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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:
[ ] Preliminary Proxy Statement
[ ] Confidential For Use of the [ ] Confidential For Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted
[X] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
BALDWIN PIANO & ORGAN COMPANY
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(Name of Registrant as Specified in its Charter)
BOLERO INVESTMENT GROUP, L.P.
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
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BOLERO INVESTMENT GROUP, L.P.
INGRAHAM BUILDING 1101 EAST BALBOA BLVD.
25 S.E. 2ND AVE., STE.720 NEWPORT BEACH, CA 92661-1313
MIAMI, FL 33131 (714) 675-3850
(305) 371-5200 (714) 673-0434 (FAX)
(305) 371-5226 (FAX)
May 23, 1997
Dear Fellow Shareholder:
At this year's Annual Meeting of Shareholders of Baldwin Piano & Organ
Company, Bolero Investment Group, L.P., will be nominating five individuals to
stand for election as members of the Board of Directors of Baldwin.
BOLERO IS ASKING YOU TO VOTE "FOR" ITS FIVE NOMINEES.
Bolero firmly believes that Baldwin has many advantages as it moves
toward the twenty-first century, including being the sole domestic manufacturer
of pianos; the name recognition of brands such as Baldwin, Chickering and
Wurlitzer; and having a finance company that is over one hundred years old. The
issue is not whether our company has potential, but rather how best to realize
that potential. THE TIME HAS COME FOR BALDWIN SHAREHOLDERS TO ACT. PLEASE
COMPLETE, SIGN AND RETURN YOUR BLUE BOLERO PROXY TODAY.
Bolero and I own 8.2% of Baldwin, together making us one of Baldwin's
largest shareholders. I began acquiring shares of the Company in 1994, the same
year that Ms. Hendricks joined the Company. Despite the lack of progress in
sales, earnings and stock price during current management's tenure, Bolero has
steadily increased its position in Baldwin based solely on the belief that the
Company's potential for increased shareholder value far outweighed its current
problems. Based on Bolero's perception of the opportunities and challenges
confronting the Company, Bolero is proposing five highly qualified director
nominees who will bring a wealth of experience, specialized knowledge,
enthusiasm and vigor that will be essential to the future success of Baldwin.
IMPORTANT: YOUR SUPPORT IS CRUCIAL, AND TIME IS SHORT. PLEASE
COMPLETE, SIGN, DATE AND RETURN YOUR BLUE BOLERO PROXY TODAY.
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THE NEED FOR A CHANGE
DO YOU WANT ANOTHER YEAR OF STAGNANT SALES, EARNINGS AND STOCK PRICE?
Baldwin shareholders have waited years for improvement in Baldwin's results. We
believe that they are tired of waiting. The following overview of the Company's
financial performance before and after the Company's November 1994 management
change demonstrates that the Company continues to plod along at the expense of
its shareholders:
[Graph depicting Baldwin's net earnings from 1993 through 1996:
1993: $4.6 million
1994: $ .3 million
1995: $4.0 million
1996: $2.1 million
Graph depicting Baldwin's net sales from 1993 through 1996:
1993: $120.7 million
1994: $122.3 million
1995: $122.6 million
1996: $115.0 million]
THE COMPANY'S STOCK PERFORMANCE GRAPH TAKEN FROM ITS OWN PROXY
STATEMENT, WHERE THE "PEER GROUP" CHOSEN BY BALDWIN WAS IDENTIFIED, IS EQUALLY
TELLING:
[Graph depicting the following shareholder returns.]
1991 1992 1993 1994 1995 1996
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Baldwin $100.00 $181.08 $162.16 $118.92 $135.14 $121.62
Russell 2000 $100.00 $118.41 $140.80 $138.24 $177.55 $206.83
Peer Group $100.00 $120.24 $166.08 $151.94 $154.71 $178.43
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These results were achieved at a time when the stock market was
reaching record highs and when the United States economy was rebounding.
Management continues to ask for more time to generate improved results.
HOW LONG SHOULD SHAREHOLDERS HAVE TO WAIT?
Rather than continuing to wait for results, Bolero would like to see
the Company immediately adopt a new leadership style that will be proactive,
streamlined, and schooled in the requirements of modern corporate reality. Only
with this approach can our Company achieve the desired results and realize its
potential.
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A TIME FOR NEW IDEAS
Bolero has provided the Company with numerous ideas and observations
and identified areas of concern. Although it has done so in a vacuum, as Company
management has refused to meet with Bolero, Bolero believed that setting forth
its issues would be of benefit to Baldwin. These issues included:
o the underutilization of the Company's manufacturing facilities
o the size of the corporate headquarters
o the expansion of the finance division
o the rise of inventory levels
o decreasing revenue without decreasing expenses
In fact, since Bolero began communicating its ideas and concerns, the
Company has taken initial steps to address some of these issues. For example, in
October 1996, the Company announced a comprehensive inventory reduction plan,
and in November 1996 and April 1997, the Company announced the elimination of
jobs in order to cut expenses. WHY HAS IT TAKEN SO LONG FOR MANAGEMENT TO FOCUS
ON THESE IMPORTANT ISSUES? WILL MANAGEMENT, UNDER THE GUIDANCE OF THE CURRENT
BOARD, REALLY BE ABLE TO TURN THE COMPANY AROUND?
Additionally, in an attempt to focus the Company on the need to enhance
shareholder value, on September 13, 1996, I proposed that the Board hire a
nationally recognized investment banker to explore a possible sale, merger or
business combination involving the Company to enhance shareholder value. 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 had complied with the substance of my proposal, Baldwin shareholders are
not being asked to vote on that proposal at the annual meeting. BOLERO BELIEVES
THAT ITS NOMINEES, AS NEW DIRECTORS, WILL BE RECEPTIVE TO CHANGE AND PLAN TO
IMPLEMENT THE SPIRIT OF THE PROPOSAL, BY DIRECTING LEHMAN BROTHERS TO EXPLORE
ALL ALTERNATIVES TO ENHANCE SHAREHOLDER VALUES, INCLUDING A POSSIBLE SALE,
MERGER OR OTHER BUSINESS COMBINATION INVOLVING THE COMPANY, AS WELL AS OTHER
OPPORTUNITIES AND CHALLENGES CONFRONTING THE COMPANY.
THE TIMING OF BALDWIN'S ACTIONS IN RELATION TO BOLERO'S COMMUNICATIONS
OF ITS IDEAS IS PERHAPS COINCIDENTAL. BOLERO ASKS THAT YOU VOTE "FOR" ITS
DIRECTOR NOMINEES TO ASSURE THAT SUCH "COINCIDENCES" WILL CONTINUE.
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THE BOLERO NOMINEES
THE INDIVIDUALS WHOM BOLERO HAS NOMINATED TO STAND FOR ELECTION AS
DIRECTORS OF THE COMPANY HAVE A WEALTH OF EXPERIENCE IN THE SPHERE OF CORPORATE
GOVERNANCE AND BUSINESS:
o John West. Governor West currently serves as Chairman of Seibels Bruce
Group and on the Board of Donaldson, Lufkin & Jenrette Inc., an
internationally recognized securities and investment banking firm. Governor
West also is a former Governor of South Carolina and a former Ambassador to
Saudi Arabia. Bolero believes this experience would be extremely
beneficial, particularly with respect to the Company's ongoing work with
Lehman Brothers.
o Edward McDonnell. Mr. McDonnell has served as President and Director of
Seagram's and as Executive Vice-President of the Pillsbury Company, both
companies which, like Baldwin, are involved in the sale of well-known,
brandname products.
o Peter Cooper. Mr. Cooper has served as Chief Executive Officer of a leading
Australian beverage company and is an attorney from New Zealand. Mr. Cooper
has also been self-employed for many years at Cooper & Company, a private
investment firm. Bolero believes that Mr. Cooper would lend an important
entrepreneurial spirit and business sense to Baldwin.
o David Harmon. Mr. Harmon is Chief Executive Officer of the largest private
leasing company in the United States, which experience would be
particularly relevant to Baldwin's examination of a potential piano leasing
program.
o Robert Lippert. Dr. Lippert holds a Ph.D. in economics and has served as an
assistant professor of finance at Rutgers University. He currently serves
as Vice President of Strategic Planning at Seibels Bruce Group. Mr. Lippert
would bring a wealth of knowledge on the conduct of business in the 1990s
to the Baldwin Board.
THE VARIED EXPERIENCE OF THESE INDIVIDUALS MAKES THEM WELL SUITED FOR
THE TASK OF PROVIDING DIRECTION AND GUIDANCE TO A COMPANY THAT HAS FLOUNDERED
FOR THE PAST FOUR YEARS. THEY ARE KEENLY AWARE OF THEIR RESPONSIBILITIES AS
DIRECTORS AND TOWARD THE OWNERS OF THE COMPANY, ALL OF ITS SHAREHOLDERS.
Although the Company's management has decried the lack of these
individuals' experience in Baldwin's industry, Bolero would simply point out
that none of the biographical information on the current directors who are
standing for election in the Company's proxy statement describes any experience
in this industry other than experience with Baldwin. Furthermore, any relevant
experience of the Company's current Board has plainly done little to eliminate
the Company's decreasing sales and earnings and stagnant stock performance.
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CONCLUSION
BALDWIN MANAGEMENT WOULD HAVE SHAREHOLDERS CONTINUE TO WAIT FOR
IMPROVED PERFORMANCE. BOLERO BELIEVES THAT THE TIME FOR WAITING HAS ENDED AND
THE TIME FOR ACTION HAS COME. BOLERO'S PROPOSED DIRECTOR NOMINEES ARE COMMITTED
TO PROVIDING THE COMPANY AND ITS SHAREHOLDERS WITH THE TYPE OF LEADERSHIP AND
SHAREHOLDER SENSITIVITY THAT HAS BECOME A PREREQUISITE TO HAVING A SUCCESSFUL
COMPANY. BOLERO THEREFORE URGES YOU TO VOTE "FOR" THESE NOMINEES. I ENCOURAGE
YOU TO CONTACT ME DIRECTLY WITH ANY THOUGHTS OR COMMENTS THAT YOU MAY HAVE BY
CALLING ME AT (305) 371-5200. I LOOK FORWARD TO MEETING WITH YOU AND TO THE
UPCOMING VOTE.
Sincerely,
/s/ Kenneth W. Pavia
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Kenneth W. Pavia
General Partner
If you have any questions or require assistance, please call me at
(305) 371-5200 or Georgeson & Company at (800) 223-2064.
If your shares are held in the name of a brokerage firm or bank, only
they can vote your shares upon receiving your specific instructions. Please
complete, sign and date the BLUE Bolero Proxy or instruct the individual
responsible for your account to do so today.
PLEASE RETURN YOUR BLUE PROXY TO:
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
TOLL FREE: (800) 223-2064
BANKS & BROKERS CALL: (212) 440-9800
