FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For the fiscal year ended July 31, 1993
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the transition period from_______________________to___________________
Commission file number 1-8649
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A. The Toro Company Matching Stock Plan
B. The Toro Company
8111 Lyndale Avenue South
Minneapolis, MN 55420
REQUIRED INFORMATION
The following financial statements are furnished for the plan:
1. An audited statement of financial condition as of the end of the latest two
fiscal years of the plan (or such lesser period as the plan has been in
existence).
2. An audited statement of income and changes in plan equity for each of the
latest three fiscal years of the plan (or such lesser period as the plan has
been in existence).
3. The statements required of Items 1 and 2 shall be prepared in accordance with
the applicable provisions of Article 6A of Regulation S-X.
4. In lieu of the requirements of Items 1-3 above, plans subject to ERISA may
file financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA. To the extent required by ERISA, the
plan financial statements shall be examined by an independent accountant, except
that the "limited scope exemption" contained in Section 103(a)(3)(C) of ERISA
shall not be available.
NOTE: A written consent of the accountant is required with respect to the plan
annual financial statements which have been incorporated by reference in a
registration statement on Form S-8 under the Securities Act of 1933. The
consent should be filed as an exhibit to this annual report. Such consent shall
be currently dated and manually signed.
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
The Toro Company Matching Stock Plan
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(Name of Plan)
Date January 17, 1994 /S/ Gerald T. Knight
---------------- ------------------------------------
Gerald T. Knight
Vice President - Finance
Chief Financial Officer
THE TORO COMPANY
MATCHING STOCK PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JULY 31, 1993 and 1992
1993 1992
---- ----
Assets held by Trustee:
Investments:
First Short-Term Investment Fund $15,210 $33,295
Toro Investment Fund A 13,155 -
Toro Investment Fund B 5,302 -
The Toro Company Common Stock 6,410,554 3,534,847
Other receivables 186 159
---------- ----------
Total assets held by Trustee 6,444,407 3,568,301
Employer contributions receivable 268,383 16,010
Employee contributions receivable 67,491 64,033
Forfeitures payable (36,134) (27,357)
---------- ----------
Net assets available for benefits $6,744,147 $3,620,987
---------- ----------
---------- ----------
See accompanying notes to financial statements.
THE TORO COMPANY
MATCHING STOCK PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED JULY 31, 1993, 1992 and 1991
1993 1992 1991
---- ---- ----
Investment income related to assets held by
Trustee:
Interest $ 3,829 $ 4,500 $ 7,075
Dividends 3,256 117,444 74,368
Net appreciation (depreciation)
in the fair value of investments 1,996,750 (714,344) (860,284)
---------- ---------- ----------
Total investment income (loss) 2,003,835 (592,400) (778,841)
Employer contributions 512,458 277,994 290,708
Employee contributions 1,043,869 1,109,644 1,164,589
Benefit payments (400,614) (392,730) (184,698)
Cash management fee (254) (243) (255)
Forfeitures (36,134) (27,357) (50,716)
---------- ---------- ----------
Increase in net assets available for benefits 3,123,160 374,908 440,787
Net assets available for benefits:
Beginning of year 3,620,987 3,246,079 2,805,292
---------- ---------- ----------
End of year $6,744,147 $3,620,987 $3,246,079
---------- ---------- ----------
---------- ---------- ----------
See accompanying notes to financial statements.
THE TORO COMPANY MATCHING STOCK PLAN
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1993 and 1992
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF STATEMENT PRESENTATION
The accompanying financial statements of The Toro Company Matching Stock
Plan (the Plan) are presented in accordance with generally accepted
accounting principles.
INVESTMENTS
The investment in 324,585 and 263,516 shares of The Toro Company common
stock is stated at quoted market price at July 31, 1993 and 1992,
respectively. The cost of the investment at July 31, 1993 and 1992
was $5,727,104 and $4,847,514, respectively and is determined on an
average cost basis.
The First Short-Term Investment Fund is limited to bonds, notes,
certificates of deposit, variable rate notes and other evidences of
indebtedness that are payable on demand or that have a maturity rate
not exceeding 91 days from the date of purchase. The First Short-Term
Investment Fund is stated at cost which approximates market value.
The Fund A is invested in a fixed income fund that provides a guaranteed
income. The fund is comprised of insurance contracts, bank contracts,
and federally backed contracts. All investments in Fund A are AAA
graded by Standard and Poors at the time of purchase.
The Fund B is composed of 500 selected medium to large sized common stocks
which are chosen to represent the U.S. stock market.
(2) DESCRIPTION OF PLAN
The Plan became effective as of August 1, 1988, and has approximately 1,200
active participants. The purpose of the Plan is to provide certain
eligible employees of The Toro Company and its participating
subsidiaries (referred to together as the "Company") with an
opportunity to save part of their compensation on a pre-tax basis
(and, if an employee so elects, on an after-tax basis) and to have
those savings accumulate in a tax-deferred investment account which is
invested in the common stock of the Company and distributed after
termination of active employment. The Company, as administrator of
the Plan, absorbs the major portion of the administrative costs and
trustee fees of the Plan.
(Continued)
2
TORO COMPANY MATCHING STOCK PLAN
(2) DESCRIPTION OF PLAN (Continued)
A participant may agree to have his or her salary reduced on a pre-tax
basis, after-tax basis or a combination thereof at rates ranging up to
4% of annual compensation through an automatic payroll deduction each
payroll period, provided that such deductions may not exceed $2,400 in
any Plan year.
The Company will make contributions to the Plan on behalf of each
participant who makes pre-tax or after-tax contributions to the Plan.
These Company matching contributions consist of basic matching
contributions and performance-based matching contributions, as
described below.
The Company's basic matching contribution will be equal to 25% of the sum
of the amounts contributed by a participant to the Plan.
If the Company meets certain financial goals as defined by its Board of
Directors, the Company may make performance based matching
contributions to the Plan. If the specified financial goals are
achieved, the performance-based matching contribution may be equal to
an additional 25% of a participant's compensation which is contributed
to the Plan.
A participant is eligible to receive a performance-based matching
contribution only if he or she is enrolled in the Plan on the last day
of the Plan year.
Company matching contributions and performance-based matching contributions
together with income attributable thereto will vest at the rate of 20%
after two years of vesting service, with an additional 20% being
accumulated annually thereafter until the employee is 100% vested.
Plan earnings are allocated to participants based on individual
account balances.
Forfeitures are applied towards future Company contributions. A general
description of the Plan is contained in the Summary Plan Description.
Contributions and benefit payments are made under control of the Plan
Administrator.
(3) FUNDING POLICY
The Company's funding policy is to make monthly basic contributions and
annual performance-based matching contributions to the Plan up to
amounts allowed by the Internal Revenue Service. The
performance-based contribution is determined by the Board of Directors
of The Toro Company and is based on the specified financial goals.
(Continued)
3
THE TORO COMPANY MATCHING STOCK PLAN
(3) FUNDING POLICY (Continued)
The employee contributions consist of salary reduction elections under a
401(k) plan, as well as after tax contributions.
(4) PARTY-IN-INTEREST TRANSACTIONS
The First Trust National Association (Trustee) is a party-in-interest with
respect to the Plan. In addition, the Plan holds shares of The Toro
Company Common Stock. In the opinion of the Plan's legal counsel,
transactions between the Plan, the Trustee and The Toro Company are
exempt from being considered as "prohibited transactions" under the
Employee Retirement Income Security Act of 1974 (ERISA) Section
408(b).
(5) PLAN TERMINATION
The Toro Company has voluntarily agreed to make contributions to the Plan.
Although the Company has not expressed any intent to terminate the
Plan, it may do so at any time. Upon the termination of the plan, the
Trustee shall liquidate the Trust Fund, distributing benefits to the
Participants or their beneficiaries. The Trustee shall reserve
amounts as may be required to pay any expenses of termination,
liquidation and distribution and shall then segregate each
Participant's Trust Fund Share in a special account.
(6) COMMINGLED INVESTMENT FUNDS
For information regarding the net assets and changes in those net assets
for the Toro Investment Funds A and B, reference is made to the
separate unaudited financial statements of these commingled investment
funds, which are filed separately with the Department of Labor.
(Continued)
4
THE TORO COMPANY MATCHING STOCK PLAN
(6) COMMINGLED INVESTMENT FUNDS (continued)
The changes in the Plan's investment in The Toro Investment Funds A and B
for the year ended July 31, 1993 are summarized as follows:
Fund A Fund B
------ ------
Beginning investment balance $ - $ -
Funds Deposited 12,811 5,303
Pro rata share of investment gain (loss) 344 (1)
Funds withdrawn - -
------ -----
Ending investment balance $13,155 $5,302
------ -----
------ -----
Percentage Plan ownership in the net assets
of the Commingled Investment Fund at year end .002% .001%
---- ----
---- ----
The data presented above have been derived from information certified as
complete and accurate by the Trustee.
(7) FEDERAL INCOME TAXES
The Plan Administrator anticipates filing for a determination letter from
the Internal Revenue Service stating that the Plan and all amendments
to the Plan are qualified under Section 401 (a) of the Internal
Revenue Code and that the trust created under the Plan is exempt from
federal income taxes under Section 501(a) of the Code. The Plan
Administrator believes the Plan and all amendments to the Plan will
qualify under the provisions of Sections 401(a) and 501(a) of the Code
and be exempt from Federal income taxes.
(8) PLAN AMENDMENT
Effective June 1, 1991, the plan was amended to include the option for
participants, upon age 55, to diversify a portion of their investment
into Toro Investment Fund A, Toro Investment Fund B or the First
Short-Term Investment Fund.
SCHEDULE 1
THE TORO COMPANY
MATCHING STOCK PLAN
SCHEDULE OF INVESTMENTS
July 31, 1993
Face Amount Market
Description or shares Cost value
- ----------- ----------- -------- --------
*First Short-Term Investment Fund 15,210 $ 15,210 $ 15,210
Toro Investment Fund A 267 13,145 13,155
Toro Investment Fund B 78 5,295 5,302
*The Toro Company Common Stock 324,585 5,727,104 6,410,554
--------- ---------
Total Investments $5,760,754 $6,444,221
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--------- ---------
*Party-in-Interest
See accompanying independent auditors' report.
SCHEDULE 2
THE TORO COMPANY
MATCHING STOCK PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
Year ended July 31, 1993
Series of transactions involving a single security which, in the aggregate,
involves an amount more than 5% of beginning of year Plan assets at current
value.
Number of Total dollar amount
---------------- --------------------- Net gain
Security issue Purchases Sales Purchases Sales (loss)
- -------------- --------- ----- --------- ----- --------
*First Short Term
Investment Fund 48 46 $1,610,571 $1,619,562 $ -
*The Toro Company
Common Stock 18 17 1,272,221 202,644 1,815
*Party-in-interest
See accompanying independent auditors' report.
KPMG Peat Marwick
Certified Public Accountants
4200 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402
INDEPENDENT AUDITORS' REPORT
The Plan Administrator
The Toro Company Matching Stock Plan:
We have audited the accompanying statements of net assets available for benefits
of The Toro Company Matching Stock Plan (the Plan) as of July 31, 1993 and 1992
and the related statements of changes in net assets available for benefits for
each of the years in the three-year period ended July 31, 1993. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits as of July 31, 1993
and 1992, and the changes in net assets available for benefits for each of the
years in the three-year period ended July 31, 1993 in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
investments and reportable transactions are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and are not
a required part of the basic financial statements. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ KPMG Peat Marwick
December 28, 1993
