-----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, TPr8ttuVXqXBCtIGDVKEEoA4B0tWbEdiUIBvJRhqOnl9VhYpyXz4XnGqsgJNvg41 tziOSU+OHVBM63XfbrkSBw== 0000897069-00-000253.txt : 20000427 0000897069-00-000253.hdr.sgml : 20000427 ACCESSION NUMBER: 0000897069-00-000253 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000426 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSHKOSH TRUCK CORP CENTRAL INDEX KEY: 0000775158 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 390520270 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13886 FILM NUMBER: 609314 BUSINESS ADDRESS: STREET 1: 2307 OREGON ST STREET 2: P O BOX 2566 CITY: OSHKOSH STATE: WI ZIP: 54903 BUSINESS PHONE: 4142359151 MAIL ADDRESS: STREET 2: 2307 OREGON ST P O BOX 2566 CITY: OSHKOSH STATE: WI ZIP: 54903 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2000 or [ ] Transaction Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition period from to --------------- --------------- Commission File Number 0-13886 ------- Oshkosh Truck Corporation ------------------------------------------------------ [Exact name of registrant as specified in its charter] Wisconsin 39-0520270 ------------------------------- ------------------- [State or other jurisdiction of [I.R.S. Employer incorporation or organization] Identification No.] 2307 Oregon Street, P.O. Box 2566, Oshkosh, Wisconsin 54903 - ----------------------------------------------------- ---------- [Address of principal executive offices] [Zip Code] Registrant's telephone number, including area code (920) 235-9151 -------------- 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 A Common Stock Outstanding as of April 15, 2000: 422,609 - -------------------------------------------------------------------- Common Stock Outstanding as of April 15, 2000: 16,205,798 - -------------------------------------------------------------------- OSHKOSH TRUCK CORPORATION FORM 10-Q INDEX FOR THE QUARTER ENDED MARCH 31, 2000 Page Part I. Financial Information Item 1. Financial Statements (Unaudited) Condensed Consolidated Statements of Income - Three Months Ended March 31, 2000 and 1999; Six Months Ended March 31, 2000 and 1999 ..............3 Condensed Consolidated Balance Sheets - March 31, 2000 and September 30, 1999...................4 Condensed Consolidated Statement of Shareholders' Equity - Six Months Ended March 31, 2000 ........................5 Condensed Consolidated Statements of Cash Flows - Six Months Ended March 31, 2000 and 1999 ...............6 Notes to Condensed Consolidated Financial Statements - March 31, 2000 .........................................7 Item 2. Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations ............20 Item 3. Quantitative and Qualitative Disclosure of Market Risk .....27 Part II. Other Information Item 1. Legal Proceedings ..........................................28 Item 4. Submission of Matters to Vote of Security Holders ..........28 Item 6. Exhibits and Reports on Form 8-K ...........................28 Signatures ...................................................................29 2 PART I. ITEM 1. FINANCIAL INFORMATION OSHKOSH TRUCK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Six Months Ended March 31, March 31, 2000 1999 2000 1999 ---- ---- ---- ---- (In thousands, except per share amounts) Net sales $330,524 $298,534 $574,391 $521,227 Cost of sales 280,763 254,014 484,653 444,599 -------- -------- -------- -------- Gross income 49,761 44,520 89,738 76,628 Operating expenses: Selling, general and administrative 22,334 24,754 42,912 41,299 Amortization of goodwill and other intangibles 2,772 2,890 5,544 5,625 -------- -------- -------- -------- Total operating expenses 25,106 27,644 48,456 46,924 -------- -------- -------- -------- Operating income 24,655 16,876 41,282 29,704 Other income (expense): Interest expense (5,412) (6,645) (11,198) (13,226) Interest income 188 241 354 427 Miscellaneous, net 171 198 285 340 -------- -------- -------- -------- (5,053) (6,206) (10,559) (12,459) -------- -------- -------- -------- Income from continuing operations before income taxes, equity in earnings of unconsolidated partnership and extraordinary item 19,602 10,670 30,723 17,245 Provision for income taxes 7,964 4,501 12,704 7,501 -------- -------- -------- -------- 11,638 6,169 18,019 9,744 Equity in earnings of unconsolidated partnership, net of income taxes 275 380 590 717 -------- -------- -------- -------- Income from continuing operations before extraordinary item 11,913 6,549 18,609 10,461 Gain from discontinued operations, net of income taxes of $1,235 2,015 -- 2,015 -- Extraordinary charge for early retirement of debt, net of income tax benefit of $356 -- -- (581) -- -------- -------- -------- -------- Net income $ 13,928 $ 6,549 $ 20,043 $ 10,461 ======== ======== ======== ======== Earnings per share: Income from continuing operations before extraordinary item $ 0.72 $ 0.51 $ 1.20 $ 0.83 Net income $ 0.84 $ 0.51 $ 1.29 $ 0.83 Earnings per share assuming dilution: Income from continuing operations before extraordinary item $ 0.70 $ 0.50 $ 1.18 $ 0.81 Net income $ 0.82 $ 0.50 $ 1.27 $ 0.81 Cash dividends: Class A Common Stock $0.07500 $0.07250 $0.15000 $0.14500 Common Stock $0.08625 $0.08333 $0.17250 $0.16667 The accompanying notes are an integral part of these condensed consolidated financial statements.
3 OSHKOSH TRUCK CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS March 31, September 30, 2000 1999 --------- ------------- (Unaudited) (In thousands) ASSETS Current assets: Cash and cash equivalents $ 4,659 $ 5,137 Receivables, net 105,374 93,186 Inventories 249,392 198,446 Prepaid expenses 6,182 4,963 Deferred income taxes 12,378 14,558 ---------- ---------- Total current assets 377,985 316,290 Investment in unconsolidated partnership 13,885 12,335 Other long-term assets 22,441 20,853 Property, plant and equipment 166,493 154,597 Less accumulated depreciation (75,355) (70,606) ---------- ---------- Net property, plant and equipment 91,138 83,991 Goodwill and other intangible assets, net 314,277 319,821 ---------- ---------- Total assets $ 819,726 $ 753,290 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 100,316 $ 84,727 Floor plan notes payable 37,861 26,616 Customer advances 66,040 68,364 Payroll-related obligations 21,987 24,734 Accrued warranty 14,492 14,623 Other current liabilities 44,869 48,462 Revolving credit facility and current maturities of long-term debt 42,030 5,259 ---------- ---------- Total current liabilities 327,595 272,785 Long-term debt 157,976 255,289 Deferred income taxes 42,053 44,265 Other long-term liabilities 18,581 18,071 Commitments and contingencies -- -- Shareholders' equity 273,521 162,880 ---------- ---------- Total liabilities and shareholders' equity $ 819,726 $ 753,290 ========== ========== The accompanying notes are an integral part of these condensed consolidated financial statements. 4 OSHKOSH TRUCK CORPORATION CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY SIX MONTHS ENDED MARCH 31, 2000 (Unaudited)
Common Paid-in Retained Cost of Common Stock Capital Earnings Stock in Treasury Total ------ ------- -------- ----------------- ----- (In thousands) Balance at September 30, 1999 $ 140 $ 15,997 $ 157,810 $ (11,067) $ 162,880 Net income and comprehensive income --- --- 20,043 --- 20,043 Proceeds from Common Stock offering, net of expenses 38 93,364 --- --- 93,402 Cash dividends: Class A Common Stock --- --- (64) --- (64) Common Stock --- --- (2,795) --- (2,795) Other --- 24 --- 31 55 ----- --------- --------- --------- --------- Balance at March 31, 2000 $ 178 $ 109,385 $ 174,994 $ (11,036) $ 273,521 ===== ========= ========= ========= ========= The accompanying notes are an integral part of these condensed consolidated financial statements.
5 OSHKOSH TRUCK CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended March 31, 2000 1999 ---- ---- (In thousands) Operating activities: Income from continuing operations before extraordinary item $ 18,609 $ 10,461 Non-cash adjustments 10,500 4,252 Changes in operating assets and liabilities (45,425) (18,560) --------- --------- Net cash used for operating activities (16,316) (3,847) Investing activities: Acquisition of business (5,625) -- Additions to property, plant and equipment (8,676) (4,712) Proceeds from sale of property, plant and equipment 46 30 Increase in other long-term assets (2,282) (2,482) --------- ---------- Net cash used for investing activities (16,537) (7,164) Net cash provided from discontinued operations 2,015 -- Financing activities: Net borrowings under revolving credit facility 33,200 13,300 Repayments of long-term debt (93,742) (241) Proceeds from Common Stock offering 93,736 -- Costs of Common Stock offering (334) -- Dividends paid (2,531) (2,103) Other 31 819 --------- --------- Net cash provided from financing activities 30,360 11,775 --------- --------- Increase (decrease) in cash and cash equivalents (478) 764 Cash and cash equivalents at beginning of period 5,137 3,622 --------- --------- Cash and cash equivalents at end of period $ 4,659 $ 4,386 ========= ========= Supplementary disclosures: Depreciation and amortization $ 11,515 $ 11,085 Cash paid for interest 12,014 12,986 Cash paid for income taxes 9,258 14,028 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 OSHKOSH TRUCK CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The condensed consolidated financial statements included herein have been prepared by Oshkosh Truck Corporation (the "Company") without audit. However, the foregoing financial statements contain all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of Company management, necessary to present fairly the condensed consolidated financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 1999 annual report to shareholders. 2. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted weighted average shares used in the denominator of the per share calculations: Three Months Ended Six Months Ended March 31, March 31, ------------------ ----------------- 2000 1999 2000 1999 ---- ---- ---- ---- Denominator for basic earnings per share 16,628,316 12,700,368 15,507,527 12,667,757 Effect of dilutive options and incentive compensation awards 314,625 304,943 312,581 289,582 ---------- ---------- ---------- ---------- Denominator for dilutive earnings per share 16,942,941 13,005,311 15,820,108 12,957,339 ========== ========== ========== ========== 3. INVENTORIES Inventories consist of the following: March 31, September 30, 2000 1999 --------- ------------- (In thousands) Finished products $ 74,125 $ 59,649 Partially finished products 95,415 62,047 Raw materials 100,042 89,417 --------- --------- Inventories at FIFO cost 269,582 211,113 Less: Progress payments on U.S. government contracts (9,191) (2,951) Excess of FIFO cost over LIFO cost (10,999) (9,716) --------- --------- $ 249,392 $ 198,446 ========= ========= Title to all inventories related to government contracts, which provide for progress payments, vests with the government to the extent of unliquidated progress payments. 7 4. ACQUISITIONS/DISPOSITIONS In January 2000, the Company entered into a technology transfer agreement and collected certain previously written-off receivables from a foreign affiliate, as a part of the disposition of a business that the Company exited in 1995. Gross proceeds of $3.2 million, less taxes of $1.2 million, or net proceeds of $2.0 million, have been recorded as a gain from discontinued operations. On November 1, 1999, the Company acquired the manufacturing assets of Kewaunee Engineering Corporation ("Kewaunee") for $5.6 million in cash plus the assumption of certain liabilities aggregating approximately $2.2 million. Kewaunee is a fabricator of heavy-steel components for cranes, aerial devices and other equipment. The acquisition was financed from borrowings under the Company's senior credit facility. The acquisition was accounted for using the purchase method of accounting and, accordingly, the operating results of Kewaunee are included in the Company's consolidated statements of income beginning November 1, 1999. The purchase price, including acquisition costs, approximated the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date. Had the acquisition occurred on October 1, 1999 or 1998, there would have been no material pro forma impact on the Company's consolidated net sales, net income or earnings per share in fiscal 2000 or 1999. 5. LONG-TERM DEBT The Company has outstanding a senior credit facility and $100.0 million of 8.75% senior subordinated notes due March 1, 2008. The senior credit facility consists of a six year $100.0 million revolving credit facility ("Revolving Credit Facility") and three term loan facilities ("Term Loan A", "Term Loan B", and "Term Loan C"). The outstanding balances as of March 31, 2000 on the Revolving Credit Facility, Term Loan A, Term Loan B, and Term Loan C are $38.2 million, $32.5 million, $13.5 million, and $13.5 million, respectively. At March 31, 2000, outstanding borrowings of $38.2 million and $9.2 million of outstanding letters of credit reduced available capacity under the Revolving Credit Facility to $52.6 million. Substantially all the tangible and intangible assets of the Company and its subsidiaries (including the stock of certain subsidiaries) are pledged as collateral under the senior credit facility. The senior credit facility includes customary affirmative and negative covenants and requires mandatory prepayments to the extent of "excess cash flows" as defined in the senior credit facility. The senior subordinated notes were issued pursuant to an Indenture dated February 26, 1998 (the "Indenture"), between the Company, the Subsidiary Guarantors (as defined below) and Firstar Trust Company, as trustee. The Indenture contains customary affirmative and negative covenants. The Subsidiary Guarantors fully, unconditionally, jointly and severally guarantee the Company's obligations under the senior subordinated notes. 8 6. COMMON STOCK OFFERING On November 24, 1999, the Company sold 3,795,000 shares of its Common Stock at $26.00 per share. Proceeds from the offering, net of underwriting discounts and commissions, totaled $93.7 million with $93.5 million used to repay indebtedness under the Company's senior credit facility. Pro forma unaudited earnings per share of the Company, assuming that the net proceeds to the Company from the offering were used to repay term debt as of October 1, 1999 and 1998, are summarized below: Six Months Ended March 31, 2000 1999 ---- ---- Earnings per share from continuing operations before extraordinary item Basic $ 1.16 $ 0.77 Assuming dilution 1.14 0.75 Weighted average shares Basic 16,627,364 16,462,757 Assuming dilution 16,939,945 16,752,339 7. COMMITMENTS AND CONTINGENCIES McNeilus Companies, Inc. ("McNeilus") was a defendant in litigation commenced in 1993 prior to the acquisition of McNeilus by the Company, which was brought by The Heil Co. ("Heil"), a McNeilus competitor. This litigation sought damages and made claims that McNeilus infringed certain aspects of one of its patents. A settlement of the matter was reached in January 2000. As part of its routine business operations, the Company disposes of and recycles or reclaims certain industrial waste materials, chemicals and solvents at third party disposal and recycling facilities, which are licensed by appropriate governmental agencies. In some instances, these facilities have been and may be designated by the United States Environmental Protection Agency ("EPA") or a state environmental agency for remediation. Under the Comprehensive Environmental Response, Compensation, and Liability Act (the "Superfund" law) and similar state laws, each potentially responsible party ("PRP") that contributed hazardous substances may be jointly and severally liable for the costs associated with cleaning up the site. Typically, PRPs negotiate a resolution with the EPA and/or the state environmental agencies. PRPs also negotiate with each other regarding allocation of the cleanup cost. As to one such Superfund site, Pierce Manufacturing Inc. ("Pierce") is one of 431 PRPs participating in the costs of addressing the site and has been assigned an allocation share of approximately 0.04%. Currently, a report of the remedial investigation/ feasibility study is being completed, and as such, an estimate for the total cost of the remediation of this site has not been made to date. However, based on estimates and the assigned allocations, the Company believes its liability at the site will not be material and its share is adequately covered through reserves established by the Company at March 31, 2000. Actual liability could vary based on 9 results of the study, the resources of other PRPs, and the Company's final share of liability. The Company is addressing a regional trichloroethylene ("TCE") groundwater plume on the south side of Oshkosh, Wisconsin. The Company believes there may be multiple sources in the area. TCE was detected at the Company's North Plant facility with testing showing the highest concentrations in a monitoring well located on the upgradient property line. Because the investigation process is still ongoing, it is not possible for the Company to estimate its long-term total liability associated with this issue at this time. Also, as part of the regional TCE groundwater investigation, the Company conducted a groundwater investigation of a former landfill located on Company property. The landfill, acquired by the Company in 1972, is approximately 2.0 acres in size and is believed to have been used for the disposal of household waste. Based on the investigation, the Company does not believe the landfill is one of the sources of the TCE contamination. Based upon current knowledge, the Company believes its liability associated with the TCE issue will not be material and that it has established adequate reserves for the matter as of March 31, 2000. However, this may change as investigations proceed by the Company, other unrelated property owners, and the government. The Company is subject to other environmental matters and legal proceedings and claims, including patent, antitrust, product liability and state dealership regulation compliance proceedings, that arise in the ordinary course of business. Although the final results of all such matters and claims cannot be predicted with certainty, management believes that the ultimate resolution of all such matters and claims, after taking into account the liabilities accrued with respect to such matters and claims, will not have a material adverse effect on the Company's financial condition or results of operations. Actual results could vary, among other things, due to the uncertainties involved in litigation. The Company has guaranteed certain customers' obligations under deferred payment contracts and lease purchase agreements totaling approximately $1.0 million at March 31, 2000. The Company is also contingently liable under bid, performance and specialty bonds totaling approximately $148.6 million and open standby letters of credit issued by the Company's bank in favor of third parties totaling approximately $9.2 million at March 31, 2000. 10 8. BUSINESS SEGMENT INFORMATION Three Months Ended Six Months Ended March 31, March 31, --------- --------- 2000 1999 2000 1999 ---- ---- ---- ---- (In thousands) Net sales to unaffiliated customers: Commercial $181,873 $168,848 $297,267 $265,667 Fire and emergency 102,804 85,781 178,381 159,630 Defense 45,847 44,405 98,743 96,430 Corporate and other -- (500) -- (500) -------- -------- -------- -------- Consolidated net sales $330,524 $298,534 $574,391 $521,227 ======== ======== ======== ======== Operating income (loss): Commercial $ 17,809 $ 13,624 $ 26,863 $ 18,418 Fire and emergency 9,478 6,878 13,393 11,697 Defense 2,163 4,605 9,658 10,769 Corporate and other (4,795) (8,231) (8,632) (11,180) -------- -------- -------- -------- Consolidated operating income 24,655 16,876 41,282 29,704 Net interest expense (5,224) (6,404) (10,844) (12,799) Miscellaneous other 171 198 285 340 -------- -------- -------- ------- Income from continuing operations before income taxes, equity in earnings of unconsolidated partnership and extraordinary item $ 19,602 $ 10,670 $ 30,723 $ 17,245 ======== ======== ======== ======== March 31, September 30, 2000 1999 --------- ------------- (In thusands) Identifiable assets: Commercial $ 442,127 $ 381,199 Fire and emergency 295,638 276,692 Defense 76,593 85,796 Corporate and other 5,368 9,603 --------- --------- Consolidated identifiable assets $ 819,726 $ 753,290 ========= ========= 9. CONDENSED CONSOLIDATING FINANCIAL INFORMATION The following tables present condensed consolidating financial information for: (a) the Company; (b) on a combined basis, the guarantors of the senior subordinated notes, which include all wholly-owned subsidiaries of the Company ("Subsidiary Guarantors") other than McNeilus Financial Services, Inc. and Oshkosh/McNeilus Financial Services, Inc., which are the only non-guarantor subsidiaries of the Company ("Non-Guarantor Subsidiaries"), and (c) on a combined basis, the Non-Guarantor Subsidiaries. Separate financial statements of the Subsidiary Guarantors are not presented because the Subsidiary Guarantors are jointly, severally and unconditionally liable under the guarantees, and the Company believes separate financial statements and other disclosures regarding the Subsidiary Guarantors are not material to investors. The Company is comprised of Wisconsin and Florida manufacturing operations and certain corporate management, information services and finance functions. Borrowings and related interest expense under the senior credit facility and the senior subordinated notes are charged to the Company. The Company has allocated a portion of this interest expense to certain Subsidiary Guarantors through formal lending arrangements. There are no management fee arrangements between the Company and its Non-Guarantor Subsidiaries. 11 OSHKOSH TRUCK CORPORATION Condensed Consolidating Statements of Income For the Three Months Ended March 31, 2000 (Unaudited)
Subsidiary Non-Guarantor Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------ (In thousands) Net sales $ 109,843 $ 225,691 $ -- $ (5,010) $ 330,524 Cost of sales 97,941 187,832 -- (5,010) 280,763 --------- --------- ------- ---------- --------- Gross income 11,902 37,859 -- -- 49,761 Operating expenses: Selling, general and administrative 10,333 11,899 102 -- 22,334 Amortization of goodwill and other intangibles -- 2,772 -- -- 2,772 --------- --------- ------- --------- --------- Total operating expenses 10,333 14,671 102 -- 25,106 --------- --------- ------- --------- --------- Operating income (loss) 1,569 23,188 (102) -- 24,655 Other income (expense): Interest expense (4,717) (2,270) -- 1,575 (5,412) Interest income 56 1,706 1 (1,575) 188 Miscellaneous, net (60) 100 131 -- 171 --------- --------- ------- --------- --------- (4,721) (464) 132 -- (5,053) ---------- ---------- ------- --------- ---------- Income (loss) from continuing operations before income taxes and equity in earnings of subsidiaries and unconsolidated partnership (3,152) 22,724 30 -- 19,602 Provision (credit) for income taxes (1,198) 9,150 12 -- 7,964 ---------- --------- ------- --------- --------- (1,954) 13,574 18 -- 11,638 Equity in earnings of subsidiaries and unconsolidated partnership, net of income taxes 13,867 -- 275 (13,867) 275 --------- --------- ------- ---------- --------- Income from continuing operations 11,913 13,574 293 (13,867) 11,913 Discontinued operations, net 2,015 -- -- -- 2,015 --------- --------- ------- --------- --------- Net income $ 13,928 $ 13,574 $ 293 $ (13,867) $ 13,928 ========= ========= ======= ========== =========
12 OSHKOSH TRUCK CORPORATION Condensed Consolidating Statements of Income For the Three Months Ended March 31, 1999 (Unaudited)
Subsidiary Non-Guarantor Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------ (In thousands) Net sales $ 101,360 $ 198,635 $ -- $ (1,461) $ 298,534 Cost of sales 89,187 166,288 -- (1,461) 254,014 --------- ---------- ------- ---------- --------- Gross income 12,173 32,347 -- -- 44,520 Operating expenses: Selling, general and administrative 12,458 12,196 100 -- 24,754 Amortization of goodwill and other intangibles -- 2,890 -- -- 2,890 --------- ---------- ------- --------- --------- Total operating expenses 12,458 15,086 100 -- 27,644 --------- ---------- ------- --------- --------- Operating income (loss) (285) 17,261 (100) -- 16,876 Other income (expense): Interest expense (6,158) (2,062) -- 1,575 (6,645) Interest income 123 1,671 22 (1,575) 241 Miscellaneous, net 39 35 124 -- 198 --------- ---------- ------- --------- --------- (5,996) (356) 146 -- (6,206) ---------- ----------- ------- --------- ---------- Income (loss) before income taxes and equity in earnings of subsidiaries and unconsolidated partnership (6,281) 16,905 46 -- 10,670 Provision (credit) for income taxes (2,499) 6,982 18 -- 4,501 ---------- ---------- ------- --------- --------- (3,782) 9,923 28 -- 6,169 Equity in earnings of subsidiaries and unconsolidated partnership, net of income taxes 10,331 -- 380 (10,331) 380 --------- ---------- ------- ---------- --------- Net income $ 6,549 $ 9,923 $ 408 $ (10,331) $ 6,549 ========= ========== ======= ========== =========
13 OSHKOSH TRUCK CORPORATION Condensed Consolidating Statements of Income For the Six Months Ended March 31, 2000 (Unaudited)
Subsidiary Non-Guarantor Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------ (In thousands) Net sales $ 190,637 $ 393,405 $ -- $ (9,651) $ 574,391 Cost of sales 165,934 328,370 -- (9,651) 484,653 --------- --------- ------- ---------- --------- Gross income 24,703 65,035 -- -- 89,738 Operating expenses: Selling, general and administrative 18,731 23,995 186 -- 42,912 Amortization of goodwill and other intangibles -- 5,544 -- -- 5,544 --------- --------- ------- --------- --------- Total operating expenses 18,731 29,539 186 -- 48,456 --------- --------- ------- --------- --------- Operating income (loss) 5,972 35,496 (186) -- 41,282 Other income (expense): Interest expense (10,123) (4,225) -- 3,150 (11,198) Interest income 88 3,374 42 (3,150) 354 Miscellaneous, net (52) 88 249 -- 285 --------- --------- ------- --------- --------- (10,087) (763) 291 -- (10,559) ---------- ---------- ------- --------- ---------- Income (loss) from continuing operations before income taxes, equity in earnings of subsidiaries and unconsolidated partnership and extraordinary item (4,115) 34,733 105 -- 30,723 Provision (credit) for income taxes (1,564) 14,228 40 -- 12,704 ---------- --------- ------- --------- --------- (2,551) 20,505 65 -- 18,019 Equity in earnings of subsidiaries and unconsolidated partnership, net of income taxes 21,160 -- 590 (21,160) 590 --------- --------- ------- ---------- --------- Income from continuing operations before extraordinary item 18,609 20,505 655 (21,160) 18,609 Discontinued operations, net 2,015 -- -- -- 2,015 Extraordinary item, net (581) -- -- -- (581) --------- --------- ------- --------- ---------- Net income $ 20,043 $ 20,505 $ 655 $ (21,160) $ 20,043 ========= ========= ======= ========== =========
14 OSHKOSH TRUCK CORPORATION Condensed Consolidating Statements of Income For the Six Months Ended March 31, 1999 (Unaudited)
Subsidiary Non-Guarantor Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------ (In thousands) Net sales $ 178,094 $ 345,574 $ -- $ (2,441) $ 521,227 Cost of sales 155,529 291,511 -- (2,441) 444,599 --------- --------- ------- ---------- --------- Gross income 22,565 54,063 -- -- 76,628 Operating expenses: Selling, general and administrative 19,756 21,400 143 -- 41,299 Amortization of goodwill and other intangibles -- 5,625 -- -- 5,625 --------- --------- ------- --------- --------- Total operating expenses 19,756 27,025 143 -- 46,924 --------- --------- ------- --------- --------- Operating income (loss) 2,809 27,038 (143) -- 29,704 Other income (expense): Interest expense (12,342) (4,034) -- 3,150 (13,226) Interest income 197 3,346 34 (3,150) 427 Miscellaneous, net 111 73 156 -- 340 --------- --------- ------- --------- --------- (12,034) (615) 190 -- (12,459) ---------- ---------- ------- --------- ---------- Income (loss) before income taxes and equity in earnings of subsidiaries and unconsolidated partnership (9,225) 26,423 47 -- 17,245 Provision (credit) for income taxes (3,618) 11,101 18 -- 7,501 ---------- --------- ------- --------- --------- (5,607) 15,322 29 -- 9,744 Equity in earnings of subsidiaries and unconsolidated partnership, net of income taxes 16,068 -- 717 (16,068) 717 --------- --------- ------- ---------- --------- Net income $ 10,461 $ 15,322 $ 746 $ (16,068) $ 10,461 ========= ========= ======= ========== =========
15 OSHKOSH TRUCK CORPORATION Condensed Consolidating Balance Sheets March 31, 2000 (Unaudited)
Subsidiary Non-Guarantor Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------ (In thousands) ASSETS Current assets: Cash and cash equivalents $ 3,550 $ 1,099 $ 10 $ -- $ 4,659 Receivables, net 49,792 57,634 (19) (2,033) 105,374 Inventories 76,747 172,645 -- -- 249,392 Prepaid expenses 4,833 1,349 -- -- 6,182 Deferred income taxes 5,447 3,638 3,293 -- 12,378 --------- --------- -------- ---------- --------- Total current assets 140,369 236,365 3,284 (2,033) 377,985 Investment in and advances to: Subsidiaries 390,701 (2,705) -- (387,996) -- Unconsolidated partnership -- -- 13,885 -- 13,885 Other long-term assets 13,372 9,015 54 -- 22,441 Net property, plant and equipment 22,935 68,203 -- -- 91,138 Goodwill and other intangible assets, net -- 314,277 -- -- 314,277 --------- --------- -------- ---------- --------- Total assets $ 567,377 $ 625,155 $ 17,223 $ (390,029) $ 819,726 ========= ========= ======== =========== ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 42,631 $ 58,254 $ 32 $ (601) $ 100,316 Floor plan notes payable -- 39,293 -- (1,432) 37,861 Customer advances 3,101 62,939 -- -- 66,040 Payroll-related obligations 8,674 13,282 31 -- 21,987 Accrued warranty 7,237 7,255 -- -- 14,492 Other current liabilities 22,721 13,881 8,267 -- 44,869 Revolving credit facility and current maturities of long-term debt 41,796 234 -- -- 42,030 --------- --------- -------- ---------- --------- Total current liabilities 126,160 195,138 8,330 (2,033) 327,595 Long-term debt 155,904 2,072 -- -- 157,976 Deferred income taxes (6,146) 36,601 11,598 -- 42,053 Other long-term liabilities 17,938 643 -- -- 18,581 Commitments and contingencies -- -- -- -- -- Investments by and advances from (to) parent -- 390,701 (2,705) (387,996) -- Shareholders' equity 273,521 -- -- -- 273,521 --------- --------- -------- ---------- --------- Total liabilities and shareholders' equity $ 567,377 $ 625,155 $ 17,223 $ (390,029) $ 819,726 ========= ========= ======== =========== =========
16 OSHKOSH TRUCK CORPORATION Condensed Consolidating Balance Sheets September 30, 1999 (Unaudited)
Subsidiary Non-Guarantor Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------ (In thousands) ASSETS Current assets: Cash and cash equivalents $ 3,698 $ 1,337 $ 102 $ -- $ 5,137 Receivables, net 49,311 43,837 38 -- 93,186 Inventories 49,988 148,458 -- -- 198,446 Prepaid expenses 3,791 1,172 -- -- 4,963 Deferred income taxes 3,818 6,523 4,217 -- 14,558 --------- --------- -------- ---------- ---------- Total current assets 110,606 201,327 4,357 -- 316,290 Investment in and advances to: Subsidiaries 357,575 (7,590) -- (349,985) -- Unconsolidated partnership -- -- 12,335 -- 12,335 Other long-term assets 11,902 8,899 52 -- 20,853 Net property, plant and equipment 22,803 61,188 -- -- 83,991 Goodwill and other intangible assets, net -- 319,821 -- -- 319,821 --------- --------- -------- ---------- ---------- Total assets $ 502,886 $ 583,645 $ 16,744 $ (349,985) $ 753,290 ========= ========= ======== =========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 34,261 $ 50,234 $ 232 $ -- $ 84,727 Floor plan notes payable -- 26,616 -- -- 26,616 Customer advances 1,669 66,695 -- -- 68,364 Payroll-related obligations 9,172 15,532 30 -- 24,734 Accrued warranty 6,785 7,838 -- -- 14,623 Other current liabilities 17,940 19,894 10,628 -- 48,462 Revolving credit facility and current maturities of long-term debt 5,000 259 -- -- 5,259 --------- --------- -------- ---------- ---------- Total current liabilities 74,827 187,068 10,890 -- 272,785 Long-term debt 253,000 2,289 -- -- 255,289 Deferred income taxes (5,407) 36,228 13,444 -- 44,265 Other long-term liabilities 17,586 485 -- -- 18,071 Commitments and contingencies -- -- -- -- -- Investments by and advances from (to) parent -- 357,575 (7,590) (349,985) -- Shareholders' equity 162,880 -- -- -- 162,880 --------- --------- -------- ---------- ---------- Total liabilities and shareholders' equity $ 502,886 $ 583,645 $ 16,744 $ (349,985) $ 753,290 ========= ========= ======== ========== ==========
17 OSHKOSH TRUCK CORPORATION Condensed Consolidating Statements of Cash Flows For the Six Months Ended March 31, 2000 (Unaudited)
Subsidiary Non-Guarantor Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------ (In thousands) Operating activities: Income from continuing operations before extraordinary item $ 18,609 $ 20,505 $ 655 $ (21,160) $ 18,609 Non-cash adjustments 266 12,122 (1,888) -- 10,500 Changes in operating assets and liabilities (15,320) (27,602) (2,503) -- (45,425) ---------- ---------- --------- --------- ---------- Net cash provided from (used for) operating activities 3,555 5,025 (3,736) (21,160) (16,316) Investing activities: Acquisition of business (5,625) -- -- -- (5,625) Investments in and advances to subsidiaries (27,501) 2,111 4,230 21,160 -- Additions to property, plant and equipment (2,080) (6,596) -- -- (8,676) Other (1,114) (536) (586) -- (2,236) ---------- ---------- --------- --------- ---------- Net cash provided from (used for) investing activities (36,320) (5,021) 3,644 21,160 (16,537) Net cash provided from discontinued operations 2,015 -- -- -- 2,015 Financing activities: Net borrowings under revolving credit facility 33,200 -- -- -- 33,200 Repayments of long-term debt (93,500) (242) -- -- (93,742) Proceeds from Common Stock offering 93,736 -- -- -- 93,736 Costs of Common Stock offering (334) -- -- -- (334) Dividends paid (2,531) -- -- -- (2,531) Other 31 -- -- -- 31 --------- --------- -------- --------- --------- Net cash provided from (used for) financing activities 30,602 (242) -- -- 30,360 --------- ---------- -------- --------- --------- Decrease in cash and cash equivalents (148) (238) (92) -- (478) Cash and cash equivalents at beginning of period 3,698 1,337 102 -- 5,137 --------- --------- -------- --------- --------- Cash and cash equivalents at end of period $ 3,550 $ 1,099 $ 10 $ -- $ 4,659 ========= ========= ======== ========= =========
18 OSHKOSH TRUCK CORPORATION Condensed Consolidating Statements of Cash Flows For the Six Months Ended March 31, 1999 (Unaudited)
Subsidiary Non-Guarantor Company Guarantors Subsidiaries Eliminations Consolidated ------- ---------- ------------- ------------ ------------ (In thousands) Operating activities: Net income $ 10,461 $ 15,322 $ 746 $ (16,068) $ 10,461 Non-cash adjustments (1,048) 8,816 (3,516) -- 4,252 Changes in operating assets and liabilities (21,210) 3,624 (974) -- (18,560) --------- --------- --------- --------- ---------- Net cash provided from (used for) operating activities (11,797) 27,762 (3,744) (16,068) (3,847) Investing activities: Investments in and advances to subsidiaries 1,868 (21,745) 3,809 16,068 -- Additions to property, plant and equipment (1,867) (2,845) -- -- (4,712) Other (310) (2,232) 90 -- (2,452) --------- ---------- -------- --------- ---------- Net cash provided from (used for) investing activities (309) (26,822) 3,899 16,068 (7,164) Financing activities: Net borrowings under revolving credit facility 13,300 -- -- -- 13,300 Repayments of long term debt -- (241) -- -- (241) Dividends paid (2,103) -- -- -- (2,103) Other 819 -- -- -- 819 --------- --------- -------- --------- ---------- Net cash provided from (used for) financing activities 12,016 (241) -- -- 11,775 --------- ---------- -------- --------- ---------- Increase (decrease) in cash and cash equivalents (90) 699 155 -- 764 Cash and cash equivalents at beginning of period 1,065 979 1,578 -- 3,622 --------- --------- -------- --------- ---------- Cash and cash equivalents at end of period $ 975 $ 1,678 $ 1,733 $ -- $ 4,386 ========= ========= ======== ========= ==========
19 Item 2. Oshkosh Truck Corporation Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations FORWARD-LOOKING STATEMENTS This Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations and other sections of this Form 10-Q contain "forward-looking statements" that are believed to be within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report, including, without limitation, statements regarding Oshkosh Truck Corporation's (the "Company" or "Oshkosh") future financial position, business strategy, budgets, targets, projected costs and plans and objectives of management for future operations are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimates", "anticipate", "believe", "should", "plans", or "continue", or the negative thereof or variations thereon or similar terminology. Although the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the Company's expectations include, without limitation, the following: (1) the cyclical nature of the concrete placement industry; (2) the risks related to reductions or changes in government expenditures; (3) the potential for actual costs to exceed projected costs with long-term, fixed-price government contracts; (4) the uncertainty inherent in government contracts; (5) the challenges of identifying, completing and integrating future acquisitions; (6) competition; (7) disruptions in the supply of parts or components from sole source suppliers and subcontractors; (8) product liability and warranty claims; and (9) labor relations and market conditions. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings, including, but not limited to, the Company's prospectus dated November 18, 1999 included in the Company's Registration Statement on Form S-3 No. 333-87149. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements. General The major products manufactured and marketed by each of the Company's business segments are as follows: Commercial -- concrete mixer systems, refuse truck bodies, portable concrete batch plants and truck components sold to commercial ready-mix companies and commercial and municipal waste haulers in the U. S. and abroad. Fire and emergency -- commercial and custom fire trucks, aircraft rescue and firefighting trucks, snow removal trucks and other emergency vehicles primarily sold to fire departments, airports and other governmental units in the U. S. and abroad. 20 Defense -- heavy-and medium-payload tactical trucks and supply parts sold to the U. S. military and to other militaries around the world. Results of Operations Analysis of Consolidated Net Sales The following table presents net sales by business segment: Second Quarter Fiscal First Six Months Fiscal --------------------- ----------------------- 2000 1999 2000 1999 ---- ---- ---- ---- (In thousands) Net sales to unaffiliated customers: Commercial $ 181,873 $ 168,848 $ 297,267 $ 265,667 Fire and emergency 102,804 85,781 178,381 159,630 Defense 45,847 44,405 98,743 96,430 Corporate and other -- (500) -- (500) --------- --------- --------- --------- Consolidated net sales $ 330,524 $ 298,534 $ 574,391 $ 521,227 ========= ========= ========= ========= Second Quarter Fiscal 2000 Compared to 1999 Consolidated net sales increased $32.0 million, or 10.7%, to $330.5 million for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. Commercial segment net sales increased $13.0 million, or 7.7%, to $181.9 million for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. Continued strong end-markets in the concrete placement industry, the growing popularity of Oshkosh's front-discharge concrete mixer and sales, marketing and distribution synergies created through the February 1998 acquisition of McNeilus Companies, Inc. ("McNeilus") contributed to an 11.6% increase in concrete mixer sales for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. Refuse packer sales decreased 4.1% for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999 on a lower mix of packer body and chassis package sales. Refuse packer unit volume in the quarter was flat as municipal sales increases offset significantly lower packer shipments to the U.S.'s largest waste haulers. Fire and emergency segment net sales increased $17.0 million, or 19.8%, to $102.8 million for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999, on a strong mix of custom pumpers and aerials. The Company believes production inefficiencies resulting from the installation of an enterprise-wide resource planning ("ERP") system at Pierce Manufacturing Inc.("Pierce") have largely been resolved. Defense segment net sales increased $1.4 million, or 3.2%, to $45.8 million for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. A slight decrease in defense vehicle sales was offset by an increase in parts sales. Vehicle sales under the Medium Tactical Vehicle Replacement ("MTVR") contract awarded to Oshkosh in 21 December 1998 began in the second quarter of fiscal 2000. The Company expects sales under this contract to increase throughout fiscal 2000. First Six Months of Fiscal 2000 Compared to 1999 Consolidated net sales increased $53.2 million, or 10.2%, to $574.4 million for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Commercial segment net sales increased $31.6 million, or 11.9%, to $297.3 million for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Continued strong end-markets in the concrete placement industry, the growing popularity of Oshkosh's front-discharge concrete mixer and sales, marketing and distribution synergies created through the February 1998 acquisition of McNeilus contributed to a 13.7% increase in concrete mixer sales for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Refuse packer sales increased 7.3% for the first six months of fiscal 2000 compared to the first six months of fiscal 1999, generally as a result of increases in sales to municipal and international customers. Fire and emergency segment net sales increased $18.8 million, or 11.7%, to $178.4 million for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Pierce comprises a substantial majority of the revenue of this segment. Pierce's sales increased 12.7% during the period, which is in line with Pierce's long-term sales growth rate of 11% per annum since 1980. The Company believes production inefficiencies resulting from the installation of an ERP system at Pierce have largely been resolved. Defense segment net sales increased $2.3 million, or 2.4%, to $98.7 million for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Vehicle sales under the MTVR contract awarded to Oshkosh in December 1998 began in the second quarter of fiscal 2000. The Company expects defense segment sales to increase substantially in the second half of fiscal 2000 as MTVR sales ramp up and as Oshkosh's heavy tactical truck sales are more heavily weighted to the second half of the year. Analysis of Consolidated Operating Income The following table presents operating income by business segment: Second Quarter Fiscal First Six Months Fiscal --------------------- ----------------------- 2000 1999 2000 1999 ---- ---- ---- ---- (In thousands) Operating income (loss): Commercial $ 17,809 $ 13,624 $ 26,863 $ 18,418 Fire and emergency 9,478 6,878 13,393 11,697 Defense 2,163 4,605 9,658 10,769 Corporate and other (4,795) (8,231) (8,632) (11,180) -------- -------- -------- --------- Consolidated operating income $ 24,655 $ 16,876 $ 41,282 $ 29,704 ======== ======== ======== ========= 22 Second Quarter Fiscal 2000 Compared to 1999 Consolidated operating income increased $7.8 million, or 46.1%, for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. Commercial segment operating income increased $4.2 million, or 30.7%, for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. Operating income as a percent of segment sales ("operating income margin") increased to 9.8% of commercial segment sales for the second quarter of fiscal 2000 compared to 8.1% of commercial segment sales for the second quarter of fiscal 1999. Increased concrete mixer unit volume and continued cost reduction activities contributed to the improvement in the operating income margin. Fire and emergency segment operating income increased $2.6 million, or 37.8%, for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. The operating income margin increased from 8.0% to 9.2% during this same time period. Increased operating income margins were primarily attributable to increased sales volume and improved production efficiencies as operations stabilized under Pierce's new ERP system. The Company believes that any lingering effects from the system conversion have been substantially resolved. Defense segment operating income decreased $2.4 million, or 53.0%, for the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. The defense operating income margin decreased to 4.7% of defense segment sales for the second quarter of fiscal 2000 compared to 10.4% of defense segment sales for the second quarter of fiscal 1999. Second quarter 2000 operating income was adversely impacted by an unfavorable truck sales mix and higher bid and proposal spending compared to the second quarter of fiscal 1999. Corporate and other expenses decreased $3.4 million to $4.8 million, or 1.5% of consolidated net sales, for the second quarter of fiscal 2000 from $8.2 million, or 2.8% of consolidated net sales, for the second quarter of fiscal 1999. Results for the second quarter of fiscal 1999 included a $3.8 million charge for litigation. Excluding that charge, corporate expenses increased $0.4 million generally due to increased staffing to support the Company's higher level of sales. First Six Months of Fiscal 2000 Compared to 1999 Consolidated operating income increased $11.6 million, or 39.0%, for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Commercial segment operating income increased $8.4 million, or 45.9%, for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. The commercial operating income margin increased to 9.0% of commercial segment sales for the first six months of fiscal 2000 compared to 6.9% of commercial segment sales for the first six months of fiscal 1999. Increased concrete mixer unit volume and continued cost reduction activities contributed to the improvement in the operating income margin. 23 Fire and emergency segment operating income increased $1.7 million, or 14.5%, for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. The operating income margin increased from 7.3% to 7.5% during this same time period. Increased operating income margins were attributable to the resolution of the first quarter production inefficiencies following the installation at Pierce of the final modules of a new ERP system. Defense segment operating income decreased $1.1 million, or 10.3%, for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. The defense operating income margin decreased to 9.8% of defense segment sales for the first six months of fiscal 2000 compared to 11.2% of defense segment sales for the first six months of fiscal 1999. Increases in parts and MTVR sales with lower margins and higher bid and proposal spending contributed to the decreased operating income margins for the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Corporate and other expenses decreased $2.5 million to $8.6 million, or 1.5% of consolidated net sales, for the first six months of fiscal 2000 from $11.2 million, or 2.1% of consolidated net sales, for the first six months of fiscal 1999. Results for the first six months of fiscal 1999 included a $3.8 million pre-tax charge for litigation. Excluding that charge, corporate expenses increased $1.3 million generally due to increased staffing to support the higher level of sales. Analysis of Non-Operating Income Statement Items Second Quarter of Fiscal 2000 Compared to 1999 Net interest expense decreased $1.2 million, or 18.4%, in the second quarter of fiscal 2000 compared to the second quarter of fiscal 1999. Prepayment of $93.5 million of term debt from proceeds of the Company's November 24, 1999 public offering of Common Stock resulted in a $1.9 million reduction in interest expense for the quarter. Increased borrowings to fund the acquisition of Kewaunee Engineering Corporation ("Kewaunee") and to support the seasonal working capital requirements of the commercial segment contributed to the increase in interest expense after consideration of the debt prepayment. The effective tax rate for combined federal and state income taxes for the second quarter of fiscal 2000 was 40.6% compared to 42.2% in the second quarter of fiscal 1999. Excluding the impact of $1.4 million of nondeductible goodwill in the second quarter of fiscal 2000 and $1.5 million in the second quarter of fiscal 1999, the Company's effective income tax rate was 38% in both periods. Equity in earnings of an unconsolidated partnership of $0.3 million in the second quarter of fiscal 2000 and $0.4 million in the second quarter of fiscal 1999 represents the Company's equity interest in its lease financing partnership. In January 2000, the Company entered into a technology transfer agreement and collected certain previously written-off receivables from a foreign affiliate, which was part of a business that the Company exited in 1995. 24 Gross proceeds of $3.2 million, less taxes of $1.2 million, or net proceeds of $2.0 million, have been recorded as a gain from discontinued operations in the second quarter of fiscal 2000 First Six Months of Fiscal 2000 Compared to 1999 Net interest expense decreased $2.0 million, or 15.3%, in the first six months of fiscal 2000 compared to the first six months of fiscal 1999. Prepayment of $93.5 million of term debt from proceeds of the Company's November 24, 1999 public offering of Common Stock resulted in a $2.9 million reduction in interest expense for the period. Increased working capital borrowings to fund the Kewaunee acquisition and to support overall sales growth contributed to the increase in net interest expense after consideration of the debt prepayment. The effective tax rate for combined federal and state income taxes for the first six months of fiscal 2000 was 41.4% compared to 43.5% for the first six months of fiscal 1999. Excluding the impact of $2.7 million of nondeductible goodwill in the first six months of fiscal 2000 and $2.8 million in the first six months of fiscal 1999, the Company's effective income tax rate was 38% for both periods. Equity in earnings of an unconsolidated partnership of $0.6 million in the first six months of fiscal 2000 and $0.7 million in the first six months of fiscal 1999 represents the Company's equity in earnings of its lease financing partnership. Financial Condition First Six Months of Fiscal 2000 During the first six months of fiscal 2000, cash decreased by $0.5 million to $4.7 million at March 31, 2000. Cash used in operating activities of $16.3 million, capital expenditures of $8.7 million, an increase in long-term assets of $2.3 million, dividend payments of $2.5 million and the acquisition of Kewaunee for $5.6 million were funded by net borrowings of $33.2 million. In November 1999, the Company completed a public offering of 3,795,000 shares of Common Stock at $26.00 per share, before commissions and expenses. Proceeds to the Company, net of underwriting discounts and commissions, were used to prepay $93.5 million of term debt under the Company's senior credit facility. During the period, inventory increased $50.9 million, including $36.6 million in the commercial segment as a result of seasonal build requirements. Fire and emergency inventories increased $17.1 million during the period, generally as a result of earlier commercial chassis and systems-related production inefficiencies at Pierce. Defense segment inventories were down slightly due to timing of inventory purchases. Increases in inventory were partially offset by increased trade payables of $15.6 million and a $11.2 million increase in floor plan notes payable related to commercial segment chassis purchases. First Six Months of Fiscal 1999 During the first six months of fiscal 1999, cash increased by $0.8 million. Cash used in operations during the period of $3.8 million, equipment and 25 software purchases of $7.2 million and dividend and scheduled debt payments of $2.1 million and $0.2 million, respectively, were funded by a $13.3 million increase in borrowings under the Company's revolving credit facility and $0.8 million of proceeds from exercise of Common Stock options under the Company's Incentive Stock Plan. Liquidity and Capital Resources The Company had $52.6 million of unused availability under the terms of its revolving credit facility as of March 31, 2000. The Company's primary cash requirements include working capital, interest and principal payments on indebtedness, capital expenditures, dividends, and, potentially, future acquisitions. The primary sources of cash are expected to be cash flow from operations and borrowings under the Company's senior credit facility. As indicated above, in November 1999, the Company completed the sale of 3,795,000 shares of Common Stock. Proceeds to the Company, net of underwriting discounts and commissions, were used to prepay $93.5 million of term indebtedness under the Company's senior credit facility. In addition, the Company purchased the manufacturing assets of Kewaunee. The Kewaunee acquisition was financed through borrowings under the Company's revolving credit facility. The senior credit facility requires prepayment of indebtedness to the extent of "excess cash flows" as defined in the senior credit agreement. Based upon current and anticipated future operations, management believes that capital resources will be adequate to meet future working capital, debt service and other capital requirements for fiscal 2000, including the working capital requirements associated with the start-up of production under the MTVR contract and the acquisition of Kewaunee. The Company's cash flow from operations has fluctuated, and will likely continue to fluctuate, significantly from quarter to quarter due to changes in working capital arising principally from seasonal fluctuations in sales. Capital expenditures are expected to approximate $20 million in fiscal 2000 and $15 million in fiscal 2001. Fiscal 2000 capital expenditures include approximately $4 million of an $8 million expansion of the Company's production facilities in Oshkosh. The remaining $4 million of the expansion will occur early in fiscal 2001. New Accounting Standards The Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," which was amended by SFAS No. 137. Provisions of these standards are required to be adopted in years beginning after June 15, 2000. Because of the Company's minimal use of derivatives, management does not anticipate that the adoption of the new statement will have a significant effect on the Company's financial condition, profitability or cash flows. 26 Customers and Backlog Sales to the U. S. Department of Defense comprised approximately 17% of the Company's net sales in the first six months of fiscal 2000. No other single customer accounted for more than 10% of the Company's net sales for this period. A substantial majority of the Company's net sales are derived from customer orders prior to commencing production. The Company's backlog at March 31, 2000 increased 29.3% to $739.9 million compared to $572.2 million at March 31, 1999. The commercial segment backlog decreased by $19.4 million, or 10.3%, to $168.3 million at March 31, 2000 compared to March 31, 1999. The fire and emergency segment backlog increased $29.7 million, or 14.9%, to $228.8 million at March 31, 2000 compared to March 31, 1999. The defense segment backlog increased by $157.4 million, or 84.9%, to $342.8 million at March 31, 2000 compared to March 31, 1999, reflecting the funding of the second year of the MTVR contract. Approximately 30% of the aggregate March 31, 2000 backlog is not expected to be filled in fiscal 2000. Reported backlog excludes purchase options and announced orders for which definitive contracts have not been executed. Additionally, backlog excludes unfunded portions of the U. S. Department of Defense long-term family and MTVR contracts. Backlog information and comparisons thereof as of different dates may not be accurate indicators of future sales or the ratio of the Company's future sales to the U. S. Department of Defense versus its sales to other customers. Item 3. Quantitative and Qualitative Disclosure of Market Risk The Company's quantitative and qualitative disclosures about market risk for changes in interest rates and foreign exchange risk are incorporated by reference in Item 7A of the Company's Annual Report on Form 10-K for the year ended September 30, 1999 and have not materially changed since that report was filed. 27 OSHKOSH TRUCK CORPORATION PART II. OTHER INFORMATION FORM 10-Q MARCH 31, 2000 ITEM 1 LEGAL PROCEEDINGS McNeilus was a defendant in litigation, which was commenced in 1998 prior to the acquisition of McNeilus by the Company, in the U.S. District court for the Northern District of Alabama. The litigation, which was brought by The Heil Co. ("Heil"), a McNeilus competitor, sought damages and claims that McNeilus infringed certain aspects of one of its patents. A settlement of the matter was reached on January 12, 2000. The settlement included a payment to Heil, the amount of which was fully reserved for at December 31, 1999. ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS At the annual meeting of shareholders held on January 31, 2000, all of the persons nominated as directors were elected. The following table sets forth certain information with respect to such election. Shares Shares Withholding Other Shares Name of Nominee Voted For Authority Not Voted --------------- --------- ----------- ------------ Class A Common Stock Nominees - ----------------------------- J.W. Andersen 228,138 0 197,844 R.G. Bohn 228,138 0 197,844 F.M. Franks 228,138 0 197,844 M.W. Grebe 228,138 0 197,844 K.J. Hempel 228,138 0 197,844 S.P. Mosling 228,134 4 197,844 J.P. Mosling, Jr. 228,134 4 197,844 Common Stock Nominees - ----------------------------- D.T. Carroll 12,914,263 50,024 3,236,886 R.G. Sim 12,912,660 51,627 3,236,886 Also at the annual meeting, shareholders approved a proposal to amend the Company's Restated Articles of Incorporation to increase the number of shares of Common Stock that the Company is authorized to issue from 18,000,000 to 60,000,000. The following table sets forth certain information with respect to such vote. Shares Abstentions Shares Voted and Broker Voted For Against Non-Votes --------- ------- ----------- Class A Common Stock 225,844 0 200,138 Common Stock 8,865,413 4,055,126 3,280,634 ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following exhibits are filed herewith: 3.1 Form of Amendment to Restated Articles of Incorporation of Oshkosh Truck Corporation. 3.2 Restated Articles of Incorporation of Oshkosh Truck Corporation, as amended. 10.1 Oshkosh Truck Corporation Executive Retirement Plan 27 Financial Data Schedule (b) Reports on Form 8-K None. 28 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OSHKOSH TRUCK CORPORATION April 26, 2000 /S/ R. G. Bohn -------------------------------------------- R. G. Bohn Chairman, President and Chief Executive Officer (Principal Executive Officer) April 26, 2000 /S/ C. L. Szews -------------------------------------------- C. L. Szews Executive Vice President and Chief Financial Officer (Principal Financial Officer) April 26, 2000 /S/ T. J. Polnaszek -------------------------------------------- T. J. Polnaszek Vice President and Controller (Principal Accounting Officer) 29 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 3.1 Form of Amendment to Restated Articles of Incorporation of Oshkosh Truck Corporation. 3.2 Restated Articles of Incorporation of Oshkosh Truck Corporation, as amended. 10.1 Oshkosh Truck Corporation Executive Retirement Plan 27 Financial Data Schedule 30 EX-3.1 2 ARTICLES OF AMEND. TO RESTATED ART. OF INC. ARTICLES OF AMENDMENT TO RESTATED ARTICLES OF INCORPORATION OF OSHKOSH TRUCK CORPORATION 1. Paragraph A of Article Third of the Corporation's Restated Articles of Incorporation is amended to read in its entirety as follows: A. STOCK The total number of shares of stock which the corporation shall have the authority to issue is sixty-three million (63,000,000) shares itemized by classes as follows: 1. Sixty-one million (61,000,000) shares of common stock, one cent ($.01) par value, divided into the following classes: (a) one million (1,000,000) shares of Class A Common Stock (the "Class A Common Stock"); and (b) sixty million (60,000,000) shares of Common Stock (the "Common Stock"). 2. Two million (2,000,000) shares of preferred stock, one cent ($.01) par value (the "Preferred Stock"). 2. Paragraph AA of Article Third of the Corporation's Restated Articles of Incorporation is amended to read in its entirety as follows: AA. STOCK The total number of shares of stock which the corporation shall have the authority to issue is sixty-three million (63,000,000) shares itemized by classes as follows: 1. Sixty-one million (61,000,000) shares of common stock, one cent ($.01) par value, divided into the following classes: (a) one million (1,000,000) shares of Class A Common Stock (the "Class A Common Stock"); and (b) sixty million (60,000,000) shares of Common Stock (the "Common Stock") (the Class A Common Stock and the Common Stock are hereinafter collectively referred to as the "Common Shares"). 2. Two million (2,000,000) shares of preferred stock, one cent ($.01) par value (the "Preferred Stock"). EX-3.2 3 RESTATED ARTICLES OF INCORPORATION RESTATED ARTICLES OF INCORPORATION OF OSHKOSH TRUCK CORPORATION Pursuant to Section 180.1007 of the Wisconsin Business Corporation Law, these Restated Articles of Incorporation shall supersede and take the place of the Corporation's heretofore existing Restated Articles of Incorporation and all amendments thereto. First: The name of the corporation is OSHKOSH TRUCK CORPORATION. Second: The purpose for which the corporation is organized is to engage in any lawful activity within the purposes of which corporations may be organized under Chapter 180 of the Wisconsin Statutes. Third: As of December 18, 1996, the authorized, issued and outstanding common stock, one cent ($.01) par value, of the corporation consists of Class A Common Stock ("Class A Common Stock") and Class B Common Stock ("Class B Common Stock"). Upon the effectiveness of these Restated Articles of Incorporation, each issued and outstanding share of Class B Common Stock shall immediately and automatically be redesignated without further act on anyone's part as a share of "Common Stock" ("Common Stock"), and stock certificates representing outstanding shares of Class B Common Stock shall thereupon and thereafter be deemed to represent a like number of shares of Common Stock. Until such time as no shares of Class A Common Stock are issued and outstanding, Sections AA through DD of this Third Article shall govern and be applicable. From and after such time as no shares of Class A Common Stock are issued and outstanding, Sections A through D of this Third Article shall govern and be applicable. At such time as Sections AA through DD of this Third Article shall no longer govern and apply, the appropriate officers of the corporation shall promptly (i) cause to be prepared and duly filed with the Wisconsin Department of Financial Institutions such documents as are necessary to restate these Amended and Restated Articles to eliminate Sections AA through DD of this Third Article and any other words, sentences, clauses or paragraphs contained in this Third Article providing for or relating to Class A Common Stock and/or the conversion of shares of Class A Common Stock into shares of Common Stock and (ii) cause to be prepared and sent to registered holders of Common Stock a notice to the effect that such action has been taken. A. STOCK The total number of shares of stock which the corporation shall have the authority to issue is sixty-three million (63,000,000) shares itemized by classes as follows: 1. Sixty-one million (61,000,000) shares of common stock, one cent ($.01) par value, divided into the following classes: (a) one million (1,000,000) shares of Class A Common Stock (the "Class A Common Stock"); and (b) sixty million (60,000,000) shares of Common Stock (the "Common Stock"). 2. Two million (2,000,000) shares of preferred stock, one cent ($.01) par value (the "Preferred Stock"). B. THE COMMON STOCK AND THE CLASS A COMMON STOCK 1. The holders of Common Stock shall be entitled to receive dividends when and if declared by the Board of Directors out of any funds legally available for the payment of such dividends; provided, however, that if a share of Class A Common Stock shall be converted into Common Stock pursuant to Paragraph 10.f of Section BB of this Third Article subsequent to the record date for payment of a dividend or other distribution on shares of Class A Common stock but prior to such payment, then the registered holder of such share at the close of business on such record date shall be entitled to receive the dividend or other distribution payable in the amount declared per share of Class A Common Stock on the date set for payment of such dividend or other distribution notwithstanding the conversion thereof or the corporation's default in payment of the dividend or distribution due on such date. 2. Each share of Common Stock shall be entitled to one vote on each matter submitted to a vote of holders of Common Stock; provided, however, that if shares of Class A Common Stock shall be converted into Common Stock pursuant to Paragraph 10.f of Section BB of this Third Article subsequent to the record date for the determination of shareholders entitled to vote at a meeting of shareholders or upon a matter otherwise presented for a shareholder vote, but prior to such meeting or vote, then the registered holder of each share of Class A Common Stock and Common Stock at the close of business on such record date shall be entitled to one vote for each such share at such meeting or for such vote on each matter presented for a vote by the holders of Class A Common Stock and/or Common Stock. 3. In case of any voluntary or involuntary liquidation, dissolution or winding up of the corporation, the holders of Common Stock shall be entitled to receive on a pro rata basis the proceeds of any remaining assets of the corporation. 4. No holders of shares of Common Stock shall have a preemptive right to acquire unissued shares of stock of the corporation or securities convertible into such shares or carrying a right to subscribe to or acquire such shares. 5. The rights of the Common Stock under this Section B of this Third Article of these Restated Articles of Incorporation are subject to the provisions of Section C below concerning the Preferred Stock. 6. From and after such time as no shares of Class A Common Stock are issued and outstanding, the corporation shall not issue any shares of Class A Common Stock. -2- C. THE PREFERRED STOCK The Preferred Stock may be issued in series, and authority is vested in the Board of Directors, from time to time, to establish and designate series and to fix the variations in the powers, preferences, rights, qualifications, limitations or restrictions of any series of the Preferred Stock, but only with respect to: 1. the dividend rate or rates and the preferences, if any, over any other class or series (or of any other class or series over such class or series) with respect to dividends, the terms and conditions upon which and the periods in respect of which dividends shall be payable, whether and upon what conditions such dividends shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate; 2. the price and terms and conditions on which shares may be redeemed; 3. the amount payable upon shares in the event of voluntary or involuntary liquidation; 4. sinking fund provisions for the redemption or purchase of shares; 5. the terms and conditions on which shares may be converted into shares of any other class or series of the same or any other class of stock of the Corporation, if the shares of any series are issued with the privilege of conversion; and 6. voting rights, if any. Except as to the matters expressly set forth above, all series of the Preferred Sock shall have the same preference, limitations and relative rights and shall rank equally, share ratably and be identical in all respects as to all matters. All shares of any one series of the Preferred Stock shall be alike in every particular. D. GENERAL 1. Where approval by holders of shares of one or more classes of the Common Stock and/or the Preferred Stock is required under the laws of the State of Wisconsin to effect an amendment to these Restated Articles of Incorporation, a merger or consolidation, a sale of the corporation's assets, dissolution or otherwise, the affirmative vote of the holders of a majority of the outstanding shares of each class entitled to vote on such matter, in class votes where appropriate, shall be sufficient to approve the action. AA. STOCK The total number of shares of stock which the corporation shall have the authority to issue is sixty-three million (63,000,000) shares itemized by classes as follows: 1. Sixty-one million (61,000,000) shares of common stock, one cent ($.01) par value, divided into the following classes: (a) one million (1,000,000) shares of Class A -3- Common Stock (the "Class A Common Stock"); and (b) sixty million (60,000,000) shares of Common Stock (the "Common Stock") (the Class A Common Stock and the Common Stock are hereinafter collectively referred to as the "Common Shares"). 2. Two million (2,000,000) shares of preferred stock, one cent ($.01) par value (the "Preferred Stock"). BB. THE COMMON SHARES 1. Whenever any Dividend shall be paid by the corporation on the Common Shares, such Dividend shall be paid so that the Dividend per share for the Common Stock shall equal one hundred fifteen percent (115%) of the Dividend per share for the Class A Common Stock. As used herein, the term "Dividend" shall mean any dividend paid by the corporation in cash or other assets except as a dividend payable solely in shares of any class of the capital stock of this corporation. In calculating the amount of any Dividend payable on the Common Stock, such Dividend shall be rounded to the closest one quarter of one cent ($.0025). 2. The holders of Common Stock shall not be entitled to any vote on any matters except: (a) as may be required by law; and (b) that the Common Stock shall have one vote for each share for the election and removal of the Common Directors voting as a separate class. The "Common Directors" shall be that number of Directors which constitutes twenty five percent (25%) of the authorized number of members of the Board of Directors, including, for all purposes, the Common Directors and any Directors which are entitled to be elected by the holders of any Preferred Stock. If twenty five percent (25%) of the authorized number of Directors is not a whole number, then the number of Common Directors shall be rounded to the closest whole number of Directors, but not less than one (1). In determining the closest whole number, any number which includes a fraction equal to .5 shall be deemed to be the next highest whole number. 3. The holders of Class A Common Stock shall be entitled to one vote for each share of Class A Common Stock on all matters except the election of Common Directors. 4. In case of voluntary or involuntary liquidation, dissolution or winding up of the corporation, the holders of Common Stock shall be entitled to receive out of the assets of the corporation in money or money's worth the sum of Seven and 50/100 Dollars ($7.50) per share (the "First Common Payment"), subject to adjustment in the event of any subdivisions, combinations, stock splits or stock dividends involving shares of the Common Stock, before any of such assets shall be paid or distributed to holders of Class A Common Stock, and if the assets of the corporation shall be insufficient to pay the holders of all of the Common Stock then outstanding the entire First Common Payment, the holders of each outstanding share of the Common Stock shall share ratably in such assets in proportion to the amounts which would be payable with respect to Common Stock if the First Common Payment was paid in full. 5. After payment in full of the First Common Payment, the holders of Class A Common Stock shall be entitled to receive out of the remaining assets of the corporation in money or money's worth the sum of Seven and 50/100 Dollars ($7.50) per -4- share (the "Second Common Payment"), subject to adjustment in the event of any subdivisions, combinations, stock splits or stock dividends involving shares of the Class A Common Stock, before any of such remaining assets shall be paid or distributed to holders of the Common Stock, and if the remaining assets of the corporation shall be insufficient to pay the holders of all of the Class A Common Stock then outstanding the entire Second Common Payment, the holders of each outstanding share of the Class A Common Stock shall share ratably in such assets in proportion to the amounts which would be payable with respect to Class A Common Stock if the Second Common Payment was paid in full. 6. After payment in full of the First Common Payment and the Second Common Payment, any further payments on the liquidation, dissolution or winding up of the business of the corporation shall be on an equal basis as to all of the Common Shares then outstanding. 7. Except as to the matters expressly set forth above, the Class A Common Stock and the Common Stock shall be identical in all respects. 8. No holders of Common Shares shall have a preemptive right to acquire unissued shares of stock of the corporation or securities convertible into such shares or carrying a right to subscribe to or acquire such shares. 9. The rights of the Common Shares under this Section BB of this Third Article of these Restated Articles of Incorporation are subject to the provisions of Section CC below concerning the Preferred Stock. 10. Shares of Class A Common Stock shall be convertible into shares of Common Stock as provided below: a. Each shares of Class A Common Stock may at any time or from time to time, at the option of the respective holder thereof, be converted into one (1) fully paid and nonassessable share of Common Stock. Such conversion right shall be exercised by the surrender of the certificate representing such share of Class A Common Stock to be converted to the corporation at any time during normal business hours at the principal executive offices of the corporation (to the attention of the Secretary of the corporation), or if an agent for the registration or transfer of shares of Class A Common Stock is then duly appointed and acting (said agent being referred to in this Article as the "Transfer Agent"), then at the office of the Transfer Agent, accompanied by a written notice of the election by the holder thereof to convert, and (if so required by the corporation or the Transfer Agent) by instruments of transfer, in each case in form satisfactory to the corporation and to the Transfer Agent, duly executed by such holder or his duly authorized attorney, and transfer tax stamps or funds therefor, if required pursuant to Paragraph 10.e. below. b. As promptly as practicable after the surrender for conversion of a certificate representing shares of Class A Common Stock in the manner provided in Paragraph 10.a. above, and the payment to the corporation in cash of any amount -5- required by the provisions of Paragraph 10.e., the corporation will deliver or cause to be delivered at the office of the Transfer Agent to, or, if no Transfer Agent has been appointed, upon the written order of, the holder of such certificate a certificate or certificates representing the number of full shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of the certificate representing shares of Class A Common Stock, and all rights of the holder of such shares as such holder shall cease at such time, and the person or persons in whose name or names the certificate or certificates representing the shares of Common Stock are to be issued shall be treated for all purposes as having become the record holder or holders of such shares of Common Stock at such time; provided, however, that any such surrender and payment on any date when the stock transfer records of the corporation shall be closed shall constitute the person or persons in whose name or names the certificate or certificates representing shares of Common Stock are to be issued as the record holder or holders thereof for all purposes immediately prior to the close of business on the next succeeding day on which such stock transfer records are open. c. No adjustments in respect of dividends shall be made upon the conversion of any share of Class A Common Stock; provided, however, that if a share shall be converted subsequent to the record date for the payment of a dividend or other distribution on shares of Class A Common Stock but prior to such payment, the registered holder of such share at the close of business on such record date shall be entitled to receive the dividend or other distribution payable in the amount declared per share of Class A Common Stock on the date set for payment of such dividend or other distribution notwithstanding the conversion thereof or the corporation's default in payment of the dividend or distribution due on such date. d. The corporation will at all times reserve and keep available, solely for the purpose of issuance upon conversion of the outstanding shares of Class A Common Stock, such number of shares of Common Stock as shall be issuable upon the conversion of all such outstanding shares; provided, that nothing contained herein shall be construed to preclude the corporation from satisfying its obligations in respect of the conversion of the outstanding shares of Class A Common Stock by delivery of purchased shares of Common Stock which are held in the treasury of the corporation. e. The issuance of certificates for shares of Common Stock upon conversion of shares of Class A Common Stock shall be made without charge for any stamp or other similar tax in respect of such issuance. However, if any such certificate is to be issued in a name other than that of the holder of the share or shares of Class A Common Stock to be converted, the person or persons requesting the issuance thereof shall pay to the corporation the amount of any tax that may be payable in respect of any transfer involved in such issuance or shall establish to the satisfaction of the corporation that such tax has been paid. -6- f. If at any time the number of outstanding shares of Class A Common Stock that the Moslings (as defined below) beneficially own (as defined below) is less than 150,000 shares, then the outstanding shares of Class A Common Stock shall be deemed without further act on anyone's part to be immediately and automatically converted into shares of Common Stock, and stock certificates formerly representing outstanding shares of Class A Common Stock shall thereupon and thereafter be deemed to represent a like number of shares of Common Stock. For purposes hereof, "Moslings" shall mean (a) Mr. J. Peter Mosling, Jr., (b) Stephen P. Mosling or (c) any trustee, guardian or custodian for, or any executor, administrator or other legal representative of the estate of, J. Peter Mosling, Jr. and/or Stephen P. Mosling. For purposes hereof, a person shall be deemed to "beneficially own" shares of Class A Common Stock if such person, directly or indirectly, has or shares voting power that includes the power to vote, or to direct the voting of, such shares. 11. From and after the effectiveness of these Restated Articles of Incorporation, the Board of Directors of the corporation may only issue shares of Class A Common Stock in the form of a dividend or other distribution payable solely in shares of Class A Common Stock on or split-up of the shares of Class A Common Stock and only to the then holders of the outstanding shares of Class A Common Stock in conjunction with and in the same ratio as a stock dividend or distribution on or split-up of the shares of Common Stock. Except as provided in this Paragraph 11, the corporation shall not issue additional shares of Class A Common Stock after the effectiveness of these Restated Articles of Incorporation, and all shares of Class A Common Stock surrendered for conversion in accordance with Paragraph 10 shall be retired, unless otherwise approved by a vote of the holders of the outstanding shares of Class A Common Stock and Common Stock, each voting as a separate class. CC. THE PREFERRED STOCK The Preferred Stock may be issued in series, and authority is vested in the Board of Directors, from time to time, to establish and designate series and to fix the variations in the powers, preferences, rights, qualifications, limitations or restrictions of any series of the Preferred Stock, but only with respect to: 1. the dividend rate or rates and the preferences, if any, over any other class or series (or of any other class or series over such class or series) with respect to dividends, the terms and conditions upon which and the periods in respect of which dividends shall be payable, whether and upon what conditions such dividends shall be cumulative and, if cumulative, the date or dates from which dividends shall accumulate; 2. the price and terms and conditions on which shares may be redeemed; 3. the amount payable upon shares in the event of voluntary or involuntary liquidation; 4. sinking fund provisions for the redemption or purchase of shares; -7- 5. the terms and conditions on which shares may be converted into shares of any other class or series of the same or any other class of stock of the corporation, if the shares of any series are issued with the privilege of conversion; and 6. voting rights, if any. Except as to the matters expressly set forth above, all series of the Preferred Stock shall have the same preferences, limitations and relative rights and shall rank equally, share ratably and be identical in all respects as to all matters. All shares of any one series of the Preferred Stock shall be alike in every particular. DD. GENERAL 1. The number of authorized shares of any class of the capital stock of the corporation may be increased or decreased (but not below the number of shares of such class then outstanding) by the affirmative vote of the holders of a majority of the outstanding Class A Common Stock. 2. Where approval by holders of shares of one or more classes of the Common Shares or the Preferred Stock is required under the laws of the State of Wisconsin to effect an amendment to these Restated Articles of Incorporation, a merger or consolidation, a sale of the corporation's assets, dissolution or otherwise, the affirmative vote of the holders of a majority of the outstanding shares of each class entitled to vote on such matter, in class votes where appropriate, shall be sufficient to approve the action. 3. Section 180.1150 of the Wisconsin Business Corporation Law shall not apply to the corporation. Fourth: The address of the registered office is: 2307 Oregon Street Oshkosh, Wisconsin 54901 Fifth: The name of the registered agent at such address is: Timothy M. Dempsey Sixth: The number of directors constituting the Board of Directors shall be such number as is fixed from time to time by the By-Laws. Seventh: These Restated Articles of Incorporation supersede and take the place of the heretofore existing Articles of Incorporation and Amendments thereto. Eighth: These articles may be amended in the manner authorized by law at the time of amendment. -8- EX-10.1 4 EXECUTIVE RETIREMENT PLAN OSHKOSH TRUCK CORPORATION EXECUTIVE RETIREMENT PLAN Final 1/12/2000 OSHKOSH TRUCK CORPORATION EXECUTIVE RETIREMENT PLAN PREAMBLE The principal objective of this Oshkosh Truck Corporation Executive Retirement Plan is to ensure the payment of a competitive level of retirement income in order to attract, retain and motivate selected executives. This Plan is designed to provide a benefit which, when added to other retirement income of the executive, will meet the objective described above. Eligibility for participation in this Plan shall be limited to executives selected by the Chief Executive Officer and approved by the Human Resources Committee or its successor in function of the Board of Directors. This Plan became effective on January 31, 2000, after approval by the Board of Directors. Final - January 12, 2000 2 OSHKOSH TRUCK CORPORATION EXECUTIVE RETIREMENT PLAN ARTICLE I DEFINITIONS Whenever used herein with the initial letter capitalized, words and phrases shall have the meanings stated below unless a different meaning is plainly required by the context. All masculine terms shall include the feminine and all singular terms shall include the plural in all cases in which they could thus be applied unless the context clearly indicates the gender or the number. 1.1 "Accrued Normal Retirement Benefit" means the amount of a Participant's Retirement Benefit, determined as of his date of termination of employment, commencing as of the first day of the month following the month in which the Participant attains his Normal Retirement Date, and payable in the form of a single life annuity (or the Actuarial Equivalent of such amount when commencing at any other day or payable in another form). The amount of the Accrued Normal Retirement Benefit is defined in section 3.1. 1.2 "Actuarial Equivalent" means a benefit payable at a particular time and in a particular form which has the same value as another benefit payable in another form or at another time. Such Actuarial Equivalent shall be determined on the basis of a 7-1/2 percent interest rate and the 1971 Group Annuity Table, with male annuity factors weighted 70 percent and female annuity factors weighted 30 percent. With respect to lump sum distributions pursuant to section 6.4, the mortality and interest rate assumptions shall be as prescribed in such section. 1.3 "Affiliate" means: (1) a corporation which is a member of the same controlled group of corporations (within the meaning of Internal Revenue Code section 414(b) as the Employer; (2) an unincorporated trade or business which is under common control with the Employer (as determined under Code section 414(c); (3) an organization which, together with the Employer, is a member of the same affiliated service group (as determined under Code section 414(m); and (4) any other entity required to be aggregated under Code section 414(o). 1.4 "Beneficiary" means-- (a) the Spouse if the Preretirement Spouse's Death Benefit, the Joint and 50 Percent Spouse's Annuity, or the Joint and 100 Percent Spouse's Annuity is payable; (b) the person or persons (who may be named contingently or successively), including a trust or an estate, designated by a Participant, to whom a death benefit is to be paid in the event of his death. Each designation will revoke all prior designations by the same Participant. A designation shall be made on a form prescribed by the Employer, and will be effective only when filed in writing with the Employer. If no Beneficiary is designated or a designation is revoked in whole or in part, or if a designated Beneficiary does not survive, the lump sum Actuarial Equivalent of the death benefit (if any) shall be payable to the estate of the last to survive the Participant or the Beneficiary. Final - January 12, 2000 3 1.5 "Board" means the Board of Directors of the Company. 1.6 "Change in Control" means a change in management or a change in ownership of the corporation as defined in the Participant's Key Executive Employment and Severance Agreement ("KEESA") in effect on the date that such a change in control occurs or, in the absence of such an agreement, as defined in Exhibit B, attached to this Plan and incorporated here by reference. 1.7 "Code" means the Internal Revenue Code of 1986, as amended, and the regulations thereunder. 1.8 "Committee" means the Human Resources Committee of the Board or its successor in substantial functions. 1.9 "Company" means Oshkosh Truck Corporation. 1.10 "Company Matching Contribution Benefit" means Oshkosh Truck Corporation's matching contribution to (1) a Participant's Oshkosh Truck Corporation Tax Deferred Investment Plan Account, or a Participant Account in a Tax Deferred Savings Plan sponsored by an Affiliate, as defined in the governing documents for such Plans, as amended from time to time, and (2)any related investment earnings. To the extent that a Participant has withdrawn Company Matching Contributions, such contributions along with imputed income thereon, shall be added to the Participant's accumulated Company Matching Contribution Benefit. For purposes of this section 1.10, a Participant's accumulated Company Matching Contribution Benefit will be converted into an annual benefit amount payable as a single life annuity commencing as of the Participant's Retirement Date using the interest and mortality assumptions set forth in section 1.2. 1.11 "Compensation" means a Participant's base pay, including base pay amounts deferred pursuant to a compensation reduction agreement under Code section 125 or Code section 401(k). The annual compensation limit set forth in Code section 401(a)(17) shall not apply. 1.12 "Compensation Year" means each 12-month period used to determine compensation for purposes of this Plan which coincides with the calendar year which ends on or prior to the date as of which the Participant's Accrued Normal Retirement Benefit is determined. 1.13 "Completed Compensation Year" means any Compensation Year in which an employee is employed through the entire 12-month period. 1.14 "Early Retirement Date" means the first day of the month following the date on which a Participant retires prior to the Participant's Normal Retirement Date; provided that the Participant shall have attained age 55, shall have completed at least five Years of Officer Service, and shall have provided the Company with written notice of the Participant's election to take early retirement. 1.15 "Employee" means any person in the employ of the Company or an Affiliate, except for a person compensated solely on a retainer or fee basis. 1.16 "Employer" means the Company and any Affiliates, which employ or employed any Participant. 1.17 "Final Average Compensation" means the sum of the three highest consecutive Completed Compensation Years' Compensation paid to the Participant prior to the Participant's separation Final - January 12, 2000 4 from service, divided by three. If a Participant has less than three Completed Compensation Years, Final Average Compensation will be based on all Completed Compensation Years divided by the number of such years. 1.18 "Funded Plan" means the Oshkosh Truck Corporation Salaried and Clerical Employees Retirement Plan or any qualified defined benefit plan sponsored by an Affiliate. 1.19 "Funded Plan Benefit" means the annual benefit payable under (1) the Oshkosh Truck Corporation Salaried and Clerical Employees Retirement Plan, and (2) any qualified defined benefit pension plan sponsored by an Affiliate, as provided by the governing documents for such Plans, as amended from time to time. For purposes of this section 1.19, a Participant's annual benefit will be calculated as a single life annuity commencing as of the Participant's Retirement Date. 1.20 "Late Retirement Date" means the first day of the month following a Participant's termination date where the Participant continues to serve as an Officer of the Company after his Normal Retirement Date. 1.21 "Normal Retirement Date" means the first day of the month following a Participant's 62nd birthday (without regard to the Participant's Years of Service at that time). 1.22 "Officer" means any individual who is elected by the Board of Directors to an officer of the company as a Vice President, Executive Vice President, President, Chief Executive Officer, or Chairman. 1.23 "Officer Service" means an individual's Years of Service as an Officer of Oshkosh Truck Corporation including service before this Plan's effective date as set forth on Exhibit A, but excluding Years of Service with the Company or an Affiliate in any other capacity. 1.24 "Participant" means any person who has become eligible to participate in the Plan in accordance with Article II, and who has not ceased to have rights to a Retirement Benefit hereunder. 1.25 "Plan" means the Oshkosh Truck Corporation Executive Retirement Plan, as set forth herein, and as it may be amended from time to time. 1.26 "Plan Effective Date" means January 31, 2000. 1.27 "Plan Year" means the 12 consecutive month period for maintaining records for this Plan and will be the consecutive 12-month period beginning each March 1 and ending on the last day of February, except the first Plan Year shall run from the Plan Effective Date until the last day February. 1.28 "Retirement Benefit" means a pension or any other payment or payments payable under the terms of this Plan to a Participant, the Participant's Spouse, or Beneficiary. 1.29 "Retirement Date" means the date on which a Participant's Retirement Benefit commences. 1.30 "Social Security Benefit" means, for the purpose of determining the Accrued Normal Retirement Benefit as of a Participant's Normal Retirement Date or Early Retirement Date, the estimated monthly old-age benefit to which the Participant would be entitled beginning immediately upon his achieving his Normal Retirement Date under the provisions of the Social Final - January 12, 2000 5 Security Act in effect on the date of his termination and assuming that he will continue to receive until he attains his Normal Retirement Date compensation that would be treated as wages for purposes of the Social Security Act at the same rate as was in effect for him immediately prior to his termination. For purposes of determining the Accrued Normal Retirement Benefit as of a Participant's Late Retirement Date, "Social Security Benefit" means the estimated monthly old-age benefit to which the Participant would be entitled based on his age as of the date of his termination. In estimating wages for purposes of determining the Social Security Benefit, it shall be assumed that the Participant's compensation prior to date of termination has increased annually at the same rates as the Average Total Wages for Adjusting Earnings to use in Computing Social Security Benefits as published by the Social Security Administration. For the calendar year subsequent to the last year published by the Social Security Administration, the same rate of increase as applicable to the last published year shall be used. The Social Security Benefit shall be determined in accordance with rules adopted by the Employer and applied in a nondiscriminatory manner. Each Participant will be provided with clear written notice of his right to supply to the Employer his actual wage history and of the financial consequences of failing to supply such history. 1.31 "Spouse" means an individual who is legally married to a Participant as of the earlier of the date of the Participant's death or the Participant's Retirement Date. 1.32 "Years of Credited Service" means the Years of Service an Employee completed while employed by the Company or an Affiliate to a maximum of 20 Years. 1.33 "Years of Service" means the aggregate of all periods of employment by an Employee of the Employer, each such period to be calculated in completed years and months. 1.34 "Years of Officer Service" means the aggregate of all periods of employment as an Officer of Oshkosh Truck Corporation, but excluding periods of employment with Oshkosh Truck Corporation or any Affiliate in any other capacity. Final - January 12, 2000 6 ARTICLE II PARTICIPATION 2.1 Participating Employees. Each executive selected by the Chief Executive Officer ("CEO") and approved by the Committee to participate in the Plan shall become a Participant on the date specified by the Committee, as set forth in Exhibit A or as subsequently established by the Committee for new participants. Each Participant's right to benefits under this Plan shall vest in accordance with Article V hereof. 2.2 Cessation of Participation. A Participant shall cease to be an active Participant in this Plan and such Participant shall become an inactive Participant as of the date such Participant ceases to be an Employee of the Company, if they are not vested in accordance with Article V. Final - January 12, 2000 7 ARTICLE III FORM AND AMOUNT OF RETIREMENT BENEFITS 3.1 Accrued Normal Retirement Benefit. The Accrued Normal Retirement Benefit payable to a Participant who retires on or after the Participant's Normal Retirement Date shall be a monthly Retirement Benefit commencing on the Participant's Retirement Date and payable during the Participant's lifetime and ceasing with the last payment due on the first day of the month in which the Participant dies. The monthly Accrued Normal Retirement Benefit shall be equal to one-twelfth of the excess, if any, of (a) less the sum of (b), (c), and (d) where: (a) equals two (2) percent of the Participant's Final Average Compensation multiplied by the Participant's Years of Credited Service, (b) equals one-half of the Participant's annual Social Security Benefit, (c) equals the Participant's annual Company Matching Contribution Benefit, and (d) equals Participant's annual Funded Plan Benefit. 3.2 Early Retirement Benefit. Each Participant who retires prior to the Participant's Normal Retirement Date shall receive a monthly Early Retirement Benefit commencing on the Participant's Early Retirement Date and payable under the normal form in accordance with section 3.1. The monthly Early Retirement Benefit shall be equal to one-twelfth of the excess, if any, of (a) less the sum of (b), (c), and (d) where: (a) equals two (2) percent of the Participant's Final Average Compensation multiplied by the Participant's Years of Credited Service and reduced by a factor based on the number of years by which the Retirement Date precedes the Participant's Normal Retirement Date, as shown in the following schedule: Number of years* by which the Retirement Date Precedes the Participant's Normal Portion of Retirement Retirement Date Benefit Payable 7 60.00% 6 63.33% 5 66.67% 4 73.33% 3 80.00% 2 86.67% 1 93.33% 0 100.00% * For a period that is not an integral number of years, the portion to be applied will be obtained by arithmetic interpolation between the appropriate percentages set out above. (b) equals one-half of the Participant's annual Social Security Benefit, reduced by .4167 percent for each month by which Participant's Early Retirement Date precedes the Participant's Normal Retirement Date, Final - January 12, 2000 8 (c) equals the Participant's annual Company Matching Contribution Benefit payable at the Early Retirement Date, and (d) equals the annual Funded Plan Benefit payable at the Early Retirement Date. 3.3 Form and Timing of Benefit. The benefit payable to or on behalf of a Participant under this Plan shall be paid in the normal form as provided by the Funded Plan or, as elected by the Participant (or his Spouse, in the event of the Participant's death while employed), on a basis consistent with all elections made by the Participant and/or Spouse under the Funded Plan. Any conversions to an optional method of payment permitted under the Funded Plan shall be the Actuarial Equivalent of such normal form of payment. Benefits due under this Section III shall be paid coincident with the payment date of benefits under the Funded Plan. 3.4 Treatment of Plan Payments Under Other Plans. Benefits earned by a Participant under this Plan shall not be considered "Compensation" as that term is defined in other plans sponsored by the Employer. Final - January 12, 2000 9 ARTICLE IV DEATH BENEFITS BEFORE RETIREMENT 4.1 Death of a Participant Before Commencement of Retirement Benefit. If a Participant dies before the date Retirement Benefits commence hereunder, no benefits shall be payable under this Plan, except as to otherwise provided in section 4.2. 4.2 Preretirement Spouse's Death Benefit. (a) In the case of a Participant who has a nonforfeitable right to his Accrued Normal Retirement Benefit, who has a surviving Spouse and who dies prior to his Retirement Date (whether or not such Participant is employed by the Employer or an Affiliate) there shall be payable to his surviving Spouse a Preretirement Spouse's Death Benefit. (b) The monthly payments to a surviving Spouse under the Preretirement Spouse's Death Benefit shall equal the amounts which would have been payable as a survivor annuity under the Joint and 50 Percent Spouse's Annuity if-- (1) in the case of a Participant who dies after attaining his Early Retirement Date, such Participant had retired with an immediate Joint and 50 Percent Spouse's Annuity on the day before the Participant's death, or (2) in the case of a Participant who dies on or before attaining his Early Retirement Date, such Participant had terminated employment on the date of death (if his employment had not terminated), survived to his Early Retirement Date, retired with an immediate Joint and 50 Percent Spouse's Annuity on his Early Retirement Date, and died on the day after the date on which such Participant would have attained his Early Retirement Date. If, pursuant to subsection (c) below, a Spouse elects to defer the commencement of the Preretirement Spouse's Death Benefit, the amount of the benefit payable thereunder shall be increased to reflect such deferral. (c) Payment of the Preretirement Spouse's Death Benefit to a Participant's Spouse shall commence on the date selected by the surviving Spouse. Such date shall occur no earlier than the date on which a deceased Participant would have attained his Early Retirement Date (in the case of a Participant who dies prior to attaining his Early Retirement Date), or the date of the Participant's death (in the case of a Participant who dies on or after attaining his Early Retirement Date), and no later than the first day of the month next following the date the Participant would have attained age 62. Final - January 12, 2000 10 ARTICLE V VESTING 5.1 Vesting. A Participant shall vest over a period of ten years of Officer Service according to the following vesting schedule: Years of Officer Service Vested Percentage 0 - 5 0% 6 20% 7 40% 8 60% 9 80% 10 100% 5.2 Effect of Change in Control. Notwithstanding any other provision of this Plan to the contrary, in the event of a Change in Control, all Participants who are employed by the Company at the time of a Change in Control shall become fully vested in their entire Accrued Normal Retirement Benefit under this Plan. Moreover, in the event of a Change in Control, each Participant shall be entitled to receive an immediate single sum distribution of the entire present value of the Participant's Accrued Normal Retirement Benefit vested in accordance with this Article V within 60 days after the Participant's termination of employment for any reason. (Any Participant who terminated employment before such Change in Control shall receive the present value of the Participant's then remaining vested Accrued Normal Retirement Benefit within 60 days after the Change in Control.) For purposes of this provision, the present value of a Participant's Accrued Normal Retirement Benefit shall be determined using the Actuarial Assumption in section 6.4. Final - January 12, 2000 11 ARTICLE VI PAYMENT OF RETIREMENT BENEFIT 6.1 Survival. Payment of any Retirement Benefit hereunder which is contingent upon the survival of the payee shall cease with the last payment due the payee before the payee's death. 6.2 Administrative Powers Relating to Payments. If a Participant or Spouse is under a legal disability or, by reason of illness or mental or physical disability, is unable, in the opinion of the Committee, to attend properly to such Participant's personal financial matters, the Committee may make such payments in such of the following ways as the Committee shall direct: (a) Directly to such Participant or Spouse; (b) To the legal representative of such Participant or Spouse; or (c) To some relative by blood or marriage, or friend, for the benefit of such Participant or Spouse. Any payment made pursuant to this section 6.2 shall be in complete discharge of the obligation for such payment under the Plan. 6.3 Missing Persons. (a) The Company shall be deemed to have made adequate tender of payment of any benefit payable hereunder to a person if payment is made by check or by money order, and mailed to the last address of such person furnished to the Company. (b) If a person shall fail to claim or collect any such tender for a period of three months from the date thereof, the Company may stop payment on such tender and on any other tenders subsequent to the tender not claimed or collected and may suspend any further benefit payments hereunder until the Company can ascertain whether such person was living at the time any such tender was made and whether any benefit payments are due hereunder to a person. Upon such suspension of payments, a written notice thereof and of the provisions of this section 6.3 shall be mailed by the Company to the last address known to it of the person entitled to such payment or payments. (c) If such person shall fail to claim any such payment for a period of three years after such written notice is mailed, such person for all purposes of the Plan be deemed to have died on the day immediately preceding the date of the first such tender which has not been claimed or collected. Final - January 12, 2000 12 6.4 Lump Sum Cash-Out. If the lump sum Actuarial Equivalent value of:(1) a Participant's vested Accrued Normal Retirement Benefit upon termination of employment or (2) the Preretirement Spouse's Death Benefit upon the Participant's death is equal to or less than $50,000, the Plan shall make a lump sum payment of: (1) the Accrued Normal Retirement Benefit to the Participant or (2) the Preretirement Spouse's Death Benefit to the Participant's surviving Spouse. For the purpose of determining the lump sum Actuarial Equivalent under this section, the Employer shall use an interest rate equal to the annual interest rate on 30-year Treasury securities for the January (the "look back month") immediately preceding the Plan Year ("the stability period") in which the Participant's Retirement Date or termination date (if earlier) occurs, as specified by the Commissioner of Internal Revenue in revenue rulings, notices, or other guidance, published in the Internal Revenue Bulletin. The applicable mortality table shall be the mortality table based on the prevailing commissioners' standard table (described in Code section 807(d)(5(A)) used to determine reserves for group annuity contracts issued on the date of which present value is being determined (without regard to any other subparagraph of section 807(d)(5)), that is prescribed by the Commissioner of Internal Revenue in revenue rulings, notices, or other guidance, published in the Internal Revenue Bulletin. Final - January 12, 2000 13 ARTICLE VII GENERAL PROVISIONS 7.1 Funding. The Plan is intended as an unfunded plan of deferred compensation. The Company intends to establish appropriate reserves for the Plan on its books of account in accordance with generally accepted accounting principles. Such reserves shall be, for all purposes, part of the beneficial funds of the Company and no Participant, Spouse or other person claiming a right under the Plan shall have any interest, right or title to such reserves. 7.2 Continuation of the Plan. The Plan shall be binding upon the Company and any successors or assigns of the Company including any corporation with or into which the Company or its successors or assigns shall consolidate or merge and any transfer of substantially all of the assets of the Company or its successors or assigns. 7.3 Right to Amend, Suspend or Terminate. The Company reserves the right at any time and from time to time to amend, suspend or terminate the Plan by action of its Board of Directors without the consent of any Participant, Spouse, or other persons claiming a right under the Plan. No amendment of the Plan shall reduce the benefits of any Participant below the amount to which such Participant has become vested pursuant to section 5.1 prior to the date of amendment. 7.4 Rights to Benefits. No person shall have any right to a benefit under the Plan except as such benefit has accrued to such person in accordance with the terms of the Plan, and that such right shall be no greater than the rights of any unsecured general creditors of the Company. Notwithstanding any other provisions of this Plan, if a Participant shall be terminated for Cause, all of such Participant's rights to benefits under this Plan shall be forfeited. For purposes of this Plan, the Company may terminate the Participant's employment after the Plan Effective Date for "Cause" only if the conditions set forth in paragraphs (i) and (ii) have been met: (i) (A) the Participant has committed any act of fraud, embezzlement or theft in connection with the Participant's duties as an Officer or in the course of employment with the Company and/or its subsidiaries; or (B) the Participant has willfully and continually failed to perform substantially the Participant's duties with the Company or any of its Affiliates (other than any such failure resulting from incapacity due to physical or mental illness or injury, regardless of whether such illness or injury is job-related) for an appropriate period, which shall not be less than 30 days, after the Chief Executive Officer of the Company (or, if the Participant is then Chief Executive Officer, the Board) has delivered a written demand for performance to the Participant that specifically identifies the manner in which the Chief Executive Officer (or the Board, as the case may be) believes the Participant has not substantially performed the Participant's duties; or (C) the Participant has willfully engaged in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company; or (D) the Participant has willfully and wrongfully disclosed any trade secret or other confidential information of the Company or any of its Affiliates; or (E) the Participant has engaged in any competitive activity; and in any such case the act or omission shall have been determined by the Board to have been materially harmful to Final - January 12, 2000 14 the Company and its subsidiaries taken as a whole. For purposes of the provision, (1) no act or failure to act on the part of the Participant shall be considered "willful" unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant's action or omission was in the best interests of the Company and (2) any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company. (ii) (A) The Company terminates the Participant's employment by delivering a Notice of Termination to the Participant, and (B) prior to the time the Company has terminated the Participant's employment pursuant to a Notice of Termination, the Board, by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board, has adopted a resolution finding that the Participant was guilty of conduct set forth in this definition of Cause, and specifying the particulars thereof in detail, at a meeting of the Board called and held for the purpose of considering such termination (after reasonable notice to the Participant and an opportunity for the Participant, together with the Participant's counsel, to be heard before the Board), and (C) the Company delivers a copy of such resolution to the Participant with the Notice of Termination at the time the Participant's employment is terminated. In the event of a dispute regarding whether the Participant's employment has been terminated for Cause, no claim by the Company that the Company has terminated the Participant's employment for Cause in accordance with this Agreement shall be given effect unless the Company establishes by clear and convincing evidence that the Company has complied with the requirements of this Section 7.4 to terminate the Participant's employment for Cause. 7.5 Titles. The titles of the Articles and sections herein are included for convenience of reference only and shall not be construed as part of this Plan, or have any effect upon the meaning of the provisions hereof. 7.6 Separability. If any term or provision of this Plan as presently in effect or as amended from time to time, or the application thereof to any payments or circumstances, shall to any extent be invalid or unenforceable, the remainder of the Plan, and the application of such term or provisions to payments or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term or provision of the Plan shall be valid and enforced to the fullest extent permitted by law. Final - January 12, 2000 15 7.7 Authorized Officers. Whenever the Company under the terms of the Plan is permitted or required to do or to perform any act or matter or thing, it shall be done and performed by any Officer duly authorized by the Board of Directors of the Company, provided that the authority to approve Participants shall be vested in the Committee. 7.8 No Contract of Employment. Nothing herein contained shall be construed to constitute a contract of employment between any Employer and any Employee. 7.9 Data. It shall be a condition precedent to the payment of all benefits under the Plan that each Participant, former Participant and Spouse must furnish to the Company such documents, evidence or information as the Company considers necessary or desirable for the purpose of administering the Plan, or to protect the Company. 7.10 Restrictions Upon Assignments and Creditors' Claims. Except as in the Plan otherwise provided, no Participant, former Participant or any Spouse, or the state of any such person, shall have the power to assign, pledge, encumber or transfer any interest in the Plan while the same shall be possession of the Company. Any such attempt at alienation shall be void. No such interest shall be subject to attachment, garnishment, execution, levy or any other legal equitable proceeding or process and any attempt to so such interest shall be void. 7.11 Applicable Law. The Plan shall be construed and administered in accordance with the laws of Wisconsin to the extent such laws are not preempted by ERISA. Final - January 12, 2000 16 EXHIBIT A - ------------------------------------------------------------------------------------------------------------------
Oshkosh Truck Date of Date of Plan Corporation Officer Officer's Name Title Participation Hire Date Appointment - ----------------- ---------------------------------------- ------------- ----------------- ----------- Charles Szews Executive Vice President and Chief 1/31/2000 3/29/96 3/29/96 Financial Officer Matthew Zolnowski Executive Vice President, Corporate 1/31/2000 1/27/92 1/27/92 Administration Daniel Lanzdorf Executive Vice President and President, 1/31/2000 6/12/73 (orig) 9/30/96 McNeilus Companies, Inc. 11/12/79 (rehire) Timothy Dempsey Executive Vice President and Corporate 1/31/2000 10/1/95 10/1/95 General Counsel, and Secretary John Randjelovic Executive Vice President and President, 1/31/2000 10/26/92 10/26/92 Pierce Manufacturing Inc. Paul Hollowell Executive Vice President and President, 1/31/2000 4/1/89 4/1/89 Defense Business Donald Verhoff Vice President, Technology 1/31/2000 5/14/73 7/25/97 Mark Meaders Vice President, Operations and Corporate 1/31/2000 7/1/93 (orig) 1/1/98 Purchasing, Materials, and Logistics 1/1/98 (rehire) Ted Henson Vice President, International Sales 1/31/2000 1/29/90 5/1/97 Michael Wuest Vice President and General Manager, 1/31/2000 11/2/81 4/20/98 Operations, Pierce Manufacturing Inc. - ------------------------------------------------------------------------------------------------------------------
Final - January 12, 2000 17 Exhibit B DEFINITION OF "CHANGE IN CONTROL" AND RELATED TERMS A "Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (i) at any time that either no shares of Class A Common Stock of the Company are issued and outstanding or Excluded Persons have ceased to beneficially own a majority of the outstanding shares of Class A Common Stock of the Company, any Person (as defined below) (other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company or (E) an Exempt Person (as defined below) ("Excluded Persons")) is or becomes the "Beneficial Owner" (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Act")), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates (as defined below) after January 31, 2000, pursuant to express authorization by the Board that refers to this exception) representing 25% or more of (A) the combined voting power of the Company's then outstanding voting securities or (B) the then outstanding shares of common stock of the Company; or (ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on January 31, 2000, constituted the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Act) whose appointment or election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on January 31, 2000 or whose appointment, election or nomination for election was previously so approved; or (iii) the shareholders of the Company approve a merger, consolidation or share exchange of the Company with any other corporation or approve the issuance of voting securities of the Company in connection with a merger, consolidation or share exchange of the Company (or any direct or indirect subsidiary of the Company) pursuant to applicable stock exchange requirements, other than (A) a merger, consolidation or share exchange that would result in the voting securities of the Company outstanding immediately prior to such merger, consolidation or share exchange continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, Final - January 12, 2000 18 consolidation or share exchange, (B) a merger, consolidation or share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after January 31, 2000, pursuant to express authorization by the Board that refers to this exception) representing 25% or more of (1) the combined voting power of the Company's then outstanding voting securities or (2) the then outstanding shares of common stock of the Company or (C) a merger, consolidation or share exchange immediately following the effectiveness of which shares of Class A Common Stock of the Company will remain issued and outstanding and Excluded Persons will continue to beneficially own a majority of the outstanding shares of Class A Common Stock of the Company; or (iv) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets (in one transaction or a series of related transactions within any period of 24 consecutive months), other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity at least 75% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale. Notwithstanding the foregoing, no "Change in Control" shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity that owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions. For purposes of this Exhibit B, the term "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations of the Act. For purposes of this Exhibit B, the term "Exempt Person" shall mean (i) J. Peter Mosling, Jr.; (ii) Stephen P. Mosling; (iii) any transferee to which the Persons identified in clause (i) and (ii) above (the "Moslings") have lawfully transferred or may lawfully transfer shares of Class A Common Stock of the Company pursuant to the provisions of the Stock Purchase Agreement dated April 26th, 1996, by and among the Company and the Moslings, as the same may be amended from time to time; and (iv) any trustee, guardian, custodian, executor, administrator, fiduciary or other legal representative of the Persons identified in clauses (i), (ii) and (iii) above or the estates of the Moslings, in their capacity as such. For purposes of this Exhibit B, the term "Person" shall have the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 13(d) and 14(d) thereof. Final - January 12, 2000 19 EX-27 5 FDS -- OSHKOSH TRUCK CORPORATION
5 1,000 3-MOS SEP-30-2000 OCT-01-1999 MAR-31-2000 4,659 0 107,766 2,392 249,342 377,985 166,493 75,355 819,726 327,595 157,976 178 0 0 273,343 819,726 574,391 574,391 484,653 484,653 0 101 11,198 30,723 12,704 18,609 2,015 (581) 0 20,043 1.29 1.27
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