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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K(*)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER:
0-18259
AG-BAG INTERNATIONAL LIMITED
(Exact name of registrant as specified in its charter)
DELAWARE 93-1143627
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2320 SE AG-BAG LANE
Warrenton, Oregon 97146
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (503) 861-1644
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common shares, par value $.01 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. / /
The aggregate quoted market price of voting stock of registrant
held by non-affiliates as of March 11, 1996, was $1 11/32.
The registrant has one class of common stock with 12,053,741 shares
outstanding as of March 19, 1996.
DOCUMENTS INCORPORATED BY REFERENCE:
Proxy statement for the Registrant's Annual Meeting of Stockholders
to be held June 3, 1996, is incorporated into Part III of this report.
(*) The information required by a portion of Item 1 and Items 6, 7, 8
and 14(d) and Exhibits 11, 12, 23 and 27 required by Item 14(c) is the
subject of a Form 12b-25 filed contemporaneously herewith and,
therefore, has been omitted from this Form 10-K.
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AG-BAG INTERNATIONAL LIMITED
TABLE OF CONTENTS
PAGE
PART I
Item 1. Business.......................................... 1
Item 2. Property.......................................... 9
Item 3. Legal Proceedings................................. 9
Item 4. Submission of Matters to a Vote of Security
Holders Executive Officers of the Registrant...... 9
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters............................... 10
Item 6. Selected Financial Data........................... 11
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations..... 11
Item 8. Financial Statements and Supplemental Data........ 11
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure............ 11
PART III
Items 10. and 11. Directors and Executive Officers of
Registrant and Executive Compensation............. 12
Item 12. Security Ownership of Certain Beneficial
Owners and Management............................. 12
Item 13. Certain Relationships and Related Transactions.... 12
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K............................... 13
PART I
______
ITEM 1. BUSINESS
_________________
GENERAL
_______
Ag-Bag International Limited (the "Company") was incorporated as a
New York corporation in 1989. The primary operating company, Ag-Bag
Corporation, a Nebraska corporation, was incorporated in 1978. The
Company changed its name in 1990 from AB Holding Group, Inc. to Ag-Bag
International Limited. In 1994, in an effort to streamline and save
administrative expenses, two of the Company's operating subsidiaries,
A.B. Rental, Inc. and Ag-Bag Corporation were merged into the Delaware
subsidiary, ABVIN Merging Corp. On January 1, 1995, the Company was
merged into its Delaware subsidiary resulting in the reincorporation of
the Company in Delaware and changed its name to Ag-Bag International
Limited.
The Company has pioneered an alternate method of storing feed for
livestock. Traditional methods of storing feed have included placing it
in bunkers, pits, and silos or baling and stacking it. The Company's
method is to store the feed in huge plastic bags of up to 250 feet in
length and up to 12 feet in diameter by tightly stuffing the feed into
the bag. The Company assembles the machines for stuffing the feed into
the bags. It has the bags manufactured to its specifications and then
folds and distributes the bags through its dealer network. The benefits
of bagging the feed include reduced cost, additional flexibility in
harvesting and storing the feed, enhanced feed quality, and relatively
small capital requirements. The Company also sells ancillary products
which complement the Company's main line of bagging machines and bags.
The Company expects the use of bagging as a means of silage storage
to continue to play a major role in the 1990's because the quality of
stored feed is better than other known competitive methods, allowing the
farmers to be more efficient and produce dairy, beef, sheep and pork
products at a lower price. The Company believes the concept of bagging
is one way in which farmers can be more profitable by reducing, or
completely eliminating, the purchase of feed and grain from outside
sources. Bagging enables the farmer to produce and store the feed on
the farm and provides easier access to the silage thereby allowing the
farmer to choose the quality of silage to feed at any given time. The
bagged feed has shown high quality, allowing for higher production.
The Company expanded its operations into Europe in 1989 where it
offers a custom bagging service on a fee per metric tonne basis in the
United Kingdom. In 1994, the Company shipped its first orders to
dealers in Japan, Latin America and Germany.
The Company is developing other uses for its bagging technology.
In 1993, it established a grain bagging division and a composting
division. The Company assembles and sells grain bagging machines which
enable farmers to store whole grains as well as other products in the
Company's recyclable TriDura plastic bags and has adapted its bagging
machines to permit bagging of compostable organic matter. The Company
has developed plastic bag bailers which enable the Company to bail and
pick up the recyclable TriDura plastic bags from its customers.
SEASONAL NATURE OF BUSINESS
___________________________
The core business of the Company is historically seasonal due to
the harvest seasons in North America and Europe. The Company's
machinery tends to be purchased in anticipation of the next harvest
1
season, so most of the sales of machinery occur in the spring and
summer. This requires the Company to carry significant amounts of
inventory to meet rapid delivery requirements of customers. Bag sales
tend to occur as the harvest season approaches in the summer, and during
the harvest season in the fall. In 1994, the Company began to
counteract some of its seasonality by generating sales in Latin America
and expanding into the compost market.
FARM EQUIPMENT AND PRODUCTS
___________________________
INTRODUCTION. Silage is made using the Ag-Bag
TRADEMARK> system by storing forage crops, such as corn, sorghum, or
alfalfa, under anaerobic (without oxygen) conditions in sealed Ag-
Bag TriDura storage bags. The traditional methods
for making silage involve storing it in bunkers, pits or silos. Using
traditional methods, there is a nutrient loss resulting from a reduction
in the moisture content of the forage before storage. The moisture
content must be reduced to compensate for the high oxygen content of the
forage which results from the inability to pack the forage tightly
enough. When the forage is not packed sufficiently, the silage
fermentation process produces too much heat resulting in an even greater
loss of nutrient value that would occur if the moisture content were not
reduced. The loss of nutrient value results in the need for additional
food supplements or an increased volume of feed.
The Ag-Bag system is an alternative to
bunkers, pits and silos. The Ag-Bag bagging
machines push the forage into huge recyclable plastic film TriDura bags
with sufficient compaction to minimize the amount of oxygen in the bag
which is then sealed tightly when filled. As a result, the forage can
be stored with significantly higher moisture content. The ability to
store the forage in this manner also reduces the time required to cut
and store the forage thus reducing the loss of nutrients.
AG-BAG FARM EQUIPMENT. The Company's
principal line of farm equipment is marketed under the trade name "Ag-
Bagger." The Ag-Bagger is
available in three versions with a number of optional features.
The smallest version consists of machines used to load forage into
Ag-Bag TriDura storage bags ranging in size from 8
to 9 feet in diameter and 100 to 200 feet in length. This version was
first introduced by the Company in 1987. It is used primarily in
smaller dairy and cattle feeding operations by dairymen with herds
averaging about 50 head and by cattlemen feeding up to about 300 head of
feeder cattle. Most of these machines are powered by the power take-off
unit of a farm tractor and moved by a tractor or other farm vehicle.
The retail prices for this machine range from approximately $20,000 to
$45,000.
In 1992, the Company introduced a medium-sized machine which can be
operated by the power take-off unit of a farm tractor or operated
independently with an optional diesel engine made by Caterpillar or
Deere & Company. This machine allows farmers to load forage into Ag-
Bag TriDura storage bags ranging in size from 9 to
10 feet in diameter and 100 to 250 feet in length. This machine is
primarily suitable for use by dairymen with herds ranging from 150 to
300 head and by cattlemen feeding between 300 and 800 head of feeder
cattle. The retail price for this machine ranges from approximately
$65,000 to $110,000.
The largest version consists of machines that can be used to load
Ag-Bag TriDura storage bags ranging in size from 9
to 12 feet in diameter and 150 to 250 feet in length. These machines
are used primarily by dairymen with herds ranging from 300 to 2,000
head, by cattlemen with herds ranging from 800 to 15,000 head, and by
custom operators. A super 12-foot Ag-Bagger was
developed in 1989 and enhanced in 1995 for use by very large dairy and
custom operators and by cattle feeding operations with
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herds ranging from 15,000 to 25,000 head of cattle. The larger machines
come with optional diesel engines made by Caterpillar or Deere &
Company. The retail price for the larger machines ranges from
approximately $178,500 to $230,000.
A wide range of optional features are offered by the Company on its
bagging machines in order to meet the budget needs of the farmer.
The Company assembles and sells a separate line of related
equipment called the Ag-Bag Flex-a-Tuber with a
retail price ranging from $4,000 to $15,000. The Flex-a-
Tuber comes in two versions, one for storing round
bales and the other for storing square bales. The Flex-a-
Tuber permits farmers to store round-baled and
square-baled alfalfa, sorghum, and other forage in Ag-Bag
TRADEMARK> TriDura storage bags. The round bale and square bale Flex-a-
Tubers are made in three sizes to permit the bagging of four, five and
six foot bales. The bales can be stored in Ag-Bag
TriDura storage bags up to 200 feet in length.
The Company developed the Ag-Bag Grain
Bagger, which retails for between $13,000 and $45,000. This machine is
similar in design to the smallest Ag-Bagger
machines but has been adapted to permit the storage of grains, such as
corn, rice, wheat and soybeans, as well as other products, in Ag-
Bag TriDura storage bags. The machine permits the
grain to be bagged without damaging the kernel. After the grain is
bagged and sealed, it will retain the necessary quality for human
consumption.
The Company also assembles and sells the Mighty Bite
TRADEMARK> front-end load bucket. This revolutionary bucket replaces
the conventional bucket. Hydraulically operated, the Mighty
Bite closes tightly around material, thus
eliminating spillage and increasing load capacity due to compaction.
The Company manufactures them in sizes ranging from one-half cubic yard
to one cubic yard with a retail price ranging from $3,000 to $4,500.
The Company has adapted its Ag-Bag bagging
machines for use in large scale "in-vessel" composting of organic
matter. The bagging machine is combined with a shredder that shreds the
organic material which is then fed into the bagging machine which bags
the compostable matter into huge Ag-Bag TriDura
storage bags. An air blower is attached to the bag and circulates air
through the bag during the composting process.
AG-BAG TRIDURA STORAGE BAGS. The Ag-
Bag TriDura disposable storage bags range in size
from 8 to 12 feet in diameter and 100 to 250 feet in length and are made
of extruded plastic. Rolls of plastic are manufactured to the Company's
specifications. The Company then converts the rolls into bags by
cutting the rolls into the various bag lengths and folding the bags for
use on the Company's bagging machines. The plastic contains special
stabilizers to protect the bags from deterioration due to exposure to
weather and the sun's ultraviolet rays. Once a TriDura bag is used, it
may be recycled or disposed of in another manner, but may not be reused.
The Company contracts for the manufacture of, and sells, two grades
of bags: (1) TriDura three-ply bags with a white exterior and black
interior intended for storage of silage up to 24 months and (ii) single-
ply white bags intended for storage not to exceed 18 months. The retail
price of the bags ranges from approximately $225 to $950. The
manufactured plastic rolls are shipped to the Company's plant in Blair,
Nebraska, where they are folded and packed for sale using proprietary
folding techniques. The proprietary bag folding techniques reduce bag
folding time and allow the bags to uniformly unfold when being filled,
which thereby reduces operational delays.
3
AG-BAG INOCULANT. The Company markets a
liquid inoculant and a dry powder inoculant under the trade name Ag-Bag
Plus. The inoculant is added to the forage or the
round bales during bagging. It enhances the fermentation process for
making silage in bags, bunkers, pits and silos by substantially
shortening the time necessary for the creation of the silage. A liquid
inoculant was developed in 1989 by a Company supplier and introduced
into the market in 1990. The Company has experienced an increase in the
sales of liquid inoculant since June 1990. The dry inoculant is
produced from a proprietary formula owned by the Company and developed
by Larry R. Inman and Walter L. Jay. See "Executive Officers of the
Registrant." The Company is currently developing an inoculant designed
specifically for bunkers, pits and storage of high moisture grain. This
will enable the Company to penetrate three new markets for its inoculant
products.
Bags and machines each account for more than 30% of the Company's
consolidated revenue and have done so for the last three years.
MARKET SIZE
___________
The market for Ag-Bag machinery and Ag-
Bag TriDura recyclable storage bags is primarily
in the dairy and beef cattle industries. Silage is used most often as
dairy and beef animal feed. It is also used by farmers to a lesser
extent to feed hogs and sheep. In 1994, over 172,000,000 tons of corn,
alfalfa, and sorghum silage were made by United States farmers according
to the AG IQ Handbook X published in 1995 by Agricom, Inc. (the "AG
Handbook"). Based on AG Handbook statistics, the Company estimates that
there are approximately 150,000 dairy, beef, hog, and sheep farms in the
United States which are potential customers for Ag-Bag
TRADEMARK> farm equipment and TriDura storage bags; and that only about
5-7% of this group are actually using storage bags made by the Company
and its competitors. It further estimates that about 60% of the
customers using silage storage bags purchase them from the Company. In
addition to the U.S., the Company believes there is a large population
of such farms in Canada, Latin America, Germany and the United Kingdom,
where the Company currently operates, and there is a large potential
market in other countries into which the Company may expand.
The Company also markets the Ag-Bag Grain
Bagger, which is used to bag grain for animal and human consumption as
well as other products. The amount of grains stored for animal and
human consumption in the North American and European markets in which
the Company presently markets its bagging machines and equipment is very
large. However, since the Grain Bagger has only recently been
introduced, the Company is uncertain whether it will continue to gain
acceptance in the marketplace as an alternative to present methods of
grain storage. Until further marketing efforts have been made, the
Company cannot estimate with any certainty the likely size of the market
for the Grain Bagger and no assurance can be given that the grain
bagging concept will continue to be accepted in the marketplace. The
Company completed 9 sales in 1995, of its newly designed grain bagging
machines.
The Company has also developed a system for "in-vessel" composting
which is designed to eliminate odors and control leachate which is
inherent with composting. Composting is an alternative for disposing or
eliminating the large number of organics from landfills. The Company's
primary market is with cities, counties, and municipal waste companies.
The Company currently estimates the size of the compost market within
North America to be $1 billion a year. In the composting area, the
Company sold 2 bagging systems, placed 3 sublicense agreements and
commenced 7 pilot projects in 1995. Until further marketing efforts are
made outside North America, the Company cannot estimate with any
certainty the foreign market size. However, the Company believes that
there is a large potential market in other countries into which it may
expand. No assurance can be given that the "in-vessel" composting
system will be accepted in either the domestic or foreign marketplace.
4
MARKETING
_________
The Company markets its Ag-Bag farm
equipment, TriDura storage bags, Ag-Bag Plus and
other inoculants primarily through a network of United States, Canadian,
and international dealers. As of December 31, 1995, there were 140
dealers serviced by a combined total of 23 regional and territorial
Company-employed managers. Most of the dealers market all of the Ag-
Bag line of farm equipment and products; however,
some dealers sell only the farm equipment and others sell only the Ag-
Bag inoculants. The Company also sells farm
equipment, TriDura storage bags, and inoculant directly to large
customers in the states of California, New Mexico, Washington, and in
the New England area.
The Company offers customers the opportunity to finance the
purchase of Ag-Bag farm equipment through
unaffiliated third parties who offer lease-purchase financing.
The Company rents Ag-Bag bagging machines to
farmers located in the state of California. The rental charge is based
on the number of bags purchased and filled with forage. As of December
31, 1995, the Company had 6 machines available for rent. The Company
also sells TriDura storage bags in bulk to several custom farming
operations in the state of California which own Ag-Bag
TRADEMARK> bagging equipment. These operators place their private
labels on the bags and bag forage for customers on a fee-per-bag basis.
The Company offers a custom bagging service through its subsidiary
Ag-Bag Europe PLC in the United Kingdom. It retains ownership of the
bagging machines, provides bags to the customer, and fills the bags with
the customer's forage on a fee-per-metric tonne basis. In the United
Kingdom, KW Agriculture Ltd. was the exclusive sales and marketing agent
for the Company. Beginning in 1995, the relationship was no longer
exclusive and the Company began utilizing its existing sales and
marketing force in conjunction with KW Agriculture Ltd. to more fully
exploit the UK market.
The Company has formed a grain bagging division and is beginning to
market its grain bagging system. The Company markets its grain bagging
equipment through its dealer network and also through grain co-ops and
governmental agencies. In 1993, the Company received the U.S.
Department of Agriculture's approval for commodities stored in the
Company's systems to be used as collateral for Commodity Credit Corp.
loans. Commodity Credit Corp. provides low-interest loans to farmers
who store grain in approved storage structures. The Company has sold
the Ag-Bag Grain Bagger in the United States,
Canada and in North Africa.
The Company also formed a composting division to market its "in-
vessel" composting system. The Company intends to establish and market
this system through a composting dealer network. In addition, the
Company expects to develop a regional and territorial sales force which
will have expertise in composting and environmental recovery. The
Company markets its composting system through a sublicense which allows
the end user to use the Ag-Bag compost technology.
The Company is not dependent on any single customer or a few
customers. The loss of any customer would not have a material adverse
effect on the Company.
ASSEMBLY AND MANUFACTURING
__________________________
AG-BAG FARM EQUIPMENT. The Company buys most
of its components for its bagging machines from various other
manufacturers, manufactures the remaining components, and assembles the
machines
5
itself. The medium and large sized machines, composting machines and
Flex-a-Tubers are all assembled at the Company's
headquarters facility in Warrenton, Oregon. The smaller machines are
assembled both at the Warrenton facility and at the Company's Blair,
Nebraska plant and the Grain Baggers are assembled at the Company's
Blair, Nebraska plant.
The Company assembles all of its machines in order to better
control the quality of the farm equipment. This method also permits the
Company to offer customized assembly for the end user of its equipment.
The Company can acquire and install name brand manufactured components
specified by the customer in lieu of those ordinarily installed by the
Company.
AG-BAG TRIDURA STORAGE BAGS. All of the
three-ply TriDura bonded storage bags and the single-ply white bags are
manufactured for the Company by a single manufacturer. The bags are
manufactured to the Company's specifications using a stabilizer which
protects the plastic from becoming brittle due to the exposure to
weather and the sun's ultraviolet light rays. The TriDura plastic bags
are made in various diameters based on bag orders received by the
Company. The bags are shipped in uncut rolls to the Company's plant in
Blair, Nebraska, where they are cut to the proper lengths and folded for
shipment to the Company's dealers or directly to large customers, such
as feedlots.
AG-BAG INOCULANTS. The liquid inoculant is
purchased by the Company on the open market. The Company believes that
the liquid inoculant will be reasonably available for purchase on the
open market in the foreseeable future. The dry inoculant is produced by
the Company at the Blair, Nebraska plant pursuant to a proprietary
formula owned by the Company and developed by Larry R. Inman and Walter
L. Jay. See "Executive Officers of the Registrant."
PRINCIPAL SUPPLIERS AND MANUFACTURERS
_____________________________________
The Company purchases its TriDura bags from one supplier and the
Company considers its relationship with the supplier as good. The
Company believes there are adequate alternative suppliers available in
the event the supplier is unable to provide bags.
The structural components of the Company's farm equipment are
manufactured in Oregon under agreements with two manufacturing
companies. The Company believes that alternative sources of supply are
readily available at competitive prices if the present sources of supply
should become unavailable. The Company is not aware of any raw
materials shortages or problems with these suppliers which would
adversely affect the operations of the Company's business.
The Company mixes the dry inoculant at its Blair, Nebraska
facility. It purchases the ingredients for the dry inoculant from a
variety of suppliers. The Company purchased the liquid inoculant from a
supplier, who mixes the inoculants to the Company's specifications. The
Company believes there are various other alternative sources of supply.
COMPETITION
The Company believes it is the industry leader in the manufacture
and sale of complete sealed feed farm bagging systems, hence, the
Company's new slogan, the "Complete One." Ag-Bag
is the only Company which manufactures the full line of equipment, bags,
and other accessories for sealed feed farm management. There are two
competitors within the United States which manufacture similar silage
bagging machines. There are also a number of competitors which
manufacture bale wrapper machines,
6
which compete with the Company's Flex-a-Tuber.
The Company believes that it distinguishes itself in the market place
from other manufactures by providing a top quality product, better
warranty protection, and customer service.
The bag market is highly competitive. The Company competes in the
bag market by providing what the Company believes to be a superior
product and better warranty protection at a competitive price. The
Company is also offering, through central pickup locations in selected
geographic areas in the U.S., a recycling service for used Ag-
Bag TriDura bags.
The Company also competes with companies constructing bunkers and
pits, and to a lesser extent silos. The competitors are mostly smaller
companies that build the bunkers and pits for the farmer, which the
farmer then fills with forage using available or rented farm equipment
otherwise used in the farming operation. While these methods do not
require bags or special equipment to fill the bags, the use of these
alternatives involves a significant loss of flexibility in storing and
harvesting the feed and an overall loss of feed quality. Flexibility is
lost since structures must be permanently placed and significant capital
requirements are necessary to expand them. The feed quality is inferior
because of the amount of oxygen remaining after the forage is placed in
the pits or bunkers.
In the compost area, the Company competes primarily with wind row
turner manufacturers. Wind row turners compost by turning and watering
static piles weekly and require containment of odor and leachate. These
turners are comparable in price to the Company's compost machines.
However, the Company's systems offer the advantage of being self-
contained thus reducing odor and requiring no turning or watering.
There are approximately 50 manufacturers of turners. In addition, the
Company also competes with about five companies which manufacture "in-
vessel" systems, such as burners and incinerators for large projects,
generally ranging from $1 to $15 million.
In addition to the current competition, national competitors may
emerge if the bagging equipment and storage bag markets continue to
grow. These potential competitors include large farm equipment
manufacturers and large chemical companies who might decide to
manufacture and sell the storage bags.
The Company competes in its product markets primarily on the basis
of product quality, warranty protection, and customer service. Some of
its competitors are larger and have greater financial, marketing,
technical, and other resources than the Company.
BACKLOG
_______
In 1996, the orders were comparable to 1995. The dollar amount of
backlog orders of the Company that are believed to be firm, as of March
1, 1996, was approximately $3,806,600, as compared to $3,700,000 on
March 1, 1995. This backlog is seasonal and is reasonably expected to
be filled within the current fiscal year.
RESEARCH AND DEVELOPMENT
________________________
The amounts spent on research and development are not material.
7
ENVIRONMENTAL MATTERS
_____________________
Compliance with federal, state and local laws and regulations
regulating the discharge of materials into the environment, or otherwise
relating to the protection of the environment, had no material effect
upon capital expenditures, earnings, or competitive positions of the
Company during the year ended December 31, 1995. Except for the
possible effect of regulations in the United Kingdom, as described
below, no material effect is anticipated for the year ending December
31, 1996.
Effective September 1, 1991, separate pollution control regulations
were adopted concerning silage slurry or run off by Scotland, England
and Wales. The Scottish regulations specifically permit the Ag-
Bag system of bagging. The regulations adopted by
England and Wales, although subject to interpretation, may require that
farmers using Ag-Bag TriDura bags for storing
high-moisture content silage build a concrete structure under the bags
to control possible run off. It is estimated that the cost of such
structures would be approximately 16,000 pounds sterling (approximately
US$24,800). Currently, the Company has been permitted to bag low and
medium moisture silage in England and Wales without using concrete
structures so long as the bags were placed on sites that were relatively
firm and away from streams and other water courses.
PATENTS AND TRADEMARKS
______________________
The Company has basic and improvement patents in the U.S. as well
as a number of patents pending that encompass machines, bags and systems
for silage bagging, grain bagging, and hay/straw bale bagging.
Corresponding applications have or will be filed in selected foreign
countries. More recently, the bagging of compost has been added to the
Company's product line and proprietary rights in this new market have
been and are being developed.
The Company's patents on its basic bagging machine have been found
to be valid and have been successfully defended in prior litigation.
The Company believes that it has developed its position in the industry
partially as a result of protection provided by these patents. The
Company also owns the proprietary formula for making the dry inoculant
marketed under the trade name Ag-Bag Plus which
was developed by Larry R. Inman and Walter L. Jay. See "Executive
Officers of the Registrant."
The names Ag-Bag, Ag-Bag Plus
TRADEMARK>, Bale Bag, Flex-a-Tuber
TRADEMARK>, Flex-a-Tube, ABCTI System
TRADEMARK>, Mighty Bite, and the symbol
"AB" are all registered as trademarks with the
United States Patent and trademark Office.
The Company believes that its color scheme and trademarks are well
known in the industry and are an important part of its business, which
give it a competitive advantage.
EMPLOYEES
On December 31, 1995, the Company had 86 full-time employees. The
Company employs approximately 150 people during its busy season. None
of the Company's employees are represented by a union, and the Company
believes that its employee relations are good.
8
FINANCIAL INFORMATION RELATING TO FOREIGN AND DOMESTIC OPERATIONS AND
EXPORT SALES
_____________________________________________________________________
The information required by Item 101(d) of Regulation S-K, which is
required to be provided as part of this Item 1, has been omitted for the
reasons set forth in the Company's Form 12b-25 filed with the Securities
and Exchange Commission.
ITEM 2. PROPERTY
_________________
In early 1990, the Company began occupying its 30,000 square foot
facility located in Warrenton, Oregon. This facility serves as a
warehouse and houses the major portion of its silage bagging equipment
manufacturing. The Company's administrative offices are also located
there. Management estimates that the manufacturing at the Warrenton
plant is currently at approximately 60% of capacity. The Company
occupies the land pursuant to a lease which expires in 2015.
The Company owns facilities in Blair, Nebraska, which total
approximately 30,000 square feet. In these facilities, the Company
folds and packages its TriDura feed storage bags; prepares and packages
its proprietary inoculant; and assembles some of its smaller bagging
machines. These facilities are owned by the Company and also serve as a
warehouse.
ITEM 3. LEGAL PROCEEDINGS
__________________________
A civil class-action suit was filed in the Federal District Court
of Minnesota, 4th Division, on January 8, 1996 by Michael A. Hunt, on
behalf of bag customers, against the Company, UpNorth Plastics, Inc. and
Poly America, Inc. The civil suit alleges that the Company conspired
with UpNorth Plastics, Inc. and Poly America, Inc. to fix bag prices in
violation of federal law. The suit does not specify an amount of
alleged damages.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
____________________________________________________________
During the fourth quarter of 1995, no matters were submitted to a
vote of security holders.
EXECUTIVE OFFICERS OF THE REGISTRANT
____________________________________
The executive officers of the Company, their respective ages as of
March 19, 1996, business experience, and the period for which they have
served are set forth below. The executive officers are elected annually
by the Board of Directors at its meeting following the annual meeting of
stockholders. Officers serve at the discretion of the Board of
Directors.
DATE OF
NAME AGE ELECTION POSITION
____ ___ ________ ________
Larry R. Inman 45 1990 Chairman of the Board and Chief
Executive Officer (since 1990);
President of the Company since 1993;
President of Ag-Bag Corporation
(1984-1989) and Chairman (1989-1994)
of Ag-Bag Corporation (former
subsidiary).
9
Michael R. Wallis 31 1992 Chief Financial Officer (since 1993)
and Vice President of Finance (since
1992); Manager, Yergen & Meyer
(regional accounting firm, 1986-
1992).
Lemuel E. Cunningham 74 1990 Vice President (since 1990);
owner/operator of Post Oaks Ranch and
Cunningham Cattle and Feed Company
(since 1958).
Roy I. Anderson 76 1990 Secretary (since 1990); sole
practitioner (legal, 1949 to
present).
Arthur P. Schuette 56 1990 Vice President, Sales (since 1991);
Treasurer of the Company (1990-1991)
and (1983-1991) Ag-Bag Corporation
(former subsidiary).
Lou Ann Tucker 42 1990 Vice President, Administration (since
1989), and Treasurer (since 1991);
Executive Treasurer (1988-1994) of
Ag-Bag Corporation (former
subsidiary); co-owner of LGJ
Livestock, Astoria, Oregon (horse and
cattle ranch, since 1980).
Walter L. Jay 35 1990 Vice President, Manufacturing (since
1989); Manager of Blair Nebraska
Plant (since 1980); KW Trucking
(1984-1987).
PART II
_______
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
______________________________________________________________________
The Company's Common Stock began trading publicly on January 17,
1990, and was approved for quotation on NASDAQ on April 24, 1990, under
the symbol "AGBG." On December 31, 1995, there were approximately 370
holders of record of Common Stock. The closing price for the Common
Stock on March 11, 1996, as reported by NASDAQ was $1 11/32 per share.
The following table sets forth the range of high and low bid prices
of the Company's Common Stock for the quarters indicated through the
fourth quarter of 1995:
Calendar Year High Bid Low Bid
_____________ ________ _______
1994:
____
First quarter 1-3/4 1
Second quarter 1-7/16 29/32
Third quarter 1 19/32
Fourth quarter 1-11/32 3/4
1995:
____
First quarter 1-15/16 1-1/4
10
Second quarter 1-13/16 1-1/4
Third quarter 2 1-1/4
Fourth quarter 1-7/16 1-1/8
___________________
The quotations reflect inter-dealer prices, without retail markups,
markdowns, or commissions and do not necessarily represent actual
transactions.
DIVIDENDS
_________
The Company has not paid any dividends on its Common Stock since
its inception, and the Board of Directors does not anticipate declaring
any cash dividends on its Common Stock in the foreseeable future. The
Company currently intends to utilize any earnings in its business. The
Company may not pay dividends on Common Stock pursuant to certain loan
agreements, or while it is in arrears in dividends on its preferred
stock.
ITEM 6. SELECTED FINANCIAL DATA
________________________________
The information required by this Item has been omitted for the
reasons set forth in the Company's Form 12b-25 filed with the Securities
and Exchange Commission.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
________________________________________________________________________
The information required by this Item has been omitted for the
reasons set forth in the Company's Form 12b-25 filed with the Securities
and Exchange Commission.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
___________________________________________________
The information required by this Item has been omitted for the
reasons set forth in the Company's Form 12b-25 filed with the Securities
and Exchange Commission.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
________________________________________________________________________
Effective May 6, 1994, the Company engaged KPMG Peat Marwick as its
independent accountants and on May 9, 1994, the Company dismissed Price
Waterhouse as its independent accountants. The reports of Price
Waterhouse on the financial statements for the past two years of the
Company did not contain any adverse opinion or disclaimer of opinion nor
were they qualified or modified as to uncertainty, audit scope, or
accounting principles. The decision to dismiss Price Waterhouse was
recommended by management to the Audit Committee and approved by the
Board of Directors of the Company. During the two most recent fiscal
years there have been no disagreements with Price Waterhouse on any
matters of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
11
PART III
________
ITEMS 10 AND 11. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND
EXECUTIVE COMPENSATION
________________________________________________________________________
A definitive proxy statement of Ag-Bag International Limited will
be filed not later than 120 days after the end of the fiscal year with
the Securities and Exchange Commission. The information set forth
therein under "Election of Directors," "Executive Compensation," and
"Compliance with Section 16 Filing Requirements" is incorporated herein
by reference. Executive Officers of Ag-Bag International Limited are
listed under the heading "Executive Officers of the Registrant" in this
Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
________________________________________________________________________
Information required is set forth under the caption "Security
Ownership of Beneficial Owners" in the Proxy Statement for the 1996
Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
________________________________________________________
Information required is set forth under the caption "Certain
Relationships and Related Transactions" in the Proxy Statement for the
1996 Annual Meeting of Stockholders and is incorporated herein by
reference.
12
PART IV
_______
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
________________________________________________________________________
(a)
3. The exhibits are listed in the index of exhibit....... 21
(b) No reports on Form 8-K were required to be filed during the
last quarter of the period covered by this report.
(c) The index of exhibits and required exhibits.................. 21
(d) The information required by this Item 14(d) has been omitted
for the reasons set forth in the Company's Form 12b-25 filed with the
Securities and Exchange Commission.
13
SIGNATURES
__________
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
AG-BAG INTERNATIONAL LIMITED,
a Delaware corporation
Date: March 19, 1996 By: /s/ Larry R. Inman
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
(Principal 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 the Company and in the capacities and on the dates indicated.
Date: March 19, 1996 By: /s/ Larry R. Inman
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
(Principal Executive Officer)
Date: March __, 1996 By:
___________________________________
Michael R. Wallis, Chief Financial
Officer and Vice President, Finance
(Principal Financial and Accounting
Officer)
Date: March __, 1996 By:
___________________________________
Roy I. Anderson, Director
Date: March __, 1996 By:
___________________________________
Lemuel E. Cunningham, Director
Date: March __, 1996 By:
___________________________________
Michael W. Foster, Director
Date: March __, 1996 By:
___________________________________
Arthur P. Schuette, Director
Date: March __, 1996 By:
___________________________________
Michael B. Leahy, Director
SIGNATURES
__________
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
AG-BAG INTERNATIONAL LIMITED,
a Delaware corporation
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
(Principal Executive Officer)
Date: March 19, 1996 By: /s/ Michael R. Wallis
___________________________________
Michael R. Wallis, Chief Financial
Officer and Vice President, Finance
(Principal Financial and Accounting
Officer)
Date: March __, 1996 By:
___________________________________
Roy I. Anderson, Director
Date: March __, 1996 By:
___________________________________
Lemuel E. Cunningham, Director
Date: March __, 1996 By:
___________________________________
Michael W. Foster, Director
Date: March __, 1996 By:
___________________________________
Arthur P. Schuette, Director
Date: March __, 1996 By:
___________________________________
Michael B. Leahy, Director
SIGNATURES
__________
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
AG-BAG INTERNATIONAL LIMITED,
a Delaware corporation
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
(Principal Executive Officer)
Date: March __, 1996 By:
___________________________________
Michael R. Wallis, Chief Financial
Officer and Vice President, Finance
(Principal Financial and Accounting
Officer)
Date: March 13, 1996 By: /s/ Roy I. Anderson
___________________________________
Roy I. Anderson, Director
Date: March __, 1996 By:
___________________________________
Lemuel E. Cunningham, Director
Date: March __, 1996 By:
___________________________________
Michael W. Foster, Director
Date: March __, 1996 By:
___________________________________
Arthur P. Schuette, Director
Date: March __, 1996 By:
___________________________________
Michael B. Leahy, Director
SIGNATURES
__________
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
AG-BAG INTERNATIONAL LIMITED,
a Delaware corporation
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
(Principal Executive Officer)
Date: March __, 1996 By:
___________________________________
Michael R. Wallis, Chief Financial
Officer and Vice President, Finance
(Principal Financial and Accounting
Officer)
Date: March __, 1996 By:
___________________________________
Roy I. Anderson, Director
Date: March 13, 1996 By: /s/ Lemuel E. Cunningham
___________________________________
Lemuel E. Cunningham, Director
Date: March __, 1996 By:
___________________________________
Michael W. Foster, Director
Date: March __, 1996 By:
___________________________________
Arthur P. Schuette, Director
Date: March __, 1996 By:
___________________________________
Michael B. Leahy, Director
SIGNATURES
__________
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
AG-BAG INTERNATIONAL LIMITED,
a Delaware corporation
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
(Principal Executive Officer)
Date: March __, 1996 By:
___________________________________
Michael R. Wallis, Chief Financial
Officer and Vice President, Finance
(Principal Financial and Accounting
Officer)
Date: March __, 1996 By:
___________________________________
Roy I. Anderson, Director
Date: March __, 1996 By:
___________________________________
Lemuel E. Cunningham, Director
Date: March 19, 1996 By: /s/ Michael W. Foster
___________________________________
Michael W. Foster, Director
Date: March __, 1996 By:
___________________________________
Arthur P. Schuette, Director
Date: March __, 1996 By:
___________________________________
Michael B. Leahy, Director
SIGNATURES
__________
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
AG-BAG INTERNATIONAL LIMITED,
a Delaware corporation
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
(Principal Executive Officer)
Date: March __, 1996 By:
___________________________________
Michael R. Wallis, Chief Financial
Officer and Vice President, Finance
(Principal Financial and Accounting
Officer)
Date: March __, 1996 By:
___________________________________
Roy I. Anderson, Director
Date: March __, 1996 By:
___________________________________
Lemuel E. Cunningham, Director
Date: March __, 1996 By:
___________________________________
Michael W. Foster, Director
Date: March 19, 1996 By: /s/ Arthur P. Schuette
___________________________________
Arthur P. Schuette, Director
Date: March __, 1996 By:
___________________________________
Michael B. Leahy, Director
SIGNATURES
__________
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
AG-BAG INTERNATIONAL LIMITED,
a Delaware corporation
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
Date: March __, 1996 By:
___________________________________
Larry R. Inman, Chairman, Board of
Directors; Chief Executive Officer
and President
(Principal Executive Officer)
Date: March __, 1996 By:
___________________________________
Michael R. Wallis, Chief Financial
Officer and Vice President, Finance
(Principal Financial and Accounting
Officer)
Date: March __, 1996 By:
___________________________________
Roy I. Anderson, Director
Date: March __, 1996 By:
___________________________________
Lemuel E. Cunningham, Director
Date: March __, 1996 By:
___________________________________
Michael W. Foster, Director
Date: March __, 1996 By:
___________________________________
Arthur P. Schuette, Director
Date: March 15, 1996 By: /s/ Michael B. Leahy
___________________________________
Michael B. Leahy, Director
EXHIBITS INDEX
______________
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
_______ ______________________
3.1 Restated Certificate of Incorporation (3)
3.2 Bylaws of the Company (3)
4.1 Form of Common Stock Certificate (1)
4.2 Form of Underwriter's Warrants dated May 9, 1992 (1)
4.3 Warrant dated February 13, 1995, to Norwood Venture Corp. (3)
4.4 Stock Option dated September 6, 1995, to Doug Hoag*
10.1 Employment Contract of Larry R. Inman (1)*
10.3 Employee Stock Plan (1)*
10.4 Incentive Stock Option Plan (1)*
11 Statement re computation of earnings per share**
12 Statement re computation of ratios**
16 Letter re change in certifying accountants (2)
21 Subsidiaries of the Registrant
23 Reference is made to the financial reports of KPMG Peat
Marwick and Price Waterhouse containing their opinions with
respect to the financial statements.**
27 Financial Data Schedule (Filed with EDGAR version only)**
* Management contract or compensatory plan
** The information required by this Exhibit has been omitted for the
reasons set forth in the Company's Form 12b-25 filed with the
Securities and Exchange Commission.
(1) Filed as exhibit to the Form S-1 Registration No.33-46115.
(2) Filed as exhibit to the Form 8-K filed May 6, 1994.
(3) Filed as exhibit to the Form 10-K for the fiscal year ended
December 31, 1994.
EXHIBIT 4.4
THE SECURITIES REPRESENTED BY THIS STOCK OPTION HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD, OFFERED FOR SALE OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL IN FORM AND
FROM COUNSEL REASONABLY ACCEPTABLE TO AG-BAG INTERNATIONAL LIMITED THAT
THE TRANSACTION SHALL NOT RESULT IN A VIOLATION OF STATE OR FEDERAL
SECURITIES LAWS.
STOCK OPTION
____________
For value received, AG-BAG INTERNATIONAL LIMITED, a Delaware
corporation ("Company"), hereby grants to Doug Hoag ("Holder") an option
to purchase 10,000 shares of the common stock, $.01 par value, of the
Company at a price of one dollar and sixty eight cents ($1.68) per share
("Option"). This Option may be exercised as to any number of shares of
common stock covered hereby, at any time prior to its expiration, by
presenting a check payable in the full amount of the purchase price of
the shares being purchased, together with this Option duly endorsed, to
the Company. In the event this Option is exercised for less than the
full amount of shares, the Company shall amend this Option to indicate
the lesser number of shares remaining subject to the Option until
expiration. This Option shall expire at 5:00 p.m. Pacific time,
September 6, 1997.
It is expressly understood that the number of shares of stock
called for hereunder shall be good delivery hereunder whether or not the
rights or interests represented by such shares are equivalent to the
rights or interests represented by the shares of common stock of the
Company authorized or outstanding at the date hereof or at any other
time prior to such purchase and irrespective of any change which may
have occurred prior to the exercise hereof, including (without prejudice
to the generality of the foregoing) any change by way of payment of
stock dividends, sale, exchange or other disposition of any class of
stock of the Company, any change of authorized capital or
reclassification thereof, the sale or lease by the Company of all or
substantially all or any part of its property or any change whatsoever;
provided, however, that if, while this Option is in effect, the shares
of such common stock which Holder may be entitled to purchase in
accordance with the provisions hereof shall be
subdivided or consolidated into a greater or lesser number of shares of
common stock of the Company, or if, upon a merger or consolidation, the
shares of such common stock of the Company shall be exchanged for shares
of common stock of the Company resulting from such merger or
consolidation, then Holder shall be entitled to purchase such number of
new shares of common stock of the Company or such number of shares of
common stock of the Company resulting from such merger or consolidation
as were exchangeable for the number of shares of common stock of the
Company which Holder would have been entitled to purchase except for
such action, but no such change in the number of shares purchasable
hereunder shall increase or decrease the total purchase price payable
hereunder. Whenever in this Option the Company is referred to this
shall be deemed to include any corporation into which the Company may
have been merged or consolidated.
This Option does not entitle Holder to any rights whatsoever
as a stockholder of the Company. The Option granted hereunder shall be
nonassignable and nontransferable by Holder, either voluntarily or by
operation of law, except by will or the laws of descent and distribution
of the state or country of Holder's domicile at the time of death. The
Option shall be exercisable during Holder's lifetime only by Holder.
The shares subject to this Option have not been registered
under the Securities Act of 1933, as amended, and, accordingly, the
certificates for shares delivered to Holder upon the exercise of this
Option shall bear a legend, substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, OFFERED FOR SALE OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR
AN OPINION OF COUNSEL IN FORM AND FROM COUNSEL
REASONABLY ACCEPTABLE TO AG-BAG INTERNATIONAL
LIMITED THAT THE TRANSACTION SHALL NOT RESULT IN A
VIOLATION OF STATE OR FEDERAL SECURITIES LAWS.
2 - STOCK OPTION
The rights represented hereby are transferable only on the
books of the Company at the office of the Company in Warrenton, Oregon
by Holder in person or by his or her duly authorized attorney upon
surrender of this Option properly endorsed.
IN WITNESS WHEREOF the Company has caused this Option to be
executed as of September 6, 1995.
AG-BAG INTERNATIONAL LIMITED
By: /s/Mike Wallis
__________________________________________
Its: Chief Financial Officer
ATTEST:
By: /s/Lou Ann Tucker
__________________________________________
Assistant Secretary
Acknowledged and accepted on
September 6, 1995 by:
/s/Doug Hoag
_____________________________
Doug Hoag
3 - STOCK OPTION
EXHIBIT 11
__________
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
The information required by this Exhibit has been omitted for the
reasons set forth in the Company's Form 12b-25 filed with the Securities
and Exchange Commission.
EXHIBIT 12
__________
STATEMENT RE COMPUTATION OF RATIOS
The information required by this Exhibit has been omitted for the
reasons set forth in the Company's Form 12b-25 filed with the Securities
and Exchange Commission.
EXHIBIT 21
__________
SUBSIDIARIES OF THE REGISTRANT
1. Ag-Bag Europe PLC, a United Kingdom corporation.