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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>/in/edgar/work/0000950152-00-008157/0000950152-00-008157.txt : 20001122
<SEC-HEADER>0000950152-00-008157.hdr.sgml : 20001122
ACCESSION NUMBER: 0000950152-00-008157
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 8
CONFORMED PERIOD OF REPORT: 20000831
FILED AS OF DATE: 20001121
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ROBBINS & MYERS INC
CENTRAL INDEX KEY: 0000084290
STANDARD INDUSTRIAL CLASSIFICATION: [3561
] IRS NUMBER: 310424220
STATE OF INCORPORATION: OH
FISCAL YEAR END: 0831
</COMPANY-DATA>
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 000-00288
FILM NUMBER: 774507
</FILING-VALUES>
BUSINESS ADDRESS:
STREET 1: 1400 KETTERING TWR
CITY: DAYTON
STATE: OH
ZIP: 45423
BUSINESS PHONE: 9372222610
</BUSINESS-ADDRESS>
MAIL ADDRESS:
STREET 1: 1400 KETTERING TOWER
CITY: DAYTON
STATE: OH
ZIP: 45423
</MAIL-ADDRESS>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>l85073ae10-k405.txt
<DESCRIPTION>ROBBINS & MYERS, INC. 10-K405
<TEXT>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Commission
Ended August 31, 2000 File Number 0-288
- --------------------- -----------------
ROBBINS & MYERS, INC.
(Exact name of Registrant as specified in its charter)
OHIO 31-0424220
- --------------------------- ----------------
(State of incorporation) (I.R.S. employer
identification number)
1400 Kettering Tower, Dayton, Ohio 45423
- ---------------------------------- --------------
Registrant's telephone number, including area code:
(937) 222-2610
--------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- --------------------------- ------------------------
(1) Common Shares, without par value New York
(2) 6 1/2% Convertible Subordinated Notes, Due 2003 New York
Securities registered pursuant to Section 12(g) of the Act: None
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 requirement for at least 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 ]
1
<PAGE> 2
At the close of business on October 20, 2000
Number of Common Shares, without
par value, outstanding ............................10,975,798
Aggregate market value of Common
Shares, without par value, held
by non-affiliates of the Company.................$183,099,824
DOCUMENT INCORPORATED BY REFERENCE
Robbins & Myers, Inc., Proxy Statement, dated November 8, 2000, for its
Annual Meeting of Shareholders on December 13, 2000, definitive copies of the
foregoing have been filed with the Commission. Only such portions of the Proxy
Statement as are specifically incorporated by reference under Part III of this
Report shall be deemed filed as part of this Report.
2
<PAGE> 3
ITEM 1. BUSINESS
BACKGROUND
Robbins & Myers, Inc., an Ohio corporation (the "Company"), designs,
manufactures and markets on a global basis high-performance, specialized fluids
management products for the process industries. The Company has two business
segments: Process Systems and Energy Systems. Within the Process Systems segment
the Company's primary product platforms are Reactor Systems, Industrial Mixers,
Industrial Pump Products and Corrosion-Resistant Products. The following table
presents the percentages of total sales for each segment and product platform:
2000 1999
------------ ------------
Reactor Systems 45.2% 46.4%
Industrial Mixers 12.7 16.9
Industrial Pump Products 15.5 15.1
Corrosion Resistant Products 4.9 5.4
----- -----
Total Process Systems Segment 78.3 83.8
Energy Systems Segment 21.7 16.2
----- -----
100.0% 100.0%
===== =====
The Company has achieved a leading market share in each of its segments
and product platforms. The Company believes that it is first worldwide in
Reactor Systems and in progressing cavity Industrial Pump Products, and second
worldwide in Industrial Mixers. In addition the Company's Energy Systems segment
has leading market positions in power sections, wellhead equipment and rod
guides and strong market positions in down-hole pump and closure products. The
Company can provide customers with a wide array of products and systems in its
Energy Systems segment. The Company also believes that its principal brand
names, such as - Pfaudler(R), Moyno(R), Chemineer(R), Edlon(R) Hercules(R),
Patco(R), Resun(R) and Yale(R), are well-known in the marketplace and are
associated with quality products and extensive customer support, including
product application engineering, state-of-the-art customer test facilities and
strong aftermarket service and support.
The Company markets its products globally to end users where the
pumping, mixing, treatment, chemical processing, measurement and containment of
gases, fluids and particulates are important elements in their production
processes. The diverse industries with fluids management needs served by the
Company's products are specialty chemical, pharmaceutical, oil and gas
exploration and production, wastewater treatment, food and beverage and pulp and
paper.
The Company primarily markets specialty products which are technically
engineered. Individual projects are typically custom designed and bid to the
customer's specifications. Therefore, price is one basis of competition along
with technical specifications and solutions, as well as quality, aftermarket
support and delivery leadtime.
3
<PAGE> 4
The Company seeks to balance its mix of products and services and
maintain overall stability in its operating results principally through
increased levels of higher margin aftermarket sales, broad international
presence with manufacturing facilities in twelve countries, and end user market
diversification. Aftermarket sales accounted for 33% of total company sales in
fiscal 2000 and 34% in fiscal 1999. Sales to non-U.S. customers were 48% in
fiscal 2000 and 46% in fiscal 1999
The Company seeks to continue to grow by (i) internal growth from the
inherent growth of its end user markets, particularly longer-term, high-growth
markets such as pharmaceutical, wastewater treatment, and oil and gas
exploration and production, as well as new product introductions; (ii)
exploiting acquisition opportunities for industry consolidation within existing
markets, specifically the highly fragmented positive displacement pump and
industrial mixer industries; (iii) expanding geographically, both internally and
through acquisitions, into emerging markets such as the Asia-Pacific Rim, South
America and Western Canada oilfields; and (iv) establishing new product lines
through acquisitions of related fluids management businesses such as valves,
seals, filters and grinders.
The Company operates in two industry segments. Information concerning
the Company's sales, IBIT and identifiable assets by segment and sales and
identifiable assets by geographic area for the years ended August 31, 2000, 1999
and 1998 is set forth in Note 11 to the Consolidated Financial Statements
included at Item 8 and is incorporated herein by reference.
PROCESS SYSTEMS
REACTOR SYSTEMS
The Company's Reactor Systems business, consisting of its Pfaudler,
Tycon and Technoglass brands, manufactures and sells glass-lined reactor and
storage vessels, mixing systems and accessories, including instrumentation and
piping. These products are principally used in the pharmaceutical, specialty
chemical and agri-chemical end user markets. A reactor system performs critical
functions in batch production processes by providing a temperature, agitation
and pressure controlled environment for often complex chemical reactions. The
glass-lined vessel is made by lining a specially constructed steel vessel with
glass bonded to the inside steel surface. Substantial knowledge is required to
properly manufacture a glass-lined vessel. Special glasses are used to both bond
with the steel surface and provide an inert, corrosion-resistant surface that
will not contaminate the chemicals in the vessel.
Reactor systems have vessels with capacities between one and 15,000
gallons, are generally custom-ordered and designed, and are often equipped with
various accessories such as drives, glass-lined agitators and baffles, and
instruments. A fully equipped reactor can sell for up to $300,000. The Reactor
Systems business also manufactures and sells glass-lined storage vessels with
capacities up to 25,000 gallons to mostly the same customers that use
glass-lined reactor systems. A complete system can consist of a complete
processing plant, installed or skid mounted, including a process guarantee.
Complete systems that the Company provides can sell for several million dollars.
In 2000, Pfaudler introduced Prosol which is a next generation mixing
4
<PAGE> 5
system. This new product opens up processing applications where a glass-lined
solution may not always have been considered the first option. A summary of the
Company's Reactor Systems business is as follows:
<TABLE>
<CAPTION>
End User Markets
-------------------------------------------------
Market % of Major Principal
Position Markets 2000 Sales Competitors Brands
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
#1 Specialty Chemicals 48% DeDietrich Pfaudler(R)
Pharmaceutical 42% Thale Tycon(R)
Agri-chemicals 5% Technoglass(R)
Other 5% GPS(R)
CRS(R)
UGE(R)
</TABLE>
The Company believes that Pfaudler is the largest supplier of
glass-lined reactor systems with DeDietrich of France being the next largest
supplier. The Japanese suppliers largely supply only the Japanese market.
Pfaudler manufactures its glass-lined reactor systems in seven countries, the
U.S., the U.K., Germany, India, Brazil, Mexico and China. Tycon and Technoglass
("Tycon") glass-lined reactor systems are manufactured in Italy.
While the Company has a global market share of over 50% in glass-lined
reactors and storage vessels, it has a global market share of less than 10% in
Reactor Systems. Expanding the market from vessels to reactor systems provides
growth opportunities in products related to reactors in providing a complete
system for customers.
SALES, MARKETING AND DISTRIBUTION -- Pfaudler, Tycon and Technoglass glass-lined
reactor systems, storage vessels and accessories are sold directly to customers
by a Company-employed direct sales force of approximately 30 persons,
approximately 20 of whom are based outside the United States, and more than 30
manufacturers' representatives. Pfaudler and Tycon are particularly focused on
continuing to develop preferred supplier relationships with major pharmaceutical
and specialty chemical companies, as these companies continue to expand their
production operations in emerging markets.
AFTERMARKET SALES -- Pfaudler has a large installed base of glass-lined reactor
systems since it has been the leading supplier of these systems for more than 50
years. Aftermarket products and services are an important part of Pfaudler's
sales and include field service, replacement parts, accessories and
reconditioning used vessels. Glass-lined vessels require regular maintenance and
care because of their harsh operating environments and strict purity
requirements. The Company has expanded the aftermarket capabilities of Pfaudler
to better meet the needs of its customers, as many customers are reducing their
internal engineering staffs and outsourcing maintenance activities. Pfaudler has
a joint venture with Universal Process Equipment Inc. called Universal Glasteel
Equipment ("UGE") to refurbish and sell used, glass-lined vessels. For many
customers, used vessels are a cost effective alternative to new vessels. They
5
<PAGE> 6
are more affordable, warranted with the same quality specifications and can
often be delivered to a customer faster than a new vessel.
Pfaudler acquired Pharaoh in 1995 to strengthen its U.S. aftermarket
business by combining Pharaoh with Pfaudler's aftermarket business to create a
new aftermarket organization, Glasteel Parts & Service ("GPS"). Pfaudler also
acquired Cannon in 1995 to strengthen the U.K. aftermarket business by combining
Cannon with Chemical Reactor Services ("CRS"), Pfaudler's U.K. aftermarket
business. GPS and CRS are the largest providers of aftermarket services to the
U.S. and U.K. installed base of glass-lined vessels, including the installed
base of competitors.
COMPETITION -- Pfaudler and Tycon compete principally with DeDietrich in all
world markets except Japan, China and India. Pfaudler has the leading market
share in glass lined reactors and vessels and installed base in all the
countries in which it operates facilities. Tycon has the leading share in Italy
and has a significant presence in Switzerland and Germany. DeDietrich has a
dominant position in France, where its main facility is located, and a
significant presence in other continental European markets and the U.S. With the
establishment of a direct sales and service organization in France in 1999,
Pfaudler is increasing its market share in France.
Pfaudler is the market leader in Mexico, South America and India. In
China, the Company is the 70% owner of a joint venture with a Chinese
glass-lined equipment manufacturer. The joint venture has a small market share
of a fragmented Chinese market, but is upgrading its products to supply Western
quality glass-lined vessels to customers in China. The markets in Japan, Taiwan
and Korea are largely supplied by Japanese manufacturers that sell few products
to markets outside the region.
The Company believes that it will benefit from the continued trend of
high levels of capital expenditures within the pharmaceutical industry. This
trend is driven by the significant industry growth rates from globalization of
manufacturing facilities to service emerging markets, development of innovative
drugs which often require new process facilities or retrofit of existing
facilities, and expiration of patents on certain drugs which will result in
greater production of generic equivalents.
INDUSTRIAL MIXERS
Chemineer manufactures industrial mixers that range from fractional
horsepower sizes to over 1,000 horsepower. Prices for mixers and agitators range
from hundreds of dollars for small portable mixers to more than $1 million for
large, customized mixers. A summary of the Company's Industrial Mixers business
is as follows:
6
<PAGE> 7
<TABLE>
<CAPTION>
End User Markets
--------------------------------------------
Market % of Major Principal
Position Markets 2000 Sales Competitors Brands
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
#2 Specialty Chemicals 56% Lightnin' Chemineer(R)
Pharmaceutical 12% Ekato Kenics(R)
Wastewater treatment 8% Satake Greerco(R)
Pulp & Paper 7% Philadelphia Mixer Prochem(R)
Other 17%
</TABLE>
Chemineer's product line consists of top-entry, side-entry,
gear-driven, belt-driven, high shear and static mixers. The Company's Industrial
Mixers are used in a variety of applications, ranging from simple storage tank
agitation to critical applications in polymerization and fermentation processes.
Chemineer products include a line of high-quality turbine agitators.
These gear-driven agitators are available in various sizes, a wide selection of
mounting methods, and drive ranges from one to 1,000 horsepower. The Chemineer
line also includes a line of fixed mounted small mixers with drive ranges from
one-half to five horsepower, designed for less demanding applications, and a
line of portable gear-driven and direct drive mixers, which can be clamp mounted
to tanks to handle batch mixing needs. In 1999, Chemineer introduced two new
agitation drive systems, the QED Plus worm gear mixer and the GT parallel shaft
agitator. Chemineer also introduced the BTNS, a new mixer for the biotech market
to keep pace in this growth market.
Prochem industrial mixers are belt-driven, side-entry mixers used
primarily in the pulp and paper and mineral process industries. Kenics mixers
are continuous mixing and processing devices, with no moving parts, which are
used in specialized static mixing and heat transfer applications. Static mixers
in heat exchangers greatly increase the heat transfer process in certain
applications. Greerco(R) mixers are high-shear mixers used primarily for paint,
cosmetics, plastics and adhesive applications. Mixers are manufactured in
Dayton, Ohio, North Andover, Massachusetts and Haverhill, Massachusetts in the
U.S. and Derby, England and Mexico City, Mexico.
SALES, MARKETING AND DISTRIBUTION -- Chemineer industrial mixers are sold
through regional sales offices and through a network of approximately 30 U.S.
and 30 non-U.S. manufacturers' representatives. Chemineer maintains regional
sales offices for such equipment in Ohio, Texas, Mexico, Canada, the U.K.,
Singapore, Taiwan, China and Korea.
COMPETITION -- The mixer equipment industry is highly competitive. Three
companies account for a significant portion of U.S. sales, but compete with
numerous smaller manufacturers. The Company believes that Chemineer's
application engineering know-how, diverse products, product quality and customer
support allow it to compete effectively in the market place. Chemineer is
expanding its presence internationally, especially in Asia. To that end,
Chemineer operates a sales office in Shanghai to establish contacts and
relationships in China. Chemineer also has a majority-owned joint venture with
General Resources Company of Taipei, Taiwan operating in
7
<PAGE> 8
Singapore, Taiwan and Korea to provide sales, marketing and product engineering
for the entire line of Chemineer mixers and agitators throughout East Asia.
INDUSTRIAL PUMP PRODUCTS
Moyno manufactures and sells progressing cavity pumps and related
products into the wastewater treatment, specialty chemicals, mining, oil, food
and beverage, pulp and paper and general industrial end user markets. Prices
range from several hundred dollars for small pumps to up to $200,000 for large
pumps such as those used in wastewater treatment applications. A summary of the
Company's progressing cavity Industrial Pump Products business is as follows:
<TABLE>
<CAPTION>
End User Markets
-------------------------------------------------
Market % of Major Principal
Position Markets 2000 Sales Competitors Brands
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
#1 Wastewater Treatment 30% Netzsch Moyno(R)
Specialty Chemicals 14% Mono R&M(R)
Mining & Minerals 10% Tri-Phaze(R)
Food & Beverage 10%
Pulp & Paper 9%
Oil & Gas 9%
Other 18%
</TABLE>
Progressing cavity technology involves utilizing a motor-driven,
high-strength, single or multi-helix rotor within an elastomer-lined stator. The
spaces between the helixes create continual cavities which enable the fluid to
move from the suction end to the discharge end. The continuous seal creates
positive displacement and an even flow regardless of the speed of the
application. Progressing cavity pumps are versatile, as they can be positioned
at any angle and can deliver flow in either direction without modification or
accessories. As progressing cavity pumps have no valves, they are able to
efficiently handle fluids ranging from high pressure water and shear sensitive
materials to heavy, viscous, abrasive, solid-laden slurries and sludges. In
2000, Moyno introduced the Ultra Flex RM320 elastomer lining which is made of a
special compound used for specific chemical resistance, has increased
temperature capability and is abrasion resistant, a new pump for the fish
processing industry which is specially designed to reduce fish damage, and the
Moyno Tailings pump used to pump flocculated clay tailings in mining
applications. Pumps are manufactured in Springfield, Ohio and there are pump
assembly, sales and service centers in the U.K., Mexico and Singapore.
SALES, MARKETING AND DISTRIBUTION -- Industrial Pump Products are sold worldwide
through approximately 35 U.S. and 30 non-U.S. distributors and 25 U.S. and 15
non-U.S. manufacturers' representatives. These networks are managed by five
regional sales offices in the U.S., one office in the U.K., one office in Mexico
and one office in Singapore.
COMPETITION -- Moyno has a large installed base and a dominant market share in
the U.S., and a smaller presence in Europe and Asia. While the Company believes
Moyno
8
<PAGE> 9
is the world leader in the manufacture of progressing cavity pumps, the market
is competitive and includes many different types of similar equipment and
several competitors, none of which is dominant. In addition, there are several
other types of positive displacement pumps including gear, lobe and air-operated
diaphragm pumps that compete with progressing cavity pumps in certain
applications.
CORROSION-RESISTANT PRODUCTS
Edlon-PSI manufactures and sells lined pipe and fittings, fluoropolymer
coated and lined vessels for process equipment, fluoropolymer roll covers for
paper machines and glass-lined reactor systems accessories. Edlon-PSI's products
are used principally in the specialty chemicals, pharmaceutical and
semiconductor end user markets to provide corrosion protection and high purity
fluid assurance, and in the paper industry for release applications. A summary
of the Company's Corrosion-Resistant Products business is as follows:
<TABLE>
<CAPTION>
End User Markets
-------------------------------------------------
Market % of Major Principal
Position Markets 2000 Sales Competitors Brands
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
N/A Specialty Chemicals 65% Resistoflex Edlon(R)
Electronics 13% 3P PSI(R)
Pulp & Paper 9%
Pharmaceutical 6%
Other 7%
</TABLE>
Edlon-PSI primarily competes by offering highly engineered products and
products made for special needs that are not readily supplied by competitors.
Edlon-PSI is able to compete effectively based on its extensive knowledge and
application experience with fluoropolymers. In 2000, Edlon-PSI introduced newly
designed storage tanks for de-ionized water and ultra pure chemicals, and
expanded its range of products sold to the chip producers and wafer
manufacturers in the high growth semiconductor industry. Products are made in
Avondale, Pennsylvania, Charleston, West Virginia and Leven, Scotland.
SALES, MARKETING AND DISTRIBUTION -- Edlon(R) and PSI(R) products in the U.S.
are sold through both a distributor network for higher volume items such as
lined pipe and fittings, and a direct sales force and sales representatives for
lower volume products. Outside the U.S., products are sold through sales
representatives except for the U.K., where products are sold through a direct
sales force.
AFTERMARKET SALES -- Edlon-PSI products do not typically have parts or
components that routinely wear out or need replacement, and therefore
aftermarket sales are insignificant.
ENERGY SYSTEMS
R&M Energy Systems ("Energy Systems") manufactures and sells a variety
of specialized products to the oil and gas exploration and production markets.
9
<PAGE> 10
These products are principally used either down a well hole or at a wellhead. A
summary of the Company's Energy Systems business is as follows:
<TABLE>
<CAPTION>
End User Markets
--------------------------------
Market % of Major Principal
Position Markets 2000 Sales Competitors Brands
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
N/A Oil & Gas 91% Halliburton Moyno(R)
Other 9% Baker-Hughes New Era(R)
Weatherford Patco(R)
Telford Hamer(R)
Hercules(R)
Magnum(R)
Resun(R)
Staytite(R)
Yale(R)
</TABLE>
Energy Systems sells a line of power sections and down-hole progressing
cavity pumps, rod guides, wellhead products and closure products. Moyno power
sections are used to drive the drill bit in horizontal and directional drilling
applications, often with multiple wells drilled from a single location. Power
sections utilize the same technology as is used in progressing cavity pumps.
Down-hole pumps are used primarily to lift crude oil to the surface where there
is not enough natural pressure and for dewatering gas wells. The largest
oilfields that benefit from using downhole pumps are in Canada, the U.S.,
Venezuela and the Commonwealth of Independent States ("CIS"). Rod guides are
placed on downhole rods used to pump oil to protect the rods and the well
casings from damage during operation and to enhance the flow of fluid to the
surface. Wellhead products are used at the wellhead to control the flow of oil,
gas and other material from the well. Closure products are used in oil and gas
pipelines to allow access to a pipeline at selected intervals. These products
are manufactured in three plants in Texas and several rod guide service centers
located in the U.S. and Canadian oilfields. In addition, the Company operates a
facility in Belgium that relines power section stators for the European
aftermarket.
SALES, MARKETING AND DISTRIBUTION -- Power sections are sold directly to
oilfield service companies through a sales office in Houston, Texas. Rod guides
and certain wellhead equipment in the U.S. and Canada are sold through Company
service centers in key oilfield locations. Energy Systems currently operates
seven service centers in the U.S. and six service centers in Alberta, Canada.
Down-hole pumps in the U.S. are sold through three distributors, and several
other distributors have been established in South America, the CIS and Asia.
Down-hole pumps in Canada are sold through the service centers. Wellhead
products and closure products are also sold through a distributor network in the
U.S.
AFTERMARKET SALES -- Aftermarket sales are principally the relining of stators,
a key component of power sections and down-hole pumps. Power section and
down-hole pump rotors and rod guides wear out after regular usage, but
replacement sales of these items are not identifiable and are not classified as
aftermarket sales.
10
<PAGE> 11
COMPETITION -- Energy Systems is the leading manufacturer of power sections. A
few potential customers have backward integrated and produce their own power
sections. Energy Systems is also the leading supplier of rod guides, wellhead
components and pipeline closure products and is the second leading supplier of
down-hole progressing cavity pumps. While the oil and gas exploration and
production marketplace is highly fragmented, Energy Systems believes that with
its leading positions in these products, and with the introduction of new well
drivehead products, it is positioned to be a full line supplier with the
capability to provide customers with complete system sourcing.
Oil service companies, our customers, use the most advanced
technologies available in the exploration and recovery of oil and gas.
Therefore, new product innovation is critical to suppliers to this market. The
Company continually develops new elastomer compounds for use in power sections
and down-hole pumps in deeper wells and more adverse conditions. In addition,
advanced wellhead equipment is being introduced that will improve the efficiency
of well production.
BACKLOG
At August 31, 2000 and 1999, the Company's order backlog was $80.5
million and $74.3 million respectively. Within the next twelve months the
Company expects to ship all of its backlog. Sales of the Company's products are
not subject to material seasonal fluctuations.
CUSTOMERS
Sales are not concentrated with any customer, as no customer
represented more than 5% of sales in fiscal years 2000, 1999 or 1998.
RAW MATERIALS
Raw materials are purchased from various vendors that generally are
located in the same country as the Company facility using the raw materials. The
supply of raw materials and components has been adequate and available without
significant delivery delays. No events are known or anticipated that would
change the sources and availability of raw materials. No supplier provides more
than 5% of the Company's raw materials.
11
<PAGE> 12
GENERAL
The Company owns a number of patents relating to the design and
manufacture of its products. While the Company considers these patents important
to its operations, it believes that the successful manufacture and sale of its
products depend more upon technological know-how and manufacturing skills. The
Company is committed to maintaining high quality manufacturing standards and has
completed ISO certification at several facilities.
During fiscal 2000, the Company spent approximately $1.8 million on
research and development activities compared to $2.2 million in fiscal 1999 and
$2.0 million in fiscal 1998.
Compliance with federal, state and local laws regulating the discharge
of materials into the environment is not anticipated to have any material effect
upon the capital expenditures, earnings or competitive position of the Company.
At August 31, 2000, the Company had 3,284 employees, which included
approximately 700 at majority-owned joint ventures. Approximately 900 of these
employees were covered by collective bargaining agreements at various locations.
In fiscal year 2001, the company has no labor contracts expiring. A labor
agreement was reached with the employees of the Chemineer facility in
October 2000 and extends to March of 2004. The Company considers labor
relations at each of its locations to be good.
12
<PAGE> 13
ITEM 2. PROPERTIES
FACILITIES
The Company's executive offices are located in Dayton, Ohio. The
executive offices are leased and occupy approximately 10,000 square feet. Set
forth below is certain information relating to the Company's principal operating
facilities.
<TABLE>
<CAPTION>
SQUARE PRODUCTS MANUFACTURED OR
LOCATION FOOTAGE OTHER USE OF FACILITY
- -------------------------------------------------------------------------------------------------------------------
NORTH AND SOUTH AMERICA:
<S> <C> <C>
Rochester, New York 500,000 Reactor Systems
Springfield, Ohio 275,000 Industrial Pump Products
Dayton, Ohio 160,000 Industrial Mixers
Borger, Texas 115,000 Wellhead products for Energy Systems
Willis, Texas 110,000 Down-hole pumps and power sections for Energy Systems
Mexico City, Mexico 110,000 Reactor Systems
Taubate, Brazil 100,000 Reactor Systems
Charleston, West Virginia 100,000 Corrosion-Resistant Products
Tomball, Texas 75,000 Valves and closures for Energy Systems
Avondale, Pennsylvania 50,000 Corrosion-Resistant Products
North Andover, Massachusetts 30,000 (1) Industrial Mixers
Sao Jose Dos Campos, Brazil 30,000 Reactor Systems
Edmonton, Alberta, Canada 25,000 to (2) Energy Systems, including two service centers
2 plants 30,000 each (1)
Mexico City, Mexico 20,000 (1) (3) Industrial Mixers
Haverhill, Massachusetts 10,000 (1) Industrial Mixers
Rochester, New York 10,000 (1) Reactor Systems
EUROPE:
Schwetzingen, Germany 400,000 Reactor Systems
Leven, Scotland 240,000 Reactor Systems and Corrosion-Resistant Products
Quarto D'Altino, Italy 120,000 Reactor Systems
San Dona di Piave, Italy 90,000 Reactor Systems
Bilston, England 50,000 Reactor Systems
Derby, England 20,000 (1) Industrial Mixers
Petit-Rechain, Belgium 15,000 Power sections for Energy Systems
Kearsley, England 15,000 Reactor Systems
Bolton, England 15,000 Reactor Systems
Southampton, England 10,000 (1) Industrial Pump Products
ASIA:
Gujurat, India 350,000 (4) Reactor Systems
Suzhou, China 150,000 (5) Reactor Systems
Singapore 5,000 (1) Industrial Pump Products
</TABLE>
(1) Leased facility.
13
<PAGE> 14
(2) R&M Energy Systems also operates an additional 13 (7 U.S., 6 Canada)
Service Centers, primarily in leased facilities between 5,000 and
10,000 square feet each. These locations are in the oil producing
regions of the U.S. and Canada and manufacture rod guides and
distribute other of the Company's Energy Systems products. Locations
are: Bakersfield, California, Oklahoma City, Oklahoma, Odessa, Texas,
Casper, Wyoming, Mt. Pleasant, Michigan, Williston, North Dakota,
Wooster, Ohio and in Alberta, Canada - Bonnyville, Brooks, Elk Point,
Provost, Sedgewick, and Taber.
(3) Facility of a 67%-owned subsidiary.
(4) Facility of a 51%-owned subsidiary.
(5) Facility of a 70%-owned subsidiary.
14
<PAGE> 15
ITEM 3. LEGAL PROCEEDINGS
The Company is presently not a party to any material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
15
<PAGE> 16
EXECUTIVE OFFICERS OF THE REGISTRANT
Maynard H. Murch IV, age 56, has been Chairman of the Board of the
Company since July, 1979 and a director of the Company since 1977. Mr. Murch is
also President and Chief Executive Officer of Maynard H. Murch Co., Inc.
(investments), which is managing general partner of M.H.M. & Co., Ltd.
(investments). Mr. Murch is also Vice President (since June, 1976) of
Parker/Hunter Incorporated (dealer in securities), a successor firm to Murch and
Co., Inc., a securities firm which Mr. Murch had been associated with since
1968.
Gerald L. Connelly, age 59, has been President and Chief Executive
Officer of the Company since January 1, 1999. Previously he was Executive Vice
President and Chief Operating Officer of the Company, having been elected to
that position on May 1, 1996. He is also President of Pfaudler, Inc. He was
President of the Process Industries Group of Eagle Industries, Inc. from 1993
until joining the Company. Previously, he served as President of Pulsafeeder,
Inc. (metering pumps) for ten years.
Kevin J. Brown, age 42, has been Vice-President and Chief Financial
Officer of the Company since January 1, 2000. Previously he was Controller and
Chief Accounting Officer of the Company since December 12, 1995. Prior to
joining the Company he was employed by the accounting firm of Ernst & Young LLP
for fifteen years.
Hugh E. Becker, age 62, has been Vice President, Investor Relations and
Human Resources of the Company since December 9, 1998. From 1996 to 1998 he was
Senior Director, Investor Relations and Human Resources. Previously he held
various investor relations and human resource positions for the Company since
1980.
Milton M. Hernandez, age 44, has been Vice-President, Business
Development of the Company since April 4, 2000. Most recently he was Managing
Director-Argentina and Bolivia, Mobil Oil Corporation. Prior to that he was
Vice-President, Business Development Latin America, Spain and Portugal and he
also held a variety of positions in Corporate Planning and Marketing for Mobil
Chemical as well as Mobil Oil.
Thomas J. Schockman, age 36, has been Corporate Controller and Chief
Accounting Officer of the Company since March 22, 2000. Prior to joining the
Company, he was employed as Controller at Spinnaker Coating, Inc. for three
years and the accounting firm of Ernst & Young LLP for ten years.
Albert L. Raiteri, age 59, has been Treasurer of the Company since
December 9, 1998. He has held various positions in finance and accounting for
the Company since 1972.
16
<PAGE> 17
Joseph M. Rigot, age 57, has been Secretary and General Counsel of the
Company since 1990. He is a partner with the law firm of Thompson Hine & Flory
LLP Dayton, Ohio.
The term of office of all executive officers of the Company is until
the next Annual Meeting of Directors (December 13, 2000) or until their
respective successors are elected.
17
<PAGE> 18
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
(A) The Company's common shares trade on the New York Stock Exchange
under the symbol RBN. The prices presented in the following table are the high
and low sales prices for the common shares for the periods presented.
<TABLE>
<CAPTION>
Dividends
High Low Paid
------------------------------------------------------
<S> <C> <C> <C>
Fiscal 2000
- -----------
1st Quarter $23.06 $15.19 $.055
2nd Quarter 23.50 18.88 .055
3rd Quarter 24.50 19.38 .055
4th Quarter 23.88 20.25 .055
Fiscal 1999
- -----------
1st Quarter $25.25 $17.63 $.055
2nd Quarter 23.13 16.50 .055
3rd Quarter 25.25 15.69 .055
4th Quarter 25.88 20.75 .055
</TABLE>
(B) As of October 20, 2000, the Company had approximately 529
shareholders of record. Based on requests from brokers and other nominees, the
Company estimates there are approximately an additional 2,403 shareholders.
(C) Dividends paid on common shares are presented in the table in Item
5(A). The Company's credit agreements include certain covenants which restrict
the Company's payment of dividends. The amount of cash dividends plus stock
repurchases the Company may incur in each fiscal year is restricted to the
greater of $2,500,000 or 50% of the Company's net income for the immediately
preceding fiscal year, plus a portion of any unused amounts from the preceding
fiscal year. For purposes of this test, stock repurchases related to stock
option exercises or in connection with withholding taxes due under any stock
plan in which employees or directors participate are not included. Under this
formula, such cash dividends and treasury stock purchases in fiscal 2001 are
limited to $7,478,000.
18
<PAGE> 19
ITEM 6. SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA (1)
Robbins & Myers, Inc. and Subsidiaries
(In thousands, except per share, shareholder and employee data)
<TABLE>
<CAPTION>
5 Year Average Growth 2000 1999 1998 1997 1996 1995
--------------------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Results
Orders 4.3% $412,948 $373,135 $416,989 $375,042 $353,462 $334,931
Ending backlog 80,484 74,330 96,022 110,078 109,921 107,423
Sales 6.1 406,714 400,142 436,474 385,663 350,964 302,952
Gross profit 6.7 140,234 136,166 158,713 138,781 119,030 101,304
IBITDA (2, 3) 11.9 67,942 57,809 83,658 65,484 53,332 38,721
IBIT (2) 10.6 43,572 33,288 60,142 49,521 39,455 26,320
Net income (2) 6.5 18,056 11,849 31,230 28,866 19,525 13,157
Amortization 8,077 7,660 7,670 5,170 4,495 3,852
Depreciation 16,293 16,861 15,846 10,793 9,382 8,549
Capital expenditures, net 19,842 11,612 23,020 22,071 16,453 10,133
Financial Condition
Total assets $495,679 $493,852 $501,008 $372,354 $300,340 $270,407
Total debt 177,864 191,272 206,242 116,083 73,533 67,901
Shareholders' equity 167,182 154,226 150,763 124,475 91,437 69,939
Total capitalization 345,046 345,498 357,005 240,558 164,970 137,840
Performance Statistics
Percent of sales:
Gross profit 34.5% 34.0% 36.4% 36.0% 33.9% 33.4%
IBIT (2) 10.7 8.3 13.8 12.8 11.2 8.7
Debt as a % of total
capitalization 51.5 55.4 57.8 48.3 44.6 49.3
IBIT return on average net assets 12.6 9.3 16.7 21.7 24.7 18.5
Net income return on avg. equity 11.2 7.8 22.7 26.7 25.2 18.6
Per Share Data
Net income per share, diluted (2) 4.5% $ 1.53 $ 1.06 $ 2.43 $ 2.29 $ 1.77 $ 1.23
Dividends declared 8.0 0.22 0.22 0.215 0.194 0.169 0.15
Market price of common stock:
High $ 24.50 $ 25.88 $ 40.50 $ 36.75 $ 26.50 $ 14.38
Low 15.19 15.69 23.00 20.00 13.63 8.25
Close 11.7% 23.88 23.50 23.75 32.63 22.00 13.72
P/E ratio at August 31, diluted 15.6 22.2 9.8 14.4 12.5 11.3
Other Data
Free cash flow (4) $ 16,198 $ 27,851 $ 25,554 $ 13,175 $ 15,607 $ 22,844
Enterprise value (5) 16.3% 439,493 448,385 468,015 472,989 306,667 206,925
Shares outstanding at year end 10,956 10,941 11,022 10,938 10,597 10,133
Average diluted shares (6) 13,416 13,535 13,906 13,625 11,046 10,738
Number of shareholders (7) 2,932 3,256 3,326 2,723 1,632 1,520
Number of employees 3,284 3,244 3,071 2,947 2,459 2,337
</TABLE>
Notes to Selected Financial Data
(1) 1999 reflects the acquisitions of a controlling interest in Universal
Glasteel Equipment, Chemineer de Mexico and GMM Pfaudler Limited, 1998
reflects the acquisitions of Flow Control Equipment, Inc. and
Technoglass S.r.L. and 1997 reflects the acquisitions of Process Supply
Inc., Spectrum Products, Inc., Greerco and Industrie Tycon, S.p.A., as
discussed in the Business Acquisitions note. 1995 reflects the
acquisition of Pharaoh and Cannon.
(2) Fiscal 1999, includes charges of $4,769,000 primarily for the closure
of the Company's Fairfield California Manufacturing Facility, and one
time severance and early retirement costs of $1,600,000. Fiscal 2000,
includes charges of $409,000 relating to the closure of the Fairfield
Facility, a gain of $918,000 relating to the sale of the Fairfield
Facility and a charge of $500,000 related to Universal Glasteel
Equipment, Inc. These special items increased fiscal 2000 net income by
$6,000 ($0.00 per share) and reduced fiscal 1999 net income by
$4,204,000 ($0.31 per share).
(3) IBITDA represents the sum of income before interest and taxes and
depreciation and amortization. IBITDA is not a measure of performance
calculated in accordance with accounting principles generally accepted
in the United States and should not be considered as an alternative to
net income as a measure of the Company's operating results.
(4) Free Cash Flow represents net cash and cash equivalents provided by
operating activities less capital expenditures. Free Cash Flow is not a
measure of performance calculated in accordance with accounting
principles generally accepted in the United States, and should not be
considered as an alternative to cash flows as a measure of the
Company's liquidity.
(5) Market capitalization of shares outstanding at year end plus total
debt.
(6) 2000 reflects an additional 2,297,000 shares and 1999, 1998 and 1997
reflect an additional 2,385,000 shares related to the convertible note
issuance. 1995 is adjusted to reflect the 2 for 1 Stock split effective
July 31, 1996.
(7) As of September 1, 2000, the Company had 529 shareholders of record.
Based on requests from brokers and other nominees, the Company
estimates there are an additional 2,403 shareholders.
19
<PAGE> 20
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Overview
The Company seeks to balance its mix of products and services and maintain
overall stability in its operating results principally through increased levels
of aftermarket sales, increased non-U.S. sales and end market diversification.
Aftermarket sales accounted for 33% of total Company sales in fiscal 2000, 34%
in fiscal 1999 and 32% in fiscal 1998. Sales to non-U.S. customers were 48% in
fiscal 2000, 46% in fiscal 1999 and 47% in fiscal 1998 of total Company sales.
The Company's primary markets are specialty chemicals, pharmaceuticals, oil and
gas exploration and production, wastewater treatment and food and beverage.
In fiscal 1999, the Company acquired a controlling interest in
Universal Glasteel Equipment in December 1998, Chemineer de Mexico in June 1999
and GMM Pfaudler Limited in July 1999. These acquisitions are in the Company's
Process Systems business segment. The total cost of the fiscal 1999 acquisitions
was $5.3 million in cash. These acquisitions accounted for $2.3 million of sales
and $0.3 million of IBIT in fiscal 1999. In fiscal 1998, the Company purchased
Flow Control Equipment, Inc. ("FCE") and Technoglass, S.r.L. ("Technoglass") in
December 1997. FCE is in the Energy Systems segment and Technoglass is in the
Process Systems segment. The total cost of the fiscal 1998 acquisitions was
$117.4 million in cash, notes and assumed debt ($114.1 million after application
of available FCE cash at closing). These acquisitions accounted for $41.0
million of sales and $6.6 million of IBIT in fiscal 1998.
The Company recorded special items in fiscal 2000 and 1999 which impact
the comparability of certain information. The special items in fiscal 2000 and
1999 were as follows:
<TABLE>
<CAPTION>
IBIT Impact
--------------------------------------------
Process Energy Net Net Income
Systems Systems Total Income Per Share
------- ------- ------- -------- ----------
(In thousands except per share)
<S> <C> <C> <C> <C> <C>
2000
- ----
Plant closure costs $ 0 $ (409) $ (409) $ (266) $ (.02)
Gain on sale of building 0 918 918 597 .04
UGE long-term receivable write-down (500) 0 (500) (325) (.02)
------- ------- ------- ------- --------
$ (500) $ 509 $ 9 $ 6 $ .00
======= ======= ======= ======= ========
1999
- ----
Plant closure costs $ 0 $(4,769) $(4,769) $(3,148) $ (.23)
Termination costs (1,200) 0 (1,600) (1,056) (.08)
------- ------- ------- ------- --------
$(1,200) $(4,769) $(6,369) $(4,204) $ (.31)
======= ======= ======= ======= ========
</TABLE>
20
<PAGE> 21
In the fourth quarter of fiscal 2000, the Company recorded a charge of
$.5 million to reduce a long-term receivable related to Universal Glasteel
Equipment ("UGE"), which is 50% owned by the Company and 50% owned by Universal
Process Equipment, Inc. ("UPE"). The charge is due to weakness in the used
glass-lined reactor and storage vessel markets served by UGE.
In fiscal 1999, due to the downturn in the Company's Energy Systems
business segment the Company analyzed its capacity requirements for these
products. As a result, on February 10, 1999, the Company recorded a charge of
$4.2 million for the closure and relocation of the Company's Fairfield,
California, manufacturing operations. The facility manufactured power sections
and down-hole pumps. Production was transferred to the Company's manufacturing
facility near Houston, Texas, which manufactures similar products. The closure
and relocation consolidated all power section and down-hole pump manufacturing
into one facility and is expected to result in annual savings of approximately
$1.5 million when fully complete. The transfer of manufacturing was completed by
March 31, 2000. The Fairfield facility was sold in July 2000 resulting in a
pretax gain of $.9 million. Certain machinery and equipment was also sold in
fiscal 2000 at amounts approximating the written down estimated fair values. The
$4.2 million charge was composed of the following:
<TABLE>
<CAPTION>
(In thousands)
--------------
<S> <C>
Asset write-downs:
Land and building to be sold, $800 estimated fair value $ 600
Machinery and equipment to be scrapped, $200 estimated fair value 800
------
Total asset write-downs 1,400
Exit costs:
Employee related costs:
Severance, 50 Fairfield employees 300
Pay to stay costs and other employee costs 500
Environmental costs related to closure of facility 1,300
Holding costs of land and building until sold and other 700
------
Total exit costs 2,800
------
$4,200
======
</TABLE>
The asset write-downs were determined based on recent sales of similar assets.
Following is a progression of the exit cost liabilities related to the Fairfield
plant closure:
<TABLE>
<CAPTION>
Employee Holding
related Environmental and other Total
--------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Liability recorded Feb 1999 $ 800 $ 1,300 $ 700 $ 2,800
Payments made (72) (53) (402) (527)
------- ------- ------- -------
Liability at August 31, 1999 728 1,247 298 2,273
Payments made (780) (411) (246) (1,437)
Change in estimate 52 0 (52) 0
------- ------- ------- -------
Liability at August 31, 2000 $ 0 $ 836 $ 0 $ 836
======= ======= ======= =======
</TABLE>
21
<PAGE> 22
Due to the ongoing monitoring requirements, the remaining liability for
environmental costs is expected to be paid over a period of five to ten years.
The Company incurred additional expenses relating to the Fairfield
plant closure of $.4 million in fiscal 2000 and $.6 million in fiscal 1999.
These costs were for employee transfers, equipment relocation and training of
new employees at the Texas facility.
In the second quarter of fiscal 1999 the Company recorded termination
costs of $.4 million unrelated to the closure of the Fairfield facility. In the
fourth quarter of fiscal 1999 the Company recorded an additional $1.2 million in
severance and early retirement benefit costs to reduce its overhead cost
structure, primarily at its Moyno and Chemineer business units. The reduction in
employment levels at Chemineer was due to lower sales resulting from lower
capital spending within the specialty chemical market served by Chemineer. The
reduction in employment at Moyno was due to process changes within the
manufacturing operations and a reduction in the overhead cost structure. These
changes will reduce operating costs by approximately $1.2 million annually and
position these business units to achieve long-term profitability targets. All of
these benefits have been paid as of August 31, 2000 with no changes in estimates
made.
Results of Operations
The following tables present components of the Company's consolidated income
statement and segment information.
<TABLE>
<CAPTION>
CONSOLIDATED 2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Sales 100.0 % 100.0 % 100.0 %
Cost of sales 65.5 66.0 63.6
----- ----- -----
Gross profit 34.5 34.0 36.4
SG&A expenses 21.8 22.3 21.4
Amortization 2.0 1.9 1.8
Other 0.0 1.5 (0.6)
----- ----- -----
IBIT 10.7 % 8.3 % 13.8 %
===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
BY SEGMENT 2000 1999 1998
-------- -------- --------
(In thousands)
<S> <C> <C> <C>
Process Systems
Sales $318,569 $335,648 $355,411
IBIT 36,455 42,001 49,502
IBIT % 11.4 % 12.5 % 13.9 %
Energy Systems
Sales $ 88,145 $ 64,494 $ 81,063
IBIT 16,130 1,097 20,089
IBIT % 18.3 % 1.7 % 24.8 %
Total
Sales $406,714 $400,142 $436,474
IBIT 43,572 33,288 60,142
</TABLE>
22
<PAGE> 23
FISCAL 2000 COMPARED TO FISCAL 1999 - Sales of $406.7 million for fiscal 2000
were $6.6 million higher than fiscal 1999, a 1.6% increase. Pro forma sales,
assuming all of the businesses owned at August 31, 2000, were owned for all of
fiscal 2000 and fiscal 1999 decreased by $6.1 million or 1.5%.
The Process Systems segment had sales of $318.6 million in fiscal 2000
compared to $335.6 million in fiscal 1999. On a pro forma basis, the Process
Systems segment sales decreased by $28.3 million, an 8.1% decrease. The
weakening of the euro and to a lesser extent the British pound, had a negative
translation effect on sales for the year of $10.1 million. The remaining decline
in sales is attributed to low levels of profitability and capital spending in
the chemical process industry, and the weak euro causing selling price pressures
in the Company's UK operations which have continental European competitors.
Order levels have been slightly higher than sales resulting in backlog
increasing to $72.8 million from $70.9 million at the beginning of fiscal 2000.
The Process Systems segment is a long lead time business, and this low level of
opening backlog signals a slower first half of fiscal 2001 than the last half of
fiscal 2000 for this segment.
The Energy Systems segment sales were $88.1 million in fiscal 2000
compared to $64.5 million in fiscal 1999. The increase in fiscal 2000 sales is
$23.6 million, or 36.7%. The increase in oil prices has spurred an increase in
oil exploration and production activities. Incoming orders in this segment have
also been strong increasing the backlog to $7.6 million from $3.4 million at the
beginning of fiscal 2000.
Gross profit margins have increased to 34.5% in fiscal 2000 from 34.0%
in fiscal 1999. Gross profit margins increased 2% due to higher sales volumes in
the Energy Systems segment, which has higher gross margin products. Offsetting
this is lower gross margins in the Process Systems segment due to the lower
sales and production volumes and a change in sales mix.
IBIT for fiscal 2000 is $43.6 million compared to $33.3 million in
fiscal 1999, an increase of $10.3 million or 30.9%. Excluding the effects of the
special items previously mentioned, the 2000 IBIT would be $43.6 million and the
1999 IBIT would be $39.7 million. This increase is primarily in the Company's
Energy Systems segment. Excluding the effects of special items, the Energy
Systems fiscal 2000 IBIT was $15.6 million compared to $5.9 million in fiscal
1999, an increase of $9.7 million or 164.4%. The increase in IBIT is due to the
sales volume increase. The benefit of the cost reductions from closing the
Fairfield facility will not be realized until fiscal 2001. In the Process
Systems segment IBIT before special items was $37.0 million in fiscal 2000 and
$43.2 million in fiscal 1999, a decrease of $6.2 million or 14.4%. The weakening
European currencies against the dollar resulted in decreased IBIT of $1.2
million in fiscal 2000. Approximately $3.0 million of the decline can be
attributed to large system projects in the Reactor Systems product platform with
lower than historical margins. The remaining decline is due to lower sales
volumes in the Industrial Mixers product platform.
23
<PAGE> 24
Interest expense decreased to $13.5 million in fiscal 2000 from $13.8
million in fiscal 1999. The decrease is from lower average debt levels in fiscal
2000 offset slightly by higher interest rates during fiscal 2000. The Company's
effective interest rate was 7.2% in fiscal 2000 and 6.7% in fiscal 1999.
The effective tax rate was 35.0% in fiscal 2000 and 34.0% in fiscal
1999. The fiscal 2000 tax rate is higher due to a higher proportion of taxable
income in higher tax rate countries, and some tax carryforward benefits utilized
outside the U.S. in fiscal 1999. Additionally, the Company generates a tax
benefit from its Foreign Sales Corporation. Net deferred income tax assets of
$8.9 million at August 31, 2000 primarily relate to U.S. operations. Available
carrybacks and future pretax income at current levels would be sufficient to
realize these assets.
Net income and net income per share in fiscal 2000 are $18.1 million
and $1.53 compared to $11.8 million and $1.06 in fiscal 1999. Excluding the
effect of the special items mentioned previously, the fiscal 1999 net income and
net income per share would have been higher by $4.2 million and $0.31
respectively. The remaining increase was primarily from the sales increase in
the Energy Systems segment.
FISCAL 1999 COMPARED TO FISCAL 1998 - Sales of $400.1 million for fiscal 1999
were $36.3 million lower than fiscal 1998, an 8.3% decrease. Pro forma sales,
assuming all of the businesses owned at August 31, 1999, were owned for all of
fiscal 1999 and fiscal 1998 decreased by $66.8 million or 13.8%.
The Process Systems segment had sales of $335.6 million in fiscal 1999
compared to $355.4 million in fiscal 1998. On a pro forma basis, the Process
Systems segment sales decreased by $31.6 million, an 8.3% decrease. This
decrease was primarily driven by weak market demand in the specialty chemical
market. Capital spending in this market has been reduced as operating rates and
profitability levels have been weak. Order levels have declined faster than
sales resulting in backlog decreasing to $70.9 million from $93.0 million at the
beginning of fiscal 1999.
The Energy Systems segment was dramatically influenced by the decrease
in crude oil prices in fiscal 1998 and 1999, reaching a low of $10.35 a barrel
in early fiscal 1999 from price levels that were $18.00 - $22.00 per barrel for
several years. Oil exploration was significantly reduced and marginal wells were
shut down. As a result, the Company's Energy Systems segment sales were $64.5
million in fiscal 1999 compared to $81.1 million in fiscal 1998. On a pro forma
basis sales decreased by $35.2 million, a 35.3% decrease. Late in fiscal 1999
crude oil prices recovered to the $22.00 per barrel level and the Company has
seen a modest increase in order levels. Longer term stability in crude oil
prices is needed before there is a full recovery in this market. This segment is
a short lead time business and backlog levels have increased slightly to $3.4
million from $3.0 million at the beginning of fiscal 1999.
Gross profit margins have declined to 34.0% in fiscal 1999 from 36.4%
in fiscal 1998. This decrease is primarily due to the change in product mix. The
Company's Energy Systems segment is a higher gross margin business and the
significant decline in sales has caused total gross margin to decline.
Secondarily, the lower volume in the Process Systems segment has also reduced
gross margin levels slightly.
24
<PAGE> 25
IBIT before special items for fiscal 1999 was $39.7 million compared to
$60.1 million in fiscal 1998, a decrease of $20.4 million or 33.9%. This
decrease is primarily in the Company's Energy Systems segment which declined
from $20.1 million in fiscal 1998 to $5.9 million in fiscal 1999, on a sales
decline of $16.6 million. Costs to support products in this segment are of a
high fixed cost nature. Therefore, the cost structure cannot be adjusted quickly
when sales decline rapidly. As previously mentioned, the Company closed its
Fairfield, California, manufacturing facility and consolidated management.
However, these actions did not significantly benefit fiscal 1999. Fiscal 2000
saw some of the cost benefits with the full impact coming in fiscal 2001. The
anticipated benefits of approximately $1.5 million annually will not be fully
realized until 2001 because the Fairfield plant continued to operate until March
2000. In the Process Systems segment IBIT before special items decreased $6.3
million on a sales decline of $19.8 million and as a percent of sales decreased
from 13.9% to 12.9%. This level of volume decrease is more manageable and
variable costs, primarily employment levels and variable pay plans, were
adjusted to the lower volume levels minimizing the effect on IBIT before special
items.
Interest expense increased to $13.8 million in fiscal 1999 from $12.8
million in fiscal 1998. The increase was from higher average debt levels in
fiscal 1999 primarily because the $106.0 million spent for FCE was outstanding
all of fiscal 1999 and only a portion of fiscal 1998. The Company's effective
interest rate was 6.7% for both fiscal 1999 and fiscal 1998.
The effective tax rate was 34.0% for both fiscal 1999 and fiscal 1998.
The fiscal 1999 rate was lower than the statutory rate because of a reduction in
valuation allowances for deferred tax assets in countries outside the U.S.
Taxable income was generated in these countries justifying the reduction of
these allowances. Additionally, the Company generated a tax benefit from its
Foreign Sales Corporation. Net deferred income tax assets of $5.4 million at
August 31, 1999 primarily relate to U.S. operations. Available carrybacks and
future pretax income at current levels would be sufficient to realize these
assets.
Net income and net income per share for fiscal 1999 are $11.8 million
and $1.06 compared to $31.2 million and $2.43 in fiscal 1998. Excluding the
effect of the special items, net income and net income per share would have been
higher by $4.2 million and $0.31 respectively. The remaining decrease was
primarily from the decline in the Energy Systems segment and to a lesser degree
the decline in the Process Systems segment and slightly higher interest costs,
as discussed above.
Liquidity and Capital Resources
The Company's significant cash needs expected for fiscal 2001 are planned
capital expenditures of $18.2 million. The Company expects cash flow from
operating activities to be adequate for these needs. At August 31, 2000, the
Company has available borrowings of $95.0 million under it's Bank Credit
Agreement ("the Agreement"). The Company's long-term liquidity requirements will
be satisfied by cash flow from current operations and acquisitions, available
borrowings under the existing Agreement or a new Bank Credit facility negotiated
at the expiration of the current Agreement in November 2002, or additional funds
raised through capital markets. There are no significant restrictions on the
Company's ability to transfer funds from its non-U.S. subsidiaries to the
Company.
25
<PAGE> 26
The Company started a program in October 1999 to purchase up to 3%, or
approximately 350,000 shares or share equivalents in Convertible Subordinated
Notes for an amount not to exceed $6.5 million. As of August 31, 2000 the
program has been completed with the Company having purchased 77,085 shares for
$1.3 million and Convertible Subordinated Notes (194,826 equivalent shares) for
$4.9 million.
In fiscal 2000 cash flow from operating activities was $36.0 million.
This cash was primarily used for $5.6 million of net debt repayments, $19.8
million for capital expenditures, $6.2 million for the 1999 share and
Convertible Subordinated Notes repurchase program and $2.4 million for the
dividends.
In fiscal 2000 free cash flow, cash provided by operations less capital
expenditures, was $16.2 million, a decrease of $11.7 million from fiscal 1999.
Capital expenditures were $8.2 million higher in fiscal 2000. Capital
expenditures are related to additional production capacity, cost reductions and
replacement items. The remaining decrease in free cash flow is due to higher
working capital requirements caused by higher fiscal year 2000 fourth quarter
sales, and higher sales backlog levels at year end.
Forward-looking Statements
This Annual Report contains "Forward-looking Statements". All statements which
address operating performance, events or developments that we expect or
anticipate will occur in the future including statements related to growth,
operating margin performance, earnings per share or statements expressing
general opinions about future operating results, are forward-looking statements.
These forward-looking statements and performance trends are subject to
certain risks and uncertainties that could cause actual results to differ
materially from these statements and trends. Such factors include, but are not
limited to, a significant decline in capital expenditure levels in the Company's
served markets, a major decline in oil and gas prices, foreign exchange rate
fluctuations, continued availability of acceptable acquisition candidates and
general economic conditions that can affect the demand in the process
industries. Any forward-looking statements are made based on known events and
circumstances at the time. The Company undertakes no obligation to update or
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date of this report.
26
<PAGE> 27
ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Market Risk
The Company maintains operations in the United States, Canada, Mexico, Brazil,
Belgium, Germany, Italy, the United Kingdom, Singapore and joint ventures in
China, India and Taiwan. In its normal operations the Company has market risk
exposure to foreign exchange rates. As a result of the Company's global
operations, it has assets, liabilities and cash flows in currencies other than
U.S. dollars. The Company's significant non-U.S. operations have their local
currencies as their functional currency and primarily buy and sell using that
same currency. The Company manages its exposure to its net assets and cash flows
in currencies other than U.S. dollars by minimizing its non-U.S. dollar net
asset positions. The Company also enters into hedging transactions, primarily
currency swaps under established policies and guidelines, that enable it to
mitigate the potential adverse impact of foreign exchange rate risk. The Company
does not engage in trading or other speculative activities with these
transactions, as established policies require that such hedging transactions
relate to specific currency exposures.
The Company's main foreign exchange rate exposures relate to assets,
liabilities and cash flows denominated in British pounds, European euro and
Canadian dollars and the general economic exposure that fluctuations in these
currencies could have on the dollar value of future non-U.S. cash flows. To
illustrate the potential impact of changes in foreign currency exchange rates on
the Company as of August 31, 2000, the Company's net unhedged exposures in each
currency were remeasured assuming a 10% decrease in foreign exchange rates
compared to the U.S. dollar. Using this method the Company's IBIT and cash flow
from operations for fiscal 2000 would have decreased by $1.5 million and $1.0
million, respectively. This calculation assumes that each exchange rate would
change in the same direction relative to the U.S. dollar. In addition to the
direct effects of changes in exchange rates, such changes may also affect the
volume of sales or the foreign currency sales prices as competitor's products
become more or less attractive. The Company's sensitivity analysis of the
effects of changes in foreign currency exchange rates does not include any
effects of such potential changes in sales levels or local currency prices.
The Company also has market risk exposure to interest rates. At August
31, 2000, the Company has $177.9 million in interest bearing debt obligations
that are subject to market risk exposure due to changes in interest rates. To
manage its exposure to changes in interest rates, the Company attempts to
maintain a balance between fixed and variable rate debt. Such a balance in the
debt profile is expected to moderate the Company's financing cost over time. If
long-term corporate interest rates were to drop substantially, the Company is
limited in its ability to refinance its fixed rate debt. However, the Company
does have the ability to change the characteristics of its fixed rate debt to
variable rate debt through interest rate swaps to achieve its objective of
balance. No such interest rate swaps are outstanding at August 31, 2000.
27
<PAGE> 28
At August 31, 2000, $164.8 million of the outstanding debt is at fixed
rates with a weighted average interest rate of 6.78% and $13.1 million is at
variable rates with a weighted average interest rate of 5.62%. The estimated
fair value of the Company's total debt at August 31, 2000, is approximately
$173.0 million. The following table presents the aggregate maturities and
related weighted average interest rates of the Company's debt obligations at
August 31, 2000, by maturity dates ($ in thousands):
<TABLE>
<CAPTION>
U. S. Dollar U. S. Dollar Italian Lira
Fixed Rate Variable Rate Variable Rate
------------------------- ------------------------- --------------------------
Maturity
Date Amount Rate Amount Rate Amount Rate
------------- ---------- ------------ ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
2001 $ 181 9.50 % $1,160 8.25 %
2002 472 12.76
2003 1,164 12.76 $11,925 5.36 %
2004 60,834 6.52
2005 728 8.94
Thereafter 101,400 6.82
-------- ----- ------ ------ ------- ------
Total $164,779 6.78 % $1,160 8.25 % $11,925 5.36 %
======== ===== ====== ====== ======= ======
Fair value $159,915 $1,160 $11,925
======== ====== =======
</TABLE>
The Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities and The Securities
Exchange Commission issued Staff Accounting Bulletin No. 101, Revenue
Recognition. These pronouncements are not required to be adopted by the Company
until its fiscal year 2001. The Company anticipates no material impact from
adopting these pronouncements.
28
<PAGE> 29
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED BALANCE SHEET
Robbins & Myers, Inc. and Subsidiaries
($ in thousands)
<TABLE>
<CAPTION>
August 31,
2000 1999
--------- ---------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 11,244 $ 8,901
Accounts receivable 80,872 74,900
Inventories 60,096 53,747
Other current assets 7,189 12,824
Deferred taxes 7,482 5,470
--------- ---------
Total Current Assets 166,883 155,842
Goodwill 187,382 195,294
Other Intangible Assets 16,937 18,806
Deferred Taxes 1,398 0
Other Assets 7,675 6,641
Property, Plant and Equipment 115,404 117,269
--------- ---------
$ 495,679 $ 493,852
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 33,467 $ 27,949
Accrued expenses 56,481 54,935
Current portion of long-term debt 1,341 121
--------- ---------
Total Current Liabilities 91,289 83,005
Long-Term Debt - Less Current Portion 176,523 191,151
Other Long-Term Liabilities 53,134 58,518
Minority Interest 7,551 6,952
Shareholders' Equity:
Common stock-without par value:
Authorized shares-40,000,000
Issued shares-11,225,950 in 2000 and 1999 33,586 33,968
Treasury shares-269,499 (284,746 in 1999) (5,792) (6,500)
Retained earnings 147,664 132,015
Accumulated other comprehensive (loss):
Foreign currency translation (8,145) (2,946)
Minimum pension liability (131) (2,311)
--------- ---------
Total (8,276) (5,257)
--------- ---------
167,182 154,226
--------- ---------
$ 495,679 $ 493,852
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
29
<PAGE> 30
CONSOLIDATED SHAREHOLDERS' EQUITY STATEMENT
Robbins & Myers, Inc. and Subsidiaries
($ in thousands, except share data)
<TABLE>
<CAPTION>
Accumulated
Other
Common Treasury Retained Comprehensive
Shares Shares Earnings Income (Loss) Total
------------- ------------ ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Balance at September 1, 1997 $ 32,020 $ (2,211) $ 93,735 $ 931 $124,475
Net income 31,230 31,230
Change in foreign currency translation (3,041) (3,041)
Change in minimum pension liability (570) (570)
--------
Comprehensive income 27,619
Cash dividends declared, $0.215 per share (2,385) (2,385)
Stock options exercised, 165,800 shares 774 787 1,561
Proceeds from share sales, 34,632 shares 635 532 1,167
Performance stock award expense 581 581
Performance stock issuances, 15,313 shares
Stock repurchase program, 96,600 shares (2,774) (2,774)
Other stock purchases, 35,182 shares (1,220) (1,220)
Tax benefit of stock options exercised 1,739 1,739
-------- -------- -------- -------- --------
Balance at August 31, 1998 35,749 (4,886) 122,580 (2,680) 150,763
Net income 11,849 11,849
Change in foreign currency translation (1,167) (1,167)
Change in minimum pension liability (1,410) (1,410)
--------
Comprehensive income 9,272
Cash dividends declared, $0.22 per share (2,414) (2,414)
Stock options exercised, 95,400 shares (1,480) 2,188 708
Proceeds from share sales, 39,579 shares (523) 1,343 820
Performance stock award expense (243) (243)
Performance stock issuances, 19,427
Stock repurchase program, 231,153 shares (5,061) (5,061)
Other stock purchases, 3,563 shares (84) (84)
Tax benefit of stock options exercised 465 465
-------- -------- -------- -------- --------
Balance at August 31, 1999 33,968 (6,500) 132,015 (5,257) 154,226
Net income 18,056 18,056
Change in foreign currency translation (5,199) (5,199)
Change in minimum pension liability 2,180 2,180
--------
Comprehensive income 15,037
Cash dividends declared, $0.22 per share (2,407) (2,407)
Stock options exercised, 21,500 shares (199) 463 264
Proceeds from share sales, 70,832 shares (271) 1,582 1,311
Stock repurchase program, 77,085 shares (1,337) (1,337)
Tax benefit of stock options exercised 88 88
-------- -------- -------- -------- --------
Balance at August 31, 2000 $ 33,586 $ (5,792) $147,664 $ (8,276) $167,182
======== ======== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements
30
<PAGE> 31
CONSOLIDATED INCOME STATEMENT
Robbins & Myers, Inc. and Subsidiaries
($ in thousands, except per share data)
<TABLE>
<CAPTION>
Years ended August 31,
2000 1999 1998
--------- --------- ---------
<S> <C> <C> <C>
Sales $ 406,714 $ 400,142 $ 436,474
Cost of sales 266,480 263,976 277,761
--------- --------- ---------
Gross profit 140,234 136,166 158,713
SG&A expenses 88,594 89,403 93,148
Amortization 8,077 7,660 7,670
Other (9) 5,815 (2,247)
--------- --------- ---------
Income before interest and income taxes 43,572 33,288 60,142
Interest expense 13,531 13,752 12,821
--------- --------- ---------
Income before income taxes and minority interest 30,041 19,536 47,321
Income tax expense 10,513 6,647 16,091
Minority interest 1,472 1,040 0
--------- --------- ---------
Net income $ 18,056 $ 11,849 $ 31,230
========= ========= =========
Net income per share:
Basic $ 1.65 $ 1.08 $ 2.83
========= ========= =========
Diluted $ 1.53 $ 1.06 $ 2.43
========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements
31
<PAGE> 32
CONSOLIDATED CASH FLOW STATEMENT
Robbins & Myers, Inc. and Subsidiaries
($ in thousands)
<TABLE>
<CAPTION>
Years Ended August 31,
2000 1999 1998
--------- --------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 18,056 $ 11,849 $ 31,230
Adjustments to reconcile net income to net cash
and cash equivalents provided by operating activities:
Depreciation 16,293 16,861 15,846
Amortization 8,077 7,660 7,670
Deferred taxes (3,434) (2,447) 3,493
Asset impairment charges 0 1,400 0
Performance stock awards 0 (243) 581
Changes in operating assets and liabilities - excluding the effects of
acquisitions:
Accounts receivable (10,212) (310) (320)
Inventories (9,054) 11,067 (495)
Other current assets 5,675 (7,844) (1,164)
Other assets 4,895 1,138 (1,902)
Accounts payable 7,500 (3,640) (985)
Accrued expenses and other liabilities (1,756) 3,972 (5,380)
--------- --------- ---------
Net cash and cash equivalents provided by operating activities 36,040 39,463 48,574
INVESTING ACTIVITIES:
Capital expenditures, net of nominal disposals (19,842) (11,612) (23,020)
Purchase of GMM Pfaudler and Chemineer de Mexico (261) (5,344) 0
Purchase of Flow Control Equipment and Technoglass 0 0 (112,306)
--------- --------- ---------
Net cash and cash equivalents used by investing activities (20,103) (16,956) (135,326)
FINANCING ACTIVITIES:
Proceeds from debt borrowings 12,731 25,599 248,382
Payments of long-term debt (18,347) (39,996) (160,102)
Retirement of SAR's and other financing costs 0 0 (1,359)
Proceeds from sale of common stock 1,075 1,528 2,728
Purchase of common stock and convertible subordinated notes (6,646) (5,145) (3,994)
Dividends paid (2,407) (2,414) (2,385)
--------- --------- ---------
Net cash and cash equivalents (used) provided by financing activities (13,594) (20,428) 83,270
--------- --------- ---------
Increase (decrease) in cash and cash equivalents 2,343 2,079 (3,482)
Cash and cash equivalents at beginning of year 8,901 6,822 10,304
--------- --------- ---------
Cash and cash equivalents at end of year $ 11,244 $ 8,901 $ 6,822
========= ========= =========
</TABLE>
See Notes to Consolidated Financial Statements
32
<PAGE> 33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Robbins & Myers, Inc. and Subsidiaries
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
Consolidation
The consolidated financial statements include accounts of the Company and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated upon consolidation. All of the Company's operations are conducted in
the fluids management industry.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.
Accounts Receivable
Accounts receivable relate primarily to customers located in North America and
Western Europe and are concentrated in the specialty chemical, pharmaceutical
and oil and gas markets. To reduce credit risk, the Company performs credit
investigations prior to accepting an order and, when necessary, requires letters
of credit to insure payment.
Inventories
Inventories are stated at the lower of cost or market determined by the last-in,
first-out ("LIFO") method in the U.S. and the first-in, first-out ("FIFO")
method outside the U.S.
Goodwill and Other Intangible Assets
Goodwill is the excess of the purchase price paid over the value of net assets
of businesses acquired. The carrying value of goodwill is reviewed quarterly if
the facts and circumstances suggest that it may be impaired. If the review
indicates that goodwill is impaired, as determined by the undiscounted cash flow
method, it will be reduced to its estimated recoverable value.
Amortization is calculated on the straight-line basis using the
following lives:
Patents 14 to 17 years
Non-compete agreements 3 to 5 years
Financing costs 5 years
Acquisition costs 20 to 40 years
Goodwill 20 to 40 years
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation expense is
recorded over the estimated useful life of the asset on the straight-line method
using the following lives:
Land improvements 20 years
Buildings 45 years
Machinery and equipment 3 to 15 years
33
<PAGE> 34
The Company's normal policy is to expense repairs and improvements made
to capital assets as incurred. In limited circumstances, betterments are
capitalized and amortized over the estimated life of the new asset and any
remaining value of the old asset is written off. Repairs to machinery and
equipment must result in an addition to the useful life of the asset before the
costs are capitalized.
Foreign Currency Accounting
Gains and losses resulting from the settlement of a transaction in a currency
different from that used to record the transaction are charged or credited to
net income when incurred. Adjustments resulting from the translation of non-U.S.
financial statements into U.S. dollars are recognized in accumulated other
comprehensive income or loss for all non-U.S. units.
Product Warranties
The Company recognizes a product warranty liability based on the historical
relationship of warranty claims to net sales.
Revenue Recognition
The Company recognizes revenue at the time of title passage to the Company's
customer.
Income Taxes
Income taxes are provided for all items included in the Consolidated Income
Statement regardless of the period when such items are reported for income tax
purposes. Deferred income taxes reflect the net effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
The Company's policy is to provide U.S. income taxes on non-U.S. income
when remitted to the U.S. The Company does not provide U.S. income taxes on the
remaining undistributed non-U.S. income, as it is the Company's intention to
maintain its investments in these operations.
Consolidated Cash Flow Statement
Cash and cash equivalents consist of working cash balances and temporary
investments having an original maturity of 90 days or less.
Fair Value of Financial Instruments
The following methods and assumptions were used by the Company in estimating the
fair value of financial instruments:
Cash and cash equivalents - The amounts reported approximate market
value.
Long-term debt - The market value of the Company's debt is $173,000,000
at August 31, 2000 and $187,000,000 at August 31, 1999. These amounts
are based on the terms, interest rates and maturities currently
available to the Company for similar debt instruments.
Foreign exchange contracts - The amounts reported are estimated using
quoted market prices for similar instruments.
34
<PAGE> 35
Common Stock Plans
Common stock plans involving the issuance of stock options are accounted for as
noncompensatory plans. Common stock plans involving the issuance of a variable
number of shares based on performance are accounted for as compensatory plans.
New Accounting Pronouncements
The Financial Accounting Standards Board issued Statement No. 133, Accounting
for Derivative Instruments and Hedging Activities and The Securities Exchange
Commission issued Staff Accounting Bulletin No. 101, Revenue Recognition. These
pronouncements are not required to be adopted by the Company until its fiscal
year 2001. The Company anticipates no material impact from adopting these
pronouncements.
Reclassifications
Certain prior year amounts are reclassified to conform with the current year
presentation.
NOTE 2 - BUSINESS ACQUISITIONS
On July 19, 1999, the Company purchased additional shares of GMM Pfaudler
Limited, an Indian Corporation, ("GMM") for $3,744,000. These additional shares
increased the Company's ownership from 40% to 51% and results in the Company
controlling GMM. Therefore, the Company consolidated GMM into its financial
statements from that date and recorded a minority interest for the remaining 49%
owners' share of GMM. The Company's interest in GMM was previously recorded
under the equity method.
On June 30, 1999, the Company purchased 51% of Chemineer de Mexico,
S.A. de C.V. ("Chemineer de Mexico"), a Mexican corporation and its licensee in
Mexico for $1,600,000. On December 31, 1999, the Company purchased an additional
16.3% of Chemineer de Mexico for $261,000. The Company consolidates the results
of Chemineer de Mexico and records a minority interest for the remaining owners'
share. The remaining 32.7% of Chemineer de Mexico will be purchased in 2 equal
increments on December 31, 2000 and 2001 at prices based upon the earnings of
Chemineer de Mexico.
On December 1, 1998, the Universal Glasteel Equipment ("UGE")
partnership agreement with Universal Process Equipment, Inc. ("UPE") was amended
so that the Company appoints the President, approves budgets, and approves major
decisions with respect to UGE. The amendment results in the Company controlling
UGE. Therefore, the Company consolidated UGE into its financial statements from
that date and recorded a minority interest for UPE's share of UGE. The Company's
interest in UGE was previously recorded under the equity method. The Company's
ownership share of UGE did not change as a result of the amendments.
35
<PAGE> 36
On December 19, 1997, the Company acquired all of the outstanding
capital stock of Flow Control Equipment, Inc. ("FCE") for $109,300,000 in cash
(or approximately $106,030,000 after application of available FCE cash at
closing). FCE supplies a broad line of products for use in artificial lift
applications in the oil and gas exploration and production markets, including
rod guides, wellhead equipment and valves. FCE also supplies closures and valves
for gas transmission and distribution applications.
Following are the unaudited pro forma consolidated results of
operations of the Company assuming the acquisition of FCE had occurred at the
beginning of the respective period. In preparing the pro forma data adjustments
have been made to the historical financial information. These are primarily
amortization and depreciation relating to the purchase price allocation,
interest cost related to financing the transaction and adjustments to the
corporate cost allocations from FCE's former parent.
<TABLE>
<CAPTION>
1998
--------
(In thousands, except per share amounts)
<S> <C>
Sales $451,481
Net income 31,754
Basic net income per share 2.88
Diluted net income per share 2.47
</TABLE>
On December 5, 1997, the Company acquired all of the outstanding
capital stock of Technoglass S.r.L. ("Technoglass") for $8,058,000 in cash and
notes. Technoglass supplies glass-lined storage and reactor vessels and related
equipment and is located near Venice, Italy.
The operating results of the acquired businesses are included in
consolidated operating results since the dates of each acquisition.
36
<PAGE> 37
NOTE 3 - BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
ACCOUNTS RECEIVABLE 2000 1999
--------- ---------
(In thousands)
<S> <C> <C>
Allowances for doubtful accounts $ 1,726 $ 1,688
========= =========
</TABLE>
<TABLE>
<CAPTION>
INVENTORIES
2000 1999
--------- ---------
(In thousands)
<S> <C> <C>
FIFO:
Finished products $ 20,366 $ 18,586
Work in process 15,965 12,292
Raw materials 29,275 28,154
--------- ---------
65,606 59,032
LIFO reserve, U. S. Inventories (5,510) (5,285)
--------- ---------
$ 60,096 $ 53,747
========= =========
Non-U.S. inventories at FIFO $ 30,759 $ 27,783
========= =========
</TABLE>
<TABLE>
<CAPTION>
OTHER INTANGIBLE ASSETS
2000 1999
--------- ---------
(In thousands)
<S> <C> <C>
Patents and trademarks $ 2,071 $ 2,392
Non-compete agreements 5,382 5,538
Financing costs 2,721 3,243
Acquisition costs 2,869 3,304
Pension intangible 2,734 2,570
Other 1,160 1,759
---------- ----------
$ 16,937 $ 18,806
========= =========
Accumulated amortization of goodwill and other
intangible assets $ 36,083 $ 28,195
========= =========
</TABLE>
<TABLE>
<CAPTION>
PROPERTY, PLANT AND EQUIPMENT
2000 1999
--------- ---------
(In thousands)
<S> <C> <C>
Land and improvements $ 10,584 $ 11,709
Buildings 44,168 42,724
Machinery and equipment 152,371 142,387
--------- ---------
207,123 196,820
Less accumulated depreciation 91,719 79,551
--------- ---------
$ 115,404 $ 117,269
========= =========
</TABLE>
37
<PAGE> 38
<TABLE>
<CAPTION>
ACCRUED EXPENSES
2000 1999
-------- --------
(In thousands)
<S> <C> <C>
Salaries, wages and payroll taxes $ 9,386 $ 8,233
Customer advances 6,154 3,972
Pension benefits 4,900 4,794
U.S. other post retirement benefits 2,000 2,000
Warranty costs 8,332 9,863
Accrued interest 4,408 4,615
Income taxes 4,406 2,783
Plant closure 836 2,530
Other 16,059 16,145
-------- --------
$ 56,481 $ 54,935
======== ========
</TABLE>
<TABLE>
<CAPTION>
OTHER LONG-TERM LIABILITIES
2000 1999
-------- --------
(In thousands)
<S> <C> <C>
German pension liability $ 23,511 $ 28,448
U.S. other postretirement benefits 12,478 13,640
U.S. pension liability 4,158 8,689
Italy long term tax liability 3,458 0
Casualty insurance reserves 1,241 1,008
Deferred research grants 1,405 1,631
Other 6,883 5,102
-------- --------
$ 53,134 $ 58,518
======== ========
</TABLE>
NOTE 4 - INCOME STATEMENT INFORMATION
<TABLE>
<CAPTION>
OTHER
2000 1999 1998
-------- -------- --------
(In thousands)
<S> <C> <C> <C>
Plant closure costs $ 409 $ 4,769 $ 0
Other termination costs 0 1,600 0
Equity income 0 (554) (2,247)
Gain on sale of building (918) 0 0
UGE long-term receivable write-down 500 0 0
-------- -------- --------
$ (9) $ 5,815 $ (2,247)
======== ======== ========
</TABLE>
In the fourth quarter of fiscal 2000, the Company recorded a charge of
$500,000 to reduce a long-term receivable related to Universal Glasteel
Equipment ("UGE"), which is 50% owned by the Company and 50% owned by Universal
Process Equipment, Inc ("UPE"). The charge is due to weakness in the used
glass-lined reactor and storage vessel markets served by UGE.
In fiscal 1999, due to the downturn in the Company's Energy Systems
business segment, the Company analyzed its capacity requirements for these
products. As a result, on February 10, 1999, the Company recorded a charge of
$4,200,000 for the closure and relocation of the Company's Fairfield,
California, manufacturing operations. The facility manufactured power sections
and down-hole pumps. Production was
38
<PAGE> 39
transferred to the Company's manufacturing facility near Houston, Texas, which
manufactures similar products. The closure and relocation consolidated all power
section and down-hole pump manufacturing into one facility. The transfer of
manufacturing was completed by March 31, 2000. The Fairfield facility was sold
in July 2000 resulting in a pretax gain of $918,000. Certain machinery and
equipment was also sold in fiscal year 2000 at amounts approximating the written
down estimated fair values. The $4,200,000 charge was composed of the following:
<TABLE>
<CAPTION>
(In thousands)
--------------
<S> <C>
Asset write-downs:
Land and building to be sold, $800 estimated fair value $ 600
Machinery and equipment to be scrapped, $200 estimated fair value 800
------
Total asset write-downs 1,400
Exit costs:
Employee related costs:
Severance, 50 Fairfield employees 300
Pay to stay costs and other employee costs 500
Environmental costs related to closure of facility 1,300
Holding costs of land and building until sold and other 700
------
Total exit costs 2,800
------
$4,200
======
</TABLE>
The asset write-downs were determined based on recent sales of similar
assets.
Following is a progression of the exit cost liabilities related to the
Fairfield plant closure:
<TABLE>
<CAPTION>
Holding
Employee Environmental costs and
related costs costs other Total
-------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Liability recorded Feb 1999 $ 800 $ 1,300 $ 700 $ 2,800
Payments made (72) (53) (402) (527)
------- ------- ------- -------
Liability at August 31, 1999 728 1,247 298 2,273
Payments made (780) (411) (246) (1,437)
Change in estimate 52 0 (52) 0
------- ------- ------- -------
Liability at August 31, 2000 $ 0 $ 836 $ 0 $ 836
======= ======= ======= =======
</TABLE>
Due to ongoing monitoring requirements, the remaining liability for
environmental costs is expected to be paid over a period of five to ten years.
The Company incurred additional expenses relating to the Fairfield
plant closure of $409,000 in fiscal 2000 and $569,000 in fiscal 1999. These
costs were for employee transfers, equipment relocation and training of new
employees at the Texas facility.
39
<PAGE> 40
In the second quarter of fiscal 1999, the Company recorded termination
costs of $400,000 unrelated to the closure of the Fairfield facility. In the
fourth quarter of fiscal, 1999 the Company recorded an additional $1,200,000 in
severance and early retirement benefit costs to reduce its overhead cost
structure, primarily at its Moyno and Chemineer business units. The reduction in
employment levels at Chemineer was due to lower sales resulting from lower
capital spending within the specialty chemical markets served by Chemineer. The
reduction in employment at Moyno was due to process changes within the
manufacturing operations and a reduction in the overhead cost structure. These
changes will reduce operating costs by approximately $1,200,000 annually and
position these business units to achieve long-term profitability targets. All of
these benefits have been paid as of August 31, 2000 with no changes in estimates
made.
MINIMUM LEASE PAYMENTS
Future minimum payments, by year and in the aggregate, under non-cancellable
operating leases with initial or remaining terms of one year or more consisted
of the following at August 31, 2000:
(In thousands)
--------------
2001 $ 2,192
2002 1,652
2003 1,086
2004 254
2005 152
Thereafter 102
-------
$ 5,438
=======
Rental expense for all operating leases in 2000, 1999 and 1998 was
approximately $2,914,000, $3,347,000 and $3,289,000, respectively.
NOTE 5 - CASH FLOW STATEMENT INFORMATION
In 2000, the Company recorded the following non-cash investing and financing
transactions: $500,000 increase in other intangibles and common stock,
$6,500,000 increase in deferred tax assets, $1,500,000 increase in accrued
liabilities and $5,000,000 increase in other long term liabilities related to a
tax election made in Italy to allow for the tax deductibility of goodwill and
$88,000 increase in common stock and decrease in income tax payable related to
the tax benefits of stock options exercised.
In 1999, the Company recorded the following non-cash investing and
financing transactions: $1,400,000 asset impairment charges, $700,000 increase
in goodwill, $2,800,000 increase in deferred tax assets and $3,500,000 increase
in accrued liabilities related to the acquisition of FCE and $465,000 increase
in common stock and decrease in income tax payable related to the tax benefits
of stock options exercised.
In 1998, the Company recorded the following non-cash investing and financing
transactions: $1,782,000 increase in goodwill and long-term debt related to the
acquisition of Technoglass S.r.L. and $1,739,000 increase in common stock and
decrease in income tax payable related to the tax benefits of stock options
exercised.
40
<PAGE> 41
Supplemental cash flow information consisted of the following:
<TABLE>
<CAPTION>
2000 1999 1998
--------- -------- ---------
(in thousands)
<S> <C> <C> <C>
Interest paid $ 13,738 $ 14,723 $ 10,650
Taxes paid 8,456 8,812 12,366
</TABLE>
NOTE 6 - LONG-TERM DEBT
<TABLE>
<CAPTION>
2000 1999
-------- --------
(in thousands)
<S> <C> <C>
Senior debt:
Revolving credit loan $ 13,085 $ 21,198
Senior notes 100,000 100,000
Other 5,088 5,074
6.50% Convertible subordinated notes 59,691 65,000
-------- --------
Total debt 177,864 191,272
Less current portion 1,341 121
-------- --------
$176,523 $191,151
======== ========
</TABLE>
The Company's Bank Credit Agreement ("Agreement") provides that the
Company may borrow on a revolving credit basis up to a maximum of $150,000,000.
All outstanding amounts under the Agreement are due and payable on November 25,
2002. Interest is variable based upon formulas tied to LIBOR or prime, at the
Company's option, and is payable at least quarterly. At August 31, 2000, the
interest rate for all amounts outstanding was 5.45%. The outstanding amount is
primarily an Italian Lira based borrowing in Italy. Indebtedness under the
Agreement is unsecured, except for guarantees by the Company's U.S.
subsidiaries, the pledge of the stock of the Company's U.S. subsidiaries and the
pledge of the stock of certain non-U.S. subsidiaries. At August 31, 2000, the
Company has available borrowings of $95,000,000 under the Agreement.
The Company has $100,000,000 of Senior Notes ("Senior Notes") issued in
two series. Series A in the principal amount of $70,000,000 has an interest rate
of 6.76% and is due May 1, 2008, and Series B in the principal amount of
$30,000,000 has an interest rate 6.84% and is due May 1, 2010. Interest is
payable semi-annually on May 1 and November 1.
The above agreements have certain restrictive covenants including
limitations on cash dividends, treasury stock purchases and capital expenditures
and minimum requirements for interest coverage and leverage ratios. The amount
of cash dividends and treasury stock purchases, other than in relation to stock
option exercises, the Company may incur in each fiscal year is restricted to the
greater of $2,500,000 or 50% of the Company's consolidated net income for the
immediately preceding fiscal year, plus a portion of any unused amounts from the
preceding fiscal year.
The Company has $59,691,000 of 6.50% Convertible Subordinated Notes due
2003 ("Subordinated Notes"). The Subordinated Notes are due on September 1,
2003, and bear interest at 6.50%, payable semi-annually on March 1 and September
1 and are convertible into common stock at a rate of $27.25 per share. Holders
may convert
41
<PAGE> 42
at any time until maturity and the Company may call for redemption at a price
ranging from the current price of 102.17% to 100% in fiscal 2003 and thereafter.
The Notes are subordinated to all other indebtedness of the Company.
Aggregate principal payments of long-term debt, for the five years
subsequent to August 31, 2000, are as follows:
(In thousands)
--------------
2001 $ 1,341
2002 472
2003 13,089
2004 60,834
2005 728
2006 and thereafter 101,400
--------
Total $177,864
========
NOTE 7 - RETIREMENT BENEFITS
The Company sponsors two defined contribution plans covering most U.S. salaried
employees and certain U.S. hourly employees. Contributions are made to the plans
based on a percentage of eligible amounts contributed by participating
employees. The Company also sponsors several defined benefit plans covering all
U.S. employees and certain non-U.S. employees. Benefits are based on years of
service and employees' compensation or stated amounts for each year of service.
The Company's funding policy is consistent with the funding requirements of
applicable regulations. At August 31, 2000 and 1999, pension investments
included 311,700 shares of the Company's common stock.
In addition to pension benefits, the Company provides health care and
life insurance benefits for certain of its retired U.S. employees. The Company's
policy is to fund the cost of these benefits as claims are paid.
Retirement and other post-retirement plan costs are as follows:
<TABLE>
<CAPTION>
Pension Benefits
-----------------------------------------------
2000 1999 1998
------- ------- -------
(In thousands)
<S> <C> <C> <C>
Service cost $ 3,547 $ 3,733 $ 3,854
Interest cost 7,165 7,415 7,060
Expected return on plan assets (6,388) (6,214) (6,367)
Amortization of prior service cost 557 552 521
Amortization of transition obligation (118) (137) (138)
Recognized net actuarial (gains)losses (126) 545 (72)
------- ------- -------
Net periodic benefit cost $ 4,637 $ 5,894 $ 4,858
======= ======= =======
Defined contribution cost $ 950 $ 917 $ 1,011
======= ======= =======
</TABLE>
42
<PAGE> 43
<TABLE>
<CAPTION>
Other Benefits
-------------------------------------------
2000 1999 1998
------ ------ -------
(In thousands)
<S> <C> <C> <C>
Service cost $ 220 $ 250 $ 99
Interest cost 1,533 1,456 1,238
Net amortization 330 253 419
------ ------ ------
Net periodic benefit cost $2,083 $1,959 $1,756
====== ====== ======
</TABLE>
The funded status and amounts recorded in the balance sheet are as follows:
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
------------------------------- -------------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
(In thousands)
<S> <C> <C> <C> <C>
Change in benefit obligation:
Beginning of year $ 119,736 $ 115,683 $ 20,401 $ 17,103
Service cost 3,547 3,733 220 250
Interest cost 7,165 7,415 1,533 1,456
Plan amendments 0 2,022 0 3,093
Currency exchange rate impact (6,480) (82) 0 0
Settlements/curtailments 0 (4,122) 0 0
Actuarial (gains)losses (2,268) 3,912 1,731 1,078
Benefit payments (9,140) (8,825) (2,762) (2,579)
--------- --------- --------- ---------
End of year $ 112,560 $ 119,736 $ 21,123 $ 20,401
========= ========= ========= =========
Change in plan assets:
Beginning of year $ 77,912 $ 77,440 $ 0 $ 0
Actual return 10,488 9,026 0 0
Company contributions 6,562 3,021 2,762 2,579
Settlements/curtailments 0 (2,750) 0 0
Benefit payments (9,140) (8,825) (2,762) (2,579)
--------- --------- --------- ---------
End of year $ 85,822 $ 77,912 $ 0 $ 0
========= ========= ========= =========
Funded status $ (26,738) $ (41,824) $ (21,123) $ (20,401)
Unrecognized net actuarial losses(gains) (4,601) 1,758 4,117 2,043
Unrecognized transition obligation (1,016) 1,016 0 0
Unamortized prior service cost 2,721 2,686 2,528 2,718
--------- --------- --------- ---------
Amount recognized $ (29,634) $ (36,364) $ (14,478) $ (15,640)
========= ========= ========= =========
Recorded as follows:
Accrued expenses $ (4,900) $ (4,794) $ (2,000) $ (2,000)
Accrued liabilities (27,669) (37,137) (12,478) (13,640)
Intangible assets 2,734 2,570 0 0
Accumulated other comprehensive loss 201 2,997 0 0
--------- --------- --------- ---------
$ (29,634) $ (36,364) $ (14,478) $ (15,640)
========= ========= ========= =========
Deferred tax liability on accumulated other
comprehensive loss $ (70) $ (686) $ 0 $ 0
========= ========= ========= =========
</TABLE>
43
<PAGE> 44
Pension plans with accumulated ("ABO") and projected ("PBO") benefit
obligations in excess of plan assets:
2000 1999
-------- --------
(In thousands)
Accumulated benefit obligations $ 64,623 $ 98,941
Projected benefit obligation 66,228 104,395
Plan assets 35,408 61,116
In 2000 and 1999, $24,180,000 and $29,962,000, respectively, of the
unfunded ABO and $25,785,000 and $32,272,000, respectively, of the unfunded PBO
relate to the Company's pension plan for its German operation. Funding of
pension obligations is not required in Germany.
Actuarial weighted average assumptions used to determine plan costs and
liabilities are as follows:
<TABLE>
<CAPTION>
Pension Benefits Other Benefits
-------------------- ------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average assumptions:
Discount rate 7.00 % 7.00 % 7.00 % 7.00 %
Expected return on plan assets 9.00 9.00 N/A N/A
Rate of compensation increase 5.50 5.50 N/A N/A
Health care cost Increase N/A N/A 6.00 6.00
</TABLE>
The assumed health care trend rate has a significant effect on the
amounts reported for health care benefits. A one percentage point change in
assumed health care rate would have the following effects:
Increase Decrease
-------- --------
(in thousands)
Service and interest cost $ 91 $ (85)
Postretirement benefit obligation 1,097 (1,032)
44
<PAGE> 45
NOTE 8 - INCOME TAXES
Deferred income taxes reflect the net effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.
<TABLE>
<CAPTION>
DEFERRED ASSETS AND LIABILITIES 2000 1999
------- -------
(In thousands)
<S> <C> <C>
Assets:
Postretirement benefit obligations $ 5,781 $ 6,073
Advance payments 5,000 0
U.S. credit carryforward 1,084 1,800
Book depreciation in excess of tax depreciation 723 883
Other liabilities 827 1,792
Inventory allowances 1,538 1,989
Warranty reserve 2,952 3,416
Insurance reserve 1,012 912
Pension benefits 1,149 2,997
Other items 4,348 3,483
------- -------
24,414 23,345
Less valuation allowance 1,084 1,468
------- -------
23,330 21,877
Liabilities:
Tax depreciation in excess of book depreciation 7,050 6,708
Goodwill and purchased asset basis differences 4,933 6,840
Other items 2,467 2,883
------- -------
14,450 16,431
------- -------
Net deferred tax benefit $ 8,880 $ 5,446
======= =======
</TABLE>
<TABLE>
<CAPTION>
EXPENSE 2000 1999 1998
-------- -------- --------
(In thousands)
<S> <C> <C> <C>
Current:
U.S. federal $ 4,002 $ (536) $ 6,186
Non-U.S 9,570 6,244 6,348
U.S. state 375 (193) 64
-------- -------- --------
13,947 5,515 12,598
Deferred:
U.S. federal 1,028 522 3,214
Non-U.S (4,558) 355 (257)
U.S. state 96 255 536
-------- -------- --------
(3,434) 1,132 3,493
-------- -------- --------
$ 10,513 $ 6,647 $ 16,091
======== ======== ========
Tax included in minority interest $ 838 $ 535 $ 0
======== ======== ========
Non U.S. pretax income $ 14,946 $ 18,361 $ 18,449
======== ======== ========
</TABLE>
45
<PAGE> 46
A summary of the differences between the effective income tax rate
attributable to operations and the statutory rate is as follows:
<TABLE>
<CAPTION>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
U.S. statutory rate 35.0% 35.0% 35.0%
U.S. state income taxes, net of U.S. federal tax benefit 1.9 2.8 2.0
Benefit of realization of non-U.S. loss carryforwards 0 (3.7) (3.0)
Foreign Sales Corporation (1.5) (2.4) (1.4)
Non U.S. taxes .5 1.1 0.0
Other items - net (.9) 1.2 1.4
----- ----- -----
35.0% 34.0% 34.0%
===== ===== =====
</TABLE>
NOTE 9 - COMMON STOCK
The Company sponsors a long-term incentive stock plan to provide for the
granting of stock based compensation to officers and other key employees. In
addition, the Company sponsors stock option and stock compensation plans for
non-employee directors. Under the plans, the stock option price per share may
not be less than the fair market value as of the date of grant. For officers and
other key employees outstanding grants become exercisable over a three year
period, while options for non-employee directors are immediately vested.
Proceeds from the sale of stock issued under option arrangements are credited to
common stock. The Company makes no charges or credits against earnings with
respect to options.
Summaries of amounts issued under the stock option plans are presented
in the following tables.
STOCK OPTION ACTIVITY
<TABLE>
<CAPTION>
Weighted-Average
Stock Option Price Per
Options Share
---------- ----------------
<S> <C> <C>
Outstanding at September 1, 1997 858,800 $ 15.85
Granted 170,000 26.32
Exercised (165,800) 9.41
Canceled (23,333) 32.51
---------- ---------
Outstanding at August 31, 1998 839,667 18.85
Granted 165,500 25.16
Exercised (95,400) 7.41
Canceled (5,500) 37.50
---------- ---------
Outstanding at August 31, 1999 904,267 21.11
Granted 192,800 21.04
Exercised (21,500) 12.24
Canceled (61,667) 25.76
---------- ---------
Outstanding at August 31, 2000 1,013,900 $ 20.81
========== =========
</TABLE>
46
<PAGE> 47
EXERCISABLE STOCK OPTIONS AT YEAR-END
1998 534,389
1999 577,434
2000 669,933
SHARES AVAILABLE FOR GRANT AT YEAR-END
1998 1,499,500
1999 1,334,000
2000 1,141,700
COMPONENTS OF OUTSTANDING STOCK OPTIONS AT AUGUST 31, 2000
<TABLE>
<CAPTION>
Weighted-
Range of Average Weighted-
Exercise Number Contract Life Average
Price Outstanding in Years Exercise Price
- ------------- ----------- ------------- --------------
<S> <C> <C> <C>
$ 4.63-$17.50 322,600 3.06 $10.02
20.88- 39.50 691,300 8.19 25.65
- ------------- ----------- ---------------- --------------
$ 4.63-$39.50 1,013,900 6.55 $20.81
============= =========== ================ ==============
</TABLE>
COMPONENTS OF EXERCISABLE STOCK OPTIONS AT AUGUST 31, 2000
<TABLE>
<CAPTION>
Range of Weighted-
Exercise Number Average
Price Exercisable Exercise Price
- ------------- ----------- --------------
<S> <C> <C>
$ 4.63-$17.50 322,600 $10.02
20.88- 39.50 347,333 28.66
- ------------- ----------- --------------
$ 4.63-$39.50 669,933 $19.68
============= =========== ==============
</TABLE>
The Company also sponsors a long-term incentive stock plan. Under this
plan selected participants receive performance units which convert into a
variable number of restricted shares based on a three year measurement of how
favorably the total return on Company shares compares to the total shareholder
return of the Russell 2000 Company Group ("Group"). The restricted shares earned
range from 75% to 200% of the performance units awarded. The 75% threshold is
earned when the Company's return is at the 50th percentile of total shareholder
return of the Group and 200% is earned when the Company's return is at the 80th
percentile or greater. No restricted shares are earned if the Company's return
is less than the median return of the Group. Restricted shares earned under the
program are issued to the participants at the end of the three year measurement
period and are subject to forfeit if the participant leaves the employment of
the Company within the following two years.
For the three year performance period ended August 31, 1996, restricted
shares of 19,427 and 15,313 were issued in 1999 and 1998, respectively. For the
three year performance period ended August 31, 1999 no shares were earned. In
fiscal year 2000, 62,000 performance units were awarded for the performance
period ending August 31, 2002 with a weighted average fair value at the date of
grant of $23.50. No units have been earned as of August 31, 2000, and no expense
has been recorded.
47
<PAGE> 48
Total compensation expense recognized in the income statement for all
stock based awards was $0, ($243,000) and $646,000 for the years ended August
31, 2000, 1999, and 1998, respectively.
For purposes of pro forma disclosure as required by Statement of
Financial Accounting Standard No. 123, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information is as follows:
<TABLE>
<CAPTION>
2000 1999 1998
---------- ---------- ----------
(In thousands, except per share data)
<S> <C> <C> <C>
Pro forma net income $ 17,194 $ 10,808 $ 30,367
Pro forma net income per share:
Basic 1.57 0.99 2.75
Diluted 1.46 0.99 2.37
</TABLE>
The effects of providing pro forma disclosure are not indicative of the
value of future options until the new rules are applied to all outstanding
nonvested awards.
Pro forma information regarding net income and net income per share is
required by SFAS No. 123, and has been determined as if the Company had
accounted for its stock options granted subsequent to August 31, 1995 under the
fair value method of that Statement. The fair value for these options was
estimated at the date of grant using a Black-Scholes model with the following
weighted-average assumptions:
<TABLE>
<CAPTION>
2000 1999 1998
------------- ------------- ------------
<S> <C> <C> <C>
Expected volatility of common stock 34.70 % 35.60 % 32.80 %
Risk free interest rate 6.00 6.25 5.61
Dividend yield .75 .75 .75
Expected life of option 6.90 yrs 6.90 yrs 6.90 yrs
Fair value at grant date $10.49 $11.45 $11.10
</TABLE>
Option valuation models, such as the Black-Scholes model, were
developed for use in estimating the fair value of traded options which have no
vesting restrictions and are freely transferable. In addition, option valuation
models require the input of highly subjective assumptions including the expected
stock price volatility. Because the Company's options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, existing models do not provide a reliable single measure
of the fair value of its stock options.
48
<PAGE> 49
NOTE 10 - NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted net income
per share:
<TABLE>
<CAPTION>
2000 1999 1998
------- ------- -------
(In thousands, except per share amounts)
<S> <C> <C> <C>
Numerator:
Basic:
Net income $18,056 $11,849 $31,230
Effect of dilutive securities:
Convertible debt interest 2,438 2,535 2,535
------- ------- -------
Income attributable to diluted shares $20,494 $14,384 $33,765
======= ======= =======
Denominator:
Basic:
Weighted average shares 10,946 10,930 11,032
Effect of dilutive securities:
Convertible debt 2,297 2,385 2,385
Dilutive options and
restricted shares 173 220 489
------- ------- -------
Diluted 13,416 13,535 13,906
======= ======= =======
Net income per share:
Basic: $ 1.65 $ 1.08 $ 2.83
Diluted: $ 1.53 $ 1.06 $ 2.43
</TABLE>
NOTE 11 - BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION
The Company's operations are aggregated into two reportable business segments:
Process Systems and Energy Systems. The Process Systems segment provides a wide
range of systems, parts and services for process applications in the specialty
chemical, pharmaceutical, agri-chemical, wastewater treatment, food and beverage
and pulp and paper industries. The products and services relate to glass-lined
reactor systems and storage vessels, fluoropolymer products and accessories,
mixing and turbine agitation equipment and progressing cavity pump products. The
Energy Systems segment provides products and services for oil and gas
exploration and production applications. The products and services relate to
power sections for directional drilling applications, progressing cavity pumps
used in artificial lift applications, wellhead equipment, pipeline closures, rod
guides and valves.
The Company evaluates performance and allocates resources based on
Income before Interest and Taxes ("IBIT"). Identifiable assets by business
segment include all assets directly identified with those operations. Corporate
assets consist mostly of cash and intangible assets. The accounting policies of
the reportable segments are the same as those described in the summary of
significant accounting policies except that the Company accounts for U.S.
inventory on a First-In, First-Out (FIFO) basis at the segment level compared to
a Last In, First-Out (LIFO) basis at the consolidated level.
49
<PAGE> 50
The following tables provide information about the reportable segments.
<TABLE>
<CAPTION>
2000 1999 1998
--------- --------- ---------
(In thousands)
<S> <C> <C> <C>
Unaffiliated Customer Sales:
Process Systems (1) $ 318,569 $ 335,648 $ 355,411
Energy Systems (2) 88,145 64,494 81,063
--------- --------- ---------
Total $ 406,714 $ 400,142 $ 436,474
========= ========= =========
Intersegment Sales:
Process Systems (1) $ 1,954 $ 1,515 $ 523
Energy Systems (2) 0 0 0
Corporate and Eliminations (1,954) (1,515) (523)
--------- --------- ---------
Total $ 0 $ 0 $ 0
========= ========= =========
Depreciation and Amortization:
Process Systems (1) $ 16,481 $ 16,223 $ 17,318
Energy Systems (2) 7,005 7,233 5,416
Corporate and Eliminations 884 1,065 782
--------- --------- ---------
Total $ 24,370 $ 24,521 $ 23,516
========= ========= =========
IBIT:
Process Systems (1) $ 36,455 (3) $ 42,001 (3) $ 49,502
Energy Systems (2) 16,130 (4) 1,097 (4) 20,089
Corporate and Eliminations (9,013) (9,810) (9,449)
--------- --------- ---------
Total $ 43,572 $ 33,288 $ 60,142
========= ========= =========
Identifiable Assets:
Process Systems (1) $ 337,953 $ 337,037 $ 335,654
Energy Systems (2) 135,278 130,479 140,435
Corporate and Eliminations 22,448 26,336 24,919
--------- --------- ---------
Total $ 495,679 $ 493,852 $ 501,008
========= ========= =========
Capital Expenditures:
Process Systems (1) $ 15,102 $ 8,011 $ 15,647
Energy Systems (2) 4,660 3,462 7,345
Corporate and Eliminations 80 139 28
--------- --------- ---------
Total $ 19,842 $ 11,612 $ 23,020
========= ========= =========
</TABLE>
50
<PAGE> 51
Information about the Company's operations in different geographical
regions is presented below. The Company's primary operations are in the U.S. and
Europe. Sales are attributed to countries based on the location of the customer.
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
(In thousands)
<S> <C> <C> <C>
Sales (1) and (2):
United States $211,329 $214,624 $230,587
Europe 101,548 116,120 126,534
Other North America 48,916 33,385 47,014
South America 13,508 16,961 15,133
Asia 31,413 19,052 17,206
-------- -------- --------
$406,714 $400,142 $436,474
======== ======== ========
Identifiable Assets:
United States $310,798 $309,258
Europe 106,060 107,011
Other North America 31,983 27,020
South America 4,077 4,184
Asia 20,313 20,154
Corporate 22,448 26,225
-------- --------
$495,679 $493,852
======== ========
</TABLE>
(1) Includes the operations of acquisitions from the respective dates of
their acquisition: GMM-July 19, 1999, Chemineer de Mexico-June 30,
1999, UGE-December 1, 1998, Technoglass, S.r.L.-December 5, 1997, and
Tycon, S.p.A.-May 2, 1997.
(2) Includes the operations of Flow Control Equipment, Inc. from the date
of its acquisition - December 19, 1997.
(3) Fiscal year 2000 includes a $500,000 charge related to Universal
Glasteel Equipment, Inc., and fiscal year 1999 includes $1,200,000 of
one-time severance and early retirement costs for fixed cost reductions
at Moyno and Chemineer.
(4) Includes charges of $409,000 and $4,769,000 in fiscal year 2000 and
1999, respectively, for the closure of the Fairfield, California
manufacturing facility. Fiscal year 2000 includes a $918,000 gain on
the sale of the Fairfield facility.
51
<PAGE> 52
NOTE 12 - QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
QUARTERLY DATA (UNAUDITED)
2000 Quarters
----------------------------------------------------------
1st 2nd 3rd 4th (1) Total
------- ------- -------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Sales $93,499 $95,770 $104,303 $113,142 $406,714
Gross profit 31,452 33,806 37,085 37,891 140,234
IBIT 8,465 9,310 12,277 13,520 43,572
Income before income taxes
and minority interest 5,218 5,991 8,799 10,033 30,041
Net income 3,066 3,431 5,374 6,185 18,056
Net income per share:
Basic $0.28 $0.31 $0.49 $0.56 $1.65
Diluted 0.27 0.30 0.45 0.51 1.53
Weighted average common shares:
Basic 10,945 10,938 10,948 10,951 10,946
Diluted 13,519 13,451 13,424 13,326 13,416
</TABLE>
<TABLE>
<CAPTION>
1999 Quarters
----------------------------------------------------------
1st 2nd (3) 3rd 4th (4) Total
------- ------- -------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Sales $98,266 $94,876 $103,829 $103,171 $400,142
Gross profit 33,502 31,683 34,850 36,131 136,166
IBIT 9,675 3,771 10,283 9,559 33,288
Income before income taxes
and minority interest 6,135 157 7,108 6,136 19,536
Net income 4,049 (302) 4,416 3,686 11,849
Net income per share:
Basic $ 0.37 $(0.03) $ 0.40 $ 0.34 $ 1.08
Diluted 0.34 (0.03) (2) 0.37 0.32 1.06
Weighted average common shares:
Basic 10,935 10,914 10,938 10,934 10,930
Diluted 13,593 10,914 (2) 13,521 13,521 13,535
</TABLE>
(1) The fourth quarter includes a $918,000 gain on the sale of the
Company's Fairfield, CA facility, and a one time charge of $500,000
related to Universal Glasteel Equipment, Inc.
(2) The effect of diluted securities was antidilutive; therefore, they were
excluded. This causes the sum of quarters not to total the year.
(3) The second quarter includes a one-time charge of $4,600,000, primarily
for closing the Company's Fairfield, CA plant and transferring
production to a similar plant near Houston, TX.
(4) The fourth quarter includes severance and early retirement benefits of
$1,200,000 at Moyno and Chemineer.
52
<PAGE> 53
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
53
<PAGE> 54
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 is incorporated herein by
reference to the Company's Proxy Statement for its Annual Meeting of
Shareholders on December 13, 2000, except for certain information concerning the
executive officers of the Company which is set forth in Part I of this Report.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated herein by
reference to the Company's Proxy Statement for its Annual Meeting of
Shareholders on December 13, 2000.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is incorporated herein by
reference to the Company's Proxy Statement for its Annual Meeting of
Shareholders on December 13, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item 13 is incorporated herein by
reference to the Company's Proxy Statement for its Annual Meeting of
Shareholders on December 13, 2000.
54
<PAGE> 55
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
The following consolidated financial statements of Robbins &
Myers, Inc. and its subsidiaries are at Item 8 hereof.
Consolidated Balance Sheet - August 31, 2000 and 1999.
Consolidated Income Statement -
Years ended August 31, 2000, 1999, and 1998.
Consolidated Shareholders' Equity Statement -
Years ended August 31, 2000, 1999, and 1998.
Consolidated Cash Flow Statement -
Years ended August 31, 2000, 1999, and 1998
Notes to Consolidated Financial Statements.
(a) (2) FINANCIAL STATEMENT SCHEDULE
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable, or not
required, or because the required information is included in the consolidated
financial statements or notes thereto.
(a) (3) EXHIBITS. See INDEX to EXHIBITS.
(b) REPORTS ON FORM 8-K. During the quarter ended August 31, 2000,
the Company did not file any reports on Form 8-K.
55
<PAGE> 56
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Robbins & Myers, Inc. has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on this 21st
day of November, 2000.
ROBBINS & MYERS, INC.
BY /s/ Gerald L. Connelly
------------------------------
Gerald L. Connelly
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of Robbins
& Myers, Inc. and in the capacities and on the date indicated:
<TABLE>
<CAPTION>
- ------------------------------------------------- ------------------------------------- -------------------------------
NAME TITLE DATE
- ------------------------------------------------- ------------------------------------- -------------------------------
<S> <C> <C>
/s/ Gerald L. Connelly Director, President and November 21, 2000
- ------------------------------------ Chief Executive Officer
Gerald L. Connelly
/s/ Kevin J. Brown Vice President and Chief November 21, 2000
- ------------------------------------ Financial Officer
Kevin J. Brown (Principal Financial Officer)
/s/ Thomas J. Schockman Corporate Controller November 21, 2000
- ------------------------------------ (Principal Accounting
Thomas J. Schockman Officer)
*Maynard H. Murch, IV Chairman Of Board November 21, 2000
*Robert J. Kegerreis Director November 21, 2000
*Thomas P. Loftis Director November 21, 2000
*William D. Manning, Jr. Director November 21, 2000
*Jerome F. Tatar Director November 21, 2000
*John N. Taylor, Jr. Director November 21, 2000
</TABLE>
*The undersigned, by signing his name hereto, executes this Report on
Form 10-K for the year ended August 31, 2000 pursuant to powers of attorney
executed by the above-named persons and filed with the Securities and Exchange
Commission.
/s/ Gerald L. Connelly
-------------------------------
Gerald L. Connelly
Their Attorney-in-fact
56
<PAGE> 57
Report of Independent Auditors
Shareholders and Board of Directors
Robbins & Myers, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Robbins & Myers,
Inc. and Subsidiaries as of August 31, 2000 and 1999, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended August 31, 2000. Our audits also included
the financial statement schedule listed in the Index at Item 14(a). These
financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 Robbins & Myers,
Inc. and Subsidiaries at August 31, 2000 and 1999, and the consolidated results
of their operations and their cash flows for each of the three years in the
period ended August 31, 2000, in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
/s/ Ernst & Young LLP
Dayton, Ohio
October 2, 2000
57
<PAGE> 58
<TABLE>
<CAPTION>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
- --------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
----------------------------
ADDITIONS
- --------------------------------------------------------------------------------------------------------------------------------
Balance at Charged to Charged to Balance
DESCRIPTION Beginning Costs and Other Accounts- Deductions - at End
of Period Expenses Describe Describe of Period
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended August 31, 2000:
Allowances and reserves deducted from assets:
Uncollectable accounts receivable $1,688 $498 $0 $460 (1) $1,726
Inventory obsolescence 10,273 1,304 0 2,512 (2) 9,065
Other reserves:
Warranty claims 9,863 749 (450)(4) 1,830 (3) 8,332
Restructuring liabilities 2,273 0 0 1,437 (5) 836
Current & L-T insurance reserves 2,355 2,007 1,564 (6) 2,798
Year Ended August 31, 1999:
Allowances and reserves deducted from assets:
Uncollectable accounts receivable $1,539 $578 $0 $429 (1) $1,688
Inventory obsolescence 10,832 979 0 1,538 (2) 10,273
Other reserves:
Warranty claims 6,888 1,245 3,500 (7) 1,770 (3) 9,863
Restructuring liabilities 0 2,800 0 527 (5) 2,273
Current & L-T insurance reserves 2,693 1,396 352 (8) 2,086 (6) 2,355
Year Ended August 31, 1998:
Allowances and reserves deducted from assets:
uncollectable accounts receivable $1,097 $901 $291 (7) $750 (1) $1,539
Inventory obsolescence 7,096 1,822 2,484 (7) 570 (2) 10,832
Other reserves:
Warranty claims 3,301 2,058 3,500 (7) 1,971 (3) 6,888
Restructuring liabilities 807 0 0 807 (5) 0
L-T insurance reserves 3,628 2,771 0 3,706 (6) 2,693
</TABLE>
Note (1) Represents accounts receivable written off against the reserve.
Note (2) Inventory items scrapped and written off against the reserve.
Note (3) Warranty cost incurred applied against the reserve.
Note (4) Reduction of warranty accrual due to warranty claim settlement.
Note (5) Spending against restructuring reserve.
Note (6) Spending against casualty reserve.
Note (7) Amount due to acquisition of Flow Control Equipment, Inc. and
Technoglass S.r.L.
Note (8) In 1999 reclassified to include current and long-term portions.
58
<PAGE> 59
<TABLE>
<S> <C> <C>
(3) ARTICLES OF INCORPORATION AND BY-LAWS:
3.1 Amended Articles of Incorporation of Robbins
& Myers, Inc. were filed as Exhibit 3.1 to
the Company's Report on Form 10-Q for the
quarter ended February 28, 1998 *
3.2 Code of Regulations of Robbins & Myers, Inc.
was filed as Exhibit 3.2 to the Company's
Report on Form 10-Q for the quarter ended
February 28, 1995 *
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY
HOLDERS, INCLUDING INDENTURES:
4.1 Indenture relating to $65,000,000 Convertible
Subordinated Notes due 2003, with Star Bank, N.A. ,
as Trustee, dated September 1, 1996 was filed as
Exhibit 4.1 to the Company's Annual Report on Form
10-K dated August 31, 1996 *
4.2 $200,000,000 Amended and Restated Credit Agreement dated
January 8, 1999 among Robbins & Myers, Inc.,
the lenders named herein, Bank One, Dayton, N.A. as
Administrative Agent, NationsBank, N.A. as Documentation
and Syndication Agent, The Bank of Nova Scotia, as
Issuing Bank and ABN Amro N.V., as Issuing Bank
was filed as Exhibit 4.1 to the Company's Report on
Form 10-Q for the Quarter Ended February 28, 1999 *
4.3 First Amendment dated as of February 24, 1999 (the "First
Amendment") to the Amended and Restated Credit
Agreement dated January 8, 1999 was filed as Exhibit 4.2
to the Company's Report of Form 10-Q for the Quarter
Ended February 28, 1999 *
4.4 Pledge and Security Agreement between Robbins & Myers, Inc.
and Bank One, Dayton, N.A., dated November 26, 1996
was filed as Exhibit 4.3 to the Company's Annual Report
on Form 10-K for the year ended August 31, 1996 *
4.5 Form of $100 million senior note agreement dated May
1, 1998 was filed as exhibit 4.1 to the Company's
Annual Report on Form 10-Q for the quarter ended May
31, 1998 *
</TABLE>
59
<PAGE> 60
<TABLE>
<S> <C> <C>
(10) MATERIAL CONTRACTS:
10.1 Robbins & Myers, Inc. Pension Plan (As
Amended and Restated Effective as of
October 1, 1989) was filed as Exhibit 10.3
to the Company's Annual Report on Form 10-K
for year ended August 31, 1990 *
10.2 First Amendment to Supplement One to the
Robbins & Myers, Inc. Pension Plan dated
October 22, 1990 was filed as Exhibit 10.4 to
the Company's Annual Report on Form 10-K for
the year ended August 31, 1990 *
10.3 Amendments to the Robbins & Myers, Inc. Pension
Plan dated March 5, 1991, December 16, 1992, and
two additional amendments both dated
September 30, 1993 were filed as Exhibit 10.4
to the Company's Annual Report on Form 10-K for
the year ended August 31, 1993 *
10.4 Robbins & Myers, Inc. Employee Savings
Plan as amended through August 31, 2000 +
10.5 Robbins & Myers, Inc. Executive Supplemental Retirement Plan
adopted February 2000 and Amendment No. 1 to such
Plan adopted August 2000 +
10.6 Robbins & Myers, Inc. Executive Supplemental Pension Plan
adopted July 2000 +
10.7 Form of Indemnification Agreement between
Robbins & Myers, Inc., and each director of
the Company was filed as Exhibit 10.11 to the
Company's Report on Form 10-K for the
year ended August 31, 1993 *
</TABLE>
60
<PAGE> 61
<TABLE>
<S> <C> <C>
10.8 Robbins & Myers, Inc. 1994 Directors Stock
Compensation Plan was filed as Exhibit 10.13
to the Company's Report on Form 10-K for the
year ended August 31, 1994 *
10.9 Robbins & Myers, Inc. 1994 Long-Term Incentive
Stock Plan as amended was filed as Exhibit 10.11
to the Company's Report on Form 10-K for the
year ended August 31, 1996 *
10.10 Robbins & Myers, Inc. 1995 Stock Option Plan for
Non-Employee Directors was filed as
Exhibit 10.12 to the Company's Report on
Form 10-K for the year ended August 31, 1996 *
10.11 Robbins & Myers, Inc. Senior Executive Annual Cash
Bonus Plan was filed as Exhibit 10.13 to the
Company's Report on Form 10-K for the year
ended August 31, 1996 *
10.12 Salary Continuation Agreement between Robbins &
Myers, Inc. and Gerald L. Connelly, dated
February 19, 1999 was filed as Exhibit 10.1 to
the Company's Report on Form 10-Q for the
Quarter Ended February 28, 1999 *
10.13 Robbins & Myers, Inc. 1999 Long-Term Incentive Stock Plan
was filed as Exhibit 4.3 to the Company's
Registration Statement on Form S-8
(No. 333-35856) *
</TABLE>
<TABLE>
<S> <C>
(21) SUBSIDIARIES OF THE REGISTRANT:
21.1 Subsidiaries of Robbins & Myers, Inc. +
</TABLE>
61
<PAGE> 62
<TABLE>
<S> <C> <C>
(23) CONSENTS OF EXPERTS AND COUNSEL
23.1 Consent of Ernst & Young LLP +
(24) POWER OF ATTORNEY
24.1 Powers of Attorney of any person who
signed this Report on Form 10-K on
behalf of another pursuant to a
Power of attorney +
(27) 27.1 Financial Data Schedule -- Year ended August 31, 2000 +
</TABLE>
"+" Indicates Exhibit is being filed with this Report.
"*" Indicates that Exhibit is incorporated by reference in this Report
from a previous filing with the Commission.
62
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>2
<FILENAME>l85073aex10-4.txt
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<PAGE> 1
EXHIBIT 10.4
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
(REVISED AND RESTATED EFFECTIVE JANUARY 1, 1996)
<PAGE> 2
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I - NAME, PURPOSE AND HISTORY OF PLAN ............................................................. 1
ARTICLE II - DEFINITIONS AND CONSTRUCTION ................................................................. 1
Section 2.01. Definitions .................................................................... 1
Section 2.02. Construction ................................................................... 5
ARTICLE III - PARTICIPATION ............................................................................... 6
Section 3.01. Eligibility to Participate ..................................................... 6
Section 3.02. Election to Participate ........................................................ 7
ARTICLE IV - CONTRIBUTIONS ................................................................................ 7
Section 4.01. Amount of Participant's Contributions .......................................... 7
Section 4.02. Limitations on Basic Contributions ............................................. 7
Section 4.03. Suspension of Contributions .................................................... 8
Section 4.04. Payment of Basic Contributions to Trustee ...................................... 9
Section 4.05. Employer Matching Contributions ................................................ 9
Section 4.06. Limitations on Contributions For Nondiscrimination Testing Purposes ............ 10
Section 4.07. Maximum Annual Additions ....................................................... 14
ARTICLE V - TRUST AGREEMENT; INVESTMENT FUNDS
AND PARTICIPANT INVESTMENT ELECTIONS ........................................... 17
Section 5.01. Trust Agreement ................................................................ 17
Section 5.02. Investment Funds ............................................................... 17
Section 5.03. Allocation and Reallocation of Contributions Among Investment Funds ............ 18
Section 5.04. Fees and Expenses .............................................................. 18
Section 5.05. Exclusive Benefit and Funding Policy ........................................... 18
Section 5.06. Special Rules Relating to Certain Participants Subject to Section 16(b) ........ 18
ARTICLE VI - PARTICIPANT ACCOUNTS ......................................................................... 19
Section 6.01. Establishment of Accounts ...................................................... 19
Section 6.02. Adjustment of Participants' Accounts ........................................... 19
ARTICLE VII - VESTING; DISTRIBUTION OF ACCOUNTS ........................................................... 20
Section 7.01. Vesting ........................................................................ 20
Section 7.02. Distribution Upon Termination of Employment .................................... 20
Section 7.03. Designation of Beneficiary ..................................................... 21
Section 7.04. Manner and Timing of Distributions ............................................. 21
Section 7.05. Years of Service ............................................................... 23
Section 7.06. One Year Break in Service ...................................................... 23
ARTICLE VIII - WITHDRAWALS AND LOANS ...................................................................... 24
Section 8.01. Withdrawal of Supplemental Contributions ....................................... 24
Section 8.02. Withdrawal of After-Tax Contributions .......................................... 24
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 8.03. Withdrawals After Age 59-1/2 ................................................... 24
Section 8.04. Hardship Withdrawals ........................................................... 24
Section 8.05. Source of Funds for Withdrawals ................................................ 25
Section 8.06. Loans to Participants .......................................................... 26
ARTICLE IX - ADMINISTRATION ............................................................................... 27
Section 9.01. Designation of Fiduciaries ..................................................... 27
Section 9.02. Board .......................................................................... 27
Section 9.03. Corporate Benefits Committee ................................................... 27
Section 9.04. Action of Committee ............................................................ 29
Section 9.05. Trustee ........................................................................ 30
Section 9.06. Employer Records ............................................................... 30
Section 9.07. Indemnification. ............................................................... 30
Section 9.08. Discrimination Prohibited ...................................................... 30
Section 9.09. Representation in Proceedings .................................................. 30
Section 9.10. Time of Delivery ............................................................... 31
ARTICLE X - MISCELLANEOUS ................................................................................. 31
Section 10.01. Rights to Trust Assets ......................................................... 32
Section 10.02. Non-Recommendation of Investment ............................................... 32
Section 10.03. Non-Alienation ................................................................. 32
Section 10.04. Facility of Payment ............................................................ 32
Section 10.05. Unclaimed Benefits ............................................................. 32
ARTICLE XI - TOP-HEAVY PLAN PROVISIONS .................................................................... 33
Section 11.01. Effect of Top-Heavy Status ..................................................... 33
Section 11.02. Additional Definitions ......................................................... 33
Section 11.03. Minimum Benefits ............................................................... 34
Section 11.04. Maximum Benefit Limits ......................................................... 35
ARTICLE XII - AMENDMENT ................................................................................... 35
Section 12.01. General Amendment .............................................................. 35
Section 12.02. Amendment of Vesting Schedule .................................................. 35
ARTICLE XIII - SUSPENSION, DISCONTINUANCE OR TERMINATION .................................................. 36
Section 13.01. Termination or Partial Termination of the Plan ................................. 36
Section 13.02. Termination of the Trust ....................................................... 36
Section 13.03. Discontinuance of Employer Contributions ....................................... 36
ARTICLE XIV - GENERAL ..................................................................................... 37
Section 14.01. Severability ................................................................... 37
Section 14.02. Merger of Plans ................................................................ 37
Section 14.03. Plan Not a Contract of Employment .............................................. 37
Section 14.04. Successors; Reorganizations .................................................... 37
Section 14.05. Expenses ....................................................................... 38
Section 14.06. Controlling Law ................................................................ 38
Section 14.07. Construction ................................................................... 38
Section 14.08. Headings ....................................................................... 38
Section 14.09. Counterparts ................................................................... 38
Section 14.10. Treasury Qualification ......................................................... 38
Section 14.11. Denial of Guaranty ............................................................. 39
SUPPLEMENT A - IRS MODEL DIRECT ROLLOVER REVISIONS ........................................................ 40
SUPPLEMENT B - IRS MODEL SECTION 401(a)17 LIMITATION ...................................................... 41
SUPPLEMENT C - PERIOD OF LIMITED ACTIVITY ................................................................. 42
</TABLE>
<PAGE> 4
CERTIFICATE
I, ___________________ of Robbins & Myers, Inc. and a member of its
Corporate Benefits Committee, hereby certify that the attached document is a
full, true and complete copy of the Robbins & Myers Employee Savings Plan, as
adopted by the Corporate Benefits Committee of Robbins & Myers, Inc., on
________________, 1995, to be effective as of January 1, 1996.
Dated this _____ day of _________, 1995.
-----------------------------
<PAGE> 5
ROBBINS & MYERS. INC.
EMPLOYEE SAVINGS PLAN
ARTICLE I
NAME, PURPOSE AND HISTORY OF PLAN
Robbins & Myers, Inc., an Ohio corporation (the "Company"), has
previously established the Robbins & Myers, Inc. Employee Savings Plan for
Salaried Employees of Chemineer, Edlon, and Pfaudler and the Robbins & Myers,
Inc. Employee Savings Plan (the "Plans"). The Company now restates those plans
in the form of the Robbins & Myers, Inc. Employee Savings Plan ("Plan"),
effective January 1, 1996 (the "Effective Date"). Its purpose is to stimulate
employee savings for financial security on a tax-advantaged basis.
The Plan has been amended and restated to bring it into compliance with
the requirements of the Internal Revenue Code of 1986. The Company intends that
this Plan and the related Trust qualify under all applicable provisions of the
Internal Revenue Code of 1986, as amended ("Code"), and the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and each of the terms of this
Plan and the Trust Agreement shall be so interpreted. This Plan is intended to
be a profit sharing plan with a qualified cash or deferred arrangement meeting
the requirement of Code sections 401(a) and 401(k).
The provisions of the Plan may be modified or supplemented by
Supplements to the Plan. Any such Supplement shall form a part of the Plan as of
its effective date and be attached hereto.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
Section 2.01. Definitions. For purposes of the Plan, unless the
content clearly or necessarily indicates otherwise, the following words and
phrases shall have the meaning set forth in the definitions below:
(a) "Account" shall mean the separate Account or Accounts to be
maintained under the Plan for each Participant as provided in Section 6.02.
(b) "Acquired Business" shall mean one or more plants, units or other
facilities acquired by the Company or any other Employer after the Effective
Date as a going concern.
(c) "Affiliate" shall mean each corporation or unincorporated trade or
business which is a member of either a controlled group of corporations, a group
of trades or businesses under common control, or an affiliated service group
within the meaning of Code sections 414(b), (c) or (m), which includes the
Company, or any other entity required to be aggregated with the Company pursuant
to regulations under Code section 414(o).
(d) "After-Tax Contributions" shall mean contributions by the
Participant pursuant to the Participant's authorization to make regular payroll
deductions from his Compensation pursuant to
1
<PAGE> 6
Section 4.01(b). The term shall be deemed to include amounts contributed as
"Qualified Deposits" under the terms of the Plan in effect prior to January 1,
1985.
(e) "Basic Contributions" shall mean contributions made pursuant to
Section 4.01(a) or (b) and shall include both Pre-Tax Contributions and
After-Tax Contributions.
(f) "Beneficiary" shall mean the person or persons designated on Timely
Notice by a Participant to receive benefits in the event of the Participant's
death, as provided in Section 7.03.
(g) "Board" shall mean the Board of Directors of the Company.
(h) "Committee" shall mean the Corporate Benefits Committee described
in Section 9.01 hereof, which committee shall be the plan administrator for
purposes of ERISA.
(i) "Compensation" shall mean an Employee's total salary or wages from
an Employer before deductions, including annual base pay bonuses, commissions
and overtime and Pre-Tax Contributions hereunder and any other salary reduction
amount under Code section 401(k), but excluding deferred compensation,
contributions by an Employer to this or any other benefit plan, and any other
form of remuneration which is not "compensation" within the meaning of Code
section 415, all as determined in accordance with such rules, regulations or
standards as may be prescribed by the Committee. The maximum annual compensation
that may be taken into account hereunder for any Participant shall be $150,000
or such greater amount as may be permitted pursuant to Code section 401(a)(17).
In determining the compensation of a Participant for purposes of this
limitation, the rules of Code section 414(q)(6) shall apply, except that, in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the Plan Year.
(j) "Effective Date" means January 1, 1996.
(k) "Employee" shall mean any person who is in the employ of an
Employer during periods in which he meets the following conditions:
(i) he is employed by an Employer on its United States payroll;
(ii) he is not in a unit of employees covered by a collective
bargaining agreement, unless such collective bargaining agreement
specifically provides for the application of the Plan to the employees
in such unit; and
(iii) his employment is not in a group which has been excluded by
the Corporate Benefits Committee from participation in the Plan.
The term shall not include persons employed by an Employer at an Acquired
Business unless and until the Corporate Benefits Committee designates the
persons so employed as Employees hereunder.
In addition, any leased employee (within the meaning of Code section
414(n)(2)) of the Employer performing services shall be treated as an Employee
of the Employer. However, contributions or benefits provided by the leasing
organization for any leased employee which are attributable to services
performed for the Employer shall be treated as provided by the Employer. The
preceding sentences shall not apply to any leased employee of the Employer if
(a) leased employees do
2
<PAGE> 7
not constitute more than 20 percent of the Employer's nonhighly compensated
workforce (as defined by reference to Code section 414(q)) and (b) the leased
employee is covered by a money purchase pension plan maintained by the leasing
organization which provides (i) a nonintegrated employer contribution rate for
each participant of at least 10 percent of compensation (ii) full and immediate
vesting and (iii) immediate participation for all employees of the leasing
organization (except for those individuals whose compensation is less than
$1,000 in each Plan Year during the 4-year period ending with the Plan Year).
Notwithstanding any other provisions of the Plan, for purposes of determining
the number or identity of highly compensated employees (within the meaning of
Code section 414(q)), the employees of the Employer shall include all
individuals defined as Employees in this Section 2.01(m).
Notwithstanding the preceding paragraph, a leased employee shall be
deemed to be in a class of employees not eligible to participate in this Plan
unless such participation is required as a condition of the Plan's qualification
under Code section 401(a).
(l) "Employer" shall mean the Company, Chemineer, Inc., Edlon, Inc.,
Pfaudler, Inc. and each other Affiliate which, with the approval of the
Corporate Benefits Committee, adopts this Plan.
(m) "Employer Contributions" shall mean amounts contributed under the
Plan by Employers as provided in Article IV. The term shall also be deemed to
include forfeitures applied to reduce the amount of an Employer's contributions
otherwise due hereunder.
(n) "Employment Commencement Date" shall mean the date on which an
Employee first performs an Hour of Service.
(o) "Highly Compensated Employee" shall mean an individual described in
Code section 414(q) and Section 4.06 of this Plan.
(p) "Hour of Service" shall mean:
(i) Each hour for which the Employee is paid or entitled to
payment, for the performance of duties for the Company or an Affiliate,
during the applicable computation period. These hours shall be credited
to the Employee for the computation period in which the duties were
performed;
(ii) each hour for which the Employee is paid or entitled to
payment by the Company or an Affiliate, either directly or indirectly,
on account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty, and leave of absence, but excluding
payments under a plan maintained solely for the purpose of complying
with workmen's compensation, unemployment compensation, or disability
insurance laws and also excluding payments for medical or medically
related expenses. No more than 501 Hours of Service shall be credited
under this paragraph (ii) for any single computation period whether or
not such period occurs in a single computation period); and
(iii) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Company or an Affiliate:
The same hours of service shall not be credited under clause (i) or clause (ii),
as the case may be, and under clause (iii). Further, no more than 501 Hours of
Service shall be credited for payment of back
3
<PAGE> 8
pay to the extent it is agreed to or awarded for a period of time during which
an Employee did not or would not have performed duties. These Hours shall be
credited to the Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period in which the
award, agreement or payment is made. Hours of Service shall be computed and
credited in accordance with paragraphs (b) and (c) of Section 2530.200b-2 of the
Department of Labor Regulations.
(q) "Investment Fund" means an unsegregated fund established at the
direction of the Committee pursuant to Section 5.02, and invested in securities,
insurance contracts, mutual fund shares or other property of such type and
characteristics as the Committee shall determine.
(r) "Normal Retirement Age" shall mean the date on which the
Participant attains age 65.
(s) "Participant" shall mean an Employee who has satisfied the
requirements of Section 3.01 and has made Basic Contributions under the Plan.
The term shall also include any other person whose interests derived from
participation in a prior plan are transferred or rolled over into the Plan. A
person who has become a Participant hereunder shall continue to be a Participant
until his entire Account has been distributed or forfeited pursuant to the Plan.
(t) "Part-Time Employee" shall mean an Employee who is regularly
scheduled to perform less than 20 Hours of Service per week or whose work
schedule, because of its seasonal or temporary nature, is expected to result in
completion of fewer than 1,000 Hours of Service per year.
(u) "Plan" shall mean the Robbins & Myers, Inc. Employee Savings Plan
for Salaried Employees of Chemineer, Edlon and Pfaudler.
(v) "Plan Year" shall mean the calendar year.
(w) "Pre-Tax Contributions" shall mean amounts contributed by the
Participant's Employer pursuant to the Participant's authorization and direction
under Section 4.01(a) to make such contribution on the Participant's behalf in
lieu of payment of an equal amount directly to the Participant.
(x) "After-Tax Contributions" shall mean amounts contributed as such
under the terms of the Plan as it was in effect prior to the Effective Date.
(y) "Supplemental Contributions" shall mean amounts contributed as
"Special Deposits" under the terms of the plan as it was in effect prior to the
Effective Date.
(z) "Timely Notice" shall mean a notice in writing on a form prescribed
by the Committee and filed at such places and at such reasonable times as shall
be required by the rules of the Committee.
(aa) "Trust" shall mean the trust fund established pursuant to the
provisions of this Plan, as it may be amended from time to time.
(bb) "Trustee" shall mean the Trustee under the Trust.
(cc) "Valuation Date" shall mean each business day.
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<PAGE> 9
Section 2.02. Construction.
(a) Where appearing in this Plan, the masculine shall include the
feminine and the plural shall include the singular, unless the context clearly
indicates otherwise. The words "hereof", "herein", "hereunder", and other
similar compounds of the word "here" shall mean and refer to the entire Plan and
not to any particular section or subsection. Titles of articles and sections are
for reference purposes only.
(b) The Plan is intended to be a qualified profit sharing plan meeting
the requirements of Code section 401(a) and to contain a "qualified cash or
deferred arrangement" meeting the requirements of Code section 401(k), and shall
be interpreted so as to comply with the applicable requirements thereof, where
such requirements are not clearly contrary to the express terms hereof. In all
other respects, the Plan shall be construed and its validity determined
according to the laws of the State of Ohio to the extent such laws are not
preempted by applicable requirements of federal law. In case any provision of
this Plan shall be held illegal or invalid for any reason, such illegality or
invalidity shall not affect the remaining provisions of the Plan, and the Plan
shall be construed and enforced as if said illegal or invalid provisions had
never been included herein.
ARTICLE III
PARTICIPATION
Section 3.01. Eligibility to Participate.
(a) Each Participant in the prior Plans on December 31, 1995 shall
continue as a Participant subject to the terms of the Plan on January 1, 1996 if
he is then an Employee. Each Employee who would have become a Participant under
one of the Prior plans on January 1, 1996 shall become a Participant under this
Plan on January 1, 1996 if he is then an Employee. On or after January 1, 1996,
an Employee, other than a Part-Time Employee, shall be eligible to participate
herein as of the first January 1, April 1, July 1 or October 1 which is at least
90 days after his Employment Commencement Date.
(b) A Part-Time Employee, shall be eligible to participate herein as of
the last day of his "qualifying period". For purposes of this subsection, the
"qualifying period" of a Part-Time Employee shall mean the first
12-consecutive-month period commencing on his Employment Commencement Date or
any anniversary thereof, during which he completes at least 1,000 Hours of
Service.
(c) A former Participant whose employment has terminated and who is
subsequently reemployed as an Employee shall reenter the Plan as a Participant
on the date of his reemployment. If a reemployed Employee was not formerly a
Participant in the Plan, he shall be considered a new Employee and required to
meet the requirements of Section 3.01 to be eligible to participate in the Plan.
Section 3.02. Election to Participate. An Employee may elect to
participate in the Plan by filing his election with his Employer on a Timely
Notice to make Basic Contributions on the Participant's behalf, as provided in
Section 4.01. Such election shall be effective with the January 1, April 1, July
1 or October 1 which next follows the later of (i) the filing of the election or
(ii) the date as of which he shall have become eligible to participate herein as
determined under Section 3.01. Such
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<PAGE> 10
election shall remain in effect so long as the Participant remains an Employee
as defined herein, subject to Sections 4.03 and 8.04 relating to the suspension
of contributions.
ARTICLE IV
CONTRIBUTIONS
Section 4.01. Amount of Participant's Contributions.
(a) Basic Contributions. Subject to the limitations described in
Sections 4.02, 4.06 and 4.07, a Participant may elect to make Pre-Tax Basic
Contributions in any whole percentage from 1 to 12 percent of the Participant's
Compensation. Basic Contributions shall be made by the Participant's Employer in
lieu of payment of an equal amount directly to the Participant as current
compensation, pursuant to authorization by the Participant on a form provided by
the Committee. A Participant's Basic Contributions for a Plan Year may not
exceed the limitation of Code section 402(g). No After-Tax Contributions will be
made under the Plan on or after the Effective Date.
(b) Supplemental Contributions. The Plan does not permit Supplemental
Contributions.
(c) Change in Rate of Contributions. The designated rates of a
Participant's Basic Contributions may be changed as of the first day of any
month following the Company's receipt of Timely Notice, but shall remain in
effect for successive periods of time unless changed.
Section 4.02. Limitations on Basic Contributions.
(a) No Participant shall be permitted to have Basic Contributions made
under the Plan and any other plan maintained by the Employer during any taxable
year in excess of the dollar limitation contained in Code section 402(g) as in
effect at the beginning of such taxable year.
(b) Excess Elective Deferrals under this Plan, plus any income and
minus any losses allocable thereto, may be distributed to the Participant no
later than March 15 of the following year.
(c) Definitions.
(i) "Excess Elective Deferrals" shall mean those Basic
Contributions that are includable in a Participant's gross income under
Code section 402(g) to the extent such Participant's Elective Deferrals
for a taxable year exceed the dollar limitation under such Code
section. Excess Elective Deferrals shall be treated as Annual Additions
under the Plan.
(ii) "Elective Deferrals" with respect to any taxable year, shall
mean, the sum of all employer contributions (including those of another
employer who is not an Employer who has adopted this Plan) made on
behalf of a Participant pursuant to an election to defer under any
qualified cash or deferred arrangement as described in Code section
401(k), any simplified employee pension cash or deferred arrangement as
described in Code section 402(h)(l)(B), any eligible deferred
compensation plan under Code section 457, any plan as described under
Section 501(c) (18), and any employer contributions made on the behalf
of a Participant for the purchase of an annuity contract under Code
section 403(b) pursuant to a salary reduction agreement.
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<PAGE> 11
(d) Determination of income or loss. Excess Elective Deferrals shall be
adjusted for any income or loss up to the date of distribution using the method
described in this subsection or any other method permitted under Treasury
Regulation Section l.402(g)-1(e)(5). The income or loss allocable to Excess
Elective Deferrals is the sum of: (i) income or loss allocable to the
Participant's Basic Contributions for the taxable year multiplied by a fraction,
the numerator of which is such Participant's Excess Elective Deferrals for the
year and the denominator of which is the Participant's Account balance
attributable to Basic Contributions without regard to any income or loss
occurring during such taxable year; and (ii) ten percent (10%) of the amount
determined under (i) multiplied by the number of whole calendar months between
the end of the Participant's taxable year and the date of distribution, counting
the month of distribution if distribution occurs after the 15th of such month.
Section 4.03. Suspension of Contributions.
(a) A Participant's Basic Contributions shall be suspended if any of
the following occurs:
(i) the Participant elects, in the form of a Timely Notice, to
suspend all of his Basic Contributions being made pursuant to Section
4.01;
(ii) the Participant receives a hardship withdrawal under Section
8.04; or
(iii) the Participant fails to qualify as an Employee. (A
Participant on an authorized leave of absence without pay fails to
qualify as an Employee for purposes of this Section.)
Suspensions shall be effective as soon as practicable following such occurrence.
Participants will not be permitted to make up suspended contributions. A
Participant's Basic Contributions shall be suspended for the period described in
Section 8.04(d) following his receipt of a hardship withdrawal.
(b) A Participant whose contributions have been suspended for reasons
other than a Hardship Withdrawal pursuant to Section 8.04 of this Plan may
resume making contributions as of the next January 1, April 1, July 1 or October
1 following his provision of Timely Notice provided that he is then an Employee
as defined herein.
Section 4.04. Payment of Basic Contributions to Trustee . Each Employer
shall periodically (but not less frequently than monthly), remit to the Trustee
(or to the Company, if the Company has remitted to the Trustee) the amounts
withheld from the Compensation of its Employees as Basic Contributions under the
Plan. Such amounts shall be credited to the Accounts of Participants on a
monthly basis.
Section 4.05. Employer Matching Contributions.
(a) Each Employer shall make contributions for each of its eligible
Employees in an amount equal to forty percent (40%) of the Employee's Basic
Contributions up to six percent (6%) of his Compensation that he elects to make
as Basic Contributions and each Employer may contribute, from its current or
accumulated profits (as determined in accordance with generally accepted
accounting principles), on behalf of each Participant (excluding any Participant
who resigned or was dismissed during that year and who is not employed by the
Employers on the last day of that year) an amount, if any, equal to such
percentage (which shall be the same for all Participants) of the Participant's
Basic Contributions for that Plan Year as the Employer shall decide and as shall
be approved by the Corporate Benefits Committee. Amounts forfeited from the
Accounts of Employees of the Employer
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<PAGE> 12
pursuant to Section 7.01 shall be applied to reduce the amount of the Employer's
Matching Contributions otherwise payable hereunder.
(b) Employer Matching Contributions under this subsection shall be made
in "qualifying employer securities" (as defined in Section 407(d)(4) of ERISA)
issued by the Company ("Company Stock"), on or before the due date of the
Company's tax return for the year.
(c) Employer Matching Contributions hereunder are conditioned upon
their deductibility under Code section 404. Notwithstanding any provision herein
to the contrary, to the extent a deduction is disallowed, contributions may be
returned to the Employer within one year after such disallowance.
(d) Employer Matching Contributions shall be forfeited to the extent
they are based on Excess Elective Deferrals under Section 4.02(c), Basic
Contributions that are Excess Contributions or After-Tax Contributions that are
Excess Aggregate Contributions distributed under Section 4.06(h). Any
forfeitures that occur will be used to reduce Employer Matching Contributions
for the next Plan Year.
Section 4.06. Limitations on Contributions For Nondiscrimination
Testing Purposes.
(a) Employer Matching Contributions and Basic Contributions allocated
to the Accounts of Highly-Compensated Employees shall not in any Plan Year
exceed the limits specified in this Section 4.06. The Committee may make the
adjustments authorized in this Section 4.06 to ensure that the limits of
Subsections (b) (the "Actual Deferral Percentage test") and (c) (the "Average
Contribution Percentage test") are not exceeded, regardless of whether such
adjustments affect some Participants more than others. This Section shall be
administered and interpreted in accordance with Code sections 401(k) and 401(m).
(b) The Actual Deferral Percentage of the Highly-Compensated Employees
shall not exceed, in any Plan Year, the greater of:
(i) The Actual Deferral Percentage of all other Participants for
such Plan Year multiplied by 1.25; or
(ii) The lesser of the (A) Actual Deferral Percentage. of all
other Participants for such Plan Year multiplied by two (2) and (B) the
Actual Deferral Percentage of all other Participants for such Plan Year
plus two (2) percentage points, or such lesser amount as the Secretary
of the Treasury shall prescribe to prevent the multiple use of this
alternative limitation with respect to any Highly-Compensated Employee.
(c) The Average Contribution Percentage of the Highly Compensated
Employee shall not exceed, in any Plan Year, the greater of:
(i) The Average Contribution Percentage of all other
Participants for such Plan Year multiplied by 1.25; or
(ii) The lesser of (A) the Average Contribution Percentage of all
other Participants for such Plan Year multiplied by two (2) and (B) the
Average Contribution Percentage of all other Participants for such Plan
Year plus two (2) percentage points, or such lesser amounts as the
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<PAGE> 13
Secretary of the Treasury shall prescribe to prevent the multiple use
of this alternative limitation with respect to any Highly-Compensated
Employee.
(d) The following terms shall have the meanings specified herein for
purposes of this Section 4.06.
(i) Actual Deferral Percentage. The average, for a specified
group of Participants for a Plan Year, of the ratios (calculated
separately for each Participant in such group) of (1) the amount of
Employer contributions actually paid over to the Trust on behalf of
such Participant for the Plan Year to (2) the Participant's
compensation for such Plan Year, as determined under Treasury
Regulation Section 1.401(k)-1(g)(2). For this purpose, Employer
contributions on behalf of any Participant shall include Basic
Contributions, including amounts in excess of the dollar limitation
contained in Section 4.02(g) of the Code described in Section 4.02, but
excluding Basic Contributions that are taken into account in the
Average Contribution Percentage test (provided that the Actual Deferral
Percentage test is satisfied both with and without exclusion of these
Basic Contributions). For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for the failure
to make Basic Contributions shall be treated as a Participant on whose
behalf no Basic Contributions are made.
(ii) Average Contribution Percentage. The average for a
designated group of Employees of the ratios (calculated separately for
each Employee in the group) of (1) the sum of (A) the Employer Matching
Contributions paid and credited to the Account of such Employee for a
Plan Year, and (B) any Basic Contributions which are to be taken into
account for purposes of the Average Contribution Percentage Test, to
(2) such Employee's compensation for such Plan Year, as determined
under Treasury Regulation Section 1.401(k)-1(g)(2). Participant Basic
Contributions may be used in the Average Contribution Percentage test
provided that the Actual Deferral Percentage test is met before the
Basic Contributions are used in the Average Contribution Percentage
test and continues to be met following the exclusion of those
contributions that are used to meet the Average Contribution Percentage
test.
(iii) Highly-Compensated Employee. The term Highly Compensated
Employee shall mean Highly Compensated Active Employees and Highly
Compensated Former Employees.
A Highly Compensated Active Employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (i) received compensation from the
Employer in excess of $75,000 (as adjusted pursuant to Code section
415(d)); (ii) received compensation from the Employer in excess of
$50,000 (as adjusted pursuant to Code section 415(d)) and was a member
of the top paid group for such year; or (iii) was an officer of the
Employer and received compensation during such year that is greater
than 50 percent of the dollar limitation in effect under Code section
415(b)(1)(A). The term Highly Compensated Employee also includes: (i)
Employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and
the Employee is one of the 100 employees who received the most
compensation from the Employer during the determination year; and (ii)
employees who are five percent owners at any time during the look-back
year or determination year.
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<PAGE> 14
If no officer has satisfied the compensation requirement of (iii)
above during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a Highly Compensated
Employee.
For purposes of this Section, the determination year shall be the
Plan Year. The look-back year shall be the twelve-month period
immediately preceding the determination year.
A Highly Compensated Former Employee includes any Employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Employer during the
determination year, and was a Highly Compensated Active Employee for
either the separation year or any determination year ending on or after
the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year,
a family member of either a five percent owner who is an active or
former Employee or a Highly Compensated Employee who is one of the ten
(10) most Highly Compensated Employees ranked on the basis of
compensation paid by the Employer during such year, then the family
member and the five percent owner or top-ten Highly Compensated
Employee shall be aggregated. In such case, the family member and five
percent owner or top-ten Highly Compensated Employee shall be treated
as a single employee receiving compensation and plan contributions or
benefits equal to the sum of such compensation and contributions or
benefits of the family member and five percent owner or top-ten Highly
Compensated Employee. For purposes of this Section, family member
includes the spouse, lineal ascendants and descendants of the Employee
or former Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in
the top-paid group, the top ten Employees, the number of Employees
treated as officers and the compensation that is considered, will be
made in accordance with Code section 414(q) and the regulations
thereunder.
(e) For purposes of determining compliance with the Actual Deferral
Percentage Test and the Average Contribution Percentage test, Basic
Contributions and Employer Matching Contributions must be made before the last
day of the twelve-month period immediately following the Plan Year to which the
contributions relate.
(f) The Committee shall maintain records sufficient to demonstrate
satisfaction of the Actual Deferral Percentage test and the Average Contribution
Percentage test and the amount of Basic Contributions and Employer Matching
Contributions used in such test.
(g) For purposes of determining the Actual Deferral Percentage or
Average Contribution Percentage of a Participant who is a five percent owner or
one of the ten most highly paid Highly Compensated Employees, the Basic
Contributions, Employer Matching Contributions, and Compensation of such
Participant shall include the Basic Contributions, Employer Matching
Contributions, and Compensation for the Plan Year of family members (as defined
in Code section 414(q)(6)). Family members, with respect to Highly Compensated
Employees, shall be disregarded as separate employees in determining the Actual
Deferral Percentages and Average Contribution Percentages of Participants who
are Highly Compensated Employees and Participants who are not Highly Compensated
Employees.
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<PAGE> 15
(h) Treatment of Excess Contributions. If Employer Matching
Contributions or Basic Contributions exceed any of the limits specified in
Subsections 4.06(b) and (c) for a Plan Year, then the Plan Administrator shall
correct such excess in accordance with the provisions of this Subsection (h).
(i) Notwithstanding any other provision of this Plan, unless
Employer Matching Contributions are treated as Qualified Matching
Contributions as provided under Subsection (iv) below, excess
contributions and excess aggregate contributions (as defined in
subsections (ii) and (iii) below) attributable to Basic Contributions,
plus any income and minus any loss allocable thereto, such income or
loss determined and allocated in accordance with Treasury Regulation
Section l.401(k)-l(f)(4)(ii), shall be distributed no later than the
last day of each Plan Year to Participants to whose accounts such
excess contributions and excess aggregate contributions were allocated
for the preceding Plan Year. Employer Matching Contributions based on
such Basic Contributions distributed as excess contributions and excess
aggregate contributions shall be forfeited as provided under Section
4.05(d). Excess contributions and excess aggregate contributions shall
be allocated to Participants who are subject to the family member
aggregation rules of Code section 414(q) (6) in the manner prescribed
by the regulations. If such excess contributions and excess aggregate
contributions are distributed more than 2-1/2 months after the last day
of the Plan Year in which such excess amounts arose, a ten percent
(10%) excise tax will be imposed on the Employer maintaining the Plan
with respect to those amounts. Excess contributions and excess
aggregate contributions shall be treated as Annual Additions under the
plan.
(ii) "Excess contributions" shall mean, with respect to any Plan
Year, the excess of:
(A) The aggregate amount of Employer contributions actually
taken into account in computing the Actual Deferral Percentage of
Highly Compensated Employees for such Plan Year, over
(B) The maximum amount of such contributions permitted by
the Actual Deferral Percentage test (determined by reducing
contributions made on behalf of Highly Compensated Employees in
order of the Actual Deferral Percentages, beginning with the
highest of such percentages).
(iii) "Excess aggregate contributions" shall mean, with respect
to any Plan Year, the excess of:
(A) The aggregate amount of Employer contributions taken
into account in computing the numerator of the Average
Contribution Percentage actually made on behalf of Highly
Compensated Employees for such Plan year, over
(B) The maximum amount of Employer contributions permitted
by the Average Contribution Percentage test (determined by
reducing contributions made on behalf of Highly Compensated
Employees in order of their Contribution Percentages beginning
with the highest of such percentages).
(iv) The Plan Administrator may, in its sole discretion, elect to
treat any portion of the Employer Matching Contributions as Qualified
Matching Contributions to be taken into account for the Actual Deferral
Percentage test to the extent necessary to satisfy the requirements of
this Section 4.06. To the extent Employer Matching Contributions are
treated as Qualified
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<PAGE> 16
Matching Contributions and taken into account for the Actual Deferral
Percentage test, they may not be taken into account for the Average
Contribution Percentage test. To the extent Employer Matching
Contributions are treated as Qualified Matching Contributions they
shall be allocated to Participants' Accounts within the Plan Year to
which they relate and shall be paid to the Trust no later than 12
months after the end of the Plan Year to which they relate.
Section 4.07. Maximum Annual Additions.
(a) The Annual Addition to the Accounts of any Participant for a
Limitation Year, when added to the Annual Additions to his accounts under all
other defined contribution plans (if any) maintained by the Employer, may not
exceed the Maximum Permissible Amount. In addition, in the case of a Participant
who also participates in a defined benefit plan maintained by the Employer, the
Annual Addition for a Limitation Year will, if necessary, be further limited so
that the sum of the Defined Contribution Plan Fraction and the Defined Benefit
Plan Fraction for such Limitation Year does not exceed 1.0.
(b) Definitions. For purposes of this Article, the following
definitions and rules of interpretation shall apply:
(i) Annual Additions. The sum of the following amounts credited
to a Participant's Account for the Limitation Year:
(A) Employer Contributions;
(B) Employee Contributions; and
(C) Forfeitures.
Annual additions shall also include (i) any amounts
allocated to an individual medical account, as defined in Code
section 415(l)(2) which is part of a pension or annuity plan
maintained by an Employer and (ii) amounts derived from
contributions for post-retirement medical benefits allocated to
the separate account of a key employee (as defined in Code
section 419A(d)) under a welfare benefit plan (as defined in Code
section 419(e)) maintained by an Employer.
(ii) Compensation. A Participant's earned income, wages,
salaries, and fees for professional services and other amounts received
for personal service actually rendered in the course of employment with
the Employer maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips and
bonuses), and excluding the following:
(A) Employer contributions to a plan of deferred
compensation which are not includable in the Employee's gross
income for the taxable year in which contributed, or Employer
contributions under a simplified employee pension to the extent
such contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
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<PAGE> 17
(B) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(C) Amounts realized from the sale, exchange, or other
disposition of stock acquired under a qualified stock option; and
(D) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a
compensation reduction agreement) towards the purchase of an
annuity described in Code section 403(b) (whether or not the
amounts are actually excludable from the gross income of the
Employee).
For purposes of applying the limitations of this Article,
Compensation for a Limitation Year is the Compensation actually paid or
includable in gross income during such year.
(iii) Defined Benefit Fraction. A fraction, the numerator of
which is the projected annual benefit of the Participant under all
defined benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of (i) the product
of 1.25 multiplied by the dollar limitation in effect under Code
section 415(b)(1)(A) for such Plan Year, or (ii) the product of 1.4
multiplied by the amount which may be taken into account under Code
section 415(b)(l)(B)with respect to such Participant under the Plan for
such Plan Year.
(iv) Defined Contribution Fraction. A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's accounts
under defined contribution plans (whether or not terminated) maintained
by the Employer for the current and all prior Limitation Years, and the
denominator of which is the sum of the lesser of the following amounts
determined for such limitation Year and all prior Limitation Years of
service with the Employer: (i) the product of 1.25 multiplied by the
dollar limitation in effect under Code section 415(c)(l)(A) for such
Plan Year (determined without regard to Code section 415(c)(6)), or
(ii) the product under Code section 415(c)(1)(B) (or Code section
415(c) (7), if applicable) with respect to the Participant under the
Plan for such Plan Year.
(v) Maximum Permissible Amount. The lesser of thirty thousand
dollars ($30,000) (or, if larger, one-fourth of the dollar limitation
in effect under Code section 415(b)(l)(A)) or twenty-five percent (25%)
of the Participant's Compensation for the Limitation Year.
(vi) Limitation Year. The Plan Year.
(c) In the event that rules set forth in Subsections (a) or (b) would
otherwise be violated after making all possible adjustments under the terms of
any defined benefit plans, then such Employee's benefits under this Plan shall
be reduced by forfeiting a pro rata portion of the Employer Matching
Contribution made with respect thereto and, in the event such return is not
sufficient to eliminate the violation, by returning the Participant's Basic
Contributions together with the earnings thereon and by forfeiting a pro rata
portion of Employer Matching Contributions made with respect thereto. Such
forfeited Employer Matching Contributions shall be held in a suspense account
and used to reduce Employer Matching Contributions to all Participants in the
next Limitation Year.
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ARTICLE V
TRUST AGREEMENT; INVESTMENT FUNDS
AND PARTICIPANT INVESTMENT ELECTIONS
Section 5.01. Trust Agreement. The Company shall enter into a trust
agreement with a corporate trustee selected by the Corporate Benefits Committee
to act as Trustee. The Trustee shall receive all Basic Contributions and all
Employer Matching Contributions and shall hold, manage, administer and invest
the same, reinvest any income, and make distributions in accordance with the
provisions of the Plan and the trust agreement. The trust agreement shall be in
such form and contain such provisions as the Board may deem necessary and
appropriate to effectuate the purposes of the Plan and to qualify the Plan and
the Trust under the Code.
Section 5.02. Investment Funds. The Committee shall establish two or
more Investment Funds and shall advise the Trustee in writing of the types of
investments to be made for each Investment Fund. The Committee may direct that
any such Investment Fund will be invested in one or more insurance contracts or
mutual funds selected by the Committee or may appoint one or more investment
managers to direct the investment of any Investment Fund. The Committee may at
any time add, delete or change the investment medium or investment manager of
any Investment Fund, provided that if such change substantially changes the
characteristics of any Investment Fund, Participants utilizing such Fund shall
be notified and given an opportunity to reallocate their Account balances.
Notwithstanding the foregoing, the Committee shall at all times on and after
September 1, 1995 cause to be maintained an Investment Fund, known as the
Robbins & Myers, Inc. Company Stock Fund," the assets of which shall be invested
in shares of a class of voting common stock issued by the Company, which are
regularly traded on an established securities market and are required to be, and
are, registered under the provisions of Section 12 of the Securities Exchange
Act of 1934, as amended. Notwithstanding the asset character of an Investment
Fund, the Trustee, in its sole discretion, may invest any amount held under the
Fund in cash or cash equivalents pending investment of, or any distribution or
withdrawal from, that fund pursuant to the terms of the Trust Agreement or the
Plan. The Plan shall be administered in compliance with the provisions of
Section 404 (c) of ERISA.
Section 5.03. Allocation and Reallocation of Contributions Among
Investment Funds.
(a) Allocation. On Timely Notice a Participant shall elect to allocate
all of his Basic Contributions and Employer Matching Contributions among the
Investment Funds established pursuant to Section 5.02 in whole multiples of 1
percent of such Contributions. An election under this subsection may be changed
as of any business day but shall remain in effect for successive periods of time
unless changed on Timely Notice. In the event that a Participant fails to direct
the investment of contributions subject to his direction or fails to replace any
directions which may have been suspended or revoked, then such contributions
shall be invested in an Investment Fund designated by the Committee which
invests primarily in securities or other property providing a fixed or
guaranteed rate of return.
(b) Investment Fund Transfers. A Participant may on Timely Notice elect
to transfer his interests in any one or more Investment Funds to other
Investment Funds. Except to the extent that the conditions governing any
Investment Fund (such as a fund investing in guaranteed investment contracts
issued by an insurance company) may limit or prohibit such transfers, such
transfers may be made on any business day. Such election shall be in such form
as the Committee shall determine.
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Section 5.04. Fees and Expenses. Brokerage fees and other direct costs
of investment shall be paid by the Trustee out of that fund of the Trust to
which such cost is attributable. All other costs and expenses of the Plan
including without limitation the Trustee's fees and transfer taxes shall be paid
by the Company.
Section 5.05. Exclusive Benefit and Funding Policy.
(a) All contributions hereunder shall be paid to the Trust and all
property and funds of the Trust allocable to the Plan, including income from
investments and from all other sources, shall be managed solely in the interest
of Participants and their Beneficiaries and for the exclusive purpose of:
(i) providing benefits to Participants and their Beneficiaries;
and
(ii) defraying the reasonable expenses of administering the Plan.
(b) To the extent not specifically set forth in the Plan or Trust, the
Trustee shall establish the funding policy for the Plan and shall consult with
the Committee with respect thereto.
Section 5.06. Special Rules Relating to Certain Participants Subject to
Section 16(b). Notwithstanding any other provision of the Plan, the Plan shall
at all times be administered in a manner that will minimize or eliminate a
Participant's liability to the Company under Section 16(b) of the Securities
Exchange Act of 1934, and the rules, regulations and interpretations thereunder.
ARTICLE VI
PARTICIPANT ACCOUNTS
Section 6.01. Establishment of Accounts. A separate Account shall be
established and maintained in the name of each Participant. To the extent
necessary or appropriate to provide for the proper administration of the Plan,
such Account shall include separate balances for interests derived from Pre-tax
and After-Tax Contributions, Supplemental Contributions and Employer Matching
Contributions and such other separate balances as the Committee shall determine.
As soon as practicable following the end of each Plan Year, the Company shall
provide to each Participant a statement of his Account balances, which may, but
need not, be provided more frequently.
Section 6.02. Adjustment of Participants' Accounts. On, or as soon as
administratively practicable after, each Valuation Date, the Company shall cause
Participants' Accounts to be adjusted, as of that Valuation Date, as follows:
(a) first, by adjusting the balances of the Participant's interests
invested under each of the Investment Funds as of the last preceding Valuation
Date, upward or downward, pro rata, according to the interests so that the
aggregate interests of Participants invested under that Investment Fund will
equal the then "Adjusted Net Worth" (as defined below) of that Investment Fund;
(b) next, by executing the Investment Fund transfer elections made by
each Participant pursuant to the provisions of Section 5.03 that are to be
executed as of that date;
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(c) next, by charging to the proper Accounts of each Participant the
amount of any distributions made to or on account of that Participant pursuant
to the provisions of Articles VII and VIII since the last preceding Valuation
Date and with any cost directly related to any such distribution or loan that
have not been charged previously;
(d) finally, by crediting the proper Accounts of each Participant with
the amount of any contributions made on his behalf or by him pursuant to the
provisions of Article IV that are to be credited as of that date.
The "Adjusted Net Worth" of any Investment Fund as of any Accounting Date means
the then fair market value of the assets held in the Investment Fund, as
determined by the Trustee.
ARTICLE VII
VESTING; DISTRIBUTION OF ACCOUNTS
Section 7.01. Vesting. A Participant's right to the balances credited
to his Basic Contributions Account and his Supplemental and After-Tax
Contributions Accounts, if any, shall at all times be fully vested and
nonforfeitable. A Participant's right to the balance of his Employer Matching
Contributions is subject to the following table:
Number of Completed
Years of Service Forfeitable Percentage
---------------- ----------------------
Less than 1 year 100 percent
at least 1 year but less than 2 years 80 percent
at least 2 years but less than 3 years 60 percent
at least 3 years but less than 4 years 40 percent
at least 4 years but less than 5 years 20 percent
5 years or more 0 percent;
The portion of a Participant's Employer Matching Contributions Account that is
not distributable to him by reason of the provisions of this subsection shall be
forfeited and shall be applied, commencing with the Plan Year next following the
Plan Year during which the Participant first incurs a One Year Break in Service
(as defined in subsection 7.06) to reduce the amount of any Employer Matching
Contributions that would otherwise be made pursuant to subsection 4.05, until
exhausted. Notwithstanding the foregoing provisions of this Section, the
Forfeitable Percentage of an Employee of an Employer who participated in the
Robbins & Myers, Inc. Savings Plan for Salaried Employees of Chemineer, Edlon
and Pfaudler prior to January 1, 1996 shall be determined under the provisions
of Section 12.02 of the Plan.
Section 7.02. Distribution Upon Termination of Employment. When a
Participant's employment with the Company and any Affiliates is terminated for
any reason (except an intercompany transfer between the Company or any Affiliate
and another Affiliate), including death, disability or retirement, the entire
vested balance in such Participant's Account shall be paid at the time and in
the manner specified in Section 7.04. If the termination occurs by reason of the
death of the Participant, or if the Participant dies before the distribution is
completed, distribution shall be made to the Participant's
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Beneficiary. If a Participant terminates employment with the Company and
Affiliates but does not take a distribution under this subsection, his entire
Account shall be invested in the Investment Fund selected by the Committee for
that purpose and shall continue to share in the earnings, gains and losses of
such Investment Fund until distribution has been completed.
Section 7.03. Designation of Beneficiary. A Participant may designate
any person, trust and/or other entity as Beneficiary. Any such designation shall
be in writing and filed with the Committee on the form and in the manner
prescribed by the Committee, and may be revoked or changed at any time by
the-Participant. Notwithstanding the foregoing, in the event that the
Participant has a spouse at the time of his death, such spouse shall be the
Participant's Beneficiary unless (i) such spouse has consented in writing to the
Participant's designation of a different Beneficiary, (ii) such consent
acknowledges the effect of such election and is witnessed by a plan
representative appointed by the Committee or by a notary public, and (iii) the
Participant is survived by a Beneficiary designated as such as described above.
Any such consent shall be irrevocable, but shall be effective only with respect
to the specific Beneficiary designation unless the consent expressly permits
designations by the Participant without any requirement of further consent. In
the event that the Participant is not married at the time of death and either no
valid designation of Beneficiary is on file with the Committee at the date of
death or no designated Beneficiary survives, the Participant's estate shall be
the Beneficiary.
Section 7.04. Manner and Timing of Distributions.
(a) All amounts becoming payable under Section 7.02 shall be paid in
the form of a lump sum cash distribution, provided, however that at the election
of the Participant, distribution of whole shares of Company Stock shall be made
in kind.
(b) Distributions under this Section shall be made as soon as
practicable after the Valuation Date which is coincident with or next follows
the Participant's election to receive his Account.
(c) Notwithstanding the foregoing, if the value of the Participant's
interests exceeds $3,500, no distribution shall be made prior to the
Participant's Normal Retirement Age unless the prior written consent of the
Participant and the Participant's spouse, if any (or if either the Participant
or the spouse has died, the survivor) to the distribution has been obtained by
the Plan Administrator within the period beginning no more than 90 days and
ending no less than 30 days before the date payments are to be made or
commenced. The Plan Administrator shall notify the Participant and the
Participant's spouse of the right to defer any distribution until the
Participant's Normal Retirement Age. Such notification shall include a general
description of the material features of, and an explanation of the relative
values of, the optional forms of benefit under the Plan in a manner that would
satisfy the notice requirements of Code section 417(a)(3), and shall be provided
no less than 30 days and no more than 90 days prior to the date that benefit
payments are to be made or commenced. If the Participant or Beneficiary fails to
consent, distribution shall be made as soon as practicable after the Participant
attains Normal Retirement Age; provided that distribution shall in all events be
completed not later than five (5) years after the date of the Participant's
death. In the event that distribution is deferred, the Participant's entire
Account shall be invested in the Investment Funds selected by the Participant
under Section 5.03.
(d) Notwithstanding any election to the contrary, payment of benefits
to a Participant shall commence no later than the April 1 next following the
close of the calendar year in which he attains age 70-1/2, whether or not the
Participant has retired.
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(e) All distributions required under this Section 7.04 shall be
determined and made in accordance with the provisions of Code section 401(a)(9)
and the regulations issued thereunder, including the minimum distribution
incidental benefit requirement of Section 1.401(a)(9)-2 of the Treasury
Regulations.
(f) Pre-Tax Contributions, Employer Matching Contributions, and income
allocable to each, shall not be distributed to Participants or Beneficiaries
earlier than upon separation from service, death, or disability, or upon the
occurrence of one of the following events:
(i) The termination of the Plan without establishment of a
successor defined contribution plan as such term is defined in Section
1.401(k)-l(d)(3) of the Treasury regulations.
(ii) The disposition by the Company of substantially all of the
assets (within the meaning of Section 401(k)-l(d) (4)(iv)(A) of the
Treasury regulations) used in the trade or business of the Company if
the Company continues to maintain this Plan after the disposition, but
only with respect to Employees who continue employment with the
corporation acquiring such assets.
(iii) The disposition by the Company to an unrelated entity of
the Company's interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code) if the Company continues to maintain this Plan,
but only with respect to Employees who continue employment with such
subsidiary.
(iv) The attainment of age 59-1/2 or, in the case of Pre-Tax
Contributions only, the hardship of the Participant, as described in
Section 8.04.
(g) Notwithstanding the foregoing provisions of this subsection, a
Participant in the Robbins & Myers, Inc. Employee Savings Plan on December 31,
1995 shall have the right to receive a distribution of his account balance as of
December 31, 1995 under subsection 7.02 in 5 substantially equal annual or more
frequent installments if his Distribution Eligibility Date occurs on account of
his retirement on:
(i) a normal retirement date elected by him which must occur on
or after the date on which he attains age 65 years;
(ii) an early retirement date elected by him which must occur on
or after the later of the date on which he both attains age 55 years
and completes at least 10 Years of Service (as defined in subsection
7.06) or the date on which he is first eligible to retire on an early
retirement date under the terms of any defined benefit plan (as defined
in section 414(j) of the Code) that is maintained by an Employer and in
which he is a participant, but prior to the date on which he attains
age 65 years.
Section 7.05. Years of Service. The term "Years of Service" means,
with respect to any employee of Participant, the number of years, including
fractional portions thereof, elapsed since the first date for which he was paid,
or entitled to payment, for the performance of duties for the Employers or
Affiliates, subject to the following:
(a) an employee's or Participant's number of Years of Service for the
period ended on December 31, 1995, shall be equal to his number of "Years of
Service", if any, determined in accordance with the provisions of the Plan as in
effect on that date;
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(b) for purposes of determining the nonforfeitable portion of the
balance of a Participant's Employer Matching Contributions Account accrued prior
to the date he incurs a One Year Break in Service, his number of Years of
Service accrued after 5 consecutive One Year Breaks in Service shall be
disregarded.
(c) if a Participant's employment with the Employers and Affiliates is
terminated and he incurs a One Year Break in Service, he shall not be credited
with service for the period elapsed between the date his employment is
terminated and the date, if any, of his reemployment by the Employers or
Affiliates;
(d) if an employee or Participant does not have a nonforfeitable right
under the Plan to any portion of an Employer Matching Contributions Account
balance, and the number of his consecutive One Year Breaks in Service equals or
exceeds 5, then, his number of Years of Service, if any, accrued prior to such
break shall be disregarded and he shall be considered as a new employee.
Section 7.06. One Year Break in Service . The term "One Year Break in
Service" means, with respect to any employee or Participant, the
12-consecutive-month period commencing on his Distribution Eligibility Date if
he is not paid or entitled to payment for the performance of duties for the
Employers, or the Company Affiliates during that period.
ARTICLE VIII
WITHDRAWALS AND LOANS
Section 8.01. Withdrawal of Supplemental Contributions. Participant
may elect to withdraw, as of any Valuation Date, all or part of any balances
credited to such Participant's Account attributable to Supplemental
Contributions, provided that, in no event shall any Participant have a right
under this Section to withdraw amounts in excess of the amounts actually
contributed as Supplemental Contributions. The minimum withdrawal under this
Section (together with any contemporaneous withdrawal under Section 8.02) shall
be $500.00.
Section 8.02. Withdrawal of After-Tax Contributions. A Participant may
elect to withdraw, as of any Valuation Date, all or part of any balances
credited to such Participant's Account, attributable to After-Tax Contributions;
provided that Supplemental Contributions, if any, have been previously withdrawn
or are withdrawn at the same time; and provided further that in no event shall
any Participant have a right to withdraw amounts in excess of the amounts
actually contributed as After-Tax Contributions. The minimum withdrawal under
this Section (together with any contemporaneous withdrawal under Section 8.01)
shall be $500.00.
Section 8.03. Withdrawals After Age 59-1/2. A Participant who has
attained age 59-1/2 may elect to withdraw, as of any Valuation Date, all or part
of the balances credited to such Participant's Account.
Section 8.04. Hardship Withdrawals.
(a) Prior to the termination of the Participant's employment, upon a
demonstration by the Participant of an immediate and heavy financial need that
cannot be met from other resources that are reasonably available to the
Participant, a Participant shall be permitted, on Timely Notice, to make a
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withdrawal of an amount not exceeding the lesser of (i) the amount needed to
satisfy such need, or (ii) 100% of all balances in the Participant's Account
which are derived from the Participant's Pre-Tax Contributions. Notwithstanding
the foregoing, (i) amounts derived from Employer Matching Contributions may not
be withdrawn pursuant to this Section, and (ii) distributions made pursuant to
this Section may not include any earnings credited on or after January 1, 1989
to the balance in the Participant's Account derived from Pre-Tax Contributions.
(b) or purposes of this Section, "an immediate and heavy financial
need" shall be deemed to exist if the distribution is on account of:
(i) Unreimbursed medical expenses described in Code section
213(d) incurred by the Participant, the Participant's spouse, or any
dependent of the Participant (as defined in Code section 152);
(ii) Costs directly related to the purchase of the principal
residence for the Participant (excluding mortgage payments);
(iii) Payment of tuition and related fees for the next semester
or quarter of post-secondary education for the Participant, his or her
spouse, children or dependents;
(iv) The need to prevent the eviction of the Participant from his
principal residence or foreclosure on the mortgage on the Participant's
principal residence; or
(v) Other events provided for in rulings, notices or other
documents published by the Commissioner of Internal Revenue. The amount
of an immediate and heavy financial need may include amounts necessary
to pay any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution.
(c) In order to demonstrate that a need cannot be met from other
resources, the Participant shall be required to provide such documents or
information as the Committee may require and to certify that the need cannot be
relieved (i) through reimbursement from insurance, (ii) by reasonable
liquidation of assets, (iii) by cessation of Pre-Tax or After-Tax Contributions
under the Plan, or (iv) by other withdrawals under or loans from this or any
other plan or a loan from a commercial lender, on reasonable terms.
(d) Withdrawals under this Section shall be permitted only if the
Participant has first withdrawn all amounts available to him under this or any
other Employer plan and borrowed all amounts available to him under any other
Employer plan. All of the Participant's Contributions to this Plan and
contributions to all other plans maintained by the Employer (except
contributions to welfare benefit plans and mandatory employee contributions to
defined benefit plans) shall be suspended for a period of 12 months following
such withdrawal, and the amount which the Participant may contribute as Pre-Tax
Contributions for the Plan Year following such withdrawal shall not exceed the
amount described in Code section 402(g), reduced by the amount of the
Participant's actual Pre-Tax Contributions for the Plan Year in which the
withdrawal occurred.
(e) Distributions pursuant to this Section shall be made as soon as
administratively feasible after the withdrawal is approved. The minimum
withdrawal under this subsection is $500.00.
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Section 8.05. Source of Funds for Withdrawals. A Participant may
specify which of his Accounts should be charged for any withdrawal under this
Article. Distribution will be made out of the Participant's interests in each of
the Investment Funds in accordance with the proportion of the Participant's
Account then invested in such Fund. Notwithstanding the foregoing provisions of
this Article, any withdrawal by a Participant of an amount held under any group
investment contract held by the Trustee shall be subject to any restrictions on
withdrawals contained in that contract.
Section 8.06. Loans to Participants. On written application of a
Participant, the Corporate Benefits Committee may, if it determines that the
Participant is creditworthy, direct the Trustee to make a loan to him from the
Trust Fund for any purpose set forth in the written loan policies of the
Corporate Benefits Committee. The amount of any loan shall not exceed an amount
equal to the lesser of:
(a) $50,000, reduced by the excess, if any, of:
(i) the highest outstanding balance of loans from the Plan during
the 1-year period ending on the day before the date the loan is made,
over
(ii) the outstanding balance of loans from the Plan on the date
on which the loan is made; or
(b) 50 percent of the amount of the Participant's nonforfeitable
Account balances determined as of the last preceding Accounting Date.
Each such loan shall be evidenced by a written note containing such terms as may
be determined by the Corporate Benefits Committee in a uniform and
nondiscriminatory manner in accordance with written loan procedures adopted by
it. Such terms shall provide that:
(i) interest will be paid on the amount of the loan at a
commercial lender's then prevailing rate for loans of a similar type;
(ii) except in the case of a loan used to acquire a dwelling unit
which, within a reasonable time (determined as of the date the loan is
made) will be utilized as a principal residence of the Participant, the
loan will be repaid within 5 years;
(iii) repayment of the loan will be made in substantially equal
quarterly or more frequent installments over the period of the loan.
The Corporate Benefits Committee shall establish a Loan Account in the name of
each Participant to whom a loan is granted, which Loan Account shall be
periodically adjusted as provided in Article VI. If, on a Participant's
distribution (under Section 7.02), any loan or portion of a loan made to him,
together with the accrued interest thereon, remains unpaid, an amount equal to
such loan or portion thereof, together with the accrued interest thereon, shall
be charged to the Participant's Accounts after all other adjustments required
under the Plan have been made, but before any payment or distribution is made to
any person pursuant to the provisions of Article VII.
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ARTICLE IX
ADMINISTRATION
Section 9.01. Designation of Fiduciaries. The persons designated in
Sections 9.02, 9.03, and 9.05, and the persons they designate to carry out or
help to carry out their duties or responsibilities are fiduciaries under the
Plan and Trust. Each fiduciary has only those duties or responsibilities
specifically assigned to him under the Plan or Trust or delegated to him by
another fiduciary. Each fiduciary may assume that any direction, information or
action of another fiduciary is proper and need not inquire into the propriety of
any such action, direction or information. Except as provided by law, no
fiduciary will be responsible for the malfeasance, misfeasance or nonfeasance of
any other fiduciary. Any fiduciary may participate in the Plan, provided he
otherwise is eligible to do so. Except as permitted by law, no Employee or
director shall receive any compensation from the Plan or Trust for his services
as a fiduciary.
Section 9.02. Board. The Board will appoint the members of the
Corporate Benefits Committee, act on any matter referred by the Corporate
Benefits Committee under subsection 9.03(c) and receive and review reports
submitted periodically by the Corporate Benefits Committee concerning
administration of the Plan and Trust.
Section 9.03. Corporate Benefits Committee.
(a) Designation. The Board will name the members of the Corporate
Benefits Committee and will fix the number of its members.
(b) Purpose. The Corporate Benefits Committee will control and
administer the Plan.
(c) Powers. The Corporate Benefits Committee has all powers necessary
to carry out its purposes, including the following:
(i) administer the Plan in accordance with its terms and
conditions;
(ii) establish the rules, regulations and procedures it finds
necessary or appropriate to discharge its duties;
(iii) adopt or amend the Plan and any trusts or insurance contracts
used to fund the Plan;
(iv) interpret the Plan, including supplying any omissions in
accordance with the intent of the Plan;
(v) decide all questions concerning eligibility of any Employee
to become a Participant;
(vi) compute the amount of benefits and determine to whom such
benefits will be paid;
(vii) authorize or deny the payment of Plan benefits;
(viii) delegate its powers and duties to others as it sees fit,
including:
(A) the preparation and filing of all reports with
governmental agencies;
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(B) the preparation and distribution of booklets,
announcements, reports and descriptions of the Plan to Employees,
as required by law;
(C) the maintenance of all records relating the Plan and
Trust;
(D) the establishment and administration of a uniform claims
procedure; and
(E) the performance of all other duties necessary to
administer the Plan;
(ix) employ those accountants, actuaries, agents, consultants,
physicians and attorneys (who may be counsel to the Company) it finds
necessary, and to receive and evaluate their reports;
(x) review bonding and insurance requirements;
(xi) designate an agent for service of legal process upon the
Plan;
(xii) review and implement long-term planning in developing
modifications of the Plan;
(xiii) establish and enforce the rules, regulations, procedures,
investment policies and investment programs it considers desirable;
(xiv) receive and evaluate monthly, quarterly and annual reports of
Trustees, investment managers and investment advisers;
(xv) review the performance of the Trustees, investment managers
and/or investment advisers at least quarterly;
(xvi) allocate the amount of assets to be managed by each Trustee,
investment manager and investment adviser;
(xvii) accept or reject rollover amounts;
(xviii) establish any accounts called for by the Plan or Trust;
(xix) report at least annually to the Company on the investment
performance of the Trust Fund;
(xx) appoint, remove or replace other fiduciaries including the
Trustee (or insurance company which holds Plan assets), investment
managers or investment advisers;
(xxi) approve the amount of Employer Contributions to be made to
the Plan or approve discontinuance of Employer Contributions to the
Trust Fund;
(xxii) discontinue or terminate the Plan and any trusts or insurance
contracts used to fund the Plan; and
(xxiii) perform any other act or acts necessary to the performance of
its powers and duties;
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(d) Resignation, Removal and Designation of Successor. The Company may
remove any member of the Corporate Benefits Committee at any time. Any member of
the Corporate Benefits Committee may resign at any time by delivering his
written resignation to the Company and the Corporate Benefits Committee. New
members will be named by the Company. Any new member will have the same rights,
powers, privileges, immunities and duties as the other members of the Corporate
Benefits Committee. The Corporate Benefits Committee must promptly notify the
Trustee of any change in its membership.
Section 9.04. Action of Committee. Any act authorized, permitted or
required to be taken by the Corporate Benefits Committee may be taken by a
majority of its members, either by vote at a meeting or in writing without a
meeting. All members must be notified of the proposed action and must have an
opportunity to vote. A majority of the members of the Corporate Benefits
Committee constitutes a quorum. All notices, advices, directions,
certifications, approvals and instructions required or authorized to be given by
the Corporate Benefits Committee must be in writing and signed (a) by a majority
of the members of the Corporate Benefits Committee, (b) by the member or members
of the Corporate Benefits Committee designated as having authority to execute
documents on its behalf or (c) by a person authorized to act for the Corporate
Benefits Committee under subsection 9.03(c)(ix).
Section 9.05. Trustee.
(a) Designation. The Corporate Benefits Committee will appoint the
Trustee.
(b) Powers and Duties. The Trustee has the duties and powers set forth
in the agreement executed by the Company and the Trustee.
Section 9.06. Employer Records. The Corporate Benefits Committee may
inspect the Employer's books and records to determine any fact in connection
with acts to be performed by it under the Plan, or it may rely on the Employer's
statement. If the Corporate Benefits Committee wants any statement, certified,
it may rely on a certification of the Company, Employer or Affiliate, as
appropriate.
Section 9.07. Indemnification. All fiduciaries designated in Section
9.01 other than a bank or trust company or any insurance company acting as a
Trustee and anyone else delegated any power, authority or responsibility under
this Article, have all rights of indemnification provided by law or agreement or
under the Company's Articles of Incorporation, regulations or by-laws. In
addition, the Employer will satisfy any liability actually and reasonably
incurred by all fiduciaries, other than a bank or trust company or an insurance
company acting as Trustee, including expenses, attorneys' fees, judgments, fines
and amounts paid in settlement, in connection with any threatened, pending, or
completed action, suit or proceeding related to their exercise or failure to
exercise any of the powers, authority, responsibilities or discretion provided
under the Plan and the Trust, or reasonably believed by them to be provided
thereunder, any action taken by them in connection with those matters if they
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interest of the Plan, and with respect to any criminal action or
proceeding, if they had no reasonable cause to believe that their conduct was
unlawful.
Section 9.08. Discrimination Prohibited. In exercising any
discretionary or absolute authority under the Plan, the Corporate Benefits
Committee will act in a consistent and nondiscriminatory manner, treating all
persons in similar circumstances in a similar manner. The Corporate Benefits
Committee may take no action which would discriminate in favor of Members,
Beneficiaries or
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Employees who are officers, shareholders or highly-compensated employees, or
which would result in benefiting one employee or group of employees at the
expense of others similarly situated.
Section 9.09. Representation in Proceedings. In any court proceeding
arising under the Plan, the Corporate Benefits Committee will be the
representative of the Members, Beneficiaries and all other claiming any interest
under the Plan.
Section 9.10. Time of Delivery. Any information, forms of election,
rejection or other materials required to be filed or delivered by a Member or
Beneficiary to the Company, the Employer or any fiduciary will be deemed filed
or delivered when received. Any consents, approvals, information, requests for
information or other materials required to be filed or delivered to a Member or
Beneficiary by the Company, the Employer for any fiduciary will be deemed filed
or delivered on the earlier of the date of personal delivery or the date
deposited in first class mail. Any information or other materials required to be
filed or delivered to the Company, the Employer or any fiduciary by the Company,
the Employer or any fiduciary will be deemed filed or delivered when actually
received.
ARTICLE X
MISCELLANEOUS
Section 10.01. Rights to Trust Assets.
(a) No Participant or any other person shall have any right to, or
interest in, any part of the Trust assets upon termination of employment or
otherwise, except as provided from time to time under this Plan, and then only
to the extent of the amounts due and payable to such person out of the assets of
the Trust. All payments as provided for in this Plan shall be made solely out of
the assets of the Trust and neither the Employers, the Trustee, nor any member
of the Committee shall be liable therefor in any manner.
(b) The effectiveness of this Plan is expressly subject to the
condition that the Company shall initially receive a favorable determination
letter from the Internal Revenue Service that the Plan meets the requirements
for qualification under Section 401(a) of the Code and all Employer
contributions hereunder are conditioned on the continued qualification of the
Plan under such Code section and the deductibility of such contributions under
Code section 404. In the event that the Internal Revenue Service initially fails
to issue a favorable determination letter, the Company may, at its option,
terminate the Plan, in which case all amounts in the Trust attributable to
Employer contributions shall be refunded to the Employers and all amounts
attributable to Participant contributions shall be distributed to Participants.
In the event that the Committee determines that a contribution has been made as
the result of a good faith mistake of fact, then the Committee may direct that
any non-deductible Employer contribution or any other contribution made as the
result of a mistake of fact shall be refunded to the Employer or Participant in
accordance with applicable provisions of ERISA.
(c) Except as provided in subsection (b) of this Section, the Employers
shall have no beneficial interest of any nature whatsoever in any Employer
Matching Contributions after the same have been received by the Trustee, or in
the assets, income or profits of the Trust or any part thereof.
Section 10.02. Non-Recommendation of Investment. The decision as to
the choice of Investment Funds hereunder must be made solely by each
Participant, and no officer or employee of
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<PAGE> 30
any Employer or the Trustee is authorized to make any recommendation to any
Participant concerning the allocation or reallocation of Contributions among the
Investment Funds.
Section 10.03. Non-Alienation. Except as otherwise provided herein, no
right or interest of any Participant or Beneficiary in the Plan and the Trust
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, attachment, garnishment, execution,
levy, bankruptcy, or any other disposition of any kind, either voluntary or
involuntary, prior to actual receipt of payment by the person entitled to such
right or interest under the provisions hereof, and such disposition or attempted
disposition shall be void. Notwithstanding the foregoing, a qualified domestic
relations order relating to child support, alimony payments or marital property
rights shall be recognized and given effect if such order contains sufficient
information to permit the Committee to determine that it meets the requirements
of Code section 414(p). If a qualified domestic relations order so directs,
distribution of benefits to the alternate payee may be made at a time not
permitted for distributions to the Participant.
Section 10.04. Facility of Payment. If the Committee shall determine
that a Participant or Beneficiary entitled to a distribution hereunder is
incapable of caring for his own affairs, because of illness or otherwise, it may
direct that any distribution from such Participant's Account may be made, in
such shares as it shall determine, to the spouse, child, parent or other blood
relative of such Participant or his Beneficiary, or any of them, or to such
other persons or persons as the Committee may determine. The Committee shall be
under no obligation to see to the proper application of the distributions so
made to such person or persons and any such distribution shall be a complete
discharge of any liability under the Plan to such Participant or Beneficiary, to
the extent of such distribution.
Section 10.05. Unclaimed Benefits. In the event that the Committee is
unable to locate any person who is entitled to benefits hereunder despite
reasonable and diligent efforts to do so, then such person's benefits shall be
automatically forfeited as of the last day of the Plan Year next following the
year in which such benefits became payable; provided, however, in the event that
such person subsequently makes a claim for such forfeited benefits prior to the
termination of the Plan, such benefits shall be reinstated by means of a special
Employer contribution equal to the amount of the forfeiture or by direct payment
by the Company to such person as determined by the Committee.
ARTICLE XI
TOP-HEAVY PLAN PROVISIONS
Section 11.01. Effect of Top-Heavy Status. The Plan shall be a
"Top-Heavy Plan" for any Plan Year if either of the following conditions
applies:
(a) The Top-Heavy Ratio for the Plan exceeds sixty percent (60%) and
the Plan is not part of any Required Aggregation Group or Permissive Aggregation
Group having a Top-Heavy Ratio of sixty percent (60%) or less.
(b) The Plan is part of a Required Aggregation Group Having a Top-Heavy
Ratio which exceeds sixty percent (60%) and is not part of a Permissive
Aggregation Group having a Top-Heavy Ratio of sixty percent (60%) or less.
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<PAGE> 31
If the Plan is a Top-Heavy Plan in any Plan Year, the provisions of Article
11.03 through 11.05 shall supersede any conflicting provisions of the Plan.
Section 11.02. Additional Definitions. Solely for purposes of this
Article, the following terms shall have the meanings set forth below:
(a) "Key Employee" means any employee or former employee (and the
beneficiary of such employee) whose status as an officer or owner of the
Employer makes him a "key employee" as determined in accordance with Code
section 416(i)(1) and the regulations thereunder.
(b) "Determination Date" means the last day of the preceding Plan Year.
(c) "Top-Heavy Ratio" means a fraction, the numerator of which is the
sum of account balances under any defined contribution plans maintained by the
Employer for all Key Employees and the present value of accrued benefits under
any defined benefit plans maintained by the Employer for all Key Employees, and
the denominator of which is the sum of the account balances under such defined
contribution plans for all employees and the present value of accrued benefits
under such defined benefit plans for all employees disregarding in either case
accrued benefits attributable to employees who have not been employed within the
five year period preceding the Determination Date. Both the numerator and
denominator of the Top-Heavy Ratio shall be adjusted for any distribution of an
account balance on an accrued benefit made in the five (5) year period ending on
the Determination Date and any contribution due but unpaid as of the
Determination Date. For purposes of calculating the Top-Heavy Ratio, (i) the
value of account balances and the present value of accrued benefits shall be
determined as of the most recent Valuation Date that falls within or ends with
the twelve (12) month period ending on the Determination Date, and (ii) the
account balances and present values of accrued benefits of any employees who are
not Key Employees but who were Key Employees in a prior year shall be
disregarded. The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Code section 416 and the regulations thereunder. When
aggregating plans, the value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall within the same
calendar year. The present value of accrued benefits shall be determined
pursuant to Code section 416(g) using a five (5) percent interest assumption and
the 11P-1984 Mortality Table. Solely for the purpose of determining if the Plan,
or any other plan included in an aggregation group of which this Plan is a part,
is top-heavy, the accrued benefit of an Employee other than a Key Employee shall
be determined under (i) the method, if any, that uniformly applies for accrual
purposes under all plans maintained by the Affiliates, or (ii) if there is no
such method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under the fractional accrual rate of Code section
411(b)(1)(C).
(d) "Permissive Aggregation Group" means the Required Aggregation Group
of plans plus any other plan or plans of the Employer which, when considered as
a group with the Required Aggregation Group, would continue to satisfy the
requirements of Code section 401(a)(4) and 410.
(e) "Required Aggregation Group" means (i) each qualified plan of the
Employer in which at least one Key Employee participates, and (ii) any other
qualified plan of the Employer which enables a plan described in (i) to meet the
requirements of Code sections 401(a)(4) and 410.
(f) "Valuation Date" means (i) in the case of a defined contribution
plan, the Determination Date, and (ii) in the case of a defined benefit plan,
the date as of which funding calculations are generally made within the twelve
(12) month period ending on the Determination Date.
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<PAGE> 32
(g) "Employer" means the employer or employers whose employees are
covered by this Plan and any other employer which must be aggregated with any
such employer under Code sections 414(b), (c), (m) or (o).
Section 11.03. Minimum Benefits. For any year in which the Plan is a
Top-Heavy Plan, the employer contributions on behalf of each Employee who is not
Key Employee shall at least be equal to three percent (3%) of such Employee's
compensation (as defined in Code section 415) for such Plan Year or the
percentage of compensation allocated on behalf of the Key Employee for which
such allocation was highest, whichever is less, reduced however by the amounts
allocated to such Employee under any other defined contribution plans. If such
Employee is also covered under a defined benefit plan of the Affiliates, such
Employee will only be entitled to the defined benefit minimum.
Section 11.04. Maximum Benefit Limits. If the Employer maintains a
defined benefit plan and a defined contribution plan which both cover one or
more of the same Key Employees, and if such Plans are Top-Heavy, then the
limitation stated in a separate provision of this Plan with respect to the Code
section 415(e) maximum benefit limitations shall be deemed to refer to a 1.0
adjustment on the dollar limitation rather than a 1.25 adjustment. This
provision shall not apply if the Top-Heavy Ratio is less than ninety percent
(90%) and if the minimum benefit requirements of Section 11.03 are met when
three percent (3%) is changed to four percent (4%).
ARTICLE XII
AMENDMENT
Section 12.01. General Amendment. The Corporate Benefits Committee may
amend the Plan at any time, by action of a majority of its members at a meeting
or by unanimous written consent in lieu of meeting. The Employer, the Corporate
Benefits Committee and all Members, Beneficiaries and other persons will be
bound by those amendments. However, no amendment may increase the duties or
liabilities of the Trustee, the Company or the Employer without its written
consent, and no amendment may authorize or permit any part of the Trust Fund to
be used for or diverted to any purpose other than the exclusive benefit of
Members or their Beneficiaries, and for defraying the reasonable expenses of
administering the Plan and Trust. The Corporate Benefits Committee specifically
reserves the right to make any amendment designed to comply, or to eliminate any
uncertainty of compliance, with the Code, ERISA, any other laws relating to
qualified employees' trusts or any regulations or rulings issued under those
laws, even though accrued benefits are eliminated or reduced retroactively.
Section 12.02. Amendment of Vesting Schedule. If the Plan is amended
to provide a different vesting schedule, each person adversely affected:
(a) who is a Participant during the election period below; and
(b) who has completed a Period of Service of at least three years
before that period ends;
may elect to have the amendment disregarded in determining his vested amount.
The election must be in writing and delivered to the Corporate Benefits
Committee within the election period. Upon delivery, the election will be
irrevocable. The election period begins on the date the amendment is adopted and
ends 60 days after the latest of the date:
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<PAGE> 33
(c) the amendment is adopted;
(d) the amendment becomes effective; or
(e) the Corporate Benefits Committee delivers a written notice of the
amendment to the Participant.
No amendment to the Plan's vesting schedule may decrease the vested amount which
any Member has earned as of the date of the amendment.
ARTICLE XIII
SUSPENSION, DISCONTINUANCE OR TERMINATION
Section 13.01. Termination or Partial Termination of the Plan. The
Corporate Benefits Committee may terminate or partially terminate the Plan at
any time by action of a majority of its members at a meeting or by unanimous
written consent in lieu of meeting. If the Plan is terminated or partially
terminated without termination of the Trust, the Trust will be continued until
terminated by the Corporate Benefits Committee or until all Trust assets have
been distributed.
Section 13.02. Termination of the Trust. If the Plan is terminated or
partially terminated, the Trust may be terminated by the Corporate Benefits
Committee in the manner described above. The Trust Fund and each account under
the Trust Fund will be valued as provided in the Trust document. The Corporate
Benefits Committee will determine the methods and means of distribution and will
certify that information to the Trustee. After receiving that certification and
after making necessary adjustments to reflect additional earnings, losses and
liquidation expenses, the Trustee will distribute the Trust assets promptly. If
one but not all Employers terminates or partially terminates the Plan, that
Employer will determine whether or not the Trust will continue for its Members.
If those interests are terminated, the Corporate Benefits Committee will direct
their liquidation under this Section.
Section 13.03. Discontinuance of Employer Contributions. The Employer
expects to continue the Plan and to make Employer Contributions indefinitely.
However, the Employer does not assume a contractual obligation to continue the
Plan and reserves the right to reduce, suspend or discontinue Employer
Contributions. Any suspension or discontinuance of Employer Contributions will
not constitute a discontinuance of the Plan. If Employer Contributions are
discontinued or suspended the Trust will be continued until terminated by the
Company or until all trust Assets have been distributed.
ARTICLE XIV
GENERAL
Section 14.01. Severability. Each provision of the Plan is independent
of each other provision. If any provision of the Plan proves to be, or is
finally held by any court or tribunal, board or authority of competent
jurisdiction to be illegal, unenforceable or in conflict with the Code, ERISA or
any other law relating to qualified employees' trusts, that provision will be
disregarded and will be void. Such invalidation will not impair the Plan or any
of its other provisions.
29
<PAGE> 34
Section 14.02. Merger of Plans. No merger or consolidation of the Plan
with, or transfer in whole or in part of the assets and liabilities of the Trust
Fund to, any other plan of deferred compensation or trust fund maintained or
established for the benefit of all or some Members may occur unless:
(a) each Member would receive (if the other plan then terminated) a
benefit immediately after the merger, consolidation or transfer which is equal
to or great than the benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had then terminated);
(b) resolutions adopted by the Company, the Corporate Benefits
Committee, and the Employer, and by any new or successor employer of the
affected Members, authorize the transfer of assets and, in the case of the new
or successor employer of the affected Members, its resolutions specifically
assume liabilities for those Members' benefits; and
(c) the other plan and trust are qualified under Code sections 401(a)
and 501(a).
Section 14.03. Plan Not a Contract of Employment. Neither the creation
of the Plan nor any amendment to it nor the creation of the Trust Fund nor the
payment of benefits gives any legal or equitable right to any person against the
Company, the Employer or any Affiliate, their officers or employees, or against
the Trustee except as provided in the Plan. All liabilities under the Plan will
be satisfied, if at all, only out of the Trust Fund. Participation in the Plan
does not give any Member any right to continued employment.
Section 14.04. Successors; Reorganizations. In the case of the merger,
consolidation, sale of assets, liquidation or other reorganization of the
Employer under circumstances in which a successor person, firm or company (a)
continues all or a substantial part of the Employer's business and (b) employs a
substantial number of the Employer's employees, the successor will be
substituted for the Employer under the Plan if it files a written election with
the Trustee and the Corporate Benefits Committee to carry on the provisions of
the Plan.
Section 14.05. Expenses. The Employer will pay all the expenses of
administering the Plan, including the Trustee's compensation and expenses, any
broker's fees incurred by the Trust, the expenses of the Corporate Benefits
Committee, and any other expenses incurred at the direction of the Corporate
Benefits Committee. Any of those expenses not paid by the Employer will be paid
out of the Trust Fund. The Company will allocate the expenses among Employers.
Section 14.06. Controlling Law. The Plan will be construed and
enforced according to the laws of the State of Ohio and the United States.
Section 14.07. Construction. If the Plan contains contradictory
clauses or if there appears to be a conflict between its provisions, the
following rules of construction will apply:
(a) The interpretation that favors the Plan as a tax-free retirement
plan and the deduction of Employer Contributions for federal income tax purposes
will prevail over any interpretation that might render the Plan taxable or
prevent that deduction.
(b) Subject to subsection (a), the rules established by the Supreme
Court of the State of Ohio for the construction of like instruments will apply.
30
<PAGE> 35
Section 14.08. Headings. The headings and subheadings in the Plan are
inserted for convenience of reference only and are not to be considered in the
construction of its provisions.
Section 14.09. Counterparts. The Plan may be executed in any number of
counterparts, each of which is an original. All counterparts constitute one and
the same instrument, sufficiently evidenced by any one counterpart.
Section 14.10. Treasury Qualification. The Plan is designed to comply
with Code section 401(a) and will terminate automatically if (a) the Internal
Revenue Service issues a written determination that the Plan as initially
adopted is not qualified and the Corporate Benefits Committee elects not to
amend or further amend the Plan, or (b) the Internal Revenue Service fails to
issue, within one year following a request that the Internal Revenue Service
issue, a written determination of qualification. Upon termination of the Plan
under this Section, the Trust will terminate and all amounts contributed by the
Employer and Participants (adjusted for net earnings and losses) will be
returned to them.
Section 14.11. Denial of Guaranty. There is no guarantee that the
Trust Fund will not incur losses or depreciate in value. Also, there is no
guarantee that any benefit or amount which may become due to any Member,
Participant or Beneficiary, or to any creditor of the Trust will be paid, nor
does the Employer or the Corporate Benefits Committee guarantee or assume any
obligation to enforce payment by any insurance company of any benefit or amount
which may become due under any insurance contract. Each Member or Beneficiary
and any creditor of the Trust may look only to the Trust Fund for payment. After
a Member's Distributable Credit has been fully distributed to him or to his
Beneficiary, or to the persons designated in Section 5.05, his interest in the
Trust Fund is extinguished. Neither the Company nor the Employer is liable in
any manner to any Member, Beneficiary or other person for any act or omission of
the Corporate Benefits Committee or Trustee.
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<PAGE> 36
SUPPLEMENT A
IRS MODEL DIRECT ROLLOVER REVISIONS
(Effective January 1, 1996)
A.1 Rollover Requirements
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee's election under this Supplement, a distributee may elect,
at the time and in the manner prescribed by the plan administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
A.2 Definitions
(a) Eligible rollover distribution: An eligible rollover distribution is any
cash distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to Employer securities).
(b) Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(c) Distributee: A distributee includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of
the spouse or former spouse.
(d) Direct rollover: A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
32
<PAGE> 37
SUPPLEMENT B
IRS MODEL SECTION 401(a)17 LIMITATION
(Effective January 1, 1996)
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, the annual
compensation of each employee taken into account under the plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner for increases in the cost of living
in accordance with section 401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this plan
to the limitation under section 401(a)(17) of the Code shall mean the OBRA '93
annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefit accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
33
<PAGE> 38
SUPPLEMENT C
PERIOD OF LIMITED ACTIVITY
(Effective January 1, 1996)
This Supplement applies to Participants who were Participants in the
Robbins & Myers, Inc. Employee Savings Plan on December 31, 1995. During the
period beginning January 1, 1996 and ending as soon as practicable following the
transition to Vanguard administration, such Participants shall not be permitted
to take loans or any in-service withdrawals under the Plan.
34
<PAGE> 39
FIRST AMENDMENT TO
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc.
Employee Savings Plan (the "Plan"); and
WHEREAS, amendment of the Plan is now deemed desirable;
NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it by Section 12.01 of the Plan, hereby amends the Plan
effective January 1, 1996 in the following particulars:
1. By adding the following paragraph (i) to Section 4.06, to follow
immediately after paragraph (h) thereof:
(i) Multiple Use Test. The provisions of IRC Regs. Section
1.401(m)-2(b) are incorporated herein by reference. In applying the
multiple use test, the actual deferral percentage shall be reduced
with respect to all Highly Compensated Employees.
2. By adding the following new sentence to the end of Section 4.07 of
the Plan:
If, as the result of the allocation of forfeitures, a reasonable error
in estimating a Participant's Compensation, a reasonable error in
determining the amount of pre-tax Basic Contributions that a
Participant may make under the limits created by section 415 of the
Code, or other facts and circumstances which the Commissioner
determines justify this treatment, any excess annual additions on
behalf of a Participant shall be reduced by returning pre-tax Basic
Contributions to the Participant (including gains attributable to those
contributions) to the extent necessary to eliminate any excess annual
additions.
3. By substituting subsection 7.06 for the reference to subsection 7.07
in subsection 7.01 of the Plan.
4. By adding the following new sentence to the end of Section 7.02 of
the Plan:
A Participant is 100 percent vested in his Account Balances upon
attainment of Normal Retirement Age, if he is then employed, upon plan
termination and upon partial plan termination.
5. By adding the following sentence to the end of subsection 7.06 of
the Plan:
Notwithstanding the foregoing provision of this subsection, in the case
of a person on maternity or paternity leave of absence, a One Year
Break in Service will not occur until the end of the
<PAGE> 40
24-consecutive month period commencing on his Distribution Eligibility
Date if he is not paid or entitled to payment for the performance of
duties for the Employers, or the Company Affiliates during that
period.
6. By inserting "or at the time of any prior distribution exceeded
$3,500" immediately following the reference to $3,500 in Section 7.04(c).
7. By adding a new Section 7.07 to follow immediately after Section
7.06 of the Plan:
Section 7.07. Payment of Benefits. Unless the Participant
otherwise elects, payment of his Account Balances shall begin not later
than 60 days after the last day of the Plan Year during which the last
of the following occurs:
(a) the Participant attains age 65;
(b) the tenth anniversary of the Participant's participation in
the Plan; or
(c) the Participant terminates employment with Robbins & Myers,
Inc. and its Affiliates.
8. By substituting the following for Section 11.02(e) of the Plan:
(e) "Required Aggregation Group" means (i) each qualified plan of
the Employer in which at least one Key Employee participates during the
current Plan Year or any of the four immediately preceding Plan Years,
and (ii) any other qualified plan of the Employer which enables a plan
described in (i) to meet the requirements of Code sections 401(a)(4) or
410.
IN WITNESS WHEREOF, the undersigned, a duly appointed member of the
Corporate Benefits Committee, has caused this First Amendment to be executed on
its behalf, this ___ day of __________________, 1996.
--------------------------------------------
A Member of the Corporate Benefits Committee
-2-
<PAGE> 41
SECOND AMENDMENT TO
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Employee Savings Plan (the "Plan"); and
WHEREAS, amendment of the Plan is now deemed desirable;
NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it by Section 12.01 of the Plan, hereby amends the
Plan, effective November 1, 1996, by substituting the following for Section
2.01(i) of the Plan:
(i) "Compensation" means an Employee's total salary or wages from
the Employing Unit before deductions, including base pay, commissions,
overtime, incentive pay provided under an incentive pay plan maintained
by his Employer and any before-tax contributions made under any 401(k)
plan or any amount deferred under Code section 125, and excluding any
severance pay, moving allowance, car allowance, awards or prizes,
bonuses, stock option or SAR payments, nonqualified deferred
compensation, expatriate allowances or imputed income under Code
section 79 or 132, or such other similar payments under the Code and
regulations thereunder. Notwithstanding the foregoing, Compensation in
a Plan Year in excess of $150,000, subject to adjustment as provided in
Code section 401(a)(17), shall be disregarded for all purposes under
the Plan. In determining compensation of an employee, the rules of
section 414(q)(6) of the Code shall apply, except that in applying such
rules, the term "family" shall include only the spouse of the employee
and lineal descendants of the employee who have not attained age 19
years before the close of year. If, as a result of the application of
such rules, the adjusted dollar limitation of section 401(a)(17) of the
Code applicable to family members is exceeded, then such limitation
shall be prorated among the affected individuals in proportion to each
such individual's Compensation as determined under this subsection
prior to the application of the limitation.
IN WITNESS WHEREOF, the undersigned, a duly appointed member of the
Corporate Benefits Committee, has caused this Second Amendment to be executed on
its behalf, this ___ day of October, 1996.
--------------------------------------------
A Member of the Corporate Benefits Committee
<PAGE> 42
THIRD AMENDMENT TO
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Employee Savings Plan (the "Plan"); and
WHEREAS, amendment of the Plan is now deemed desirable;
NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it by Section 12.01 of the Plan, hereby amends the
Plan, effective January 1, 1997, by substituting the following for Section
3.01(a) of the Plan:
(a) On or after January 1, 1997, an Employee, other than a Part-Time
Employee, shall be eligible to participate herein as of the first day
of the calendar month coincident with or next following his Employment
Commencement Date.
IN WITNESS WHEREOF, the undersigned, a duly appointed member of
the Corporate Benefits Committee, has caused this Third Amendment to be executed
on its behalf, this ___ day of _______________, 1996.
--------------------------------------------
A Member of the Corporate Benefits Committee
<PAGE> 43
FOURTH AMENDMENT TO
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Employee Savings Plan (the "Plan"); and
WHEREAS, amendment of the Plan is now deemed desirable;
NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it by Section 12.01 of the Plan, hereby amends the
Plan, effective April 1, 1997, by substituting the following for Section 3.01(a)
of the Plan:
(a) On or after January 1, 1997, an Employee, other than a
Part-Time Employee, shall be eligible to participate herein as of the
first day of the calendar month coincident with or next following his
Employment Commencement Date. Notwithstanding the foregoing provisions
of this paragraph, individuals performing services for Process Supply,
Inc. through a leasing agency shall become eligible to participate in
the Plan on April 1, 1997.
IN WITNESS WHEREOF, the undersigned, a duly appointed member of the
Corporate Benefits Committee, has caused this Fourth Amendment to be executed on
its behalf, this ___ day of _______________, 1997.
--------------------------------------------
A Member of the Corporate Benefits Committee
<PAGE> 44
FIFTH AMENDMENT TO THE
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
Amendment to the Robbins & Myers, Inc. Employee Savings Plan.
WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Savings Plan (the "Plan"), as amended; and
WHEREAS, the Company intends to amend the Plan to allow for the Plan to
accept direct rollovers from participants in a qualified plan;
NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it under Section 9.03 of the Plan, hereby
amends the Plan effective as of January 1, 1997, as follows:
1. ARTICLE II DEFINITIONS AND CONSTRUCTION
Add new paragraph (dd):
(dd) "Rollover Contribution" means any rollover contribution to
the Plan made by a participant as permitted under ARTICLE IV.
2. ARTICLE IV CONTRIBUTIONS
The following section is added to this ARTICLE IV:
Section 4.08. Rollover Contributions.
(a) An Employee who was a participant in a plan qualified under
Section 401(a) of the Code and who receives a cash distribution from
such plan that he elects either (i) to roll over immediately to a
qualified retirement plan or (ii) to roll over into a conduit IRA
from which he receives a later cash distribution, may elect to make
a Rollover Contribution to the Plan if he is entitled under Section
402(c) or Section 408(d)(3)(A) of the Code to roll over such
distribution to a plan qualified under Section 401(a) of the Code.
The Administrator may require an Employee to provide it with such
information as it deems necessary or desirable to show that he is
entitled to roll over such distribution to another qualified
retirement plan. An Employee shall make a Rollover Contribution to
the Plan by delivering, or causing to be delivered, to the Trustee
the cash that constitutes the Rollover Contribution amount within
the time period required in the Code in the manner prescribed by the
Administrator. If the Employee does not already have an investment
election on file with the Administrator, the employee
<PAGE> 45
shall also deliver to the Administrator his election as to the
investment of his contributions in accordance with Article X.
(b) A Participant's vested interest in his Rollover Contributions
Sub-Account shall be at all times 100 percent.
3. ARTICLE VI PARTICIPANT'S ACCOUNTS
Section 6.01 is amended as follows:
Section 6.01. Establishment of Accounts. A separate Account shall
be established and maintained in the name of each Participant. To
the extent necessary or appropriate to provide for the proper
administration of the Plan, such Account shall include separate
balances for interests derived from Pre-Tax and After-Tax
Contributions, Supplemental Contributions, Employer Matching
Contributions, Rollover Contributions and such other separate
balances as the Committee shall determine. As soon as practicable
following the end of each Plan Year, the Company shall provide to
each Participant a statement of his Account balances, which may, but
need not, be provided more frequently.
The effective date of this Amendment is January 1, 1997.
In all respects not amended, the Plan is hereby ratified and confirmed.
* * * * * * * *
IN WITNESS WHEREOF, Robbins & Myers, Inc. has caused this amendment to
be executed this ____ day of ______________, 1997.
ROBBINS & MYERS, INC.
By:
----------------------------------
-2-
<PAGE> 46
SIXTH AMENDMENT TO THE
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
Amendment to the Robbins & Myers, Inc. Employee Savings Plan. Robbins &
Myers, Inc. (the "Company") maintains the Robbins & Myers, Inc. Savings Plan
(the "Plan"), as amended. The Company now deems it desirable to amend the Plan;
NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it under Section 12.01 of the Plan, hereby
amends the Plan, effective as of January 1, 1998, in the following
manner:
1. Section 8.3, When and How Distributions Are Made, is amended in its
entirety to read as follows:
8.3. When and How Distributions Are Made. Subject to the following
provisions of this Section, a Participant's nonforfeitable Account
balances, determined as of the Accounting Date coincident with or next
preceding his Plan Payment Date, will be distributed to him in cash or,
in the case of Company Stock held for his benefit, in kind, by either
of the following methods:
(a) in a single lump sum payment; or
(b) in the case of a Participant whose Distribution
Eligibility Date occurs on account of retirement under
subparagraph 8.1(a)(i) or (ii) and who so elects by writing filed
with the Corporate Benefits Committee, in 5 substantially equal
annual or more frequent installments.
Notwithstanding the foregoing:
(i) in the case of a Participant whose aggregate
nonforfeitable Account balances as of his Distribution
Eligibility Date equal an amount that is less than $5,000, a
distribution will be made as soon as practicable after that
date in a single lump sum payment; and
(ii) in case of a Participant whose interest in the
Company Stock Fund has a value on his Distribution
Eligibility Date which is less than the fair market value of
100 shares of Company Stock on such date, distributions of
his interest in the Company Stock Fund shall be made in cash
rather than in Company Stock.
<PAGE> 47
A Participant's "Plan Payment Date" is any date occurring after his
Distribution Eligibility Date that is elected by him. A Participant's
election pursuant to the foregoing sentence must be made not less than
30 and not more than 90 days prior to the date that is to be his Plan
Payment Date. In the case of a Participant (not a 5% owner) who attains
age 70 1/2 after December 31, 1998, and is then still employed by the
Company, distributions will commence on the April 1 following the year
in which the Participant retires. If a Participant dies prior to
receipt of his entire aggregate nonforfeitable Account balances, any
remaining amount shall be distributed to his Designated Beneficiary or,
if for any reason the Participant is not survived by a Designated
Beneficiary, to his Beneficiary or Beneficiaries, as the case may be,
in a lump sum or lump. sums, as soon as practicable, but not later than
the 5th anniversary of the Participant's death.
2. A new Supplement D, as attached hereto, shall be added to the Plan.
The effective date of this Amendment is January 1, 1998.
In all respects not amended, the Plan is hereby ratified and confirmed.
* * * * * * * *
IN WITNESS WHEREOF, the undersigned, a duly appointed member of the
Corporate Benefits Committee, has caused this Sixth Amendment to be executed
this ____ day of ______________, 1998.
--------------------------------
-2-
<PAGE> 48
SUPPLEMENT D
MODEL IRS UNIFORMED SERVICES
EMPLOYMENT AND REEMPLOYMENT
RIGHTS ACT OF 1994
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military
service will be provided in accordance with Section 414(u) of the Internal
Revenue Code.
<PAGE> 49
SEVENTH AMENDMENT TO THE
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Savings Plan (the "Plan"), as amended; and
WHEREAS, amendment of the Plan is now deemed desirable;
NOW, THEREFORE, the Corporate Benefits Committee, acting pursuant to
the authority granted to it under Section 12.01 of the Plan, hereby amends the
Plan effective July 1, 1998, in the following manner:
Replace subsection 8.02 in its entirety and substitute a new subsection
8.02 which reads as follows:
Section 8.02. Withdrawal of Rollover and After-Tax Contributions. A
Participant may elect to withdraw, as of any Valuation Date, all or
part of any balances credited to such Participant's Account
attributable to his Rollover Contributions plus earnings thereon, and
After-Tax Contributions; provided that Supplemental Contributions, if
any, have been previously withdrawn or are withdrawn at the same time.
The minimum withdrawal under this Section (together with any
contemporaneous withdrawal under Section 8.01) shall be $500.00.
The effective date of this Amendment is July 1, 1998.
In all respects not amended, the Plan is hereby ratified and confirmed.
* * * * * * * *
IN WITNESS WHEREOF, the undersigned, a duly appointed member
of the Corporate Benefits Committee has caused this Seventh Amendment to be
executed on its behalf this ____ day of July, 1998.
--------------------------------------------
A Member of the Corporate Benefits Committee
<PAGE> 50
EIGHTH AMENDMENT TO THE
ROBBINS & MYERS, INC.
EMPLOYEE SAVINGS PLAN
WHEREAS, Robbins & Myers, Inc. (the "Company") maintains the Robbins &
Myers, Inc. Employee Savings Plan (the "Savings Plan"), as amended; and
WHEREAS, the Company also maintains the Flow Control Equipment, Inc.
401(k) Retirement Savings Plan (the "FCE Plan"); and
WHEREAS, effective January 1, 2000, the Company merged the FCE Plan
into the Savings Plan; and
WHEREAS, assets of the FCE Plan are to be transferred to the Savings
Plan as soon as practicable after January 1, 2000; and
WHEREAS, the Company now intends to amend the Savings Plan to reflect
the plan merger;
NOW, THEREFORE, the Savings Plan is amended as follows:
1. By adding the following language after the last sentence of Article
III, Section 3.01(a), Eligibility to Participate:
(a) Each participant in the Flow Control Equipment, Inc. 401(k)
Retirement Savings Plan (the "FCE Plan") on December 31, 1999 shall
automatically become a Participant in the Plan effective January 1,
2000.
2. By adding the following language to the last sentence of Section
6.01, Establishment of Accounts:
Effective January 1, 2000, a separate Account shall be established
and maintained in the name of each former participant in the FCE
Plan who now participates in the Plan ("Former FCE Participant").
Such Accounts shall include, in addition to the separate Account
balances set out above, a balance for interest derived from Employer
Non-elective Matching Contributions.
3. By adding the following new section to Article VI, Participant
Accounts:
Section 6.03. Merger of Accounts. All assets held under the FCE Plan
shall be transferred to, and merged with, assets of the Plan as soon
as practicable after January 1, 2000. All benefits payable from the
FCE Plan after the date assets are transferred shall be payable from
the Plan. Participant Account balances under the FCE Plan shall be
transferred to the separate accounts established and maintained for
each Former FCE Participant under Section 6.01 above.
<PAGE> 51
4. By adding the following sentence to Section 7.05. Years of Service:
The number of completed Years of Service for determining vesting
under Section 7.01 of the Plan shall include Years of Service
credited to a Former FCE Participant under the FCE Plan.
5. By adding the following subsection (h) to Section 7.04. Manner and
Timing of Distributions:
(h) Notwithstanding the foregoing provisions of this subsection,
a Former FCE Participant shall have the right to an in-service
withdrawal of any portion of his Account attributable to Employer
Non-elective Contributions, if the Former FCE Participant has
attained age 59 1/2.
6. The effective date of this Eighth Amendment is January 1, 2000.
IN ALL RESPECTS NOT AMENDED, THE PLAN IS HEREBY RATIFIED AND CONFIRMED.
* * * * * * * *
IN WITNESS WHEREOF, the undersigned, a duly appointed member of
the Corporate Benefits Committee, has caused this Eighth Amendment to be
executed on its behalf this ____ day of February, 2000.
--------------------------------------------
Hugh E. Becker
A Member of the Corporate Benefits Committee
-2-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>3
<FILENAME>l85073aex10-5.txt
<DESCRIPTION>EXHIBIT 10.5
<TEXT>
<PAGE> 1
EXHIBIT 10.5
ROBBINS & MYERS, INC.
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
ROBBINS & MYERS, INC. (the "Company") agrees to provide each Executive,
in consideration of his continued employment, a supplemental retirement benefit
under the terms described below.
The Company expressly intends that this program constitute an unfunded,
nonqualified program of deferred compensation for specified key management or
highly compensated employees as described in the Employee Retirement Income
Security Act of 1974, as amended.
SECTION 1
Definitions
1.1 Beneficiary means the person, persons or entity designated by the
Executive to receive death benefits under this Plan. A Beneficiary designation
will be effective only when a signed and dated Beneficiary designation form is
submitted by the Executive to the Committee. A designation of Beneficiary may be
revoked or amended by the Executive, in writing, at any time. If there is no
effective designation, an Executive's Beneficiary will be the person entitled to
receive his death benefits under the Qualified Plan or, if there is no such
person, his estate.
1.2 Board of Directors means the Company's board of directors.
1.3 Committee means the compensation committee of the Company.
1.4 Executive means a salaried employee of the Company who is covered
under Supplement One to the Qualified Plan, is a key management or highly
compensated employee of the Company or an affiliate, and who has been designated
and approved by the Committee as a participant in the Plan.
<PAGE> 2
1.5 Plan means the Robbins & Myers, Inc. Executive Supplemental
Retirement Plan.
1.6 Qualified Plan means the Robbins & Myers, Inc. Cash Balance Pension
Plan, a tax-qualified employee defined benefit pension plan sponsored by the
Company, of which the Executive is or has been a member.
1.7 Supplemental Pension means the payments under this Plan.
SECTION 2
Supplemental Pension
2.1 Normal Retirement. If the Executive terminates employment with the
Company on or after his Normal Retirement Date (as defined in the Qualified
Plan), his Supplemental Pension as of any date is an amount that (when expressed
as a single life annuity) is equal to:
(a) the Executive's accrued benefit in the Qualified Plan,
determined in accordance with the provisions of the Qualified Plan as
in effect on that date, but assuming, for purposes of this computation,
that (i) Sections 415 and 401(a)(17) of the Code had not been enacted;
and (ii) Credited Service is determined in accordance with Exhibit A to
this Plan;
REDUCED BY
(b) the Executive's accrued benefit in the Qualified Plan
determined in accordance with the provisions of the Qualified Plan as
in effect on that date.
2.2 Early Retirement. If the Executive terminates employment with the
Company on or after his Early Retirement Date (as defined in the Qualified
Plan), the Executive will receive a Supplemental Pension equal to the benefit
described under Section 2.1 of this Plan, reduced in the same manner as though
the payments were made to the Executive
-2-
<PAGE> 3
under the Qualified Plan. If the Compensation Committee of the Company so
determines in its sole and absolute discretion, benefits payable under this
Plan, for an Executive who terminates employment with the Company on or after
his 55th birthday with at least 10 years of Vesting Service (as defined in the
Qualified Plan), may be calculated without the reduction described above.
2.3 Disability. If the Executive becomes Disabled (as defined in the
Qualified Plan) before terminating employment with the Company, he will receive
a Supplemental Pension equal to the benefit described in Section 2.1 of this
Plan. The Supplemental Pension shall be calculated as though the Executive
continued to receive the same rate of compensation he was receiving immediately
prior to his disability and as though he continued to earn Credited Service (as
defined in Supplement One to the Qualified Plan) from the date of his disability
until his Normal Retirement Date or, if earlier, the date the Committee consents
to the payment of benefits. In connection with this consent, the Committee shall
also determine whether the amount of the Executive's disability benefit will be
reduced to reflect early payment.
2.4 Death. If the Executive dies before his Supplemental Pension
payments begin under this Plan, the Executive's Beneficiary will receive a
benefit, paid in the form of a lump sum, within 90 days after the death of the
Executive. The amount of the death benefit to which the Executive's Beneficiary
is entitled under this Plan is the Actuarial Equivalent (as defined in the
Qualified Plan) of the Supplemental Pension payable to the Executive under this
Plan as though the Executive had reached his Normal Retirement Date on the day
immediately preceding his date of death.
2.5 Termination for Other Reasons. If the Executive terminates
employment with the Company for any reason other than death or disability prior
to his Early Retirement Date and before he has earned a nonforfeitable right to
100% of his benefits under the Qualified
-3-
<PAGE> 4
Plan, he will irrevocably forfeit all benefits under this program. If the
Executive terminates employment with the Company for any reason other than death
or disability prior to his Early Retirement Date and after he has earned a
nonforfeitable right to 100% of his benefits under the Qualified Plan, he will
receive the benefit described in Section 2.1, commencing on his Normal
Retirement Date.
2.6 Form and Timing of Supplemental Benefit Payment.
(1) Except as provided in Section 2.4, or unless an
alternative form of payment is selected by the Executive pursuant to
Section 2.7, if the Executive is not married on the date payment of his
Supplemental Pension is to begin, the Executive's Supplemental Pension
shall be paid in the form of an annuity for the life of the Executive;
or if the Executive is married on the date payment of the Supplemental
Pension is to begin, the Actuarial Equivalent of the Executive's
Supplemental Pension shall be paid in the form of a qualified joint and
55% survivor annuity (as described in Supplement One to the Qualified
Plan).
(2) Unless an election is made by the Executive pursuant to
Section 2.7 or, unless the second sentence of Section 2.5 applies, or
Section 2.6(3) applies, the annuity form of Supplemental Pension shall
be paid monthly and commence no later than sixty days after the close
of the Plan Year during which the Executive terminates employment with
the Company.
(3) Unless an election is made by the Executive pursuant to
Section 2.7, Supplemental Pension payments for an Executive who becomes
Disabled shall be paid monthly and commence when the Executive reaches
his Normal Retirement Date or, if earlier, the date the Committee
consents to the payment of benefits.
-4-
<PAGE> 5
2.7 Alternative Manner and Time of Benefit Payment.
(1) In lieu of a qualified joint and 55% survivor annuity or
life annuity as the manner of payment pursuant to Section 2.6(1), or
the timing of payment described in Sections 2.6(2) and (3), an
Executive may elect to receive the Actuarial Equivalent of his
Supplemental Pension in a single lump-sum payment payable within 90
days from the date the Executive reaches his Normal Retirement Date or,
if later, the date the Executive terminates employment with the
Company.
(2) To be effective, an election pursuant to this subparagraph
must be made at least 12 months prior to the date on which the
Executive terminates employment with the Company; or, where the
Executive becomes Disabled, 12 months prior to his Normal Retirement
Date. An election may be revised, but such revision must be made at
least 12 months prior to the date on which the Executive terminates
employment with the Company; or, if Disabled, 12 months prior to his
Normal Retirement Date. No election revision will be permitted within
the 12-month period immediately prior to the date on which the
Executive terminates employment with the Company; or, if Disabled,
within the 12-month period immediately preceding his Normal Retirement
Date.
(3) Except as provided in the following sentence, the
conversion of the Supplemental Pension into a qualified joint and
survivor annuity or a lump-sum payment shall be made based on the same
actuarial and present value assumptions used for purposes of the
Qualified Plan. When the Qualified Plan is amended to determine
lump-sum payments by using the mortality table described in Section
417(e)(3)(A)(ii)(I) of the Code and the annual rate of interest on
30-year Treasury securities, as described in Code Section
417(e)(3)(A)(ii)(II) (commonly known as the "GATT" revisions), lump-sum
payments under this Plan will be calculated on the
-5-
<PAGE> 6
basis of the same actuarial and present value assumptions used for
purposes of the Qualified Plan or, if a larger lump sum payment
results, on the basis of the actuarial and present value assumptions
used for purposes of the Qualified Plan immediately before such
amendment.
SECTION 3
Risk of Forfeiture
If the Executive, without the express prior written consent of the
Company, directly or indirectly, individually or as an agent, officer, director,
employee, consultant, shareholder, or partner engages in any business or
enterprise which is in Competition with the Company (as defined below) during
the time of the Executive's employment with the Company or any of its affiliates
or at any time thereafter, all benefits accrued under this supplemental
retirement plan will be forfeited permanently and payment of benefits, if begun,
will stop.
As used in this Section, (i) the words "Competition with the Company"
include competition with the Company or any subsidiary or affiliate of the
Company, or any of the successors or assigns of the business of any of them (the
"Company Group"), and (ii) a business or enterprise will be in Competition with
the Company if it is engaged, in any state in the United States in which any
products of any member of the Company Group are then marketed or in any foreign
country in which such products are then marketed, in manufacturing, designing,
engineering, assembling or distributing pumps, oil field power sections,
industrial mixers and agitators, glass-lined reactor and storage vessels, or
valves. However, this section will not prevent the Executive from (i) being
employed by or serving as an officer of or consultant to any subsidiary or
division of a business or enterprise in Competition with the Company if that
subsidiary or division is not itself in Competition with
-6-
<PAGE> 7
the Company; or (ii) purchasing or holding for investment less than 2% of the
shares of any corporation regularly traded either on a national securities
exchange or in the over-the-counter market.
The Executive also will forfeit any benefits accrued under this
supplemental retirement plan and payment of benefits, if begun, will stop if the
Executive, without the express prior written consent of the Company, discloses,
misappropriates, or makes available to anyone outside the Company at any time,
either during the Executive's employment with the Company or any of its
affiliates or subsequent to termination of employment, any trade secrets or
confidential information belonging to the Company or any of its affiliates. As
used in this Section, "confidential information" includes, but is not limited
to, business systems, methods, policies, procedures, manuals, promotional
materials, price lists, pricing policies, order forms, contracts, agreements,
invoices, receipts, messages, memoranda, circulars, bulletins, sales records for
any assigned territory, sale and delivery schedules, customer lists, customer
files, customer credit terms and information, any records regarding the
solicitation of orders, past, present or prospective orders to the extent that
any of these items are used by the Company or any of its affiliates and which
became known to the Executive by reason of his employment.
SECTION 4
Administration
The Committee is responsible for the general interpretation and
administration of this Plan and the carrying out of its provisions, and has all
rights and powers required in that connection.
-7-
<PAGE> 8
SECTION 5
Nature of Benefits
A participant in this Plan shall not, by virtue of his participation in
this Plan, have any right, title or interest in any asset of the Company. The
obligation of the Company to make payments under this Plan is an unsecured
promise of the Company to pay benefits as they become due.
SECTION 6
General Provisions
6.1 Non-Alienation of Benefits. Benefits payable under this Plan may
not be anticipated, assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process.
6.2 Taxes. Any taxes required to be withheld by any federal, state or
local government will be deducted from payments due under this Plan, and paid on
behalf of the Executive to the appropriate taxing authority.
6.3 Amendment; Termination. The Board of Directors may from time to
time amend this Plan, or any provision thereof, in such respects as the Board of
Directors may deem advisable except that no amendment to this Plan may be
adopted which would adversely affect the rights of any participant under this
Plan unless the Executive consents in writing to the amendment. When an
Executive terminates employment with the Company, he will cease to earn
additional benefits under this Plan, except as provided in Section 2.3. If the
Executive is reemployed after terminating employment with the Company (whether
or not he incurs a Break-in-Service as defined in the Qualified Plan), he may
earn benefits attributable to his subsequent period of employment only if the
Committee again extends this Plan to him.
-8-
<PAGE> 9
6.4 Non-duplication. No Executive may receive a benefit under this Plan
if he receives a benefit under the Robbins & Myers, Inc. Executive Supplemental
Pension Program.
6.5 Successor; Binding Agreement. This Plan and the obligations
hereunder are binding on the Company and its successors and assigns. In the case
of a merger, consolidation, sale of all or substantially all of its assets,
liquidation or other reorganization of the Company under circumstances in which
a successor person, firm or company (a) continues all or a substantial part of
the Company's business and (b) employs a substantial number of the Company's
employees, the successor will be substituted for the Company under this Plan.
The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company, by agreement in form and substance reasonably
satisfactory to Executive, to expressly assume and agree to perform this Plan in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.
6.6 Applicable Law. This Plan will be governed by and construed in
accordance with the laws of the State of Ohio and the United States of America.
6.7 Plan Not a Contract of Employment. Neither the adopting of this
supplemental pension program nor the payment of any benefit gives any legal or
equitable right to any person against the Company, any affiliate of the Company
or their officers or employees except as provided in this document.
Participation in the program does not give any Executive any right to continued
employment.
6.8 Claims Procedure. Any controversy or claim arising out of or
relating to this Plan shall be filed with the Committee which shall make all
determinations concerning such claim. Any decision by the Committee denying such
claim shall be in writing and shall be
-9-
<PAGE> 10
delivered to all parties in interest. Such decision shall set forth the reasons
for denial in plain language. Pertinent provisions of the Plan shall be cited
and, where appropriate, an explanation as to how the Executive can perfect the
claim will be provided. This notice of denial of benefits will be provided
within 90 days of the Committee's receipt of the Executive's claim for benefits.
If the Committee fails to notify the Executive of its decision regarding his
claim, the claim shall be considered denied, and the Executive shall then be
permitted to proceed with his appeal as provided in this section.
If the Executive has been completely or partially denied a
benefit, the Executive shall be entitled to appeal this denial of his claim by
filing a written statement of his position with the Committee no later than
sixty (60) days after receipt of the written notification of such claim denial.
The Committee shall schedule an opportunity for a full and fair review of the
issue within thirty (30) days of receipt of the appeal.
The decision on review shall set forth specific reasons for
the decision, and shall cite specific references to the pertinent Plan
provisions on which the decision is based.
Following the Committee's review of any additional information
submitted by the Executive, either through the hearing process or otherwise, the
Committee shall render a decision on its review of the appealed claim in the
following manner:
(a) The Committee shall make its decision regarding the merits
of the appealed claim within sixty (60) days following its receipt of
the request for review (or within 120 days after such receipt, in a
case where there are special circumstances requiring extension of time
for reviewing the appealed claim). The Committee shall deliver the
decision to the Executive in writing. If an extension of time for
reviewing the appealed claim is required because of special
circumstances, written notice of the extension shall be furnished to
the Executive prior to the
-10-
<PAGE> 11
commencement of the extension. If the decision on review is not
furnished within the prescribed time, the claim shall be deemed denied
on review.
(b) The decision on review shall set forth specific reasons
for the decision, and shall cite specific references to the pertinent
Plan provisions on which the decision is based.
IN WITNESS WHEREOF, Robbins & Myers, Inc. has executed this document
this ___ day of February, 2000.
ROBBINS & MYERS, INC.
By: ______________________________
Title: _____________________________
-11-
<PAGE> 12
AGREEMENT OF EXECUTIVE
The undersigned hereby agrees to be designated as an Executive
participating in the foregoing Robbins & Myers, Inc. Executive Supplemental
Retirement Plan and to be bound by the terms and provision of said Plan.
-----------------------------------
Executive
Date:
-------------------------------
-12-
<PAGE> 13
EXHIBIT A
For purposes of calculating an Executive's benefit under Supplement One
to the Plan, the following rules apply:
(a) The amount of an Executive's Credited Service shall be
determined by multiplying the Executive's Credited Service, as
determined under the terms of the Qualified Plan, by the percentage set
forth in the following table:
Daniel Duval 150%
Gerald L. Connelly 150%
George M. Walker 130%
Hugh E. Becker 130%
In no event shall the total Credited Service of an Executive exceed 35
years after application of the above table.
(b) The amount of an Executive's Final Average Earnings shall
be calculated by including any elective deferred compensation for the
applicable period.
-13-
<PAGE> 14
FIRST AMENDMENT
TO THE
ROBBINS & MYERS, INC.
EXECUTIVE SUPPLEMENTAL RETIREMENT PLAN
WHEREAS, Robbins & Myers, Inc. (the "Company") adopted the Robbins &
Myers, Inc. Executive Supplemental Retirement Plan (the "Plan") to provide
certain Executives a supplemental retirement benefit; and
WHEREAS, the Company now intends to amend the Plan;
NOW, THEREFORE, the Plan is amended, effective June 27, 2000, in the
following manner:
9. In Section 1, Paragraph 1.4, the definition of "Executive" is
deleted in its entirety and replaced with the following language:
"Executive means a salaried employee of the Company who is
covered under the Qualified Plan, is a key management or highly
compensated employee of the Company or an affiliate, and who has
been designed and approved by the Committee as a participant in
this Plan."
10. Section 2, Paragraph 2.1, is amended in its entirety to read as
follows:
2.1 Normal Retirement
(a) If an Executive who is covered under Supplement One to
the Qualified Plan terminates employment with the Company on or after
his Normal Retirement Date (as defined in the Qualified Plan), his
Supplemental Pension as of any date is an amount that (when expressed
as a single life annuity) is equal to:
(b) If an Executive who is not covered under Supplement One
to the Qualified Plan terminates employment with the Company on or
after his
-14-
<PAGE> 15
Normal Retirement Date (as defined in the Qualified Plan), his
Supplemental Pension as of any date is an amount that (when expressed
as a single life annuity) is equal to:
(1) the Executive's accrued benefit in the Qualified Plan,
determined in accordance with the provisions of the Qualified
Plan as in effect on that date, but assuming for purposes of this
computation that (i) Sections 415 and 401(a)(17) of the Code had
not been enacted; and (2) his final account balance is multiplied
by the percentage listed for the Executive in accordance with
Exhibit B to this Plan;
REDUCED BY
(2) the Executive's accrued benefit in the Qualified Plan
determined in accordance with the provisions of the Qualified
Plan as in effect on that date.
11. Section 2, Paragraph 2.6(1), Form and Timing of Supplemental
Benefit Payment, is amended to read as follows:
(1) Except as provided in Section 2.4, or unless an alternative
form of payment is selected by the Executive pursuant to Section
2.7, if the Executive is not married on the date payment of his
Supplemental Pension is to begin, the Executive's Supplemental
Pension shall be paid in the form of a qualified joint and 55%
survivor annuity (as described in Supplement One to the Qualified
Plan) if the Executive is covered under Supplement One to the Plan;
or in the form of a qualified joint and 50% survivor annuity (as
described in the Qualified Plan) if the Executive is not covered
under Supplement One to the Qualified Plan.
12. Section 2, Paragraph 2.7(1) is amended to read as follows:
(1) In lieu of a qualified joint and survivor annuity or life
annuity as the manner of payment applicable to the Executive
pursuant to Section 2.6(1), or the timing of payment described in
Sections 2.6(2) and (3), an Executive may elect to receive the
Actuarial Equivalent of his Supplemental Pension in a single
lump-sum payment payable within 90 days from the date the Executive
reaches his Normal
-15-
<PAGE> 16
Retirement Date or, if later, the date the Executive terminates
employment with the Company.
13. Exhibit A is amended by adding the following Executive:
Kevin Brown 130%
14. A new Exhibit B (attached) is added to the Plan.
In all respects not amended, the Plan remains in full force and effect.
This document is executed at Dayton, Ohio this _____ day of August, 2000.
ROBBINS & MYERS, INC.
By
-----------------------------------
Hugh E. Becker
-16-
<PAGE> 17
EXHIBIT A
For purposes of calculating the Plan benefit of an Executive covered
under Supplement One to the Qualified Plan, the following rules apply:
(a) The amount of an Executive's Credited Service shall be
determined by multiplying the Executive's Credited Service, as
determined under Supplement One to the Qualified Plan, by the
percentage set forth in the following table:
Daniel Duval 150%
Gerald L. Connelly 150%
George M. Walker 130%
Hugh E. Becker 130%
Kevin Brown 130%
In no event shall the total Credited Service of an Executive exceed 35
years after application of the above table.
(b) The amount of an Executive's Final Average Earnings, as
determined pursuant to Supplement One to the Qualified Plan, shall be
calculated by including any elective deferred compensation for the
applicable period.
A-1
<PAGE> 18
EXHIBIT B
For purposes of calculating the Plan benefit of an Executive covered
under the cash balance portion of the Qualified Plan, the following rule
applies:
The amount of the Executive's benefit shall be determined by
multiplying the Executive's final account balance as
determined under the cash balance portion of the Qualified
Plan, by the percentage set forth below:
Milton Hernandez 130%
B-1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>4
<FILENAME>l85073aex10-6.txt
<DESCRIPTION>EXHIBIT 10.6
<TEXT>
<PAGE> 1
EXHIBIT 10.6
ROBBINS & MYERS, INC.
EXECUTIVE SUPPLEMENTAL PENSION PLAN
ROBBINS & MYERS, INC. (the "Company") agrees to provide each Executive,
in consideration of his continued employment, a supplemental retirement benefit
under the terms described below.
The Company expressly intends that this program constitute an unfunded,
nonqualified program of deferred compensation for specified key management or
highly compensated employees as described in the Employee Retirement Income
Security Act of 1974, as amended.
SECTION 1
Definitions
1.1 Beneficiary means the person, persons or entity designated by the
Executive to receive death benefits under this Plan. A Beneficiary designation
will be effective only when a signed and dated Beneficiary designation form is
submitted by the Executive to the Committee. A designation of Beneficiary may be
revoked or amended by the Executive, in writing, at any time. If there is no
effective designation, an Executive's Beneficiary will be the person entitled to
receive his death benefits under the Qualified Plan or, if there is no such
person, his estate.
1.2 Board of Directors means the Company's board of directors.
1.3 Committee means the compensation committee of the Company.
1.4 Executive means a salaried employee of the Company who is covered
under the Qualified Plan, is a key management or highly compensated employee of
the Company
<PAGE> 2
or an affiliate, and who has been designated and approved by the Committee as a
participant in the Plan.
1.5 Plan means the Robbins & Myers, Inc. Executive Supplemental Pension
Plan.
1.6 Qualified Plan means the Robbins & Myers, Inc. Cash Balance Pension
Plan, including Supplements, a tax-qualified employee defined benefit pension
plan sponsored by the Company, of which the Executive is or has been a member.
[Effective October 1, 1999, the Robbins & Myers, Inc. Pension Plan merged into
the Robbins & Myers, Inc. Cash Balance Plan for Salaried Employees of Chemineer,
Pfaudler and Edlon. The merged plan is named the Robbins & Myers, Inc. Cash
Balance Pension Plan. Supplement One to the merged plan applies to those
Executives covered under the Robbins & Myers, Inc. Pension Plan.]
1.7 Supplemental Pension means the payments under this Plan.
SECTION 2
Supplemental Pension
2.1 Normal Retirement. If the Executive terminates employment with the
Company on or after his Normal Retirement Date (as defined in the sections of
the Qualified Plan applicable to the Executive's benefits), his Supplemental
Pension as of any date is an amount that (when expressed as a single life
annuity) is equal to:
(a) the Executive's accrued benefit in the Qualified Plan,
determined in accordance with the provisions of the Qualified Plan
applicable to the Executive's benefit calculations as in effect on that
date, but assuming, for purposes of this computation, that (i) Sections
415 and 401(a)(17) of the Code had not been enacted;
-2-
<PAGE> 3
REDUCED BY
(b) the Executive's accrued benefit in the Qualified Plan
determined in accordance with the provisions of the Qualified Plan
applicable to the Executive's benefit computation, as in effect on that
date.
2.2 Early Retirement. If the Executive terminates employment with the
Company on or after his Early Retirement Date (as defined in the section of the
Qualified Plan applicable to the Executive's benefit computation), the Executive
will receive a Supplemental Pension equal to the benefit described under Section
2.1 of this Plan; provided, if benefits under this section commence prior to the
Executive's Normal Retirement Date, payments shall be reduced in the same manner
as though made to the Executive in accordance with the Early Retirement
provisions of the Qualified Plan applicable to the Executive's benefit
computation, as in effect on the date payments under this sections are to begin.
2.3 Disability. If the Executive becomes Disabled (as defined in the
Qualified Plan) before terminating employment with the Company, he will receive
a Supplemental Pension equal to the benefit described in Section 2.1 of this
Plan. The Supplemental Pension shall be calculated as though the Executive
continued to receive the same rate of compensation he was receiving immediately
prior to his disability, and as though (i) if the Executive is covered under
Supplement One to the Plan, he continued to earn Credited Service (as defined in
Supplement One to the Plan), or (ii) if the Executive is not covered under
Supplement One, he continued to receive pay-based credits (as defined in the
Qualified Plan) from the date of his disability until his Normal Retirement
Date.
2.4 Death. If the Executive dies before his Supplemental Pension
payments begin under this Plan, the Executive's Beneficiary will receive a
benefit, paid in the form of a lump sum, within 90 days after the death of the
Executive. The amount of the death
-3-
<PAGE> 4
benefit to which the Executive's Beneficiary is entitled under this Plan is the
Actuarial Equivalent (as defined in the Qualified Plan) of the Supplemental
Pension payable to the Executive under this Plan as though the Executive had
reached his Normal Retirement Date on the day immediately preceding his date of
death.
2.5 Termination for Other Reasons. If the Executive terminates
employment with the Company for any reason other than death or disability prior
to his Early Retirement Date and before he has earned a nonforfeitable right to
100% of his benefits under the Qualified Plan, he will irrevocably forfeit all
benefits under this program. If the Executive terminates employment with the
Company for any reason other than retirement, death or disability after he has
earned a nonforfeitable right to 100% of his benefits under the Qualified Plan,
he will receive the benefit described in Section 2.1, commencing on his Normal
Retirement Date.
2.6 Form and Timing of Supplemental Benefit Payment.
(1) Except as provided in Section 2.4, or unless an
alternative form of payment is selected by the Executive pursuant to
Section 2.7, if the Executive is not married on the date payment of his
Supplemental Pension is to begin, the Executive's Supplemental Pension
shall be paid in the form of an annuity for the life of the Executive;
or if the Executive is married on the date payment of the Supplemental
Pension is to begin, the Actuarial Equivalent of the Executive's
Supplemental Pension shall be paid in the form of a qualified joint and
50% survivor annuity.
(2) Unless an election is made by the Executive pursuant to
Section 2.7 or, unless the second sentence of Section 2.5 applies, or
Section 2.6(3) applies, the annuity form of Supplemental Pension shall
be paid monthly and commence no later
-4-
<PAGE> 5
than sixty days after the close of the Plan Year during which the
Executive terminates employment with the Company.
(3) Unless an election is made by the Executive pursuant to
Section 2.7, Supplemental Pension payments for an Executive who becomes
Disabled shall be paid monthly and commence when the Executive reaches
Normal Retirement or, if earlier, the date the Committee consents to
the payment of benefits.
2.7 Alternative Manner and Time of Benefit Payment.
(1) In lieu of a qualified joint and survivor annuity, or life
annuity as the manner of payment pursuant to Section 2.6(1), or the
timing of payment described in Sections 2.6(2) and (3), an Executive
may elect to receive the Actuarial Equivalent of his Supplemental
Pension in a single lump-sum payment payable within 90 days from the
date the Executive reaches Normal Retirement or, if later, the date the
Executive terminates employment with the Company.
(2) To be effective, an election pursuant to this subparagraph
must be made at least 12 months prior to the date on which the
Executive terminates employment with the Company; or, where the
Executive becomes Disabled, 12 months prior to his Normal Retirement.
An election may be revised, but such revision must be made at least 12
months prior to the date on which the Executive terminates employment
with the Company; or, if Disabled, 12 months prior to his Normal
Retirement. No election revision will be permitted within the 12-month
period immediately prior to the date on which the Executive terminates
employment with the Company; or, if Disabled, within the 12-month
period immediately preceding his Normal Retirement.
(3) Except as provided in the following sentence, the
conversion of the Supplemental Pension into a qualified joint and
survivor annuity or a lump-sum payment shall be made based on the same
actuarial and present value assumptions
-5-
<PAGE> 6
applicable to the Executive's benefits calculation under the Qualified
Plan. When the Qualified Plan is amended to determine lump-sum
payments by using the mortality table described in Section
417(e)(3)(A)(ii)(I) of the Code and the annual rate of interest on
30-year Treasury securities, as described in Code Section
417(e)(3)(A)(ii)(II) (commonly known as the "GATT" revisions),
lump-sum payments under this Plan will be calculated on the basis of
the same actuarial and present value assumptions used for purposes of
the Qualified Plan or, if a larger lump sum payment results, on the
basis of the actuarial and present value assumptions used for purposes
of the Qualified Plan immediately before such amendment.
SECTION 3
Risk of Forfeiture
If the Executive, without the express prior written consent of the
Company, directly or indirectly, individually or as an agent, officer, director,
employee, consultant, shareholder, or partner engages in any business or
enterprise which is in Competition with the Company (as defined below) during
the time of the Executive's employment with the Company or any of its affiliates
or at any time thereafter, all benefits accrued under this supplemental
retirement plan will be forfeited permanently and payment of benefits, if begun,
will stop.
As used in this Section, (i) the words "Competition with the Company"
include competition with the Company or any subsidiary or affiliate of the
Company, or any of the successors or assigns of the business of any of them (the
"Company Group"), and (ii) a business or enterprise will be in Competition with
the Company if it is engaged, in any state in the United States in which any
products of any member of the Company Group are then marketed or in any foreign
country in which such products are then marketed, in
-6-
<PAGE> 7
manufacturing, designing, engineering, assembling or distributing pumps, oil
field power sections, industrial mixers and agitators, glass-lined reactor and
storage vessels, or valves. However, this section will not prevent the Executive
from (i) being employed by or serving as an officer of or consultant to any
subsidiary or division of a business or enterprise in Competition with the
Company if that subsidiary or division is not itself in Competition with the
Company; or (ii) purchasing or holding for investment less than 2% of the shares
of any corporation regularly traded either on a national securities exchange or
in the over-the-counter market.
The Executive also will forfeit any benefits accrued under this
supplemental retirement plan and payment of benefits, if begun, will stop if the
Executive, without the express prior written consent of the Company, discloses,
misappropriates, or makes available to anyone outside the Company at any time,
either during the Executive's employment with the Company or any of its
affiliates or subsequent to termination of employment, any trade secrets or
confidential information belonging to the Company or any of its affiliates. As
used in this Section, "confidential information" includes, but is not limited
to, business systems, methods, policies, procedures, manuals, promotional
materials, price lists, pricing policies, order forms, contracts, agreements,
invoices, receipts, messages, memoranda, circulars, bulletins, sales records for
any assigned territory, sale and delivery schedules, customer lists, customer
files, customer credit terms and information, any records regarding the
solicitation of orders, past, present or prospective orders to the extent that
any of these items are used by the Company or any of its affiliates and which
became known to the Executive by reason of his employment.
-7-
<PAGE> 8
SECTION 4
Administration
The Committee is responsible for the general interpretation and
administration of this Plan and the carrying out of its provisions, and has all
rights and powers required in that connection.
SECTION 5
Nature of Benefits
A participant in this Plan shall not, by virtue of his participation
in this Plan, have any right, title or interest in any asset of the Company.
The obligation of the Company to make payments under this Plan is an unsecured
promise of the Company to pay benefits as they become due.
SECTION 6
General Provisions
6.1 Non-Alienation of Benefits. Benefits payable under this Plan may
not be anticipated, assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process.
6.2 Taxes. Any taxes required to be withheld by any federal, state or
local government will be deducted from payments due under this Plan, and paid on
behalf of the Executive to the appropriate taxing authority.
6.3 Amendment; Termination. The Board of Directors may from time to
time amend this Plan, or any provision thereof, in such respects as the Board of
Directors may deem advisable except that no amendment to this Plan may be
adopted which would adversely affect the rights of any participant under this
Plan unless the Executive consents in writing to the amendment. When an
Executive terminates employment with the
-8-
<PAGE> 9
Company, he will cease to earn additional benefits under this Plan, except as
provided in Section 2.3. If the Executive is reemployed after terminating
employment with the Company (whether or not he incurs a Break-in-Service as
defined in the Qualified Plan), he may earn benefits attributable to his
subsequent period of employment only if the Committee again extends this Plan to
him.
6.4 Non-duplication. No Executive may receive a benefit under this Plan
if he receives a benefit under the Robbins & Myers, Inc. Executive Supplemental
Retirement Plan.
6.5 Successor; Binding Agreement. This Plan and the obligations
hereunder are binding on the Company and its successors and assigns. In the case
of a merger, consolidation, sale of all or substantially all of its assets,
liquidation or other reorganization of the Company under circumstances in which
a successor person, firm or company (a) continues all or a substantial part of
the Company's business and (b) employs a substantial number of the Company's
employees, the successor will be substituted for the Company under this Plan.
The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company, by agreement in form and substance reasonably
satisfactory to Executive, to expressly assume and agree to perform this Plan in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place.
6.6 Applicable Law. This Plan will be governed by and construed in
accordance with the laws of the State of Ohio and the United States of America.
6.7 Plan Not a Contract of Employment. Neither the adopting of this
supplemental pension program nor the payment of any benefit gives any legal or
equitable right to any person against the Company, any affiliate of the Company
or their officers or
-9-
<PAGE> 10
employees except as provided in this document. Participation in the program does
not give any Executive any right to continued employment.
6.8 Claims Procedure. Any controversy or claim arising out of or
relating to this Plan shall be filed with the Committee which shall make all
determinations concerning such claim. Any decision by the Committee denying such
claim shall be in writing and shall be delivered to all parties in interest.
Such decision shall set forth the reasons for denial in plain language.
Pertinent provisions of the Plan shall be cited and, where appropriate, an
explanation as to how the Executive can perfect the claim will be provided. This
notice of denial of benefits will be provided within 90 days of the Committee's
receipt of the Executive's claim for benefits. If the Committee fails to notify
the Executive of its decision regarding his claim, the claim shall be considered
denied, and the Executive shall then be permitted to proceed with his appeal as
provided in this section.
If the Executive has been completely or partially denied a
benefit, the Executive shall be entitled to appeal this denial of his claim by
filing a written statement of his position with the Committee no later than
sixty (60) days after receipt of the written notification of such claim denial.
The Committee shall schedule an opportunity for a full and fair review of the
issue within thirty (30) days of receipt of the appeal.
The decision on review shall set forth specific reasons for
the decision, and shall cite specific references to the pertinent Plan
provisions on which the decision is based.
Following the Committee's review of any additional information
submitted by the Executive, either through the hearing process or otherwise, the
Committee shall render a decision on its review of the appealed claim in the
following manner:
(a) The Committee shall make its decision regarding the merits
of the appealed claim within sixty (60) days following its receipt of
the request for review
-10-
<PAGE> 11
(or within 120 days after such receipt, in a case where there are
special circumstances requiring extension of time for reviewing the
appealed claim). The Committee shall deliver the decision to the
Executive in writing. If an extension of time for reviewing the
appealed claim is required because of special circumstances, written
notice of the extension shall be furnished to the Executive prior to
the commencement of the extension. If the decision on review is not
furnished within the prescribed time, the claim shall be deemed denied
on review.
(b) The decision on review shall set forth specific reasons
for the decision, and shall cite specific references to the pertinent
Plan provisions on which the decision is based.
IN WITNESS WHEREOF, Robbins & Myers, Inc. has executed this document
this ___ day of July, 2000.
ROBBINS & MYERS, INC.
By:
------------------------------------
Title:
---------------------------------
-11-
<PAGE> 12
AGREEMENT OF EXECUTIVE
The undersigned hereby agrees to be designated as an Executive
participating in the foregoing Robbins & Myers, Inc. Executive Supplemental
Pension Plan and to be bound by the terms and provision of said Plan.
-------------------------------------
Executive
Date:
---------------------------------
-12-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>l85073aex21.txt
<DESCRIPTION>EXHIBIT 21
<TEXT>
<PAGE> 1
Exhibit 21.1
SUBSIDIARIES OF ROBBINS & MYERS, INC.
Robbins & Myers, Inc. has the following subsidiaries all of which (i) do
business under the name under which they are organized and (ii) are included in
the consolidated financial statements of the Company. The names of such
subsidiaries are set forth below.
<TABLE>
<CAPTION>
Jurisdiction Percentage of
in which Incorporated Ownership
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Chemineer, Asia, Ptd. Ltd. Singapore 75
Chemineer, Inc. Delaware 100
Edlon, Inc. Delaware 100
Glasteel Parts and Services, Inc. Delaware 100
GMM Pfaudler Limited India 51
Moyno, Inc. Delaware 100
Pfaudler Equipamentos Industrias Ltda. Brazil 100
Pfaudler, Inc. Delaware 100
Pfaudler S.A. de C.V. Mexico 100
Pfaudler-Werke GmbH Germany 100
R&M Italia S.p.A. Italy 100
Robbins & Myers Canada, Ltd. Canada 100
Robbins & Myers Energy Systems, Inc. Delaware 100
Robbins & Myers GmbH Germany 100
Robbins & Myers Energy Systems L.P. Texas 100
Robbins & Myers Holdings, Inc. Delaware 100
Robbins & Myers International Sales Co., Inc. U.S. Virgin Islands 100
Robbins & Myers, Limited England 100
Robbins & Myers de Mexico, S.A. Mexico 100
Chemineer de Mexico, S.A. Mexico 67
Moyno de Mexico, S.A. Mexico 51
Universal Glasteel Partnership Delaware 50
Robbins & Myers U.K. Limited England 100
Suzhou Pfaudler Co., Ltd. China 70
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>6
<FILENAME>l85073aex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE> 1
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8's) pertaining to the 1984 Stock Option Plan (No. 2-98841, Post
Effective Amendment No. 1, dated November 23, 1988), Stock Option Plan for
Non-Employee Directors (No. 33-43625, dated November 1, 1991), 1994 Directors'
Stock Compensation Plan (No. 33-84032, dated September 13, 1994), Robbins &
Myers, Inc. Employee Savings Plan (No. 33-61893, dated August 17, 1995), Robbins
& Myers, Inc. 1994 Long-term Incentive Plan (No. 333-00291, dated January 19,
1996), Robbins & Myers, Inc. 1995 Stock Option Plan for Non-employee Directors
(No. 333-00293, dated January 19, 1996), Robbins & Myers, Inc. Savings Plan for
Union Employees (No. 333-00289 dated February 7, 1996), Robbins & Myers, Inc.
1999 Long-term Incentive Plan (No. 333-35856 dated April 28, 2000) and the
Registration Statement (Form S-3) pertaining to Investor Stock Purchase Plan
(No. 333-31235, dated July 14, 1997) of our report dated October 2, 2000, with
respect to the consolidated financial statements and schedule of Robbins &
Myers, Inc. and Subsidiaries, included in this Annual Report (Form 10-K) for the
year ended August 31, 2000.
/s/ Ernst & Young LLP
Dayton, Ohio
November 17, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.1
<SEQUENCE>7
<FILENAME>l85073aex24-1.txt
<DESCRIPTION>EXHIBIT 24.1
<TEXT>
<PAGE> 1
Exhibit 24.1
ROBBINS & MYERS, INC.
LIMITED POWER OF ATTORNEY
WHEREAS, Robbins & Myers, Inc. (the "Company") intends to file with the
Securities and Exchange Commission its Annual Report on Form 10-K for the year
ended August 31, 2000:
NOW, THEREFORE, each of the undersigned in his capacity as a director
of the Company hereby appoints Gerald L. Connelly his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
to execute in his name, place and stead, the Company's Annual Report on Form
10-K for the year ended August 31, 2000, (including any amendment to such
report) and any and all other instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange Commission.
Said attorney shall have full power and authority to do and perform in the name
and on behalf of the undersigned, in the aforesaid capacity, every act
whatsoever necessary or desirable to be done, as fully to all intents and
purposes as the undersigned might or could do in person. The undersigned hereby
ratifies and approves the act of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this
21st day of November, 2000.
/s/ Maynard H. Murch, IV
------------------------
Maynard H. Murch, IV
/s/ Robert J. Kegerreis
------------------------
Robert J. Kegerreis
/s/ Thomas P. Loftis
------------------------
Thomas P. Loftis
/s/ William D. Manning, Jr.
---------------------------
William D. Manning, Jr.
/s/ Jerome F. Tatar
------------------------
Jerome F. Tatar
/s/John N. Taylor, Jr.
----------------------
John N. Taylor, Jr.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>8
<FILENAME>l85073aex27.txt
<DESCRIPTION>EXHIBIT 27
<TEXT>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-2000
<PERIOD-START> SEP-01-1999
<PERIOD-END> AUG-31-2000
<CASH> 11,244
<SECURITIES> 0
<RECEIVABLES> 82,598
<ALLOWANCES> (1,726)
<INVENTORY> 60,096
<CURRENT-ASSETS> 166,883
<PP&E> 207,123
<DEPRECIATION> (91,719)
<TOTAL-ASSETS> 495,679
<CURRENT-LIABILITIES> 91,289
<BONDS> 176,523
<PREFERRED-MANDATORY> 0
<PREFERRED> 0
<COMMON> 27,794
<OTHER-SE> 139,388
<TOTAL-LIABILITY-AND-EQUITY> 495,679
<SALES> 406,714
<TOTAL-REVENUES> 406,714
<CGS> 266,480
<TOTAL-COSTS> 96,662
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 498
<INTEREST-EXPENSE> 13,531
<INCOME-PRETAX> 30,041
<INCOME-TAX> 10,513
<INCOME-CONTINUING> 18,056
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,056
<EPS-BASIC> 1.65
<EPS-DILUTED> 1.53
</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----