FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ Mark one ]
[ X ] Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For quarter ended December 31, 1997
OR
[ ] Transition Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission file number 1-9334
BALDWIN TECHNOLOGY COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3258160
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
One Norwalk West, 40 Richards Avenue, Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 203-838-7470
(Former name, former address and former fiscal year, if changed
since last report.)
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
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 .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding at January 31, 1998
Class A Common Stock
$0.01 par value 15,308,881
Class B Common Stock
$0.01 par value 1,835,883
Total number of pages in this document 13
BALDWIN TECHNOLOGY COMPANY, INC.
INDEX
Page
Part I Financial Information
Consolidated Balance Sheet -
December 31, 1997 and June 30, 1997 1
Consolidated Statement of Income -
Three months and six months ended
December 31, 1997 and 1996 2
Consolidated Statement of Changes in
Shareholders' Equity - Six months
ended December 31, 1997 3
Consolidated Statement of Cash Flows -
Six months ended December 31, 1997 and 1996 4-5
Notes to Consolidated Financial Statements 6-7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-12
Part II Other Information
Item 4 Submission of Matters to a Vote of
Security Holders 12
Item 6 Exhibits and Reports on Form 8-K 12
Signatures 13
CAUTIONARY STATEMENT -- This Form 10-Q may contain statements which
constitute "forward-looking" information as that term is defined in
the Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission ("SEC") in its rules,
regulations and releases. Baldwin Technology Company, Inc. (the
"Company") cautions investors that any such forward-looking
statements made by the Company are not guarantees of future
performance and that actual results may differ materially from
those in the forward-looking statements. Some of the factors that
could cause actual results to differ materially from estimates
contained in the Company's forward-looking statements are set forth
in Exhibit 99 to Form 10-K for the year ended June 30, 1997.
PART I FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
(Unaudited)
December 31, June 30,
1997 1997
ASSETS
CURRENT ASSETS:
Cash $ 8,484 $ 9,421
Short-term securities 10 4,032
Accounts receivable trade, net of allowance for
doubtful accounts of $1,988($2,106 at June 30, 1997) 38,947 38,177
Notes receivable, trade 16,378 15,051
Inventories 34,644 27,833
Prepaid expenses and other 7,752 13,512
Total current assets 106,215 108,026
MARKETABLE SECURITIES:
Cost $628 ($712 at June 30, 1997) 719 942
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land and buildings 3,109 3,136
Machinery and equipment 6,995 6,732
Furniture and fixtures 5,744 5,638
Leasehold improvements 1,057 976
Capital leases 5,370 5,397
22,275 21,879
Less: Accumulated depreciation and amortization 14,807 14,334
Net property, plant and equipment 7,468 7,545
PATENTS, TRADEMARKS AND ENGINEERING DRAWINGS at cost,
less accumulated amortization of $5,035 ($4,664 at
June 30, 1997) 5,068 5,279
GOODWILL, less accumulated amortization of $7,661
($7,368 at June 30, 1997) 30,134 31,452
OTHER ASSETS 8,521 8,879
TOTAL ASSETS $158,125 $162,123
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Loans payable $ 5,348 $ 8,312
Current portion of long-term debt 6,352 6,425
Accounts payable, trade 13,779 15,634
Notes payable, trade 13,799 11,273
Accrued salaries, commissions, bonus and profit-sharing 6,428 7,794
Customer deposits 7,767 6,439
Accrued and withheld taxes 1,887 1,941
Income taxes payable 4,700 5,369
Other accounts payable and accrued liabilities 13,033 15,143
Total current liabilities 73,093 78,330
LONG-TERM LIABILITIES:
Long-term debt 21,296 20,256
Other long-term liabilities 4,856 5,275
Total long-term liabilities 26,152 25,531
Total liabilities 99,245 103,861
SHAREHOLDERS' EQUITY:
Class A Common Stock, $.01 par, 45,000,000 shares
authorized, 16,411,683 shares issued
(16,391,683 at June 30, 1997) 164 164
Class B Common Stock, $.01 par, 4,500,000 shares
authorized, 2,000,000 shares issued 20 20
Capital contributed in excess of par value 57,273 57,185
Retained earnings 9,456 6,152
Cumulative translation adjustment (2,168) 538
Unrealized gain on investments net of $45 of
deferred taxes ($117 at June 30, 1997) 45 113
Less: Treasury stock, at cost:
Class A - 1,102,802 shares (1,102,802 at June 30, 1997)
Class B - 164,117 shares (164,117 at June 30, 1997) (5,910) (5,910)
Total shareholders' equity 58,880 58,262
COMMITMENTS ------ ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $158,125 $162,123
The accompanying notes to consolidated financial statements
are an integral part of these statements.
- 1 -
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(in thousands of dollars except per share data)
(Unaudited)
For the three months For the six months
ended December 31, ended December 31,
1997 1996 1997 1996
Net sales $55,618 $61,094 $103,665 $118,635
Cost of goods sold 36,761 41,859 68,781 80,818
Gross Profit 18,857 19,235 34,884 37,817
Operating expenses:
General and administrative 5,995 6,501 11,565 13,030
Selling 4,863 5,453 9,148 10,808
Engineering 3,164 3,699 6,170 7,310
Research and development 1,177 1,786 2,501 3,616
Provision for loss on
the disposition of
pre-press operations (Note 3) 46,036 46,036
15,199 63,475 29,384 80,800
Operating income (loss) 3,658 (44,240) 5,500 (42,983)
Other (income) expense:
Interest expense 769 898 1,504 1,808
Interest income (107) (96) (314) (208)
Minority interest (97)
Other income, net (439) (357) (1,100) (927)
223 445 (7) 673
Income (loss) before taxes 3,435 (44,685) 5,507 (43,656)
Provision for income taxes 1,332 622 2,203 1,095
Net income (loss) $ 2,103 $(45,307) $ 3,304 $(44,751)
Basic income (loss)
per share $ 0.12 $ (2.62) $ 0.19 $ (2.58)
Diluted income (loss)
per share $ 0.12 $ (2.62) $ 0.19 $ (2.58)
Weighted average number of
shares:
Basic 17,135 17,298 17,129 17,329
Diluted 17,528 17,298 17,344 17,329
The accompanying notes to consolidated financial statements
are an integral part of these statements.
- 2 -
BALDWIN TECHNOLOGY COMPANY INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands, except share data)
(Unaudited)
Capital
Class A Class B Contributed Cumulative Unrealized
Common Stock Common Stock in Excess Retained Translation Gain(Loss)on Treasury Stock
Shares Amount Shares Amount of Par Earnings Adjustment Investments Shares Amount
Balance at June 30, 1997 16,391,683 $164 2,000,000 $20 $57,185 $6,152 $538 $113 (1,266,919) $(5,910)
Net income for the six months 3,304
Stock options exercised 20,000 88
Unrealized loss on
available for sale
securities, net of tax (68)
Translation adjustment (2,706)
Balance at December 31, 1997 16,411,683 $164 2,000,000 $20 $57,273 $9,456 $(2,168) $ 45 (1,266,919) $(5,910)
The accompanying notes to consolidated financial statements
are an integral part of these statements.
- 3 -
BALDWIN TECHNOLOGY COMPANY, INC. CONSOLIDATED STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(in thousands)
(Unaudited)
For the six months
ended December 31,
1997 1996
Cash Flows from operating activities:
Income (loss) from operations $ 3,304 $(44,751)
Adjustments to reconcile net income to net cash
provided by operating activities -
Depreciation and amortization 1,643 2,549
Accrued retirement pay 307 448
Provision for losses on accounts receivable 89 212
Provision for loss on the pre-press disposition 46,036
Changes in assets and liabilities net of
effects from the disposition and
acquisition in 1996 -
Accounts and notes receivable, net (6,081) (3,699)
Inventories (7,833) 2,786
Prepaid expenses and other (472) 667
Customer deposits 1,444 856
Accrued compensation (1,164) (2,364)
Accounts and notes payable, trade 2,922 (268)
Income taxes payable (289) (362)
Accrued and withheld taxes (2) (266)
Other accounts payable and accrued liabilities (1,800) 930
Interest payable (71) 184
Net cash (used) provided by operating activities (8,003) 2,958
Cash flows from investing activities:
Proceeds from the pre-press disposition 5,925
Additions of property, net (865) (712)
Additions of patents, trademarks and drawings, net (183) (292)
Other assets 347 (224)
Net cash provided (used) by investing activities 5,224 (1,228)
Cash flows from financing activities:
Long-term borrowings 8,226 3,777
Long-term debt repayment (7,105) (8,483)
Short-term borrowings 1,136 6,218
Short-term debt repayment (3,710) (2,498)
Principal payments under capital lease
obligations (126) (130)
Other long-term liabilities (129) (497)
Treasury stock purchased (432)
Stock options exercised 88
Net cash used by financing activities (1,620) (2,045)
Effects of exchange rate changes (560) (99)
Net decrease in cash and
cash equivalents (4,959) (414)
Cash and cash equivalents at beginning of year 13,453 9,794
Cash and cash equivalents at end of period $ 8,494 $ 9,380
The accompanying notes to consolidated financial statements
are an integral part of these statements.
- 4 -
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Supplemental disclosures of cash flow information:
For the six months
ended December 31,
1997 1996
(in thousands)
Cash paid during the period for:
Interest $ 1,575 $ 1,624
Income taxes $ 2,872 $ 1,599
Supplemental schedule of non-cash investing and financing activities:
For the six months ended December 31, 1997:
There were no significant non-cash transactions for the six months ended
December 31, 1997.
The Company entered into capital lease agreements of $67,314 for the six
months ended December 31, 1997.
For the six months ended December 31, 1996:
The Company recorded a provision for the disposition of its pre-press
operations in a non-cash transaction in the amount of $46,036,000. In
conjunction with the disposition the related assets and liabilities of the
pre-press operations were reduced to fair value less the estimated costs of
disposal and recorded in "Other assets". (See Note 3 - Notes to
Consolidated Financial Statements.)
The Company reclassified $6,250,000 of its 8.17% Senior Notes to "Current
portion of long-term debt" from "Long-term debt" as the first scheduled
installment became current.
The Company entered into capital lease agreements of $1,942 for the six
months ended December 31, 1996.
The accompanying notes to consolidated financial statements
are an integral part of these statements.
- 5 -
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - General:
Baldwin Technology Company, Inc. (Baldwin, or the Company) is engaged
primarily in the development, manufacture and sale of material handling,
accessory, and control equipment for the printing and print on demand
industries.
The consolidated financial statements include the accounts of Baldwin
and its subsidiaries and reflect all adjustments (consisting of only normal
recurring adjustments) which are, in the opinion of management, necessary
to present a fair statement of the results for the interim periods.
Operating results for the three month and six month periods ended December
31, 1997 are not necessarily indicative of the results that may be expected
for the year ending June 30, 1998.
All significant intercompany transactions have been eliminated in
consolidation. The Company has adopted Statement of Financial Accounting
Standards No. 128 "Earnings per Share" (FAS 128). Accordingly, for the
three and six month periods ended December 31, 1997 and 1996, net income
was divided by the weighted average number of common shares outstanding in
order to calculate basic earnings per share and net income was divided by
the total of the weighted average number of common shares outstanding and
common stock equivalents in order to calculate diluted earnings per share.
Common stock equivalents for the three month periods ended December 31,
1997 and 1996 consisted of 393,679 shares and no (0) shares, respectively,
for stock options. The weighted average number of common and common
equivalent shares outstanding for the three month periods ended December
31, 1997 and 1996 were 17,528,226 and 17,298,381, respectively. Common
stock equivalents for the six month periods ended December 31, 1997 and
1996 consisted of 214,360 shares and no (0) shares, respectively, for stock
options. For the six month periods ended December 31, 1997 and 1996 the
weighted average number of common and common equivalent shares were
17,344,015 and 17,328,710, respectively. As there were no (0) common
equivalent shares for either the three or six month periods ended December
31, 1996, there is no difference between basic and diluted earnings per
share as presented versus primary and fully diluted earnings per share as
previously reported.
Note 2 - Inventories:
Inventories consist of the following:-
December 31, June 30,
1997 1997
Raw material $14,698,000 $11,383,000
In process 14,335,000 8,833,000
Finished goods 5,611,000 7,617,000
$34,644,000 $27,833,000
Inventories decreased by $1,022,000 due to translation effects of
exchange from June 30, 1997 to December 31, 1997.
Note 3 - Disposition of pre-press operations:
During the quarter ended December 31, 1996 the Company wrote down the
net assets of its pre-press operation to their estimated fair values
concurrent with the Company's decision to dispose of such operations.
The Company valued the pre-press business at fair value less the
estimated costs of disposal by recording a charge of $46,036,000 to
operations.
- 6 -
The following proforma condensed Consolidated Statement of Income of
the Company reflects the removal of the results of the Company's pre-press
operations for the three and six month periods ended December 31, 1996.
Three Six
months ended months ended
December 31, December 31,
1996 1996
Net sales $ 52,888,000 $104,274,000
Gross profit 16,660,000 33,178,000
Operating expenses 14,456,000 29,009,000
Provision for loss on
pre-press disposal 46,036,000 46,036,000
Operating (loss) income (43,832,000) (41,867,000)
Other expenses 543,000 714,000
Pre tax (loss) income $(44,375,000) $(42,581,000)
Note 4 - Restructuring Charge and Reserves:
A restructuring reserve was charged to income during the quarter ended
December 31, 1995 in the amount of $3,000,000. The reserve was established
in order to accrue the costs associated with a planned workforce reduction
at the Company's German operations as well as to accrue for dealer claims
associated with changes made to the European dealer network and
distribution system. The Company also has $97,000 remaining from a fiscal
1992 restructuring charge, all of which relates to an excess facility
sublease subsidy.
The following schedule shows the use of restructuring reserves for
severance and sublease subsidies for the six months ended December 31,
1997.
Restructuring reserves consist of the following:-
December 30, June 30,
1997 1997
Severance and dealer claims $ 694,000 $1,144,000
Excess facility sublease subsidy 97,000 160,000
$ 791,000 $1,304,000
Note 5 - Common Stock:
Stock Options:-
On November 21, 1997, six (6) eligible non-employee Directors of the
Company were automatically granted non-qualified options for a total of
5,358 shares of Class A Common Stock and 642 shares of Class B Common Stock
under the Company's 1990 Directors' Stock Option Plan at exercise prices of
$5.125 and $6.4063 per share, respectively, the fair market values on the
date of grant. Restrictions, as described in the Company's 1991 Proxy
Statement, are similar to the 1996 Stock Option Plan, (the "1996 Plan"),
with the exception of the dates of exercise, vesting and termination.
On August 12, 1997 the Board of Directors granted non-qualified
options to purchase 375,000 shares of the Company's Class A Common Stock to
certain executives under the Company's 1996 Plan at an exercise price of
$3.00 per share, the fair market value on the date of grant. The options
granted are otherwise identical with regard to restrictions on options
previously granted.
- 7 -
BALDWIN TECHNOLOGY COMPANY, INC.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position
and consolidated financial statements.
The Company's disposition of its former Pre-press operations on June
30, 1997 results in significant distortions when comparing operating
performance of the current and prior year periods. The following condensed
Consolidated Statement of Income of the Company sets forth the actual 1997
and 1996 results for the respective periods together with 1996 proforma
results which reflects the removal of the Company's former pre-press
operations and the provision for loss on the disposal of those operations
for the three and six month periods ended December 31, 1996. The proforma
1996 amounts will be used in the following discussion of the current year
actual results as compared to the prior year results.
Six months ended December 31,
(in $000's except per share data)
less
Actual Actual Pre-press Proforma
1997 1996 1996 1996
Net sales $103,665 $118,635 $ 14,361 $104,274
Gross profit 34,884 37,817 4,639 33,178
Selling, general and
administrative expenses 20,713 23,838 4,420 19,418
Other operating expenses 8,671 10,926 1,335 9,591
Provision for loss on
the disposition of
Pre-press operations (46,036) (46,036)
Operating income (loss) 5,500 (42,983) (47,152) 4,169
Other (income) expense (7 ) 673 (41) 714
Income (loss) before taxes 5,507 (43,656) (47,111) 3,455
Provision for income taxes 2,203 1,095 (270) 1,365
Net income (loss) $ 3,304 $(44,751) $(46,841) $ 2,090
Basic income (loss)
per share $0.19 $(2.58) $(2.70 ) $0.12
Diluted income (loss)
per share $0.19 $(2.58) $(2.70 ) $0.12
Three months ended December 31,
(in $000's except per share data)
less
Actual Actual Pre-press Proforma
1997 1996 1996 1996
Net sales $55,618 $ 61,094 $ 8,206 $52,888
Gross profit 18,857 19,235 2,575 16,660
Selling, general and
administrative expenses 10,858 11,954 2,334 9,620
Other operating expenses 4,341 5,485 649 4,836
Provision for loss on
the disposition of
Pre-press operations (46,036) (46,036)
Operating income (loss) 3,658 (44,240) (46,444) 2,204
Other expense (income) 223 445 (98) 543
Income (loss) before taxes 3,435 (44,685) (46,346) 1,661
Provision for income taxes 1,332 622 (96) 718
Net income (loss) $ 2,103 $(45,307) $(46,250) $ 943
Basic income (loss)
per share $0.12 $(2.62) $(2.67 ) $0.05
Diluted income (loss)
per share $0.12 $(2.62) $(2.67 ) $0.05
- 8 -
Six Months Ended December 31, 1997 vs. Six Months
Ended December 31, 1996.
Net sales for the six months ended December 31, 1997 decreased by
$609,000, or 0.6%, to $103,665,000 from $104,274,000 for the six months
ended December 31, 1996. Currency rate fluctuations attributable to the
Company's overseas operations decreased net sales by $7,431,000 for the
current period. In terms of local currency, sales changes were as follows.
Sales were down 7.5% in Germany and decreased 2.2% in Sweden. Sales
increased by 21.2% in the United Kingdom, were up by 31.8% in France and
increased by 21.0% in Japan. In the Americas, net sales increased by 7.1%.
Gross profit for the six month period ended December 31, 1997 was
$34,884,000 (33.7% of net sales), as compared to $33,178,000 (31.8% of net
sales) for the six month period ended December 31, 1996, an increase of
$1,706,000 or 5.1%. Currency rate fluctuations decreased gross profit by
$2,553,000 in the current period. Gross profit was higher as a percentage
of sales when compared to the prior year due primarily to a decrease in
manufacturing costs, principally at the Company's German and Swedish
operations and an increased percentage of sales of products carrying higher
gross profit rates in Asia.
Selling, general and administrative expenses were $20,713,000 (20.0% of
net sales), for the six month period ended December 31, 1997 as compared to
$19,418,000 (18.6% of net sales) for the same period of the prior year, an
increase of $1,295,000 or 6.7%. Currency rate fluctuations decreased these
expenses by $1,224,000 and the acquisition of the Print-On-Demand Group,
which occurred in January of 1997, added $615,000 to these expenses in the
current period. Otherwise, selling, general and administrative expenses
increased by $1,904,000. Selling expenses increased by $1,007,000 and were
primarily sales volume and trade show related while general and
administrative expenses increased by $897,000 due primarily to increased
consulting and compensation costs. Other operating expenses decreased by
$920,000 over the same period of the prior year. Currency rate
fluctuations decreased these expenses by $660,000 in the current period
with the remaining decrease in these expenses relating primarily to
engineering staff level reductions in Germany.
Interest expense for the six month period ended December 31, 1997 was
$1,504,000 as compared to $1,710,000 for the six month period ended
December 31, 1996. Currency rate fluctuations decreased interest expense
by $246,000. Interest income was $314,000 and $168,000 for the six month
periods ended December 31, 1997 and December 31, 1996, respectively.
Currency rate fluctuations decreased interest income by $64,000 in the
current period. Interest income increased primarily due to interest earned
on the proceeds from the disposition of the Company's Pre-press operations.
Other income increased primarily due to higher royalty income which was
partially offset by lower foreign currency transaction gains of $100,000
and $236,000 for the six months ended December 31, 1997 and 1996,
respectively. Currency rate fluctuations increased other income by $96,000
for the current period.
The Company's effective tax rate on income before taxes was 40% for the
six month period ended December 31, 1997 as compared to 39.5% for the six
month period ended December 31, 1996. Currency rate fluctuations decreased
tax expense by $127,000 for the current period. The current period's
effective rate reflects the impact of foreign source income which is
generally taxed at substantially higher rates than domestic income.
Net income for the six month period ended December 31, 1997 increased to
$3,304,000 from $2,090,000 for the six month period ended December 31,
1996, or to $0.19 from $0.12 per share. Currency rate fluctuations
decreased net income by $190,000 for the current period. The weighted
average number of common and common equivalent shares outstanding during
the six month periods ended December 31, 1997 and December 31, 1996 were
17,344,015 and 17,328,710, respectively.
- 9 -
Three Months Ended December 31, 1997 vs. Three Months
Ended December 31, 1996.
Net sales for the three months ended December 31, 1997 increased by
$2,730,000, or 5.2%, to $55,618,000 from $52,888,000 for the three months
ended December 31, 1996. Currency rate fluctuations attributable to the
Company's overseas operations decreased net sales by $3,679,000 for the
current period. In terms of local currency, sales changes were as follows.
Sales increased by 1.9% in Sweden, were up by 36.1% in the United Kingdom
and improved by 11.1% in France but decreased by 4.7% in Germany. In
Japan, sales increased by 24.0%. In the Americas, net sales increased by
18.3%.
Gross profit for the three month period ended December 31, 1997 was
$18,857,000 (33.9% of net sales), as compared to $16,660,000 (31.5% of net
sales) for the three month period ended December 31, 1996, an increase of
$2,197,000 or 13.2%. Currency rate fluctuations decreased gross profit by
$1,286,000 in the current period. Gross profit was higher as a percentage
of sales when compared to the prior year due primarily to a decrease in
manufacturing costs at the Company's German and Swedish operations.
Selling, general and administrative expenses were $10,858,000 (19.5%
of net sales), for the three month period ended December 31, 1997 as
compared to $9,620,000 (18.2% of net sales) for the same period of the
prior year, an increase of $1,238,000 or 12.9%. Currency rate fluctuations
decreased these expenses by $612,000 and the acquisition of the Print-On-
Demand Group, which occurred in January of 1997, added $329,000 to these
expenses in the current period. Otherwise, selling, general and
administrative expenses increased by $1,521,000. Selling expenses
increased by $790,000 and were primarily sales volume and trade show
related while general and administrative expenses increased by $731,000 due
primarily to increased consulting and compensation costs. Other operating
expenses decreased by $495,000 over the same period of the prior year.
Currency rate fluctuations decreased these expenses by $308,000 in the
current period with the remaining decrease in these expenses relating
primarily to engineering staff level reductions in Germany.
Interest expense for the three month period ended December 31, 1997
was $769,000 as compared to $852,000 for the three month period ended
December 31, 1996. Currency rate fluctuations decreased interest expense
by $110,000. Interest income was $107,000 and $76,000 for the three month
periods ended December 31, 1997 and December 31, 1996, respectively.
Other income and expense includes net foreign currency transaction gains of
$178,000 and $328,000 for the three months ended December 31, 1997 and
1996, respectively. Currency rate fluctuations increased other income by
$76,000 for the current period. Other income increased primarily due to
royalty income in the current period.
The Company's effective tax rate on income before taxes was 38.8% for
the three month period ended December 31, 1997 as compared to 43.2% for the
three month period ended December 31, 1996. Currency rate fluctuations
decreased tax expense by $62,000 for the current period. The current
period's effective rate reflects the impact of foreign source income which
is generally taxed at substantially higher rates than domestic income. The
decrease in the current period's effective tax rate is primarily due to
increased income in tax jurisdictions for which there are available tax
loss carryforwards.
Net income for the three month period ended December 31, 1997 increased
by $1,160,000 or 123.0% to $2,103,000 from $943,000 for the three month period
ended December 31, 1996, or to $0.12 from $0.05 per share. Currency rate
fluctuations decreased net income by $114,000 for the current period.
Weighted average equivalent shares outstanding during the three month
periods ended December 31, 1997 and December 31, 1996 were 17,528,226 and
17,298,381, respectively.
- 10 -
Liquidity and Capital Resources at December 31, 1996
Liquidity and Working Capital
The Company's long-term debt includes $18,750,000 of 8.17% senior
notes (the "Senior Notes") due October 29, 2000. The Company also has a
four-year $20,000,000 Revolving Credit Agreement (the "Revolver") with
NATIONSBANK, N.A. which matures in December, 1999. The Senior Notes and
the Revolver require the Company to maintain certain financial covenants
and have certain restrictions regarding the payment of dividends, limiting
them throughout the terms of the Senior Notes and the Revolver to
$1,000,000 plus 50% of the Company's net income after January 1, 1997. In
addition, the Company was required to pledge certain of the shares of its
domestic subsidiaries as collateral for both the Senior Notes and the
Revolver.
Both the Senior Notes and the Revolver require the Company to maintain
a ratio of current assets to current liabilities (as those terms are
defined in the agreements) of not less than 1.4 to 1. At December 31,
1997, this ratio was 1.63 to 1.
Net cash provided (used) by investing activities was $5,244,000 for
the six months ended December 31, 1997 versus $(1,228,000) for the six
months ended December 31, 1996. The change was primarily due to the
collection of the proceeds from the disposition of the Company's Pre-press
operations. Net cash (used) by financing activities was $(1,620,000) for
the period ended December 31, 1997 as compared to $(2,045,000) at December
31, 1996. The change was primarily due to increased debt repayments.
During the current period a 6,000,000 DM drawdown (U.S. $3,476,000) was
made under the Revolver and a simultaneous repayment was made on a short-
term open bank loan facility. Additionally, the first scheduled repayment
of the Company's Senior Notes ($6,250,000) was made in October. An
additional $4,000,000 drawdown on the Revolver was made in order to meet
increased working capital requirements as discussed below.
The Company's working capital increased from $21,933,000 at December
31, 1996, to $33,122,000 at December 31, 1997, an increase of $11,189,000
or 51.0%. Currency rate fluctuations decreased working capital by
$3,080,000. Inventories and trade and other accounts receivable increased
due to increased order backlog, increases in sales levels during the second
quarter and increased other receivables related primarily to royalties.
Bank loans for working capital and other accounts payable and accrued
liabilities both decreased. Other accounts payable and accrued liabilities
decreased primarily for reductions in restructuring and warranty reserves.
These above increases in working capital were partially offset by increases
in trade accounts payable and customer deposits. The Company's working
capital increased by $3,426,000 or 11.5% from $29,696,000 at June 30, 1997
to $33,122,000 at December 31, 1997. Currency rate fluctuations decreased
working capital by $2,154,000 in the current period. The primary reasons
for the increase in working capital resulted from the increase in
inventories and trade and other accounts receivable as discussed above, a
decrease in accrued compensation and a decrease in other accounts payable
and accrued liabilities due primarily to lower accrued professional fees
and restructuring reserves. The effects of the above working capital
increases were partially offset by increases in customer deposits on orders
related to the increase in backlog, the collection of a $6,000,000 note
receivable related to the disposition of the Company's Pre-press
operations, an increase in trade payables related to the increased level of
inventory and a decrease in cash and short term securities.
The Company maintains relationships with foreign and domestic banks
which have extended credit facilities to the Company totaling $29,516,000,
including amounts available under the Revolver. As of December 31, 1997,
the Company had outstanding $12,798,000 under these lines of credit, of
which $7,450,000 is classified as long-term debt. Total debt levels as
reported on the balance sheet at December 31, 1997 are $544,000 lower than
they would have been if June 30, 1997 exchange rates had been used.
Net capital expenditures made to meet the normal business needs of the
Company for the six months ended December 31, 1997 and December 31, 1996,
including commitments for capital lease payments, were $1,048,000 and
$1,004,000, respectively.
The Company believes its cash flow from operations and bank lines of
credit are sufficient to finance its working capital and other capital
requirements for the near and long-term future.
- 11 -
Impact of Inflation
The Company's results are affected by the impact of inflation on
manufacturing and operating costs. Historically, the Company has used
selling price adjustments, cost containment programs and improved operating
efficiencies to offset the otherwise negative impact of inflation on its
operations.
BALDWIN TECHNOLOGY COMPANY, INC.
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders was held on
November 18, 1997.
(c) A brief description of matters voted upon and the results of
the voting follows:
Proposal 1 - To elect three Class I Directors to serve for three-
year terms or until their respective successors are elected and qualify.
SCHEDULE OF VOTES CAST FOR EACH DIRECTOR
Total Vote For Total Vote Withheld
Each Director From Each Director
Class A
Judith A. Booth 12,405,349 103,966
Class A & B
Samuel B. Fortenbaugh III 30,169,133 39,652
Wendell M. Smith 30,049,631 159,154
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.15 Employment Agreement dated November 25, 1997 and
effective as of July 1, 1997 between Baldwin Technology
Company, Inc. and Gerald A. Nathe (filed herewith).
10.24 Fifth Amendment to Amended and Restated Revolving
Credit Agreement between Baldwin Americas Corporation
and Baldwin Technology Limited (as borrowers) and
Nationsbank N.A. as lender (Filed herewith).
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K. There were no reports on Form 8-K filed for
the three months ended December 31, 1997.
- 12 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BALDWIN TECHNOLOGY COMPANY, INC.
BY /s/William J. Lauricella
Vice President, Chief Financial
Officer and Treasurer
Dated: February 3, 1998
- 13 -
EXHIBIT 10.15
Baldwin Technology Company, Inc.
One Norwalk West
40 Richards Avenue
Norwalk, CT 06854
Tel: 203 838 7470
Fax: 203 852 7040
November 25, 1997
Mr. Gerald A. Nathe
11448 Bronzedale Drive
Oakton, VA 22124
Dear Mr. Nathe:
This Agreement sets forth the terms of your employment
with Baldwin Technology Company, Inc., a Delaware corporation (the
"Company"), it supersedes our agreement dated January 31, 1994, and
it is effective as of July 1, 1997.
1. DUTIES. During the term of your employment
hereunder, you shall be employed as the President and the Chief
Executive Officer of the Company, and you shall direct and manage
the business, affairs, and property of the Company subject to the
direction of the Board of Directors of the Company (the "Board of
Directors").
2. COMPENSATION. As compensation for your services
during the term of your employment hereunder:
A. Salary. You shall be paid a salary at the annual
rate of three hundred eighteen thousand dollars ($318,000) (the
"base salary"), payable in appropriate installments to conform with
regular payroll dates for salaried personnel of the Company.
B. Reviews and Adjustments. As of July 1, 1998 and
each succeeding July 1 during the term of your employment
hereunder, your performance shall be reviewed by the Board of
Directors, your attainment of mutually agreed-upon objectives shall
be evaluated, and the base salary payable to you for the twelve
(12) months beginning on such July 1 may be adjusted upward (but
not downward) by the Board of Directors.
C. Incentive Compensation. During the term of your
employment hereunder, and at such other times subsequent thereto as
are otherwise set forth herein, you shall be paid annually, no
later than ninety (90) days after the end of each fiscal year,
beginning with the fiscal year ending June 30, 1998, incentive
compensation which shall be determined under the Company's
Executive and Key Person Cash Incentive Program.
D. Deferred Compensation. You shall be paid, at
such times as are set forth in this Agreement, deferred
compensation based upon an amount equal to a range from forty
percent (40%) to fifty percent (50%) of your Final Average Pay (the
"Deferred Compensation"), which percent shall be set at any time,
and may be set from time to time, by the Board of Directors;
provided, however, that such percent shall in no event be set later
than the time at which your Final Average Pay is to be determined
hereunder. For purposes of this Agreement, the term "Final Average
Pay" shall mean an amount equal to (i) the total of (a) the sum of
the base salary and incentive compensation paid to you with respect
to each of the two (2) fiscal years ending immediately preceding
the fiscal year in which you become entitled to the Deferred
Compensation, plus (b) the base salary and incentive compensation
payable to you at the time that you become entitled to the Deferred
Compensation (annualized to twelve (12) months), (ii) divided by
three (3). The amount of the foregoing percent (as so determined
by the Board of Directors) of your Final Average Pay, when
calculated, shall then be restated to a monthly amount by dividing
such amount by twelve (12) (the "Monthly Amount"), and the Monthly
Amount shall be paid monthly, to you or your estate, as the case
may be, beginning on the day set forth in this Agreement, for a
period of one hundred eighty (180) months or the period ending with
the month of your death, whichever is longer. In this regard, if
you die after the date on which you first become entitled to
payment of the Deferred Compensation, whether or not the first
payment of the Monthly Amount has been made, and prior to the
payment of the Monthly Amount for one hundred eighty (180) months,
the Monthly Amount shall be paid monthly for the balance of such
one hundred eighty (180) month period to the beneficiary or
beneficiaries designated by you in writing to the Company, or, if
none are designated, to your estate. Effective July 1, 1997 the
amount of Deferred Compensation has vested to the extent of seventy
percent (70%), as of July 1, 1998 it shall vest to the extent of
eighty percent (80%), as of July 1, 1999 it shall vest to the
extent of ninety percent (90%), and as of July 1, 2000 it shall
vest to the extent of one hundred percent (100%) so that as of the
latter date the full amount determined by the above formula shall
be due and payable in the instances as set forth elsewhere in this
Agreement.
3. CLASS A STOCK AND CLASS B STOCK.
A. Class A Stock.
(i) The Company shall issue or transfer to
you, at such times when you have earned them and at no cost to you,
a total of one hundred sixty thousand (160,000) shares of the
Company's Class A Common Stock, par value $.01 per share ("Class A
Stock") in four (4) equal installments of forty thousand (40,000)
shares each. You will be deemed to have earned the first of the
four (4) installments of forty thousand (40,000) shares of Class A
Stock on a date when the closing price of the Class A Stock on the
American Stock Exchange (the "Fair Market Value") reaches seven and
875/1,000 dollars ($7.875); each of the three (3) subsequent
installments of Class A Stock shall similarly be deemed to be
earned by you when the Fair Market Value of the Class A Stock
increases by an additional two dollars ($2.00) per share over the
Fair Market Value at which the previous installment was earned. A
stock certificate for the Class A Stock so earned shall be issued
and delivered to you within fifteen (15) days of the date such
stock was deemed to be earned by you.
(ii) In the event of a reorganization,
recapitalization, change of shares, stock split, spinoff, stock
dividend, reclassification, subdivision or combination of shares,
merger, consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of the Company, the
number of shares and increase in price of the Fair Market Value as
stated in Paragraph 3A(i) hereof shall be adjusted appropriately.
(iii) With regard to each installment of the
Class A Stock issued under Paragraph 3A(i) hereof, the Company
grants to you the right to require the Company to include the
Class A Stock issued to you in any registration statement that the
Company may file in the future (such right to be known as the
"Piggy-Back Registration Rights"). In the event the Company does
not file and cause to become effective a registration statement
subsequent to your earning each installment of the Class A Stock as
outlined in Paragraph 3A(i) hereof on which you could have
exercised your Piggy-Back Registration Rights, the Company further
grants to you a one-time right to demand that the Company file and
cause to become effective a registration statement for each
installment of the Class A Stock issued to you under
Paragraph 3A(i) hereof, by written notice to the Company (such
right to be known as the "Demand Registration Right"). In the
event you notify the Company of your exercise of a Demand
Registration Right, the Company shall use its best efforts to have
a registration statement with respect to the Class A Stock issued
under Paragraph 3A(i) hereof prepared, filed, and declared
effective by the Securities and Exchange Commission as soon as
practicable. Notwithstanding anything in this Paragraph 3A(iii) to
the contrary, the Company shall not be required to file a
registration statement during the period between (a) the date on
which its financial statements for any fiscal year become available
and (b) the date on which it is required to file an annual report
with respect to such fiscal year on Form 10-K under the Securities
Exchange Act of 1934; provided, however, that the Company shall
during such period be required to continue to use its best efforts
to prepare such registration statement for filing and to file such
registration statement as soon as possible after the date
described in clause (b) above. Your right to exercise each
Demand Registration Right shall expire, respectively, on or before
the earlier of (c) the date the Company files and causes to become
effective a registration statement on which you could have
exercised your PiggyBack Registration Right for each installment of
Class A Stock issued under Paragraph 3A(i) hereof, or (d) three (3)
years after the date each installment of shares of the Class A
Stock is issued to you under Paragraph 3A(i) hereof.
B. Class B Stock. In order to facilitate your
purchase of three hundred fifteen thousand one hundred forty-four
(315,144) shares of the Company's Class B Common Stock, par value
$.01 per share (the "Class B Stock"), the Company loaned to you one
million eight hundred seventeen thousand three hundred twenty-one
dollars and sixteen cents ($1,817,321.16) (the "Loan"). The Loan
(i) bears interest, payable annually, at a rate equal to the
Company's borrowing rate (as adjusted quarterly) on its U.S.
short-term banking facilities, and (ii) requires pledging by you of
the Class B Stock (until sold in part or in full as described in
this Paragraph 3B). Except in the event of the termination of your
employment under Paragraph 9C hereof, the Loan shall be amended to
require repayment by you no later than six (6) months after the
last day of your employment by the Company; provided, however, in
case of your death repayment shall be required no later than one
(1) year after such date. Notwithstanding anything to the contrary
contained in this Paragraph 3B, at any time that you sell any of
the shares of Class B Stock while any amount of the Loan remains
unpaid, you shall, within five (5) days of receipt of the funds
from such sale, pay to the Company, in repayment of part or all, as
the case may be, of the Loan, an amount equal to five dollars and
seventy-seven cents ($5.77) times the number of shares of the
Class B Stock so sold, but not in excess of the unpaid balance of
the Loan, plus interest, as set forth in this Paragraph 3B, on the
amount so repaid to the extent that such interest accrued to the
date of such repayment.
4. LIFE INSURANCE.
A. Your Insurance. During the term of your
employment hereunder, the Company shall continue to pay the
premiums on an existing contract of life insurance on your life in
the amount of five hundred thousand dollars ($500,000), which
contract is currently owned by your spouse.
B. The Company's Insurance. The Company is the
beneficiary of a contract of life insurance on your life in the
amount of one million dollars ($1,000,000), which contract is owned
by the Company. Upon your death, and the Company's receipt of the
proceeds of such policy, the Company shall apply up to five hundred
thousand dollars ($500,000) of such proceeds toward payment of the
unpaid balance of the Loan, plus interest on such payment accrued
to the date of such payment.
5. REIMBURSEMENT OF EXPENSES. In addition to the
compensation provided for herein, the Company shall reimburse to
you, or pay directly, all reasonable expenses incurred by you in
connection with the business of the Company, and its subsidiaries
and affiliates, including but not limited to business-class travel
if overseas, reasonable accommodations, and entertainment, subject
to documentation in accordance with the Company's policy. In this
connection, it is understood that certain business of the Company
will require the presence of your spouse, and this Paragraph 5
applies as well to such expenses relating to her.
6. EXTENT OF SERVICES.
A. In General. During the term of your employment
hereunder you shall devote your best and full-time efforts to the
business and affairs of the Company.
B. Limitation on Other Services. During the term
of your employment hereunder, you shall not undertake employment
with, or participate in, the conduct of the business affairs of any
other person, corporation, or entity, except at the direction or
with the written approval of the Board of Directors; provided,
however, that this Paragraph 6B shall not apply to the affairs of
your family's farming and ranching activities in Montana and the
States and Canadian Provinces adjoining Montana.
C. Personal Investments. Nothing herein shall
preclude you from having, making, or managing personal investments
which do not involve your active participation in the affairs of
the entities in which you so invest, but, unless approved in
writing by the Board of Directors, during the term of your
employment hereunder, you shall not have more than a one percent
(1%) ownership interest in any entity which is directly competitive
with any business conducted by the Company at that time. The
phrase "conducted by the Company" as used in this Paragraph 6C and
in Paragraph 13 hereof shall mean the business conducted by the
Company or by any corporation or other entity in which the Company
owns stock possessing fifty percent (50%) or more of the stock
(either voting or non-voting) in such corporation or fifty percent
(50%) or more of the equity interests (either voting or non-voting)
in such other entity (a "Subsidiary").
7. LOCATION. Your duties hereunder shall be performed
for the Company worldwide, with particular emphasis in the
Company's office in Norwalk, CT.
8. VACATION; OTHER BENEFITS.
A. Vacation. During the term of your employment
hereunder, you shall be entitled to a vacation or vacations, with
pay, totalling four (4) weeks in each fiscal year. You may
accumulate up to twelve (12) weeks vacation, but not more than
three (3) weeks from any single prior year. Any such accumulated
vacation may be used in any subsequent year or years in addition to
the four (4) weeks of vacation to which you are entitled for each
such year.
B. The Company's Benefit Plans. During the term of
your employment hereunder, you shall be eligible for inclusion, to
the extent permitted by law, as a full-time employee of the Company
or any Subsidiary, in any and all (i) pension, profit sharing,
savings, and other retirement plans and programs as in effect at
the time, (ii) life and health (medical, dental, hospitalization,
short-term and long-term disability) insurance plans and programs
as in effect at the time, (iii) stock option and stock purchase
plans and programs as in effect at the time, (iv) accidental death
and dismemberment protection plans and programs as in effect at the
time, (v) travel accident insurance plans and programs as in effect
at the time, and (vi) other plans and programs at the time
sponsored by the Company or any Subsidiary for employees or
executives generally as in effect at the time, including any and
all plans and programs that supplement any or all of the foregoing
types of plans or programs (except for any annual bonus plan, other
than the incentive compensation payable under Paragraph 2C hereof,
for employees in general).
C. Automobile, Club, and Professional Services.
During the term of your employment hereunder, (i) the Company shall
provide an automobile for your continued business use pursuant to
the arrangement between you and the Company that was in effect
immediately prior to the effective date of this Agreement, (ii) the
Company shall pay dues, not in excess of five thousand dollars
($5,000), for your membership at a social club of your choice, and
(iii) the Company shall reimburse to you, or pay directly, upon
submission by you to the Company of statements for services, the
amounts payable by you to any person or persons of your choice that
you retain to advise you with regard to financial, investment, and
tax matters; provided, however, that such reimbursement or payment
shall not exceed ten thousand dollars ($10,000) per fiscal year
beginning with the fiscal year ending June 30, 1998.
D. Post-Termination Benefits. In addition to any
other payments and benefits provided in this Agreement, effective
with the termination of your employment by the Company without
cause, you shall be entitled to (i) continued medical and dental
benefits for a period of two (2) years from the effective date of
your termination or until you secure other employment, whichever
occurs first, and (ii) reimbursement of reasonable expenses
incurred by you in connection with job search services.
9. TERMINATION OF EMPLOYMENT.
A. Termination by the Company Without Cause. The
Company may, without cause, terminate your employment hereunder at
any time upon ten (10) or more days' written notice to you. In the
event your employment is terminated under this Paragraph 9A, the
Company shall pay to you the following:
(i) A single lump sum payment, no later than
the last day of your employment, of:
(a) Any accrued but unpaid salary set
forth in Paragraph 2A hereof (as adjusted by Paragraph 2B hereof),
including salary in respect of any accrued and accumulated
vacation, due to you at the date of such termination;
(b) Any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof; and
(c) An amount equal to the product of two
and nine-tenths (2.9) times your "base salary" under Paragraph 2A
hereof (as adjusted by Paragraph 2B hereof);
(ii) A single lump sum payment of any accrued
but unpaid incentive compensation set forth in Paragraph 2C hereof
due to you at the date of such termination for the fiscal year
ending immediately prior to the date of such termination, which
shall be paid no later than ninety (90) days after the end of such
fiscal year;
(iii) A single lump sum payment of any
incentive compensation set forth in Paragraph 2C hereof earned in
the fiscal year of the termination of your employment, which
incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, shall be
pro-rated through the last day of your employment, and shall be
paid no later than ninety (90) days after the end of such fiscal
year; and
(iv) If and to the extent vested, the Deferred
Compensation as set forth in Paragraph 2D hereof, with payment of
the Monthly Amount beginning on the first day of the month
immediately succeeding the last day of your employment.
The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the
Company under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
B. Termination by Mutual Consent. You may
terminate your employment hereunder at any time with the written
consent of the Company. In the event your employment is terminated
under this Paragraph 9B, the Company shall pay to you the
following:
(i) A single lump sum payment, no later than
the last day of your employment, of:
(a) Any accrued but unpaid salary set
forth in Paragraph 2A hereof (as adjusted by Paragraph 2B hereof),
including salary in respect of any accrued and accumulated
vacation, due to you at the date of such termination;
(b) Any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof; and
(c) An amount equal to your annual "base
salary" under Paragraph 2A hereof (as adjusted by Paragraph 2B
hereof);
(ii) A single lump sum payment of any accrued
but unpaid incentive compensation set forth in Paragraph 2C hereof
due to you at the date of such termination for the fiscal year
ending immediately prior to the date of such termination, which
shall be paid no later than ninety (90) days after the end of such
fiscal year;
(iii) A single lump sum payment of any
incentive compensation set forth in Paragraph 2C hereof earned in
the fiscal year of the termination of your employment, which
incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, shall be
pro-rated through the last day of your employment, and shall be
paid no later than ninety (90) days after the end of such fiscal
year; and
(iv) If and to the extent vested, the Deferred
Compensation as set forth in Paragraph 2D hereof, with payment of
the Monthly Amount beginning on the first day of the month
immediately succeeding the last day of your employment.
The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the
Company under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
C. Termination by the Company With Cause. The
Company may for cause terminate your employment hereunder at any
time by written notice to you. For purposes of this Agreement, the
term "cause" shall mean (1) a failure by you to remedy either (a)
a continuing neglect in the performance of your duties under this
Agreement, or (b) any action taken by you that seriously prejudices
the interests of the Company, in either event within ten (10) days
of the Company's written notice to you of such neglect or action,
or (2) your conviction of a felony. In the event of the termination
of your employment hereunder for cause, the Company shall pay to
you the following:
(i) A single lump sum payment, no later than
ten (10) days after the last day of your employment, of
(a) Any accrued but unpaid salary set
forth in Paragraph 2A hereof (as adjusted by Paragraph 2B hereof),
including salary in respect of any accrued and accumulated
vacation, due to you at the date of such termination; and
(b) Any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof;
(ii) A single lump sum payment of any accrued
but unpaid incentive compensation set forth in Paragraph 2C hereof
due to you at the date of such termination for the fiscal year
ending immediately prior to the date of such termination, which
shall be paid no later than ninety (90) days after the end of such
fiscal year; and
(iii) If and to the extent vested, the
Deferred Compensation as set forth in Paragraph 2D hereof, with
payment of the Monthly Amount beginning on the first day of the
month immediately succeeding the last day of your employment. You
shall forfeit the incentive compensation set forth in Paragraph 2C
hereof for the fiscal year in which such termination occurs.
The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the
Company under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
D. Events. If any of the following described
events occurs during the term of your employment hereunder, you may
terminate your employment hereunder by written notice to the
Company either prior to, or not more than six (6) months after, the
happening of such event. In such event, your employment hereunder
will be terminated effective as of the later of ten (10) days after
the notice or ten (10) days after the event, and the Company shall
make to you the same payments that the Company would have been
obligated to make to you under Paragraph 9A hereof if the Company
had terminated your employment hereunder effective on such
date. The events, the occurrence of which shall permit you to
terminate your employment hereunder under this Paragraph 9D, are as
follows:
(i) The removal of you or the election of
any other person as the President or the Chief Executive Officer of
the Company; provided, however, that you shall not have approved
such removal or such election, in your capacity as a director, by
voting for such removal or such election.
(ii) Any merger or consolidation by the
Company with or into any other entity or any sale by the Company of
substantially all of its assets; provided, however, that you shall
not have approved such transaction, in your capacity as a director,
by voting for it.
(iii) Any change of a majority of the
directors of the Company occurring within any thirteen (13) month
period, or the acquisition by a single person or entity or a
related group of persons or entities, of shares of any class or
classes of voting stock of the Company representing twenty-five
percent (25%) or more of the total votes entitled to be cast by all
of the then outstanding shares of all classes of voting stock of
the Company; provided, however, that you shall not have approved
such change in directors or acquisition, in your capacity as a
shareholder or director, by voting for any of such new directors or
for such acquisition, and that there shall be excluded from any
such calculation of percentage of ownership all stock held by any
officer of the Company on the effective date of this Agreement.
(iv) The adoption by the Company of any plan
of liquidation providing for the distribution of all or
substantially all of its assets; provided, however, that you shall
not have approved the adoption of such plan, in your capacity as a
director, by voting for it.
(v) The failure by the Company to observe or
comply in any material respect with any of the provisions of this
Agreement, including a material diminution in your duties, or the
assignment to you of duties that are materially inconsistent with
your duties or that materially impair your ability to function as
the President or the Chief Executive of the Company if such failure
has not been cured within thirty (30) days after written notice
thereof has been given by you to the Company.
E. Disability or Death. If you should suffer a
Permanent Disability, the Company may terminate your employment
hereunder upon ten (10) or more days' prior written notice to you.
For purposes of this Agreement, a "Permanent Disability" shall be
deemed to have occurred only when you are qualified for benefits
under the Company's or a Subsidiary's Long Term Disability
Insurance Policy. In the event of the termination of your
employment hereunder by reason of Permanent Disability or death at
any time, the Company shall pay:
(i) In the case of Permanent Disability only,
to you, in conformity with regular payroll dates for salaried
personnel of the Company, an amount equal to fifty percent (50%) of
the base salary you were receiving at the date of such termination
under Paragraph 2A hereof (as adjusted by Paragraph 2B hereof),
payable through August 5, 2003, at which time monthly payments of
the Deferred Compensation set forth in Paragraph 2D hereof shall
begin; provided, however, that the amount payable under this
Paragraph 9E(i) (but not the Deferred Compensation payments) shall
be reduced to the extent of any payments made to you through any
Company-sponsored group disability plan;
(ii) To you or your legal representative, or
any beneficiary or beneficiaries designated by you in writing to
the Company, a single lump sum payment of:
(a) No later than ten (10) days after the
last day of your employment, any accrued but unpaid salary set
forth in Paragraph 2A hereof (as adjusted by Paragraph 2B hereof),
including salary in respect of any accrued and accumulated
vacation, due to you at the date of such termination;
(b) No later than ten (10) days after the
last day of your employment, any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof;
(c) A single lump sum payment of any
accrued but unpaid incentive compensation as set forth in
Paragraph 2C hereof due to you at the date of such termination for
the fiscal year ending immediately prior to the date of such
termination, which shall be paid no later than ninety (90) days
after the end of such fiscal year; and
(d) Any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year in which the
termination of your employment occurs, which incentive compensation
shall be determined on the basis of the Company's operations
through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and shall be paid no later than
ninety (90) days after the end of such fiscal year; and
(iii) In the case of death only, to your legal
representative, or any beneficiary or beneficiaries designated by
you in writing, the vested portion of the Deferred Compensation set
forth in Paragraph 2D hereof, with payment of the Monthly Amount
beginning on the first day of the month immediately succeeding the
last day of your employment.
The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the
Company under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
F. No Excess Parachute Payments. Notwithstanding
anything to the contrary contained in this Agreement, if the
Company obtains a written opinion of its tax counsel ("Tax
Counsel") to the effect that there exists a material possibility
that any payment to which you would (but for the application of
this Paragraph 9F) be entitled under this Agreement, would (but for
such application) be treated as an "excess parachute payment" (as
defined in Section 280G(b) of the Internal Revenue Code and the
Treasury Regulations promulgated thereunder):
(i) Unless you and the Company agree to an
alternative amendment of this Agreement that satisfies the
requirements of Paragraph 9F(ii) hereof, this Agreement shall be
amended by reducing the payments to which you are entitled
hereunder, in the order specified in the last sentence of this
Paragraph 9F, to the extent necessary so that, in the opinion of
Tax Counsel, there does not exist a material possibility that any
payment to which you are entitled under this Agreement (as so
amended) will be treated as an excess parachute payment; or
(ii) If you and the Company agree to amend
this Agreement by modifying the amount and/or timing of the
payments to which you are entitled hereunder in a manner other than
that specified in Paragraph 9F(i) hereof, and if, in the opinion of
Tax Counsel, there does not exist a material possibility that any
payment to which you are entitled under this Agreement (as so
amended) will be treated as an excess parachute payment, this
Agreement shall be so amended. An amendment to this Agreement
pursuant to Paragraph 9F(i) hereof shall reduce, first, the
Deferred Compensation (and, concomitantly, the Monthly Amount),
second (if applicable), the amount payable under Paragraph 9A(i)(c)
hereof by virtue of your election under Paragraph 9D hereof to
treat an event described therein as constituting the termination of
your employment, and third, on a pro-rata basis, all other amounts
(other than amounts payable pursuant to Paragraph 5 hereof, which
shall in any event be paid in full) to which you are entitled
hereunder.
G. Retirement. If not previously terminated under
any of the previously outlined provisions, your employment
hereunder shall terminate when you retire from full-time employment
with the Company, which shall occur no earlier than August 5, 2003,
at which time the Company shall pay to you the following:
(i) A single lump sum payment, no later than
the last day of your employment, of:
(a) Any accrued but unpaid salary set
forth in Paragraph 2A hereof (as adjusted by Paragraph 2B hereof),
including salary in respect of any accrued and accumulated
vacation, due to you at the date of such termination; and
(b) Any amounts owing, but not yet paid,
pursuant to Paragraph 5 hereof;
(ii) A single lump sum payment of any accrued
but unpaid incentive compensation as set forth in Paragraph 2C
hereof due to you at the date of such termination for the fiscal
year ending immediately prior to the date of such termination,
which shall be paid no later than ninety (90) days after the end of
such fiscal year;
(iii) A single lump sum payment of any
incentive compensation set forth in Paragraph 2C hereof earned in
the fiscal year of the termination of your employment, which
incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, and shall
be pro-rated through the last day of your employment, and shall be
paid no later than ninety (90) days after the end of such fiscal
year; and
(iv) The Deferred Compensation as set forth
in Paragraph 2D hereof, with payment of the Monthly Amount
beginning on the first day of the month immediately succeeding the
last day of your employment.
The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the
Company under this Agreement except as provided in Paragraph 12 and
Paragraph 13 hereof.
10. SOURCE OF PAYMENTS. All payments provided for
hereunder shall be paid from the general funds of the Company. The
Company may, but shall not be required to, make any investment or
investments whatsoever, including the purchase of a life insurance
contract or contracts on your life, to provide it with funds to
satisfy its obligations hereunder; provided, however, that neither
you nor your beneficiary or beneficiaries, nor any other person,
shall have any right, title, or interest whatsoever in or to any
such investment or contracts. If the Company shall elect to
purchase a life insurance contract or contracts on your life to
provide the Company with funds to satisfy its obligations
hereunder, the Company shall at all times be the sole and complete
owner and beneficiary of such contract or contracts, and shall have
the unrestricted right to use all amounts and to exercise all
options and privileges thereunder without the knowledge or consent
of you, your beneficiary or beneficiaries, or any other person, it
being expressly agreed that neither you, any such beneficiary or
beneficiaries, nor any other person shall have any right, title, or
interest whatsoever in or to any such contract or contracts.
Notwithstanding anything to the contrary contained in this
Paragraph 10, if the Company purchases any such contract or
contracts, you shall have the right, upon the termination of your
employment by the Company to purchase as soon after such
termination as possible any one or more of such contracts for an
amount equal to the cash surrender value thereof; provided,
however, that you notify the Company in writing of your intention
to make any such purchase no later than thirty (30) days subsequent
to such termination.
11. ENFORCEMENT OF RIGHTS. Nothing in this Agreement,
and no action taken pursuant to its terms, shall create or be
construed to create a trust or escrow account of any kind, or a
fiduciary relationship between the Company and you, your
beneficiary or beneficiaries, or any other person. You, your
beneficiary or beneficiaries, and any other person or persons
claiming a right to any payments or interests hereunder shall rely
solely on the unsecured promise of the Company, and nothing herein
shall be construed to give you, your beneficiary or beneficiaries,
or any other person or persons, any right, title, interest, or
claim in or to any specific asset, fund, reserve, account, or
property of any kind whatsoever owned by the Company or in which it
may have any right, title, or interest now or in the future, but
you or your beneficiary or beneficiaries shall have the right to
enforce a claim for benefits hereunder against the Company in the
same manner as any unsecured creditor. Notwithstanding anything to
the contrary set forth in this Paragraph 11, the Company agrees to
consider the feasibility of paying to a so-called "rabbi trust," as
described in the Internal Revenue Service's Revenue Procedure
92-64, the amounts necessary for the Company to fund the Deferred
Compensation set forth in Paragraph 2D hereof.
12. INVENTIONS AND CONFIDENTIAL INFORMATION. So long as
you shall be employed by the Company, you agree promptly to make
known to the Company the existence of any and all creations,
inventions, discoveries, and improvements made or conceived by you,
either solely or jointly with others, during the term of this
Agreement and for three (3) years thereafter, and to assign to the
Company the full exclusive right to any and all such creations,
inventions, discoveries, and improvements relating to any subject
matter with which the Company is now or shall become concerned, or
relating to any other subject matter if made with the use of the
Company's time, materials, or facilities. To the fullest extent
permitted by law, any of the foregoing inventions shall be
considered as "work-made-for-hire" and the Company shall be the
owner thereof. You further agree, without charge to the Company
but at its expense, if requested to do so by the Company, to
execute, acknowledge, and deliver all papers, including
applications or assignments for patents, trademarks, and
copyrights, and papers relating thereto, as may be considered by
the Company to be necessary or desirable to obtain or assign to the
Company any and all patents, trademarks, or copyrights for any and
all such creations, inventions, discoveries, and improvements in
any and all countries, and to vest title thereto in the Company in
all such creations, inventions, discoveries, and improvements as
indicated above conceived during your employment by the Company,
and for three (3) years thereafter. You further agree that you will
not disclose to any third person any trade secrets or proprietary
information of the Company, or use any trade secrets or proprietary
information of the Company in any manner, except in the pursuit of
your duties as an employee of the Company, and that you will return
to the Company all materials (whether originals or copies)
containing any such trade secrets or proprietary information (in
whatever medium) on termination of your employment by the Company.
The obligations set forth in this Paragraph 12 shall survive the
termination of your employment hereunder. This Paragraph 12
replaces the agreement executed by you on January 5, 1993, which
prior agreement is now null and void.
13. RESTRICTIVE COVENANT. For a period of three (3)
years after the termination of your employment by the Company, you
shall not, in any geographical location at which there is at that
time business conducted by the Company which was conducted by the
Company at the date of such termination, directly or indirectly,
own, manage, operate, control, be employed by, participate in, or
be connected in any manner with, the ownership, management,
operation, or control of any business similar to or competitive
with such business conducted by the Company without the written
consent of the Company; provided, however, that you may have an
ownership interest of up to one percent (1%) in any entity,
notwithstanding that such entity is directly competitive with any
business conducted by the Company at the date of such termination.
14. LEGAL FEE. The Company shall reimburse to you, or
pay directly, upon submission in either event to the Company of a
statement for services, the amount payable by you to any attorney
of your choice that you have retained to advise you with regard to
this Agreement; provided, however, that such reimbursement or
payment shall not exceed ten thousand dollars ($10,000).
15. ARBITRATION. Any controversy or claim arising out of
or relating to this Agreement, or the breach or asserted breach
thereof, shall be settled by arbitration to be held in New York,
New York in accordance with the rules then obtaining of the
American Arbitration Association, and the judgment upon the award
rendered may be entered in any court having jurisdiction thereof.
The arbitrator shall determine which party shall bear the costs of
such arbitration, including attorneys' fees.
16. NON-ASSIGNABILITY. Your rights and benefits
hereunder are personal to you, and shall not be alienated,
voluntarily or involuntarily, assigned or transferred.
17. BINDING EFFECT. This Agreement shall be binding upon
the parties hereto, and their respective assigns, successors,
executors, administrators, and heirs. In the event the Company
becomes a party to any merger, consolidation, or reorganization,
this Agreement shall remain in full force and effect as an
obligation of the Company or its successors in interest. None of
the payments provided for by this Agreement shall be subject to
seizure for payment of any debts or judgments against you or your
beneficiary or beneficiaries, nor shall you or any such beneficiary
or beneficiaries have any right to transfer or encumber any right
or benefit hereunder; provided, however, that the undistributed
portion of the Deferred Compensation shall at all times be subject
to set-off by the Company for debts owed by you to the Company.
18. ENTIRE AGREEMENT. This Agreement contains the
entire agreement relating to your employment by the Company. It
may not be changed orally, and may be changed only by an agreement
in writing signed by the party against whom enforcement of any
waiver, change, modification, extension, deletion, or revocation is
sought. Our agreement dated January 31, 1994 is now null and void.
19. NOTICES. All notices and communications hereunder
shall be in writing, sent by certified or registered mail, return
receipt requested, postage prepaid; by facsimile transmission, time
and date of receipt noted thereon; or by hand-delivery properly
receipted. The actual date of receipt as shown by the receipt
therefor shall determine the time at which notice was given. All
payments required hereunder by the Company to you shall be sent
postage prepaid, or, at your election, shall be transferred to you
electronically to such bank as you designate in writing to the
Company, including designation of the applicable electronic
address. The foregoing items (other than any electronic transfer
to you) shall be addressed as follows (or to such other address as
the Company and you may designate in writing from time to time):
To the Company: To you:
Baldwin Technology Company, Inc. Gerald A. Nathe
One Norwalk West 11448 Bronzedale Drive
40 Richards Avenue Oakton, VA 22124
Norwalk, CT 06854 Facsimile: 703-264-0670
Facsimile: 203-852-7040
20. NEW YORK LAW TO GOVERN. This Agreement shall be
governed by, and construed and enforced according to, the domestic
laws of the State of New York without giving effect to the
principles of conflict of laws thereof.
Very truly yours,
BALDWIN TECHNOLOGY COMPANY, INC.
By: /s/W.J. Lauricella
Vice-President
AGREED TO AND ACCEPTED:
/s/Gerald A. Nathe 11/25/97
Gerald A. Nathe
H:\MAS\Nathe\employag.97
EXHIBIT 10.24
FIFTH AMENDMENT TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this
"Amendment Agreement") is made and entered into as of this 31st day of December,
1997, by and among BALDWIN AMERICAS CORPORATION, a Delaware corporation ("BAM"),
BALDWIN TECHNOLOGY LIMITED, a Bermuda corporation ("BTL"and together with BAM,
the "Borrowers"), BALDWIN TECHNOLOGY COMPANY, INC., a Delaware corporation
("Baldwin" and together with the Borrowers, the "Credit Parties"), EACH OF THE
GUARANTORS PARTY HERETO (the "Guarantors"), NATIONSBANK, N.A., a national bank-
ing association (formerly known as NationsBank of North Carolina, National
Association), as Agent (the "Agent") for the lenders (the "Lenders") party to
the Credit Agreement (defined below), NATIONSBANK, N.A., as Lender ("Nations
Bank"), and BANKBOSTON, N.A., successor by merger to Bank of Boston Connecti-
cut, as Lender ("BankBoston").
W I T N E S S E T H:
WHEREAS, the Credit Parties, the Lenders and the Agent have entered into
that certain Amended and Restated Revolving Credit Agreement dated as of De-
cember 31, 1995 (as amended, the "Credit Agreement"), pursuant to which the
Lenders have agreed to make certain revolving credit loans to the Borrowers;
and
WHEREAS, the parties hereto desire to further amend the Credit Agreement
in the manner herein set forth;
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. The term "Credit Agreement" or "Agreement" (as the case
may be) as used herein and in the Loan Documents shall mean the Credit Agreement
as hereby amended and modified, and as further amended, modified or supplemented
from time to time as permitted thereby. Unless the context otherwise requires,
all terms used herein without definition shall have the definitions provided
therefor in the Credit Agreement.
2. Amendments. Subject to the conditions hereof, the Credit Agreement
is hereby amended, effective as of the date hereof, as follows:
(a) The definition of "Revolving Credit Termination Date" in
Section 1.1 of the Credit Agreement is hereby deleted in its entirety and
the following is inserted in replacement thereof:
"Revolving Credit Termination Date" means the earlier to
occur of (i) the fourth anniversary of the Closing Date, or
(ii) any other date upon which the Total Commitment shall
terminate in accordance with the terms hereof;
3. Guarantors. Each Guarantor has joined in the execution of this
Amendment Agreement for the purpose of (i) agreeing to the amendments to the
Credit Agreement contained herein and (ii) confirming and ratifying its guar-
antee of payment of all the Obligations pursuant to the Guaranty.
4. Representations and Warranties. Each Credit Party hereby certifies
that:
(a) The representations and warranties made by each Credit
Party in Article VI of the Credit Agreement are true on and as of
the date hereof, with the same effect as though such representations
and warranties were made on the date hereof, except to the extent
that such representations and warranties expressly relate to an
earlier date or schedules referred to therein have changed due to
the sale of Misomex.
(b) There has been no material change in the condition,
financial or otherwise, of Baldwin, any Borrower or any of their
respective Subsidiaries since the date of the most recent financial
reports of Baldwin and the Borrowers received by each Lender under
Section 7.1 of the Credit Agreement;
(c) The business and properties of each Credit Party and any
of their respective Subsidiaries are not, and since the date of the
most recent financial reports of Baldwin and the Borrowers received
by each Lender under Section 7.1 of the Credit Agreement have not
been, adversely affected in any substantial way as the result of any
fire, explosion, earthquake, accident, strike, lockout, combination
of workmen, flood, embargo, riot, activities of armed forces, war or
acts of God or the public enemy, or cancellation or loss of any
major contracts; and
(d) No event has occurred and no condition exists which, upon
the consummation of the transaction contemplated hereby, will
constitute a Default or an Event of Default on the part of any
Credit Party under the Credit Agreement or any other Loan Document
either immediately or with the lapse of time or the giving of
notice, or both.
5. Conditions Precedent. The effectiveness of this Agreement is subject
to the receipt by the parties hereto of the following:
(a) The Agent shall have received, in form and substance satisfactory to
it:
(i) five (5) counterparts of this Agreement duly executed by
all signatories hereto together with all Annexes hereto;
(ii) six (6) counterparts of an Officer's Certificate from
the secretary or assistant secretary of each Credit Party, dated as
of the date hereof, certifying (A) as to the resolutions of the
boards of directors or other appropriate governing body (or of the
appropriate committee thereof) of such Credit Party approving and
adopting the amendments to the Credit Agreement contemplated hereby
and this Agreement and authorizing the execution and delivery
thereof, (B) as to the specimen signatures of officers of each
Credit Party executing this Agreement on behalf of such Credit Party
and (c) that the charter documents and bylaws of each Credit Party
are unchanged since the date last certified by the Secretary of
State of its state of organization;
(iii) six (6) counterparts of an Officer's Certificate
from the secretary or assistant secretary of each Guarantor, dated
as of the date hereof, certifying (A) as to the resolutions of the
boards of directors or other appropriate governing body (or of the
appropriate committee thereof) of such Guarantor approving and
adopting the amendments to the Credit Agreement contemplated hereby
and this Agreement and authorizing the execution and delivery
hereof, (B) as to the specimen signatures of officers of such
Guarantor executing this Agreement on behalf of such Guarantor and
(c) that the charter documents and bylaws of such Guarantor are
unchanged since the date last certified by the Secretary of State
(or other appropriate governmental authority) of its state of
organization;
(iv) copies of all additional agreements, instruments and
documents which the Lender may reasonably request, such documents,
when appropriate, to be certified by appropriate governmental
authorities.
(b) All proceedings of the Credit Parties and the Guarantors
relating to the matters provided for herein shall be satisfactory to the
Lender and its counsel.
6. Entire Agreement. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter.
7. Full Force and Effect of Agreement. Except as hereby specifically
amended, modified or supplemented, the Credit Agreement and all of the other
Loan Documents are hereby confirmed and ratified in all respects and shall
remain in full force and effect according to their respective terms.
8. Counterparts. This Amendment Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9. Credit Agreement and Other Loan Documents. All references in any of
the Loan Documents to the "Credit Agreement" shall mean the Credit Agreement
as amended hereby.
[Signature pages follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement
to be duly executed by their duly authorized officers, all as of the day and
year first above written.
BORROWERS:
BALDWIN AMERICAS CORPORATION
By: /s/Ronald F. Rahe
Name: Ronald F. Rahe
Title: Treasurer
BALDWIN TECHNOLOGY LIMITED
By: /s/Gerald A. Nathe
Name: Gerald A. Nathe
Title: President
AGENT:
NATIONSBANK, N.A., as Agent for the Lenders
By: /s/Thomas J. Kane
Name: Thomas J. Kane
Title: Vice President
LENDERS:
NATIONSBANK, N.A., as Lender
By: /s/Thomas J. Kane
Name: Thomas J. Kane
Title: Vice President
BANKBOSTON, N.A., as Lender
By: /s/W. Lincoln Schoff, Jr.
Name: W. Lincoln Schoff, Jr.
Title: Director
GUARANTORS:
BALDWIN TECHNOLOGY COMPANY, INC.
By: /s/Gerald A. Nathe
Name: Gerald A. Nathe
Title: Chairman, President & CEO
BALDWIN EUROPE CONSOLIDATED, INC.
By: /s/William J. Lauricella
Name: William J. Lauricella
Title: Vice President & Treasurer
BALDWIN ASIA PACIFIC CORPORATION
By: /s/William J. Lauricella
Name: William J. Lauricella
Title: Treasurer
BALDWIN TECHNOLOGY CORPORATION
By: /s/Gerald A. Nathe
Name: Gerald A. Nathe
Title: Chairman
KANSA CORPORATION
By: /s/Ronald F. Rahe
Name: Ronald F. Rahe
Title: Treasurer & Secretary
BALDWIN GRAPHIC SYSTEMS, INC.
By: /s/Ronald F. Rahe
Name: Ronald F. Rahe
Title: Secretary, Treasurer & CFO
ENKEL CORPORATION
By: /s/William J. Lauricella
Name: William J. Lauricella
Title: Assistant Treasurer