<PAGE> 1
SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential For Use of the
Commission Only (as permitted
[ ] Definitive Proxy Statement by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
BALDWIN PIANO & ORGAN COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
BOLERO INVESTMENT GROUP, L.P.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
PRELIMINARY COPY
PROXY STATEMENT
OF
BOLERO INVESTMENT GROUP, L.P.
-----------------------
ANNUAL MEETING OF THE STOCKHOLDERS
OF
BALDWIN PIANO & ORGAN COMPANY
This Proxy Statement and the Blue Proxy Card are furnished by Bolero
Investment Group, L.P., a California limited partnership ("Bolero"), in
connection with the solicitation by Bolero of proxies from the holders of Common
Stock, par value $0.01 per share (the "Common Stock"), of Baldwin Piano & Organ
Company, a Delaware corporation (the "Company" or "Baldwin"), to vote at the
Annual Meeting of the stockholders of the Company, including any adjournments or
postponements thereof and any special meeting called in lieu thereof, (the
"Annual Meeting") scheduled to be held at Fifth Third Center, 38 Fountain Square
Plaza, Cincinnati, Ohio, on the fifth floor in the Board Room, at 11:00 a.m. on
Thursday, June 12, 1997, to nominate and elect to the Company's Board of
Directors (the "Board") the five director nominees of Bolero (the "Bolero
Nominees") named herein.
BOLERO RECOMMENDS THAT YOU VOTE IN FAVOR OF THE BOLERO NOMINEES
Stockholders of record of shares of Common Stock on April 16, 1997
(the "Record Date") are entitled to vote at the Annual Meeting. It is
anticipated that this proxy material will first be furnished to stockholders
of the Company on or about May __, 1997. On the Record Date, Bolero and Kenneth
W. Pavia, Sr. ("Mr. Pavia"), Bolero's general partner, beneficially owned an
aggregate of 279,460 shares (or approximately 8.2%) of the Common Stock. Bolero
and Mr. Pavia intend to cause all of such shares to be voted FOR the Bolero
Nominees. See "Voting Securities and Principal Holders Thereof."
BY SIGNING, DATING AND MAILING THE ENCLOSED BLUE PROXY CARD YOU
WILL REVOKE ANY PREVIOUSLY DATED PROXY. ONLY YOUR LATEST-DATED
PROXY WILL COUNT AT THE MEETING.
THIS SOLICITATION IS BEING MADE BY BOLERO AND NOT ON BEHALF OF THE
BOARD OF DIRECTORS OF THE COMPANY.
YOUR VOTE IS EXTREMELY IMPORTANT. If you agree with Bolero's efforts,
we ask for your support by immediately signing, dating and mailing the enclosed
Blue proxy card.
SHARES IN YOUR NAME. No matter how many shares you own, vote "FOR" the
Bolero Nominees by signing, dating and mailing the enclosed Blue proxy card.
Sign the Blue proxy card exactly as your name appears on the stock certificate
regarding your shares.
SHARES IN YOUR BROKER'S OR BANK'S NAME. If you own shares in the name
of a brokerage firm, bank or other nominee, your broker, bank or other nominee
cannot vote your shares for the Bolero Nominees unless it receives your specific
instructions. Please sign, date and mail as soon as possible the enclosed Blue
proxy card in the envelope that has been provided by your broker, bank or other
nominee to be sure that your shares are voted, or contact the person responsible
for your account and instruct that person to execute a Blue proxy card on your
behalf.
<PAGE> 3
QUESTIONS AND ASSISTANCE. If you have not received a Blue proxy card or
have any questions or need assistance in voting, please call:
Kenneth W. Pavia, Sr.
Ingraham Building
25 S.E. 2nd Ave., Suite 720
Miami, Florida 33131
(305) 371-5200 (collect)
PLEASE REMEMBER TO DATE YOUR PROXY CARD, AS ONLY YOUR LATEST DATED PROXY WILL
COUNT AT THE ANNUAL MEETING. IF YOU HAVE ANY DOUBTS AS TO WHETHER YOUR PROXY
WILL BE RECEIVED IN TIME TO BE CAST AT THE ANNUAL MEETING, PLEASE CALL KENNETH
PAVIA PROMPTLY.
REASONS FOR THE SOLICITATION
Bolero believes that Baldwin is facing a variety of challenges and
opportunities that Baldwin's management has not addressed. The Company's
tradenames - Baldwin, Wurlitzer and Chickering - have worldwide name
recognition, and the Company is a premier producer of mid-priced pianos and
organs. As the sole piano maker in America, Baldwin faces mostly foreign
competition in an era in which there is a movement in this country to "buy
American." The finance company of Baldwin has been in existence for a century,
and provides growth opportunities as an independent entity and as a sales tool
for the Company. Yet despite all of these and other intrinsic strengths and
opportunities, Bolero believes that the Company's stock has underperformed,
and that the current, laggard stock price does not reflect the Company's
true value.
Mr. Pavia has outlined for the Board examples of issues which he
believes the Company has failed to address in order to rectify its poor stock
market performance. In an attempt to focus the Board and management on the need
to enhance stockholder value, on September 13, 1996, Mr. Pavia proposed that
the Board hire a nationally recognized investment banker to explore a possible
sale, merger or business combination involving the Company. On December 19,
1996, Mr. Pavia formally requested the Company to include his proposal that the
Board hire an investment banker to enhance stockholder value in the Company's
1997 Proxy Statement.
On February 27, 1997, the Company announced that it had retained
Lehman Brothers to, among other things, review strategic opportunities
available to Baldwin, including acquisitions, mergers and strategic alliances.
Based on its position that it has complied with the substance of the proposal,
the Company has not included the proposal in the Company's 1997 Proxy Statement
and Baldwin stockholders are not being asked to vote on that proposal at the
Annual Meeting. Mr. Pavia has called on the Board to work promptly and
effectively with Lehman Brothers to develop and implement a strategy that will
increase stockholder value.
Based on Bolero's perception of the opportunities and challenges
confronting the Company, Bolero believes that the stockholders would benefit
from the election of five new independent directors to the Board. Bolero
believes that these nominees will bring a wealth of experience, specialized
knowledge, enthusiasm and vigor that will be essential to Baldwin and is
proposing them based on Bolero's reasoned belief that Baldwin would prosper
under new Board leadership.
2
<PAGE> 4
ELECTION OF BOLERO NOMINEES AS DIRECTORS
Bolero is proposing that the stockholders of the Company elect the
Bolero Nominees to the Board at the Annual Meeting. The Bolero Nominees named in
the table below, each of whom has consented to serve as a director, if elected,
would serve until the next annual meeting of stockholders and until his
successor has been elected and qualified.
<TABLE>
<CAPTION>
NAME, AGE AND EMPLOYMENT HISTORY OR PRESENT PRINCIPAL
BUSINESS ADDRESS OCCUPATION AND FIVE YEAR EMPLOYMENT HISTORY
---------------- -------------------------------------------
<S> <C>
Governor John West (74) ....................... Mr. West served as Governor of South Carolina
23-B Shelter Cove Lane, Suite 400, from 1970 through 1976 and as Ambassador to
Hilton Head Island, South Carolina Saudi Arabia from 1977 through 1981. Mr. West
29938 has been Distinguished Professor of Middle East
Studies (part-time) since September 1981.
He has also been of counsel to the law
firm of Bethea, Jordan & Griffin
since January 1993. Mr. West currently
serves on the Board of Directors of
Seibels Bruce Group, as Chairman of the
Board, and of Donaldson, Lufkin & Jenrette Inc.
Mr. Edward McDonnell (61) ..................... Mr. McDonnell has been the President of The
52 New Orleans Road, Premier Group, a family-owned private investment
Jade Building, Suite 202, company, since 1995. From the mid-1980s until
Hilton Head Island, South Carolina June 1995, Mr. McDonnell served as the President
29928 of Seagram's Spirits and Wine Group. Mr.
McDonnell has also served on the Board
of Directors of Seagram's and as executive
vice-president of the Pillsbury Company.
Mr. Peter Cooper (45) ......................... Mr. Cooper has been self-employed at Cooper &
2010 Main St., Company, a private investment firm, for the past
Suite 1220, five years. Mr. Cooper is an attorney from New
Irvine, California 92714 Zealand who previously served as Chief Executive
Officer of L.D., Nathan & Co., Limited, a leading
brewery and soft drink company in Australia and Asia.
Mr. David Harmon (58) ......................... Mr. Harmon has been the president and chief
21051 Warner Center Lane, executive officer of El Camino Resources, Ltd., a
Woodland Hills, California 91367 privately held equipment lessor, for the past five
years. El Camino Resources currently has
subsidiaries, offices and strategic alliances in
Europe, Latin America, the Pacific Rim and the Far
East.
Dr. Robert Lippert (34) ....................... Mr. Lippert has served as Vice President of Strategic
1501 Lady Street Planning at Seibels Bruce Group, Inc., an insurance
Columbia, South Carolina 29201 company, since May 1996. From July 1992 to May 1996,
he served as an Assistant Professor of Finance at
Rutgers University. From August 1988 to June 1992,
he was a graduate student at the University of
South Carolina.
</TABLE>
3
<PAGE> 5
It is anticipated that each Bolero Nominee, upon election, will receive
director's fees, consistent with the Company's past practice, for services as a
director of the Company. According to the Company's Proxy Statement dated May 5,
1997 for the Annual Meeting (the "Company's 1997 Proxy Statement"), non-employee
directors of the Company received $10,000 in 1996, payable in quarterly
installments, and an additional $900 for each Board meeting and each committee
meeting attended in person or by telephone. The Company's 1997 Proxy Statement
also indicated that such directors were also reimbursed for all reasonable
expenses incurred in connection with their services and received an annual grant
of 2,000 non-qualified stock options having an exercise price equal to the
market price of the Common Stock on the date of the grant. Annex I sets forth
certain information with respect to the Common Stock owned by the Bolero
Nominees.
VOTE AND RECOMMENDATION. Directors are elected by vote of a plurality
of the shares of voting stock present and entitled to vote, in person or by
proxy, at the Annual Meeting. The five nominees receiving the greatest number of
votes cast at the Annual Meeting upon the presence of a quorum will be elected
as directors. Abstentions or broker non-votes as to the election of directors
will not affect the election of the candidates receiving the plurality of
votes. Unless instructed to the contrary, the shares represented by the proxies
will be voted FOR the election of the Bolero Nominees named above. Although it
is anticipated that each Bolero Nominee will be able to serve as a director,
should any Bolero Nominee become unavailable to serve, the proxies will be
voted for such other person or persons as may be designated by Bolero.
BOLERO RECOMMENDS A VOTE "FOR" THE BOLERO NOMINEES.
CERTAIN INFORMATION REGARDING BOLERO, THE BOLERO NOMINEES AND
OTHER PARTICIPANTS
Bolero's principal business is investing in marketable securities. The
principal business addresses of Bolero are Ingraham Building, 25 S.E. 2nd Ave.,
Suite 720, Miami, Florida 33131 and 1101 E. Balboa Boulevard, Newport Beach,
California 92661-1313. As of the Record Date, Bolero beneficially owned 217,460
shares of the Common Stock.
Kenneth W. Pavia, Sr. is the sole general partner of Bolero. The
principal business of Mr. Pavia (age 54) is to make and hold investments. As the
sole general partner of Bolero, Mr. Pavia may be deemed to beneficially own the
217,460 shares of Common Stock owned by Bolero. In addition, Mr. Pavia is the
founder, a director, sole executive officer and sole stockholder of FHI, Inc.
("FHI"), a corporation whose principal business is private investment banking.
FHI owns 52,000 shares of Common Stock, which Mr. Pavia may be deemed to
beneficially own. The principal business addresses of Mr. Pavia are Ingraham
Building, 25 S.E. 2nd Ave., Suite 720, Miami, Florida 33131 and 1101 E. Balboa
Boulevard, Newport Beach, California 92661-1313. Mr. Pavia has beneficially
owned shares of Common Stock since August 2, 1994.
Francisco G. Llaca, Jr. (age 30), in-house counsel for FHI, may also
assist Bolero in the solicitation of proxies. The principal business address of
Mr. Llaca is Ingraham Building, 25 S.E. 2nd Avenue, Suite 720, Miami, Florida
33131.
Bolero, the Bolero Nominees, Mr. Pavia and Mr. Llaca are sometimes
referred to herein as the "Participants" in this solicitation. Additional
information with respect to the Participants is set forth below under "Voting
Securities and Principal Holders Thereof" and in Annex I.
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<PAGE> 6
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The shares of Common Stock constitute the only class of outstanding
voting securities of the Company. Accordingly, only holders of Common Stock are
entitled to vote at the Annual Meeting or execute proxies in connection
therewith. The Company stated in the Company's 1997 Proxy Statement that as of
the Record Date, there were 3,425,396 shares of Common Stock outstanding. Each
share of Common Stock entitles its record holder to one vote. Stockholders of
the Company do not have cumulative voting rights.
The following table sets forth, as of the Record Date, the name of each
person who owned beneficially more than 5% of the shares of Common Stock
outstanding at such date, the number of shares owned by each such person, the
percentage of the outstanding shares represented thereby and certain information
with respect to such person. The information below (except with respect to
Bolero and footnote (6)) is based on information reported by the Company in the
Company's 1997 Proxy Statement.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENTAGE
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER(1) OWNERSHIP CLASS
---------------------- --------- ----------
<S> <C> <C>
Heartland Advisors, Inc........................................... 850,400 (2) 24.8%
R. S. Harrison.................................................... 361,267 (3) 10.5%
State of Wisconsin Investment Board............................... 300,000 (4) 8.8%
David L. Babson & Company, Inc.................................... 292,900 (5) 8.6%
Bolero Investment Group, L.P...................................... 279,460 (6) 8.2%
SoGen International Fund, Inc..................................... 215,000 (7) 6.3%
Dimensional Fund Advisors Inc..................................... 191,100 (8) 5.6%
</TABLE>
- ----------
(1) Based upon the Schedule 13D's and Schedule 13G's filed with the
Securities and Exchange Commission (the "Commission") by the named
stockholders: the address of Heartland Advisors, Inc. is 790 North
Milwaukee Street, Milwaukee Wisconsin 53202; the address of R.S.
Harrison is 4040 Mt. Carmel Road, Cincinnati, Ohio 45244; the address
of State of Wisconsin Investment Board is P.O. Box 7842, Madison,
Wisconsin 53707; the address of David L. Babson & Company, Inc. is One
Memorial Drive, Cambridge, Massachusetts 02142; the address of Bolero
Investment Group, L.P. is 1101 E. Balboa Boulevard, Newport Beach,
California 92661; the address of SoGen International Fund, Inc. is 1221
Avenue of the America, 8th Floor, New York, New York 10020; and the
address of Dimensional Fund Advisors Inc. is 1299 Ocean Avenue, 11th
Floor, Santa Monica, California 90401.
(2) Pursuant to Amendment No. 5 to Schedule 13G dated February 12, 1997,
Heartland Advisors, Inc., stated that it is a registered investment
adviser that may be deemed the beneficial owner of 850,400 shares of
Common Stock. Heartland Advisors, Inc. has sole dispositive power over
all 850,400 shares and sole voting power of 736,300 shares.
(3) Pursuant to Amendment No. 9 to Schedule 13G dated February 13, 1997,
Mr. Harrison stated that he directly owns 260,255 shares. Mr. Harrison
is also deemed to be a beneficial owner of 101,012 shares of Common
Stock held under four trusts for the benefit of his four adult
children.
(4) Pursuant to Schedule 13G's provided to the Company, State of Wisconsin
Investment Board stated that it is a governmental agency which manages
public pension funds and that it may be deemed the beneficial owner of
300,000 shares of Common Stock. State of Wisconsin Investment Board has
sole dispositive power and sole voting power over all 300,000 shares.
(5) Pursuant to Amendment No. 6 to Schedule 13G dated February 7, 1997,
David L. Babson & Company, Inc. stated that it is a registered
investment adviser that may be deemed the beneficial owner of 292,900
shares of
5
<PAGE> 7
Common Stock. David L. Babson & Company, Inc. has sole dispositive
power over all 292,900 shares, sole voting power over 179,900 shares
and shared voting power over 113,000 shares.
(6) Bolero directly owns and is the beneficial owner of 217,460 shares of
Common Stock. FHI directly owns and is the beneficial owner of 52,000
shares of Common Stock. Florence Partners, Inc. ("Florence Partners"),
a corporation whose principal business is investing in marketable
securities, directly owns and is the beneficial owner of 10,000 shares
of Common Stock. Mr. Pavia, as the sole general partner of Bolero and
as the founder, a director and the sole executive officer and
stockholder of FHI, may be deemed to be the beneficial owner of shares
of Common Stock held by Bolero and FHI. Charles Powers ("Mr. Powers"),
whose principal business is to make and hold investments, as the sole
director, executive officer and stockholder of Florence Partners may be
deemed to be the beneficial owner of 10,000 shares of Common Stock. Mr.
Powers is a limited partner of Bolero. As a limited partner of Bolero,
Mr. Powers has no right to vote or dispose of any shares of Common
Stock held by Bolero, and therefore does not beneficially own any
shares held by Bolero. By reason of the provisions of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
Bolero, Mr. Pavia, FHI, Florence Partners and Mr. Powers may be deemed
to be a "group." By reason of the provisions of Rule 13d-5 under the
Exchange Act, the group consisting of these persons may be deemed to
own all shares of Common Stock beneficially owned by Bolero, Mr. Pavia,
FHI, Florence Partners and Mr. Powers. Mr. Powers and Florence Partners
do not affirm the existence of such a group and disclaim beneficial
ownership of shares of Common Stock beneficially owned by Bolero, Mr.
Pavia and FHI.
(7) Pursuant to Schedule 13G's provided to the Company, SoGen International
Fund, Inc., stated that it is a registered investment company and that,
with its investment adviser Societe Generale Asset Management Corp., it
is the beneficial owner of 215,000 shares of Common Stock. SoGen
International and its investment adviser share voting and dispositive
power over all 215,000 shares.
(8) Pursuant to Amendment No. 2 to Schedule 13G dated February 5, 1997,
Dimensional Fund Advisors Inc. stated that it is a registered
investment adviser that may be deemed the beneficial owner of 191,100
shares of Common Stock, all of which shares are held in portfolios of
DFA Investment Dimensions Group Inc., a registered open- end investment
company, or in series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of
which Dimensional Fund Advisors Inc. serves as investment manager.
Dimensional Fund Advisors Inc. has sole dispositive power over all
191,100 shares and sole voting power over 124,600 shares. DFA
Investment Dimensions Group Inc. has voting power over an additional
38,200 shares and DFA Investment Trust Company has voting power over
the remaining 28,300 shares.
For information relating to the ownership of Common Stock by directors
and executive officers of the Company, see Annex II hereto.
INFORMATION CONCERNING THE COMPANY
The Company is subject to the informational requirements of the
Exchange Act and in accordance therewith files reports and other information
with the Commission. Reports, proxy statements and other information filed by
the Company with the Commission in accordance with the Exchange Act may be
inspected and copied at the public reference facilities of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the following regional offices of the Commission: 7 World Trade Center, Suite
1300, New York, New York 10048 and Suite 1400, Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can be obtained from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such material
concerning the Company can be inspected at the offices of the Nasdaq National
Market, 1735 K Street, N.W., Washington, D.C. 20006. The Commission also
maintains a World Wide Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission.
SOLICITATION OF PROXIES
Solicitation of proxies may be made by Bolero, Mr. Pavia or Mr. Llaca.
Proxies will be solicited by mail, advertisement, telephone or telecopier and in
person. No such persons will receive additional compensation for such
solicitation.
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<PAGE> 8
Banks, brokers, custodians, nominees and fiduciaries may be requested
to forward solicitation material to beneficial owners of the shares of Common
Stock. Bolero will reimburse banks, brokers, custodians, nominees and
fiduciaries for their reasonable expenses for sending solicitation material to
the beneficial owners on behalf of Bolero.
The cost of the solicitation of proxies with respect to the Bolero
Nominees will be borne by Bolero. Costs related to the solicitation of proxies
with respect to the election of the Bolero Nominees include expenditures for
attorneys, accountants, financial advisers, proxy solicitors, public relations
advisers, printing, advertising, postage, litigation and related expenses and
filing fees and are expected to aggregate approximately $125,000. To date,
Bolero has spent approximately $40,000 of such total estimated expenditures.
Bolero reserves the right, though no final determination has been
made, to seek reimbursement from the Company for the costs incurred in
connection with this proxy solicitation. Such request for reimbursement will
not be submitted to a vote of the Company's stockholders.
PROXY PROCEDURES
Unless contrary instructions are indicated on the proxy, all shares of
Common Stock represented by valid proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted for the election of the
Bolero Nominees. A proxy executed by a holder of shares may be revoked at any
time before its exercise by sending a written revocation (as provided below), by
submitting another properly executed proxy with a later date prior to the time
of the Annual Meeting or by giving notice of revocation at the Annual Meeting.
The mere presence of any stockholder at the Annual Meeting will not operate to
revoke his or her proxy. The revocation may be delivered to Mr. Pavia at
Ingraham Building, 25 S.E. 2nd Ave., Suite 720, Miami, Florida 33131 or the
Company at 422 Wards Corner Road, Loveland, Ohio 45140 or at any other address
provided by the Company. Although a revocation or a later dated proxy delivered
to the Company but not to Bolero will be effective, Bolero requests that if a
revocation or a later dated proxy is delivered only to the Company, a
photostatic copy of the revocation or later dated proxy also be delivered to
Bolero (FAX # 305-371-5226) so that it will be aware of such revocation or later
dated proxy. All revocations received by Bolero will be delivered by it to the
Company, but will be effective only upon their receipt by the Company. Bolero
intends to deliver any such revocations to the Company immediately prior to the
convening of the Annual Meeting. Stockholders who have executed and returned a
proxy and who then attend the Annual Meeting and desire to vote in person are
requested to so notify Bolero prior to the time of the Annual Meeting.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE BOLERO NOMINEES TO THE
BOARD, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED BLUE PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED OR FAX BOTH SIDES OF THE ENCLOSED BLUE PROXY CARD
TO BOLERO AT 305-371-5226. BOLERO RECOMMENDS THAT YOU VOTE "FOR" THE BOLERO
NOMINEES.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
According to the Company's 1997 Proxy Statement, any stockholder
proposal intended for inclusion in the proxy material for the 1998 Annual
Meeting must be received in writing by the Company on or before January 5,
1998. The inclusion of any proposal will be subject to applicable rules of the
Commission.
OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
Appointment of Auditors
According to the Company's 1997 Proxy Statement, the Company is
seeking to obtain stockholder ratification of the appointment of KPMG Peat
Marwick LLP ("KPMG") as the independent auditors of the Company for the fiscal
year ending December 31, 1997. Bolero is not making any recommendation on this
proposal. The appointment of KPMG requires the affirmative vote of a majority
of the votes cast on the matter at the Annual Meeting, assuming a quorum is
present.
Bolero's Blue Proxy Card contains spaces that allow each stockholder
to vote on the Bolero Nominees and the appointment of KPMG as separate issues.
Therefore, it is possible for a stockholder to vote "FOR" the Bolero Nominees
on Bolero's Blue Proxy Card and also vote on the appointment of KPMG. It will
not be necessary to vote on management's form of proxy in order to vote on the
appointment of KPMG. If no marking is made on the Blue Proxy Card, you will be
deemed to have given a direction to abstain from voting with respect to the
appoinment of KPMG.
Other Proposals
Except as set forth above, Bolero is not aware of any matter to be
considered by the Company's stockholders at the Annual Meeting. However, if
any other matters come before the Annual Meeting, including any motion to
adjourn the Annual Meeting prior to the taking of a vote on the election of
directors or on the other matters set forth in this Proxy Statement, the
proxies will vote in their discretion all shares covered by Blue proxy cards
with respect to such matters unless such discretionary authority has been
specifically withheld.
7
<PAGE> 9
COMPANY INFORMATION. Except as otherwise noted herein, the information
concerning the Company contained in this Proxy Statement has been taken from or
is based upon documents and records on file with the Commission and other
publicly available information. Although Bolero does not have any knowledge that
would indicate that any statement contained herein based upon such documents and
records is untrue, Bolero does not take any responsibility for the accuracy or
completeness of the information contained in such documents and records, or for
any failure by the Company to disclose events that may affect the significance
or accuracy of any such information.
Only holders of record as of the close of business on the Record Date
will be entitled to vote at the Annual Meeting. Accordingly, it is important
that you vote the shares held by you on the Record Date or grant a proxy to vote
such shares even if you have sold such shares after such date.
If your shares are held in the name of a brokerage firm, bank,
custodian, fiduciary or other nominee on the Record Date, only it can vote your
shares, and only upon receipt of your specific instructions. Accordingly, please
contact the person responsible for your account and give instructions for your
shares to be voted.
BOLERO INVESTMENT GROUP, L.P.
Dated: May __, 1997
8
<PAGE> 10
ANNEX I
SHARES HELD BY BOLERO, MR. PAVIA, FHI,
THE BOLERO NOMINEES AND CERTAIN OTHER PERSONS
Within the past two years, Bolero, Mr. Pavia, FHI, the Bolero Nominees
and certain other persons named in this Proxy Statement have engaged in the
following transactions in securities of the Company. In each such transaction,
the securities acquired or disposed of consisted of shares of the Common Stock.
Except as otherwise indicated below, all transactions were effected on the
Nasdaq National Market.
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
ACQUIROR TRANSACTION DATE ACQUIRED DISPOSED OF
- -------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Bolero Investment Group, L.P. (8) 05/13/96 2,500
05/20/96 1,500
05/21/96 48,100 (1)
05/22/96 1,000
05/24/96 6,000
05/28/96 5,000 (1)
05/30/96 10,000 (2)
05/31/96 400
06/14/96 500
06/14/96 16,000
06/28/96 10,000 (1)
07/08/96 11,000
07/12/96 1,060
07/16/96 2,000
07/17/96 10,000
07/19/96 3,000 (1)
07/22/96 2,000
07/25/96 1,500
08/02/96 3,000
08/19/96 1,500
08/22/96 2,000
09/04/96 3,000
09/13/96 5,000
09/20/96 5,500
10/02/96 3,000
10/04/96 2,000
10/07/96 2,000
10/21/96 2,000
11/05/96 1,000
11/13/96 2,000
11/15/96 2,000
11/18/96 2,500
11/25/96 1,500
</TABLE>
I-1
<PAGE> 11
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
ACQUIROR TRANSACTION DATE ACQUIRED DISPOSED OF
- -------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
12/06/96 1,000
12/11/96 4,000
12/12/96 2,000
12/16/96 2,000
12/16/96 3,000
12/23/96 2,000
12/26/96 5,000
01/02/97 2,000
01/07/97 12,500
02/04/97 500
02/06/97 2,000
02/10/97 400
Kenneth W. Pavia, Sr. (8) 05/30/96 10,000 (3)
Balboa Investment Group, L.P. (4)(8) 07/11/95 1,000
09/18/95 2,000
12/15/95 1,000
03/21/96 1,600
04/25/96 2,000
04/30/96 2,000
05/21/96 38,100 (4)
FHI, Inc. (6)(8) 09/18/95 2,000
09/27/95 1,000
04/01/96 2,000
Governor John West 03/15/96 1,000
03/21/96 1,000
03/28/96 3,000
03/29/96 4,000
04/19/96 1,000
06/28/96 10,000 (6)
Mr. Peter Cooper 07/22/96 11,500 (7)
</TABLE>
- ----------
(1) Such shares were acquired through a capital contribution by a limited
partner.
(2) Such shares were acquired through a capital contribution by Mr. Pavia,
as sole general partner of Bolero.
(3) Contributed to Bolero. Mr. Pavia has benenficially owned shares of
Common Stock since August 2, 1994.
(4) As the sole general partner of Balboa Investment Group, L.P.
("Balboa"), Mr. Pavia may be deemed to have beneficially owned the
shares held by Balboa.
(5) As the founder, a director and the sole executive officer and
stockholder of FHI, Mr. Pavia may be deemed to beneficially own the
shares held by FHI.
(6) Mr. West transferred these shares to Bolero in exchange for a limited
partnership interest. Mr. West disclaims beneficial ownership of shares
owned by Bolero.
(7) Such shares were acquired by Willowbrook Investments, L.P., the general
partner of which is Aeneas Investments, LLC, which is controlled by Mr.
Cooper.
I-2
<PAGE> 12
(8) Florence Partners directly owns and is the beneficial owner of 10,000
shares of Common Stock. Mr. Powers, as the sole director, executive
officer and stockholder of Florence Partners may be deemed to be the
beneficial owner of 10,000 shares of Common Stock. Mr. Powers is a
limited partner of Bolero. As a limited partner of Bolero, Mr. Powers
has no right to vote or dispose of any shares of Common Stock held by
Bolero, and therefore does not beneficially own any shares held by
Bolero. By reason of the provisions of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), Bolero, Mr.
Pavia, FHI, Florence Partners and Mr. Powers may be deemed to be a
"group." By reason of the provisions of Rule 13d-5 under the Exchange
Act, the group consisting of these persons may be deemed to own all
shares of Common Stock beneficially owned by Bolero, Mr. Pavia, FHI,
Florence Partners and Mr. Powers. Mr. Powers and Florence Partners do
not affirm the existence of such a group and disclaim beneficial
ownership of shares of Common Stock beneficially owned by Bolero, Mr.
Pavia and FHI.
Except as set forth in this Proxy Statement, none of Bolero, Mr. Pavia,
the Bolero Nominees or any other Participant, or any associate of the foregoing,
directly or indirectly owns any securities of the Company or any subsidiary of
the Company, beneficially or of record, has the right to acquire beneficial
ownership within 60 days or has purchased or sold such securities within the
past two years.
To the knowledge of Bolero, except as set forth in this Proxy
Statement, none of Bolero, Mr. Pavia, the Bolero Nominees or any other
Participant has any substantial interest, direct or indirect, by security
holdings or otherwise, in any matter to be acted upon at the Annual Meeting,
except for the election of directors.
During the past 10 years, none of Bolero, Mr. Pavia, the Bolero
Nominees or any other Participant has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
No part of the purchase price of any of the shares of Common Stock
beneficially owned by any of Bolero, Mr. Pavia, the Bolero Nominees or any
other Participant is represented by funds borrowed or otherwise obtained for
the purpose of acquiring or holding such securities. From time to time, Balboa
acquired shares with funds provided by borrowings under standard broker margin
arrangements which have been repaid.
None of Bolero, Mr. Pavia, the Bolero Nominees or any other Participant
is, or within the past year has been, a party to any contract, arrangement or
understanding with any person with respect to any securities of the Company,
except that (i) Mr. West is a limited partner and Mr. Pavia is a limited partner
and general partner, of Bolero and (ii) Mr. Pavia has an agreement with Florence
Partners pursuant to which Mr. Pavia has the authority to perform all acts
necessary to carry out the purposes and business of Florence Partners. Pursuant
to the terms of the Bolero Limited Partnership Agreement dated as of May 13,
1996, Mr. Pavia has the authority to perform all acts necessary to carry out the
purposes and business of Bolero pursuant to the Partnership Agreement. As
general partner of Bolero, Mr. Pavia has a 12.5% interest in the profits of
Bolero. Mr. Pavia also will receive 12.5% of the profits from Florence Partners'
investment in the Company. Florence Partners is the beneficial owner of 10,000
shares of Common Stock.
None of Bolero, Mr. Pavia, the Bolero Nominees or any other
Participant, or any associate of the foregoing, has any arrangement or
understanding with any person (A) with respect to any future employment by the
Company or its affiliates or (B) with respect to any future transactions to
which the Company or any of its affiliates will or may be a party.
There are no pending legal proceedings in which any of the Bolero
Nominees or any of their associates is a party adverse to the Company or any of
its affiliates or in which any of the Bolero Nominees or any of their associates
has an interest adverse to the Company or any of its affiliates.
None of the Bolero Nominees holds any position or office with the
Company or any parent, subsidiary or affiliate of the Company, and none has ever
served as a director of the Company or any parent, subsidiary or affiliate of
the Company.
None of the Bolero Nominees has any family relationship, by blood,
marriage or adoption, to any director, executive officer or person nominated or
chosen by the Company to become a director or executive officer of the Company.
During the last three fiscal years, no compensation was awarded to, earned by,
or paid to any of the Bolero Nominees by any person for any services rendered in
any capacity to the Company or its subsidiaries.
I-3
<PAGE> 13
BENEFICIAL OWNERSHIP OF SHARES BY THE BOLERO NOMINEES
The following table sets forth the ownership of the Common Stock as of
the Record Date by each of the Bolero Nominees. Unless otherwise indicated, such
persons have sole voting and investment power with respect to such shares, and
all such shares were owned beneficially by the person indicated.
<TABLE>
<CAPTION>
Amount of
Beneficial Percent
Name Ownership of Class (1)
- ------------------------- ---------- ------------
<S> <C> <C>
John West (2) 0 0
Edward McDonnell 0 0
Peter Cooper (3) 11,500 *
David Harmon 0 0
Robert Lippert 0 0
</TABLE>
- ----------
* Less than 1% of the outstanding Common Stock.
(1) Based on the Common Stock shown as outstanding as of the Record Date,
in the Company's 1997 Proxy Statement.
(2) Governor West is a limited partner of Bolero but disclaims beneficial
ownership of shares of Common Stock owned by Bolero.
(3) Mr. Cooper may be deemed to beneficially own 11,500 shares of Common
Stock held by Willowbrook Investments, L.P., the general partner of
which, Aeneas Investments, LLC, is a company controlled by Mr. Cooper.
The address of Willowbrook Investments and Aeneas Investments is 2010
Main Street, Suite 1220, Irvine, California 92714.
I-4
<PAGE> 14
ANNEX II
SHARES HELD BY THE COMPANY'S DIRECTORS
AND EXECUTIVE OFFICERS
Based upon Bolero's review of the Company's 1997 Proxy Statement, to
Bolero's knowledge, the directors and five most highly compensated executive
officers of the Company (and the directors and executive officers as a group)
beneficially owned as of the Record Date, the following amounts of the
outstanding shares of Common Stock:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENTAGE
NAME OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS
---------------- --------- ----------
<S> <C> <C>
CURRENT DIRECTORS AND NOMINEES
Karen L. Hendricks............................................. 125,000(1)(2) 3.6%
Joseph H. Head, Jr............................................. 30,000(2) .9%
Roger L. Howe.................................................. 23,000(2) .7%
George E. Castrucci............................................ 22,000(2) .6%
William B. Connell............................................. 5,000(2) .1%
EXECUTIVE OFFICERS
R.S. Harrison.................................................. 361,267(3) 10.5%
Stephen P. Brock............................................... 22,000(1) .6%
George C. Huebner.............................................. 21,000(1) .6%
Larry D. Thompson.............................................. 15,000(1) .4%
All executive officers and directors
as a group (10 persons)...................................... 280,500(1)(2)(3) 8.2%
</TABLE>
- ----------
(1) Includes shares owned beneficially subject to the holder's right to
exercise outstanding incentive stock options: 10,000 shares for Ms.
Hendricks, 20,000 shares for Mr. Brock, 19,000 shares for Mr. Huebner,
13,000 shares for Mr. Thompson, and 17,500 shares in the aggregate for
the Company's other executive officers.
(2) Includes shares owned beneficially subject to the holder's right to
exercise outstanding non-qualified stock options: 100,000 shares for
Ms. Hendricks, 20,000 shares for each of Messrs. Head and Castrucci,
8,000 shares for Mr. Howe, 4,000 shares for Mr. Connell, and 2,000
shares for each of Messrs. Brock, Huebner and Thompson.
(3) Mr. Harrison retired as a director and executive officer of the Company
in January 1997, but is a named executive for purposes of the Company's
1997 Proxy Statement based on his 1996 compensation. Accordingly, the
Company did not include the shares owned by Mr. Harrison in the
aggregate number of shares owned by current executive officers and
directors of the Company as of the Record Date.
II-1
<PAGE> 15
Preliminary Copy--Subject to Completion[Form of Proxy Card]
BLUE PROXY CARD
ANNUAL MEETING OF STOCKHOLDERS OF BALDWIN PIANO & ORGAN COMPANY TO BE HELD ON
JUNE 12, 1997 TO VOTE FOR THE DIRECTOR NOMINEES SET FORTH BELOW
THIS PROXY IS SOLICITED BY BOLERO INVESTMENT GROUP, L.P.
The undersigned hereby appoints Kenneth W. Pavia, Sr. and Francisco G. Llaca,
Jr., and each of them, each with full power of substitution, as proxy of the
undersigned, to attend the Annual Meeting of the stockholders of Baldwin Piano &
Organ Company (the "Company") to be held at Fifth Third Center, 38 Fountain
Square Plaza, Cincinnati, Ohio, on the fifth floor in the Board Room, on June
12, 1997, commencing at 11:00 a.m., and at any and all adjournments or
postponements thereof and any special meeting called in lieu thereof, and to
vote all Common Stock of the Company, as designated on the reverse side of this
proxy, with all powers the undersigned
would possess if personally present at the meeting.
This Proxy will be voted or withheld from being voted in accordance with the
instructions specified. IF NO CHOICE IS SPECIFIED, THE PROXY WILL CONFER
DISCRETIONARY AUTHORITY AND WILL BE VOTED FOR THE BOLERO NOMINEES
LISTED BELOW AND ABSTAIN WITH RESPECT TO THE RATIFICATION OF AUDITORS.
This Proxy confers authority for each of the aforementioned
persons to vote in his or her discretion with respect to amendments or
variations to the matters identified in the notice of meeting
accompanying this Proxy and other matters which may
properly come before this meeting.
(Please mark and "X" in the appropriate box)
BOLERO INVESTMENT GROUP, L.P. RECOMMENDS A VOTE FOR THE FOLLOWING
DIRECTOR NOMINEES
1. ELECTION OF DIRECTORS. The following persons are hereby elected as directors
of the Company, each to serve until his successor is duly elected and
qualified:
Governor John West, Mr. Edward McDonnell, Mr. Peter Cooper, Mr. David Harmon
and Dr. Robert Lippert.
[ ] FOR ALL NOMINEES LISTED ABOVE [ ] WITHHOLD AUTHORITY TO
(EXCEPT AS MARKED TO THE CONTRARY VOTE FOR ALL NOMINEES LISTED
BELOW) ABOVE
INSTRUCTIONS. To withhold authority to vote for the election of any
candidate(s), write the name(s) of such candidate(s) in the following space.
BOLERO INVESTMENT GROUP, L.P. MAKES NO RECOMMENDATION ON THE FOLLOWING PROPOSAL
2. RATIFICATION OF AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
the ratification of the appointment of KPMG Peat Marwick LLP as
auditors for Baldwin Piano & Organ Company for the fiscal year ending
December 31, 1997
(CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE)
<PAGE> 16
3. IN THEIR DISCRETION WITH RESPECT TO ANY OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE ANNUAL MEETING.
The undersigned hereby revokes any other proxy or proxies heretofore given to
vote or act with respect to the shares of the Company's common stock held by the
undersigned, and hereby ratifies and confirms all actions the herein named
proxies, their substitutes, or any of them may lawfully take by virtue hereof.
Please date this Proxy and sign it exactly
as your name or names appear on your stock
certificates or on a label affixed thereto.
When shares are held jointly, EACH joint
owner should sign. When signing as attorney,
executor, administrator, trustee, guardian,
corporate officer, etc., give full title as
such. If shares are held by a corporation,
please sign in full corporate name by the
President or other authorized officer. If
shares are held by a partnership, please
sign in partnership name by an authorized
person.
Dated:
-------------------------------------
-------------------------------------------
Signature
-------------------------------------------
Signature, if held jointly
-------------------------------------------
Title of Authority
IN ORDER FOR YOUR PROXY TO BE VALID, IT MUST BE DATED.
PLEASE SIGN, DATE AND MAIL YOUR PROXY PROMPTLY TO KENNETH W. PAVIA, SR.,
INGRAHAM BUILDING, 25 S.E. 2ND AVE., SUITE 720, MIAMI, FLORIDA 33131.
