-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ls5mVrsrRSixmFYuo5vhNlZPXpJ0ZVEqwwX38pnnZrASYLYtAg22CbqnEbevObga lKgDJH3zrnSTICa8sIumMw== 0000897069-94-000126.txt : 19941230 0000897069-94-000126.hdr.sgml : 19941230 ACCESSION NUMBER: 0000897069-94-000126 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941229 SROS: NASD 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13886 FILM NUMBER: 94566943 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-K 1 OSHKOSH TRUCK CORP. FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) (X) Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the fiscal year ended September 30, 1994, or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required) 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 of other jurisdiction of (I.R.S. Employer Identification) incorporation or organization) P. O. Box 2566, Oshkosh, WI 54903-2566 (Address of principal executive offices) (zip code) Registrant's telephone number, including area code:(414) 235-9151 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Class B Common Stock (Title of Class) 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X Aggregate market value of the voting stock held by non-affiliates of the registrant as of November 15, 1994: Class A Common Stock, $.01 par value - No Established Market Value Class B Common Stock, $.01 par value - $93,939,619 Number of shares outstanding of each of the registrant's classes of common stock as of November 15, 1994: Class A Common Stock, $.01 par value - 449,370 shares Class B Common Stock, $.01 par value - 8,258,428 shares DOCUMENTS INCORPORATED BY REFERENCE Parts II and IV incorporate, by reference, portions of the Annual Report to Shareholders for year ended September 30, 1994. Part III incorporates, by reference, portions of the Proxy Statement dated December 19, 1994. ------------------------------------------------------------------------ OSHKOSH TRUCK CORPORATION Index to Annual Report on Form 10-K Year Ended September 30, 1994 Page PART I. ITEM 1. BUSINESS. . . . . . . . . . . . . . . . . . . . 3 ITEM 2. PROPERTIES. . . . . . . . . . . . . . . . . . . . 6 ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . 6 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . . . . . . . . . . . 7 EXECUTIVE OFFICERS OF THE REGISTRANT . . . . . . 7 PART II. ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS. . . . . . . . . 8 ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . 8 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . 8 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . 8 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. . . . . . . . . . . . . 8 PART III. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. . . . . . . . . . . . . . 9 ITEM 11. EXECUTIVE COMPENSATION. . . . . . . . . . . . 9 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. . . . . . . . . . . . 9 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . 9 PART IV. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. . . . . . . . . . . 10 INDEX TO EXHIBITS . . . . . . . . . . . . . . 11 PART I Item 1.BUSINESS General The company engineers, manufactures and markets a broad range of specialized trucks, chassis, trailers, and proprietary parts under the "Oshkosh" trademark. As a specialized vehicle producer, the company holds a unique position in the industry, having acquired the engineering and manufacturing expertise and flexibility to profitably build specialty vehicles in competition with companies much larger than itself. Mass producers design a vehicle to serve many markets. In contrast, the company's vehicles, manufactured in low to medium production volumes, are engineered for market niches where a unique, innovative design will meet a purchaser's requirements for use in specific, usually adverse operating conditions. Many of the company's products are found operating in snow, deserts and soft or rough terrain where there is a need for high performance or high mobility. Because of the quality of its specialized vehicles, the company believes its products perform at lower life cycle costs than those that are mass-produced. Markets served by the company domestically and internationally are categorized as defense and commercial. Since 1980, specialized vehicles sales to the defense market have significantly increased and in fiscal 1994 represented 62% of the company's sales volume, after reaching a peak of 83% in fiscal 1987. The company primarily depends upon components made by suppliers for its products, but manufactures certain important proprietary components. The company has successfully managed its supply network, which consists of approximately 2,000 active vendors. Through its reliance on this supply network for the purchase of certain components, the company is able to avoid many of the preproduction and fixed costs associated with the manufacture of those components. However, while the company purchases many of the high dollar components for assembly, such as engines, transmissions and axles, it does have significant machining and fabricating capability. This capability is used for the manufacture of certain axles, transfer cases, cabs and many smaller parts which add uniqueness and value to the company's products. Some of these proprietary components are marketed to other manufacturers. Products and Markets The company currently manufactures 8 different series of commercial trucks and 5 series of motorized chassis, and during fiscal 1994, had two active contracts with the U.S. Government. Within each series there is a varying number of models. Models are usually distinguished by differences in engine, transmission, and axle combinations. Vehicles produced range in price from $14,000 to $1 million; in horsepower from 105 to 1,025; and in gross vehicle weight from 10,000 to 150,000 pounds. The company has designed vehicles to operate in the environmental extremes of arctic cold or desert heat. With the exception of motorized chassis, most vehicles are designed with the capability to operate in both highway and off-road conditions. Oshkosh manufactures a broad range of trailers including vans, flatbed, container chassis, fruit haulers, and a variety of military trailers. The company aggressively supports its products with an aftermarket parts and service organization. Defense The company manufactures a range of military vehicles for the U.S. Department of Defense and export markets and is the free world's largest producer of heavy-duty military wheeled vehicles. The company has performed major defense work for the past 50 years. Contracts with the Department of Defense generally are multi-year contracts. Each contract provides that the government will purchase a base quantity of vehicles with options for additional purchases. All obligations of the government under the contracts are subject to receipt of government funding, and it is customary to expect purchases when Congress has funded the purchase through budget appropriations and after the government has committed the funds to the contractor. The following are defense contracts that were active in fiscal 1994: Heavy Equipment Transporter (HET). In January 1990 the company was awarded a $214 million contract for the production of 1,044 M1070 HETs. This contract also contained an option for an additional 522 units. The eight wheel drive M1070 HET is primarily designed to haul the Army's main battle tank, but also transports other tanks, fighting and recovery vehicles, self-propelled howitzers, and construction equipment. First article test approval was received by the company in February 1994. Production deliveries began in August 1992 and are substantially complete as of September 1994. The contract is funded at $281.8 million for the base quantity of 1,044 units and exercised options of 310 units. As of September 30, 1994, the company has delivered 1331 units under the contract and will deliver 23 units during 1995. In addition to the U.S. Army contract, the company produced 50 M1070 HET vehicles for the government of Saudi Arabia in 1993. Palletized Load System (PLS). In July 1990 the company was selected as the producer of the Army's new generation heavy-duty transport truck. This ten wheel drive truck self-loads and unloads flatracks carrying palletized cargo. The five year contract for 2,626 units and associated trailers and flatracks was awarded in September 1990. This contract contains a 100% option clause. The company received first article test approval on January 3, 1994. Production began in early 1992 and will conclude approximately August 1996. The company has produced 1,703 units as of September 30, 1994. If options are exercised, it will extend the production period or increase the rate of production. The contract is currently funded at $897 million for 2,683 trucks under all five program years, and there is $247 million available under unexercised options. Backlog at September 30, 1994 was $386 million, which will be produced ratably through August 1996. Commercial The company manufactures a range of vehicles for commercial markets. The S-series is a forward placement concrete carrier that offers advantages over conventional rear discharge trucks in that the concrete is placed from the front of the truck, in full view of the driver while in the cab, providing superior productivity and customer service. The company serves municipal markets with products that include Aircraft Rescue & Fire Fighting (ARFF), snow removal vehicles and waste transport vehicles. The company believes itself to be the world's largest producer of ARFF vehicles and produces four models of varying water capacities. The multi-purpose airport snow removal vehicle is a snow blower with interchangeable blade plows and brooms. The P-series is a line of heavy duty, high speed snow plow vehicles. The company has three model series of refuse vehicles, the A, NC, and NL. These vehicles are sold to private contractors as well as municipalities. The company manufactures its L, M, X, V, and S lines of motorized chassis for sale to manufacturers of motorhomes, buses and delivery step vans. The company offers the broadest model line in the industry and has developed a strong niche in the diesel segment of the market. Other product lines include F-series construction, utility, and heavy haul transport vehicles, and J-series desert oil field service and heavy haul transport vehicles. The company is engaged in the production of trailers that are marketed under the Oshkosh trademark to commercial and military markets. The company is marketing its proprietary components to original equipment manufacturers. Front-driving axles, transfer cases, all wheel steer, independent suspension, central tire inflation systems (CTIS), and axle wheel ends are currently being supplied to other original equipment manufacturers. Backlog The company has a funded backlog as of September 30, 1994, of $512 million. The backlog as of September 25, 1993, was $459 million. The majority of the current backlog relates to funded base and option quantities under the company's existing defense contracts. Approximately 13% of the current backlog relates to firm orders for commercial trucks, motorized chassis products, trailers, or non-military parts sales. In addition, option quantities under the existing defense contracts could amount to another $255 million, if exercised. Government Contracts A significant portion of the company's sales are made to the United States government under long-term contracts and programs in which there are significant risks, including the uncertainty of economic conditions and defense policy. The company's defense business is substantially dependent upon periodic awards of new contracts and the purchase of base vehicle quantities and the exercise of options under existing contracts. The company's existing contracts with the U.S. Government may be terminated at any time for the convenience of the government. Upon such termination, the company would be entitled to reimbursement of its incurred costs and, in general, to payment of a reasonable profit for work actually performed. There can be no assurance that the U.S. government will continue to purchase the company's products at comparable levels. The termination of any of the company's significant contracts, failure of the government to purchase quantities under existing contracts or failure of the company to receive awards of new contracts could have a material adverse effect on the business operations of the company. Under firm fixed-price contracts with the government, the price paid the company is not subject to adjustment to reflect the company's actual costs, except costs incurred as a result of contract changes ordered by the government or for economic price adjustment clauses contained in certain contracts. The company generally attempts to negotiate with the government the amount of increased compensation to which the company is entitled for government-ordered changes which result in higher costs. In the event that the company is unable to negotiate a satisfactory agreement to provide such increased compensation, the company may file an appeal with the Armed Services Board of Contract Appeals or the U.S. Claims Court. The company has no such appeals pending. Marketing and Distribution All domestic defense products are sold direct and the company maintains a liaison office in Washington, D.C. The company also sells defense products to foreign governments direct, through representatives, or under the United States Foreign Military Sales program. The company's commercial vehicle, chassis and trailer products and aftermarket parts are sold either direct to customers or through dealers or distributors, depending upon geographic area and product line. Supplemental information relative to export shipments is incorporated by reference to Note 8 of the financial statements included in the company's Annual Report to Shareholders for the fiscal year ended September 30, 1994. Competition In all the company's markets, the competitors include smaller, specialized manufacturers as well as the larger, mass producers. The company believes it has greater technical strength and production capability than other specialized manufacturers. The company also believes it has greater flexibility than larger competitors and has the engineering and manufacturing expertise in the low to middle production volumes that allows it to compete effectively in its markets against mass producers. The principal method of competition for the company in the defense and municipal markets, where there is intense competition, is generally on the basis of lowest qualified bid. In the non-governmental markets, the company competes mainly on the basis of price, innovation, quality and product performance capabilities. Engineering, Test and Development For fiscal years 1994, 1993, and 1992 the company incurred engineering, research and development expenditures of $8.2 million, $11.0 million, and $10.9 million, respectively, portions of which were recoverable from customers, principally the government. The company does not believe that patents are a significant factor in its business success. Employees As of September 30, 1994, the company had approximately 1,900 employees. Production workers at the company's principal facilities in Oshkosh, Wisconsin are represented by the United Auto Workers union. The company's five-year contract with the United Auto Workers expires September 30, 1996. Item 2. PROPERTIES. The company's principal offices and manufacturing facilities are located in Oshkosh, Wisconsin. Space occupied encompasses 697,761 square feet, 80,658 of which is leased. One half of the space owned by the company has been constructed since 1970. The company owns approximately 50 acres of vacant land adjacent to its existing facilities. The company owns a 153,600 sq. ft. chassis manufacturing plant in Gaffney, SC, and the trailer office and manufacturing facility with 287,000 sq. ft. located in Bradenton, FL. The company's equipment and buildings are modern, well maintained and adequate for its present and anticipated needs. In addition, the company has leased parts and service facilities in Hartford, CT, Greensboro, NC, Chicago, IL and Salt Lake City, UT, and owns similar facilities in Lakeland, FL and Oshkosh, WI. Item 3. LEGAL PROCEEDINGS. Various actions or claims have been brought or asserted or may be contemplated by government authorities against the company. Among these is a potential action by government authorities against the company in connection with a grand jury investigation which commenced on April 28, 1989. No charges have been filed against the company or its employees. The company and its employees have cooperated fully with the government investigation. Based on internal reviews and after consultation with counsel, the company does not have sufficient information to reasonably estimate what potential future costs, if any, the company may incur as a result of the government claims or actions. As a result, no provision related to these issues has been recorded in the accompanying financial statements. Costs incurred in responding to these actions and claims have been expensed as incurred. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended September 30, 1994. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the company are as follows: Name Age* Title R. Eugene Goodson 59 Chairman & CEO, Member of Executive Committee and Director Robert G. Bohn 41 President & COO Paul C. Hollowell 53 Executive Vice President & President- Oshkosh International Fred S. Schulte 51 Vice President, Chief Financial Officer and Treasurer Matthew J. Zolnowski 41 Vice President-Administration *As of November 15, 1994 All of the company's officers serve terms of one year and until their successors are elected and qualified. R. EUGENE GOODSON - Mr. Goodson joined the company in April 1990 in his present position. Prior thereto, he served as Group Vice President and General Manager of the Automotive Systems Group of Johnson Controls, Inc., which position he held since 1985. Mr. Goodson is also a director of Donnelly Corporation and Knowles Electronics, Incorporated. ROBERT G. BOHN - Mr. Bohn joined the company as Vice President- Manufacturing in May 1992 and assumed his present position in February 1994. Mr. Bohn came from Johnson Controls, Inc., where he was Managing Director at their European Operations in the Automotive Systems Division since 1988. PAUL C. HOLLOWELL - Mr. Hollowell joined the company in April 1989 as Vice President-Defense Products and assumed his present position in February 1994. Mr. Hollowell came from General Motors Corporation where he served for three years as manager of their Washington, DC office for military tactical vehicle programs. He previously served 22 years in the U.S. Army from which he retired with the rank of Lieutenant Colonel. FRED S. SCHULTE - Mr. Schulte joined the company in March 1991 in his present position. Prior thereto, he served as Chief Financial Officer of Tracor, Inc. from 1987 to 1991. MATTHEW J. ZOLNOWSKI - Mr. Zolnowski joined the company as Vice President-Human Resources in January 1992 and assumed his present position in February 1994. Before joining the company Mr. Zolnowski was Director, Human Resources and Administration at Rexene Products Company from September 1990 through January 1992 and Director, Headquarters Employee Relations at PepsiCo, Inc. from June 1982 through August 1990. PART II Item 5. Market for Registrant's Common Stock and Related Stockholder Matters. The information under the captions "Shareholder Information", Note 9 to the Consolidated Financial Statements, and "Financial Statistics" contained in the company's Annual Report to Shareholders for the fiscal year ended September 30, 1994, is hereby incorporated by reference in answer to this item. Item 6. Selected Financial Data. The information under the caption "Financial Highlights" contained in the company's Annual Report to Shareholders for the fiscal year ended September 30, 1994, is hereby incorporated by reference in answer to this item. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The information under the caption "Management's Discussion and Analysis of Results of Operations and Financial Condition" contained in the company's Annual Report to Shareholders for the fiscal year ended September 30, 1994, is hereby incorporated by reference in answer to this item. Item 8. Financial Statements and Supplementary Data. The financial statements set forth in the company's Annual Report to Shareholders for the fiscal year ended September 30, 1994, is hereby incorporated by reference in answer to this item. Data regarding quarterly results of operations included under the caption "Financial Statistics" in the company's Annual Report to Shareholders for the fiscal year ended September 30, 1994, is hereby incorporated by reference. Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosures. None. PART III Item 10. Directors and Executive Officers of the Registrant. The information under the captions "Election of Directors" and "Other Matters" of the company's definitive proxy statement for the annual meeting of shareholders on January 23, 1995, as filed with the Securities and Exchange Commission, is hereby incorporated by reference in answer to this Item. Reference is also made to the information under the heading "Executive Officers of the Registrant" included under Part I of this report. Item 11. Executive Compensation. The information under the captions "Executive Compensation" contained in the company's definitive proxy statement for the annual meeting of shareholders on January 23, 1995, as filed with the Securities and Exchange Commission is hereby incorporated by reference in answer to this Item. Item 12. Security Ownership of Certain Beneficial Owners and Management. The information under the caption "Shareholdings of Nominees and Principal Shareholders" contained in the company's definitive proxy statement for the annual meeting of shareholders on January 23, 1995, as filed with the Securities and Exchange Commission, is hereby incorporated by reference in answer to this Item. Item 13. Certain Relationships and Related Transactions. The information contained under the captions "Election of Directors" and "Certain Transactions" contained in the company's definitive proxy statement for the annual meeting of shareholders on January 23, 1995, as filed with the Securities and Exchange Commission, is hereby incorporated by reference in answer to this Item. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a) 1. Financial Statements: The following consolidated financial statements of the company and the auditors' report appearing at the indicated pages of the Annual Report to Shareholders for fiscal year ended September 30, 1994, are incorporated by reference in Item 8: Consolidated Balance Sheet at September 30, 1994 and September 25, 1993 Consolidated Statement of Operations and Retained Earnings for the years ended September 30, 1994, September 25, 1993 and September 30, 1992 Consolidated Statement of Cash Flows for the years ended September 30, 1994, September 25, 1993, and September 30, 1992 Notes to Consolidated Financial Statements Report of Ernst & Young, LLP Independent Auditors 2. Financial Statement Schedules: Consent of Independent Auditors For the years ended September 30, 1994, September 25, 1993, and September 30, 1992 Schedule II - Amounts Receivable From Related Parties Schedule V - Property, Plant & Equipment Schedule VI - Accumulated Depreciation & Amortization of Property, Plant & Equipment Schedule VIII - Valuation & Qualifying Accounts Schedule IX - Short-term Borrowing All other schedules are omitted because they are not applicable, or the required information is shown in the financial statements or notes thereto. 3. Exhibits: 3.1 Restated Articles of Incorporation * 3.2 Bylaws of the company, as amended ***** 4.1 Credit Agreement # 4.2 Credit Agreement amendments through October 15, 1993 ### 4.3 Credit Agreement Amendments from October 16, 1993 through September 30, 1994 10.2 Lease with Cadence Company (formerly Mosling Realty Company) and related documents * 10.3 1990 Incentive Stock Plan for Key Employees, as amended (through April 25, 1994)@ 10.4 Form of Key Employee Employment and Severance Agreement with Messrs. R. E. Goodson, Chairman & CEO and F. S. Schulte, Vice President and Chief Financial Officer **@ 10.5 Lease with Lake Aire Development, Inc. ### 10.6 Employment Agreement with R. E. Goodson, Chairman & CEO as of April 16, 1990 ****@ 10.7 Restricted stock grant to R. E. Goodson, Chairman & CEO ****@ 10.8 Incentive Stock Option Agreement to R. E. Goodson, Chairman & CEO****@ 10.9 Employment Agreement with R. E. Goodson, Chairman & CEO as of April 16, 1992 ##@ 10.11 Lease extension with Lake Aire Development, Inc. dated April 21, 1994 10.12 1994 Long-Term Incentive Compensation Plan dated March 29, 1994@ 10.13 Form of Key Employees Employment and Severance Agreement with Messrs. R.G. Bohn, P.C. Hollowell, and M.J. Zolnowski@ 11. Computation of per share earnings (contained in Note 1 of "Notes to Consolidated Financial Statements" of the company's Annual Report to Shareholders for the fiscal year ended September 30, 1994) 13. 1994 Annual Report to Shareholders, to the extent incorporated herein by reference 23. Consent of Ernst & Young LLP (contained in Consent of Independent Auditors, which accompanies financial statement schedules) 27. Financial Data Schedule *Previously filed and incorporated by reference to the company's Form S-1 registration statement filed August 22, 1985, and amended September 27, 1985, and October 2, 1985 (Reg. No. 2-99817). **Previously filed and incorporated by reference to the company's Form 10- K for the year ended September 30, 1987. ***Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 30, 1989. ****Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 30, 1990. *****Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 30, 1991. # Previously filed and incorporated by reference to the company's form 10- Q for the quarter ended March 31, 1992. ## Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 30, 1992. ### Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 25, 1993. @ Denotes a management contract or compensatory plan or arrangement. (b) No report on Form 8-K was required to be filed by the registrant during the last quarter of the period covered by this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. OSHKOSH TRUCK CORPORATION December 19, 1994 By /S/ R. Eugene Goodson R. Eugene Goodson Chairman & CEO Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated. December 19, 1994 /S/ R. E. Goodson R. E. Goodson Chairman & CEO, Member of Executive Committee and Director December 19, 1994 /S/ F. S. Schulte F. S. Schulte Vice President, Chief Financial Officer and Treasurer December 19, 1994 /S/ P. F. Mueller P. F. Mueller Corporate Controller (Principal Accounting Officer) December 19, 1994 /S/ J. W. Andersen J. W. Andersen Director December 19, 1994 /S/ D. T. Carroll D. T. Carroll Director December 19, 1994 /S/ T. M. Dempsey T. M. Dempsey Director December 19, 1994 /S/ M. W. Grebe M. W. Grebe Director December 19, 1994 /S/ S. P. Mosling S. P. Mosling Director and Member of Executive Committee December 19, 1994 /S/ J. P. Mosling, Jr. J. P. Mosling, Jr. Director and Member of Executive Committee CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in this Annual Report on Form 10-K of Oshkosh Truck Corporation of our report dated November 14, 1994, included in the 1994 Annual Report to Shareholders of Oshkosh Truck Corporation. Our audits also included the financial statement schedules of Oshkosh Truck Corporation listed in Item 14(a). These schedules are the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. We also consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-38822) pertaining to the Oshkosh Truck Corporation's 1990 Incentive Stock Plan and in the related prospectus of our report dated November 14, 1994, with respect to the consolidated financial statements and schedules of Oshkosh Truck Corporation included or incorporated by reference in the Annual Report (Form 10-K) for the year ended September 30, 1994. Ernst & Young LLP Milwaukee, Wisconsin December 19, 1994 SCHEDULE II OSHKOSH TRUCK CORPORATION AMOUNTS RECEIVABLE FROM RELATED PARTIES Years Ended September 30, 1994, September 25, 1993 and September 30, 1992 (In Thousands) Balance at Balance at Beginning of End of Name of Debtor Period Additions Reductions Period 47.25% Equity Owned Foreign Subsidiary: Chassises Y Autopartes Oshmex Year Ended September 30, 1992 $-- $-- $-- $-- ==== ==== ==== ==== Year Ended September 25, 1993 $-- $-- $-- $-- ==== ==== ==== ==== Year Ended September 30, 1994 $-- $8,297(1) ($320) $7,977(2) ==== ====== ==== ====== (1) In fiscal 1994 $3,507 which arose in the ordinary course of business was converted into a note as described in (2) below. (2) Includes trade receivables of $177 and a note receivable of $7,800. Terms of the note receivable are as follow: Date of Note: July 7, 1994 Due Date: July 7, 1995 Interest Rate: 1% above Firstar Bank of Wisconsin reference rate Terms of Repayment: Lump sum on due date of note Guaranteed 10% by Microbuses Y Refacciones, S.A., de C.V. and 45% by Mexicana de Autobuses Soliedad Anonima de Capital Variable. SCHEDULE V OSHKOSH TRUCK CORPORATION PROPERTY, PLANT AND EQUIPMENT Years Ended September 30, 1994, September 25, 1993, and September 30, 1992 (In Thousands)
Balance at Other Beginning Additions Retirements Changes Balance at Classification of Year at Cost or Sales Add/(Deduct) End of Year ------------------------------------------------------------------------------------------------ Year ended September 30, 1992: Land and improvements... $ 6,587 $ 219 $ -- $ -- $ 6,806 Buildings... 30,344 1,951 -- -- 32,295 Machinery and equipment... 55,524 7,837 57 -- 63,304 ------- ------- ----- ---- -------- Total... $92,455 $10,007 $ 57 $ -- $102,405 ======= ======= ===== ==== ======== Year ended September 25, 1993: Land and improvements... $ 6,806 $ 988 $ 6 $ -- $ 7,788 Buildings... 32,295 873 64 198 * 33,302 Machinery and equipment... 63,304 6,540 1,066 (198)* 68,580 ------- ------- ------ ----- -------- Total... $102,405 $ 8,401 $1,136 $ 0 $109,670 ======== ======= ====== ===== ======== Year ended September 30, 1994: Land and improvements... $ 7,788 $ 156 $ -- $ -- $ 7,944 Buildings... 33,302 1,074 12 -- 34,364 Machinery and equipment... 68,580 4,479 1,655 (15) 71,389 -------- ------- ------- ----- -------- Total... $109,670 $ 5,709 $ 1,667 $(15) $113,697 ======== ======= ======= ===== Depreciation is provided using accelerated methods for machinery and equipment and principally straightline methods for land improvements and buildings. Estimated useful lives used in computing depreciation are as follows: Land improvements..................10-15 years Buildings..........................10-40 years Machinery and equipment............ 2-20 years * Reclassification of Buildings and Machinery and Equipment
SCHEDULE VI OSHKOSH TRUCK CORPORATION ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT Years Ended September 30, 1994, September 25, 1993, and September 30, 1992 (In Thousands)
Additions Balance at Charged to Other Beginning Costs and Changes Balance at Classification of Year Expenses Retirements Add/(Deduct) End of Year Year ended September 30, 1992: Land and improvements... $ 1,398 $ 141 $ -- $ -- $ 1,539 Buildings... 8,517 1,182 -- -- 9,699 Machinery and equipment... 29,743 6,471 35 -- 36,179 ------- ------ ---- ---- -------- Total... $39,658 $7,794 $ 35 $ -- $ 47,417 ======= ====== ==== ==== ======== Year ended September 25, 1993: Land and improvements... $ 1,539 $ 189 $ -- $ -- $ 1,728 Buildings... 9,699 1,286 60 -- 10,925 Machinery and equipment... 36,179 7,113 699 -- 42,593 ------- ------ ---- ---- -------- Total... $47,417 $8,588 $759 $ -- $ 55,246 ======= ====== ==== ==== ======== Year ended September 30, 1994: Land and improvements... $ 1,728 $ 189 $ -- $ -- $ 1,917 Buildings... 10,925 1,634 9 -- 12,550 Machinery and equipment... 42,593 7,309 1,158 (15) 48,729 ------- ------ ------ ---- -------- Total... $55,246 $9,132 $1,167 $(15) $ 63,196 ======= ====== ====== ===== ========
SCHEDULE VIII
OSHKOSH TRUCK CORPORATION VALUATION AND QUALIFYING ACCOUNTS Years Ended September 30, 1994, September 25, 1993, and September 30, 1992 (In Thousands) Balance at Additions Beginning Charged to Balance at Classification of Year Expense Reductions* End of Year Receivables - Allowance for doubtful accounts: 1992.......... $1,148 $456 ($128) $1,476 ====== ==== ====== ====== 1993.......... $1,476 $149 ($948) $ 677 ====== ==== ====== ====== 1994.......... $ 677 $128 ($274) $ 53 ====== ==== ====== * Represents amounts written off to the reserve, net of recoveries.
SCHEDULE IX OSHKOSH TRUCK CORPORATION SHORT-TERM BORROWINGS Years Ended September 30, 1994, September 25, 1993, and September 30 1992 (In Thousands)
Weighted Average Weighted Maximum Average Interest Average Amount Amount Rate Interest Outstanding Outstanding Incurred Category of Aggregate Balance at Rate at End During the During the During Short-Term Borrowings End of Year of Year Year Year the Year ----------------------------------------------------------------------------------------------------------- Year ended September 30, 1992: Notes Payable to banks... -- -- $59,100 $34,000 6.20% Year ended September 25, 1993: Notes Payable to banks... -- -- -- -- -- Year ended September 30, 1994: Notes Payable to banks... -- -- -- -- --
EXHIBIT INDEX Exhibits 3.1 Restated Articles of Incorporation * 3.2 Bylaws of the company, as amended ***** 4.1 Credit Agreement # 4.2 Credit Agreement amendments through October 15, 1993 ### 4.3 Credit Agreement Amendments from October 16, 1993 through September 30, 1994 10.2 Lease with Cadence Company (formerly Mosling Realty Company) and related documents * 10.3 1990 Incentive Stock Plan for Key Employees, as amended (through April 25, 1994)@ 10.4 Form of Key Employee Employment and Severance Agreement with Messrs. R. E. Goodson, Chairman & Chief Executive Officer (CEO) and F. S. Schulte, Vice President and Chief Financial Officer (CFO) **@ 10.5 Lease with Lake Aire Development, Inc. ### 10.6 Employment Agreement with R. E. Goodson, Chairman & CEO as of April 16, 1990 ****@ 10.7 Restricted stock grant to R. E. Goodson, Chairman & CEO ****@ 10.8 Incentive Stock Option Agreement to R. E. Goodson, Chairman & CEO ****@ 10.9 Employment Agreement with R. E. Goodson, Chairman & CEO as of April 16, 1992 ##@ 10.11 Lease extension with Lake Aire Development, Inc. dated April 21, 1994 10.12 1994 Long-Term Incentive Compensation Plan dated March 29, 1994@ 10.13 Form of Key Employees Employment and Severance Agreement with Messrs. R.G. Bohn, P.C. Hollowell, and M.J. Zolnowski@ 11. Computation of per share earnings (contained in Note 1 of "Notes to Consolidated Financial Statements" of the company's Annual Report to Shareholders for the fiscal year ended September 30, 1994) 13. 1994 Annual Report to Shareholders, to the extent incorporated herein by reference 23. Consent of Ernst & Young LLP (contained in Consent of Independent Auditors, which accompanies financial statement schedules) 27. Financial Data Schedule *Previously filed and incorporated by reference to the company's Form S-1 registration statement filed August 22, 1985, and amended September 27, 1985, and October 2, 1985 (Reg. No. 2-99817). **Previously filed and incorporated by reference to the company's Form 10- K for the year ended September 30, 1987. ***Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 30, 1989. ****Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 30, 1990. *****Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 30, 1991. # Previously filed and incorporated by reference to the company's form 10- Q for the quarter ended March 31, 1992. ## Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 30, 1992. ### Previously filed and incorporated by reference to the company's Form 10-K for the year ended September 25, 1993. @ Denotes a management contract or compensatory plan or arrangement. EX-4 2 OSHKOSH TRUCK EXHIBIT 4.3 EXHIBIT 4.3 FOURTH AMENDMENT TO CREDIT AGREEMENT THIS FOURTH AMENDMENT TO CREDIT AGREEMENT is made as of June 7, 1994 among the undersigned financial institutions (individually a "Bank" and collectively the "Banks"), FIRSTAR BANK MILWAUKEE, NATIONAL ASSOCIATION (formerly known as First Wisconsin National Bank of Milwaukee), as agent for the Banks (the "Agent"), and OSHKOSH TRUCK CORPORATION (the "Company"). RECITALS The Company, the Banks and the Agent entered into a Credit Agreement dated as of March 31, 1992, as amended by a First Amendment to Credit Agreement dated as of March 12, 1993, a Second Amendment to Credit Agreement dated as of July 7, 1993 and a Third Amendment to Credit Agreement dated as of October 15, 1993 (collectively, the "Credit Agreement"). The Company, the Banks and the Agent desire to amend the Credit Agreement as provided below. AGREEMENTS In consideration of the Recitals and the agreements contained herein and in the Credit Agreement as amended hereby, the Company, the Banks and the Agent agree as follows: 1. Definitions and References. Capitalized terms used herein shall have the meanings set forth in the Credit Agreement. All references to the Credit Agreement contained herein or in the Credit Agreement shall mean the Credit Agreement as amended by this Amendment. 2. Amendment. The Credit Agreement is hereby amended as follows: (a) The following definitions are hereby added to Section 1 of the Credit Agreement: "Basic Documents" means two or more, including all, of the Cherokee Co. Industrial Revenue Bonds, the Indenture, the Loan Agreement, and the Pledge and Security Agreement, all as defined in the Indenture and all as the same may be amended, modified, supplemented or restated from time to time, and "Basic Document" shall mean any one of the foregoing. "Cherokee Co. IRB Default" means such term as defined in Section 7.1(1). "Cherokee Co. Industrial Revenue Bonds" means those Cherokee County, South Carolina Variable/Fixed Rate Demand Industrial Revenue Bonds, Series 1989 (Oshkosh Truck Corporation Project) in the original aggregate principal amount of $9,300,000. "Cherokee Co. IRB Letter of Credit" shall mean that irrevocable letter of credit issued pursuant to the terms of this Agreement in support of the Cherokee Co. Industrial Revenue Bonds, as amended, modified, extended, renewed or replaced from time to time. "Indenture" means Indenture of Trust dated as of August 1, 1989 between Cherokee County, South Carolina and Citizens and Southern Trust Company (Georgia), National Association (now known as NationsBank of Georgia, N.A.) pursuant to which the Cherokee Co. Industrial Revenue Bonds were issued. "NationsBank" means NationsBank of North Carolina, N.A., as a Bank under this Agreement, and as initial Issuing Bank of the Cherokee Co. IRB Letter of Credit hereunder. "Special Bank Event" means the delivery by the Agent or the Issuing Bank for the Cherokee Co. IRB Letter of Credit to the Company and the Trustee of an opinion of counsel (selected by the Agent and reasonably acceptable to the Company) recognized to have expertise in banking or securities law matters to the effect that, on the basis of a change after the date of issuance of the Cherokee Co. IRB Letter of Credit in the laws, rules or regulations applicable to the Agent or the Banks or in the interpretation of such laws, rules or regulations by any governmental authority having jurisdiction over the Agent and the Banks or of a ruling after the date of issuance of the Cherokee Co. IRB Letter of Credit by a court of competent jurisdiction or other governmental authority, the maintenance of the Cherokee Co. IRB Letter of Credit by the Issuing Bank thereof, the execution of the Pledge and Security Agreement in favor of the Issuing Bank of the Cherokee Co. IRB Letter of Credit, the acceptance by the Issuing Bank of the collateral thereunder or any other transaction contemplated by this Agreement is, or will be, a violation of the laws, rules and regulations applicable to the Issuing Bank, or requires or will require the Issuing Bank to register as a securities dealer (or in any similar capacity) if not otherwise so registered. "Trustee" means NationsBank of Georgia, N.A. formerly known as Citizens and Southern Trust Company) as trustee under the indenture and any successor trustee under the Indenture. (b) The definition of "Issuing Bank" in Section 1 of the Credit Agreement is hereby amended to read in its entirety as follows: "Issuing Bank" means, (a) Bank appointed by the Company, which shall be one of the Banks and which shall have accepted such appointment, which issues or will issue a Letter of Credit, and (b) for the initial Cherokee Co. IRB Letter of Credit, NationsBank. (c) The definition of "Letter of Credit" in Section 1 of the Credit Agreement is hereby amended to read in its entirety as follows: "Letter of Credit" means a letter of credit issued by the Issuing Bank at the request of the Company pursuant to Section 2.10 and "Letters of Credit" means all such letters of credit; including without limitation the Cherokee Co. IRB Letter of Credit. (d) The definition of "Letter of Credit Commitment" in Section 1 of the Credit Agreement is hereby amended to read in its entirety as follows: "Letter of Credit Commitment" means, as to each Bank, such Bank's Percentage of the aggregate amount of the Letter of Credit Commitments. The aggregate amount of the Letter of Credit Commitments is initially $15,000,000 and is subject to reduction from time to time pursuant to section 2.5. The aggregate Letter of Credit Commitments may at the request of the Company by notice to the Agent by increased to an amount in excess of $15,000,000 in integral multiples of $1,000,000; provided, however, that (a) the amount by which the aggregate Letter of Credit Commitments exceeds $15,000,000 shall reduce the Banks' aggregate Revolving Loan Commitments and (b) the amount by which the aggregate letter of Credit Commitments exceeds $15,000,000, plus the aggregate outstanding balances of the Notes may not exceed $70,000,000. Each Bank's Revolving Loan Commitment shall be reduced by an amount equal to such Bank's Percentage of the amount by which the aggregate Letter of Credit Commitments exceeds $15,000,000. (e) The definition of "Maturity Date" in Section 1 of the Credit Agreement is hereby amended to read in its entirety as follows: "Maturity Date" means march 17, 1997 or such earlier date on which (a) the Agent declares the Notes to be immediately due and payable pursuant to Section 7.2 of this Agreement, or (b) the Company permanently reduces the Revolving Loan Commitments to zero pursuant to section 2.5(a) of this Agreement. (f) The definition of "Permitted Lien" in Section 1 of the Credit Agreement is amended by deleting "and" at the end of subsection (g), adding "and" at the end of subsection (h) and adding a new subsection (i) as follows: (i) liens created under the Custody, Pledge and Security Agreement dated as of August 1, 1989, as amended, modified or supplemented from time to time. (g) The definition of "Revolving Loan Commitment" in Section 1 of the Credit Agreement is hereby amended to read in its entirety as follows: "Revolving Loan Commitment" means, as to a Bank, the obligation of such Bank to make its pro rata share of Revolving Loans to the Company. The aggregate amount of the Revolving Loan Commitments is $70,000,000, less the amount by which the aggregate Letter of Credit Commitments exceeds $15,000,000 and is subject to reduction from time to time pursuant to Section 2.5. The Revolving Loan Commitment of each Bank is such Bank's Percentage of the aggregate of the Revolving Loan Commitments. (h) A new Section 2.4(3) is hereby added to the Credit Agreement as follows: (e) Facility Fees. The Company agrees to pay to the Agent, for the ratable account of the Banks, on the last Business Day of each fiscal quarter of the Company commencing with the quarter ending March 31, 1994, and on the Maturity Date, a facility fee equal to one-half of 1% of the daily average amount of the outstanding loans, advances or extensions of credit to Mexicana de Chasises S.A. de C.V. (as provided in Section 6.7(m) during the preceding quarter or other applicable period. Facility fees shall be calculated for the actual number of days elapsed on the basis of a 360-day year. (i) A new Section 2.4(f) is hereby added to the Credit Agreement as follows: (f) Issuing Bank Fees. The company agrees to pay to the Issuing Banks, for their own account, in connection with the issuance and maintenance of the Letters of Credit hereunder, such fees as may be agreed upon by the Company and Issuing Bank whether by way of letter agreement or otherwise. (j) The first sentence of Section 2.10(a) of the Credit Agreement is hereby amended to read in its entirety as follows: The Issuing Bank will issue Letters of Credit which it may lawfully issue, in Dollars, for the account of the Company, subject to the terms and conditions hereof, at any time during the period from the Closing Date to the Maturity Date; provided that the amount available for drawing under all Letters of Credit, plus the Letter of Credit Exposure as of the applicable Borrowing Date, shall not exceed the aggregate Letter of Credit Commitments and, provided further, that no Letter of Credit shall have an initial expiry date later than the Maturity Date, except that (i) the Cherokee Co. IRB Letter of Credit and (ii) Letters of Credit in an aggregate face amount not exceeding $2,500,000 at any time outstanding, may have an initial expiry date not later than 12 months after the Maturity Date. (k) The first sentence of Section 2.10(e) of the Credit Agreement is hereby amended to read in its entirety as follows: If on the Maturity Date any Letter of Credit (including the Cherokee Co. IRB Letter of Credit) remains outstanding, the Company shall either make arrangements satisfactory to the Required Banks for the assumption of liabilities created by any such issued and unexpired Letter of Credit or, in the absence of such satisfactory arrangements, the Company shall deliver to the Agent, for the benefit of the Banks, Cash Collateral in an aggregate principal amount equal to 110% of the Letter of Credit Exposure. (l) A new Section 2.10(f) is hereby added to the Credit Agreement as follows: (f) Cherokee Co. IRB Letter of Credit. The Cherokee Co. IRB Letter of Credit will be issued for an initial term of one year and may be renewed or extended (upon the written request of the Company) at the option of the Required Banks for a period ending not later than 12 months after the Maturity Date. (m) A new Section 5.19 is hereby added to the Credit Agreement as follows: 5.19 Special Bank Event. Within 90 days after the occurrence of a Special Bank Event, (i) replace the Cherokee Co. IRB Letter of Credit with the letter of credit of an issuer who is not subject to a Special Bank Event as a result of issuing the Cherokee Co. IRB Letter of Credit, (ii) cause the redemption of all of the Cherokee Co. Industrial Revenue Bonds in accordance with the terms of the indenture, or (iii) cause the Letter of Credit to be surrendered for cancellation. (n) Section 6.1 of the Credit Agreement is hereby amended in its entirety to read as follows: Restricted Payments. Make any Restricted Payments, provided that so long as no Default or Event of Default exists, the Company may make (a) the Restricted Payments of Dividends paid by the Company on November 15, 1993, and (b) Restricted Payments in an additional amount not exceeding, in the aggregate during the term of this Agreement, $4,000,000 plus 40% of Net Income (or, if Net Income is a negative number, then reduced by 100% of such negative Net Income) for the period commencing September 26, 1993 to the end of the fiscal quarter immediately preceding the making of such Restricted Payment. (o) Section 6.7 of the Credit Agreement is amended by deleting "and" at the end of the subsection 91) and by replacing subsection 6.7(m) with the following: (m) loans, advances or extensions of credit (including accounts receivable) to Chasises y Autopartes OSHMEX S.A. de C.V., a Mexico corporation, not to exceed an aggregate amount of $10,000,000 from the date hereof through March 17, 1995 or $0 at any time after March 17, 1995; (n) new investments by the Company in Midwest O.P. Holdings, Corp. during fiscal years 1994 and 1995 not to exceed $400,000 in excess of the amount permitted under Section 6.7(l) above; and (0) new strategic investments of the Company in other business entities, not to exceed an aggregate amount of $1,000,000 in each fiscal year. (p) Section 6.9(a)(i), Sale of Receivables, of the Credit Agreement is amended by deleting "$10,000,000" and inserting "$20,000,000" in its place. (q) A new Section 6.21 is hereby added to the Credit Agreement as follows: 6.21 Cherokee Co. Industrial Revenue Bonds. Enter into or consent to any amendment of any of the Basic Documents without the prior written consent of the Issuing Bank for the Cherokee Co. IRB Letter of Credit and the Majority Banks. The Company will not, and will not permit any Affiliate to have any Cherokee Co. Industrial Revenue Bond (including the principal amount thereof and interest accrued thereon) legally or beneficially owned by any of them to be purchased, or redeemed or otherwise paid, directly or indirectly, by any drawing on the Cherokee Co. IRB Letter of Credit, and the Company agrees not to cause any optional redemption of the Cherokee Co. Industrial Revenue Bonds pursuant to Sections 2.06(a) or 2.07(a)(ii) of the Indenture, unless (i) the Majority Banks shall have given their prior written consent, or (ii) the Company shall provide cash collateral in advance of the draw in an amount at least as great as the amount of the draw. (r) A new subsection (1) is hereby added to Section 7.1 of the Credit Agreement as follows: (1) Event of Default Under Basic Documents. The Company shall default in the due performance or observance of any other term, covenant or agreement contained in any of the other Basic Documents (subject to applicable grace or cure periods, if any, sometimes herein referred to as a "Cherokee Co. IRB Default"). (s) A new subsection (c) is hereby added to Section 7.2 of the Credit Agreement as follows: (c) The Issuing Bank may, at the request and direction of the Majority Banks, notify the Trustee of the occurrence of an Event of Default hereunder and thereby require the Trustee to declare the principal amount of the Cherokee Co. Industrial Revenue Bonds and interest accrued thereon to be due and payable immediately, all in accordance with the terms of the Indenture, and, upon said declaration, such principal and interest shall become and be immediately due and payable. In addition the Issuing Bank, at the request and direction of the Majority Banks, may exercise any other rights and remedies available under any Basic Document, any other agreement or at law or in equity. If the Event of Default is the failure by the Company to reimburse the Issuing Bank on a timely basis for an "Interest Drawing" (as defined in the Cherokee Co. IRB Letter of Credit), the Issuing Bank may, no later than the tenth Business Day following such drawing, deliver to the Trustee notice that the Cherokee Co. IRB Letter of Credit will not be reinstated. 3. Effectiveness of the Amendment. This Amendment shall become effective when counterparts hereof executed on behalf of the Company, the Agent and the Required Lenders shall have been received by the Agent and notice thereof shall have been given by the Agent to the Company and each Bank. 4. Representations and Warranties. The Company certifies that (a) the representations and warranties contained in the Credit Agreement are true and correct as of the date of the Amendment except (1) that the representations and warranties contained in section 3.3 shall apply to the most recent financial statements delivered pursuant to sections 5.1 and 5.2 and (ii) for changes permitted by the Credit Agreement, (b) no condition exists nor has any event or act occurred which, with or without the giving of notice or the passage of time, would constitute an Event of Default under the Credit Agreement, and (c) this Amendment has been duly authorized, executed and delivered on its behalf, and that the Credit Agreement, as amended hereby, constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms. 5. Expenses and Fees. As consideration for the amendment contained herein, the Company will pay to the Agent, for the account of the Banks, upon execution hereof, a fee equal to $20,000. The Company shall reimburse the Agent and the Banks (including NationsBank) for all reasonable legal fees and expenses incurred by the Agent and the Banks (including NationsBank) in connection with the preparation, negotiation and execution of this Amendment and the issuance of the Cherokee Co. IRB Letter of Credit. 6. Full Force and Effect. Except as amended hereby the Credit Agreement shall remain in full force and effect. The Credit Agreement, as amended hereby, and all rights and powers created thereby and thereunder and under the Notes are in all respects ratified and confirmed except that the Notes are hereby amended as required by the amendment to the Credit Agreement herein. The Company covenants and agrees that each of the Notes shall remain in full force and effect and shall continue to secure the debts, obligations and liabilities of the Company to the Bank for due payment of all principal, interest and other charges due the Bank by the Company under the Credit Agreement, as amended hereby, and any extensions, modifications or refinancing thereof. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed the day and year first written above. FIRSTAR BANK MILWAUKEE, N.A. (formerly known as First Wisconsin national Bank of Milwaukee), as Agent and a OSHKOSH TRUCK CORPORATION Bank BY FRED SCHULTE BY /s/ Its Vice President Its Assistant Vice President BANK ONE, MILWAUKEE NATIONAL NATIONSBANK OF NORTH CAROLINA, ASSOCIATION N.A. BY /s/ BY /s/ Its Vice President Its Vice President THE NORTHERN TRUST COMPANY HARRIS TRUST AND SAVINGS BANK BY /s/ BY /s/ Its Vice President Its Vice President PNC BANK, NATIONAL ASSOCIATION (formerly known as Pittsburgh National Bank) BY /s/ Its Commercial Banking Officer EX-10 3 OSHKOSH TRUCK EXHIBIT 10.3 EXHIBIT 10.3 OSHKOSH TRUCK CORPORATION 1990 INCENTIVE STOCK PLAN, as amended Section 1. Establishment, Purpose, and Effective Date of Plan 1.1 Establishment. Oshkosh Truck Corporation, a Wisconsin corporation, hereby establishes the "1990 INCENTIVE STOCK PLAN" (the "Plan") for key employees and for directors of the Corporation who are not employees of the Corporation or any Subsidiary. The Plan permits the grant of Stock Options and Restricted Stock. 1.2 Purpose. The purpose of the Plan is to advance the interests of the Corporation and its Subsidiaries and promote continuity of management by encouraging and providing for the acquisition of an equity interest in the success of the Corporation by key employees and by enabling the Corporation to attract and retain the services of key employees upon whose judgment, interest, skills, and special effort the successful conduct of its operations is largely dependent. In addition, the Plan is designed to promote the best interests of the Corporation and its shareholders by providing a means to attract and retain competent directors who are not employees of the Corporation or any Subsidiary and to provide opportunities for stock ownership by such directors which will increase their proprietary interest in the Corporation and, consequently, their identification with the interests of the shareholders of the Corporation. 1.3 Effective Date. The Plan was initially effective April 9, 1990 and was amended effective April 25, 1994, subject to subsequent approval by the holders of outstanding shares of common stock of the Corporation entitled to vote thereon at the next annual meeting of the Corporation's shareholders. Section 2. Definitions; Construction 2.1 Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below: (a) "Act" means the federal Securities Exchange Act of 1934, as amended. (b) "Board" means the Board of Directors of the Corporation. (c) A "Change of Control" means a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Act, as amended; provided that, without limitation, such a change in control shall be deemed to have occurred (i) if any "person", as used in Section 3(a) (9) of the Act, other than the Corporation or any person who on the effective date hereof is a director or officer of the Corporation, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Corporation representing twenty-five percent (25%) or more of the combined voting power of the Corporation's then outstanding securities, or (ii) during any period of two (2) consecutive years, individuals who, at the beginning of such period, constituted the Board cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who were directors at the beginning of the period. (d) "Code" means the Internal Revenue Code of 1986, as amended. (e) "Committee" means the Compensation Committee of the Board, which shall consist of two (2) or more members of the Board, each of whom is a "disinterested person" within the meaning of Rule 16b-3 and each of whom qualifies as an "outside director" for purposes of Section 162(m) of the Code. (f) "Corporation" means Oshkosh Truck Corporation, a Wisconsin corporation. (g) "Disability" shall have the meaning assigned to the terms "total disability" or "totally disabled" in the Oshkosh Truck Corporation Long Term Disability Program for Salaried Employees, provided the Participant remains totally disabled for five (5) consecutive months. (h) "Fair Market Value" means the last sale price of the Stock as reported on the NASDAQ National Market System on a particular date. (i) "Non-Employee Director" means any member of the Board who is not an employee of the Corporation or of any Subsidiary. (j) "Option" means the right to purchase Stock at a stated price for a specified period of time. For purposes of the Plan an Option may be either (i) an "incentive stock option" within the meaning of Section 422 of the Code or (ii) a "nonstatutory stock option." (k) "Participant" means any individual designated by the Committee to participate in the Plan. (l) "Period of Restriction" means the period during which the transfer of shares of Restricted Stock is restricted pursuant to Section 7 of the Plan. (m) "Restricted Stock" means Stock granted to a Participant pursuant to Section 7 of the Plan. (n) "Retirement" shall have the meaning assigned to such term in the pension plan of the Corporation. (o) "Rule 16b-3" means Rule 16b-3 as promulgated by the United States Securities and Exchange Commission under the Act or any successor rule or regulation thereto. (p) "Stock" means the Class B Common Stock of the Corporation, par value of one cent ($.01) per share. (q) "Subsidiary" means any present or future subsidiary of the Corporation, as defined in Section 424(f) of the Code. 2.2 Number. Except when otherwise indicated by the context, the singular shall include the plural, and the plural shall include the singular. Section 3. Eligibility and Participation 3.1 Eligibility and Participation. Participants in the Plan shall be selected by the Committee from among those officers and other key employees of the Corporation and its Subsidiaries who, in the opinion of the Committee, are in a position to contribute materially to the Corporation's continued growth and development and to its long-term financial success. All Non-Employee Directors shall receive grants of Options as provided in Section 6A. Section 4. Stock Subject to Plan 4.1 Number. The total number of shares of Stock subject to issuance under the Plan may not exceed eight hundred twenty five thousand (825,000). The total number of shares of Stock subject to issuance pursuant to Options granted under the Plan in any five year period to any one person may not exceed 150,000. The limitations set forth in this Section 4.1 are subject to adjustment upon occurrence of any of the events indicated in Subsection 4.3. The shares to be delivered under the Plan may consist, in whole or in part, of authorized but unissued Stock or treasury Stock, not reserved for any other purpose. 4.2 Unused Stock; Unexercised Rights. In the event any shares of stock are subject to an Option which, for any reason, expires or is terminated unexercised as to such shares, or any shares of Stock, subject to a Restricted Stock grant made under the Plan are reacquired by the Corporation pursuant to Subsection 7.9 or 7.10 of the Plan, such shares again shall become available for issuance under the Plan. 4.3 Adjustment in Capitalization. In the event that any change in the outstanding shares of Stock (including an exchange of the Stock for stock or other securities of another corporation) occurs after adoption of the Plan by the Board by reason of a Stock dividend or split, recapitalization, merger, consolidation, combination, exchange of shares or other similar corporate change, the aggregate number of shares of Stock (or the stock or other securities that had been issued in exchange for the shares of Stock) subject to each outstanding Option, and its stated Option price, shall be appropriately adjusted by the Committee, whose determination shall be conclusive; provided, however, that fractional shares shall be rounded to the nearest whole share. In such event, the Committee shall also have discretion to make appropriate adjustments in the number and type of shares subject to Restricted Stock grants then outstanding under the Plan pursuant to the terms of such grants or otherwise. In the event of any other change in the Stock, the Committee shall in its sole discretion determine whether such change equitably requires a change in the number or type of shares subject to any outstanding Stock Option or Restricted Stock grant and any such adjustment made by the Committee shall be conclusive. Notwithstanding the foregoing, Options subject to grant or previously granted to Non-Employee Directors under the Plan at the time of any event described in this Section 4.3 shall be subject to only such adjustments as shall be necessary to maintain the relative proportionate interest of the Non-Employee Directors and preserve, without exceeding, the value of such Options. Section 5. Duration of Plan 5.1 Duration of Plan. The Plan shall remain in effect, subject to the Board's right to earlier terminate the Plan pursuant to Subsection 10.3 hereof, until all Stock subject to it shall have been purchased or acquired pursuant to the provisions hereof. Notwithstanding the foregoing, no Option or Restricted Stock may be granted under the Plan on or after March 29, 2004. Section 6. Stock Options 6.1 Grant of Options. Subject to the provisions of Sections 4 and 5, Options may be granted to Participants at any time and from time to time as shall be determined by the Committee. Non-Employee Directors shall not be eligible to be granted Options under the Plan, except as provided in Section 6A. The Committee shall have complete discretion in determining the number of Options granted to each Participant. The Committee also shall determine whether an Option is to be an incentive stock option within the meaning of Section 422 of the Code or a nonstatutory stock option. However, in no event shall the Fair Market Value (determined at the date of grant) of Stock with respect to which incentive stock options are exercisable for the first time by a Participant during any calendar year exceed one hundred thousand dollars ($100,000). Nor shall any incentive stock option be granted to any person who owns, directly or indirectly, stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation ("Ten Percent Stockholder"). Nothing in this Section 6 of the Plan shall be deemed to prevent the grant of nonstatutory stock options in excess of the maximum established by Section 422 of the Code. 6.2 Option Agreement. Each Option shall be evidenced by an Option agreement that shall specify the type of Option granted, the Option price, the duration of the Option, the number of shares of Stock to which the Option pertains and such other provisions as the Committee shall determine. 6.3 Option Price. No Option granted pursuant to the Plan shall have an Option price that is less than the Fair Market Value of the Stock on the date the Option is granted. 6.4 Duration of Options. Each Option shall expire at such time as the Committee shall determine at the time it is granted; provided, however, that no Option that is an incentive stock option shall be exercisable later than the tenth (10th) anniversary date of its grant, and no Option that is a nonstatutory stock option shall be exercisable more than ten (10) years and one (l) month after the date of its grant. 6.5 Exercise of Options. Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for all Participants; except that Options granted to officers, directors or Ten Percent Stockholders may not be exercised until at least six (6) months after the date of grant. 6.6 Payment. The Option price upon exercise of any Option shall be payable to the Corporation in full either (i) in cash or its equivalent, or (ii) by tendering shares of previously acquired Stock having a Fair Market Value at the time of exercise equal to the total Option price, or (iii) by a combination of (i) and (ii). The proceeds from such a payment shall be added to the general funds of the Corporation and shall be used for general corporate purposes. 6.7 Restrictions on Stock Transferability. The Committee may impose such restrictions on any shares of Stock acquired pursuant to the exercise of an Option under the Plan as it may deem advisable, including, without limitation, restrictions under applicable Federal securities law, under the requirements of any stock exchange upon which such shares of Stock are then listed and under any blue sky or state securities laws applicable to such shares. 6.8 Termination of Employment Due to Death, Disability or Retirement. In the event the employment of a Participant is terminated by reason of death, Disability or Retirement, the Committee may provide in the Option agreement that any outstanding Options shall become immediately exercisable at any time prior to the expiration date of the Options or within twelve (12) months after such date of termination of employment, whichever period is the shorter. However, in the case of incentive stock options, the favorable tax treatment prescribed under Section 422 of the Code shall not be available if such options are not exercised within three (3) months after such date of termination due to Retirement. 6.9 Termination of Employment Other than for Death, Disability or Retirement. If the employment of the Participant shall terminate for any reason other than death, Disability or Retirement, the rights under any then outstanding Option granted pursuant to the Plan shall terminate upon the expiration date of the Option or three (3) months after such date of termination of employment, whichever first occurs, subject to such exceptions (which shall be set forth in the Option Agreement) as the Committee may, in its sole discretion, approve. 6.10 Nontransferability of Options. No Option granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution. Further, all Options granted to a Participant under the Plan shall be exercisable during his or her lifetime only by such Participant. Section 6A. Non-Employee Director Stock Options 6A.1 Grant of Options. Subject to approval of amendments to the Plan by the shareholders of the Corporation as contemplated by Section 1.3, as of April 25, 1994, each Non-Employee Director at such time shall be granted a nonqualified Option to purchase 1,000 shares of Stock. Thereafter, upon the conclusion of each annual meeting of the shareholders of the Corporation, each Non-Employee Director at such time shall be granted a nonqualified Option to purchase an additional 1,000 shares of Stock. 6A.2 Terms of Options. The right to exercise Options granted to a Non-Employee Director pursuant to this Section 6A shall accrue as to one-third (1/3) of the shares on each of the first three anniversaries of the date of grant. No partial exercise of the Options may be for less than one hundred (100) share lots or multiples thereof. The term of Options granted pursuant to this Section 6A shall expire ten years and one month from the date of grant or twelve months after the Non-Employee Director ceases for any reason to be a member of the Board, whichever occurs first. The Option exercise price shall be the Fair Market Value of the Stock on the date each Option is granted, which shall be payable to the Corporation in full upon exercise either (i) in cash or its equivalent, or (ii) by tendering shares of previously acquired Stock having a Fair Market Value at the time of exercise equal to the total Option price, or (iii) by a combination of (i) and (ii). Section 7. Restricted Stock 7.1 Grant of Restricted Stock. Subject to the provisions of Sections 4 and 5, the Committee, at any time and from time to time, may grant shares of Restricted Stock under the Plan to such Participants and in such amounts as it shall determine. Non-Employee Directors are not eligible to receive grants of Restricted Stock under the Plan. Each grant of Restricted Stock shall be in writing. 7.2 Transferability. Except as provided in Section 7 hereof, the shares of Restricted Stock granted hereunder may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated for such period of time as shall be determined by the Committee and shall be specified in the Restricted Stock grant, or upon earlier satisfaction of other conditions as specified by the Committee in its sole discretion and set forth in the Restricted Stock grant; provided that Restricted Stock granted to officers, directors or Ten Percent Stockholders may not be sold for at least six (6) months after the date of grant. 7.3 Other Restrictions. The Committee may impose such other restrictions on any shares of Restricted Stock granted pursuant to the Plan as it may deem advisable including, without limitation, restrictions under applicable Federal or state securities laws, and may legend the certificates representing Restricted Stock to give appropriate notice of such restrictions. 7.4 Certificate Legend. In addition to any legends placed on certificates pursuant to Subsection 7.3 hereof, each certificate representing shares of Restricted Stock granted pursuant to the Plan shall bear the following legend: "The sale or other transfer of the shares of stock represented by this certificate, whether voluntary, involuntary or by operation of law, is subject to certain restrictions on transfer set forth in Oshkosh Truck Corporation's 1990 Incentive Stock Plan, rules of administration adopted pursuant to such Plan and a Restricted Stock grant dated __________ A copy of the Plan, such rules and such Restricted Stock grant may be obtained from the Secretary of Oshkosh Truck Corporation." 7.5 Removal of Restrictions. Except as otherwise provided in Section 7 hereof, shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant after the last day of the Period of Restriction. Once the shares are released from the restrictions, the Participant shall be entitled to have the legend required by Subsection 7.4 removed from the Participant's Stock certificate. 7.6 Voting Rights. During the Period of Restriction, Participants holding shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those shares. 7.7 Dividends and Other Distributions. During the Period of Restriction, Participants holding shares of Restricted Stock granted hereunder shall be entitled to receive all dividends and other distributions paid with respect to those shares while they are so held. If any such dividends or distributions are paid in shares of Stock, the shares shall be subject to the same restrictions on transferability as the shares of Restricted Stock with respect to which they were paid. 7.8 Termination of Employment Due to Retirement. The Committee may provide in its Restricted Stock grant that in the event a Participant terminates his or her employment with the Corporation because of Retirement, any remaining Period of Restriction applicable to the Restricted Stock pursuant to Subsection 7.2 hereof shall automatically terminate and, except as otherwise provided in Subsection 7.3, the shares of Restricted Stock shall thereby be free of restrictions and freely transferable. In the event the Restricted Stock grant does not automatically terminate such restrictions and a Participant terminates his or her employment with the Corporation because of Retirement, the Committee may, in its sole discretion, waive the restrictions remaining on any or all shares of Restricted Stock pursuant to Subsection 7.2 hereof and/or add such new restrictions to those shares of Restricted Stock as it deems appropriate. 7.9 Termination of Employment Due to Death or Disability. The Committee may provide in its Restricted Stock grant that in the event a Participant terminates his or her employment with the Corporation because of death or Disability during the Period of Restriction, the restrictions applicable to the shares of Restricted Stock pursuant to Subsection 7.2 hereof shall terminate automatically with respect to all of the shares or that number of shares (rounded to the nearest whole number) equal to the total number of shares of Restricted Stock granted to such Participant multiplied by the number of full months which have elapsed since the date of grant divided by the maximum number of full months of the Period of Restriction. All remaining shares shall be forfeited and returned to the Corporation; provided, however, that the Committee may, in its sole discretion, waive the restrictions remaining on any or all such remaining shares either before or after the death of the Participant. 7.10 Termination of Employment for Reasons Other than Death Disability or Retirement. In the event that a Participant terminates his or her employment with the Corporation for any reason other than those set forth in Subsections 7.8 and 7.9 hereof during the Period of Restriction, then any shares of Restricted Stock still subject to restrictions at the date of such termination shall automatically be forfeited and returned to the Corporation; provided, however, that, in the event of an involuntary termination of the employment of a Participant by the Corporation, the Committee may, in its sole discretion, waive the automatic forfeiture of any or all such shares and/or may add such new restrictions to such shares of Restricted Stock as it deems appropriate. 7.11 Nontransferability of Restricted Stock. No shares of Restricted Stock granted under the Plan may be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution until the termination of the applicable Period of Restriction. All rights with respect to Restricted Stock granted to a Participant under the Plan shall be exercisable during the Participant's lifetime only by such Participant. Section 8. Beneficiary Designation 8.1 Beneficiary Designation. Each Participant and Non-Employee Director under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of the death of the Participant or the Non-Employee Director, as the case may be, before he or she receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant or Non-Employee Director, shall be in a form prescribed by the Committee and will be effective only when filed by the Participant or Non-Employee Director in writing with the Committee during the lifetime of the Participant or Non-Employee Director. In the absence of any such designation, benefits remaining unpaid at the death of the Participant or Non-Employee Director, as the case may be, shall be paid to the estate of the Participant or Non-Employee Director, as the case may be. Section 9. Rights of Employees 9.1 Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Corporation to terminate any Participant's employment at any time nor confer upon any Participant any right to continue in the employ of the Corporation. 9.2 Participation. No employee shall have a right to be selected as a Participant or, having been so selected, to be selected again as a Participant. The preceding sentence shall not be construed or applied so as to deny an employee any Participation in the Plan solely on the basis that the employee was a Participant in connection with a prior grant of benefits under the Plan. Section 10. Administration; Powers and Duties of the Committee 10.1 Administration. The Committee shall be responsible for the administration of the Plan. The Committee, by majority action thereof, is authorized to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to the Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Corporation, and to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan. Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final and binding and conclusive for all purposes and upon all persons whomsoever. The grant, amount and terms of Awards to Non-Employee Directors under the Plan shall be determined as provided in Section 6A of the Plan. 10.2 Change of Control. Without limiting the authority of the Committee as provided herein, the Committee, either at the time Options or shares of Restricted Stock are granted, or, if so provided in the applicable Option agreement or Restricted Stock grant, at any time thereafter, shall have the authority to accelerate in whole or in part the exercisability of Options and/or the last day of the Period of Restriction upon a Change of Control. The Option agreements and Restricted Stock grants approved by the Committee may contain provisions whereby, in the event of a Change of Control, the acceleration of the exercisability of Options and/or the last day of the Period of Restriction may be automatic or may be subject to the discretion of the Committee, depending on whether the Change of Control shall be approved by a majority of the members of the Board. If the receipt of any payment by a Participant under the circumstances described above would result in the payment by the Participant of any excise tax provided for in Section 280G and Section 4999 of the Code, then the amount of such payment shall be reduced to the extent required to prevent the imposition of such excise tax. 10.3 Amendment, Modification and Termination of Plan. The Board may at any time terminate, and from time to time may amend or modify the Plan, provided, however, that no such action of the Board, without approval of the stockholders, may: (a) Increase the total amount of Stock which may be issued under the Plan, except as provided in Subsections 4.1 and 4.3 of the Plan. (b) Increase the total number of shares of Stock that may be issued under the Plan to any one Participant, except as provided in Subsections 4.1 and 4.3 of the Plan. (c) Change the provisions of the Plan regarding the Option price except as permitted by Subsection 4.3. (d) Materially increase the cost of the Plan or materially increase the benefits to Participants and/or Non-Employee Directors. (e) Extend the period during which Options or Restricted Stock may be granted. (f) Extend the maximum period after the date of grant during which Options may be exercised. (g) Change the class of individuals eligible to receive Options or Restricted Stock. No amendment, modification or termination of the Plan shall in any manner adversely affect any Options or Restricted Stock theretofore granted under the Plan, without the consent of the Participant. Section 11. Tax Withholding 11.1 Tax Withholding. Whenever shares of Stock are to be issued under the Plan, the Corporation shall have the power to require the recipient of the Stock to remit to the Corporation an amount sufficient to satisfy Federal, state and local withholding tax requirements prior to issuance of the certificate for shares of stock. Section 12. Requirements of Law 12.1 Requirements of Law. The granting of Options or Restricted Stock, and the issuance of shares of Stock upon the exercise of an Option shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 12.2 Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Wisconsin. EX-10 4 OSHKOSH TRUCK EXHIBIT 10.11 EXHIBIT 10.11 LEASE RENEWAL AGREEMENT I. THE PARTIES The Parties to this Agreement are: 1.01 Oshkosh Truck Corporation, a Wisconsin corporation having offices at 2307 Oregon Street; Oshkosh, Wisconsin 54901 ("Tenant"). 1.02 Lake-Aire Development, Inc., a Wisconsin corporation located in Oshkosh, WI 54901 ("Landlord"). II. RECITALS 2.01 The date of this Agreement is April 21, 1994. 2.02 Landlord and Tenant entered into a lease agreement dated March 31, 1993 ("Lease") for 16,084 square feet of office space located at 2201 Oregon Street, Oshkosh, Wisconsin ("Premises"). 2.03 Landlord and Tenant each desire and agree to extend the lease term of the Premises. III. THE AGREEMENT THEREFORE, the Parties agree as follows: 3.01 The Recitals are a part of this Agreement. 3.02 The lease term for the Premises under Article 2 of the Lease is hereby be extended and will now expire at midnight on February 28, 1999. 3.03 All other provisions of the Lease are incorporated herein and are hereby modified or supplemented to conform herewith but in all other respects are to be and shall continue in full force and effect. 3.04 This Agreement shall bind the Parties, their successors and assigns. IN WITNESS WHEREOF, this Agreement has been duly executed on the date of this Agreement. LAKE-AIRE DEVELOPMENT, INC. OSHKOSH TRUCK CORPORATION By: WILLIAM A. BREHM, JR. By: FRED S. SCHULTE William A. Brehm, Jr., Agent Fred S. Schulte Its: VP, CFO and Treasurer Attested By: BARBARA E. BOYCKS Barbara E. Boycks Its: Assistant Corp. Secretary EX-10 5 OSHKOSH TRUCK EXHIBIT 10.12 EXHIBIT 10.12 OSHKOSH TRUCK CORPORATION 1994 LONG-TERM INCENTIVE COMPENSATION PLAN SECTION 1. ESTABLISHMENT, PURPOSE AND EFFECTIVE DATE OF PLAN 1.1 Establishment. Oshkosh Truck Corporation, a Wisconsin corporation (the "Company"), hereby establishes the "OSHKOSH TRUCK CORPORATION 1994 LONG-TERM COMPENSATION INCENTIVE PLAN" (the "Plan") for key employees of the Company and its Subsidiaries. The Plan permits the grant of Awards relating to Performance Share Units. 1.2 Purpose. The purpose of the Plan is to advance the interests of the Company and its Subsidiaries and promote continuity of management by providing a means to attract and retain in the employ of the Company and its Subsidiaries persons possessing outstanding management skills and competence who will contribute substantially to the success of the Company. Such means are incentives to such persons to exert their maximum efforts on behalf of the Company by rewarding them with additional compensation when the Company has achieved significant financial objectives as provided for in the Plan. The Board believes that the Plan will promote continuity of management and increase personal interest in the welfare of the Company by those who are primarily responsible for developing and carrying out the long-range plans of the Company and securing its continued growth and financial success. 1.3 Effective Date. The Plan shall become effective on March 29, 1994, subject to subsequent approval by the holders of outstanding shares of common stock of the Company entitled to vote thereon at the next annual meeting of the Company's shareholders. SECTION 2. DEFINITIONS; CONSTRUCTION 2.1 Definitions. Whenever used herein, the following terms shall have the respective meanings set forth below: (a) "Act" means the federal Securities Exchange Act of 1934, as amended. (b) "Average Net Assets" means, for any fiscal year of the Company, the result obtained by (i) adding together the Company's Net Assets as of the end of the fiscal year and the Company's Net Assets as of the end of the immediately preceding fiscal year and (ii) dividing such sum by two. (c) "Average Return on Net Assets" means, with respect to any Performance Period, the result obtained by (i) adding together the Return on Assets for each fiscal year in the Performance Period and (ii) dividing such sum by three. (d) "Average Return on Equity" means, with respect to any Performance Period, the result obtained by (i) adding together the Return on Equity for each fiscal year in the Performance Period and (ii) dividing such sum by three; provided, however, that for the Performance Period applicable to Initial Awards, the amount described in clause (i) of this subsection (d) shall be increased by 0.1273. (e) "Award" shall mean an award granted to a Participant under the Plan that shall reflect a Target Award Number for a Performance Period. (f) "Award Agreement" shall mean any written agreement, contract or other instrument or instrument or document evidencing any Award granted under the Plan. (g) "Board" means the Board of Directors of the Company. (h) A "Change of Control" means a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Act, as amended; provided that, without limitation, such a change in control shall be deemed to have occurred (i) if any "person", as used in Section 3(a)(9) of the Act, other than the Company or any person who on the effective date hereof is a director or officer of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company's then outstanding securities, or (ii) during any period of two (2) consecutive years, individuals who, at the beginning of such period, constituted the Board cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds (2/3) of the directors then still in office who are directors at the beginning of the period. (i) "Code" means the Internal Revenue Code of 1986, as amended. (j) "Commission" means the United States Securities and Exchange Commission or any successor agency. (k) "Committee" means the Compensation Committee of the Board, which shall consist of two (2) or more members of the Board, each of whom is a "disinterested person" within the meaning of Rule 16b-3 and each of whom qualifies as an "outside director" for purposes of Section 162(m) of the Code. (l) "Company" means Oshkosh Truck Corporation, a Wisconsin corporation. (m) "Disability" shall have the meaning assigned to the terms "Total Disability" or "Totally Disabled" in the Oshkosh Truck Corporation Long-Term Disability Program for Salaried Employees, provided the Participant remains totally disabled for five (5) consecutive months. (n) "Excluded Items" means any gains or losses from discontinued operations, any extraordinary gains or losses and the effects of accounting changes. (o) "Fair Market Value" means the average of the last sale prices of the Stock as reported on the Nasdaq National Market on the ten trading days preceding a particular date and the ten trading days following such date. (p) "Final Award Number" means, for an Award, a number of Performance Share Units with respect to a Performance Period calculated in accordance with Section 6.4 or Section 6.6. (q) "Key Employee" means any officer or other key employee of the Company or any Subsidiary who is responsible for or contributes to the management, growth or profitability of the business of the Company or any Subsidiary as determined by the Committee. (r) "Initial Award" shall mean any Award approved by the Committee on March 29, 1994. (s) "Maximum Performance" means, with respect to a Performance Period, the level of performance under the performance measure for the Performance Period fixed by the Committee under Section 6.2 that will entitle a Participant to the maximum payment under an Award in accordance with Section 6.4. (t) "Net Assets" means the Company's total consolidated assets as of the date in question reduced by the Company's consolidated cash and consolidated current liabilities as of such date. (u) "Participant" means any Key Employee designated by the Committee to participate in the Plan. (v) "Performance Period" means, in relation to an Award, any period of three consecutive fiscal years of the Company with respect to which the Award is granted, except that the Performance Period for Initial Awards shall be the period consisting of the Company's 1995 and 1996 fiscal years. (w) "Performance Share Unit" means a unit of measurement for purposes of Section 6. (x) "Retirement" shall have the meaning assigned to such term in the pension plan of the Company. (y) "Return on Net Assets" means, for any fiscal year of the Company, the result obtained by dividing the Company's consolidated net income (or loss) for such fiscal year, excluding Excluded Items, by the Company's Average Net Assets for such fiscal year; where the Company has a consolidated net loss for a fiscal year (excluding Excluded Items), Return on Net Assets shall be a negative number. (z) "Return on Equity" means, for any fiscal year of the Company, the result obtained by dividing the Company's consolidated net income (or loss) for such fiscal year, excluding Excluded Items, by the Company's total consolidated shareholders' equity as of the end of the immediately preceding fiscal year; where the Company has a consolidated net loss for a fiscal year (excluding Excluded Items), Return on Equity shall be a negative number. (aa) "Rule 16b-3" means Rule 16b-3 as promulgated by the Commission under the Act or any successor rule or regulation thereto. (ab) "Stock" means the Class B Common Stock of the Company, par value of one cent ($.01) per share. (ac) "Subsidiary" means any present or future subsidiary of the Company, as defined in Section 425(f) of the Code. (aa) "Target Award Number" means, with respect to a Participant, the number of Performance Share Units reflected in an Award. (bb) "Target Performance" means, with respect to a Performance Period, the level of performance under the performance measure for the Performance Period fixed by the Committee under Section 6.2 that will entitle a Participant to the target payment under an Award in accordance with Section 6.4. (cc) "Threshold Performance" means, with respect to a Performance Period, the lowest level of performance under the performance measure for the Performance Period fixed by the Committee under Section 6.2 that will entitle a Participant to a payment under an Award in accordance with Section 6.4. 2.2 Number. Except when otherwise indicated by the context, the singular shall include the plural, and the plural shall include the singular. SECTION 3. ELIGIBILITY AND PARTICIPATION 3.1 Eligibility and Participation. Participants in the Plan shall be selected by the Committee from among those Key Employees, including any executive officer or employee-director of the Company or of any Subsidiary, who in the opinion of the Committee are in a position to contribute materially to the Company's continued growth and development and to its long-term financial success. SECTION 4. STOCK AND PERFORMANCE SHARE UNITS SUBJECT TO PLAN 4.1 Number. (a) The total number of shares of Stock subject to issuance under the Plan may not exceed one share of Stock for each Performance Share Unit earned by a Participant under the Plan and paid in Stock in accordance with Section 6.5, subject to adjustment upon occurrence of any of the events indicated in Section 4.3. The Shares to be delivered under the Plan may consist, in whole or in part, of authorized but unissued Stock or treasury Stock, not reserved for any other purpose. (b) The total number of Performance Share Units earned under the Plan may not exceed five hundred forty thousand (540,000), subject to adjustment upon occurrence of any of the events indicated in Section 4.3. (c) The total number of shares of Stock subject to issuance to any one person and the total number of Performance Shares Units earned under the Plan by any one person may not exceed one hundred ninety-five thousand (195,000). 4.2 Unused Stock; Unexercised Rights. If any Performance Share Units to which any Award relates are forfeited, if an Award otherwise terminates, expires or is canceled prior to delivery of all shares of Stock or of other consideration issuable or payable pursuant to such Award or if the Company's performance for a Performance Period is less than Maximum Performance, then the number of Performance Share Units counted against the number of Performance Share Units available under the Plan in connection with the grant of such Award, to the extent of any such forfeiture, termination, expiration or deficiency, shall again be available for granting of additional Awards under the Plan. 4.3 Adjustment in Capitalization. In the event that any change in the outstanding shares of Stock (including an exchange of the Stock for stock or other securities of another corporation) occurs after adoption of the Plan by the Board by reason of a Stock dividend or split, recapitalization, merger, consolidation, combination, exchange of shares or other similar corporate change, the aggregate number of Performance Share Units subject to each outstanding Award, and the shares of Stock that may be issued in connection with such Award, shall be appropriately adjusted by the Committee, whose determination shall be conclusive; provided, however, that fractional shares shall be rounded to the nearest whole share. In the event of any other change in the Stock, the Committee shall in its sole discretion determine whether such change equitably requires a change in the number of Performance Share Units subject to any outstanding Award, or the shares of Stock that may be issued in connection with such Award, and any such adjustment made by the Committee shall be conclusive. SECTION 5. DURATION OF PLAN No Award shall be granted under the Plan after December 31, 1999. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award theretofore granted may extend beyond such date, and to the extent set forth in the Plan, the authority of the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award, or to waive any conditions or restrictions with respect to any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date. SECTION 6. PERFORMANCE SHARE UNITS 6.1 Issuance. The Committee is hereby authorized to grant Awards to Participants. The Committee shall have complete discretion in determining the Target Award Number of Performance Share Units subject to an Award for a Participant. 6.2 Performance Terms. Prior to the first day of the Company's first fiscal year in a Performance Period with respect to which an Award is made (or such later time as may be permitted without adversely affecting the qualification of such Award for the performance-based exception under Section 162(m) of the Code), the Committee shall fix in writing (or otherwise evidence such action in a manner that complies with requirements relating to the performance-based exception under Section 162(m) of the Code) the following: (a) Whether the performance measure applicable to the Award will be Return on Equity or Return on Assets; and (b) The Threshold Performance, the Target Performance and the Maximum Performance under such performance measure for the Performance Period. 6.3 Vesting. Subject to Section 6.6, an Award to a Participant with respect to a Performance Period shall vest on the last day of the Company's last fiscal year in the Performance Period. 6.4 Final Award Number. As soon as practicable after the completion of the Performance Period with respect to which an Award has been made, the Committee shall certify in writing (or otherwise evidence such action in a manner that complies with requirements relating to the performance-based exception under Section 162(m) of the Code) the Average Return on Equity or Average Return on Assets of the Company, as the case may be, for the Performance Period. The Committee shall also certify in writing (or otherwise evidence such action in a manner that complies with requirements relating to the performance-based exception under Section 162(m) of the Code) the comparison of such performance with the Threshold Performance, Target Performance and Maximum Performance for the Performance Period. A Final Award Number of Performance Share Units for the Performance Period shall be calculated for each recipient of an Award for such Performance Period by multiplying such Participant's Target Award Number for the Performance Period by a percentage determined in accordance with the following table, subject to the additional conditions and limitations set forth in this Section 6: Actual Performance Applicable Percentage Below Threshold Performance 0% Threshold Performance 50% Target Performance 100% Maximum Performance 150% Above Maximum Performance 150% If the Company's performance falls between Threshold Performance and Target Performance or between Target Performance and Maximum Performance, then the applicable percentage shall be determined by linear interpolation between the applicable points. 6.5 Payment of Award. As soon as practicable after the determination of a Participant's Final Award Number for an Award, the Company shall pay the Participant the value of the Final Award Number of Performance Share Units. Such payment shall be made, in the sole discretion of the Committee, in cash, Stock or a combination of cash and Stock. Performance Share Units shall be paid in Stock by delivering one share of Stock for each Performance Share Unit and shall be paid in cash by valuing each Performance Share Unit at the Fair Market Value as of the date on which the Company publicly reports its earnings for the last fiscal year of the Company in the Performance Period. Upon such payment, the Company shall have no further obligations in connection with the Award granted with respect to the Performance Period. 6.6 Termination of Employment. A Participant whose employment with the Company terminates prior to the date an Award to such Participant has vested shall not be entitled to receive any payment hereunder in respect of such unvested Award. Notwithstanding the foregoing sentence: (a) The Committee may, in its sole discretion, provide for the payment, in whole or in part, in respect of such unvested Award if the Participant's employment with the Company terminates by reason of the Participant's death or Disability. Such payment shall be made, in the sole discretion of the Committee, in cash, Stock or a combination of cash and Stock. (b) In the event of a Participant's Retirement on or after the date on which the first one-half of the Performance Period for an Award has elapsed, the Participant shall be entitled to a payment in respect of such Award if the Award would have resulted in a payment to the Participant (i) under Sections 6.4 and 6.5 had the Participant been an employee at the end of the Performance Period or (ii) under Section 6.6(c) had the Participant been an employee at the date of a Change of Control. The amount of the payment shall be the amount determined in accordance with Sections 6.4 and 6.5 or Section 6.6(c), as the case may be, multiplied by a fraction, the numerator of which is the number of months that the Participant was an employee during the Performance Period and the denominator of which is the number of months in the Performance Period (or, in the case of a Change of Control, the number of months in the Performance Period prior to the Change of Control). Such payment shall be made in the form and at the time contemplated by Section 6.5 or Section 6.6(c), as the case may be. (c) If there is a Change of Control during a Performance Period and while a Participant is an employee, then (i) each Award of the Participant not vested shall be deemed vested as of the date of such Change of Control, (ii) the Final Award Number for each such Award shall be deemed equal to the Target Award Number for such Award and (iii) as soon as practicable thereafter, the Company shall pay to such Participant the value of the Final Award Number of Performance Share Units for each such Award, in cash, in an amount per Performance Share Unit equal to the Fair Market Value as of the date of the Change of Control; provided, however, that the foregoing shall not operate to reduce or increase any amounts payable by the Company in respect of Performance Share Units relating to any Performance Period that has ended prior to the occurrence of the Change in Control. 6.7 No Rights. Unless and until shares of Stock are issued and payments are made to a Participant with respect to an Award, the Participant shall have no interest or rights as a result of such Award in or to any specific assets or property of the Company or any shares of Stock, and the Participant shall have no right to vote any shares of Stock or to dividends paid on Stock as a result of such Award. 6.8 Other Terms. The Committee may, in its sole discretion, establish additional or different terms and conditions with respect to any Award to any or all Participants. Without limiting the foregoing, the Committee may impose goals based upon growth in earnings per share, Stock price appreciation and/or cash flow in addition to, or in lieu of, a Return on Equity or Return on Assets goals. Section 7. Beneficiary Designation 7.1 Beneficiary Designation. Each Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of the Participant's death before he or she receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee and will be effective only when filed by the Participant in writing with the Committee during the lifetime of the Participant. In the absence of any such designation, benefits remaining unpaid at the Participant's death shall be paid to the estate of the Participant. Section 8. Rights of Employees 8.1 Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time nor confer upon any Participant any right to continue in the employ of the Company. 8.2 Participation. No employee shall have a right to be selected as a Participant or, having been so selected, to be selected again as a Participant. The preceding sentence shall not be construed or applied so as to deny an employee any Participation in the Plan solely on the basis that the employee was a Participant in connection with a prior grant of benefits under the Plan. Section 9. Administration; Powers and Duties of the Committee 9.1 Administration. The Committee shall be responsible for the administration of the Plan. The Committee, by majority action thereof, is authorized to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to the Plan, to provide for conditions and assurances deemed necessary or advisable to protect the interests of the Company, and to make all other determinations necessary or advisable for the administration of the Plan, but only to the extent not contrary to the express provisions of the Plan. Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final and binding and conclusive for all purposes and upon all persons whomsoever. 9.2 Change of Control. If the receipt of any payment by a Participant under the Plan would, taking into account other amounts payable to the Participant, result in the payment by the Participant of any excise tax provided for in Section 280G and Section 4999 of the Code, then the amount of such payment shall be reduced to the extent required to prevent the imposition of such excise tax. 9.3 Amendment, Modification and Termination of Plan. The Board may at any time terminate, and from time to time may amend or modify the Plan, provided, however, that no such action of the Board, without approval of the stockholders, may: (a) Increase the amount of Stock which may be issued under the Plan in total or to any individual, except as provided in Section 4.1 and Section 4.3. (b) Increase the number of Performance Share Units that may be earned under the Plan in total or by any individual, except as provided in Section 4.1 and Section 4.3. (c) Materially increase the cost of the Plan or materially increase the benefits to Participants. (d) Extend the period during which Awards may be granted. (e) Change the class of individuals eligible to receive Awards. No amendment, modification or termination of the Plan shall in any manner adversely affect any Awards theretofore granted under the Plan, without the consent of the Participant. Section 10. Tax Withholding 10.1 Tax Withholding. Whenever shares of Stock are to be issued under the Plan, the Company shall have the power to require the recipient of the Stock to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements prior to issuance of the certificate for shares of Stock. Section 11. Requirements of Law 11.1 Requirements of Law. The granting of Awards, and the issuance of shares of Stock pursuant to Awards, shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 11.2 Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Wisconsin. EX-10 6 OSHKOSH TRUCK EXHIBIT 10.13 EXHIBIT 10.13 KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT THIS AGREEMENT, made and entered into as of the 2nd day of September, 1994, by and between OSHKOSH TRUCK CORPORATION, a Wisconsin corporation (hereinafter referred to as the "Company") and Robert G. Bohn (hereinafter referred to as "Executive"): W I T N E S S E T H : WHEREAS, the Executive is employed by the Company in a key executive capacity and possesses intimate knowledge of the business and affairs of the Company; and WHEREAS, the Company desires to insure, insofar as possible, that it will continue to have the benefit of the Executive's services and to protect its confidential information and goodwill; and WHEREAS, the Company recognizes that circumstances may arise in which a change in the control of the Company through acquisition or otherwise occurs, thereby causing uncertainty of employment without regard to the Executive's competence or past contributions which uncertainty may result in the loss of valuable services of the Executive to the detriment of the Company and its shareholders, and the Company and the Executive wish to provide reasonable security to the Executive against changes in the Executive's relationship with the Company in the event of any such change in control; and WHEREAS, both the Company and the Executive are desirous that any proposal for a change in control or acquisition will be considered by the Executive objectively and with reference only to the business interests of the Company and its shareholders; and WHEREAS, the Executive will be in a better position to consider the Company's best interests if the Executive is afforded reasonable security, as provided in this Agreement, against altered conditions of employment which could result from any such change in control or acquisition. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto mutually covenant and agree as follows: 1. Definitions. (a) Act. For purposes of this Agreement, the term "Act" means the Securities Exchange Act of 1934. (b) Base Period Income. For purposes of this Agreement, the term "Base Period Income" shall be an amount equal to the Executive's Annualized Includible Compensation for the Base Period as defined in Section 280G(d)(1) and (2) of the Code (as hereinafter defined). (c) Cause. "Cause" for termination by the Company of the Executive's employment after a Change of Control of the Company (as hereinafter defined) shall, for purposes of this Agreement, be limited to (i) the engaging by the Executive in willful and intentional conduct which has caused demonstrable and serious injury to the Company, monetary or otherwise, as evidenced by a determination in a binding and final judgment, order or decree of a court or administrative agency of competent jurisdiction, in effect after exhaustion or lapse of all rights of appeal, in an action, suit or proceeding, whether civil, criminal, administrative or investigative; (ii) conviction of a felony, as evidenced by binding and final judgment, order, or decree of a court of competent jurisdiction, in effect after exhaustion or lapse of all right of appeal; and (iii) willful and unreasonable neglect or refusal by the Executive to perform the Executive's duties or responsibilities (unless significantly changed without the Executive's consent). (d) Change in Control of the Company. For purposes of this Agreement, a "Change in Control of the Company" shall mean a change in control of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Act, as amended; provided that, without limitation, such a change in control shall be deemed to have occurred (i) if any Person (as hereinafter defined), other than the Company or any Person who on the date hereof is a director or officer of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Act, as amended), directly or indirectly of securities of the Company representing 25% of the combined voting power of the Company's then outstanding securities; or (ii) during any period of two consecutive years during the term of this Agreement, individuals who, at the beginning of such period, constituted the Board of Directors of the Company cease, for any reason, to constitute at least a majority thereof, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. (e) Code. For purposes of this Agreement, the term "Code" means the Internal Revenue Code of 1986, including any amendments thereto or successor tax codes thereof. (f) Employment Period. For purposes of this Agreement, the term "Employment Period" means a period commencing on the date of a Change of Control of the Company, and ending on the earlier of the third anniversary of such date or the Executive's Normal Retirement Date. (g) Good Reason. For purposes of this Agreement, the Executive shall have a "Good Reason" for termination of employment after a Change in Control of the Company in the event of: (i) any breach of this Agreement by the Company, including specifically any breaches by the Company of its agreements contained in Section 4 hereof. (ii) the removal of the Executive from or any failure to re- elect the Executive to any of the positions held on the date of the Change in Control of the Company or any other positions to which the Executive shall thereafter be elected or assigned except in the event that such removal or failure to re-elect relates to the termination by the Company of the Executive's employment for Cause or by reason of disability pursuant to Section 12 hereof; (iii) a good faith determination by the Executive that there has been a significant adverse change, without the Executive's written consent, in working conditions or status, including but not limited to (A) a significant change in the nature or scope of the Executive's authority, powers, functions, duties or responsibilities, or (B) a reduction in the level of support services, staff, secretarial and other assistance, office space and accoutrements available to a level below that which is reasonably necessary for the performance of such duties. (iv) any voluntary termination of employment by the Executive following the first anniversary of the Change in Control of the Company. (h) Person. For purposes of this Agreement, "Person" shall mean any individual, partnership, joint venture, association, trust, corporation or other entity (including a "group" as defined in Section 13(d)(3) of the Act). (i) Normal Retirement Date. For purposes of this Agreement, the term "Normal Retirement Date" means Normal Retirement Date as defined in the Oshkosh Truck Corporation Retirement Plan for Salaried Employees. (j) Termination Date. For purposes of this Agreement, except as otherwise provided in Section 10(b) hereof, the term "Termination Date" means (i) if the Executive's employment is terminated by the Executive's death, the date of death; (ii) if the Executive's employment is terminated by reason of voluntary early retirement, the agreed upon date of such early retirement; (iii) if the Executive's employment is terminated by reason of disability, thirty (30) days after the delivery of the Notice of Termination unless the Executive shall, prior to the expiration of such period, have returned to the performance of the Executive's duties on a full-time basis; (iv) if the Executive's employment is terminated by the Executive voluntarily other than for Good Reason the date of the Notice of Termination; and (v) if the Executive's employment is terminated by the Company other than by reason of disability, or by the Executive for Good Reason, thirty (30) days after the delivery of the Notice of Termination; provided, that if termination is for Cause pursuant to Section 1(c)(iii) of this Agreement, that the conduct constituting such Cause as described by the Company in its Notice of Termination has not been cured by the Executive within such thirty (30) day period. Notwithstanding the foregoing, the Termination Date shall be delayed as follows: (A) if, within any period referred to above following receipt of a Notice of Termination the party receiving the Notice of Termination notifies the other party in good faith that a dispute exists concerning the termination, the Termination Date shall be the earlier of the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or the end of the Employment Period and (B) if the opinion required to be delivered pursuant to Section 9(b)(ii) hereof shall not have been delivered, the Termination Date shall be the earlier of the date on which such opinion is delivered or the end of the Employment Period. 2. Termination or Cancellation Prior to Change in Control. The Company and the Executive shall each retain the right to terminate the employment of the Executive at any time prior to a Change in Control of the Company. In the event the Executive's employment is terminated prior to a Change in Control of the Company this Agreement shall be terminated and canceled and of no further force and effect and any and all rights and obligations of the parties hereunder shall cease. 3. Employment Period. If a Change in Control of the Company occurs when the Executive is employed by the Company, the Company will continue thereafter to employ the Executive during the Employment Period, and the Executive will remain in the employ of the Company, in accordance with the terms and provisions of this Agreement. 4. Duties. During the Employment Period, the Executive shall, in the same capacities and positions held by the Executive at the time of such Change in Control of the Company or in such other capacities and positions as may be agreed to by the Company and the Executive in writing, devote the Executive's best efforts and all of the Executive's business time, attention and skill to the business and affairs of the Company, as such business and affairs now exist and as they may hereafter be conducted. The services which are to be performed by the Executive hereunder are to be rendered in the same metropolitan area in which the Executive was employed at the time of such Change in Control, or in such other place or places as shall be mutually agreed upon in writing by the Executive and the Company from time to time. Without the Executive's consent the Executive shall not be required to be absent from the metropolitan area more than 45 days in any fiscal year. 5. Compensation. During the Employment Period, the Executive shall be compensated as follows: (a) The Executive shall receive, at such intervals and in accordance with such standard policies as may be in effect on the date of the Change in Control of the Company, an annual salary not less than the Executive's annual salary as in effect as of the date of the Change in Control of the Company, subject to adjustment as herein-after provided; (b) The Executive shall be reimbursed, at such intervals and in accordance with such standard policies as may be in effect on the date of the Change in Control of the Company, for any and all monies advanced in connection with the Executive's employment for reasonable and necessary expenses incurred by the Executive on behalf of the Company, including travel expenses; (c) The Executive shall be included to the extent eligible thereunder in any and all plans providing general benefits for the Company's employees, including but not limited to, group life insurance, hospitalization, disability, medical, dental, pension, profit sharing and stock bonus plans and be provided any and all other benefits and perquisites made available to other employees of comparable status and position, at the expense of the Company on a comparable basis; (d) The Executive shall receive annually not less than the amount of paid vacation and not fewer than the number of paid holidays received annually immediately prior to the Change in Control of the Company or such greater amount of paid vacation and number of paid holidays as may be made available annually to other employees of comparable status and position with the Company and; (e) The Executive shall be included in all plans providing special benefits to senior executives, including but not limited to bonus, deferred compensation, incentive compensation, supplemental pension, stock option, stock appreciation, stock bonus and similar or comparable plans extended by the Company from time to time to senior corporate officers, key employees and other employees of comparable status. 6. Annual Compensation Adjustments. During the Employment Period the Board of Directors of the Company or an appropriate committee thereof will consider and appraise, at least annually, the contributions of the Executive to the Company's operating efficiency, growth, production and profits, and, in accordance with past practice, due consideration shall be given to the upward adjustment of the Executive's compensation rate, at least annually, commensurate with increases generally given to other senior corporate officers and key employees and as the scope and success of the Company's operations or the Executive's duties expand. 7. Termination For Cause or Without Good Reason. If, during the Employment Period, the Executive's employment is terminated for Cause, or if the Executive voluntarily terminates the Executive's employment other than for Good Reason, any such termination to be subject to the procedures set forth in Section 13 hereof, then the Executive shall be entitled to receive only Accrued Benefits pursuant to Section 9 hereof. 8. Termination Giving Rise to a Termination Payment. (a) If, during the Employment Period, the Executive's employ- ment is terminated by the Executive for Good Reason or by the Company other than by reason of death or disability or Cause, then the Executive shall be entitled to receive and the Company shall promptly pay Accrued Benefits and, in lieu of further salary payments for periods following the Termination Date, as liquidated damages and severance pay, a Termination Payment. (b) If, during the Employment Period, the Executive's employment is terminated and the Executive is entitled to Accrued Benefits and a Termination Payment, then the Executive shall continue to be covered at the expense of the Company by the same or equivalent hospital, medical, dental, accident, disability and life insurance coverage as Executive was covered by immediately prior to the date the Notice of Termination is received until the earlier of the expiration of the Employment Period or until the Executive has obtained new employment and thereby becomes eligible for comparable benefits. 9. Payments Upon Termination. (a) Accrued Benefits. For purposes of this Agreement, the Executive's Accrued Benefits shall include the following amounts, payable as described herein: (i) All salary earned or accrued through the Termination Date; (ii) reimbursement for any and all monies advanced in connection with the Executive's employment for reasonable and necessary expenses incurred by the Executive through the Termination Date; (iii) any and all other cash benefits previously earned through the Termination Date and deferred at the election of the Executive or pursuant to any deferred compensation plans then in effect; (iv) a lump sum payment of the bonus or incentive compensation otherwise payable to the Executive with respect to the year in which termination occurs under any bonus or incentive compensation plan or plans in which the Executive is a participant; and (v) all other payments and benefits (other than severance payments) to which the Executive may be entitled under the terms of any benefit plan of, or individual employment contract with, the Company. Payment of Accrued Benefits shall be made promptly in accordance with the Company's prevailing practice with respect to Subsections (i) and (ii), or with respect to Subsections (iii), (iv) and (v) pursuant to the terms of the benefit plan or contract establishing such benefits. (b) Termination Payment. (i) For purposes of this Agreement and subject to the limits set forth in Section 9(b)(ii) hereof, the Executive's Termination Payment shall be an amount equal to (A) the Executive's annual salary, as in effect on the date of the Change in Control of the Company as adjusted upward, from time to time, pursuant to Section 6 hereof plus (B) the amount of the highest annual bonus award paid to the Executive with respect to the three years preceding the Termination Date (the aggregate amount set forth in (A) and (B) hereof shall hereafter be referred to as "Annual Cash Compensation"), times the number of years (rounded to the nearest one-twelfth) remaining in the Employment Period determined as of the date the Notice of Termination is received, provided, however, that such amount shall not be less than the amount of Executive's Annual Cash Compensation. The Termination Payment shall be payable in one of two alternative methods as determined pursuant to Sec. 17 hereof, either (x) in a lump sum within ten (10) days of the (y) Date hereunder or in 36 equal and consecutive monthly installments with the first such installment due and payable on the first business day of the month immediately following the Termination Date. Such Termination Payment shall not be reduced by any present value or similar factor, and the Executive shall not be required to mitigate the amount of such payment by securing other employment or otherwise, nor will such payment be reduced by reason of the Executive securing other employment or for any other reason. The Termination Payment shall be paid in lieu of any severance pay due to the Executive pursuant to any severance or employment agreement with or severance payment plan of the Company. (ii) Notwithstanding any other provision of this Agreement, if any portion of the Termination Payment or any other payment under this Agreement, or under any other agreement with or plan of the Company (in the aggregate "Total Payments") would constitute an "excess parachute payment," then the Total Payments to be made to the Executive shall be reduced such that the value of the aggregate Total Payments that the Executive is entitled to receive shall be One Dollar ($1) less than the maximum amount which the Executive may receive without becoming subject to the tax imposed by Section 4999 of the Code or which the Company may pay without loss of deduction under Section 280G(a) of the Code. For purposes of this Agreement, the terms "excess parachute payment" and "parachute payments" shall have the meanings assigned to them in Section 280G of the Code, and such "parachute payments" shall be valued as provided therein. Within sixty days following delivery of the Notice of Termination or notice by the Company to the Executive of its belief that there is a payment or benefit due the Executive which will result in an excess parachute payment as defined in Section 280G of the Code, the Executive and the Company, at the Company's expense, shall obtain the opinion of such legal counsel, which need not be unqualified, as the Executive may choose, which sets forth (a) the amount of the Base Period Income of the Executive, (b) the present value of Total Payments and (c) the amount and present value of any excess parachute payments. The opinion of such legal counsel shall be supported by the opinion of a certified public accounting firm and, if necessary, a firm of recognized executive compensation consultants. Such opinion shall be binding upon the Company and the Executive. In the event that such opinion determines that there would be an excess parachute payment, the Termination Payment hereunder or any other payment determined by such counsel to be includible in Total Payments shall be reduced or eliminated as specified by the Executive in writing delivered to the Company within thirty days of his receipt of such opinion or, if the Executive fails to so notify the Company, then as the Company shall reasonably determine, so that under the bases of calculations set forth in such opinion there will be no excess parachute payment. The provisions of this sub- paragraph 9(b)(ii), including the calculations, notices and opinion provided for herein shall be based upon the conclusive presumption that (x) the compensation and benefits provided for in Section 5 hereof and (y) any other compensation, including but not limited to the Accrued Benefits, earned prior to the Termination Date by the Executive pursuant to the Company's compensation programs if such payments would have been made in the future in any event, even though the timing of such payment is triggered by the Change in Control or the Termination Date, are reasonable. (iii) If, notwithstanding the provisions of subparagraph (ii) of this Section 9(b), it is ultimately determined by a court or pursuant to a final determination by the Internal Revenue Service that any portion of Total Payments is subject to excise tax under Section 4999 of the Code, the Executive shall be entitled to receive a lump-sum payment sufficient to place the Executive in the same net after-tax position, computed by using the Special Tax Rate as such term is defined below, that the Executive would have been in had such payment not been subject to such excise tax and had the Executive not incurred any interest charges or penalties in respect of the imposition of such excise tax. For purposes of this Agreement, the Special Tax Rate shall be the highest effective federal and state marginal tax rates applicable to the Executive in the year the payment contemplated under this paragraph is made. (iv) In the event that the provisions of Sections 280G and 4999 of the Code are repealed, Sections 9(b)(ii) and 9(b)(iii) shall be of no further force or effect. 10. Death. If the Executive shall die during the Employment Period, the Executive's employment shall terminate and the Executive's estate, heirs and beneficiaries shall receive all the Executive's Accrued Benefits through the Termination Date. 11. Retirement. If, during the Employment Period, the Executive and the Company shall execute an agreement providing for the early retirement of the Executive from the Company, or the Executive shall otherwise voluntarily choose to retire early from the Company, the Executive shall receive Accrued Benefits through the Termination Date, provided, that if the Executive's employment is terminated by the Executive for Good Reason or by the Company other than by reason of death, disability or Cause and the Executive also, in connection with such termination, elects voluntary early retirement, the Executive shall also be entitled to receive a Termination Payment pursuant to Section 8(a) hereof. 12. Termination for Disability. If, during the Employment Period, as a result of the Executive's disability due to physical or mental illness or injury (regardless of whether such illness or injury is job-related), the Executive shall have been absent from the Executive's duties hereunder on a full-time basis for six consecutive months, and within thirty (30) days after the Company notifies the Executive in writing that it intends to terminate the Executive's employment, the Executive shall not have returned to the performance of the Executive's duties hereunder on a full-time basis, the Company may terminate the Executive's employment pursuant to the procedure set forth in Section 13 hereof. During the term of the Executive's disability prior to termination, the Executive shall continue to receive all salary and benefits payable under Section 5 hereof, including participation in all employee benefit plans and programs in which the Executive was entitled to participate immediately prior to the disability, provided that the Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event the Executive's employment is terminated on account of the Executive's disability in accordance with this Section, the Executive shall receive any Accrued Benefits in accordance with Section 9 hereof and shall remain eligible for all benefits provided by any long term disability programs of the Company in effect at the time of such termination. 13. Termination Notice and Procedure. Any termination by the Company, or the Executive, of the Executive's employment during the Employment Period shall be communicated by written Notice of Termination to the Executive if such Notice is delivered by the Company and to the Company if such Notice is delivered by the Executive, all in accordance with the following procedures: (a) The Notice of Termination shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances alleged to provide a basis for termination. (b) Any Notice of Termination by the Company shall be approved by a resolution duly adopted by a majority of the directors of the Company (or any successor corporation) then in office, specifying in detail the basis for such termination. (c) The Executive shall have 30 days or such longer period as the Company may determine to be appropriate, to cure any conduct or act, if curable, alleged to provide grounds for termination of the Executive's employment under this Agreement. (d) In the event that, within 30 days following the date of receipt of the Notice of Termination, the opinion referred to in Section 9(b)(ii) hereof shall not have been delivered or one party notifies the other that a dispute exists concerning the termination, the Executive's employment under this Agreement shall not be terminated until such determination is delivered or until the dispute is finally resolved either by mutual written agreement of the parties, or pursuant to a final arbitration award in accordance with Section 22 hereof, as the case may be; provided, however, that in no event shall such employment extend beyond the Employment Period. 14. Further Obligations of the Executive. (a) Competition. The Executive agrees that if, during the Employment Period, the Executive's employment is terminated in a manner such that the Executive will or has received a Termination Payment, the Executive shall not, during the balance of the Employment Period, (i) act in a similar capacity for any business enterprise which competes to a substantial degree with the Company or (ii) without the prior written approval of the Company's Board of Directors, participate in the management of any business enterprise that engages in substantial competition with the Company or its subsidiaries, where such enterprise's sales of any product or service competitive with any products or service of the Company or its subsidiaries amount to 10% of such enterprise's net sales for its most recently completed fiscal year and the Company's consolidated net sales of said product or service amount to 10% of the Company's consolidated net sales for its most recently completed fiscal year; provided, however, that nothing in this Section 14(a) shall prohibit the Executive from owning stock or other securities of a competitor amounting to less than five percent of the outstanding capital stock of such competitor. (b) Confidential Information. During and following the Executive's employment by the Company, the Executive shall hold in confidence and not directly or indirectly disclose or use or copy or make lists of any confidential information or proprietary data of the Company, except to the extent authorized in writing by the Board of Directors of the Company or required by any court or administrative agency, other than to an employee of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of duties as an executive of the Company. Confidential information shall not include any information known generally to the public or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that of the Company. All records, files, documents and materials or copies thereof, relating to the Company's business which the Executive shall prepare, or use, or come into contact with, shall be and remain the sole property of the Company and shall be promptly returned to the Company upon termination of employment with the Company. 15. Expenses and Interest. If, after a Change in Control of the Company a good faith dispute arises with respect to the enforcement of the Executive's rights under this Agreement or if any legal or arbitration proceeding shall be brought in good faith to enforce or interpret any provision contained herein, or to recover damages for breach hereof, the Executive shall recover from the Company any reasonable attorney's fees and necessary costs and disbursements incurred as a result of such dispute, legal or arbitration proceeding, and prejudgment interest on any money judgment or arbitration award obtained by the Executive calculated at the rate of interest announced by FIRSTAR BANK MILWAUKEE, N.A., from time to time as its prime rate from the date that payments to him should have been made under this Agreement. 16. Payment Obligations Absolute. Except as set forth in Section 18 of this Agreement, the Company's obligation during and after the Employment Period to pay the Executive the compensation and to make the arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right which the Company may have against him or anyone else. All amounts payable by the Company hereunder shall be paid without notice or demand. Each and every payment made hereunder by the Company shall be final and the Company will not seek to recover all or any part of such payment from the Executive or from whomsoever may be entitled thereto, for any reason whatsoever. 17. Election of Payment Alternatives. At any time prior to the Termination Date, the Executive shall have the right to specify the alternative method of payment of the Termination Payment to be used by filing a written election thereof with the Secretary of the Company; provided, however, if no election has been filed by the Executive prior to the Term Date, the method of payment of the Term Payment shall be at the option of the Board of Directors. If the Term Payment is made using the installment method, the Company shall purchase a life insurance policy on the life of the Executive prior to the first installment payment naming the Company as beneficiary. Such insurance shall have a term of at least 37 months and shall provide proceeds in the event of the Executive's death at least equal to the amount of remaining installment payments at the time of the Executive's death. The Company shall not, however, be required to purchase such life insurance policy if the total cost of such life insurance policy exceeds the amount of the Termination Payment. 18. Successors. (a) If the Company sells, assigns or transfers all or substantially all of its business and assets to any Person, excluding affiliates of the Company, or if the Company merges into or consolidates or otherwise combines with any Person which is a continuing or successor entity, then the Company shall assign all of its right, title and interest in this Agreement as of the date of such event to the Person which is either the acquiring or successor corporation, and such Person shall assume and perform from and after the date of such assignment all of the terms, conditions and provisions imposed by this Agreement upon the Company. Failure of the Company to obtain such assignment shall be a breach of this Agreement. In case of such assignment by the Company and of assumption and agreement by such Person, all further rights as well as all other obligations of the Company under this Agreement thenceforth shall cease and terminate and thereafter the expression "the Company" wherever used herein shall be deemed to mean such Person(s). (b) This Agreement and all rights of the Executive shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, estates, executors, administrators, heirs and beneficiaries. All amounts payable to the Executive under Sections 7, 10, 11 and 12 hereof if the Executive had lived shall be paid, in the event of the Executive's death, to the Executive's estate, heirs and representatives. All amounts still payable to the Executive, if any, under Section 8 hereof on the date of the Executive's death shall be paid to the Executive's estate, heirs and administrators our of the proceeds of the life insurance policy referred to in Section 17 hereof, provided, however, that if such life insurance policy is not obtained because the total cost of the policy exceeds the amount of the Termination Payment, the Company shall have no further obligation to make such payments after the Executive's death. This Agreement shall inure to the benefit of, be binding upon and be enforceable by, any successor, surviving or resulting corporation or other entity to which all or sub- stantially all of the Company's business and assets shall be transferred. This Agreement shall not be terminated by the voluntary or involuntary dissolution of the Company. 19. Enforcement. The provisions of this Agreement shall be regarded as divisible, and if any of said provisions or any part hereof are declared invalid or unenforceable by a court of competent jurisdiction, the validity and enforceability of the remainder of such provisions or parts hereof and the applicability thereof shall not be affected thereby. 20. Amendment. This Agreement may not be amended or modified at any time except by written instrument executed by the Company and the Executive. 21. Withholding. The Company shall be entitled to withhold from amounts to be paid to the Executive hereunder any federal, state or local withholding or other taxes or charges which it is from time to time required to withhold. The Company shall be entitled to rely on an opinion of counsel if any question as to the amount or requirement of any such withholding shall arise. 22. Governing Law; Arbitration. This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of Wisconsin. Any dispute arising out of this Agreement shall be determined by arbitration in Milwaukee, Wisconsin under the rules of the American Arbitration Association then in effect and judgment upon any award pursuant to such arbitration may be enforced in any court having jurisdiction thereof. 23. Notice. Notices given pursuant to this Agreement shall be in writing and shall be deemed given when received and if mailed, shall be mailed by United States registered or certified mail, return receipt requested, addressee only, postage prepaid, if to the Company, to the Board of Directors of Oshkosh Truck Corporation, Attention: Corporate Secretary, 2307 Oregon St., Oshkosh, WI 54903, or if to the Executive, at the address set forth below the Executive's signature line of this Agreement, or to such other address as the party to be notified shall have given to the other. 24. No Waiver. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or any prior or subsequent time. 25. Headings. The headings herein contained are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. OSHKOSH TRUCK CORPORATION: By: ____________________________ Name: R. Eugene Goodson Title: Chairman & CEO [CORPORATE SEAL] Attest: ________________________ Name: Connie S. Stellmacher Title: Adm. Asst/Asst Corp Secretary __________________________________(SEAL) Name: Robert G. Bohn (Executive) Address: 1225 Washington Ave Oshkosh, WI 54901 EX-13 7 OSHKOSH TRUCK EXHIBIT 13 EXHIBIT 13 Oshkosh Truck Corporation 1994 Anual Report For The Year Ended September ["Shareholder Information" section] Shareholder Information Annual Meeting The Annual Meeting of Shareholders of Oshkosh Truck Corporation will be held on Monday, January 23, 1995, at 10:00 a.m. at the Oshkosh Hilton & Convention Center, One North Main Street, Oshkosh, Wisconsin. Stock Listing Oshkosh Truck Corporation Class B common stock is quoted on the National Market System of the National Association of Securities Dealers Automated Quotations. The trading symbol is OTRKB. Form 10-K Copies of the company's Form 10-K as filed with the Securities and Exchange Commission are available free of charge by written request to the Chief Financial Officer of the company. Transfer Agent and Registrar Firstar Trust Company P.O. Box 2077 Milwaukee, Wisconsin 53201 Independent Auditors Ernst & Young, LLP 111 East Kilbourn Avenue, Suite 900 Milwaukee, Wisconsin 53202 Corporate Headquarters 2307 Oregon Street Oshkosh, Wisconsin 54901 Mailing Address and Telephone Oshkosh Truck Corporation P.O. Box 2566 Oshkosh, Wisconsin 54903-2566 414-235-9151 ["Financial Highlights" section] FINANCIAL HIGHLIGHTS
Years ended September (In thousands, except per share amounts) 1994 1993 1992 1991 1990 Net Shipments $691,508 $635,012 $640,566 $419,616 $453,122 Net Income (Loss) 13,054 1,063 8,771 755 (2,763) Per Share 1.50 .12 1.01 .09 (.31) Dividends Per Share Class A .435 .435 .435 .435 .435 Class B .500 .500 .500 .500 .500 Total Assets 216,860 253,099 260,003 219,587 178,058 Expenditures For Property, Plant, and Equipment 5,709 8,401 10,007 6,628 8,236 Depreciation 9,132 8,588 7,794 6,939 6,071 Working Capital 82,010 100,967 118,026 62,427 86,658 Long-Term Debt (Less Current Maturities) 8,737 47,819 66,800 8,700 8,700 Shareholders' Equity 121,558 112,004 116,130 111,648 118,002 Per Share 13.96 12.89 13.37 12.86 13.10 Backlog 512,000 459,000 505,000 639,000 349,000 After a charge of $4,088, or $.47 per share, to reflect the cumulative effect of change in method of accounting for postretirement benefits.
["Management's Discussion and Analysis of Results of Operations and Financial Condition" section] Management's Discussion and Analysis of Results of Operations and Financial Condition Results of Operations Year Ended September 30, 1994 Compared to Year Ended September 25, 1993 Net shipments were $691.5 million for fiscal 1994, an increase of $56.5 million, compared to shipments of $635.0 million in fiscal 1993. Net income for fiscal 1994 was $13.1 million ($1.50 per share) compared to income, before cumulative effect of accounting change for the adoption of Statement of Financial Accounting Standards (SFAS) No. 106, Employers' Accounting for Post Retirement Benefits Other Than Pensions, of $5.2 million ($.59 per share) for fiscal 1993. Net income for fiscal 1993, including the non-cash SFAS No. 106 accounting change of $4.1 million, was $1.1 million ($.12 per share). Net shipments of both commercial and defense products increased compared to the previous year. Shipments to commercial markets increased by $46.3 million to $265.3 million during fiscal 1994. The volume increase resulted from higher shipments of construction, stripped motorized chassis, and trailers compared to the previous year. Shipments of defense products increased by $10.2 million to $426.2 million in fiscal 1994. The fiscal 1994 shipments are comprised almost exclusively of shipments under the Palletized Load System (PLS) and Heavy Equipment Transporter (HET) contracts. Production under the PLS and HET contracts more than offset declines due to completion of other defense contracts during fiscal 1993. The PLS and HET programs went to full rate production during fiscal 1993 while production of the Heavy Expanded Mobility Tactical Truck (HEMTT) ended during fiscal 1993. The company also completed a contract for U.S. Air Force snow removal equipment during fiscal 1993. Defense export shipments were $3.9 million in fiscal 1994, compared to $49.3 million in fiscal 1993. Commercial export shipments were $16.5 million and $16.6 million, respectively, in fiscal 1994 and 1993. Virtually all of the company's revenues are derived from customer orders prior to commencing production. Gross profits during fiscal 1994 were $88.0 million, or 12.7% of shipments, up from $69.6 million, or 11.0% of shipments in fiscal 1993. The improved margin performance is attributable to increased volume and production efficiency. Operating expenses increased 10.4% to $63.5 million, or 9.2% of shipments in fiscal 1994, compared to $57.5 million, or 9.1% of shipments during fiscal 1993. Fiscal 1994 includes charges of $3.1 million relating to a reduction of work force in anticipation of lower levels of future business. The remaining increased operating expense is due to increased volume in fiscal 1994 compared to a year earlier. Interest expense, net of interest income, decreased to $1.3 million, compared to $4.1 million during fiscal 1993. This decrease is due to decreased working capital requirements throughout fiscal 1994. The effective income tax rate for combined federal and state income taxes for fiscal 1994 was 40.5%. This compares to 35.0% in fiscal 1993. The lower rate in fiscal 1993 is due to proportionately higher export shipments and a lower federal statutory rate. Results of Operations Year Ended September 25, 1993 Compared to Year Ended September 30, 1992 Net shipments were $635.0 million for fiscal 1993, compared to shipments of $640.6 million in fiscal 1992. Income, before cumulative effect of accounting change for the adoption of Statement of Financial Accounting Standards (SFAS) No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions," was $5.2 million ($.59 per share). Net income for fiscal 1993 including the non-cash SFAS No. 106 accounting charge of $4.1 million, was $1.1 million ($.12 per share). This compares to net income of $8.8 million ($1.01 per share) for fiscal 1992. Net shipments of commercial products increased in fiscal 1993 which offset a decline in defense products. Shipments of commercial products increased $34.1 million, totaling $219.0 million in fiscal 1993. All commercial product lines had increased shipments during the year. Shipments of defense products to the U.S. Government and foreign governments decreased to $416.0 million in fiscal 1993 from $455.7 million during fiscal 1992. The company's defense business consists of major contracts with the U.S. Department of Defense and periodic contracts with foreign governments. During fiscal 1993, the company had shipments to the U.S. Department of Defense, net of Foreign Military Sales (FMS), of $366.7 million, compared to $290.1 million the previous year. Production of the Palletized Load System (PLS) and the Heavy Equipment Transporter (HET) more than offset declines resulting from completion of other contracts. The PLS and HET programs went to full rate production during fiscal 1993, while production of the Heavy Expanded Mobility Tactical Truck (HEMTT) ended. During the year, the company also completed a contract for U.S. Air Force snow removal equipment and a contract during fiscal 1992 for aircraft refuelers. Defense export shipments, including FMS, were $49.3 million in fiscal 1993, down from $165.6 million the previous year. Fiscal 1992 shipments were substantially made up of a major export order for HET trucks and trailers which the company began delivering late in fiscal 1991. Virtually all of the company's revenues are derived from firm customer orders prior to commencing production. Gross profits increased 3.2% to $69.6 million in fiscal 1993, inclusive of non-recurring costs of $2.9 million pertaining to settlement with the U.S. Government of long standing cost accounting issues. This compares to $67.5 million the previous year. As a percentage of shipments, gross profits were 11.0% in the current year, compared to 10.5% during fiscal 1992. This is due to the increased level of PLS and HET shipments which had higher margins. Margin contributions of commercial products also improved due to increased volumes and production efficiencies. Operating expenses increased 10.5% to $57.5 million in fiscal 1993, compared to $52.0 million the previous year, due largely to costs associated with development of commercial markets. Interest expense, net of interest income, increased to $4.1 million from $2.9 million the previous year. This increase is attributable to increased working capital needs throughout much of the current year. The effective income tax rate for combined federal and state income taxes for fiscal 1993 was 35.0%, compared to 29.1% the previous year. The lower rate in fiscal 1992 is attributable to tax benefits related to export shipments. Liquidity and Capital Resources Working capital was $82.0 million at year-end fiscal 1994, compared to $101.0 million for fiscal 1993. This decrease is due to reduction in accounts receivable levels to normal levels compared to a year earlier. Inventory levels declined $13.9 million, or 20.2% at September 30, 1994, compared to the 1993 fiscal year. Cash and cash equivalents increased to $15.8 million at September 30, 1994, from $0.6 million at year-end fiscal 1993. The company achieved favorable cash flow performance in fiscal 1994, generating $64.3 million in cash provided by operations. This funded dividend payments of $4.3 million, a reduction in long-term debt of $39.1 million to $8.7 million at September 30, 1994, and capital additions and investing activities of $5.8 million. During the prior year, operating activities generated $38.4 million of cash due to production efficiency and decreased working capital needs. Payment of dividends, capital additions and investing activities required $4.3 million and $13.8 million, respectively. Borrowings under the long-term debt facility were reduced by $19.9 million during fiscal 1993. The company believes its internally generated cash flow, supplemented by progress payments when applicable, and the existing credit facilities will be adequate to meet working capital and other operating and capital requirements in the foreseeable future. The company is dependent on its shipments of defense products to the U.S. Government as evidenced by shipments of 62% and 66% of total shipments during fiscal 1994 and 1993, respectively. Substantial decreases in the company's level of defense business from the current level could have an adverse effect on the company's profitability. The company is anticipating a lower level of sales to the U.S. Government in fiscal 1995 due to the completion of the HET contract in September 1994. The PLS contract will remain in production through August 1996. Additional orders could increase the rate of production or extend the period of production. The company remains optimistic about its defense business prospects. Inflation The company believes that the risks of inflation are minimized by the nature of its businesses. All revenue derived by the company from its contracts with the U.S. Government were received under firm fixed-price contracts. The company prices major government programs and contracts on a current basis that takes into account cost increases expected to occur during performance of the contract. Generally, major suppliers receive terms from the company similar to what the company receives under its contracts with the U.S. Government. Commercial business is performed on the basis of pricing specific orders. Any impact from inflation will be minimized by the company's ability to include inflationary cost increases in prices. Backlog The company's backlog at year-end fiscal 1994 was $512 million, compared to $459 million the previous year. The change in backlog represents delivery of products on long-term contracts net of additional funding received. Backlog on U.S. Government contracts comprises $448 million of the year-end backlog with the remainder being commercial. Environmental The company continues to be engaged in environmental monitoring activities that include both investigation and remediation. The company does not anticipate that costs relating to environmental activities will have a material adverse impact on the company's financial condition. [consolidated financial statements section] Consolidated Balance Sheet September 30, 1994, and September 25, 1993 (In thousands, except share and per share amounts) Assets 1994 1993 Current assets: Cash and cash equivalents $ 15,836 $ 592 Receivables, net of allowance for doubtful accounts of $531 and $677 at September 30, 1994 and September 25, 1993, respectively (Note 2) 65,926 97,429 Inventories (Note 3) 54,909 68,801 Prepaid expenses 6,334 5,672 Refundable income taxes 801 -- Deferred income taxes (Note 4) 8,156 6,166 ------- ------- Total current assets 151,962 178,660 Deferred charges (Note 1) 2,884 8,128 Deferred income taxes (Note 4) 626 -- Other assets (Note 1) 10,887 11,887 Property, plant, and equipment: Land and improvements 7,944 7,788 Buildings 34,364 33,302 Machinery and equipment 71,389 68,580 ------- ------- 113,697 109,670 Less accumulated depreciation 63,196 55,246 ------- ------- Net property, plant, and equipment 50,501 54,424 ------- ------- Total assets $216,860 $253,099 ======= ======= Liabilities and shareholders' equity Current liabilities: Accounts payable $ 37,973 $ 52,881 Federal excise taxes 1,550 774 Payroll-related obligations 6,484 6,127 Accrued warranty 6,788 4,542 Income taxes -- 620 Other liabilities 17,157 12,749 -------- ------- Total current liabilities 69,952 77,693 Long-term debt (Note 5) 8,737 47,819 Postretirement benefit obligations (Note 7) 8,159 7,726 Other long-term liabilities (Note 1) 8,454 7,094 Deferred income taxes (Note 4) -- 763 Commitments and contingencies (Notes 1, 5 and 6) Shareholders' equity (Notes 7 and 9): Preferred stock, par value $.01 per share, authorized 2,000,000 shares, none issued -- -- Common stock, par value $.01 per share: Class A, authorized 1,000,000 shares, issued and outstanding 449,370 shares 4 4 Class B, authorized 18,000,000 shares, issued 8,558,795 shares 86 86 Additional paid-in capital 7,623 7,399 Retained earnings 116,890 108,158 ------- ------- 124,603 115,647 Less: Cost of Class B common stock in treasury; 300,367 and 321,117 shares in 1994 and 1993, respectively 2,591 2,767 Pension liability adjustment (Note 7) 454 876 ------- ------- Total shareholders' equity 121,558 112,004 ------- ------- Total liabilities and shareholders' equity $216,860 $253,099 ======== ======= See accompanying notes Consolidated Statement of Operations and Retained Earnings Years ended September 30, 1994, September 25, 1993, and September 30, 1992 (In thousands, except share and per share amounts) 1994 1993 1992 Net shipments (Note 8) $691,508 $635,012 $640,566 Cost of goods sold 603,537 565,410 573,094 ------- ------- ------- Gross profit 87,971 69,602 67,472 Operating expenses: Selling, general and administrative 55,285 46,570 41,111 Engineering, research and development 8,205 10,958 10,936 ------- ------- ------- Total operating expenses 63,490 57,528 52,047 ------- ------- ------- Income from operations 24,481 12,074 15,425 Other income (expense): Interest expense (1,769) (4,232) (3,463) Interest income 432 106 598 Miscellaneous, net (1,193) (24) (188) -------- ------- ------- (2,530) (4,150) (3,053) -------- ------- ------- Income before income taxes and cumulative effect of change in accounting principle 21,951 7,924 12,372 Provision for income taxes (Note 4) 8,897 2,773 3,601 -------- ------- ------- Income before cumulative effect of change in accounting principle 13,054 5,151 8,771 Cumulative effect of change in method of accounting for postretirement benefits, net of tax benefit of $2,726 -- 4,088 -- -------- ------- ------- Net income 13,054 1,063 8,771 Retained earnings at beginning of year 108,158 111,410 106,954 Cash dividends (Note 9): Class A common ($.435 per share each year) (195) (196) (196) Class B common ($.500 per share each year) (4,127) (4,119) (4,119) -------- -------- -------- Retained earnings at end of year $116,890 $108,158 $ 111,410 ======== ======= ======= Earnings per common share: Before cumulative effect of accounting change $ 1.50 $ .59 $ 1.01 Cumulative effect of change in method of accounting for postretirement benefits, net of taxes -- (.47) -- --------- --------- -------- Net income $ 1.50 $ .12 $ 1.01 ========= ========= ======== See accompanying notes Consolidated Statement of Cash Flows Years ended September 30, 1994, September 25, 1993, and September 30, 1992 (In thousands, except share and per share amounts) 1994 1993 1992 Operating activities: Net income $ 13,054 $11,063 $28,771 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 10,137 9,420 8,242 Deferred income taxes (3,659) (7,279) 2,250 Cumulative effect of change in accounting principle -- 6,814 -- Loss on disposal of property, plant, and equipment 500 377 22 Changes in operating assets and liabilities: Receivables 31,503 (21,861) (8,808) Inventories 13,892 30,834 (17,631) Prepaid expenses (662) (2,956) 344 Deferred charges 5,244 4,881 (4,174) Accounts payable (14,908) 5,886 (5,395) Income taxes (1,421) 3,943 (2,681) Federal excise taxes 776 (1,914) (3,443) Payroll-related obligations 702 154 163 Accrued warranty 2,246 967 812 Other liabilities 4,406 3,954 1,103 Long-term liabilities 2,459 4,087 1,973 ------- ------- ------- Total adjustments 51,215 37,307 (27,223) ------- ------- ------- Net cash provided (used) by operating activities 64,269 38,370 (18,452) ------- ------- ------- Investing activities: Additions to property, plant, and equipment (5,709) (8,401) (10,007) Less amount capitalized under financing leases -- 639 1,240 ------- ------- ------- Net additions to property, plant, and equipment (5,709) (7,762) (8,767) Increase in other assets (124) (6,054) (5,153) ------- ------- ------- Net cash used by investing activities (5,833) (13,816) (13,920) ------- ------- ------- Financing activities: Net borrowings (payments) on lines of credit (39,082) (19,871) 36,554 Sale of common stock from treasury 210 2 26 Dividends paid (4,320) (4,314) (4,314) ------- ------- ------ Net cash provided (used) by financing activities (43,192) (24,183) 32,266 ------- ------- ------ Increase (decrease) in cash and cash equivalents 15,244 371 (106) Cash and cash equivalents at beginning of year 592 221 327 ------- ------- ------- Cash and cash equivalents at end of year $ 15,836 $ 592 $ 221 ======= ======= ======= Supplementary disclosures: Cash paid for interest $ 1,852 $ 4,227 $ 3,048 Cash paid for income taxes $ 13,972 $ 3,382 $ 4,032 See accompanying notes Financial Notes Years ended September 30, 1994, September 25, 1993, and September 30, 1992 (In thousands, except share and per share amounts) 1. Summary of Significant Accounting Policies Consolidation and Presentation The consolidated financial statements include the accounts of Oshkosh Truck Corporation and a wholly owned foreign sales corporation (collectively referred to as the company). Government Contracts The company derives a significant portion of its revenue from the U.S. Government (see Note 8). Inherent in doing business with the U.S. Government are certain risks, including technological changes and changes in levels of defense spending. Sales and related costs under fixed-price contracts, which the company has with the government, are recorded as units are accepted. Amounts for government ordered changes are not invoiced until they are agreed upon. Recognition of profit on government ordered changes and certain contracts is based upon estimates of final performance which may be revised as the contract progresses. All U.S. Government contracts contain a provision that they may be terminated at any time for the convenience of the government. In such an event, the company is entitled to recover allowable costs plus a reasonable profit earned to the date of termination. Various actions or claims have been brought or asserted or may be contemplated by government authorities against the company. During 1993, the company entered into a $3.5 million settlement with the U.S. Government related to alleged noncompliance with certain cost accounting standards. Of that amount, $0.2 million and $2.9 million has been charged to cost of sales in 1994 and 1993, respectively, with the remainder to be amortized over remaining deliverable units under the PLS contract. A potential action by government authorities against the company in connection with a grand jury investigation which commenced in 1989 remains open. In addition, in October 1992, the company responded to a grand jury investigation related to Steeltech Manufacturing, Inc., a vendor. No charges have been filed against the company or its employees in either action. The company and its employees have cooperated fully with the investigations. No provisions for loss are recorded in the financial statements because the company cannot reasonably estimate what, if any, costs may result from these actions. Costs incurred in responding to these actions have been expensed as incurred. Inventories The company values its inventories principally at the lower of cost, determined using the last-in, first-out (LIFO) method, or market. If the company had used the first-in, first-out (FIFO) method, inventories would have been $6,212 and $6,506 higher than reported at September 30, 1994 and September 25, 1993, respectively. Inventories do not include amounts of general and administrative expenses related to U.S. Government contracts. Property, Plant, and Equipment Additions and improvements are capitalized at cost, whereas expenditures for maintenance and repairs are charged to expense as incurred. Depreciation has been provided over the estimated useful lives of the respective assets on the following basis: machinery and equipment -- accelerated method; other assets -- principally straight-line method. Other Assets Other assets include capitalized software and related costs which are being amortized over a five-year period, funding for long-term pension costs, and certain other investments. These investments include $3,526 in joint ventures in Mexico to manufacture vehicles for that market and Central and South America. The company accounts for its investments in Mexico under the equity method as it is able to exercise significant influence over their operations. The equity from operations included in the company's earnings in these investments was a loss of $942 in 1994, and earnings of $9 in 1993, included in other expense. The company also has an investment aggregating $1,100 in a minority-owned supplier and joint venture which leases equipment to the minority-owned supplier and has guaranteed loans of the joint venture in the amount of $2,218 at September 30, 1994. Deferred Charges Deferred charges include certain engineering and technical support costs incurred in connection with long-term contracts. These costs are charged to expense when the related project is billable to the government, or are amortized to expense as base units are delivered under the contract. Long-Term Liabilities Long-term liabilities include accumulated postretirement benefit obligations and deferred revenue on long-term U.S. Government contracts, which will be recognized as income in future years as base units are delivered under the contracts. Warranty Costs The company provides for the estimated cost of warranty work related to specific sales. Amounts expensed in 1994, 1993 and 1992 were $7,739, $6,836 and $5,886, respectively. Net Income Per Common Share Net income per common share was computed by dividing net income by the weighted average number of shares of common stock outstanding (8,699,846, 8,686,973 and 8,685,804 in 1994, 1993 and 1992, respectively). Stock options were not dilutive in any of the three years. Reclassifications Certain reclassifications have been made to the 1993 and 1992 consolidated financial statements to conform to the 1994 presentation. 2. Receivables Receivables consist of the following: 1994 1993 Government: Amounts billed, net $21,338 $55,563 Unbilled 4,277 2,080 ------- ------ 25,615 57,643 Commercial customers 39,599 38,845 Other 712 941 ------- ------- $65,926 $97,429 ====== ====== The receivables from the government result principally from long-term contracts (see Note 1). The unbilled amount principally represents estimated claims for government ordered changes which are expected to be invoiced upon completion of negotiations within two years, and price adjustment provisions which will be invoiced within the next year. Receivables include $7,977, and $3,507 from the company's joint venture in Mexico, at September 30, 1994 and September 25, 1993, respectively. 3. Inventories Inventories consisted of the following: 1994 1993 Finished products $12,618 $ 8,912 Products in process 9,572 17,495 Raw material 38,931 48,900 ------ ------ 61,121 75,307 Less: Allowance for reduction to LIFO cost 6,212 6,506 ------ ------ $54,909 $68,801 ====== ======= Title to all inventories related to U.S. Government contracts which provide for progress payments vests in the U.S. Government to the extent of unliquidated progress payments. 4. Income Taxes Effective October 1, 1992, the company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. This method requires all deferred taxes to be recorded using enacted tax rates for the year in which the differences between the financial statement and tax bases of assets and liabilities are expected to reverse. The impact of adopting SFAS No. 109 was not material to 1993 operations. The provision for income taxes consists of the following: 1994 1993 1992 Current: Federal $12,857 $6,307 $ 1,107 State 1,935 1,018 244 ------ ------ ------ 14,792 7,325 1,351 Deferred: Federal (5,391) (4,075) 1,843 State (504) (477) 407 ------ ------ ------ (5,895) (4,552) 2,250 ------ ------ ------ $ 8,897 $2,773 $ 3,601 ====== ====== ====== The components of the net deferred tax asset as of September 30, 1994 and September 25, 1993, were as follows: 1994 1993 Deferred tax assets: Non-pension postretirement benefits $ 3,121 $ 2,945 Accrued compensation/benefits 1,703 1,026 Accrued expenses 4,842 1,010 Revenue recognition 4,135 6,940 Accrued warranty 2,475 1,740 Deferred charges, and other 469 82 Investments in affiliates 555 79 ------ ------ Total deferred tax assets 17,300 13,822 Deferred tax liabilities: Depreciation and amortization 6,142 5,650 Inventory 177 286 Prepaid expenses 1,675 1,241 Deferred charges, and other 9 1,242 ------- ------- Total deferred tax liabilities 8,003 8,419 9,297 5,403 Valuation allowance for investment in affiliates 515 -- ------- -------- Net deferred tax assets $ 8,782 $ 5,403 The sources of significant temporary differences which gave rise to deferred taxes in 1992, were as follows: 1992 Depreciation and amortization $ 1,331 Revenue recognition (776) Inventory valuation 367) Warranty (198) Pension 357) Deferred charges 2,890 Other, net (721) ------ $ 2,250 ====== A reconciliation of the provision for federal income taxes computed at the federal statutory rate to the income tax provision is as follows: 1994 1993 1992 Federal income tax provision computed at statutory rate $7,683 $2,773 $4,206 Increase (decrease) in taxes resulting from: Statutory rate increase from 34% to 35% effective January 1,1993 -- (19) -- State income taxes, net of federal tax benefit 723 310 220 Benefit from untaxed earnings of the company's foreign sales corporation (80) (374) (903) Valuation allowance 515 -- -- Other, net 56 83 78 ----- ----- ----- $8,897 $2,773 $3,601 ====== ====== ====== 5. Long-term Debt Long-term debt consists of the following as of September 30, 1994 and September 25, 1993: 1994 1993 Revolving credit agreement $ -- $38,500 Industrial revenue bonds 8,700 8,700 Other 37 619 ------ ------ $ 8,737 $47,819 Revolving Credit Facility -- On March 31, 1992, the company entered into an unsecured revolving credit agreement with a group of banks. This credit facility extends to the company an $80.0 million working capital line and a $5.0 million letter of credit facility. The agreement was extended during the current fiscal year and will expire on March 17, 1997. The facility allows the company to borrow at various rates equivalent to or less than the current prime rate of Firstar Bank. The company incurred certain fees at closing for agent and facility fees and will also incur a fee on the unused portion of the facility. The agreement contains various restrictive covenants under which the company must meet certain financial ratio tests and has some restrictions relative to the payment of dividends, amounts of capital expenditures, acquisitions, and other indebtedness. As of September 30, 1994, the company had no outstanding borrowings under the revolving credit facility and had letters of credit outstanding of $2.4 million under the letter of credit facility. The average borrowings for 1994 and 1993 amounted to approximately $10.5 million and $61.1 million at weighted average effective interest rates of 5.75% and 5.05%, respectively. The maximum amount of borrowings at any month-end during 1994 was $24.0 million, and $73.5 million during 1993. Industrial Revenue Bonds -- The company has outstanding $8,700 of industrial development revenue bonds that were used to finance the construction of a chassis manufacturing facility. The bonds are due in a single payment on August 1, 2019. Interest on the bonds is adjusted each week to the lesser of 15% or the rate that would allow the bonds to be resold at par. The average interest rate on the bonds was 2.7%, 2.6% and 3.5% during 1994, 1993 and 1992, respectively. The company has the option to convert the variable interest rate to a fixed rate. Through June 6, 1995, the bonds are secured by a letter of credit which is secured by the chassis manufacturing facility. The maturities of long-term debt are as follows: 1995-$592; 1996-$37 and 2019-$8,700. 6. Operating Leases Total rental expense for plant and equipment charged to operations under noncancellable operating leases was $1,940, $2,474 and $2,499 in 1994, 1993 and 1992, respectively. Minimum annual rental payments for the five fiscal years after 1994, are: 1995-$1,254; 1996-$795; 1997-$562; 1998-$421 and 1999-$191, for an aggregate commitment of $3,223. Included in rental expense are charges of $304, $332 and $307 in 1994, 1993 and 1992, respectively, relating to leases between the company and certain shareholders. 7. Employee Benefit and Incentive Plans The company has defined benefit pension plans covering substantially all employees. The plans provide benefits based on compensation, years of service and year of birth. The company's funding policy is to fund the pension plans in amounts which comply with contribution limits imposed by law. Net periodic pension cost for these plans for 1994, 1993 and 1992 includes the following components: 1994 1993 1992 Service cost -- benefits earned during year $(1,227) $ 986 $ 873 Interest cost on projected benefit obligations 1,684 1,506 1,344 Actual return on plan assets (296) (743) (1,607) Net amortization (deferral) (1,523) (948) 186) ------ ------- ------ Net periodic pension cost 1,092 801 796 Curtailment loss related to reduction in work force 560 -- -- ------ ----- ------ Net expense $ 1,652 $ 801 $ 796 ====== ===== ====== The following table summarizes the combined funded status of the pension plans and the amounts recognized in the company's consolidated balance sheets at September 30, 1994 and September 25, 1993. 1994 1993 Actuarial present value of benefit obligations: Vested benefits $16,322 $17,189 Nonvested benefits 822 862 Total accumulated benefit obligations 17,144 18,051 Adjustment for projected benefit obligations 5,134 4,808 Projected benefit obligations 22,278 22,859 Plan assets at fair value 20,383 19,643 Projected benefit obligations in excess of plan assets (1,895) (3,216) Unrecognized net loss 4,088 5,521 Unrecognized prior service cost 452 591 Unrecognized net transition asset (800) (928) Adjustment required to recognize minimum liability (1,125) (1,946) ------ ------ Prepaid expense recognized in the consolidated balance sheet $ 720 $ 22 ====== ====== Generally accepted accounting principles require the recognition of an additional minimum liability (recorded as a long-term liability) for each defined benefit plan for which the accumulated benefit obligation exceeds plan assets. The company is permitted to record an offsetting intangible asset ($367 in 1994 and $486 in 1993) to the extent of unrecognized prior service cost. To the extent the minimum liability exceeds the amount of unrecognized prior service cost, the company records a reduction of shareholders' equity ($454 in 1994 and $876 in 1993, net of tax benefits of $304 and $584, respectively). The assets in the pension plans are comprised of investments in commingled equity and fixed income funds, and individually managed equity portfolios. Actuarial assumptions are as follows: 1994 1993 1992) Discount rate 8.25% 7.50% 9.00% Rate of increase in compensation 4.50% 4.50% 5.75% Expected long-term rate of return on assets 9.25% 9.25% 9.25% In addition to providing pension benefits for the majority of its employees, the company provides health benefits to retirees and their eligible spouses. Substantially all of the company's employees may become eligible for these benefits if they reach normal retirement age while working for the company. Effective October 1, 1992, the company adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions." SFAS No. 106 requires that the cost of these benefits be recognized during the employee's active working career rather than accounting for them on a cash basis as had been prior practice. The cumulative effect of adopting SFAS No. 106 on the immediate recognition basis as of October 1, 1992, was a charge to earnings of $4,088, net of $2,726 income tax effect. The following tables provide information on the Plan status as of September 30, 1994 and September 25, 1993: 1994 1993 Accumulated postretirement benefit obligation: Retirees $2,988 $ 2,447 Fully eligible active plan participants 497 1,152 Other active participants 4,396 5,179 ----- ----- Total 7,881 8,778 Unrecognized net gain (loss) 278 (1,052) ----- ----- Accrued postretirement benefit cost $8,159 $ 7,726 ===== ====== Net periodic postretirement benefit cost includes the following: 1994 1993 Service cost, benefits attributed for service of active employees for the period $ 472 $ 439 Interest cost on the accumulated postretirement benefit obligation 658 579 Amortization of unrecognized loss 26 -- ----- ----- Net periodic postretirement benefit cost $1,156 $1,018 ===== ===== Net change in accrued postretirement benefit cost includes the following: 1994 1993 Balance at beginning of year $7,726 $6,814 Benefits paid (347) (106) Net periodic postretirement benefit cost 1,156) 1,018) Curtailment gain related to reduction in work force (376) -- ----- ------ Balance at end of year $8,159) $7,726) ===== ===== The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation (APBO) was 14.0% in 1994, declining to 7.0% in 2006. The weighted average discount rate used in determining the APBO was 8.25%. If the health care cost trend rate was increased by 1%, the APBO at September 30, 1994, would increase by $808 and net periodic postretirement benefit cost for 1994 would increase by $168. The amount paid for retiree health benefits prior to the adoption of SFAS No. 106 was $237 in 1992. The company has defined contribution 401(k) plans covering substantially all employees. The plans allow employees to defer 2% to 19% of their income on a pre-tax basis. Each employee who elects to participate is eligible to receive employer matching contributions. For every dollar an employee contributes (up to 4% of one's income on a pre-tax basis), the company will contribute $.25. Amounts expensed for company matching contributions were $464, $467 and $410 in 1994, 1993 and 1992, respectively. Under the 1990 Incentive Stock Plan for Key Employees (the Plan), officers and other key employees may be granted options to purchase up to an aggregate of 400,000 shares of the company's Class B common stock at not less than the fair market value of such shares on the date of grant. Participants may also be awarded grants of restricted stock under the Plan. The Plan expires on April 9, 2000. The option to purchase shares expires not later than ten years and one month after the grant of the option. The following table sets forth information with respect to the Plan: Option Shares Price Range Outstanding at September 30, 1991 140,084 $7.88 - $15.25 Options granted 3,750) $13.00 - $14.25 Options exercised (3,750) $7.88 Options cancelled (8,000) $7.88 - $15.25 ------ Outstanding at September 30, 1992 132,084 $7.88 - $15.25 Options granted 48,500 $9.75 Options exercised (167) $7.88 Options cancelled (2,000) $15.25 ------ Outstanding at September 25, 1993 178,417 $7.88 - $15.25 Options granted 242,400 $9.13 - $10.50 Options exercised (5,750) $7.88 Options cancelled (14,418) $7.88 - $15.25 ------- Outstanding at September 30, 1994 (120,194 exercisable) 400,649 $7.88 - $15.25 ======= In addition, in 1990 the company's chief executive officer was granted 25,000 shares of restricted Class B common stock, and during 1994, 15,000 shares of Class B common stock were granted to company officers. Options as to 50,482 shares granted in 1994 are subject to approval by shareholders. 8. Net Shipments Net shipments consist of sales to the following markets: 1994 1993 1992 Domestic: U.S. Government $424,995 $372,574 $450,901 Commercial 248,743 202,425 167,735 Export 17,770 60,013 21,930 ------- ------- ------- $691,508 $635,012 $640,566 ======= ======= ======= U.S. Government sales include $2,619, $5,915 and $160,818 in 1994, 1993 and 1992, respectively, for products sold internationally under the Foreign Military Sales Program. 9. Shareholders' Equity Dividends are required to be paid on both the Class A and Class B common stock at any time that dividends are paid on either. Whenever cash dividends are paid on the common stock, each share of Class B common stock is entitled to receive 115% of the dividend paid on each share of Class A common stock, rounded up or down to the nearest $0.0025 per share. The Class B common stock shareholders are entitled to receive a liquidation preference of $7.50 per share before any payment or distribution to holders of the Class A common stock. Thereafter, holders of the Class A common stock are entitled to receive $7.50 per share before any further payment or distribution to holders of the Class B common stock. Thereafter, holders of the Class A common stock and Class B common stock share on a pro rata basis in all payments or distributions upon liquidation, dissolution or winding up of the company. Report of Ernst & Young, LLP, Independent Auditors Board of Directors, Oshkosh Truck Corporation We have audited the accompanying consolidated balance sheets of Oshkosh Truck Corporation (the company) as of September 30, 1994 and September 25, 1993, and the related consolidated statements of operations and retained earnings and cash flows for each of the three years in the period ended September 30, 1994. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the company at September 30, 1994 and September 25, 1993, and the consolidated results of its operations and its cash flows for each of the three years in the period ended September 30, 1994, in conformity with generally accepted accounting principles. As discussed in Notes 4 and 7 to the financial statements, the company changed its methods of accounting for income taxes and postretirement benefits other than pensions effective October 1, 1992. ERNST & YOUNG LLP November 14, 1994 Milwaukee, WI [financial statistics section] Financial Statistics Common Dividends Quarterly (Payable February, May, August, November) (In thousands, except per share amounts)
Fiscal 1994 Fiscal 1993 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Class A Cash Dividend: Declared $ 49 $ 49 $ 49 $ 49 $ 49 $ 49 $ 49 $ 49 Per Share .10875 .10875 .10875 .10875 .10875 .10875 .10875 .10875 Class B Cash Dividend: Declared $ 1,032 $ 1,032 $ 1,032 $ 1,030 $ 1,030 $ 1,030 $ 1,030 $ 1,030 Per Share .125 .125 .125 .125 .125 .125 .125 .125
The information included in this exhibit reflects dividends as set forth in the Consolidated Statements of Operations and Retained Earnings (see page 9). Oshkosh Truck Corporation Class B Common Stock Price* The Corporation's common stock is quoted on the National Association of Securities Dealers Automated Quotation System (NASDAQ) National Market System. The following table sets forth prices reflecting actual sales as reported on the NASDAQ National Market System. Quarter Ended Fiscal 1994 Fiscal 1993 High Low High Low September $11-1/4 $10 $9-1/8 $8-7/8 June 11-1/2 8-3/4 9 8-1/2 March 11-3/4 8-3/4 9 8-1/2 December 9-3/8 8-5/8 11 10-5/8 *There is no established public trading market for Class A common stock. Quarterly Financial Data (Unaudited) (In thousands, except per share amounts)
Fiscal 1994 Fiscal 1993 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Net Shipments $149,281 $187,011 $192,891 $162,325 $183,142 $153,226 $154,345 $144,299 Gross Profit 23,777 22,966 22,018 19,210 16,887 17,911 19,475 15,329 Income Before Cumulative Effect of Accounting Change 3,158 3,674 2,759 3,463 1,806 703 1,974 668 Per Share .36 .42 .32 .40 .21 .08 .23 .07 Net Income (Loss) 3,158 3,674 2,759 3,463 1,806 703 1,974 (3,420) Per Share .36 .42 .32 .40 .21 .08 .23 (.40) Quarterly results have been restated for the adoption of SFAS No. 106 which the company adopted effective October 1, 1992. Quarterly results have been restated to include as cost of goods sold, cost associated with settlement of long standing cost accounting issues with the U.S. Government which had been reported as selling, general and administrative expense.
Shareholders of Record As of December 7, 1994, there were 1,280 and 199 record holders of Class B and Class A common stock, respectively. EX-27 8 OSHKOSH TRUCK EXHIBIT 27
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF OSHKOSH TRUCK CORPORATION AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR SEP-30-1994 SEP-26-1993 SEP-30-1994 15,863 0 66,457 531 54,909 151,962 113,697 63,196 216,860 69,952 8,737 90 0 0 121,468 121,558 691,508 691,508 603,537 603,537 0 128 1,769 21,951 8,897 13,054 0 0 0 13,054 1.50 1.50
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