<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
BALDWIN TECHNOLOGY COMPANY, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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)(4) and 0-12.
(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
BALDWIN TECHNOLOGY COMPANY, INC.
One Norwalk West
40 Richards Avenue
Norwalk, Connecticut 06854
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 18, 1997
To the Stockholders:
The Annual Meeting of Stockholders of Baldwin Technology Company, Inc. (the
"Company") will be held at the Tara Stamford Hotel, 2701 Summer Street,
Stamford, Connecticut on the 18th day of November, 1997 at 10:00 a.m., Eastern
Standard Time, for the following purposes:
1. To elect three Class I Directors to serve for three-year terms or until
their respective successors are elected and qualify.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record as of the close of business on September 30,
1997, are entitled to receive notice of and to vote at the meeting. A list of
such stockholders shall be open to the examination of any stockholder, for any
purpose germane to the meeting, during ordinary business hours, for a period of
ten days prior to the meeting, at the Tara Stamford Hotel, 2701 Summer Street,
Stamford, Connecticut.
By Order of the Board of Directors.
Helen P. Oster
Secretary
Norwalk, Connecticut
October 15, 1997
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE FILL IN, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE YOUR SHARES OF COMMON STOCK
PERSONALLY, WHETHER OR NOT YOU HAVE PREVIOUSLY SUBMITTED A PROXY.
<PAGE> 3
BALDWIN TECHNOLOGY COMPANY, INC.
PROXY STATEMENT
Norwalk, Connecticut
October 15, 1997
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of Baldwin Technology Company, Inc., a Delaware corporation (the
"Company"), for use only at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held at the Tara Stamford Hotel, 2701 Summer Street, Stamford,
Connecticut on the 18th day of November, 1997 at 10:00 a.m., Eastern Standard
Time, and at any adjournment thereof. The approximate date on which this Proxy
Statement and accompanying Proxy will first be given or sent to stockholders is
October 15, 1997.
Each Proxy executed and returned by a stockholder may be revoked at any
time thereafter, by written notice to that effect to the Company, attention of
the Secretary, prior to the Annual Meeting, or to the Chairman, or the
Inspectors of Election, at the Annual Meeting, or by execution and return of a
later-dated Proxy, except as to any matter voted upon prior to such revocation.
Proxies in the accompanying form will be voted in accordance with the
specifications made and, where no specifications are given, will be voted FOR
the election as Directors of the nominees named herein and if any one or more of
such nominees should become unavailable for election for any reason then FOR the
election of any substitute nominee that the Board of Directors of the Company
may propose. In the discretion of the proxy holders, the Proxies will also be
voted FOR or AGAINST such other matters as may properly come before the meeting.
The management of the Company is not aware of any other matters to be presented
for action at the meeting.
With regard to the election of Directors, votes may be cast in favor of or
withheld from each nominee; votes that are withheld will be counted as present
for purposes of determining the existence of a quorum and will not have any
effect on the vote. Broker non-votes will be counted for purposes of determining
the presence or absence of a quorum and will have no effect on the outcome of
the election of Directors.
The affirmative vote of a majority of the votes entitled to be cast by the
outstanding shares of Class A Common Stock, par value $.01 per share (the "Class
A Common Stock"), and Class B Common Stock, par value $.01 per share (the "Class
B Common Stock"), present, in person or by proxy, and entitled to vote at the
meeting, voting as a single class, with each share of Class A Common Stock
having one vote per share and each share of Class B Common Stock having ten
votes per share, is required for any other matters voted upon at the meeting or
any adjournment thereof other than the election of Directors. The required votes
for the election of Directors is described below under the caption "Voting
Securities."
<PAGE> 4
VOTING SECURITIES
The Board of Directors has fixed the close of business on September 30,
1997 as the record date for the determination of stockholders entitled to
receive notice of and to vote at the Annual Meeting. The issued and outstanding
stock of the Company on September 30, 1997 consisted of 15,288,881 shares of
Class A Common Stock and 1,835,883 shares of Class B Common Stock.
With respect to the election of Directors, the holders of Class A Common
Stock, voting as a separate class, are entitled to elect 25% of the total number
of Directors (or the nearest higher whole number) constituting the entire Board
of Directors. Accordingly, the holders of Class A Common Stock are entitled to
elect two of the eight Directors constituting the entire Board of Directors.
Holders of Class B Common Stock, voting as a separate class, are entitled to
elect the remaining Directors, but only so long as the number of outstanding
shares of Class B Common Stock is equal to at least 12.5% of the number of
outstanding shares of both classes of Common Stock. If the number of outstanding
shares of Class B Common Stock is less than 12.5% of the total number of
outstanding shares of both classes of Common Stock, the remaining directors are
elected by the holders of both classes of Common Stock voting together as a
single class, with the holders of Class A Common Stock having one vote per share
and the holders of Class B Common Stock having ten votes per share. As of
September 30, 1997 the number of outstanding shares of Class B Common Stock
constituted approximately 10.7% of the total number of outstanding shares of
both classes of Common Stock. Accordingly, the holders of Class A Common Stock
and Class B Common Stock voting together are entitled to elect six of the eight
Directors constituting the entire Board of Directors.
Except with respect to the election or removal of Directors, and certain
other matters with respect to which Delaware law requires each class to vote as
a separate class, the holders of Class A Common Stock and Class B Common Stock
vote as a single class on all matters, with each share of Class A Common Stock
having one vote per share and each share of Class B Common Stock having ten
votes per share. A quorum of stockholders is constituted by the presence, in
person or by proxy, of holders of record of both Class A Common Stock and Class
B Common Stock representing a majority of the aggregate number of votes entitled
to be cast by both classes together. Abstentions will be considered present and
have the effect of a negative vote; broker non-votes will be neither present nor
have any effect on the vote on such matters.
With respect to the election or removal of Directors, and certain other
matters with respect to which Delaware law requires each class to vote as a
separate class, a quorum of the stockholders of such class is constituted by the
presence, in person or by proxy, of holders of record of such class of Class A
Common Stock or Class B Common Stock representing a majority of the number of
votes entitled to be cast by such class. As stated above, proxies withheld and
broker non-votes will be excluded entirely with respect to the election of
Directors and have no effect on the vote thereon.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership
of the Class A Common Stock and Class B Common Stock as of August 31, 1997
(except where otherwise noted) based on a review of information filed with the
United States Securities and Exchange Commission ("SEC") and the Company's stock
records with respect to (a) each person known to be the beneficial owner of more
than 5% of the outstanding shares of Class A Common Stock or Class B Common
Stock, (b) each Director or nominee for a directorship of the Company, (c) each
executive officer of the Company named in the Summary Compensation Table, and
(d) all executive officers and directors of the Company as a group. Unless
otherwise stated, each of such persons has sole voting and investment power with
respect to such shares.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
-----------------------------------------------------------------
AMOUNT & NATURE
OF OWNERSHIP PERCENT OF
NAME AND ADDRESS --------------------------------- -------------------------
OF BENEFICIAL OWNER CLASS A(1) CLASS B(1) CLASS A(1) CLASS B(1)
- - --------------------------------------- -------------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Shufro Rose & Ehrman................... 1,437,000(2) 0 9.4%(2) --
745 Fifth Avenue
New York, New York 10151
Oppenheimer Group, Inc................. 1,436,500(3) 0 9.4%(3) --
One World Financial Center
37th Floor
New York, New York 10281
Gabelli Funds, Inc..................... 1,109,400(4) 0 7.3%(4) --
One Corporate Center
Rye, New York 10580
The TCW Group, Inc..................... 1,010,700(5) 0 6.6%(5) --
865 South Figueroa Street
Los Angeles, California 90017
Dimensional Fund Advisors, Inc......... 838,200(6) 0 5.5%(6) --
1299 Ocean Ave., 11th floor
Santa Monica, California 90401
Akira Hara(7).......................... 830,084(8) 322,266(9) 5.4% 17.0%
Baldwin Japan Limited
2-4-34 Toyo 2-chome, Kotoh-ku
Tokyo 135, Japan
Wendell M. Smith(7)(10)................ 674,493(8)(11) 587,016(9) 4.4% 31.3%
10 Manor House
Smith's FL07, Bermuda
Gerald A. Nathe(7)..................... 471,000(8)(12) 471,810(9) 3.0% 23.7%
Baldwin Technology Company, Inc.
40 Richards Avenue
Norwalk, Connecticut 06854
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
-----------------------------------------------------------------
AMOUNT & NATURE
OF OWNERSHIP PERCENT OF
NAME AND ADDRESS --------------------------------- -------------------------
OF BENEFICIAL OWNER CLASS A(1) CLASS B(1) CLASS A(1) CLASS B(1)
- - --------------------------------------- -------------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Jane G. St. John(13)................... 377,736 404,864 2.5% 22.1%
P.O. Box 3236
Blue Jay, California 92317
William J. Lauricella.................. 76,011(8)(14) 57,666(9) * 3.1%
Baldwin Technology Company, Inc.
40 Richards Avenue
Norwalk, Connecticut 06854
S. Roger Johansson..................... 28,333(8) 0 * --
Baldwin Amal AB
V:a Bangatan 8, Box 9
S662 21 Amal, Sweden
M. Richard Rose(7)..................... 10,328(8) 20,672(9) * 1.1%
4606 Willow Cove
Geneva, New York 14456
Judith A. Booth(7)..................... 7,795(8)(15) 205(9) * *
4301 Silver Fox Drive
Naples, Florida 34119
Samuel B. Fortenbaugh III(7)........... 7,328(8) 672(9) * *
Morgan, Lewis & Bockius
101 Park Avenue
New York, New York 10178
Ralph R. Whitney, Jr.(7)............... 5,328(8) 100,672(9) * 5.5%
Hammond Kennedy Whitney & Co.
230 Park Avenue
New York, New York 10169
John T. Heald, Jr.(7).................. 500 0 * --
Union Camp Corporation
1600 Valley Road
Wayne, New Jersey 07470
All executive officers and directors of
the Company as a group (including 10
individuals, named above)(16)........ 2,111,200(8) 1,560,979(9) 13.3% 73.6%
(11)(12)
(14)(15)
</TABLE>
- - ---------------
* = Less than 1%.
(1) Each share of Class B Common Stock is convertible at any time, at the
option of the holder thereof, into one share of Class A Common Stock. The
amount shown as Class A Common Stock does not include those shares of Class
A Common Stock issuable upon conversion of the shares of Class B Common
Stock held by the beneficial owner. If the shares of Class B Common Stock
owned by the individuals
4
<PAGE> 7
named above were converted, their respective ownership of Class A Common
Stock and their Percent of Class A Common Stock owned would be as follows:
Mr. Hara, 1,152,350 -- 7.3%; Mr. Smith, 1,261,509 -- 7.9%; Mr. Nathe,
942,810 -- 5.9%; Mrs. St. John, 782,600 -- 4.97%; with less than 1%, Mr.
Lauricella, 133,677; Dr. Rose, 31,000; Mr. Fortenbaugh, 8,000; Ms. Booth,
8,000; Mr. Whitney, 106,000; Mr. Heald, 500; Mr. Johansson, 28,333 and as
to all executive officers and directors of the Company as a group,
3,672,178 or 21.1%.
(2) Amount and Nature of Ownership is based on a Schedule 13G dated February
14, 1997 filed with the SEC reporting beneficial ownership of securities of
the Company held by the beneficial owner as of December 31, 1996; Percent
of Class has been recalculated as of August 31, 1997.
(3) Amount and Nature of Ownership is based on a Schedule 13G dated October 7,
1997 filed with the SEC reporting beneficial ownership of securities of the
Company held by the named beneficial owner; Percent of Class recalculated
to show Percent of Class A only (filing shows 8.4% of total Class A and
Class B shares outstanding).
(4) Amount and Nature of Ownership is based on a Schedule 13D dated June 16,
1997 filed with the SEC reporting beneficial ownership of securities of the
Company held by certain entities and persons affiliated with the named
beneficial owner; Percent of Class has been recalculated as of August 31,
1997.
(5) Amount and Nature of Ownership is based on a Schedule 13G dated February
12, 1997, filed with the SEC reporting beneficial ownership of securities
of the Company held by certain affiliates of the named beneficial owner as
of December 31, 1996; Percent of Class has been recalculated as of August
31, 1997.
(6) Amount and Nature of Ownership is based on a Schedule 13G dated February 5,
1997, filed with the SEC; Percent of Class has been recalculated as of
August 31, 1997. Dimensional Fund Advisors Inc. ("Dimensional"), a
registered investment advisor, was deemed to have had beneficial ownership
of 838,200 shares of the Company's stock as of December 31, 1996, all of
which shares were held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of DFA
Investment Trust Company, a Delaware business trust, or the DFA Group Trust
and DFA Participation Group Trust, investment vehicle for qualified
employee benefit plans, all of which Dimensional serves as investment
manager. Dimensional disclaims beneficial ownership of all such shares.
(7) Member of the Board of Directors of the Company.
(8) Includes shares of Class A Common Stock subject to options which are
exercisable within 60 days as follows -- Mr. Hara, 81,666 shares; Mr.
Smith, 70,666 shares; Mr. Nathe, 300,000 shares; Mr. Lauricella, 69,999
shares; Dr. Rose, 2,684 shares; Mr. Fortenbaugh, 5,328 shares; Ms. Booth,
1,795 shares; Mr. Whitney, 5,328 shares; and Mr. Johansson, 28,333 shares.
(9) Includes shares of Class B Common Stock subject to options which are
exercisable within 60 days as follows -- Mr. Hara, 61,666 shares; Mr.
Smith, 38,333 shares; Mr. Nathe, 151,666 shares; Mr. Lauricella, 31,666
shares; Dr. Rose, 672 shares; Mr. Fortenbaugh, 672 shares; Ms. Booth, 205
shares; and Mr. Whitney, 672 shares.
(10) The record owner of 587,750 and 504,015 of such shares of Class A Common
Stock and Class B Common Stock, respectively, is Polestar Corporation (or
its nominee, Murdoch & Company under a Pledge Agreement between Polestar
and the Bank of Bermuda under which Mr. Smith retains voting rights to said
shares). The record owner of 20,668 of such shares of Class B Common Stock
is Polestar Limited. All outstanding shares of capital stock of Polestar
Corporation and Polestar Limited are owned beneficially and of record by
Wendell M. Smith.
5
<PAGE> 8
(11) Includes 4,943 shares of Class A Common Stock held in Mr. Smith's IRA
account. Does not include 14,400 shares of Class A Common Stock owned by
Mr. Smith's wife, as to which shares Mr. Smith disclaims beneficial
ownership.
(12) Includes 11,000 shares of Class A Common Stock held jointly with Mr.
Nathe's wife; also includes 160,000 shares which may be issued pursuant to
Mr. Nathe's employment agreement with the Company as more fully described
in the Employment and Consulting Agreements section below.
(13) Includes 24,000 shares of Class B Common Stock owned by Mrs. St. John's
husband, John G. St. John, President of a subsidiary of the Company, 8,902
shares of Class A Common Stock held in Mr. St. John's account under the
Company's Profit Sharing and Savings Plan, 4 shares of Class A Common Stock
held for Mr. St. John in the Stock Bonus Fund of said Plan and 28,333
shares of Class A Common Stock subject to options which are exercisable
within 60 days. Also includes an aggregate of 4,800 shares of Class A
Common Stock held by the St. Johns as custodians for their children.
(14) Includes 6,011 shares of Class A Common Stock held in Mr. Lauricella's
account under the Company's Profit Sharing and Savings Plan and 1 share of
Class A Common Stock held for Mr. Lauricella in the Stock Bonus Fund under
said Plan.
(15) Includes 5,000 shares held in trust and 1,000 shares owned jointly with Ms.
Booth's husband.
(16) Does not include 101,000 shares of Class A Common Stock owned by Harold W.
Gegenheimer, Chairman Emeritus of the Company.
To the knowledge of the Company, no arrangement exists, the operation of
which might result in a change in control of the Company.
6
<PAGE> 9
ELECTION OF DIRECTORS
Under the Company's Certificate of Incorporation, the Board of Directors is
divided into three classes, with each class being as equal in size as possible.
One class is elected each year. Directors in each class hold office for a term
of three years and until their respective successors are elected and qualified.
There are currently eight members of the Company's Board of Directors, the
number having been set by the Board of Directors in accordance with the
Company's By-laws. Judith A. Booth (a Class I Director) and M. Richard Rose (a
Class II Director) were elected by a plurality vote of the outstanding shares of
Class A Common Stock. The other Directors were elected by a plurality vote of
the outstanding shares of Class A Common Stock and Class B Common Stock voting
together as a single class.
At this year's Annual Meeting, three Directors will be elected to Class I.
If elected, their new terms will expire at the Annual Meeting in 2000. Wendell
M. Smith and Samuel B. Fortenbaugh III, nominated to serve as Class I directors,
may be elected by a plurality vote of the outstanding shares of Class A Common
Stock and Class B Common Stock present, in person or by proxy, and entitled to
vote at the meeting, voting together as a single class. Judith A. Booth, also
nominated to serve as a Class I director, may be elected by a plurality vote of
the outstanding shares of Class A Common Stock present, in person or by proxy,
and entitled to vote at the meeting.
The Board of Directors knows of no reason why any nominee for director
would be unable to serve as a director. If any nominee should for any reason be
unable to serve, the shares represented by all valid proxies not containing
contrary instructions may be voted for the election of such other person as the
Board may recommend in place of a nominee that is unable to serve.
Set forth below are the names of all Directors and nominees and certain
biographical information with respect to each such Director and nominee.
NOMINEES FOR ELECTION AT THE 1997 ANNUAL MEETING:
CLASS I
Wendell M. Smith, age 62, has been a Director of the Company since 1984. He
served as Chairman of the Board from November, 1988, through February, 1997; was
Chief Executive Officer from 1984 through October, 1995 and was President from
1984 through August, 1993. He is the founder and President of Polestar Limited,
and currently serves as a director of Bowne & Co., Inc., a provider of financial
and commercial printing services.
Samuel B. Fortenbaugh III, age 63, is a Senior Partner and member of the
Executive Committee of the law firm of Morgan, Lewis & Bockius, L.L.P., counsel
to the Company. He has been a partner of that firm since 1980 and a Director of
the Company since 1987.
Judith A. Booth, age 55, has been a Director of the Company since 1994. She
is a retired graphic arts industry executive. Until December, 1996, Ms. Booth
was Vice President of Courier Corporation, the sixth largest book printer in the
U.S. Ms. Booth joined Courier in 1990 as founder and President of The Courier
Connection, an electronic integrated publishing service bureau, which is a
division of Courier Corporation.
7
<PAGE> 10
OTHER DIRECTORS:
CLASS II (Term will expire at the 1998 Annual Meeting)
Gerald A. Nathe, age 56, has served as Chairman of the Board of the Company
since February, 1997, as Chief Executive Officer since October 1995, as
President since August, 1993 and as a Director since 1987. He was a Vice
President of the Company from July, 1990 through August, 1993. He has also
served as President of Baldwin Americas Corporation since he joined the Company
in 1990, a position he continues to hold.
M. Richard Rose, age 64, has served as a Director of the Company since
1989. He is President Emeritus of the Rochester Institute of Technology, where
he served as President and Chief Executive Officer from 1979 through June, 1992,
when he retired. He is currently Chairman of the Board of Trustees of Roberts
Wesleyan College and Vice Chairman of the local development authority of Seneca
County, New York. He is a director of Unimail Corporation, a mail service
company located in Rochester, New York.
CLASS III (Term will expire at the 1999 Annual Meeting)
Akira Hara, age 62, has served as a Vice President and Director of the
Company and as President of Baldwin Asia Pacific Corporation since 1989. He has
been President of Baldwin Japan Limited since 1979. In April of 1997, Mr. Hara
was named President of the Company's Graphic Products and Controls Group.
Ralph R. Whitney, Jr., age 62, has served as a Director of the Company
since 1988. Mr. Whitney has been a principal of Hammond, Kennedy, Whitney &
Company, Inc., a private capital firm, since 1971 and currently serves as its
President and Chief Executive Officer. He also serves as a director and Chairman
of IFR Systems, Inc., a communications test equipment company, and Control
Devices, Inc., a manufacturer of bimetal fuses and sensing devices for the
automobile industry. He is a director of Excel Industries, Inc., an automobile
parts manufacturer, Selas Corporation of America, an industrial furnace company,
and Adage Inc., a diversified manufacturing company.
John T. Heald, Jr., age 52, has served as a Director of the Company since
1996. He is Senior Vice President of the Converting Group of Union Camp
Corporation, a manufacturer of paper, packaging and wood products and a producer
of chemicals used in flavors and fragrances. From 1989 to 1995 he was Vice
President and General Manager of the Container Division of Union Camp
Corporation. He also serves as a director of American Nutrition, Inc., a pet
food manufacturing company.
8
<PAGE> 11
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The Directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME POSITION
- - ------------------------------ --------------------------------------------------------------
<S> <C>
Gerald A. Nathe............... Chairman of the Board, President, Chief Executive Officer and
Director(1)
Akira Hara.................... Vice President and Director(1)
S. Roger Johansson............ Vice President
William J. Lauricella......... Chief Financial Officer and Treasurer
Judith A. Booth............... Director(3)
Samuel B. Fortenbaugh III..... Director(3)
John T. Heald, Jr............. Director(2)
M. Richard Rose............... Director(2)
Wendell M. Smith.............. Director(3)
Ralph R. Whitney, Jr.......... Director(1)(2)
</TABLE>
- - ---------------
(1) Member of the Executive Committee.
(2) Member of the Compensation and Stock Option Committee.
(3) Member of the Audit Committee.
S. Roger Johansson, age 50, has been a Vice President of the Company since
November, 1996. He has been Managing Director of Amal AB, a subsidiary of the
Company, since November, 1991. In October, 1995, he was made head of the
Company's European Sector, and since April, 1997, has served as President of the
Company's Material Handling Group.
William J. Lauricella, age 38, has been Chief Financial Officer of the
Company since July, 1993. He joined the Company in 1989, was appointed Assistant
Treasurer in 1990 and was appointed Treasurer in 1992.
All of the Company's officers are elected annually by the Board of
Directors and hold office at the pleasure of the Board of Directors and serve
until their successors are duly elected and qualified.
See "Election of Directors" for biographies relating to Directors.
BOARD OF DIRECTORS
The Board of Directors has responsibility for establishing broad corporate
policies and for overseeing the management of the Company, although it is not
involved in day-to-day operations. Members of the Board are kept informed of the
Company's business by various reports and documents sent to them as well as by
operating and financial reports presented at Board and Committee meetings.
During the fiscal year ended June 30, 1997, the Board held four regularly
scheduled meetings, three special meetings and acted by written
9
<PAGE> 12
consent in lieu of meeting seven times. Each of the Directors attended at least
75% of the meetings of the Board and the Committees on which they serve.
COMPENSATION OF DIRECTORS
Directors who were not employees of the Company received a $14,000 annual
retainer and a fee of $1,000 for each meeting of the Board of Directors or
Committee attended during the fiscal year ended June 30, 1997. The per-meeting
fee is limited to one per day.
Non-employee Directors also receive annual awards of stock options under
the Company's 1990 Directors' Stock Option Plan (the "Directors' Plan"). Each
year, following the Company's Annual Meeting of Stockholders, every eligible
Director is automatically granted an option to purchase 1,000 shares of Common
Stock, allocated between Class A Common Stock and Class B Common Stock in the
same ratio as there are shares outstanding of Class A Common Stock to Class B
Common Stock on such day. To date, options to purchase 28,458 shares of Class A
Common Stock and 3,542 shares of Class B Common Stock have been granted under
the Directors' Plan of which options to purchase 24,035 shares of Class A Common
Stock and 3,321 shares of Class B Common Stock remain outstanding, with exercise
prices ranging from $2.5625 to $5.50 for the options to purchase Class A Common
Stock and between $3.20 and $6.875 for the options to purchase Class B Common
Stock. Under the Plan, three Directors have each been granted options to
purchase 6,222 shares of Class A Common Stock and 778 shares of Class B Common
Stock; one Director has been granted options to purchase 5,328 shares of Class A
Common Stock and 672 shares of Class B Common Stock; one Director has been
granted options to purchase 2,689 shares of Class A Common Stock and 311 shares
of Class B Common Stock; one Director has been granted options to purchase 894
shares of Class A Common Stock and 119 shares of Class B Common Stock; and one
Director has been granted options to purchase 881 shares of Class A Common Stock
and 106 shares of Class B Common Stock.
A corporation controlled by one non-employee Director, Wendell M. Smith,
has a consulting agreement with the Company. One employee Director, Akira Hara,
has an employment agreement with one of the Company's subsidiaries; another
employee Director, Gerald A. Nathe, has an employment agreement with the
Company. These agreements are described in detail in the Employment and
Consulting Agreements section, below.
EXECUTIVE COMMITTEE
The Executive Committee meets on call and has authority to act on most
matters during the intervals between Board meetings. During the fiscal year
ended June 30, 1997, the Executive Committee met four times and acted by Written
Consent in Lieu of Meeting once. The Executive Committee presently consists of
Gerald A. Nathe, Akira Hara and Ralph R. Whitney, Jr.
AUDIT COMMITTEE
The Audit Committee reviews the internal controls of the Company and the
objectivity of its financial reporting and meets with appropriate Company
financial personnel and its independent certified public accountants in
connection with these reviews. The Audit Committee recommends to the Board the
appointment of independent certified public accountants to serve as auditors to
examine the corporate
10
<PAGE> 13
accounts of the Company. During the fiscal year ended June 30, 1997, the Audit
Committee met four times. The Audit Committee presently consists of Judith A.
Booth, Samuel B. Fortenbaugh III and Wendell M. Smith.
COMPENSATION AND STOCK OPTION COMMITTEE
The Compensation and Stock Option Committee has the responsibility for
establishing the compensation arrangements for the executive officers of the
Company and Directors who are not salaried employees. The Compensation and Stock
Option Committee also administers the Amended and Restated 1986 Stock Option
Plan, and the 1996 Stock Option Plan. During the fiscal year ended June 30,
1997, the Compensation and Stock Option Committee met seven times and acted by
written consent once. The Compensation and Stock Option Committee presently
consists of John T. Heald, Jr., M. Richard Rose and Ralph R. Whitney, Jr.
NOMINATING COMMITTEE
The Board does not have a nominating committee, but acts, as a whole, in
performing the functions of such a committee. The Executive Committee has the
responsibility for recommending to the Board the candidates to be considered for
nomination to the Board of Directors.
11
<PAGE> 14
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committee of the Board of Directors (the
"Committee") is comprised of three members, each of whom is a non-employee
Director of the Company. The Committee has the responsibility for establishing
the salary, incentive compensation, non-wage benefits and perquisites of the
Chief Executive Officer and each of the other executive officers of the Company.
Decisions concerning grants or awards under certain of the Company's stock-based
compensation plans are also made solely by the Committee in order for the grants
or awards under such plans to satisfy Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended. Set forth below is a report
submitted by the members of the Committee addressing the Company's compensation
policies for fiscal 1997 as they affect the executive officers of the Company.
Philosophy
The Company is committed to increasing shareholder value through employee
excellence. The Board, the Committee, and the management all recognize the
critical relationship between an employee's knowledge, skill, experience and
incentives, and the success of the Company's business. The Company is, and must
always be, customer driven. Historically, the Company's compensation philosophy
has recognized entrepreneurial spirit, encouraged small business unit
initiatives and rewarded individual business unit performance. Performance was
most often measured against budgeted or targeted income levels.
During fiscal 1997, the Company developed a new financial performance
measurement system called Economic Profit, or EP. With a focus on return on
capital, EP is similar to Economic Value Added, or EVA(R). Beginning with fiscal
1998, all executive officers and a number of key employees of the Company will
have their cash incentive compensation based on EP, either at the corporate,
product group, or business unit level. Beginning with fiscal 1999, an overall
corporatewide EP performance hurdle has been established to ensure that cash
incentive compensation payments will be made at the product group and business
unit levels only if the overall corporate hurdle has been achieved.
Executive Officers' Disclosure
GENERAL. For each of the executive officers of the Company named in the
Summary Compensation Table below, compensation consists of base salary (which,
in the case of each of Messrs. Smith, Nathe, Hara and Johansson, is set by their
respective employment agreements), a bonus (which, during fiscal 1997 and for
prior years was based on a formula tied to either the Company's consolidated net
income and/or the income of a sector or subsidiary of the Company, but which,
beginning with fiscal 1998 will be calculated in accordance with the new cash
incentive compensation system described in the Philosophy section above), stock
options (which are tied to the long-term performance of the Company, as
reflected by its stock price), and other perquisites. Certain of these executive
officers also have deferred compensation or supplemental retirement benefits
reported under "Supplemental Retirement Benefits".
FISCAL 1998 COMPENSATION. During fiscal 1998, it is expected that the
employment agreements for Messrs. Nathe, Hara and Johansson will be amended to,
among other things, conform their incentive
12
<PAGE> 15
compensation arrangements to the Company's newly designed cash incentive
compensation program based upon EP.
FISCAL 1997 COMPENSATION. Mr. Smith's base salary was set by his
employment agreement with the Company, signed in 1990 and amended in 1995, (see
Employment and Consulting Agreements section below). On February 10, 1997, Mr.
Smith resigned as Chairman of the Company. As a result of such resignation, and
pursuant to his employment agreement, the Company made compensation payments to
Mr. Smith in the amount of $890,004. Prior to fiscal 1997, Polestar Limited
("Polestar"), a corporation controlled by Mr. Smith, as more fully described in
the Employment and Consulting Agreements section below, received compensation
under consulting agreements between three subsidiaries of the Company and
Polestar, which compensation is included in Mr. Smith's bonus payments in the
Summary Compensation Table. During fiscal 1997, said consulting agreements were
canceled and renegotiated into a new agreement providing for payments by the
Company to Polestar of $60,000 per year for consulting services for up to a
maximum term of 17 years.
Mr. Hara's base salary is set by an employment agreement between Mr. Hara
and a subsidiary of the Company, Baldwin Japan Limited, signed in 1988 and
amended in 1995. During fiscal 1997, Mr. Hara received a six (6%) percent
increase in his base salary. As President of Baldwin Asia Pacific ("BAP"), Mr.
Hara is a participant in the BAP Bonus Plan, under which participants are
assigned target bonus opportunities equal to a percentage of the participant's
base salary. The primary criteria for payment of a bonus to an employee under
the BAP Bonus Plan are: (i) the pre-tax profit of BAP, and (ii) the degree to
which the employee meets certain performance goals established at the beginning
of each fiscal year, e.g., sales, product development, on-time delivery,
improved cash flow, inventory turnover, and/or other personal goals and
objectives. For fiscal 1997, BAP achieved its targeted profit level and Mr. Hara
earned a cash bonus of $201,125 representing a portion of his bonus opportunity.
A-Plus Limited, a corporation wholly-owned by Mr. Hara, described in detail in
the Employment and Consulting Agreements section below, is entitled to other
compensation by BAP, under a consulting agreement between BAP and A-Plus
Limited, which compensation amounts to one percent (1%) of the after-tax profits
of BAP. For fiscal 1997 Mr. Hara earned $33,517 under this agreement. The above
amounts paid under the BAP Bonus Plan and consulting agreement with A-Plus
Limited are included in Mr. Hara's bonus payments in the Summary Compensation
Table. Also, during fiscal 1997, Mr. Hara was granted options to purchase 15,000
shares of Class A Common Stock of the Company in recognition of his dedication
and performance in carrying out his duties and responsibilities as a Vice
President of the Company.
Mr. Johansson's base salary is set by employment agreements with two
subsidiaries of the Company, Amal AB, and Baldwin Europe Consolidated ("BEC")
signed in October 1995. During fiscal 1997, Mr. Johansson received a four (4%)
percent increase in his base salary. As Managing Director of Amal, a portion of
Mr. Johansson's incentive compensation is based on the performance of Amal. Amal
and BEC each operate bonus programs similar to the BAP Bonus Plan. For fiscal
1997, Mr. Johansson earned $14,515 under the Amal bonus program; he did not
receive a bonus under the BEC program. Also during fiscal 1997, Mr. Johansson
was granted options to purchase 30,000 shares of Class A Common Stock and
100,000 shares of Class B Common Stock of the Company in recognition of his
additional duties and responsibilities as a Vice President of the Company.
13
<PAGE> 16
Mr. Lauricella's annual base salary was increased to $172,500 in April
1997. Mr. Lauricella participates in the Baldwin Technology Company, Inc. Bonus
Plan which is similar to the BAP Bonus Plan except that it is based on the
after-tax consolidated results of the Company. For fiscal 1997, the Company did
not achieve its minimum targeted profit level and Mr. Lauricella earned no
bonus; however, in recognition of his efforts in concluding the Misomex
divestiture, Mr. Lauricella was awarded a special one-time bonus of $25,000.
Also during fiscal 1997, Mr. Lauricella was granted options to purchase 35,000
shares of Class A Common Stock and 20,000 shares of Class B Common Stock of the
Company in recognition of his dedication and performance in carrying out his
duties and responsibilities as Chief Financial Officer of the Company.
CEO Disclosure
In February 1997 Mr. Gerald A. Nathe was appointed Chairman of the Board of
the Company. Since October 1995, Mr. Nathe has served as Chief Executive Officer
of the Company, and prior to that time, as President of Baldwin Americas
Corporation ("BAM") and President of the Company. Mr. Nathe's base salary is set
by his employment agreement with the Company (see Employment and Consulting
Agreements section below). Effective November 1, 1996, the Committee approved an
increase in Mr. Nathe's annual base salary to $300,000. In December 1996, the
Committee forgave an interest payment due from Mr. Nathe in the amount of
$104,613 on a loan from the Company which Mr. Nathe had used to purchase shares
of Class B Common Stock of the Company, which amount is included as "Other
Compensation" in the Summary Compensation Table.
During fiscal 1997, Mr. Nathe earned no bonus payments. He was granted
options to purchase 35,000 shares of Class A Common Stock of the Company in
recognition of his dedication and performance as President and Chief Executive
Officer.
Based on currently prevailing authority, including Treasury Regulations
issued in December, 1995, and in consultation with outside tax and legal
experts, the Committee has determined that it is unlikely that the Company will
pay any amounts in fiscal 1998 that would result in the loss of a federal income
tax deduction under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), and accordingly has not recommended that any special
actions be taken or plans or programs be revised at this time in light of such
tax law provision, except that the Company intends that fair market value stock
options to be granted under the 1996 Stock Option Plan will qualify as
"performance-based compensation" under Section 162(m).
RALPH R. WHITNEY, JR. (Chairman)
JOHN T. HEALD, JR.
M. RICHARD ROSE
14
<PAGE> 17
EXECUTIVE COMPENSATION
The following table sets forth the total remuneration paid to the Company's
Chief Executive Officer and to each of the most highly compensated executive
officers of the Company for the fiscal years ended June 30, 1997, 1996 and 1995,
respectively, and includes remuneration in respect of all elements indicated
from all sources, including affiliates of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------
ANNUAL COMPENSATION STOCK OPTIONS
-------------------------------------- (NO. OF SHARES
NAME AND OTHER ANNUAL CLASS A/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) CLASS B) COMPENSATION
- - -------------------------------- ------ --------- -------- --------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gerald A. Nathe................. 1997 $ 265,510 $ -0- (3) 35,000/0 $106,333(4)
Chairman of the Board, President 1996 $ 190,004 $ 90,400 0/60,000 $123,866
and Chief Executive Officer 1995 $ 192,192 $232,292 0/25,000 $235,750
Akira Hara...................... 1997 $ 329,135 $234,642(5) (3) 15,000/0 -0-
Vice President and Director; 1996 $ 315,848 $270,249 55,000/45,000 -0-
President--Graphic Products and 1995 $ 327,985 $254,479 20,000/25,000 -0-
Controls Group(6)
S. Roger Johansson.............. 1997 $ 152,897 $ 14,516 (3) 30,000/100,000 -0-
Vice President;
President -- Material 1996 $ 162,367 $ 10,827 25,000/0 -0-
Handling Group(6)
William J. Lauricella........... 1997 $ 155,608 $ 25,000 (3) 35,000/20,000 $ 9,500(7)
Chief Financial Officer 1996 $ 142,900 -0- 40,000/45,000 $ 1,625
and Treasurer 1995 $ 134,640 $ 56,624 10,000/25,000 $ 2,606
Wendell M. Smith................ 1997 $ 147,981 $ 79,235(8) (3) 10,000/0 $896,254(9)
former Chairman of the Board 1996 $ 241,031 $170,931 50,000/45,000 $ 1,625
1995 $ 240,464 $188,395 20,000/25,000 $ 2,606
</TABLE>
- - ---------------
(1) Amounts shown include bonuses earned (whether or not paid) during the fiscal
year.
(2) Does not include deferred compensation and retirement benefits (previously
included for FY95) -- see Supplemental Retirement Benefits below.
(3) Excluded where benefits less than $50,000 or 10% of the total salary and
bonus.
(4) Includes $104,613 representing forgiveness of interest payment due to the
Company on December 1, 1996; also includes $1,720 representing life
insurance policy premiums.
(5) Includes $201,125 to Mr. Hara directly under the Baldwin Asia Pacific Bonus
Plan, and $33,517 to A-Plus Limited, a company wholly-owned by Mr. Hara.
(6) Amounts translated from foreign currency.
(7) Represents life insurance policy premiums.
(8) Consulting fees to Polestar Limited, a company wholly-owned by Mr. Smith.
(9) Includes $6,250 Directors fees paid to Mr. Smith after his resignation and
$890,004 termination pay. Does not include $34,326 deferred compensation
paid in fiscal 1997 after his resignation (see Employment and Consulting
Agreements below).
15
<PAGE> 18
The following table sets forth certain information relating to options
granted during fiscal 1997 to purchase shares of Class A Common Stock of the
Company, pursuant to the Company's Amended and Restated 1986 Stock Option Plan
(the "Plan"). These options become exercisable in three equal annual
installments beginning on the second anniversary of the date of grant, subject
to acceleration as set forth in the Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL
GRANTS
------------
% OF TOTAL POTENTIAL REALIZABLE VALUE(3) AT ASSUMED
OPTIONS/SARS ANNUAL RATES OF STOCK PRICE APPRECIATION FOR
OPTIONS/ GRANTED TO OPTION TERM(4)
SARS EMPLOYEES EXERCISE ----------------------------------------------
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#/SH) YEAR(1) ($/SH)(2) DATE 0%($)(5) 5%($) 10%($)
- - ------------------ -------- ------------ --------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
G.A. Nathe........ Class A 35,000 7.41% $3.00 10/07/06 $0 $ 66,033 $167,342
Class B 0
A. Hara........... Class A 15,000 3.17% $3.00 10/07/06 $0 $ 28,300 $ 71,718
Class B 0
S.R. Johansson.... Class A 30,000 6.35% $3.00 10/07/06 $0 $ 56,600 $143,436
Class B 100,000 21.16% $3.75 10/07/06 $0 $113,667 $403,122
W.J. Lauricella... Class A 35,000 7.41% $3.00 10/07/06 $0 $ 66,033 $167,342
Class B 20,000 4.23% $3.75 10/07/06 $0 $ 22,733 $ 80,624
W.M. Smith........ Class A 10,000 2.12% $3.00 02/10/97 $0 $ 1,500 $ 3,000
Class B 0
</TABLE>
- - ---------------
(1) Options to purchase a total of 352,500 shares of Class A Common Stock and
120,000 shares of Class B Common Stock, respectively, were granted to all
employees as a group during the fiscal year ended June 30, 1997.
(2) The exercise price represents the closing price of the Company's Class A
Common Stock as traded on the American Stock Exchange on the date of grant
for options to purchase shares of Class A Common Stock, and 125% of such
closing price of the Company's Class A Common Stock for options to purchase
shares of Class B Common Stock.
(3) The dollar amounts under the potential realizable values columns use the 0%,
5% and 10% rates of appreciation as permitted by the Securities and Exchange
Commission, and are not intended to forecast actual future appreciation in
the Company's stock price. Actual gains, if any, on stock options are
dependent on the future performance of the Company's stock. There can be no
assurance that the amounts reflected in this table will be achieved.
(4) All stock options granted during fiscal 1997 are for a ten (10) year term.
(5) No gain to the optionee is possible without an increase in the stock price,
which would benefit all stockholders commensurately. A zero percent gain in
stock appreciation will result in zero dollars for the optionee.
16
<PAGE> 19
The following table provides information concerning each option exercised
during the fiscal year ended June 30, 1997 by each of the executive officers
named in the Summary Compensation Table and the fiscal year-end values of
unexercised options held by such executive officers:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
SHARES AT FY-END(#) AT FY-END($)
ACQUIRED VALUE -------------------------- --------------------------
NAME ON EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- - --------------------- -------------- -------------- -------------------------- --------------------------
<S> <C> <C> <C> <C>
G.A. Nathe........... -0- -0- 233,333/101,667 Class A $0/$0 Class A
123,333/76,667 Class B $0/$0 Class B
A. Hara.............. -0- -0- 56,666/83,334 Class A $0/$0 Class A
38,333/61,667 Class B $0/$0 Class B
S.R. Johansson....... -0- -0- 20,000/55,000 Class A $0/$0 Class A
0/100,000 Class B $0/$0 Class B
W.J. Lauricella...... -0- -0- 39,999/95,001 Class A $0/$0 Class A
8,333/81,667 Class B $0/$0 Class B
W.M. Smith........... -0- -0- 70,666/0 Class A $0/$0 Class A
23,333/0 Class B $0/$0 Class B
</TABLE>
- - ---------------
(1) Market value of underlying securities at exercise minus the exercise price.
(2) Where the value shown is zero, the exercise prices of all outstanding stock
options at fiscal year end were greater than the fair market value of the
Company's Class A Common Stock on the last day of fiscal 1997 ($2.875), or
in the case of Class B stock, 125% of such value of the Company's Class A
Common Stock ($3.594).
SUPPLEMENTAL RETIREMENT BENEFITS
Each of Messrs. Smith, Nathe, Hara and Johansson are entitled to deferred
compensation or supplemental retirement benefits in accordance with their
respective employment agreements.
Mr. Smith's employment agreement provided for deferred compensation to be
paid to him or his estate for the longer of 15 years or life, beginning at age
65 or upon his earlier retirement, in amounts equal to 40% of his final average
compensation for his last three (3) years of employment, not to exceed $220,000
per year. Mr. Smith resigned as Chairman of the Company in February 1997. The
annual amount to be paid Mr. Smith will be $102,979; during fiscal 1997, $34,326
was paid to Mr. Smith.
Mr. Nathe's employment contract provides for deferred compensation to be
paid to him or his estate for 15 years or life, whichever is longer, beginning
at age 62. The annual benefit not to exceed $175,000 annually, is equal to 40%
of Mr. Nathe's final average compensation for his last three (3) years under his
employment agreement. The estimated annual benefit is $175,000.
17
<PAGE> 20
Mr. Hara is a participant in the Retirement Allowance Plan for
Representative Directors of Baldwin Japan Limited under his Employment Agreement
executed in connection with the Stock Purchase Agreement between Mr. Hara and
the Company made during fiscal 1989. Under that plan, Mr. Hara is entitled to
receive a retirement benefit equal to his then current base salary multiplied by
years of service and a multiplication factor for the position served, payable in
a single lump sum payment. The estimated amount of this lump sum benefit is
$1,518,766. In addition, pursuant to an amendment to his employment agreement
made during fiscal 1996, Mr. Hara shall be entitled, if at retirement he has
served as a Director of BJL for more than 20 years, at least 16 of which were as
President and Representative Director, to receive a supplemental retirement
allowance equal to 40% of the average of his three highest paid salary years
during his employment by BJL. The supplemental retirement allowance is payable,
beginning at age 65, for a minimum of 15 years or for life, whichever is longer.
The estimated annual benefit of this supplemental retirement allowance is
$158,339.
As required by Swedish law, Mr. Johansson is a participant in the Amal AB
retirement program, as are all Amal employees. Pursuant to the terms of Mr.
Johansson's employment agreement, Amal is required to make additional
contributions to the plan to ensure that adequate amounts have been accrued to
allow for Mr. Johansson to retire at age 60 and receive the same amount of
pension he would have received had he worked until the normal retirement age of
65. In addition to contributions made to the plan by Amal, Mr. Johansson has
also made voluntary contributions to the plan. The estimated annual benefit,
including amounts arising from Mr. Johansson's voluntary contribution is
$84,857.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Samuel B. Fortenbaugh III, a Director of the Company who serves on the
Audit Committee, is a partner in the law firm of Morgan Lewis & Bockius LLP, who
serve as the Company's counsel.
18
<PAGE> 21
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
stockholder return on its Class A Common Stock for the five fiscal years ended
June 30, 1997 with the cumulative total return of the American Stock Exchange
Market Value Index and a peer group based on selected companies from the
Standard Industrial Classification ("SIC") Code 3555 -- the Special Industry
Machinery, Printing Trades Machinery and Equipment. The companies included in
the peer group are: Multigraphics, Inc., Baldwin Technology Company, Inc., Check
Technology Corp., Gunther International Ltd., Indigo, NV, Presstek Inc.,
Publishers Equipment Corp., Scitex Ltd., Stevens International Inc. and Xeikon
NV. The comparison assumes $100 was invested on June 30, 1992 in the Company's
Class A Common Stock and in each of the foregoing indices and assumes
reinvestment of all dividends. Total stockholder return is calculated using the
closing price of the stock on the last trade date of each fiscal year. The stock
price performance shown is not intended to forecast or be indicative of the
possible future performance of the Company's stock.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG
BALDWIN TECHNOLOGY COMPANY, INC., THE AMEX MARKET VALUE INDEX
AND THE PEER GROUP
<TABLE>
<CAPTION>
'BALDWIN
MEASUREMENT PERIOD TECHNOLOGY
(FISCAL YEAR COVERED) COMPANY, INC.' PEER GROUP AMEX MARKET VALUE
<S> <C> <C> <C>
JUN-92 100 100 100
JUN-93 91 114 114
JUN-94 113 61 112
JUN-95 127 86 132
JUN-96 89 75 152
JUN-97 72 53 168
</TABLE>
* $100 invested on 6/30/92 in stock or index -- including reinvestment
of dividends. Fiscal year ending June 30.
19
<PAGE> 22
EMPLOYMENT AND CONSULTING AGREEMENTS
During fiscal 1998, it is expected that the employment agreements for
Messrs. Nathe, Hara and Johansson will be amended to, among other things,
conform their incentive compensation arrangements to the Company's newly
designed cash incentive compensation program based upon EP. The following
describe the current arrangements.
Effective July 1, 1990, the Company entered into an employment agreement
with Wendell M. Smith, its Chairman of the Board, for a ten-year term. The
employment agreement provided that Mr. Smith would be paid (x) an annual salary
of no less than $200,000, (with minimum annual increases of not less than two
percent), (y) annual incentive compensation in amounts not less than one-half of
one percent (0.5%) of the Company's net income after taxes, provided that such
amount may not exceed twice Mr. Smith's annual salary, and (z) certain amounts
upon termination of employment, such amounts to depend upon whether the
termination was by the Company or by Mr. Smith, whether the termination was with
or without cause or with or without Company consent, whether the termination was
at the end of the stated term of the employment agreement or thereafter, and
whether the termination was due to death or disability. The employment agreement
also provided for the payment of certain deferred compensation to Mr. Smith over
a period of 180 months after the termination of his employment with the Company.
Mr. Smith also agreed that, for a period of five years after the termination of
his employment under the employment agreement, he will not compete, directly or
indirectly, with the Company in any geographical location at which there is at
the time business conducted by the Company. This employment agreement was
amended as of July 1, 1995 to (1) set $220,000 per year as the maximum annual
payment of deferred compensation payable to Mr. Smith under his employment
agreement, and (2) to revise the period of time during which said payments of
deferred compensation shall be made to Mr. Smith to be 180 months after
termination of employment, or life, whichever is longer. On February 10, 1997,
Mr. Smith resigned as Chairman of the Company, his employment agreement with the
Company was mutually terminated, and he received a payment from the Company of
$890,004. Mr. Smith also began receiving his deferred compensation after
February 10, 1997; $34,326 was paid to him during fiscal 1997, and, commencing
with fiscal 1998, $102,979 will be paid annually for approximately 15 years or
life, whichever is longer.
Effective January 1, 1990, three of the Company's wholly-owned
subsidiaries, Baldwin Americas Corporation ("BAM"), Baldwin Europe Consolidated
Inc. ("BEC") and Baldwin Asia Pacific Corporation ("BAP"), entered into
consulting agreements with Polestar Limited ("Polestar"), a corporation wholly-
owned by Wendell M. Smith. Under the respective agreements, Polestar was
obligated to provide certain management services outside of the United States in
exchange for compensation equal to two percent (2%) of the after-tax profits of
BAM, BEC and BAP, respectively, for the twelve (12) month period ending on each
June 30, up to a maximum of $150,000 annually under each agreement. During
fiscal 1997, the agreements were terminated, and a revised agreement was entered
into between the Company and Polestar. The new agreement provides for payments
of $60,000 per year and has a maximum term of seventeen (17) years. Polestar has
agreed that, for a period of one year after the termination of the new
consulting agreement, it will not compete and will not permit any of its
employees (who include Mr. Smith) to compete, directly or indirectly, with the
other party to such consulting agreement, and will not consult with any
competitor of such party. Amounts earned by Polestar during the fiscal years
ending June 30, 1997, 1996 and 1995 under the new
20
<PAGE> 23
and old agreements were $85,485, $158,341, and $160,140, respectively, which are
included in Mr. Smith's bonus payments in the Summary Compensation Table above.
Effective August 5, 1993, the Company entered into an employment agreement
with Gerald A. Nathe, its President and Chief Executive Officer and President of
Baldwin Americas Corporation ("BAM"), a subsidiary of the Company. The
employment agreement provides that Mr. Nathe will be paid (x) an annual salary
of no less than $175,000, (y) annual incentive compensation equal to one-half of
one percent (0.5%) of the Company's net income after taxes, plus an amount
determined under the Company's Executive and Key Personnel Bonus Plan, provided
the aggregate amount of incentive compensation payable under the agreement shall
not exceed two-times Mr. Nathe's annual salary, and (z) certain amounts upon
termination of employment, such amounts to depend upon whether the termination
was by the Company or by Mr. Nathe, whether the termination was with or without
cause or with or without Company consent, and whether the termination was due to
death or disability. For purposes of clause (z) above, in the event of (i) the
removal of Mr. Nathe or the election of any other person as President of the
Company, (ii) any merger or consolidation or sale of substantially all of the
assets of the Company or BAM or change in control or liquidation of the Company,
or (iii) the failure by the Company to observe or comply in any material respect
with any of the provisions of the employment agreement, in each case, other than
with Mr. Nathe's approval, Mr. Nathe may, within six months of any such event,
treat such event as a termination, without cause, of his employment by the
Company. The employment agreement also provides for (a) the payment of certain
deferred compensation to Mr. Nathe following the termination of his employment
with the Company, provided he has provided services under the employment
agreement for a period of no less than five years, (b) the Company making an
interest bearing loan to Mr. Nathe, in the amount of approximately $1.8 million
to facilitate the purchase by Mr. Nathe of Class B Common Stock of the Company
from an unrelated party with the loan secured by a pledge of the purchased
shares of the Company's Class B Common Stock, and (c) the transfer by the
Company to Mr. Nathe, at no cost to Mr. Nathe, of up to two hundred thousand
shares of the Company's Class A Common Stock, in five equal installments of
40,000 shares each, when, in the case of the first such installment, the market
value of the Company's Class A Common Stock has attained $5.875 per share and,
in the case of each subsequent installment, such market value increases by $2.00
per share over the market value at which the previous installment was earned.
The market value of the Company's Class A Common Stock attained $5.875 per share
on October 10, 1994 and 40,000 shares were transferred to Mr. Nathe at no cost
to him. Mr. Nathe has agreed that, for a period of three years after the
termination of his employment under the employment agreement, he will not
compete, directly or indirectly, with the Company in any geographical location
at which there is at the time business conducted by the Company which was
conducted by the Company at the date of such termination. During fiscal 1996,
the Compensation and Stock Option Committee of the Board of Directors of the
Company agreed to amend Mr. Nathe's employment agreement to provide that he
annually receive incentive compensation equal to two (2%) percent of the
consolidated net after-tax profits of the Company.
In November, 1988, Baldwin Japan Limited entered into an employment
agreement with Akira Hara, its President. The employment agreement provides for
Mr. Hara's continued employment by Baldwin Japan Limited until the earlier of
Mr. Hara's retirement (not to take place prior to Mr. Hara's attaining the age
of 61 or subsequent to his attaining the age of 68) or his death or disability.
Further, Mr. Hara has agreed not to compete with Baldwin Japan Limited for a
period of three years after the termination of the employment
21
<PAGE> 24
agreement. Effective July 1, 1995, the employment agreement between Mr. Hara and
Baldwin Japan Limited was amended to include a supplemental retirement
allowance.
Effective July 1, 1991, one of the Company's wholly-owned subsidiaries,
Baldwin Asia Pacific Corporation, entered into a consulting agreement with
A-Plus Ltd., a company owned by Mr. Akira Hara, a Director and Vice President of
the Company. Under the consulting agreement, A-Plus Ltd. is obligated to provide
certain management services within the Asia Pacific Region, outside of Japan and
Hong Kong, and will receive compensation equal to one percent (1%) of the
after-tax profits for the twelve (12) month period ending on each June 30, that
are earned by BAP up to a maximum of $75,000. The consulting agreement has a
one-year term and is automatically extended for additional one-year terms unless
either party gives prior timely notice of termination. As of the date of this
Proxy Statement, no such notice has been given. A-Plus Ltd. has agreed that for
a period of one year after the termination of the consulting agreement, it will
not compete and will not permit any of its employees (who presently include Mr.
Hara) to compete, directly or indirectly, with the other party to the consulting
agreement, and will not consult with any competitor of such party. Amounts
earned by A-Plus Ltd. during the fiscal years ending June 30, 1997, 1996 and
1995 under the agreement were $33,517, $39,131 and $46,561, respectively; said
amounts are included in Mr. Hara's bonus payments in the Summary Compensation
Table above.
In October, 1995, two of the Company's subsidiaries, Amal AB and Baldwin
Europe Consolidated B.V. entered into employment agreements with S. Roger
Johansson, Managing Director of those entities. The employment agreements
provide for (a) a minimum base annual salary of $165,000 to be paid, in the
aggregate, to Mr. Johansson, (b) incentive compensation, (c) guaranteed pension,
health insurance and group insurance as are customary in Sweden, and (d) the
option of early retirement at age sixty (60). The agreements are for a term of
one-year, automatically renewed for subsequent one (1) year periods unless
canceled by either party.
CERTAIN TRANSACTIONS
The Company retains the law firm of Morgan, Lewis & Bockius as its legal
counsel. Samuel B. Fortenbaugh III, a Director of the Company, is a partner of
Morgan, Lewis & Bockius.
On November 30, 1993, the Company entered into a loan and pledge agreement
with Gerald A. Nathe, President, Chief Executive Officer and a Director of the
Company, pursuant to which the Company loaned Mr. Nathe $1,817,321 to enable him
to purchase 315,144 shares of the Company's Class B Common Stock from a
non-employee stockholder. On March 11, 1994, the Company entered into a loan and
pledge agreement with William J. Lauricella, Chief Financial Officer and
Treasurer of the Company, pursuant to which the Company loaned Mr. Lauricella
$164,063 to enable him to purchase 25,000 shares of the Company's Class B Common
Stock from a non-employee stockholder. Each of such loans is evidenced by a
demand promissory note bearing interest equal to the U.S. Dollar 3-Month LIBOR
rate plus 1.25%, such rate to be reset on the first day of each succeeding
January, April, July and October, and secured by such purchased shares. The
maximum amount of the loans outstanding, including interest, during the year
ended June 30, 1997 was $1,604,613 and $191,169 for Messrs. Nathe and
Lauricella, respectively. On December 1, 1996, the Company forgave Mr. Nathe's
interest payment in the amount of $104,613 which amount is included in Mr.
Nathe's compensation in the Summary Compensation Table above.
22
<PAGE> 25
INDEPENDENT PUBLIC ACCOUNTANTS
Price Waterhouse LLP audited the accounts of the Company for the fiscal
year ending June 30, 1997. Price Waterhouse LLP has also audited the accounts of
the Company since 1968.
A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting, with the opportunity to make a statement if the representative
desires to do so, and is expected to be available to respond to appropriate
questions.
STOCKHOLDER PROPOSALS
Stockholders may present proposals for inclusion in the Company's 1998
proxy statement provided they are received by the Company no later than June 17,
1998 and are otherwise in compliance with applicable Securities and Exchange
Commission regulations.
GENERAL
So far as is now known, there is no business other than that described
above to be presented for action by the stockholders at the meeting, but it is
intended that the Proxies will be voted upon any other matters and proposals
that may legally come before the meeting and any adjournments thereof in
accordance with the discretion of the persons named therein.
CERTAIN REPORTS
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Company,
the Securities and Exchange Commission, and the American Stock Exchange initial
reports of ownership and reports of changes in ownership of any equity
securities of the Company. During fiscal 1997, to the best of the Company's
knowledge, all required reports were filed on a timely basis, except by Mr.
Johansson who filed one late Form 3 report. In making this statement, the
Company has relied on the written representations of its directors and executive
officers and copies of the reports provided to the Company.
OTHER INFORMATION
The cost of solicitation of Proxies will be borne by the Company.
Solicitation of Proxies may be made by mail, personal interview, telephone and
facsimile by officers, directors and regular employees of the Company.
Helen P. Oster
Secretary
EVA(R) is a registered trademark of Stern Stewart & Co.
23
<PAGE> 26
PROXY
CLASS A COMMON STOCK
BALDWIN TECHNOLOGY COMPANY, INC.
Annual Meeting of Stockholders
To Be Held November 18, 1997
Revoking any such prior appointment, the undersigned, a stockholder of
BALDWIN TECHNOLOGY COMPANY, INC., hereby appoints GERALD A. NATHE, HELEN P.
OSTER and WILLIAM J. LAURICELLA, and each of them, attorneys and agents of the
undersigned, with full power of substitution, to vote all shares of the Class A
Common Stock of the undersigned in said Company at the Annual Meeting of
Stockholders of said Company to be held at the Tara Stamford Hotel, 2701 Summer
Street, Stamford, Connecticut on November 18, 1997 at 10:00 a.m., Eastern
Standard Time, and at any adjournments thereof, as fully and effectually as the
undersigned could do if personally present and voting, hereby approving,
ratifying and confirming all that said attorneys and agents or their
substitutes may lawfully do in place of the undersigned as indicated on the
reverse side.
(continued and to be signed on reverse side)
SEE REVERSE
SIDE
<PAGE> 27
[X] Please mark
votes as in
this example
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
INDICATED THIS PROXY WILL BE VOTED FOR PROPOSAL (1).
1. To elect three Class I Directors 2. To transact such other business
to serve for three-year terms or as may properly come before the
until their successors are elected meeting or any adjournment
and qualified. thereof.
Nominees: Judith A. Booth, Samuel B.
Fortenbaugh III and Wendell M. Smith
FOR WITHHELD
[ ] [ ]
MARK HERE IF YOU PLAN TO ATTEND
[ ] THE MEETING [ ]
--------------------------------------
For all nominees exccept as noted above
MARK HERE FOR ADDRESS CHANGE AND
NOTE AT LEFT [ ]
PLEASE SIGN, DATE AND RETURN PROXY
CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
When shares are held by joint
tenants both should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign in full corporate name by
President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
Please sign exactly as name
appears hereon.
Signature: Date: Signature: Date:
---------------- -------- -------------- -----------
<PAGE> 28
PROXY
CLASS B COMMON STOCK
BALDWIN TECHNOLOGY COMPANY, INC.
Annual Meeting of Stockholders
To Be Held November 18, 1997
Revoking any such prior appointment, the undersigned, a stockholder of
BALDWIN TECHNOLOGY COMPANY, INC., hereby appoints GERALD A. NATHE, HELEN P.
OSTER and WILLIAM J. LAURICELLA, and each of them, attorneys and agents of the
undersigned, with full power of substitution, to vote all shares of the Class B
Common Stock of the undersigned in said Company at the Annual Meeting of
Stockholders of said Company to be held at the Tara Stamford Hotel, 2701 Summer
Street, Stamford, Connecticut on November 18, 1997 at 10:00 a.m., Eastern
Standard Time, and at any adjournments thereof, as fully and effectually as the
undersigned could do if personally present and voting, hereby approving,
ratifying and confirming all that said attorneys and agents or their
substitutes may lawfully do in place of the undersigned as indicated on the
reverse side.
(continued and to be signed on reverse side)
SEE REVERSE
SIDE
<PAGE> 29
[X] Please mark
votes as in
this example
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS
INDICATED THIS PROXY WILL BE VOTED FOR PROPOSAL (1).
1. To elect two Class I Directors 2. To transact such other business
to serve for three-year terms or as may properly come before the
until their successors are elected meeting or any adjournment
and qualified. thereof.
Nominees: Samuel B. Fortenbaugh III
and Wendell M. Smith
FOR WITHHELD
[ ] [ ]
MARK HERE IF YOU PLAN TO ATTEND
[ ] THE MEETING [ ]
----------------------------------
For both nominees exccept
as noted above MARK HERE FOR ADDRESS CHANGE AND
NOTE AT LEFT [ ]
PLEASE SIGN, DATE AND RETURN PROXY
CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
When shares are held by joint
tenants both should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title
as such. If a corporation, please
sign in full corporate name by
President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
Please sign exactly as name
appears hereon.
Signature: Date: Signature: Date:
---------------- -------- -------------- -----------
