal
2004, the Board adopted the recommendations of the Compensation Committee without material
modification.
Executive Compensation
and Equity Incentive Policies
The
basic policy of the Compensation Committee is to provide a competitive compensation
program for executive officers sufficient to attract and retain those executive officers
considered crucial to the attainment of the Company’s long-term strategic goals,
including the enhancement of shareholder value. The compensation package for executive
officers consists of base salary, opportunities for cash bonuses and equity-based awards,
including both stock options and restricted stock, and participation in other employee
benefits plans offered by the Company.
In
determining salary levels for executive officers of the Company, the Compensation
Committee takes into consideration each individual’s level of expertise and
experience and his or her performance in the individual’s particular area of
responsibility during the past fiscal year as well as the overall financial performance of
the Company. The Committee did engage an outside compensation consultant in connection
with establishing salary, bonus and other benefit levels for the Company’s executive
officers for fiscal 2005.
16
In
addition to base salaries, the Company’s compensation package includes an opportunity
for key employees (including executive officers) to earn cash bonuses. The Company had in
effect the 2004 Incentive Compensation Plan for its executive officers and other key
managers that awarded annual variable cash payments based upon net income and the return
on assets. The Company’s 2004 Incentive Compensation Plan emphasized a net income
before taxes corporate performance target and a return on assets target, along with an
individual goals performance objective for each participant in the plan. Bonuses earned by
the named executive officers for 2004 performance under the 2004 Incentive Compensation
Plan are reflected in the “Bonus” column of the Summary Compensation Table.
To
provide an additional performance incentive for its executive officers and other key
management personnel, the Company’s executive compensation package includes stock
option and restricted stock grants. Under the Company’s 2004 Equity Incentive Plan,
the Compensation Committee also has the authority to grant, in addition to stock options,
and restricted stock, other equity-based awards, including stock appreciation rights, and
performance shares. The general purpose of the Company’s current equity-based plans
is consistent with the basic policy of the Company’s executive compensation program,
which is designed to promote the achievement of the long-range strategic goals of the
Company and to enhance shareholder value. Stock options granted by the Company have a per
share exercise price of 100% of the fair market value of a share of Common Stock on the
date of grant and, accordingly, the value of the option will be dependent on the future
market value of the Common Stock. Restricted stock awarded under the 2004 Equity Incentive
Plan generally will be subject to a three year restriction period; however, restricted
stock awarded to Mr. Rettler upon his joining the Company has a five year restriction
period. Consideration is given to the financial performance of the Company in determining
whether in the first instance to award stock options or restricted stock and in
determining the size of any award. In addition, consideration is given to the level of
responsibility of the individual executive officer within the Company, the performance of
such officer in his or her area of responsibility and the officer’s salary grade in
recommending the size of the awards. Although these factors are considered, no specific
weight is assigned to one factor as compared to the others in making an option award
determination. Options relating to an aggregate of 97,650 shares of Common Stock
(including an option for 36,000 shares granted to the Company’s Chief Executive
Officer) were awarded to the executive officers and other key management personnel in
2004. In addition, 28,485 shares of restricted Common Stock, including 12,000 shares
awarded to the Company Chief Executive Officer, were awarded to the executive officers and
other key management personnel in 2004.
In
addition to base salary, cash bonus opportunity and the potential for equity-based awards,
all executive officers of the Company are eligible to participate in the various employee
benefit plans offered to employees of the Company. The Company’s policy with respect
to these plans (including the Company’s retirement plan, savings plan and life
insurance program) is to provide competitive benefits to its employees, including
executive officers, to encourage their continued service with the Company and to attract
qualified individuals for available Company positions.
17
CEO Compensation
During
fiscal 2004, William D. Gehl, the Company’s Chief Executive Officer, was paid a
salary of $432,300. Mr. Gehl is party to an employment agreement with the Company
described under the heading “Executive Compensation-Employment Agreement.”
Pursuant to Mr. Gehl’s employment agreement, his base salary is subject to
review on at least an annual basis and may be increased or decreased as determined to be
appropriate, provided that Mr. Gehl’s annual base salary may not be decreased
below $432,300. In reviewing Mr. Gehl’s proposed employment agreement, the Committee
focused on three factors: the competitiveness of Mr. Gehl’s proposed compensation;
performance-related compensation issues; and the fairness and reasonableness of the
employment agreement. The Committee also considered a report from its compensation
consultant that concluded the proposed compensation package for Mr. Gehl was reasonable
and competitive based on their review of peer companies and industry trends. For fiscal
2004 performance, Mr. Gehl earned a cash bonus of $379,579 pursuant to the terms of the
Company’s 2004 Incentive Bonus Plan as described above. Based upon a comprehensive
review of the Company’s performance and on the factors described above, Mr. Gehl
received on December 16, 2004 an option to purchase 36,000 shares of Common Stock at
an exercise price of $24.95 per share and a restricted stock grant of 12,000 shares.
Deductibility of
Executive Compensation
Under
Section 162(m) of the Internal Revenue Code, a tax deduction by certain corporate
taxpayers, such as the Company, is limited with respect to the compensation of specified
executive officers unless such compensation is based upon performance objectives meeting
certain regulatory criteria or is otherwise excluded from the limitation. The Compensation
Committee intends that the compensation paid to the Company’s executive officers will
qualify for deductibility by the Company under Section 162(m).
COMPENSATION COMMITTEE
Nicholas C. Babson (Chairman)
Thomas J. Boldt
John W. Splude
Hermann Viets
18
PERFORMANCE INFORMATION
The
following graph compares the cumulative total return (change in stock price plus
reinvested dividends) of the Common Stock with the Standard & Poor’s 500
Composite Index and the Standard & Poor’s Small Cap Construction and Farm
Machinery Index. The graph assumes $100 was invested on December 31, 1999 in each of the
three alternatives, and that all dividends were reinvested.
Comparison of Five
Year Cumulative Market Performance
Among S&P 500 Index, S&P Small Cap Construction
and Farm Machinery Index, and the Company
(Assumes $100 invested
December 31, 1999 with dividends reinvested)
December 31,
1999
December 31,
2000
December 31,
2001
December 31,
2002
December 31,
2003
December 31,
2004
S&P Composite 500
$
100.00
$
88.73
$
77.16
$
59.13
$
74.73
$
82.76
S&P Small Cap Construction
and Farm Machinery Index
$
100.00
$
81.15
$
25.42
$
9.54
$
16.03
$
21.47
Gehl
$
100.00
$
117.04
$
89.40
$
96.88
$
56.70
$
151.82
19
AUDIT COMMITTEE REPORT
The
Audit Committee of the Board is composed of four directors and operates under a written
charter approved by the Board. Each member of the Audit Committee meets the audit
committee independence requirements of the Nasdaq rules and is independent under the rules
of the Securities and Exchange Commission.
Management
is responsible for the Company’s financial statements and the reporting process,
including the system of internal controls. The Company’s independent registered
public accounting firm is responsible for expressing an opinion on the conformity of the
audited financial statements with accounting principles generally accepted in the United
States of America. The Audit Committee’s responsibility is to monitor and oversee
this process.
In
discharging its oversight responsibility relative to the audit process, the Audit
Committee performed, among others, the following functions during fiscal year 2004:
•
Reviewed
and discussed with management the audited financial statements for the fiscal year
ended December 31, 2004;
•
Discussed
with the Company’s independent registered public accounting firm,
PricewaterhouseCoopers LLP, the matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees), as amended and supplemented; and
•
Received
the written disclosures and the letter from PricewaterhouseCoopers LLP required by
Independence Standards Board Standard No. 1 and discussed with PricewaterhouseCoopers LLP
its independence.
•
Reviewed
the Audit Committee Charter.
Based
on the review and discussions referred to above, the Audit Committee recommended to the
Board that the audited financial statements be included in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2004.
The
Audit Committee has concluded that the audit and permitted non-audit services rendered by
PricewaterhouseCoopers LLP’s described in “Approval of the Selection of the
Independent Registered Public Accounting Firm” is compatible with maintaining
PricewaterhouseCoopers LLP’s independence. The Audit Committee has established
pre-approval policies and procedures with respect to audit and permitted non-audit
services to be provided by its independent registered public accounting firm. Pursuant to
these policies and procedures, the Audit Committee may form, and delegate authority to,
subcommittees consisting of one or more members when appropriate to grant such
pre-approvals, provided that decisions of such subcommittee to grant pre-approvals are
presented to the full Audit Committee at its next scheduled meeting. The Audit
Committee’s pre-approval policies do not permit the delegation of the Audit
Committee’s responsibilities to management.
AUDIT COMMITTEE
John W. Splude (Chairman)
Nicholas C.
Babson
Thomas J. Boldt
John T. Byrnes
20
APPROVAL OF SELECTION
OF THE INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The
Board recommends the approval of the appointment of PricewaterhouseCoopers LLP as the
independent registered public accounting firm for fiscal year 2005.
PricewaterhouseCoopers
LLP acted as the independent registered public accounting firm for the Company for the
year ended December 31, 2004. Representatives of PricewaterhouseCoopers LLP are expected
to be present at the Annual Meeting with the opportunity to make a statement if they so
desire. Such representatives are also expected to be available to respond to appropriate
questions.
PricewaterhouseCoopers
LLP provided to the Company during fiscal years 2004 and 2003 the following professional
services:
2004
2003
Audit Fees(1)
$
494,600
$
219,000
Audit-Related Fees(2)
65,600
78,900
Tax Fees(3)
102,900
198,200
All Other Fees
0
0
Total
$
663,100
$
496,100
(1)
Audit
of annual financial statements and review of financial statements included
in Quarterly Reports on Form 10-Q.
(2)
Primarily
due diligence work, employee benefit plan audits and internal control
advisory services.
(3)
Tax
return preparation ($53,000 for 2004 and $75,300 for 2003, respectively) and
tax consultations.
The
affirmative vote of the holders of a majority of the shares of Common Stock represented
and voted at the Annual Meeting (assuming a quorum is present) is required to approve the
appointment of the independent registered public accounting firm. Any shares not voted at
the Annual Meeting (whether as a result of broker non-votes, abstentions or otherwise)
with respect to the approval of the appointment of the independent registered public
accounting firm will have no impact on the vote.
THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP AS THE GEHL COMPANY INDEPENDENT
REGISTERED PUBLIC
ACCOUNTING FIRM FOR FISCAL YEAR 2005.
21
OTHER MATTERS
Shareholder Proposals
Proposals
of shareholders pursuant to Rule 14a-8 under the Securities Exchange Act of 1934
(“Rule 14a-8”) that are intended to be presented at the 2006 annual meeting of
shareholders and included in the Company’s proxy materials for that meeting must be
received by the Company no later than November 7, 2005. Further, a shareholder who
otherwise intends to present business at the 2006 annual meeting must comply with the
requirements set forth in the Company’s By-laws. To bring business before an annual
meeting, a shareholder must, among other things, give written notice thereof, complying
with the By-laws, to the Secretary of the Company not less than 60 days and not more than
90 days prior to the last Thursday in the month of April, subject to certain exceptions if
the annual meeting is advanced or delayed a certain number of days. The 2006 annual
meeting of shareholders is tentatively scheduled to be held on April 21, 2006. Under the
By-laws, if the Company does not receive notice of a shareholder proposal submitted
otherwise than pursuant to Rule 14a-8 (
i.e.
, a proposal a shareholder intends to
present at the 2006 annual meeting of shareholders but does not intend to have included in
the Company’s proxy materials) on or prior to February 26, 2006 (assuming an April
21, 2006 meeting date), then the notice will be considered untimely and the Company will
not be required to present such proposal at the 2006 annual meeting. If the Board
nonetheless chooses to present such proposal at the 2006 annual meeting, then the persons
named in proxies solicited by the Board for the 2006 annual meeting may exercise
discretionary voting power with respect to such proposal.
Compliance with Section
16(a) Beneficial Ownership Reporting
Section
16(a) of the Securities and Exchange Act of 1934 requires the Company’s directors,
officers and any beneficial owner of greater than 10% of the Company’s Common Stock
to file reports with the Securities and Exchange Commission regarding their ownership of
Common Stock and any changes in such ownership. Based upon the Company’s review of
copies of these reports, the Company believes that during 2004 the directors, officers and
owners of greater than 10% of the Common Stock have complied with the Section 16(a) filing
requirements.
Certain Transactions
The
Company has an agreement with Neuson AG (“Neuson”), which through an affiliate,
Neuson Kramer Baumaschinen AG, owns more than 10% of the Common Stock of the Company,
pursuant to which Gehl distributes excavators and all-wheel-steer loaders manufactured by
Neuson and its affiliates under the Company’s “Gehl” and
“Mustang” brand names in North and South America. Pursuant to that agreement,
the Company purchased in 2004 excavators and all-wheel-steer loaders with an aggregate
purchase price of $13,463,772. The Company intends to continue to purchase excavators and
all-wheel-steer loaders from Neuson in the future. The terms of the distributor agreement
with Neuson and the related purchases were negotiated between the Company and Neuson on an
arms-length basis in 1999. Mr. Neunteufel, a director of the Company, is a director or
trustee of the Neuson companies.
The
Company has an agreement with Manitou BF S.A. (“Manitou”), which owns more than
10% of the Common Stock of the Company, pursuant to which each party will purchase certain
models of telehandlers manufactured by the other for distribution in the United States.
Pursuant to that agreement, the Company is expected to purchase from Manitou in 2005
telehandlers with an estimated aggregate wholesale value of approximately $5.3 million,
and the Company expects to sell to Manitou in 2005 telehandlers with an estimated
aggregate wholesale value of approximately $4.3 million. In addition, the Company has an
agreement with Manitou to manufacture certain models of telehandlers under a license and
manufacturing agreement with Manitou. It is expected that the Company will purchase from
Manitou kits and components for the manufacture of telehandlers in the latter part of
2005. Such purchases from Manitou are included in the estimated purchases from Manitou
described above. The terms of the distributor agreement with Manitou, and the related
purchases by each party and the terms of the licensing and manufacturing agreement were
negotiated between the Company and Manitou on an arms-length basis in 2004. Mr. Braud, a
nominee for election as a director of the Company, is President and Chief Executive
Officer of the Manitou Group, which includes Manitou BF S.A. Pursuant to an agreement with
Manitou, the Company has agreed to use reasonable efforts to nominate Mr. Braud for
election as a director of the Company.
22
Solicitation of Proxies
Proxies
may be solicited by mail, advertisement, telephone or other methods and in person.
Solicitations may be made by directors, officers, investor relations personnel and other
employees of the Company, none of whom will receive additional compensation for such
solicitations.
All
expenses of solicitation of proxies will be borne by the Company.
Delivery of Proxy
Materials to Households
Pursuant
to the rules of the Securities and Exchange Commission, services that deliver the
Company’s communications to shareholders that hold their stock through a bank, broker
or other holder of record may deliver to multiple shareholders sharing the same address a
single copy of the Company’s annual report to shareholders and this proxy statement.
Upon written or oral request, the Company will promptly deliver a separate copy of the
annual report to shareholders and/or this proxy statement to any shareholder at a shared
address to which a single copy of each document was delivered. Shareholders may notify the
Company of their requests by calling or by sending a written request addressed to Gehl
Company, Attention: Secretary, 143 Water Street, West Bend, Wisconsin 53095.
By Order of the Board of Directors
GEHL COMPANY
/s/ Michael J. Mulcahy
Michael J. Mulcahy
Secretary
March 7, 2005
23
PROXY
GEHL COMPANY
This Proxy is
Solicited on Behalf of the Board of Directors
Proxy for 2005 Annual
Meeting of Shareholders to be held April 22, 2005
The
undersigned hereby appoints William D. Gehl and Michael J. Mulcahy, or either of them
(with full power of substitution in each of them), as Proxies, and hereby authorizes them
to represent and to vote as designated below all of the shares of Common Stock of Gehl
Company held of record by the undersigned on February 28, 2005, at the annual meeting of
shareholders to be held on April 22, 2005, or any adjournments or postponements thereof.
This
proxy when properly executed will be voted in the manner directed herein by the
undersigned shareholder. If no direction is made, this proxy will be voted “FOR”
the election of the Board’s nominees and “FOR” the approval of the
appointment of PricewaterhouseCoopers LLP as the Company’s independent registered
public accounting firm for fiscal year 2005.
The
undersigned hereby revokes any other proxy heretofore executed by the undersigned for the
meeting and acknowledges receipt of notice of the annual meeting and the proxy statement.
(Continued and to be
signed on the reverse side)
ANNUAL MEETING OF
SHAREHOLDERS OF
GEHL COMPANY
April 22, 2005
Please date, sign and
mail your proxy card
in the envelope provided as soon as possible.
|
V
Please
detach along perforated line and mail in the envelope provided.
|
V
THE BOARD OF
DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS AND
A VOTE “FOR” THE
APPROVAL OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL
YEAR 2005. PLEASE SIGN, DATE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS
SHOWNHERE |X|
1.
The four (4) directors nominated for election are:
2. Approval of the appointment of
PricewaterhouseCoopers LLP as the Company's
independent registered public accounting firm
[ ]
FOR ALL NOMINEES
NOMINEES:
for fiscal year 2005.
[ ]
[ ]
WITHHOLD AUTHORITY
FOR ALL NOMINEES
FOR ALL EXCEPT
(See instructions below)
o Marcel - Claude Braud
o Nicholas C. Babson
o Thomas J. Boldt
o Hans Neunteufel
For a term ending in 2007
For a term ending in 2008
For a term ending in 2008
For a term ending in 2008
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
In their discretion, the proxies are
authorized to vote upon such other business
as may properly come before the meeting.
INSTRUCTION
: To withhold
authority to vote for any individual nominee(s),
mark “FOR ALL EXCEPT” and fill
in the circle next to each nominee you wish
to withhold, as shown here:
•
To change the address on your
account, please check the box at right and indicate your new address in the address space
above. Please note that changes to the registered name(s) on the account may not be
submitted via this method.
[ ]
Signature of Shareholder
Date:
Signature of Shareholder
Date:
Note: Please sign exactly as your
name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full
title as such. If the signer is a corporation, please sign full corporate name by duly
authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
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