Delaware
|
1-8649
|
41-0580470
|
(State
of Incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification Number)
|
Large
accelerated filer
S
|
Accelerated
filer
£
|
Non-accelerated
filer
£
|
Smaller
reporting company
£
|
Page Number
|
||
PART
I.
|
FINANCIAL
INFORMATION:
|
|
3
|
||
4
|
||
5
|
||
6-12
|
||
13-22
|
||
22-23
|
||
23-24
|
||
24-25
|
||
25
|
||
25
|
||
25-26
|
||
27
|
||
28
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
August
1,
|
August
3,
|
August
1,
|
August
3,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
sales
|
$ | 492,635 | $ | 478,707 | $ | 1,536,944 | $ | 1,544,448 | ||||||||
Cost
of sales
|
318,695 | 301,264 | 986,101 | 982,224 | ||||||||||||
Gross
profit
|
173,940 | 177,443 | 550,843 | 562,224 | ||||||||||||
Selling,
general, and administrative expense
|
110,874 | 110,598 | 352,934 | 348,722 | ||||||||||||
Earnings
from operations
|
63,066 | 66,845 | 197,909 | 213,502 | ||||||||||||
Interest
expense
|
(4,645 | ) | (4,959 | ) | (14,947 | ) | (15,235 | ) | ||||||||
Other
(expense) income, net
|
(368 | ) | 1,954 | 532 | 5,821 | |||||||||||
Earnings
before income taxes
|
58,053 | 63,840 | 183,494 | 204,088 | ||||||||||||
Provision
for income taxes
|
19,826 | 21,354 | 63,856 | 68,186 | ||||||||||||
Net
earnings
|
$ | 38,227 | $ | 42,486 | $ | 119,638 | $ | 135,902 | ||||||||
Basic
net earnings per share of common stock
|
$ | 1.01 | $ | 1.05 | $ | 3.13 | $ | 3.32 | ||||||||
Diluted
net earnings per share of common stock
|
$ | 0.99 | $ | 1.02 | $ | 3.06 | $ | 3.23 | ||||||||
Weighted-average
number of shares of common
|
||||||||||||||||
stock
outstanding – Basic
|
37,901 | 40,569 | 38,177 | 40,938 | ||||||||||||
Weighted-average
number of shares of common
|
||||||||||||||||
stock
outstanding – Diluted
|
38,708 | 41,803 | 39,039 | 42,113 |
August
1,
|
August
3,
|
October
31,
|
||||||||||
2008
|
2007
|
2007
|
||||||||||
ASSETS
|
||||||||||||
Cash
and cash equivalents
|
$ | 55,013 | $ | 94,192 | $ | 62,047 | ||||||
Receivables,
net
|
364,988 | 379,788 | 283,115 | |||||||||
Inventories,
net
|
211,760 | 243,437 | 251,275 | |||||||||
Prepaid
expenses and other current assets
|
14,811 | 13,018 | 10,677 | |||||||||
Deferred
income taxes
|
56,147 | 58,499 | 57,814 | |||||||||
Total
current assets
|
702,719 | 788,934 | 664,928 | |||||||||
Property,
plant, and equipment
|
608,554 | 569,981 | 577,082 | |||||||||
Less
accumulated depreciation
|
434,742 | 399,233 | 406,410 | |||||||||
173,812 | 170,748 | 170,672 | ||||||||||
Deferred
income taxes
|
6,485 | 1,861 | 5,185 | |||||||||
Other
assets
|
7,538 | 11,269 | 9,153 | |||||||||
Goodwill
|
86,099 | 81,768 | 86,224 | |||||||||
Other
intangible assets, net
|
15,682 | 5,526 | 14,675 | |||||||||
Total
assets
|
$ | 992,335 | $ | 1,060,106 | $ | 950,837 | ||||||
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
||||||||||||
Current
portion of long-term debt
|
$ | 2,441 | $ | - | $ | 1,611 | ||||||
Short-term
debt
|
- | 1,449 | 372 | |||||||||
Accounts
payable
|
86,824 | 83,366 | 90,966 | |||||||||
Accrued
liabilities
|
258,246 | 266,383 | 248,521 | |||||||||
Total
current liabilities
|
347,511 | 351,198 | 341,470 | |||||||||
Long-term
debt, less current portion
|
227,266 | 223,157 | 227,598 | |||||||||
Deferred
revenue and other long-term liabilities
|
15,836 | 10,354 | 11,331 | |||||||||
Stockholders'
equity:
|
||||||||||||
Preferred
stock, par value $1.00, authorized 1,000,000 voting
and
850,000 non-voting shares, none issued and outstanding
|
- | - | - | |||||||||
Common
stock, par value $1.00, authorized 100,000,000 shares,
issued
and outstanding 36,123,341 shares as of August 1,
2008
(net of 17,908,879 treasury shares), 39,774,219 shares as
of
August 3, 2007 (net of 14,258,001 treasury shares), and
37,950,831
shares as of October 31, 2007 (net of 16,081,389
treasury
shares)
|
36,123 | 39,774 | 37,951 | |||||||||
Retained
earnings
|
364,384 | 439,780 | 335,384 | |||||||||
Accumulated
other comprehensive income (loss)
|
1,215 | (4,157 | ) | (2,897 | ) | |||||||
Total
stockholders' equity
|
401,722 | 475,397 | 370,438 | |||||||||
Total
liabilities and stockholders' equity
|
$ | 992,335 | $ | 1,060,106 | $ | 950,837 |
Nine
Months Ended
|
||||||||
August
1,
|
August
3,
|
|||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
earnings
|
$ | 119,638 | $ | 135,902 | ||||
Adjustments
to reconcile net earnings to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Equity
losses from
investments
|
439 | 136 | ||||||
Provision
for depreciation and
amortization
|
32,196 | 30,263 | ||||||
Gain
on disposal of property, plant, and
equipment
|
(89 | ) | (133 | ) | ||||
Gain
on sale of
business
|
(113 | ) | - | |||||
Stock-based
compensation
expense
|
4,366 | 5,474 | ||||||
Increase
in deferred income
taxes
|
(1,490 | ) | (2,323 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Receivables,
net
|
(79,252 | ) | (86,942 | ) | ||||
Inventories,
net
|
39,663 | 101 | ||||||
Prepaid
expenses and other
assets
|
(3,712 | ) | (3,693 | ) | ||||
Accounts
payable, accrued expenses, and deferred revenue and other
long-term
liabilities
|
14,059 | 4,948 | ||||||
Net
cash provided by operating
activities
|
125,705 | 83,733 | ||||||
Cash
flows from investing activities:
|
||||||||
Purchases
of property, plant, and
equipment
|
(34,304 | ) | (32,863 | ) | ||||
Proceeds
from asset
disposals
|
880 | 152 | ||||||
Increase
in investment in
affiliates
|
(250 | ) | - | |||||
(Increase)
decrease in other
assets
|
(288 | ) | 734 | |||||
Proceeds
from sale of a
business
|
1,048 | - | ||||||
Acquisitions,
net of cash
acquired
|
(1,000 | ) | (1,088 | ) | ||||
Net
cash used in investing
activities
|
(33,914 | ) | (33,065 | ) | ||||
Cash
flows from financing activities:
|
||||||||
(Decrease)
increase in short-term
debt
|
(372 | ) | 998 | |||||
Issuance
of long-term debt, net of
costs
|
- | 121,465 | ||||||
Repayments
of long-term
debt
|
(1,124 | ) | (75,000 | ) | ||||
Excess
tax benefits from stock-based
awards
|
3,511 | 12,956 | ||||||
Proceeds
from exercise of stock
options
|
3,506 | 11,456 | ||||||
Purchases
of Toro common
stock
|
(86,679 | ) | (70,382 | ) | ||||
Dividends
paid on Toro common
stock
|
(17,170 | ) | (14,729 | ) | ||||
Net
cash used in financing
activities
|
(98,328 | ) | (13,236 | ) | ||||
Effect
of exchange rates on
cash
|
(497 | ) | 1,237 | |||||
Net
(decrease) increase in cash and cash
equivalents
|
(7,034 | ) | 38,669 | |||||
Cash
and cash equivalents as of the beginning of the fiscal
period
|
62,047 | 55,523 | ||||||
Cash
and cash equivalents as of the end of the fiscal
period
|
$ | 55,013 | $ | 94,192 | ||||
See
accompanying notes to condensed consolidated financial
statements.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(Dollars
in thousands)
|
August
1,
|
August
3,
|
August
1,
|
August
3,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
earnings
|
$ | 38,227 | $ | 42,486 | $ | 119,638 | $ | 135,902 | ||||||||
Other
comprehensive income (loss):
|
||||||||||||||||
Cumulative
translation adjustments
|
(132 | ) | 1,239 | 996 | 4,563 | |||||||||||
Minimum
pension liability adjustment,
net
of tax
|
- | - | 175 | - | ||||||||||||
Unrealized
gain (loss) on derivative
|
||||||||||||||||
instruments,
net of tax
|
903 | (498 | ) | 2,941 | (1,871 | ) | ||||||||||
Comprehensive
income
|
$ | 38,998 | $ | 43,227 | $ | 123,750 | $ | 138,594 |
Fiscal 2008
|
Fiscal 2007
|
||
Expected
life of option in years
|
3 –
6.5
|
3 –
6.5
|
|
Expected
volatility
|
24.84%
- 25.75%
|
24.96%
- 26.44%
|
|
Weighted-average
volatility
|
25.26%
|
25.65%
|
|
Risk-free
interest rate
|
3.10%
- 4.08%
|
4.420%
- 4.528%
|
|
Expected
dividend yield
|
0.92%-
0.95%
|
0.78%-
0.90%
|
|
Weighted-average
dividend yield
|
0.94%
|
0.84%
|
(Dollars
in thousands)
|
August
1,
|
August
3,
|
October
31,
|
|||||||||
2008
|
2007
|
2007
|
||||||||||
Raw
materials and work in process
|
$ | 59,615 | $ | 61,454 | $ | 64,583 | ||||||
Finished
goods and service parts
|
195,034 | 222,843 | 229,581 | |||||||||
Total
FIFO value
|
254,649 | 284,297 | 294,164 | |||||||||
Less:
adjustment to LIFO value
|
42,889 | 40,860 | 42,889 | |||||||||
Total
|
$ | 211,760 | $ | 243,437 | $ | 251,275 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(Shares
in thousands)
|
August
1,
|
August
3,
|
August
1,
|
August
3,
|
||||||||||||
Basic
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Weighted-average
number of shares of common stock
|
37,901 | 40,569 | 38,169 | 40,910 | ||||||||||||
Assumed
issuance of contingent shares
|
- | - | 8 | 28 | ||||||||||||
Weighted-average
number of shares of common stock and assumed issuance of contingent
shares
|
37,901 | 40,569 | 38,177 | 40,938 | ||||||||||||
Diluted
|
||||||||||||||||
Weighted-average
number of shares of common stock and assumed issuance of contingent
shares
|
37,901 | 40,569 | 38,177 | 40,938 | ||||||||||||
Effect
of dilutive securities
|
807 | 1,234 | 862 | 1,175 | ||||||||||||
Weighted-average
number of shares of common stock, assumed issuance of contingent shares,
and effect of dilutive securities
|
38,708 | 41,803 | 39,039 | 42,113 |
(Dollars
in thousands)
|
Professional
|
Residential
|
||||||||||
Segment
|
Segment
|
Total
|
||||||||||
Balance
as of October 31, 2007
|
$ | 75,457 | $ | 10,767 | $ | 86,224 | ||||||
Translation
adjustment
|
(65 | ) | (60 | ) | (125 | ) | ||||||
Balance
as of August 1, 2008
|
$ | 75,392 | $ | 10,707 | $ | 86,099 |
August
1, 2008
|
October
31, 2007
|
|||||||||||||||
(Dollars
in thousands)
|
Gross
Carrying
|
Accumulated
|
Gross
Carrying
|
Accumulated
|
||||||||||||
Amount
|
Amortization
|
Amount
|
Amortization
|
|||||||||||||
Patents
|
$ | 6,553 | $ | (6,258 | ) | $ | 6,553 | $ | (6,155 | ) | ||||||
Non-compete
agreements
|
1,939 | (1,111 | ) | 1,400 | (938 | ) | ||||||||||
Customer
related
|
6,587 | (902 | ) | 6,655 | (504 | ) | ||||||||||
Developed
technology
|
5,555 | (2,259 | ) | 3,490 | (1,536 | ) | ||||||||||
Other
|
800 | (800 | ) | 800 | (800 | ) | ||||||||||
Total
|
$ | 21,434 | $ | (11,330 | ) | $ | 18,898 | $ | (9,933 | ) | ||||||
Total
other intangible assets, net
|
$ | 10,104 | $ | 8,965 |
(Dollars
in thousands)
|
||||||||||||||||
Three months ended August
1, 2008
|
Professional
|
Residential
|
Other
|
Total
|
||||||||||||
Net
sales
|
$ | 351,598 | $ | 132,143 | $ | 8,894 | $ | 492,635 | ||||||||
Intersegment
gross sales
|
9,626 | 2,317 | (11,943 | ) | - | |||||||||||
Earnings
(loss) before income taxes
|
71,113 | 3,436 | (16,496 | ) | 58,053 | |||||||||||
Three months ended August
3, 2007
|
Professional
|
Residential
|
Other
|
Total
|
||||||||||||
Net
sales
|
$ | 332,014 | $ | 132,981 | $ | 13,712 | $ | 478,707 | ||||||||
Intersegment
gross sales
|
11,972 | 1,655 | (13,627 | ) | - | |||||||||||
Earnings
(loss) before income taxes
|
70,887 | 8,246 | (15,293 | ) | 63,840 | |||||||||||
Nine months ended
August
1, 2008
|
Professional
|
Residential
|
Other
|
Total
|
||||||||||||
Net
sales
|
$ | 1,074,678 | $ | 441,634 | $ | 20,632 | $ | 1,536,944 | ||||||||
Intersegment
gross sales
|
25,587 | 6,772 | (32,359 | ) | - | |||||||||||
Earnings
(loss) before income taxes
|
220,239 | 27,333 | (64,078 | ) | 183,494 | |||||||||||
Total
assets
|
526,153 | 217,576 | 248,606 | 992,335 | ||||||||||||
Nine
months
ended August 3,
2007
|
Professional
|
Residential
|
Other
|
Total
|
||||||||||||
Net
sales
|
$ | 1,052,013 | $ | 463,043 | $ | 29,392 | $ | 1,544,448 | ||||||||
Intersegment
gross sales
|
35,011 | 4,900 | (39,911 | ) | - | |||||||||||
Earnings
(loss) before income taxes
|
227,737 | 40,055 | (63,704 | ) | 204,088 | |||||||||||
Total
assets
|
522,963 | 210,660 | 326,483 | 1,060,106 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(Dollars
in thousands)
|
August
1,
|
August
3,
|
August
1,
|
August
3,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Corporate
expenses
|
$ | (15,303 | ) | $ | (18,408 | ) | $ | (59,191 | ) | $ | (66,701 | ) | ||||
Finance
charge revenue
|
247 | 590 | 853 | 1,451 | ||||||||||||
Elimination
of corporate financing
expense
|
2,528 | 4,072 | 7,778 | 11,178 | ||||||||||||
Interest
expense, net
|
(4,645 | ) | (4,959 | ) | (14,947 | ) | (15,235 | ) | ||||||||
Other
|
677 | 3,412 | 1,429 | 5,603 | ||||||||||||
Total
|
$ | (16,496 | ) | $ | (15,293 | ) | $ | (64,078 | ) | $ | (63,704 | ) |
(Dollars
in thousands)
|
Beginning
|
Warranty
|
Warranty
|
Changes
in
|
Ending
|
|||||||||||||||
Nine Months
Ended
|
Balance
|
Provisions
|
Claims
|
Estimates
|
Balance
|
|||||||||||||||
August
1, 2008
|
$ | 62,030 | $ | 35,829 | $ | (29,421 | ) | $ | (391 | ) | $ | 68,047 | ||||||||
August
3, 2007
|
$ | 65,235 | $ | 37,409 | $ | (30,539 | ) | $ | (2,271 | ) | $ | 69,834 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(Dollars
in thousands)
|
August
1,
|
August
3,
|
August
1,
|
August
3,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Service
cost
|
$ | 89 | $ | 95 | $ | 267 | $ | 284 | ||||||||
Interest
cost
|
129 | 124 | 387 | 371 | ||||||||||||
Prior
service cost
|
(48 | ) | (49 | ) | (144 | ) | (145 | ) | ||||||||
Amortization
of losses
|
53 | 55 | 159 | 163 | ||||||||||||
Net
expense
|
$ | 223 | $ | 225 | $ | 669 | $ | 673 |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
August
1,
|
August
3,
|
August
1,
|
August
3,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost
of
sales
|
(64.7 | ) | (62.9 | ) | (64.2 | ) | (63.6 | ) | ||||||||
Gross
profit
|
35.3 | 37.1 | 35.8 | 36.4 | ||||||||||||
Selling,
general, and administrative
expense
|
(22.5 | ) | (23.1 | ) | (23.0 | ) | (22.6 | ) | ||||||||
Interest
expense
|
(0.9 | ) | (1.0 | ) | (1.0 | ) | ( 1.0 | ) | ||||||||
Other
(expense) income, net
|
(0.1 | ) | 0.4 | 0.1 | 0.4 | |||||||||||
Provision
for income
taxes
|
(4.0 | ) | (4.5 | ) | (4.1 | ) | (4.4 | ) | ||||||||
Net
earnings
|
7.8 | % | 8.9 | % | 7.8 | % | 8.8 | % |
Three
Months Ended
|
||||||||||||||||
(Dollars
in thousands)
|
August
1,
|
August
3,
|
||||||||||||||
2008
|
2007
|
$
Change
|
%
Change
|
|||||||||||||
Professional
|
$ | 351,598 | $ | 332,014 | $ | 19,584 | 5.9 | % | ||||||||
Residential
|
132,143 | 132,981 | (838 | ) | (0.6 | ) | ||||||||||
Other
|
8,894 | 13,712 | (4,818 | ) | (35.1 | ) | ||||||||||
Total
*
|
$ | 492,635 | $ | 478,707 | $ | 13,928 | 2.9 | % | ||||||||
*
Includes international sales of:
|
$ | 138,682 | $ | 120,319 | $ | 18,363 | 15.3 | % | ||||||||
Nine
Months Ended
|
||||||||||||||||
(Dollars
in thousands)
|
August
1,
|
August
3,
|
||||||||||||||
2008
|
2007
|
$
Change
|
%
Change
|
|||||||||||||
Professional
|
$ | 1,074,678 | $ | 1,052,013 | $ | 22,665 | 2.2 | % | ||||||||
Residential
|
441,634 | 463,043 | (21,409 | ) | (4.6 | ) | ||||||||||
Other
|
20,632 | 29,392 | (8,760 | ) | (29.8 | ) | ||||||||||
Total
*
|
$ | 1,536,944 | $ | 1,544,448 | $ | (7,504 | ) | (0.5 | )% | |||||||
*
Includes international sales of:
|
$ | 494,909 | $ | 441,793 | $ | 53,116 | 12.0 | % |
Three
Months Ended
|
||||||||||||||||
(Dollars
in thousands)
|
August
1,
|
August
3,
|
||||||||||||||
2008
|
2007
|
$
Change
|
%
Change
|
|||||||||||||
Professional
|
$ | 71,113 | $ | 70,887 | $ | 226 | 0.3 | % | ||||||||
Residential
|
3,436 | 8,246 | (4,810 | ) | (58.3 | ) | ||||||||||
Other
|
(16,496 | ) | (15,293 | ) | (1,203 | ) | (7.9 | ) | ||||||||
Total
|
$ | 58,053 | $ | 63,840 | $ | (5,787 | ) | (9.1 | )% | |||||||
Nine
Months Ended
|
||||||||||||||||
(Dollars
in thousands)
|
August
1,
|
August
3,
|
||||||||||||||
2008
|
2007
|
$
Change
|
%
Change
|
|||||||||||||
Professional
|
$ | 220,239 | $ | 227,737 | $ | (7,498 | ) | (3.3 | )% | |||||||
Residential
|
27,333 | 40,055 | (12,722 | ) | (31.8 | ) | ||||||||||
Other
|
(64,078 | ) | (63,704 | ) | (374 | ) | (0.6 | ) | ||||||||
Total
|
$ | 183,494 | $ | 204,088 | $ | (20,594 | ) | (10.1 | )% |
·
|
Changes
in economic conditions and outlook in the United States and around the
world, including but not limited to slow domestic and worldwide economic
growth rates; slow downs or reductions in home ownership, construction,
and home sales; consumer spending levels; employment rates; interest
rates; inflation; consumer confidence; and general economic and political
conditions and expectations in the United States and the foreign countries
in which we conduct business.
|
·
|
Increases
in the cost and availability of raw materials and components that we
purchase and increases in our other costs of doing business, including
transportation costs, may adversely affect our profit margins and
business.
|
·
|
Weather
conditions may reduce demand for some of our products and adversely affect
our net sales.
|
·
|
Our
professional segment net sales are dependent upon the level of growth in
the residential and commercial construction markets, growth of homeowners
who outsource lawn care, the amount of investment in golf course
renovations and improvements, new golf course development, golf course
closures, and the amount of government spending for grounds maintenance
equipment.
|
·
|
Our
residential segment net sales are dependent upon the amount of product
placement at retailers, changing buying patterns of customers, and The
Home Depot, Inc. as a major
customer.
|
·
|
If
we are unable to continue to enhance existing products and develop and
market new products that respond to customer needs and preferences and
achieve market acceptance, or if we experience unforeseen product quality
or other problems in the development, production, and usage of new and
existing products, we may experience a decrease in demand for our
products, and our business could
suffer.
|
·
|
We
face intense competition in all of our product lines with numerous
manufacturers, including from some competitors that have greater financial
and other resources than we do. We may not be able to compete effectively
against competitors’ actions, which could harm our business and operating
results.
|
·
|
A
significant percentage of our consolidated net sales is generated outside
of the United States, and we intend to continue to expand our
international operations. Our international operations require significant
management attention and financial resources; expose us to difficulties
presented by international economic, political, legal, accounting, and
business factors; and may not be successful or produce desired levels of
net sales.
|
·
|
Fluctuations
in foreign currency exchange rates could result in declines in our
reported net sales and net
earnings.
|
·
|
We
manufacture our products at and distribute our products from several
locations in the United States and internationally. Any disruption at any
of these facilities or our inability to cost-effectively expand existing
and/or move production between manufacturing facilities could adversely
affect our business and operating
results.
|
·
|
We
intend to grow our business in part through additional acquisitions and
alliances, stronger customer relations, and new partnerships, which are
risky and could harm our business, particularly if we are not able to
successfully integrate such acquisitions, alliances, and
partnerships.
|
·
|
We
rely on our management information systems for inventory management,
distribution, and other functions. If our information systems fail to
adequately perform these functions or if we experience an interruption in
their operation, our business and operating results could be adversely
affected.
|
·
|
A
significant portion of our net sales are financed by third parties. Some
Toro dealers and Exmark distributors and dealers finance their inventories
with third party financing sources. The termination of our agreements with
these third parties, any material change to the terms of our agreements
with these third parties or in the availability or terms of credit offered
to our customers by these third parties, or any delay in securing
replacement credit sources, could adversely affect our sales and operating
results.
|
·
|
Our
reliance upon patents, trademark laws, and contractual provisions to
protect our proprietary rights may not be sufficient to protect our
intellectual property from others who may sell similar products. Our
products may infringe the proprietary rights of
others.
|
·
|
Our
business, properties, and products are subject to governmental regulation
with which compliance may require us to incur expenses or modify our
products or operations and may expose us to penalties for non-compliance.
Governmental regulation may also adversely affect the demand for some of
our products and our operating
results.
|
·
|
We
are subject to product liability claims, product quality issues, and other
litigation from time to time that could adversely affect our operating
results or financial condition, including without limitation the pending
litigation against us and other defendants that challenges the horsepower
ratings of lawnmowers, of which we are currently unable to assess whether
such litigation would have a material adverse effect on our consolidated
operating results or financial condition, although an adverse result might
be material to our operating results in a particular
period.
|
·
|
If
we are unable to retain our key employees, and attract and retain other
qualified personnel, we may not be able to meet strategic objectives and
our business could suffer.
|
·
|
The
terms of our credit arrangements and the indentures governing our senior
notes and debentures could limit our ability to conduct our business, take
advantage of business opportunities, and respond to changing business,
market, and economic conditions. In addition, if we are unable to comply
with the terms of our credit arrangements and indentures, especially the
financial covenants, our credit arrangements could be terminated and our
senior notes and debentures could become due and
payable.
|
·
|
Our
business is subject to a number of other factors that may adversely affect
our operating results, financial condition, or business, such as natural
or man-made disasters that may result in shortages of raw materials,
higher fuel costs, and an increase in insurance premiums; financial
viability of some distributors and dealers and their ability to obtain
adequate financing, changes in distributor ownership, changes in channel
distribution of our products, relationships with our distribution channel
partners, our success in partnering with new dealers, and our customers’
ability to pay amounts owed to us; ability of management to adapt to
unplanned events; and continued threat of terrorist acts and war that may
result in heightened security and higher costs for import and export
shipments of components or finished goods, reduced leisure travel, and
contraction of the U.S. and world
economies.
|
Dollars
in thousands
(except
average contracted rate)
|
Average
Contracted
Rate
|
Notional
Amount
|
Value
in
Accumulated
Other
Comprehensive
Income (Loss)
|
Fair
Value
Impact
Gain
(Loss)
|
||||||||||||
Buy
US dollar/Sell Australian dollar
|
0.8933 | $ | 48,985.6 | $ | (1,454.7 | ) | $ | (1,312.1 | ) | |||||||
Buy
US dollar/Sell Canadian dollar
|
0.9964 | 6,624.1 | 190.9 | (146.4 | ) | |||||||||||
Buy
US dollar/Sell Euro
|
1.5263 | 101,421.1 | (397.2 | ) | (6,937.0 | ) | ||||||||||
Buy
US dollar/Sell British pound
|
1.9783 | 4,945.7 | - | 2.5 | ||||||||||||
Buy
Mexican peso/Sell US dollar
|
10.3571 | 22,950.4 | 351.1 | 515.5 |
Period
|
Total
Number of
Shares
Purchased (1)(2)
|
Average
Price
Paid
per Share
|
Total
Number of
Shares
Purchased
As
Part of Publicly
Announced
Plans
or
Programs
|
Maximum
Number
of
Shares that May
Yet
Be Purchased
Under
the Plans or
Programs
(1)(2)
|
||||||||||||
May
3, 2008 through
May
30, 2008
|
40,000 | $ | 38.63 | 40,000 | 4,383,289 | |||||||||||
May
31, 2008 through
June
27, 2008
|
544,612 | 36.85 | 544,612 | 3,838,677 | ||||||||||||
June
28, 2008 through
August
1, 2008
|
863,922 | (3) | 32.74 | 860,000 | 2,978,677 | |||||||||||
Total
|
1,448,534 | $ | 34.44 | 1,444,612 |
(1)
|
On
May 22, 2007, our Board of Directors authorized the repurchase of
3,000,000 shares of our common stock in open-market or in privately
negotiated transactions. This program has no expiration date but may be
terminated by our Board of Directors at any time. We purchased an
aggregate of 423,289 shares during the periods indicated above under this
program. There are no shares remaining for repurchase under this
program.
|
(2)
|
On
May 21, 2008, our Board of Directors authorized the repurchase of an
additional 4,000,000 shares of our common stock in open-market or in
privately negotiated transactions. This program has no expiration date but
may be terminated by our Board of Directors at any time. We purchased an
aggregate of 1,021,323 shares during the periods indicated above under
this program. There are 2,978,677 shares remaining for repurchase under
this program.
|
(3)
|
Includes
3,922 units (shares) of our common stock purchased in open-market
transactions at an average price of $30.87 per share on behalf of a rabbi
trust formed by us to pay benefit obligations to participants in deferred
compensation plans. These 3,922 shares were not repurchased under our
repurchase programs described in footnotes (1) and (2)
above.
|
(a)
|
Exhibits
|
|
3(i)
and 4(a)
|
Restated
Certificate of Incorporation of The Toro Company (incorporated by
reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K dated
June 17, 2008, Commission File No. 1-8649).
|
|
3(ii)
and 4(b)
|
Amended
and Restated Bylaws of The Toro Company (incorporated by reference to
Exhibit 3.2 to Registrant’s Current Report on Form 8-K dated June 17,
2008, Commission File No. 1-8649).
|
|
4(c)
|
Specimen
Form of Common Stock Certificate (filed herewith).
|
|
4(d)
|
Indenture
dated as of January 31, 1997, between Registrant and First National Trust
Association, as Trustee, relating to the Registrant’s 7.80% Debentures due
June 15, 2027 (incorporated by reference to Exhibit 4(a) to Registrant’s
Current Report on Form 8-K dated June 24, 1997, Commission File No.
1-8649).
|
|
4(e)
|
Indenture
dated as of April 20, 2007, between Registrant and The Bank of New
York Trust Company, N.A., as Trustee, relating to the Registrant’s 6.625%
Notes due May 1, 2037 (incorporated by reference to Exhibit 4.3 to
Registrant’s Registration Statement on Form S-3 as filed with the
Securities and Exchange Commission on April 23, 2007, Registration No.
333-142282).
|
|
4(f)
|
First
Supplemental Indenture dated as of April 26, 2007, between Registrant and
The Bank of New York Trust Company, N.A., as Trustee, relating to the
Registrant’s 6.625% Notes due May 1, 2037 (incorporated by reference to
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated April 23,
2007, Commission File No. 1-8649).
|
|
4(g)
|
Form
of The Toro Company 6.625% Note due May 1, 2037 (incorporated by reference
to Exhibit 4.2 to Registrant’s Current Report on Form 8-K dated April 23,
2007, Commission File No. 1-8649).
|
|
10(a)
|
The
Toro Company Deferred Compensation Plan, Amended and Restated Effective
January 1, 2009 (filed herewith).
|
|
10(b)
|
The
Toro Company Deferred Compensation Plan for Officers, Amended and Restated
Effective January 1, 2009 (filed herewith).
|
|
10(c)
|
The
Toro Company Deferred Compensation Plan for Non-Employee Directors,
Amended and Restated Effective January 1, 2009 (filed
herewith).
|
|
10(d)
|
The
Toro Company Supplemental Benefit Plan, Amended and Restated Effective
January 1, 2009 (filed herewith).
|
|
31(a)
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a) (Section 302 of the
Sarbanes-Oxley Act of 2002) (filed herewith).
|
|
31(b)
|
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a) (Section 302 of the
Sarbanes-Oxley Act of 2002) (filed herewith).
|
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished herewith).
|
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
Date: September
5, 2008
|
By
/s/ Stephen P.
Wolfe
|
Stephen
P. Wolfe
|
|
Vice
President, Finance
|
|
and
Chief Financial Officer
|
|
(duly
authorized officer and principal financial
officer)
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
reporting purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
reporting purposes in accordance with generally accepted accounting
principles;
|
|
c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Dated:
|
|||||||
COUNTERSIGNED
AND REGISTERED:
|
/s/
Michael J. Hoffman
|
||||||
WELLS
FARGO BANK, N.A.
|
SEAL
|
CHAIRMAN,
|
|||||
PRESIDENT
AND CEO
|
|||||||
TRANSFER
AGENT
|
|||||||
AND
REGISTRAR
|
|||||||
BY
|
/s/
Todd J. May
|
/s/
Timothy P. Dordell
|
|||||
AUTHORIZED
SIGNATURE
|
VICE
PRESIDENT,
|
||||||
SECRETARY
AND GENERAL COUNSEL
|
TEN
COM
|
—
|
as
tenants in common
|
||||||
TEN
ENT
|
—
|
as
tenants by the entireties
|
||||||
JT
TEN
|
—
|
as
joint tenants with right of survivorship and not as tenants in
common
|
||||||
UNIF
GIFT MIN ACT —
|
Custodian
|
|||||||
(Cust)
|
(Minor)
|
|||||||
under
Uniform Gifts to Minors Act
|
||||||||
(State)
|
(PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE)
|
|
NOTICE:
|
THE
SIGNATURE TO THIS ASSIGNMENT MUST
|
CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.
|
1
|
|
II.
ELIGIBILITY AND PARTICIPATION
|
4
|
III.
DEFERRED COMPENSATION
|
5
|
3.1
Deferral Election
|
5
|
3.2
Accounts
|
5
|
3.3
Company Credits
|
5
|
IV.
EARNINGS ON PARTICIPANT ACCOUNTS
|
6
|
V.
DISTRIBUTIONS
|
6
|
5.1
Available Methods of Distribution
|
6
|
5.2
Distribution Elections; Absence of a Valid Election
|
6
|
5.3
Other Distributions
|
7
|
5.4
Timing of Certain Distributions
|
7
|
5.5
Limitation on Election of Distribution Method
|
7
|
5.6
Additional Code Section 409A Limitations
|
8
|
VI.
BENEFICIARY DESIGNATION
|
8
|
VII.
ADMINISTRATION OF THE PLAN
|
9
|
7.1
Company's Authority
|
9
|
7.2
Reliance
|
9
|
7.3
Individual Statements
|
9
|
7.4
Claims
|
9
|
VIII.
AMENDMENT OR TERMINATION
|
11
|
8.1
Amendment
|
11
|
8.2
Termination
|
11
|
IX.
GENERAL PROVISIONS
|
12
|
9.1
Trust
|
12
|
9.2 No
Alienation
|
12
|
9.3
Unfunded Plan
|
12
|
9.4 No
Guaranty
|
12
|
3.1
|
Deferral
Election
|
3.2
|
Accounts
|
3.3
|
Company
Credits
|
5.1
|
Available
Methods of Distribution
|
5.2
|
Distribution
Elections; Absence of a Valid
Election
|
5.4
|
Timing
of Certain Distributions
|
5.5
|
Limitation
on Election of Distribution Method
|
5.6
|
Additional
Code Section 409A Limitations
|
7.1
|
Company's
Authority
|
7.2
|
Reliance
|
7.3
|
Individual
Statements
|
7.4
|
Claims
|
|
(i)
|
the
specific reason or reasons for the
denial;
|
|
(ii)
|
specific
reference to pertinent provisions of the Plan on which the denial is
based;
|
|
(iii)
|
a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary;
|
|
(iv)
|
appropriate
information as to the steps to be taken if the Participant or Beneficiary
wishes to submit a claim for review;
and
|
|
(v)
|
in
the case of an adverse benefit determination regarding Disability
benefits, if an internal rule, guideline, protocol or other similar
criterion was relied upon in making the adverse determination, either the
specific rule, guideline, protocol or other similar criterion; or a
statement that such rule, guideline, protocol or other similar criterion
was relied upon in making the adverse determination and that a copy of
such rule, guideline, protocol or other criterion will be provided free of
charge to the claimant upon
request.
|
|
(i)
|
request
a review upon written application to the
Company;
|
|
(ii)
|
review
pertinent documents; and
|
|
(iii)
|
submit
issues and comments in writing.
|
8.1
|
Amendment
|
8.2
|
Termination
|
9.1
|
Trust
|
9.2
|
No
Alienation
|
9.3
|
Unfunded
Plan
|
9.4
|
No
Guaranty
|
9.6
|
Incompetency
|
9.7
|
Corporate
Changes
|
9.8
|
Addresses
|
9.9
|
Limitations
on Liability
|
9.11
|
Inspection
|
9.12
|
Withholding
|
9.13
|
Singular
and Plural
|
9.14
|
Severability
|
9.16
|
Discharge
of Obligations
|
9.18
|
Successors
|
9.19
|
Court
Order
|
9.20
|
No
Assurance of Tax Consequences
|
1
|
|
DEFERRED
COMPENSATION PLAN FOR OFFICERS
|
1
|
AMENDED
AND RESTATED EFFECTIVE JANUARY 1, 2009
|
1
|
I.
DEFINITIONS
|
1
|
II.
ELIGIBILITY; PARTICIPATION; DEFERRAL
|
5
|
2.1 Eligibility
|
5
|
2.2 Participation
|
5
|
2.3 Deferral
Election
|
5
|
III.
PARTICIPANTS' ACCOUNTS
|
6
|
3.1 General
|
6
|
3.2 Number of Units to Be
Credited
|
7
|
IV.
VESTING
|
7
|
V.
DISTRIBUTIONS
|
7
|
5.1 Distributable
Events
|
7
|
5.2 Distribution of
Benefits
|
7
|
5.3 Other
Distributions
|
8
|
5.4 Commencement of
Distributions
|
8
|
5.5 Form of
Payment
|
9
|
5.6 Additional Code Section 409A
Limitations
|
9
|
VI.
BENEFICIARY DESIGNATION
|
9
|
VII.
ADMINISTRATION OF THE PLAN
|
10
|
7.1 Administrator
|
10
|
7.2 Authority of
Administrator
|
10
|
7.3 Operation of
Plan
|
10
|
7.4 Claims
Procedures
|
10
|
VIII.
AMENDMENT OR TERMINATION
|
12
|
8.1 Amendment or Termination of
the Plan
|
12
|
8.2 Accounts After
Termination
|
13
|
IX.
GENERAL PROVISIONS
|
13
|
9.1 Trust
|
13
|
9.2 No Alienation
|
13
|
9.3 Unfunded Plan
|
13
|
9.4 No Guaranty
|
14
|
9.5 No Right of
Employment
|
14
|
9.6 Incompetency
|
14
|
9.7 Corporate
Changes
|
14
|
9.8 Addresses
|
14
|
9.9 Limitations on
Liability
|
15
|
9.10 Transfers to the
Trust
|
15
|
9.11 Inspection
|
15
|
9.12 Withholding
|
15
|
9.13 Voting of
Stock
|
15
|
9.14 Singular and
Plural
|
15
|
9.15 Severability
|
16
|
9.16 Unsecured General
Creditor
|
16
|
9.17 Discharge of
Obligations
|
16
|
9.18 Governing
Law
|
16
|
9.19 Successors
|
16
|
9.20 Court Order
|
16
|
9.21 No Assurance of Tax
Consequences
|
16
|
9.22 Code Section
409A
|
17
|
2.1
|
Eligibility
|
2.2
|
Participation
|
2.3
|
Deferral
Election
|
3.1
|
General
|
3.2
|
Number
of Units to Be Credited
|
5.1
|
Distributable
Events
|
|
(a)
|
death;
|
|
(b)
|
Disability;
or
|
|
(c)
|
separation
from service.
|
5.2
|
Distribution
of Benefits
|
5.3
|
Other
Distributions
|
5.4
|
Commencement
of Distributions
|
5.5
|
Form
of Payment
|
5.6
|
Additional
Code Section 409A Limitations
|
7.1
|
Administrator
|
7.2
|
Authority
of Administrator
|
7.3
|
Operation
of Plan
|
7.4
|
Claims
Procedures
|
|
(i)
|
the
specific reason or reasons for the
denial;
|
|
(ii)
|
specific
reference to pertinent provisions of the Plan on which the denial is
based;
|
|
(iii)
|
a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary;
|
|
(iv)
|
appropriate
information as to the steps to be taken if the Participant or Beneficiary
wishes to submit a claim for review;
and
|
|
(v)
|
in
the case of an adverse benefit determination regarding Disability
benefits, if an internal rule, guideline, protocol or other similar
criterion was relied upon in making the adverse determination, either a
copy of the specific rule, guideline, protocol or other similar criterion
or a statement that such rule, guideline, protocol or other similar
criterion was relied upon in making the adverse determination and that a
copy of such rule, guideline, protocol or other criterion will be provided
free of charge to the claimant upon
request.
|
|
(i)
|
request
a review upon written application to the
Company;
|
|
(ii)
|
review
pertinent documents; and
|
|
(iii)
|
submit
issues and comments in writing.
|
8.1
|
Amendment
or Termination of the Plan
|
8.2
|
Accounts
After Termination
|
9.1
|
Trust
|
9.2
|
No
Alienation
|
9.4
|
No
Guaranty
|
9.5
|
No
Right of Employment
|
9.6
|
Incompetency
|
9.7
|
Corporate
Changes
|
9.9
|
Limitations
on Liability
|
9.10
|
Transfers
to the Trust
|
9.11
|
Inspection
|
9.12
|
Withholding
|
9.13
|
Voting
of Stock
|
9.15
|
Severability
|
9.16
|
Unsecured
General Creditor
|
9.17
|
Discharge
of Obligations
|
9.18
|
Governing
Law
|
9.19
|
Successors
|
9.20
|
Court
Order
|
9.22
|
Code
Section 409A
|
1
|
|
II.
ELIGIBILITY; PARTICIPATION; DEFERRAL
|
4
|
2.1 Eligibility
|
4
|
2.2 Participation
|
4
|
2.3 Deferral
Election
|
4
|
III.
CREDITING AND VESTING
|
5
|
3.1 Amounts to Be Credited to
Accounts
|
5
|
3.2 Vesting
|
6
|
IV.
DISTRIBUTIONS
|
6
|
4.1 Distributable
Events
|
6
|
4.2 Method of
Payment
|
7
|
4.3 Death Prior to Completion of
Payment
|
7
|
4.4 Distribution Prior to
Retirement
|
7
|
4.5 Unforeseeable
Emergencies
|
7
|
V.
BENEFICIARY DESIGNATION
|
8
|
VI.
ADMINISTRATION OF THE PLAN
|
8
|
6.1 Committee
Duties
|
8
|
6.2 Administrative Committee;
Agents
|
8
|
6.3 Binding Effect of
Decisions
|
9
|
6.4 Indemnity of Committee and
Administrative Committee
|
9
|
VII.
AMENDMENT OR TERMINATION
|
9
|
7.1 Amendment
|
9
|
7.2 Termination
|
9
|
VIII.
GENERAL PROVISIONS
|
9
|
8.1 Trust
|
9
|
8.2 No Alienation
|
10
|
8.3 Unfunded Plan
|
10
|
8.4
No Guaranty
|
10
|
8.5 No Right of
Employment
|
10
|
8.6 Incompetency
|
10
|
8.7 Corporate
Changes
|
11
|
8.8 Addresses
|
11
|
8.9 Limitations on
Liability
|
11
|
8.10 Transfers to the
Trust
|
11
|
8.11 Inspection
|
11
|
8.12 Withholding
|
12
|
8.13 Voting of
Stock
|
12
|
8.14 Singular and
Plural
|
12
|
8.15 Severability
|
12
|
8.16 Unsecured General
Creditor
|
12
|
8.17 Discharge of
Obligations
|
12
|
8.18 Governing
Law
|
12
|
8.19 Successors
|
12
|
8.20 Court Order
|
13
|
8.21 No Assurance of Tax
Consequences
|
13
|
8.22 Code Section
409A
|
13
|
2.1
|
Eligibility
|
2.2
|
Participation
|
2.3
|
Deferral
Election
|
3.1
|
Amounts
to Be Credited to Accounts
|
3.2
|
Vesting
|
4.1
|
Distributable
Events
|
4.2
|
Method
of Payment
|
4.3
|
Death
Prior to Completion of Payment
|
4.4
|
Distribution
Prior to Retirement
|
4.5
|
Unforeseeable
Emergencies
|
6.1
|
Committee
Duties
|
6.2
|
Administrative
Committee; Agents
|
6.3
|
Binding
Effect of Decisions
|
6.4
|
Indemnity
of Committee and Administrative
Committee
|
7.1
|
Amendment
|
7.2
|
Termination
|
8.1
|
Trust
|
8.3
|
Unfunded
Plan
|
8.4
|
No
Guaranty
|
8.5
|
No
Right of Employment
|
8.6
|
Incompetency
|
8.7
|
Corporate
Changes
|
8.8
|
Addresses
|
8.9
|
Limitations
on Liability
|
8.10
|
Transfers
to the Trust
|
8.11
|
Inspection
|
8.13
|
Singular
and Plural
|
8.14
|
Severability
|
8.15
|
Unsecured
General Creditor
|
8.16
|
Discharge
of Obligations
|
8.17
|
Governing
Law
|
8.18
|
Successors
|
8.19
|
Court
Order
|
8.20
|
No
Assurance of Tax Consequences
|
8.21
|
Code
Section 409A
|
1
|
|
II.
ELIGIBILITY AND PARTICIPATION
|
5
|
III.
SUPPLEMENTAL ACCOUNT
|
6
|
3.1 Establishment of
Account
|
6
|
3.2 Credits to Article III
Account
|
6
|
3.3 Earnings on Amounts
Credited
|
6
|
IV.
SUPPLEMENTAL RETIREMENT BENEFIT
|
6
|
4.1 Benefit
Eligibility
|
6
|
4.2 Calculation of the
Benefit
|
7
|
4.3 Effect of Pension Plan
Termination
|
7
|
V.
SUPPLEMENTAL SURVIVING SPOUSE BENEFIT
|
7
|
5.1 Eligibility for Surviving
Spouse Benefit
|
7
|
5.2 Calculation of the
Benefit
|
8
|
5.3 Effect of Pension Plan
Termination
|
8
|
VI.
DISTRIBUTIONS
|
9
|
6.1 Distribution of Article III
Accounts
|
9
|
6.2 Election of Distribution
Method for Article III Accounts
|
9
|
6.3 Death Prior to Completion of
Distributions for Article III Accounts
|
9
|
6.4 Distribution of Article IV
Accounts
|
10
|
6.5 Election of Distribution
Method for Article IV Accounts
|
10
|
6.6 Death Before Termination of
Employment for Article IV Accounts
|
10
|
6.7 Limitation on Election of
Distribution Method
|
11
|
6.8 Payments to Specified
Employees
|
11
|
6.9 Unforeseeable
Emergencies
|
11
|
6.10 Disability
|
12
|
VII.
ADMINISTRATION OF THE PLAN
|
12
|
7.1 Company
Authority
|
12
|
7.2 Reliance
|
12
|
7.3 Individual
Statements
|
12
|
7.4 Claims
|
12
|
VIII.
AMENDMENT OR TERMINATION
|
14
|
IX.
GENERAL PROVISIONS
|
15
|
9.1 The Trust
|
15
|
9.2 No Alienation
|
15
|
9.3 Unfunded Plan
|
15
|
9.4 No Guaranty
|
16
|
9.5 No Right of
Employment
|
16
|
9.6 Incompetency
|
16
|
9.7 Corporate
Changes
|
16
|
9.8 Addresses
|
16
|
9.9 Limitations on
Liability
|
17
|
9.10 Transfers to the
Trust
|
17
|
9.11 Inspection
|
17
|
9.12 Withholding
|
17
|
9.13 Singular and
Plural
|
17
|
9.14 Severability
|
18
|
9.15 Unsecured General
Creditor
|
18
|
9.16 Discharge of
Obligations
|
18
|
9.17 Governing
Law
|
18
|
9.18 Successors
|
18
|
9.19 Court Order
|
18
|
9.20 No Assurance of Tax
Consequences
|
19
|
9.21 Code Section
409A
|
19
|
|
3.1
|
Establishment
of Account
|
|
3.2
|
Credits
to Article III Account
|
|
3.3
|
Earnings
on Amounts Credited
|
|
4.1
|
Benefit
Eligibility
|
|
4.2
|
Calculation
of the Benefit
|
|
4.3
|
Effect
of Pension Plan Termination
|
|
5.1
|
Eligibility
for Surviving Spouse Benefit
|
|
5.2
|
Calculation
of the Benefit
|
|
5.3
|
Effect
of Pension Plan Termination
|
|
6.1
|
Distribution
of Article III Accounts
|
|
6.2
|
Election
of Distribution Method for Article III
Accounts
|
|
6.3
|
Death
Prior to Completion of Distributions for Article III
Accounts
|
|
6.4
|
Distribution
of Article IV Accounts
|
|
6.5
|
Election
of Distribution Method for Article IV
Accounts
|
|
6.6
|
Death
Before Termination of Employment for Article IV
Accounts
|
|
6.8
|
Payments
to Specified Employees
|
|
6.9
|
Unforeseeable
Emergencies
|
|
7.1
|
Company
Authority
|
|
7.2
|
Reliance
|
|
7.3
|
Individual
Statements
|
|
7.4
|
Claims
|
|
(i)
|
the
specific reason or reasons for the
denial;
|
|
(ii)
|
specific
reference to pertinent provisions of the Plan on which the denial is
based;
|
|
(iii)
|
a
description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary;
|
|
(iv)
|
appropriate
information as to the steps to be taken if the Participant or Beneficiary
wishes to submit a claim for review;
and
|
|
(v)
|
in
the case of an adverse benefit determination regarding Disability
benefits, if an internal rule, guideline, protocol or other similar
criterion was relied upon in making the adverse determination, either a
copy of the specific rule, guideline, protocol or other similar criterion
or a statement that such rule, guideline, protocol or other similar
criterion was relied upon in making the adverse determination and
that
|
|
a
copy of such rule, guideline, protocol or other criterion will be provided
free of charge to the claimant upon
request.
|
|
(i)
|
request
a review upon written application to the
Company;
|
|
(ii)
|
review
pertinent documents; and
|
|
(iii)
|
submit
issues and comments in writing.
|
|
9.1
|
The
Trust
|
|
9.2
|
No
Alienation
|
|
9.3
|
Unfunded
Plan
|
|
9.4
|
No
Guaranty
|
|
9.5
|
No
Right of Employment
|
|
9.6
|
Incompetency
|
|
9.7
|
Corporate
Changes
|
|
9.8
|
Addresses
|
|
9.10
|
Transfers
to the Trust
|
|
9.11
|
Inspection
|
|
9.12
|
Withholding
|
|
9.13
|
Singular
and Plural
|
|
9.15
|
Unsecured
General Creditor
|
|
9.16
|
Discharge
of Obligations
|
|
9.17
|
Governing
Law
|
|
9.18
|
Successors
|
|
9.19
|
Court
Order
|
|
9.21
|
Code
Section 409A
|