FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ Mark one ]
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
For quarter ended March 31, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
Commission file number 1-9334
BALDWIN TECHNOLOGY COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3258160
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
One Norwalk West, 40 Richards Avenue, Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 203-838-7470
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
YES X . NO .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at April 28, 2000
Class A Common Stock
$0.01 par value 13,394,147
Class B Common Stock
$0.01 par value 1,810,883
BALDWIN TECHNOLOGY COMPANY, INC.
INDEX
Page
Part I Financial Information
Item 1 Financial Statements
Consolidated Balance Sheets at March 31,
2000 (unaudited) and June 30, 1999 1-2
Consolidated Statements of Income
for the three and nine months ended March 31,
2000 (unaudited) and 1999 (unaudited) 3
Consolidated Statements of Changes in
Shareholders' Equity for the nine months
ended March 31, 2000 (unaudited) 4
Consolidated Statements of Cash Flows
for the nine months ended March 31, 2000
(unaudited) and 1999 (unaudited) 5-6
Notes to Consolidated Financial Statements 7-11
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of
Operations 12-19
Item 3 Quantitative and Qualitative Disclosures
About Market Risk 20
Part II Other Information
Item 6 Exhibits and Reports on Form 8-K 20
Signatures 21
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS
March 31, June 30,
2000 1999
(Unaudited)
CURRENT ASSETS:
Cash $ 8,574 $ 10,028
Short-term securities 555 645
Accounts receivable trade, net of allowance for
doubtful accounts of $2,040($1,740 at June 30, 1999) 36,696 37,387
Notes receivable, trade 9,732 9,511
Inventories 37,250 31,791
Prepaid expenses and other 8,380 8,821
Total current assets 101,187 98,183
MARKETABLE SECURITIES:
Cost $820 ($681 at June 30, 1999) 785 785
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land and buildings 4,032 3,060
Machinery and equipment 4,852 6,430
Furniture and fixtures 5,080 5,313
Leasehold improvements 220 834
Capital leases 1,421 3,413
15,605 19,050
Less: Accumulated depreciation and amortization 8,352 12,122
Net property, plant and equipment 7,253 6,928
PATENTS, TRADEMARKS AND ENGINEERING DRAWINGS at cost,
less accumulated amortization of $6,265 ($5,912 at
June 30, 1999) 3,997 4,534
GOODWILL, less accumulated amortization of $10,141
($9,103 at June 30, 1999) 30,770 30,900
OTHER ASSETS 18,795 18,025
TOTAL ASSETS $162,787 $159,355
The accompanying notes to consolidated financial statements
are an integral part of these statements.
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, June 30,
2000 1999
(Unaudited)
CURRENT LIABILITIES:
Loans payable $ 5,509 $ 3,893
Current portion of long-term debt 6,517 6,397
Accounts payable, trade 13,837 10,691
Notes payable, trade 12,367 11,387
Accrued salaries, commissions, bonus and profit-sharing 6,420 6,946
Customer deposits 10,295 5,661
Accrued and withheld taxes 1,820 2,271
Income taxes payable 2,053 7,127
Other accounts payable and accrued liabilities 17,634 14,656
Total current liabilities 76,452 69,029
LONG-TERM LIABILITIES:
Long-term debt 8,979 16,515
Other long-term liabilities 7,668 7,271
Total long-term liabilities 16,647 23,786
Total liabilities 93,099 92,815
COMMITMENTS
SHAREHOLDERS' EQUITY:
Class A Common Stock, $.01 par, 45,000,000 shares
authorized, 16,458,849 shares issued 165 165
Class B Common Stock, $.01 par, 4,500,000 shares
authorized, 2,000,000 shares issued 20 20
Capital contributed in excess of par value 57,496 57,496
Retained earnings 23,724 20,793
Cumulative translation adjustment 469 (2,313)
Unrealized (loss) gain on investments net of $15 of
deferred taxes ($43 at June 30, 1999) (20) 61
Less: Treasury stock, at cost:
Class A - 3,002,202 shares (1,953,502 at June 30, 1999)
Class B - 189,117 shares (164,117 at June 30, 1999) (12,166) (9,682)
Total shareholders' equity 69,688 66,540
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $162,787 $159,355
The accompanying notes to consolidated financial statements
are an integral part of these statements.
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
For the three months For the nine months
ended March 31, ended March 31,
2000 1999 2000 1999
Net sales $50,711 $58,048 $147,717 $178,536
Cost of goods sold 34,545 39,629 100,922 121,099
Gross Profit 16,166 18,419 46,795 57,437
Operating expenses:
General and administrative 5,673 6,208 17,589 18,849
Selling 4,728 4,475 13,814 14,030
Engineering 3,091 3,502 9,147 10,681
Research and development 1,455 1,325 4,001 3,951
Restructuring charge 5,490 5,490
Provision for loss on the
disposition of
Pre-press operations 2,400 2,400
20,437 17,910 50,041 49,911
Operating income (loss) (4,271) 509 (3,246) 7,526
Other (income) expense:
Interest expense 397 603 1,390 1,744
Interest income (67) (83) (236) (353)
Other income, net (1,052) (608) (2,502) (1,681)
(722) (88) (1,348) (290)
Income (loss) before
income taxes (3,549) 597 (1,898) 7,816
Provision (benefit)
for income taxes (5,374) 976 (4,829) 3,678
Net income (loss) $ 1,825 $ (379) $ 2,931 $ 4,138
Basic income (loss) per share $ 0.12 $ (0.02) $ 0.19 $ 0.24
Diluted income (loss) per share $ 0.12 $ (0.02) $ 0.19 $ 0.24
Weighted average number of
shares:
Basic 15,408 16,719 15,812 16,908
Diluted 15,408 16,719 15,812 17,267
The accompanying notes to consolidated financial statements
are an integral part of these statements.
BALDWIN TECHNOLOGY COMPANY INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Capital
Class A Class B Contributed Cumulative Unrealized
Common Stock Common Stock in Excess Retained Translation Gain(Loss)on Treasury Stock Comprehensive
Shares Amount Shares Amount of Par Earnings Adjustment Investments Shares Amount Income
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
June 30, 1999 16,458,849 $165 2,000,000 $20 $57,496 $20,793 $(2,313) $61 (2,117,619) $(9,682)
Net income for the
nine months ended
March 31, 2000 2,931 $2,931
Translation
adjustment 2,782 2,782
Unrealized loss on
available-for-sale
securities,
net of tax (81) (81)
Comprehensive
income $5,632
Purchase of
treasury stock (1,073,700) (2,484)
Balance at
March 31, 2000 16,458,849 $165 2,000,000 $20 $57,496 $23,724 $ 469 $(20) (3,191,319) $(12,166)
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the nine months
ended March 31,
2000 1999
Cash Flows from operating activities:
Net income $ 2,931 $4,138
Adjustments to reconcile net income to net cash
provided (used) by operating activities -
Depreciation and amortization 2,948 2,644
Accrued retirement pay (906) 435
Provision for losses on accounts receivable 1,255 14
Restructuring charge 5,490
Provision for loss on the disposition of
Pre-press operations 2,400
Changes in assets and liabilities:
Accounts and notes receivable, net 3,912 1,086
Inventories (5,535) (4,276)
Prepaid expenses and other 462 (357)
Other assets (1,626) 8
Customer deposits 4,686 (4,993)
Accrued compensation (677) (744)
Accounts and notes payable, trade 1,789 (3,476)
Income taxes payable (5,210) (4,739)
Accrued and withheld taxes (445) (290)
Other accounts payable and accrued liabilities (851) (109)
Interest payable 21 277
Net cash provided (used) by operating activities 8,244 (7,982)
Cash flows from investing activities:
Additions of property, net (2,372) (1,563)
Additions of patents, trademarks and drawings, net (239) (229)
Acquisitions of businesses, net of cash acquired (2,999)
Proceeds from disposition of business 2,751
Net cash used by investing activities (2,611) (2,040)
Cash flows from financing activities:
Long-term borrowings 23,378 16,704
Long-term debt repayment (30,517) (13,657)
Short-term borrowings 3,080 3,908
Short-term debt repayment (1,714) (5,136)
Principal payments under capital lease
obligations (291) (193)
Other long-term liabilities 1,022 (188)
Treasury stock purchased (2,484) (2,830)
Stock options exercised 138
Net cash used by financing activities (7,526) (1,254)
Effects of exchange rate changes 349 666
Net decrease in cash and cash equivalents (1,544) (10,610)
Cash and cash equivalents at beginning of year 10,673 22,026
Cash and cash equivalents at end of period $ 9,129 $11,416
The accompanying notes to consolidated financial statements
are an integral part of these statements.
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Supplemental disclosures of cash flow information:
For the nine months
ended March 31,
2000 1999
(in thousands)
Cash paid during the period for:
Interest $ 1,369 $ 1,467
Income taxes $ 3,132 $ 8,508
The Company did not enter into any capital lease agreements for either of
the nine month periods ended March 31, 2000 or 1999.
Disclosure of accounting policy:
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments (cash and short term securities) with original
maturities of three months or less to be cash equivalents.
The accompanying notes to consolidated financial statements
are an integral part of these statements.
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Organization and Basis of Presentation:
Baldwin Technology Company, Inc. ("Baldwin", or the "Company") is engaged
primarily in the development, manufacture and sale of controls, accessories and
equipment for the printing industry.
The accompanying unaudited consolidated financial statements include the
accounts of Baldwin and its subsidiaries and have been prepared in accordance
with generally accepted accounting principles for interim financial information
and in compliance with the instructions to Form 10-Q. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. These financial
statements reflect all adjustments (consisting of normal recurring adjustments)
which are, in the opinion of management, necessary to present a fair statement
of the results for the interim periods. These financial statements should be
read in conjunction with the consolidated financial statements and related notes
included in the Company's latest annual report on Form 10-K for the year ended
June 30, 1999. Operating results for the three and nine month periods ended
March 31, 2000 are not necessarily indicative of the results that may be
expected for the year ending June 30, 2000. All significant intercompany
transactions have been eliminated in consolidation. The Company has
reclassified certain prior year amounts to conform to the current year's
presentation.
Note 2 - Earnings per share:
Basic earnings per share is computed by dividing net income for the period
by the weighted average number of common shares outstanding during the period.
Diluted earnings per share reflects the potential dilution of securities that
could share in the earnings of an entity, and is computed by dividing net income
for the period by the weighted average number of common shares outstanding plus
potentially dilutive common stock equivalents. The weighted average shares
outstanding used to compute diluted income per share includes zero common stock
equivalents for the three and nine month periods ended March 31, 2000 and zero
and 359,000 common stock equivalents for the three and nine month periods ended
March 31, 1999 respectively, which represent outstanding options to purchase the
Company's common stock. Options to purchase the Company's common stock in the
amount of 2,127,000 and 1,174,000 common stock equivalents were not included in
the computation of diluted earnings per share for the three and nine month
periods ended March 31, 2000 and 1999 respectively, because the exercise prices
were greater than the average market price of the common stock for the
respective periods.
Note 3 - Inventories:
Inventories consist of the following:-
March 31, June 30,
2000 1999
(Unaudited)
Raw material $17,293,000 $12,314,000
In process 12,053,000 12,889,000
Finished goods 7,904,000 6,588,000
$37,250,000 $31,791,000
Foreign currency translation increased inventories by $79,000 from
June 30, 1999 to March 31, 2000.
Note 4 - Common Stock:
Stock options:-
On August 10, 1999 the Board of Directors granted non-qualified options to
purchase 57,500 shares of the Company's Class A Common Stock to certain
executives and key personnel under the Company's 1996 Stock Option Plan at an
exercise price of $3.19 per share, the fair market value on the date of grant.
The options granted are otherwise identical with regard to restrictions to the
options previously granted under this plan.
On November 16, 1999 the Board of Directors granted non-qualified options
to purchase 50,000 shares of the Company's Class A Common Stock to a certain
executive under the Company's 1996 Stock Option Plan at an exercise price of
$2.25 per share, the fair market value on the date of grant. The options
granted are otherwise identical with regard to restrictions to the options
previously granted under this plan.
On November 17, 1999 under the Company's 1998 Directors Stock Option Plan,
six (6) eligible non-employee Directors were granted non-qualified options to
purchase 3,000 shares each (for a total of 18,000 shares) of the Company's Class
A Common Stock at an exercise price of $2.25 per share, the fair market value on
the date of grant. The options granted are otherwise identical with regard to
restrictions to the options previously granted under this plan.
On January 31, 2000 the Company's Board of Directors granted non-qualified
options to purchase 40,000 shares of the Company's Class A Common Stock to a
certain executive under the Company's 1996 Stock Option Plan at an exercise
price of $2.19 per share, the fair market value on the date of grant. The
options granted are otherwise identical with regard to restrictions to the
options previously granted under this plan.
Stock repurchase program:-
On August 10, 1999 the Board of Directors terminated the Company's stock
repurchase program. Under the program, the Company spent $13,015,000 to
repurchase 2,821,656 shares of Class A Common Stock and 164,117 shares of Class
B Common Stock over the nine year period since the inception of the program.
On October 13, 1999, the Company repurchased 400,000 shares of Class A
Common Stock of the Company. In addition, on November 3, 1999, the Company
announced that the Board of Directors had approved a new stock repurchase
program (the "New Program"). Under the New Program, the Company is authorized
to utilize up to $5,000,000 to repurchase its Class A Common Stock. In the
aggregate, the Company repurchased 1,048,700 shares of Class A and 25,000 shares
of Class B Common Stock for $2,484,000 for the nine months ended March 31, 2000.
Note 5 Provision for loss on disposition of pre-press operations:
During the third quarter of the fiscal year ended June 30, 1999, the
Company recorded a charge to earnings in the amount of $2,400,000 as a result of
certain unfunded guaranteed pension obligations of the Company's former
pre-press operations. At June 30, 1999, the remaining balance of $860,000
relating to these potential obligations was included in "Other accounts payable
and accrued liabilities". The Company continues to carry a balance of $833,000
relating to these obligations as a current liability at March 31, 2000, as
$27,000, primarily bond and legal costs associated with these obligations, have
been charged against this reserve during the nine months ended March 31, 2000.
Note 6 Restructuring charges and related reserves:
A restructuring charge has been recorded for the three and nine month
periods ended March 31, 2000 in the amount of $5,490,000. The reserve was
established in order to account for the estimated costs associated with the
planned consolidation of production into certain facilities, resulting in a
reduction in total employment, primarily in the United States. This charge
includes approximately $3,221,000 in employee severance and benefit costs,
$1,260,000 in facility lease termination costs, $509,000 related to asset
impairment of property, equipment and certain intangibles, and $500,000 in
incremental costs due to product discontinuance associated with this
restructuring. The consolidation of production includes the closing of one
domestic facility and the phasing down of another domestic facility, with the
related production being shifted to other existing domestic and overseas
facilities. The workforce reductions consist of approximately 100 employees in
various employee groups throughout the world, including production, sales,
engineering and administration. These restructuring activities are expected to
be substantially completed by June 30, 2001. As of March 31, 2000, $4,125,000
is included in "Other accounts payable and accrued liabilities" and $856,000 is
included in "Other long-term liabilities". The asset impairment amount of
$509,000 has directly reduced the carrying amount of the affected assets by
reducing the net book value of property plant and equipment by $331,000,
patents by $162,000 and goodwill by $16,000.
A restructuring reserve was charged against earnings for the year ended
June 30, 1999 in the amount of approximately $870,000. The reserve was
established in order to accrue the costs associated with planned workforce
reductions at the Company's German and Japanese operations, and certain costs
associated with a scheduled plant closing in the United States. As of June 30,
1999, $144,000 had been charged against this reserve and the balance of $726,000
was included in "Other accounts payable and accrued liabilities". As of March
31, 2000 this balance has been reduced to $104,000 as $622,000, primarily
severance costs, have been charged against this reserve during the nine months
ended March 31, 2000.
Note 7 - Income tax benefit:
Under current accounting pronouncements, Financial Accounting Standards
Board Statement No. 109- "Accounting for Income Taxes" ("FAS 109"), deferred tax
assets are reduced by a valuation allowance if it is more likely than not that
the deferred tax asset will not be realized. The Company has recorded a tax
benefit of approximately $4,147,000 for the three and nine months ended March
31, 2000 as a result of decreasing the deferred tax valuation allowance to
recognize the effect of a net operating loss carryforward ("NOL") in one of its
foreign subsidiaries in accordance with FAS 109. The Company's assessment of
the deferred tax valuation allowance has been impacted by the estimated effects
that the continuing profitability of the foreign subsidiary will have with
regard to the ultimate utilization of foreign NOL's, which in the opinion of
management, are more likely than not to be realized in the future.
Note 8 - Business segment information:
The Company's two reportable segments are the Graphic Products and Controls
Group ("GPC"), and the Material Handling Group ("MHG"). The GPC segment includes
products such as cleaning systems, water systems and other equipment designed to
enhance the quality of the printed material and improve the productivity of the
printing process. The MHG segment includes products which handle the materials
supplied to the press and automate the handling of the printed material. The all
other category is comprised of the Print On-Demand Group, which operates in the
short-run digital printing market, and other activities.
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies in the Annual Report on Form 10-K
for the fiscal year ended June 30, 1999. A segment's financial performance is
primarily evaluated based on the operating profit of the segment, which includes
inter-segment sales.
The tables below present information about reportable segments for the
three and nine month periods ended March 31, 2000, and 1999 (in thousands):
Three months ended Nine months ended
March 31, March 31,
(Unaudited) (Unaudited)
Net Sales: 2000 1999 2000 1999
Graphic Products and Controls Group $ 36,317 $ 36,630 $107,244 $116,720
Material Handling Group 14,997 21,070 43,174 61,491
All other 92 848 213 1,736
Total segments 51,406 58,548 150,631 179,947
Inter-segment sales (695) (500) (2,914) (1,411)
Total Net Sales $ 50,711 $ 58,048 $147,717 $178,536
Three months ended Nine months ended
March 31, March 31,
(Unaudited) (Unaudited)
Operating income (loss): 2000 1999 2000 1999
Graphic Products and Controls Group $ 509 $ 1,967 $ 5,400 $11,300
Material Handling Group (2,497) (512) (3,083) 1,151
All other (276) 161 (579) 314
Total segments (2,264) 1,616 1,738 12,765
Corporate (2,007) (1,107) (4,984) (5,239)
Total operating income (loss) (4,271) 509 (3,246) 7,526
Interest expense, net (330) (520) (1,154) (1,391)
Royalty income, net 1,004 1,064 2,588 2,559
Minority interest (5) (7) (19) (14)
Other income (expense), net 53 (449) (67) (864)
Income (loss) before income taxes $(3,549) $ 597 $(1,898) $ 7,816
Note 9 - Recent accounting pronouncements:
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101"), which is effective for all fiscal quarters of all fiscal years
beginning after March 15, 2000. SAB 101 summarizes certain of the SEC staff's
views in applying generally accepted accounting principles to revenue
recognition in financial statements. The Company is currently evaluating the
impacts of SAB 101, if any, and management has not yet concluded whether or not
the adoption of SAB 101 will have a significant effect on the Company's results
of operations or its financial position.
BALDWIN TECHNOLOGY COMPANY, INC.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain factors
which have affected the financial position and consolidated financial statements
of Baldwin Technology Company, Inc. (The "Company").
During the three months ended March 31, 2000, the Company has taken a
restructuring charge against earnings resulting from the Company's plan to
reduce its worldwide cost base and strengthen its competitive position. The
Company estimates that the total cost of implementing the restructuring plan
will be approximately $7,000,000, with $5,490,000 recorded in the current period
and the balance to be charged against earnings as incurred during
implementation. This charge has negatively impacted the results of operations
for the three and nine months ended March 31, 2000, as well as the working
capital of the Company at March 31, 2000, and is expected to negatively
impact cash flow in the near future as it is anticipated that these costs
will be incurred during the next twelve to fifteen months.
Upon completion of the employee reductions and the consolidation of the
facilities, it is expected that annual operating costs will be reduced by
approximately $6,000,000 which is expected to be completed by June 30, 2001.
These estimated annual cost savings consist of approximately $3,800,000 in
production compensation, $2,100,000 in selling general and administrative
compensation, and $500,000 in facility lease costs, while other production
costs, principally freight costs are estimated to increase by approximately
$400,000. The Company anticipates that revenues will not be materially impacted
as a result of this restructuring program.
In addition, the Company has recorded a tax benefit of approximately
$4,147,000 for the three and nine months ended March 31, 2000 by decreasing the
deferred tax valuation allowance to recognize the effect of a net operating loss
carryforward ("NOL") in one of its foreign subsidiaries. The Company's
assessment of the deferred tax valuation allowance has been impacted by the
estimated effect that the continuing profitability of the foreign subsidiary
will have with regard to the ultimate utilization of foreign NOL's, which in the
opinion of management, are more likely than not to be realized in the future.
During the three months ended March 31, 1999, the Company recorded a charge
against earnings in the amount of $2,400,000 which is the result of a guarantee
obligation related to certain pension liabilities associated with the Company's
former Pre-press operations. This charge against earnings has negatively
impacted the results of operations for the three and nine months ended March 31,
1999.
During the fiscal year ended June 30, 1999, the Company acquired a ninety
percent (90%) interest in a distributor of consumables in Europe, increased its
ownership of a U.S. subsidiary from 80% to 100%, and divested its former U.S.
In-Line Finishing division ("In-Line"). As a result, the revenues and
corresponding expenses attributable to each of the operations associated with
these transactions is included in these consolidated financial statements only
for the period and to the extent the operation is owned by the Company. None of
these transactions, either individually or in the aggregate, has had or is
expected to have a material impact on the financial statements when taken as a
whole. However, certain items may be affected more than others, and the effects
of these transactions on these items are discussed below.
Forward-looking Statements
Except for the historical information contained herein, the following
statements and certain other statements contained herein are based on current
expectations. Such statements are forward-looking statements that involve a
number of risks and uncertainties. The Company cautions investors that any such
forward-looking statements made by the Company are not guarantees of future
performance and that actual results may differ materially from those in the
forward-looking statements. Some of the factors that could cause actual results
to differ materially include, but are not limited to the following: (i) the
ability to obtain, maintain and defend challenges against valid patent
protection on certain technology, primarily as it relates to the Company's
cleaning systems, (ii) changes in foreign currency exchange rates versus the
U.S. Dollar, (iii) changes in the mix of products and services comprising
revenues, (iv) any Year 2000 compliance issues that may arise, (v) a decline
in the rate of growth of the installed base of printing press units and the
timing of new press orders, (vi) general economic conditions, either
domestically or in foreign locations, (vii) the ultimate realization of
certain trade receivables, (viii) the timely and successful execution of the
restructuring program, and (ix) competitive market influences. Additional
factors are set forth in Exhibit 99 to Form 10-K for the year ended June 30,
1999, which should be read in conjunction herewith.
Nine months Ended March 31, 2000 vs Nine months Ended March 31, 1999
Consolidated Results
Net sales for the nine months ended March 31, 2000 decreased by $30,819,000,
or 17.3%, to $147,717,000 from $178,536,000 for the nine months ended March 31,
1999. Currency rate fluctuations attributable to the Company's overseas
operations increased net sales by $2,281,000 in the current period. Otherwise,
sales would have decreased by $33,100,000, of which $2,243,000 relates to the
previously noted divestiture of In-Line. The remaining decrease is primarily
the result of reduced product volumes, principally roll handling equipment,
including reduced orders from one of the Company's largest OEM customers, and
a reduction in equipment orders in the commercial web heatset printing market.
In terms of local currency, and as compared to the same period in the prior
year, net sales decreased by 60.0% in Australia, by 34.7% in the Americas,
by 10.4% in Japan, and by 10.0% in Germany. Sales increased by 17.7% in Sweden.
Gross profit for the nine month period ended March 31, 2000 was $46,795,000
(31.7% of net sales), as compared to $57,437,000 (32.2% of net sales) for the
nine month period ended March 31, 1999, a decrease of $10,642,000 or 18.5%.
Currency rate fluctuations increased gross profit by $397,000 in the current
period. Otherwise gross profit would have decreased by $11,039,000 in the
current period. Gross profit was lower due primarily to decreased sales
volumes, and to continuing pricing pressures in the market.
Selling, general and administrative expenses amounted to $31,403,000 (21.3%
of net sales), for the nine month period ended March 31, 2000 as compared to
$32,879,000 (18.4% of net sales) for the same period in the prior year, a
decrease of $1,476,000 or 4.5%. Currency rate fluctuations increased these
expenses by $197,000 in the current period. Otherwise, selling, general and
administrative expenses would have decreased by $1,673,000. Selling expenses
decreased by $285,000 which primarily related to reduced sales commissions
resulting from lower sales volumes offset by higher trade show costs. General
and administrative expenses decreased by $1,388,000 due primarily to reduced
incentive compensation costs as a result of the lower profitability of the
Company, and expenses of the previously noted divestiture of In-Line in the
prior year period. Excluding the $1,100,000 bad debt charge (see
"Liquidity and Capital Resources") in the current period, general and
administrative expenses would have decreased by $2,488,000 or 13.2% when
compared to the same period in the prior year.
Engineering and research and development expenses decreased by $1,484,000
compared to the same period in the prior year. Currency rate fluctuations
increased these expenses by $78,000 in the current period. Otherwise, these
expenses would have decreased by $1,562,000. The decrease in these expenses
relates primarily to reduced costs in Japan, Germany and the United States
attributable to reduced personnel costs associated with the planned workforce
reductions which began during the fiscal year ended June 30, 1999, and the
expenses of the previously noted divestiture of In-Line in the prior year
period. As a percentage of net sales, engineering and research and development
expenses increased by 0.7% to 8.9% for the nine months ended March 31, 2000
compared to 8.2% for the same period in the prior year.
Interest expense for the nine month period ended March 31, 2000 was
$1,390,000 as compared to $1,744,000 for the nine month period ended March
31, 1999, a decrease of $354,000. This decrease was primarily due to lower
long-term debt levels during the period, which was slightly offset by higher
interest rates. Currency rate fluctuations decreased interest expense by
$83,000 in the current period. Interest income amounted to $236,000 and
$353,000 for the nine month periods ended March 31, 2000 and March 31, 1999,
respectively. This reduction in interest income is primarily due to lower
average cash balances during the period. Currency rate fluctuations increased
interest income by $11,000 in the current period.
Other income, net includes net foreign currency transaction losses of
$433,000 and $168,000 for the nine months ended March 31, 2000 and 1999,
respectively. Currency rate fluctuations increased other income by $167,000
in the current period.
Certain items have significantly impacted the Company's effective tax rate,
specifically the $4,147,000 NOL benefit in the current period and the $2,400,000
provision for the loss on the Pre-press operations in the prior year period. The
Company's effective tax rate on income before taxes (excluding the effects of
the above noted items) remained flat at 35.9% and 36.0% for the nine month
periods ended March 31, 2000 and 1999, respectively. Currency rate fluctuations
increased the provision for income taxes by $138,000 in the current period.
The Company's net income amounted to $2,931,000 for the nine month period
ended March 31, 2000, as compared to $4,138,000 for the nine month period ended
March 31, 1999. This decrease of $1,207,000 or 29.2%, is primarily due to the
$5,490,000 restructuring charge recorded in the current period, the $1,100,000
bad debt charge in the prior quarter and the previously noted overall reduction
in sales volumes and related gross profit which have been significantly offset
by the $4,147,000 NOL benefit recorded in the current period as discussed above,
and the $2,400,000 provision for the loss on the Pre-press operations in the
prior year period. Currency rate fluctuations increased net income by $245,000
in the current period. Net income per share amounted to $0.19 basic and diluted
for the nine months ended March 31, 2000, as compared to $0.24 basic and diluted
for the nine months ended March 31, 1999.
Segment Results
Graphic Products and Controls Group
Net sales for the nine months ended March 31, 2000 decreased by
$9,476,000, or 8.1%, to $107,244,000 from $116,720,000 for the nine months ended
March 31, 1999. Currency rate fluctuations attributable to the Company's
overseas operations increased net sales for the current period by $2,368,000,
otherwise, net sales would have decreased by $11,844,000 in the current period.
This decrease is primarily the result of reduced sales levels of on-press
accessories and controls in the United States and Europe and post-press
equipment and a general economic slowdown in Asia.
Operating income amounted to $5,400,000 (5.0% of net sales) for the
nine months ended March 31, 2000, as compared to $11,300,000 (9.7% of net sales)
for the same period in the prior year, a decrease of $5,900,000. Currency rate
fluctuations increased the current year's operating income by $309,000,
otherwise operating income would have decreased by $6,209,000. This decrease is
primarily the result of a restructuring charge applicable to the segment in the
amount of $2,928,000, and to the overall decrease in sales levels discussed
above, coupled with continuing pricing pressures in the market.
Material Handling Group
Net sales for the nine months ended March 31, 2000 decreased by
$18,317,000, or 29.8%, to $43,174,000 from $61,491,000 for the nine months ended
March 31, 1999. Currency rate fluctuations attributable to the Company's
overseas operations decreased net sales for the current period by $628,000,
otherwise net sales would have decreased by $17,689,000. This decrease is
primarily the result of reduced product volumes, principally roll handling
equipment, including reduced orders from one of the Company's largest OEM
customers, a reduction in equipment orders in the commercial web heatset
printing market, and the effect of the disposition of In-Line
during the prior year, which further reduced net sales by $2,243,000.
Operating loss amounted to $3,083,000 (7.1% of net sales) for the nine
months ended March 31, 2000, as compared to operating income of $1,151,000 (1.9%
of net sales) for the same period in the prior year, a decrease of $4,234,000.
Currency rate fluctuations decreased the current year's operating profit by
$91,000. The remaining decrease is primarily the result of the decrease in
sales levels, a restructuring charge applicable to the segment in the amount of
$2,276,000, and the $1,100,000 bad debt charge for the sale of the pre-petition
accounts receivable from Goss in the current year period, offset by the
$2,400,000 provision for loss on the Pre-press operations in the prior year
period.
Three Months Ended March 31, 2000 vs Three Months Ended March 31, 1999
Consolidated Results
Net sales for the three months ended March 31, 2000 decreased by $7,337,000,
or 12.6%, to $50,711,000 from $58,048,000 for the three months ended March 31,
1999. Currency rate fluctuations attributable to the Company's overseas
operations decreased net sales by $164,000 in the current period. Otherwise,
sales would have decreased by $7,173,000. This decrease is primarily the result
of reduced product volumes, principally roll handling equipment, including
reduced orders from one of the Company's largest OEM customers. In terms of
local currency, and as compared to the same period in the prior year, net sales
decreased by 31.3% in the Americas, and by 11.6% in Germany. Sales increased
by 55.9% in Sweden.
Gross profit for the three month period ended March 31, 2000 was
$16,166,000 (31.9% of net sales), as compared to $18,419,000 (31.7% of net
sales) for the three month period ended March 31, 1999, a decrease of $2,253,000
or 12.2%. Currency rate fluctuations decreased gross profit by $144,000 in the
current period. Otherwise gross profit would have decreased by $2,109,000 in
the current period. Gross profit was lower due primarily to decreased sales
volumes as gross profit margins increased 0.2% to 31.9% from 31.7% for the
three months ended March 31, 2000 and 1999, respectively.
Selling, general and administrative expenses amounted to $10,401,000 (20.5%
of net sales), for the three month period ended March 31, 2000 as compared to
$10,683,000 (18.4% of net sales) for the same period in the prior year, a
decrease of $282,000 or 2.6%. Currency rate fluctuations decreased these
expenses by $74,000 in the current period. Otherwise, selling, general and
administrative expenses would have decreased by $208,000. Selling expenses
increased by $301,000 which primarily related to increased trade show,
advertising and marketing costs, which were partially offset by reduced sales
commissions resulting from lower sales volumes. General and administrative
expenses decreased by $509,000 due primarily to reduced incentive compensation
costs as a result of the lower profitability of the Company, and personnel cost
reductions associated with the planned workforce reductions which began during
the fiscal year ended June 30, 1999.
Engineering and research and development expenses decreased by $281,000
compared to the same period in the prior year. Currency rate fluctuations
decreased these expenses by $65,000 in the current period. Otherwise, these
expenses would have decreased by $216,000. The decrease in these expenses
relates primarily to personnel cost reductions associated with planned workforce
reductions which began during the fiscal year ended June 30, 1999, and costs
attributable to reduced subcontracting costs. As a percentage of net sales,
engineering and research and development expenses increased by 0.7% to 9.0% for
the three months ended March 31, 2000 compared to 8.3% for the same period in
the prior year.
Interest expense for the three month period ended March 31, 2000 was
$397,000 as compared to $603,000 for the three month period ended March 31,
1999. This decrease was primarily due to lower long-term debt levels during the
current period, which has been slightly offset by slightly higher interest
rates. Currency rate fluctuations decreased interest expense by $35,000 in the
current period. Interest income amounted to $67,000 and $83,000 for the three
month periods ended March 31, 2000 and 1999, respectively. This reduction in
interest income is primarily due to decreased cash balances during the period.
Currency rate fluctuations decreased interest income by $1,000 in the current
period.
Other income, net includes net foreign currency transaction losses of
$142,000 and $94,000 for the three months ended March 31, 2000 and 1999,
respectively. Currency rate fluctuations increased other income by $52,000
in the current period.
Certain items have significantly impacted the Company's effective tax rate,
specifically the $4,147,000 NOL benefit in the current period and the $2,400,000
provision for the loss on the Pre-press operations in the prior year period.
The Company's effective tax rate on income before taxes (excluding the effects
of the above noted items) was 34.6% for the three month period ended March 31,
2000 as compared to 32.6% for the three month period ended March 31, 1999.
Currency rate fluctuations increased the provision for income taxes by
$29,000 in the current period. The increase in the current period's effective
tax rate is primarily due to higher taxable income in jurisdictions which have
higher income tax rates.
The Company's net income amounted to $1,825,000 for the three month period
ended March 31, 2000, as compared to a net loss of $379,000 for the three month
period ended March 31, 1999. This increase of $2,204,000 is primarily due to
the $4,147,000 NOL benefit recorded in the current period as previously
discussed, and the $2,400,000 provision for the loss on the Pre-press operations
in the prior year period, which have been partially offset by the $5,490,000
restructuring charge in the current year period and the previously noted overall
reduction in sales volumes and related gross profit. Currency rate fluctuations
increased net income by $52,000 in the current period. Net income per share
amounted to $0.12 basic and diluted for the three months ended March 31, 2000,
as compared to net loss per share of $(0.02) basic and diluted for the three
months ended March 31, 1999.
Segment Results
Graphic Products and Controls Group
Net sales for the three months ended March 31, 2000 decreased by
$313,000, or 0.9%, to $36,317,000 from $36,630,000 for the three months ended
March 31, 1999. Currency rate fluctuations attributable to the Company's
overseas operations decreased net sales for the current period by $152,000,
otherwise, net sales would have decreased by $161,000 in the current period.
This decrease is primarily the result of reduced sales levels of on-press
accessories and controls for the commercial web heatset printing market.
Operating income amounted to $509,000 (1.4% of net sales) for the
three months ended March 31, 2000, as compared to $1,967,000 (5.4% of net sales)
for the same period in the prior year, a decrease of $1,458,000. Currency rate
fluctuations increased the current year's operating income by $47,000, otherwise
operating income would have decreased by $1,505,000. This decrease is primarily
the result of a restructuring charge applicable to the segment in the amount of
$2,928,000, which was partially offset by reduced incentive compensation and
personnel costs.
Material Handling Group
Net sales for the three months ended March 31, 2000 decreased by
$6,073,000, or 28.8%, to $14,997,000 from $21,070,000 for the three months ended
March 31, 1999. Currency rate fluctuations attributable to the Company's
overseas operations decreased net sales for the current period by $273,000,
otherwise net sales would have decreased by $5,800,000. This decrease is
primarily the result of reduced product volumes, principally roll handling
equipment, including reduced sales to one of the Company's largest OEM
customers.
Operating loss amounted to $2,497,000 (16.6% of net sales) for the
three months ended March 31, 2000, as compared to $512,000 (2.4% of net sales)
for the same period in the prior year, a decrease of $1,985,000. Currency rate
fluctuations decreased the current year's operating profit by $16,000. The
remaining decrease is primarily the result of a restructuring charge applicable
to the segment in the amount of $2,276,000, and the overall decrease in sales
levels discussed above, offset by the $2,400,000 provision for loss on the
Pre-press operations in the prior year period.
Liquidity and Capital Resources at March 31, 2000
Liquidity and Working Capital
The Company's long-term debt includes $6,250,000 of 8.17% senior notes
(the "Senior Notes") due October 29, 2000. The Company also maintains a
$25,000,000 Revolving Credit Agreement (the "Revolver") with Bank of America,
N.A., as agent.
The Senior Notes and the Revolver require the Company to maintain
certain financial covenants and have certain restrictions regarding the payment
of dividends, limiting them throughout the terms of the Senior Notes and the
Revolver to $1,000,000 plus 50% of the Company's net income after January 1,
1997. The Company also was required to pledge certain of the shares of its
domestic subsidiaries as collateral.
Both the Senior Notes and the Revolver require the Company to maintain
a current ratio, a fixed charges ratio, and a funded debt to cash flow ratio, as
those terms are defined in the agreements, of not less than 1.40 to 1.00 and
1.15 to 1.00, or greater than 2.25 to 1.00, respectively. At March 31, 2000,
these ratios were 1.55 to 1.00, 0.72 to 1.00 and 2.45 to 1.00, respectively.
The Company is not in compliance with the latter two covenants, primarily as a
result of the restructuring charge, and has received a waiver thereon through
June 29, 2000. The Company and its lenders have recently agreed to extend the
maturity date of the Revolver by 91 days to June 30, 2001. Accordingly, the
Company continues to classify amounts due under the Revolver as non-current.
Management believes it will be in compliance with financial covenants in
the future.
The Company's working capital decreased by $4,419,000 or 15.2% from
$29,154,000 at June 30, 1999 to $24,735,000 at March 31, 2000. Currency rate
fluctuations increased working capital by $801,000 in the current period.
Otherwise, working capital would have decreased by $5,220,000. The primary
reasons for the decrease in working capital were lower cash balances and trade
accounts and notes receivable and increases in loans payable, customer deposits,
and trade accounts and notes payable and other accrued liabilities (including
restructuring charges of $4,125,000), which were significantly offset by
increases in inventories and decreases in accrued incentive compensation costs
due to the lower profitability of the Company and income taxes payable due
mainly to the $4,147,000 NOL benefit realized in the current period.
Net cash used by investing activities amounted to $2,611,000 for the
nine months ended March 31, 2000 as compared to $2,040,000 for the nine months
ended March 31, 1999 and resulted from additions to property, plant and
equipment, which included investments in the expansion of certain existing
facilities in the current period, as well as additions to patents.
Additionally, the prior period included net cash used for net acquisitions of
businesses.
Net cash used by financing activities amounted to $7,526,000 for the
nine months ended March 31, 2000 as compared to $1,254,000 for the nine months
ended March 31, 1999. The increase in cash used by financing activities was
primarily due to the net repayments of long-term debt.
The Company maintains relationships with foreign and domestic banks
which have extended credit facilities to the Company. As of March 31, 2000,
these credit facilities total $35,929,000 including amounts available under the
Revolver. The Company had outstanding $12,942,000 under these lines of credit,
of which $7,433,000 is classified as long-term debt. Total debt levels as
reported on the balance sheet at March 31, 2000 are $28,000 lower than they
would have been if June 30, 1999 exchange rates had been used.
On July 30, 1999, one large OEM customer, Goss Graphic Systems, Inc.
("Goss") filed for bankruptcy protection under a prearranged Chapter 11
proceeding in the U.S. Bankruptcy Court. Goss' European and Asian subsidiaries
are not included in this proceeding, and furthermore, the Company continues to
receive timely payments from the foreign subsidiaries of Goss. The pre-petition
accounts receivable from Goss of approximately $4,100,000 were sold pursuant to
an agreement between the Company and a third party for approximately $3,000,000.
The Company has taken a charge to earnings for the prior quarter ended December
31, 1999 in the amount of $1,100,000 as a bad debt, which is included in General
and Administrative expenses. As of March 31, 2000, the entire amount of
$3,000,000 has been received from the third party. For the three and nine
months ended March 31, 2000, Goss represented less than 10% of the Company's
total net sales.
The estimated cash cost of the restructuring program is expected to be
approximately $6,500,000, with approximately $5,600,000 to be spent over the
next twelve months and approximately $900,000 (primarily facility lease costs)
to be spent over the balance of the lease terms of approximately three years.
The Company believes its cash flow from operations and bank lines of credit
(before considering the estimated savings from the restructuring program) are
sufficient to finance its working capital and other capital requirements for the
near and long-term future.
Year 2000 Compliance
As of the date of this filing, the Company has not incurred any
significant business interruptions as a result of the Year-2000 situation.
However, while no such occurrence has developed as of the date of this filing,
Year-2000 problems may surface throughout calendar year 2000. Therefore, there
is no assurance that the Company will not be negatively impacted by the
Year-2000 situation in the future. The Company will continue to monitor this
situation and expeditiously remediate any issues that may arise.
Euro Conversion
Effective January 1, 1999, the "Euro" has become the new common
currency for 11 countries of the European Community ("EC") (including Germany
and France where the Company has operations). Other member states (including
the United Kingdom and Sweden where the Company also has operations) may join
in future years. Beginning January 1, 1999, transactions in the Euro became
possible, with the national currencies continuing to circulate until January 1,
2002, when the Euro will become the functional currency for these 11 countries.
During the transition period from January 1, 1999 to January 1, 2002, payments
can be made using either the Euro or the national currencies at fixed exchange
rates.
Beginning January 1, 1999, the Company began conducting business with
customers in both the Euro and the respective national currency. Systems and
processes that are initially impacted by this dual currency requirement are
customer billing and receivables, payroll and cash management activities,
including cash collections and disbursements. To accomplish compliance, the
Company is making the necessary systems and process changes and is also working
with its financial institutions on various cash management issues. The Company
currently expects to have new systems and
processes in place by July, 2000 to accommodate the recording of all business
transactions in the Euro for the affected countries.
Management currently believes that the costs associated with
implementing and completing the Euro conversion, as well as business and market
implications, if any, associated with the Euro conversion, will not be material
to its results of operations or financial condition in any year or in the
aggregate. The competitive impact of increased cross-border price transparency,
however, is uncertain, both with respect to products sold by the Company, as
well as products and services purchased by the Company.
The Company's ongoing efforts with regard to the Year-2000 compliance
and Euro conversion, and those of its significant customers and suppliers,
including financial institutions may, at some time in the future, reveal as yet
unidentified or not fully understood issues that may not be addressable in a
timely fashion, or that may cause unexpected competitive or market effects, all
contrary to the foregoing statements. These issues, if not resolved favorably,
could have a material adverse effect on the Company's results of operations or
financial condition in any year.
Impact of Inflation
The Company's results are affected by the impact of inflation on
manufacturing and operating costs. Historically, the Company has used selling
price adjustments, cost containment programs and improved operating efficiencies
to offset the otherwise negative impact of inflation on its operations.
Item 3: Quantitative and Qualitative Disclosures About Market Risk:
A discussion of market risk exposures is included in Part II Item 7A,
"Quantitative and Qualitative Disclosures About Market Risk" of the Company's
Annual Report on Form 10-K for the year ended June 30, 1999. There have been
no material changes during the nine months ended March 31, 2000.
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.31 Tenth Amendment and Waiver to Amended and Restated Revolving
Credit Agreement by and among Baldwin Americas Corporation and
Baldwin Technology Limited (as "Borrowers") and Baldwin
Technology Company, Inc., together with the Borrowers (as
"Credit Parties") and Bank of America, N.A. (as "Agent") and
Fleet National Bank, together with Agent (as "Lenders") (filed
herewith).
10.32 Employment agreement dated March 1, 2000 and effective as of
November 10, 1999 between Baldwin Technology Company, Inc. and
Michael R. Samide (filed herewith).
10.33 Employment agreement dated February 7, 2000 and effective as of
February 9, 2000 between Baldwin Technology Company, Inc. and
Lawrence M. Miller (filed herewith).
10.34 Employment agreement dated April 27, 2000 and effective as of
April 27, 2000 between Baldwin Technology Company, Inc. and
Peter E. Anselmo (filed herewith).
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K.
The Company filed a Current Report on Form 8-K, dated March 30,
2000, relating to items 5 and 7 of Form 8-K. Such Current Report announced
a corporate restructuring plan undertaken by the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BALDWIN TECHNOLOGY COMPANY, INC.
BY s\ James M. Rutledge
Vice President, Chief Financial
Officer and Treasurer
Dated: May 2, 2000
[ARTICLE] 5
[LEGEND]
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS IN THE COMPANY'S CURRENT REPORT ON FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH UNAUDITED FINANCIAL STATEMENTS
[/LEGEND]
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] JUN-30-2000
[PERIOD-END] MAR-31-2000
[CASH] 8574
[SECURITIES] 555
[RECEIVABLES] 48468
[ALLOWANCES] 2040
[INVENTORY] 37250
[CURRENT-ASSETS] 101187
[PP&E] 15605
[DEPRECIATION] 8352
[TOTAL-ASSETS] 162787
[CURRENT-LIABILITIES] 76452
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 185
[OTHER-SE] 69503
[TOTAL-LIABILITY-AND-EQUITY] 162787
[SALES] 50711
[TOTAL-REVENUES] 50711
[CGS] 34545
[TOTAL-COSTS] 34545
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 397
[INCOME-PRETAX] (3549)
[INCOME-TAX] (5374)
[INCOME-CONTINUING] 1825
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 1825
[EPS-BASIC] .12
[EPS-DILUTED] .12
</TABLE>
TENTH AMENDMENT AND WAIVER TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS TENTH AMENDMENT AND WAIVER TO AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT (this "Amendment Agreement") is made and entered into, effective
as of this 3rd day of May, 2000, by and among BALDWIN AMERICAS CORPORATION,
a Delaware corporation ("BAM"), BALDWIN TECHNOLOGY LIMITED, a Bermuda
corporation ("BTL" and together with BAM, the "Borrowers"), BALDWIN
TECHNOLOGY COMPANY, INC., a Delaware corporation ("Baldwin" and together
with the Borrowers, the "Credit Parties"), BANK OF AMERICA, N.A., successor
., as Agent ("Bank of America" or the "Agent"), BANK OF AMERICA, N.A., as a
Lender, and FLEET NATIONAL BANK (successor in interest to Bank Boston, N.A.),
as a Lender ("Fleet").
W I T N E S S E T H:
WHEREAS, the Credit Parties, the Lenders and the Agent have entered into that
certain Amended and Restated Revolving Credit Agreement dated as of December 31,
1995 (as heretofore or hereafter amended, modified, supplemented, amended and
restated or replaced, the "Credit Agreement"), pursuant to which the Lenders
have agreed to make certain revolving credit loans to the Borrowers;
WHEREAS, the parties hereto desire to further amend the Credit Agreement in
the manner herein set forth;
WHEREAS, the Borrowers have (i) informed the Agent that they have violated
Sections 8.1(c) and 8.1(d) of the Credit Agreement for the four-quarter
period ended on March 31, 2000, which violation constitutes an Event of
Default under Section 9.1(c) of the Credit Agreement (the "Violation") and
(ii) requested that the Agent and the Lenders waive the Violation for such
four-quarter period and beyond that to and including June 29, 2000 (the
"Waiver");
WHEREAS, the Borrowers have requested that the Agent and the Lenders make
certain amendments to the Credit Agreement (the "Amendments"); and
WHEREAS, in consideration for the Borrowers' acknowledgment and acceptance
of the terms of this Amendment Agreement, the Agent and Lenders are willing
to grant the Waiver and make the Amendments;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. The term "Credit Agreement" or "Agreement" (as the case may
be) as used herein and in the Loan Documents shall mean the Credit Agreement as
hereby amended and modified, and as further amended, modified, supplemented,
amended and restated or replaced from time to time as permitted thereby.
Unless the context otherwise requires, all terms used herein without
definition shall have the definitions provided therefor in the Credit Agreement.
2. Waiver Action. Agent and Lenders hereby grant to Borrowers the Waiver
subject to the following conditions:
(a) The Waiver is limited as specified herein and shall not constitute an
amendment or modification of the Credit Agreement or any other Loan Document.
(b) The Waiver is granted only for the specific instance and for the time
period specified herein and in no event shall constitute a waiver for any
period other than the four-quarter period ended on March 31, 2000 and beyond
that to and including June 29, 2000, or in any manner create a course of
dealing or otherwise impair the future ability of the Agent and the Lenders
to declare a Default or Event of Default under or otherwise enforce the terms
of the Credit Agreement.
3. Credit Agreement Amendments. Subject to the conditions hereof, the Credit
Agreement is hereby amended, effective as of the date hereof, as follows:
(a) The definition of "Revolving Credit Termination Date" in Section 1.1 is
hereby deleted in its entirety and the following is inserted in replacement
thereof:
"Revolving Credit Termination Date" means the earlier to occur of (i) June 30,
2001, or (ii) any other date upon which the Total Commitment shall terminate in
accordance with the terms hereof."
4. Representations and Warranties. Each Credit Party hereby certifies that:
(a) The representations and warranties made by each Credit Party in Article
VI of the Credit Agreement are true on and as of the date hereof, with the same
effect as though such representations and warranties were made on the date
hereof.
(b) There has been no material change in the condition, financial or
otherwise, of Baldwin, any Borrower or any of their respective Subsidiaries
since the date of the most recent financial reports of Baldwin and the
Borrowers received by each Lender under Section 7.1 of the Credit Agreement;
(c) The business and properties of each Credit Party and any of their
respective Subsidiaries are not, and since the date of the most recent
financial reports of Baldwin and the Borrowers received by each Lender under
Section 7.1 of the Credit Agreement have not been, adversely affected in any
substantial way as the result of any fire, explosion, earthquake, accident,
strike, lockout, combination of workmen, flood, embargo, riot, activities of
armed forces, war or acts of God or the public enemy, or cancel tracts; and
(d) No event has occurred and no condition exists which, upon the effectiveness
of the amendments contemplated hereby, will constitute a Default or an Event of
Default on the part of any Credit Party under the Credit Agreement or any other
Loan Document either immediately or with the lapse of time or the giving of
notice, or both.
5. Conditions Precedent. The effectiveness of this Amendment Agreement is
subject to the receipt by the Agent of (a) five (5) counterparts of this
Amendment Agreement duly executed by all signatories hereto and (b) all fees
payable by the Borrowers to the Agent and the Lenders on or before the date
hereof.
6. Entire Agreement. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. None of the terms or conditions of
this Amendment Agreement may be changed, modified, waived or canceled orally
or otherwise, except in accordance with the terms of the Credit Agreement.
7. Full Force and Effect of Agreement. Except as hereby specifically amended,
modified or supplemented, the Credit Agreement and all of the other Loan
Documents are hereby confirmed and ratified in all respects and shall remain
in full force and effect according to their respective terms.
8. Counterparts. This Amendment Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9. Credit Agreement and Other Loan Documents. All references in any of the
Loan Documents to the "Credit Agreement" shall mean the Credit Agreement as
amended hereby.
10. Reimbursement. The Borrowers agree to reimburse the Agent and the Lenders
for all costs and out-of-pocket expenses, including attorneys' fees, incurred in
connection with the preparation, execution, and delivery of this Amendment
Agreement.
[Signature pages follow.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement
to be duly executed by their duly authorized officers, all as of the day and
year first above written.
BORROWERS AND CREDIT PARTIES:
BALDWIN AMERICAS CORPORATION, as Borrower and Credit Party
By: ____________________________________________
Name:__________________________________________
Title: ___________________________________________
BALDWIN TECHNOLOGY LIMITED, as Borrower and Credit Party
By: ____________________________________________
Name:__________________________________________
Title: ___________________________________________
BALDWIN TECHNOLOGY COMPANY, INC., as Credit
Party
By:_____________________________________________
Name: __________________________________________
Title:___________________________________________
AGENT:
BANK OF AMERICA, N.A., successor in interest to NationsBank, N.A., as Agent
for the Lenders
By: ____________________________________________
Name:__________________________________________
Title:___________________________________________
SIGNATURE PAGE 1 OF 2
LENDERS:
BANK OF AMERICA, N.A., successor in interest to NationsBank, N.A., as Lender
By: ___________________________________________
Name:_________________________________________
Title:__________________________________________
FLEET NATIONAL BANK, successor in interest to BANKBOSTON, N.A., as Lender
By: ____________________________________________
Name:__________________________________________
Title:___________________________________________
SIGNATURE PAGE 2 OF 2
2
2
Doc. No.309979
2
March 1, 2000
Mr. Michael R. Samide
32 Strawberry Lane
Huntington, CT 06484
Dear Mr. Samide:
This Agreement sets forth the terms of your employment with Baldwin
Technology Company, Inc., a Delaware corporation (the "Company"), and is
effective as of November 10, 1999, and if not extended or unless sooner
terminated, shall expire on November 10, 2002.
1. DUTIES. During the term of your employment hereunder, you shall be employed
as the Executive Vice President and Chief Operating Officer of the Company, and
you shall direct and manage the operations of the Company subject to the
direction of the Chief
Executive Officer of the Company (the "Chief Executive Officer"). You shall
also be a member of the Baldwin Management Committee ("BMC").
2. COMPENSATION. As compensation for your services during the term of your
employment hereunder:
A. Salary. You shall be paid a salary at the annual rate of two hundred
and twenty-five thousand dollars ($225,000) (hereinafter referred to as your
"base salary"), payable in appropriate installments to conform with regular
payroll dates for salaried personnel of the Company.
B. Reviews and Adjustments. On or about November 10, 2000 and each
succeeding November 10 during the term of your employment hereunder, your
performance shall be reviewed by the Chief Executive Officer and your attainment
of mutually agreed-upon objectives evaluated; your base salary for the ensuing
twelve (12) months commencing on such November 10 may be adjusted, subject to
approval by the Compensation Committee of the Board of Directors of the Company,
in accordance with your level of performance. In no case, however, will any
such adjustment to your salary ever be a negative amount unless you expressly
agree to such a reduction.
C. Incentive Compensation. During the term of your employment hereunder,
and at such other times subsequent thereto as are otherwise set forth herein,
you shall be paid annually, within three (3) months of the end of each fiscal
year, beginning with the fiscal year ending June 30, 2000, incentive
compensation in an amount determined for such fiscal year under the Company's
Executive and Key Person Cash Incentive Program (the "Incentive Program") as in
effect at that time.
D. Supplemental Retirement Benefit. On the first day of each month that
you are still performing services under the terms of this Agreement, the Company
shall accrue for your benefit a supplemental retirement benefit (the
"Supplemental Retirement Benefit") in the amount of four thousand two hundred
($4,200.00).The sum of all such monthly accruals of Supplemental Retirement
Benefit shall constitute the "Aggregate Supplemental Retirement Benefit". The
Aggregate Supplemental Retirement Benefit, to the extent vested, is to be paid
to you in equal monthly installments, over a ten (10) year period
beginning at such times as are set forth in this Agreement. Wherever so used in
this Agreement, the term "Monthly Supplemental Retirement Benefit" shall mean
the Aggregate Supplemental Retirement Benefit divided by one-hundred-twenty
(120) months. The Aggregate Supplemental Retirement Benefit will vest, in each
case assuming you are then employed by the Company, as follows: as of November
10, 2000 it shall be vested to the extent of 20%, as of November 10, 2001 it
shall be vested to the extent of 40%, as of November 10, 2002 it shall be vested
to the extent of 60%, as of November 10, 2003 it shall be vested to the extent
of 80%, as of November 10, 2004 it shall be vested to the
extent of 100% so that as of the latter date the full amount of the Aggregate
Supplemental Retirement Benefit shall be due and payable in the instances set
forth elsewhere in this Agreement.
3. Stock and Loans. In order to permit you (but only if you, in your sole
discretion so elect) to purchase shares of the Company's Class B Common Stock,
par value $.01 per share (the "Class B Stock"), that may become available from
time to time, you shall be eligible, to the extent allowable under the Company's
various loan covenants or any other legal restrictions under which the Company
may operate, to obtain loans from the Company in the aggregate principal amount
of up to twice your then-current base salary which shall be used by you to
purchase such shares of Class B Stock. Any loans made under this section shall
(i) not exceed one million dollars ($1,000,000.00) in the aggregate,
(ii) bear interest, payable annually, at a rate equal to the Company's borrowing
rate (as adjusted on the first day of each calendar quarter) on its U.S.
short-term banking facilities, (iii) require pledging by you to the Company of
all shares of Class B Stock purchased using the proceeds of any such loans
(until sold in part or in full as described herein), and (iv)
require repayment by you within six (6) months of the last day of your
employment by the Company, except in case of your death, in which instance
repayment shall be within twelve (12) months of the date of your death.
Notwithstanding anything to the contrary contained
in this Paragraph 3, if at any time you sell any of such shares of Class B Stock
while any amount of any said loan remains unpaid, you shall, within five (5)
days of receipt of the funds from such sale, pay to the Company, in repayment of
part or all, as the case may be, of any said loan, an amount equal to (a) that
amount (the "Principal Repayment") equal to the product of (i) the aggregate
unpaid amount of all such loans, multiplied by (ii) a
fraction, the numerator of which is the number of shares of the Class B Stock
sold and the denominator of which is the number of shares of Class B Stock
purchased using the proceeds of all such loans (provided, however that the
Principal Repayment shall not exceed the unpaid balance of all such loans), plus
(b) any accrued but unpaid interest on the amount of the Principal Repayment to
the date of such repayment.
4. INSURANCE. During the term of your employment hereunder, the Company,
subject to your insurability, shall (i) pay the premiums on a contract or
contracts of life insurance on your life providing for an aggregate death
benefit of five hundred thousand dollars ($500,000), which contract or contracts
will be owned by you, your spouse or such other party as may be designated by
you; (ii) purchase key person term life insurance on your life in the aggregate
amount of one million dollars ($1,000,000), which contract or contracts will be
owned by the Company; provided, however, that upon your death if there
are any loans outstanding between you and the Company pursuant to Section 3 of
this Agreement, the Company agrees to pay to your survivors or estate an amount
equal to the unpaid balance of such loans, up to but not exceeding five hundred
thousand dollars ($500,000), of the death benefits received by the Company from
such key person term life insurance policy.
5. REIMBURSEMENT OF EXPENSES. In addition to the compensation provided for
herein, the Company shall reimburse to you, or pay directly, in accordance with
the policies of the Company as in effect at the time, all reasonable expenses
incurred by you in connection with the business of the Company, and its
subsidiaries and affiliates, including but not limited to business-class
travel if overseas, reasonable accommodations, and entertainment, subject to
documentation in accordance with the Company's policy.
6. EXTENT OF SERVICES.
A. In General. During the term of your employment hereunder, you shall
devote your best and full-time efforts to the business and affairs of the
Company.
B. Limitation on Other Services. During the term of your employment
hereunder, you shall not undertake employment with, or participate in the
conduct of the business affairs of, any other person, corporation, or entity,
except at the direction or with written approval of the Board of Directors of
the Company.
C. Personal Investments. Nothing herein shall preclude you from having,
making, or managing personal investments which do not involve your active
participation in the affairs of the entities in which you so invest, but, unless
approved in writing by the Board of Directors of the Company, during the term of
your employment hereunder, you shall not have more than a one percent (1%)
ownership interest in any entity which is directly competitive with any business
conducted by the Company at that time. The phrase "conducted by the Company" as
used in this Paragraph 6C and in Paragraph 13 hereof shall mean the business
conducted by the Company or by any corporation or other entity
in which the Company owns fifty percent (50%) or more of the stock or equity
interests (either voting or non-voting) in such other entity (a "Subsidiary").
7. LOCATION. Your duties hereunder shall be performed for the Company
worldwide, with substantial time in the Company's current offices in Norwalk,
Connecticut. This location may change in the future.
8. VACATION; OTHER BENEFITS.
A. Vacation. During the term of your employment hereunder, you shall be
entitled to a vacation or vacations, with pay, in accordance with the Company's
vacation policy as in effect at the time. Your yearly vacation accrual will be
three (3) weeks of annual vacation per year in year one and all subsequent years
until your time with the Company eventually triggers a larger annual accrual
beyond three (3) weeks per year. You may accumulate up to twelve (12) weeks
vacation, but not more than three (3) weeks from any single prior year. Any
such accumulated vacation may be used in any subsequent year or years (but no
more than two (2) weeks of such accumulated vacation in any one
year) in addition to the vacation to which you are entitled for each such year.
B. The Company's Benefit Plans. During the term of your employment
hereunder, you shall be eligible for inclusion, to the extent permitted by law,
as a full-time employee of the Company, in any and all (i) pension, profit
sharing, savings, and other retirement plans and programs as in effect at the
time, (ii) life and health (medical, dental,
hospitalization, short-term and long-term disability) insurance plans and
programs as in effect at the time, (iii) stock option and stock purchase plans
and programs as in effect at the time, (iv) accidental death and dismemberment
protection plans and programs as in effect at the time, (v) travel accident
insurance plans and programs as in effect at the time, and (vi) other plans and
programs sponsored by the Company or any Subsidiary for
employees or executives generally as in effect at the time, including any and
all plans and programs that supplement any or all of the foregoing types of
plans or programs.
C. Automobile, Professional Services and Club Dues. During the term of
your employment hereunder, (i) the Company shall provide an automobile for your
use pursuant to the Company's written policy on company autos as in effect at
that time; (ii) the Company shall reimburse to you, or pay directly, upon
submission by you to the Company of statements for services, the amounts payable
by you to any person or persons of your choice that you retain to advise you
with regard to financial, investment, and tax matters, including any related
legal fees; provided, however, that the costs for such services for which you
shall be reimbursed or which shall be paid shall not, in the aggregate, exceed
five thousand dollars ($5,000) per fiscal year beginning with the fiscal year
ending June 30, 2000; and (iii) the Company shall reimburse to you, or pay
directly, upon submission by you to the Company of invoices for same, a
reasonable annual membership or user fee at a health, fitness, golf, tennis,
social or other similar club, provided however, that said fee for
which you shall be reimbursed or which shall be paid shall not exceed three
thousand dollars ($3,000.00) per fiscal year beginning with the fiscal year
ending June 30, 2000.
9. TERMINATION OF EMPLOYMENT.
In the event your employment is terminated for any of the reasons set forth
under this Paragraph 9, the Company shall pay to you or your legal
representative, estate or heirs, as the case may be, the following amounts,
which are in addition to the amounts stipulated under any subparagraph of this
Paragraph 9:
(i) A single lump sum payment, not later than the last day of your
employment, of:
(a) Any accrued but unpaid salary set forth in Paragraph 2A (as
adjusted by Paragraph 2B) hereof, including salary in respect of any accrued and
accumulated vacation, due to you at the date of such termination; and
(b) Any amounts owing, but not yet paid, pursuant to Paragraph 5
hereof.
(ii) Any accrued but unpaid incentive compensation as set forth in Paragraph
2C hereof due to you at the date of such termination for the fiscal year ending
on or immediately prior to the date of such termination which shall be paid
within three (3) months of the end of such fiscal year.
A. Termination by the Company Without Cause. The Company may, without
cause, terminate your employment hereunder at any time upon ten (10) or more
days' written notice to you. In the event your employment is terminated under
this Paragraph 9A, the Company shall pay to you the following:
(i) A single lump sum payment, not later than the last day of your
employment, of severance pay in an amount equal to your then current annual base
salary as defined in Paragraph 2A (as adjusted by Paragraph 2B) hereof;
(ii) A single lump sum payment of any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year of the termination of your
employment, which incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, and shall be pro-rated
through the last day of your employment, and shall be paid within three (3)
months of such June 30;
(iii) To the extent vested, the Monthly Supplemental Retirement
Benefit with the first payment beginning on the first day of the month
immediately succeeding the last day of employment;
(iv) Continuation of medical benefits for a period of six (6) months;
and (v) Executive outplacement services for a period of six (6) months.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
B. Termination by the Company With Cause. The Company may, for cause,
terminate your employment hereunder at any time by written notice to you. In
the event your employment is terminated under this Paragraph 9B, you shall
forfeit the incentive compensation set forth in Paragraph 2C hereof for the
fiscal year in which such termination or resignation occurs. In the event
your employment is terminated under this paragraph 9B, the Company shall pay
to you, to the extent vested, the Monthly Supplemental Retirement Benefit as
set forth in Paragraph 2D with the first payment beginning on the
first day of the month immediately succeeding the last day of employment.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof. For purposes of this
Agreement, the term "cause" shall mean (1) a failure by you to remedy, within
ten (10) days of the Company's written notice to you, either (a) a continuing
neglect in the performance of your duties under this Agreement, or (b) any
action taken by you that seriously prejudices the interests of the
Company, or (2) your conviction of a felony.
C. Termination by Mutual Consent. You may terminate your employment
hereunder at any time with the written consent of the Company. In the event your
employment is terminated pursuant to this paragraph 9C, the Company shall pay to
you the following:
(i) A single lump sum payment, of any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year of the termination of your
employment, which incentive compensation shall be determined on the basis of
the Company's operations through June 30 of such fiscal year, and shall be
pro-rated through the last day of your employment, and shall be paid within
three (3) months of such June 30; and
(ii) To the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the last day of employment.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
D. Disability. If you should suffer a Permanent Disability at any time,
the Company may terminate your employment hereunder upon ten (10) or more days'
prior written notice to you. For purposes of this Agreement, a "Permanent
Disability" shall be deemed to have occurred only when you are qualified for
benefits under the Company's Long Term Disability Insurance Policy. In the
event of the termination of your employment hereunder by reason of Permanent
Disability, the Company shall pay to you or your legal representative:
(i) In conformity with regular payroll dates for salaried personnel of
the Company, an amount equal to fifty percent (50%) of the base salary you were
receiving at the date of such termination under Paragraph 2A hereof (as adjusted
by Paragraph 2B hereof), payable until you attain the age of 65 or die,
whichever occurs first; provided, however, that the amount payable under this
Paragraph 9D(i) shall be reduced to the extent of any payments made to you
through any Company-sponsored group long term
disability plan and also to the extent of any payments made to you under any
other long term disability insurance policy (the "Supplemental LTD Policy")
where the premiums for said Supplemental LTD Policy have either been paid by the
Company or reimbursed to you by the Company.
(ii) Any incentive compensation set forth in Paragraph 2C hereof earned
in the fiscal year in which the termination of your employment occurs, which
incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and shall be paid within three (3) months of
such June 30;
(iii) Upon your attainment of age 65 or your death, whichever
occurs first, to the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the month in which you attained
the age of 65 or died.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
E. Termination by Death. In the event of the termination of your
employment by reason of death, at any time, the Company shall pay to your legal
representative, estate or heirs:
(i) Any incentive compensation set forth in Paragraph 2C hereof earned
in the fiscal year in which the termination of your employment occurs, which
incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and shall be paid within three (3) months of
such June 30;
(ii) To the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the last day of your employment.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
F. Termination Upon Expiration of Agreement. If not previously terminated,
this Agreement and your employment with the Company shall be automatically
extended for additional three-year periods, unless and until either party
notifies the other, in writing, one year prior to the expiration of the
then-current term of this Agreement. After the expiration of this agreement,
the Company shall pay to you the Monthly Supplemental Retirement
Benefit as set forth in Paragraph 2D hereof, with the first monthly payment
beginning on the first day of the month immediately succeeding the month in
which you shall have attained the age of 55.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
G. Events. If any of the following described events occurs during the
term of your employment hereunder, you may terminate your employment hereunder
by written notice to the Company either prior to, or not more than six (6)
months after the happening of such event. In such event, your employment
hereunder will be terminated effective as of the later of ten (10) days after
the notice or ten (10) days after the event, and the Company shall make to you
the same payments that the Company would have been obligated to make to you
under Paragraph 9A hereof if the Company had terminated your employment
hereunder effective on such date. The events, the occurrence of which shall
permit you to terminate your employment hereunder under this Paragraph 9G, are
as follows:
(i) Any merger or consolidation by the Company with or into any
other entity or any sale by the Company of substantially all of its assets;
provided, however, that such event shall not be deemed to have occurred under
this clause if consummation of the transaction would result in at least fifty
(50%) percent of the total voting power represented by the voting securities of
the Company outstanding immediately after such
transaction being beneficially owned by holders of outstanding voting securities
of the Company immediately prior to the transaction.
(ii) Any change of a majority of the directors of the Company
occurring within any thirteen (13) month period.
(iii) The adoption by the Company of any plan of liquidation
providing for the distribution of all or substantially all of its assets.
(iv) A material diminution in your duties, or the assignment to
you of duties that are materially inconsistent with your duties or that
materially impair your ability to function as the Executive Vice President and
Chief Operating Officer of the Company if such diminution or assignment has not
been agreed to by you in writing or cured within thirty (30) days after written
notice thereof has been given by you to the Company.
10. SOURCE OF PAYMENTS. All payments provided for hereunder shall be paid from
the general funds of the Company. The Company may, but shall not be required
to, make any investment or investments whatsoever, including the purchase of a
life insurance contract or contracts on your life, to provide it with funds to
satisfy its obligations hereunder; provided, however, that neither you nor your
beneficiary or beneficiaries, nor any other person, shall have any right, title,
or interest whatsoever in or to any such investments or contracts. If the
Company shall elect to purchase a life insurance contract
or contracts on your life to provide the Company with funds to satisfy its
obligations hereunder, the Company shall at all times be the sole and complete
owner and beneficiary of such contract or contracts, and shall have the
unrestricted right to use all amounts and to exercise all options and privileges
thereunder without the knowledge or consent of you, your beneficiary or
beneficiaries, or any other person, it being expressly agreed that neither
you, any such beneficiary or beneficiaries, nor any other person shall have
any right, title, or interest whatsoever in or to any such contract or contracts
unless expressly provided otherwise in this Agreement.
11. ENFORCEMENT OF RIGHTS. Nothing in this Agreement, and no action taken
pursuant to its terms, shall create or be construed to create a trust or escrow
account of any kind, or a fiduciary relationship between the Company and you,
your beneficiary or beneficiaries, or any other person. You, your beneficiary
or beneficiaries, and any other person or persons claiming a right to any
payments or interests hereunder shall rely solely on the unsecured promise of
the Company, and nothing herein shall be construed to give
you, your beneficiary or beneficiaries, or any other person or persons, any
right, title, interest, or claim in or to any specific asset, fund, reserve,
account, or property of any kind whatsoever owned by the Company or in which
it may have any right, title, or interest now or in the future, but you or your
beneficiary or beneficiaries shall have the right to enforce a claim for
benefits hereunder against the Company in the same manner as any unsecured
creditor.
12. INVENTIONS AND CONFIDENTIAL INFORMATION. So long as you shall be
employed by the Company, you agree promptly to make known to the Company the
existence of any and all creations, inventions, discoveries, and improvements
made or conceived by you, either solely or jointly with others, during the term
of this Agreement and for three (3) years thereafter, and to assign to the
Company the full exclusive right to any and all such creations, inventions,
discoveries, and improvements relating to any subject
matter with which the Company is now or shall become concerned, or relating to
any other subject matter if made with the use of the Company's time, materials,
or facilities. To the fullest extent permitted by law, any and all of the
foregoing creations, inventions, discoveries and improvements shall be
considered as "work-made-for-hire" and the Company shall be the owner thereof.
You further agree, without charge to the Company but at its expense, if
requested to do so by the Company, to execute, acknowledge, and
deliver all papers, including applications or assignments for patents,
trademarks, and copyrights relating thereto, as may be considered by the
Company to be necessary or desirable to obtain or assign to the Company any
and all patents, trademarks, or copyrights for any and all such creations,
inventions, discoveries, and improvements in any and all countries, and to
vest title thereto in the Company in all such creations, inventions,
discoveries, and improvements as indicated above conceived during your
employment by the Company, and for three (3) years thereafter. You further
agree that you will not disclose to any third person any trade secrets or
proprietary information of the Company, or use any trade secrets or proprietary
information of the Company in any manner, except in the pursuit of your duties
as an employee of the Company, and that you will return to the Company all
materials (whether originals or copies) containing any such trade secrets or
proprietary information (in whatever medium) on termination of your employment
by the Company. The obligations set forth in this Paragraph 12 shall survive
the termination of your employment hereunder.
13. RESTRICTIVE COVENANT. For a period of three (3) years after the termination
of your employment by the Company, you shall not, in any geographical location
at which there is at that time business conducted by the Company which was
conducted by the Company at the date of such termination, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or
be connected in any manner with, the ownership, management, operation, or
control of, any business similar to or competitive with such
business conducted by the Company without the written consent of the Company;
provided, however, that you may have an ownership interest of up to one percent
(1%) in any entity, notwithstanding that such entity is directly competitive
with any business conducted by the Company at the date of such termination.
14. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the breach or asserted breach thereof, shall be settled by
arbitration to be held in New York, New York in accordance with the rules then
obtaining of the American Arbitration Association, and the judgment upon the
award rendered may be entered in any court having jurisdiction thereof. The
arbitrator shall determine which party shall bear the
costs of such arbitration, including attorneys' fees.
15. NON-ASSIGNABILITY. Your rights and benefits hereunder are personal to you,
and shall not be alienated, voluntarily or involuntarily, assigned or
transferred.
16. BINDING EFFECT. This Agreement shall be binding upon the parties hereto,
and their respective assigns, successors, executors, administrators, and heirs.
In the event the Company becomes a party to any merger, consolidation, or
reorganization, this Agreement shall remain in full force and effect as an
obligation of the Company or its successors in interest. None of the payments
provided for by this Agreement shall be subject to seizure
for payment of any debts or judgments against you or your beneficiary or
beneficiaries, nor shall you or any such beneficiary or beneficiaries have any
right to transfer or encumber any right or benefit hereunder; provided, however,
that the undistributed portion of the Aggregate Supplemental Retirement Benefit
shall at all times be subject to set-off by the Company for debts owed by you to
the Company.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement relating to
your employment by the Company. It may only be changed by written agreement
signed by the party against whom enforcement of any waiver, change,
modification, extension, deletion or revocation is sought.
18. NOTICES. All notices and communications hereunder shall be in writing, sent
by certified or registered mail, return receipt requested, postage prepaid; by
facsimile transmission, time and date of receipt noted thereon; or by
hand-delivery properly receipted. The actual date of receipt as shown by the
receipt therefor shall determine the time at which notice was given. All
payments required hereunder by the Company to you
shall be sent postage prepaid, or, at your election, shall be transferred to
you electronically to such bank as you designate in writing to the Company,
including designation of the applicable electronic address. The foregoing
items (other than any electronic transfer to you) shall be addressed as follows
(or to such other address as the Company or you may designate in writing from
time to time):
To you: To the Company:
Mr. Michael R. Samide Baldwin Technology Company, Inc.
32 Strawberry Lane One Norwalk West
Huntington, CT 06484 40 Richards Avenue
Norwalk, CT 06854
19. LAW TO GOVERN. This Agreement shall be governed by, and construed and
enforced according to, the laws of the State of Connecticut without giving
effect to the principles of conflict of laws.
Very truly yours,
BALDWIN TECHNOLOGY COMPANY, INC.
By:__________________________________
Gerald A. Nathe
Its President
Duly Authorized
AGREED TO AND ACCEPTED:
_________________________________
Michael R. Samide
February 7, 2000
Mr. Lawrence M. Miller
55 Revere Lane
Fairfield, CT 06430
Dear Mr. Miller:
This Agreement sets forth the terms of your employment with Baldwin
Technology Company, Inc., a Delaware corporation (the "Company"), and is
effective as of February 9, 2000, and if not extended or unless sooner
terminated, shall expire on February 9, 2003.
1. DUTIES. During the term of your employment hereunder, you shall be employed
as the Vice President of Sales and Service of the Company, and you shall direct
and sales and service affairs of the Company subject to the direction of the
Chief Executive Officer of the Company (the "Chief Executive Officer"). You
shall also be a member of the Baldwin Management Committee ("BMC").
2. COMPENSATION. As compensation for your services during the term of your
employment hereunder:
A. Salary. You shall be paid a salary at the annual rate of One Hundred
Seventy Thousand ($170,000.00) Dollars (hereinafter referred to as your "base
salary"), payable in appropriate installments to conform with regular payroll
dates for salaried personnel of the Company.
B. Reviews and Adjustments. On or about February 9, 2000 and each
succeeding February 9 during the term of your employment hereunder, your
performance shall be reviewed by the Chief Executive Officer and your attainment
of mutually agreed- upon objectives evaluated; your base salary for the ensuing
twelve (12) months commencing on such February 9 may be adjusted, subject to
approval by the Compensation Committee of the Board of Directors of the Company,
in accordance with your level of performance. In no case, however, will any
such adjustment to your salary ever be a negative amount unless you expressly
agree to such a reduction.
C. Incentive Compensation. During the term of your employment hereunder,
and at such other times subsequent thereto as are otherwise set forth herein,
you shall be paid annually, within three (3) months of the end of each fiscal
year, beginning with the fiscal year ending June 30, 2000, incentive
compensation in an amount determined for such fiscal year under the Company's
Executive and Key Person Cash Incentive Program (the "Incentive Program") as in
effect at that time.
D. Supplemental Retirement Benefit. On the first day of each month that
you are still performing services under the terms of this Agreement, the Company
shall accrue for your benefit a supplemental retirement benefit (the
"Supplemental Retirement Benefit") in the amount of four thousand two hundred
($4,200.00).The sum of all such monthly accruals of Supplemental Retirement
Benefit shall constitute the "Aggregate Supplemental Retirement Benefit". The
Aggregate Supplemental Retirement Benefit, to the extent vested,
is to be paid to you in equal monthly installments, over a ten (10) year period
beginning at such times as are set forth in this Agreement. Wherever so used in
this Agreement, the term "Monthly Supplemental Retirement Benefit" shall mean
the Aggregate Supplemental Retirement Benefit divided by one-hundred-twenty
(120) months. The Aggregate Supplemental Retirement Benefit will vest, in each
case assuming you are then employed by the Company, as follows: as of February
9, 2001 it shall be vested to the extent of 20%, as of February 9, 2002 it shall
be vested to the extent of 40%, as of February 9, 2003 it shall be vested to the
extent of 60%, as of February 9, 2004 it shall be vested to the extent of 80%,
as of February 9, 2005 it shall be vested to the extent of 100% so that as of
the latter date the full amount of the Aggregate Supplemental Retirement Benefit
shall be due and payable in the instances set forth elsewhere in this Agreement.
3. Stock and Loans. In order to permit you (but only if you, in your sole
discretion so elect) to purchase shares of the Company's Class B Common Stock,
par value $.01 per share (the "Class B Stock"), that may become available from
time to time, you shall be eligible, to the extent allowable under the Company's
various loan covenants or any other legal restrictions under which the Company
may operate, to obtain loans from the Company in the aggregate principal amount
of up to twice your then-current base salary
which shall be used by you to purchase such shares of Class B Stock. Any loans
made under this section shall (i) not exceed one million dollars ($1,000,000.00)
in the aggregate, (ii) bear interest, payable annually, at a rate equal to the
Company's borrowing rate (as adjusted on the first day of each calendar quarter)
on its U.S. short-term banking facilities, (iii) require pledging by you to the
Company of all shares of Class B Stock purchased using
the proceeds of any such loans (until sold in part or in full as described
herein), and (iv) require repayment by you within six (6) months of the last
day of your employment by the Company, except in case of your death, in which
instance repayment shall be within twelve (12) months of the date of your death.
Notwithstanding anything to the contrary contained in this Paragraph 3, if at
any time you sell any of such shares of Class B Stock while any
amount of any said loan remains unpaid, you shall, within five (5) days of
receipt of the funds from such sale, pay to the Company, in repayment of part or
all, as the case may be, of any said loan, an amount equal to (a) that amount
(the "Principal Repayment") equal to the product of (i) the aggregate unpaid
amount of all such loans, multiplied by (ii) a fraction, the numerator of which
is the number of shares of the Class B Stock sold and the denominator of which
is the number of shares of Class B Stock purchased using the proceeds of all
such loans (provided, however that the Principal Repayment shall not exceed
the unpaid balance of all such loans), plus (b) any accrued but unpaid
interest on the amount of the Principal Repayment to the date of such repayment.
4. INSURANCE. During the term of your employment hereunder, the Company,
subject to your insurability, shall (i) pay the premiums on a contract or
contracts of life insurance on your life providing for an aggregate death
benefit of five hundred thousand dollars ($500,000), which contract or contracts
will be owned by you, your spouse or such other party as may be designated by
you; (ii) purchase key person term life insurance on your life in the aggregate
amount of one million dollars ($1,000,000), which contract or contracts will be
owned by the Company; provided, however, that upon your death if there
are any loans outstanding between you and the Company pursuant to Section 3 of
this Agreement, the Company agrees to pay to your survivors or estate an amount
equal to the unpaid balance of such loans, up to but not exceeding five hundred
thousand dollars ($500,000), of the death benefits received by the Company from
such key person term life insurance policy.
5. REIMBURSEMENT OF EXPENSES. In addition to the compensation provided for
herein, the Company shall reimburse to you, or pay directly, in accordance with
the policies of the Company as in effect at the time, all reasonable expenses
incurred by you in connection with the business of the Company, and its
subsidiaries and affiliates, including but not limited to business-class travel
if overseas, reasonable accommodations, and entertainment, subject to
documentation in accordance with the Company's policy.
6. EXTENT OF SERVICES.
A. In General. During the term of your employment hereunder, you shall
devote your best and full-time efforts to the business and affairs of the
Company.
B. Limitation on Other Services. During the term of your employment
hereunder, you shall not undertake employment with, or participate in the
conduct of the business affairs of, any other person, corporation, or entity,
except at the direction or with written approval of the Board of Directors of
the Company.
C. Personal Investments. Nothing herein shall preclude you from having,
making, or managing personal investments which do not involve your active
participation in the affairs of the entities in which you so invest, but, unless
approved in writing by the Board of Directors of the Company, during the term of
your employment hereunder, you shall not have more than a one percent (1%)
ownership interest in any entity which is directly competitive with any business
conducted by the Company at that time. The phrase "conducted by the Company" as
used in this Paragraph 6C and in Paragraph 13 hereof shall mean the business
conducted by the Company or by any corporation or other entity in which the
Company owns fifty percent (50%) or more of the stock or equity interests
(either voting or non-voting) in such other entity (a "Subsidiary").
7. LOCATION. Your duties hereunder shall be performed for the Company
worldwide, with substantial time in the Company's current offices in Norwalk,
Connecticut. This location may change in the future.
8. VACATION; OTHER BENEFITS.
A. Vacation. During the term of your employment hereunder, you shall be
entitled to a vacation or vacations, with pay, in accordance with the Company's
vacation policy as in effect at the time. You may accumulate up to twelve (12)
weeks vacation, but not more than three (3) weeks from any single prior year.
Any such accumulated vacation may be used in any subsequent year or years (but
no more than two (2) weeks of such accumulated vacation in any one year) in
addition to the vacation to which you are entitled for each such year.
B. The Company's Benefit Plans. During the term of your employment
hereunder, you shall be eligible for inclusion, to the extent permitted by law,
as a full-time employee of the Company, in any and all (i) pension, profit
sharing, savings, and other retirement plans and programs as in effect at the
time, (ii) life and health (medical, dental, hospitalization, short-term and
long-term disability) insurance plans and programs as in effect at the time,
(iii) stock option and stock purchase plans and programs as in effect at
the time, (iv) accidental death and dismemberment protection plans and programs
as in effect at the time, (v) travel accident insurance plans and programs as in
effect at the time, and (vi) other plans and programs sponsored by the Company
or any Subsidiary for employees or executives generally as in effect at the
time, including any and all plans and programs that supplement any or all of the
foregoing types of plans or programs.
C. Automobile. During the term of your employment hereunder, the Company
shall provide an automobile for your use pursuant to the Company's written
policy on company autos as in effect at that time.
9. TERMINATION OF EMPLOYMENT.
In the event your employment is terminated for any of the reasons set forth
under this Paragraph 9, the Company shall pay to you or your legal
representative, estate or heirs, as the case may be, the following amounts,
which are in addition to the amounts stipulated under any subparagraph of this
Paragraph 9:
(i) A single lump sum payment, not later than the last day of your
employment, of:
(a) Any accrued but unpaid salary set forth in Paragraph 2A (as
adjusted by Paragraph 2B) hereof, including salary in respect of any accrued and
accumulated vacation, due to you at the date of such termination; and
(b) Any amounts owing, but not yet paid, pursuant to Paragraph 5
hereof.
(ii) Any accrued but unpaid incentive compensation as set forth in
Paragraph 2C hereof due to you at the date of such termination for the fiscal
year ending on or immediately prior to the date of such termination which shall
be paid within three (3) months of the end of such fiscal year.
A. Termination by the Company Without Cause. The Company may, without
cause, terminate your employment hereunder at any time upon ten (10) or more
days' written notice to you. In the event your employment is terminated under
this Paragraph 9A, the Company shall pay to you the following:
(i) A single lump sum payment, not later than the last day of your
employment, of severance pay in an amount equal to your then current annual base
salary as defined in Paragraph 2A (as adjusted by Paragraph 2B) hereof;
(ii) A single lump sum payment of any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year of the termination of your
employment, which incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, and shall be pro-rated
through the last day of your employment, and shall be paid within three (3)
months of such June 30;
(iii) To the extent vested, the Monthly Supplemental Retirement
Benefit with the first payment beginning on the first day of the month
immediately succeeding the last day of employment;
(iv) Continuation of medical benefits for a period of six (6) months;
and
(v) Executive outplacement services for a period of six (6) months.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
B. Termination by the Company With Cause. The Company may, for cause,
terminate your employment hereunder at any time by written notice to you. In
the event your employment is terminated under this Paragraph 9B, you shall
forfeit the incentive compensation set forth in Paragraph 2C hereof for the
fiscal year in which such termination or resignation occurs. In the event your
employment is terminated under this paragraph 9B, the Company shall pay to you,
to the extent vested, the Monthly Supplemental
Retirement Benefit as set forth in Paragraph 2D with the first payment beginning
on the first day of the month immediately succeeding the month in which you
attain the age of 55. The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the Company under
this Agreement except as provided in Paragraph 12 and Paragraph 13 hereof. For
purposes of this Agreement, the term "cause" shall mean (1) a failure by you to
remedy, within ten (10) days of the Company's written
notice to you, either (a) a continuing neglect in the performance of your duties
under this Agreement, or (b) any action taken by you that seriously prejudices
the interests of the Company, or (2) your conviction of a felony.
C. Termination by Mutual Consent. You may terminate your employment
hereunder at any time with the written consent of the Company. In the event your
employment is terminated pursuant to this paragraph 9C, the Company shall pay to
you the following:
(i) A single lump sum payment, of any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year of the termination of your
employment, which incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, and shall be pro-rated
through the last day of your employment, and shall be paid within three (3)
months of such June 30; and
(ii) To the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the last day of employment.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
D. Disability. If you should suffer a Permanent Disability at any time,
the Company may terminate your employment hereunder upon ten (10) or more days'
prior written notice to you. For purposes of this Agreement, a "Permanent
Disability" shall be deemed to have occurred only when you are qualified for
benefits under the Company's Long Term Disability Insurance Policy. In the
event of the termination of your employment hereunder by reason of Permanent
Disability, the Company shall pay to you or your legal representative:
(i) In conformity with regular payroll dates for salaried personnel of
the Company, an amount equal to fifty percent (50%) of the base salary you were
receiving at the date of such termination under Paragraph 2A hereof (as adjusted
by Paragraph 2B hereof), payable until you attain the age of 65 or die,
whichever occurs first; provided, however, that the amount payable under this
Paragraph 9D(i) shall be reduced to the extent of any payments made to you
through any Company-sponsored group long term disability plan and also to the
extent of any payments made to you under any other long
term disability insurance policy (the "Supplemental LTD Policy") where the
premiums for said Supplemental LTD Policy have either been paid by the Company
or reimbursed to you by the Company.
(ii) Any incentive compensation set forth in Paragraph 2C hereof earned
in the fiscal year in which the termination of your employment occurs, which
incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and shall be paid within three (3) months of
such June 30;
(iii) Upon your attainment of age 65 or your death, whichever
occurs first, to the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the month in which you attained
the age of 65 or died. The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the Company under
this Agreement except as provided in Paragraph 12 and Paragraph 13 hereof.
E. Termination by Death. In the event of the termination of your
employment by reason of death, at any time, the Company shall pay to your legal
representative, estate or heirs:
(i) Any incentive compensation set forth in Paragraph 2C hereof earned
in the fiscal year in which the termination of your employment occurs, which
incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and shall be paid within three (3) months of
such June 30;
(ii) To the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the last day of your employment.
The Company shall have no further obligation to you under this Agreement and
you shall
<PAGE>
have no further obligation to the Company under this Agreement
except as provided in Paragraph 12 and Paragraph 13 hereof.
F. Termination Upon Expiration of Agreement. If not previously
terminated, this Agreement and your employment with the Company shall be
automatically extended for additional three-year periods, unless and until
either party notifies the other, in writing, one year prior to the expiration of
the then-current term of this Agreement. After the expiration of this
agreement, the Company shall pay to you the Monthly Supplemental Retirement
Benefit as set forth in Paragraph 2D hereof, with the first monthly payment
beginning on the first day of the month immediately succeeding the month in
which you shall have attained the age of 55.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
G. Events. If any of the following described events occurs during the
term of your employment hereunder, you may terminate your employment hereunder
by written notice to the Company either prior to, or not more than six (6)
months after the happening of such event. In such event, your employment
hereunder will be terminated effective as of the later of ten (10) days after
the notice or ten (10) days after the event, and the Company shall make to you
the same payments that the Company would have been
obligated to make to you under Paragraph 9A hereof if the Company had terminated
your employment hereunder effective on such date. The events, the occurrence of
which shall
<PAGE>
permit you to terminate your employment hereunder under this
Paragraph 9G, are as follows:
(i) Any merger or consolidation by the Company with or into any
other entity or any sale by the Company of substantially all of its assets;
provided, however, that such event shall not be deemed to have occurred under
this clause if consummation of the transaction would result in at least fifty
(50%) percent of the total voting power represented by the voting securities of
the Company outstanding immediately after such transaction being beneficially
owned by holders of outstanding voting securities of the Company immediately
prior to the transaction.
(ii) Any change of a majority of the directors of the Company
occurring within any thirteen (13) month period.
(iii) The adoption by the Company of any plan of liquidation
providing for the distribution of all or substantially all of its assets.
(iv) A material diminution in your duties, or the assignment to
you of duties that are materially inconsistent with your duties or that
materially impair your ability to function as the Vice President of Sales and
Service of the Company if such diminution or assignment has not been agreed to
by you in writing or cured within thirty (30) days after written notice thereof
has been given by you to the Company.
10. SOURCE OF PAYMENTS. All payments provided for hereunder shall be paid from
the general funds of the Company. The Company may, but shall not be required
to, make any investment or investments whatsoever, including the purchase of a
life insurance contract or contracts on your life, to provide it with funds to
satisfy its obligations hereunder; provided, however, that neither you nor your
beneficiary or beneficiaries, nor any other person, shall have any right, title,
or interest whatsoever in or to any such investments or contracts. If the
Company shall elect to purchase a life insurance contract
or contracts on your life to provide the Company with funds to satisfy its
obligations hereunder, the Company shall at all times be the sole and complete
owner and beneficiary of such contract or contracts, and shall have the
unrestricted right to use all amounts and to exercise all options and privileges
thereunder without the knowledge or consent of you, your beneficiary or
beneficiaries, or any other person, it being expressly agreed that neither
you, any such beneficiary or beneficiaries, nor any other person shall have any
right, title, or interest whatsoever in or to any such contract or contracts
unless expressly provided otherwise in this Agreement.
11. ENFORCEMENT OF RIGHTS. Nothing in this Agreement, and no action taken
pursuant to its terms, shall create or be construed to create a trust or escrow
account of any kind, or a fiduciary relationship between the Company and you,
your beneficiary or beneficiaries, or any other person. You, your beneficiary
or beneficiaries, and any other person or persons claiming a right to any
payments or interests hereunder shall rely solely on the unsecured promise of
the Company, and nothing herein shall be construed to give
you, your beneficiary or beneficiaries, or any other person or persons, any
right, title, interest, or claim in or to any specific asset, fund, reserve,
account, or property of any kind whatsoever owned by the Company or in which it
may have any right, title, or interest now or in the future, but you or your
beneficiary or beneficiaries shall have the right to enforce
a claim for benefits hereunder against the Company in the same manner as any
unsecured creditor.
12. INVENTIONS AND CONFIDENTIAL INFORMATION. So long as you shall be
employed by the Company, you agree promptly to make known to the Company the
existence of any and all creations, inventions, discoveries, and improvements
made or conceived by you, either solely or jointly with others, during the term
of this Agreement and for three (3) years thereafter, and to assign to the
Company the full exclusive right to any and all such creations, inventions,
discoveries, and improvements relating to any subject
matter with which the Company is now or shall become concerned, or relating to
any other subject matter if made with the use of the Company's time, materials,
or facilities. To the fullest extent permitted by law, any and all of the
foregoing creations, inventions, discoveries and improvements shall be
considered as "work-made-for-hire" and the Company shall be the owner thereof.
You further agree, without charge to the Company but at its expense, if
requested to do so by the Company, to execute, acknowledge, and deliver all
papers, including applications or assignments for patents, trademarks, and
copyrights relating thereto, as may be considered by the Company to be necessary
or desirable to obtain or assign to the Company any and all patents, trademarks,
or copyrights for any and all such creations, inventions, discoveries, and
improvements in any and all countries, and to vest title thereto in the Company
in all such creations, inventions, discoveries, and improvements as indicated
above conceived during your employment by the Company, and for three (3) years
thereafter. You further agree that you will not disclose to any third person
any trade secrets or proprietary information of the Company, or use any trade
secrets or proprietary information of the Company in any manner, except
in the pursuit of your duties as an employee of the Company, and that you will
return to the Company all materials (whether originals or copies) containing any
such trade secrets or proprietary information (in whatever medium) on
termination of your employment by the Company. The obligations set forth in
this Paragraph 12 shall survive the termination of your employment hereunder.
13. RESTRICTIVE COVENANT. For a period of three (3) years after the termination
of your employment by the Company, you shall not, in any geographical location
at which there is at that time business conducted by the Company which was
conducted by the Company at the date of such termination, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or be
connected in any manner with, the ownership, management, operation, or control
of, any business similar to or competitive with such
business conducted by the Company without the written consent of the Company;
provided, however, that you may have an ownership interest of up to one percent
(1%) in any entity, notwithstanding that such entity is directly competitive
with any business conducted by the Company at the date of such termination.
14. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the breach or asserted breach thereof, shall be settled by
arbitration to be held in New York, New York in accordance with the rules then
obtaining of the American Arbitration Association, and the judgment upon the
award rendered may be entered in any court having jurisdiction thereof. The
arbitrator shall determine which party shall bear the costs of such arbitration,
including attorneys' fees.
15. NON-ASSIGNABILITY. Your rights and benefits hereunder are personal to you,
and shall not be alienated, voluntarily or involuntarily, assigned or
transferred.
16. BINDING EFFECT. This Agreement shall be binding upon the parties hereto,
and their respective assigns, successors, executors, administrators, and heirs.
In the event the Company becomes a party to any merger, consolidation, or
reorganization, this Agreement shall remain in full force and effect as an
obligation of the Company or its successors in interest. None of the payments
provided for by this Agreement shall be subject to seizure for payment of any
debts or judgments against you or your beneficiary or beneficiaries, nor shall
you or any such beneficiary or beneficiaries have any right to transfer or
encumber any right or benefit hereunder; provided, however, that the
undistributed portion of the Aggregate Supplemental Retirement Benefit shall
at all times be subject to set-off by the Company for debts owed by you to
the Company.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement relating to
your employment by the Company. It may only be changed by written agreement
signed by the party against whom enforcement of any waiver, change,
modification, extension, deletion or revocation is sought.
18. NOTICES. All notices and communications hereunder shall be in writing, sent
by certified or registered mail, return receipt requested, postage prepaid; by
facsimile transmission, time and date of receipt noted thereon; or by
hand-delivery properly receipted. The actual date of receipt as shown by the
receipt therefor shall determine the time at which notice was given. All
payments required hereunder by the Company to you shall be sent postage
prepaid, or, at your election, shall be transferred to you electronically
to such bank as you designate in writing to the Company, including designation
of the applicable electronic address. The foregoing items (other than any
electronic transfer to you) shall be addressed as follows (or to such other
address as the Company or you may designate in writing from time to time):
To you: To the Company:
Lawrence M. Miller Baldwin Technology Company, Inc.
55 Revere Lane One Norwalk West
Fairfield, CT 06430 40 Richards Avenue
Norwalk, CT 06854
19. LAW TO GOVERN. This Agreement shall be governed by, and construed and
enforced according to, the laws of the State of Connecticut without giving
effect to the principles of conflict of laws.
Very truly yours,
BALDWIN TECHNOLOGY COMPANY, INC.
By:__________________________________
Gerald A. Nathe
Its President
Duly Authorized
AGREED TO AND ACCEPTED:
_________________________________
Lawrence M. Miller
April 27, 2000
Mr. Peter E. Anselmo
20 Revere Place
Ridgefield, CT 06877
Dear Mr. Anselmo:
This Agreement sets forth the terms of your employment with Baldwin
Technology Company, Inc., a Delaware corporation (the "Company"), and is
effective as of April 27, 2000, and if not extended or unless sooner terminated,
shall expire on April 27, 2003.
1. DUTIES. During the term of your employment hereunder, you shall be employed
as the Vice President of Marketing and Business Development of the Company, and
you shall direct and manage the marketing and business development affairs of
the Company subject to the direction of the Chief Executive Officer of the
Company (the "Chief Executive Officer"). You shall also be a member of the
Baldwin Management Committee ("BMC").
2. COMPENSATION. As compensation for your services during the term of your
employment hereunder:
A. Salary. You shall be paid a salary at the annual rate of two hundred
ten thousand four hundred and forty-four dollars ($210,444) (hereinafter
referred to as your "base salary"), payable in appropriate installments to
conform with regular payroll dates for salaried personnel of the Company.
B. Reviews and Adjustments. On or about April 27, 2000 and each
succeeding April 27 during the term of your employment hereunder, your
performance shall be reviewed by the Chief Executive Officer and your attainment
of mutually agreed-upon objectives evaluated; your base salary for the ensuing
twelve (12) months commencing on such April 27 may be adjusted, subject to
approval by the Compensation Committee of the Board of Directors of the Company,
in accordance with your level of performance. In no case, however, will any
such adjustment to your salary ever be a negative amount unless
you expressly agree to such a reduction.
C. Incentive Compensation. During the term of your employment hereunder,
and at such other times subsequent thereto as are otherwise set forth herein,
you shall be paid annually, within three (3) months of the end of each fiscal
year, beginning with the fiscal year ending June 30, 2000, incentive
compensation in an amount determined for such fiscal year under the Company's
Executive and Key Person Cash Incentive Program (the "Incentive Program") as
in effect at that time.
D. Supplemental Retirement Benefit. On the first day of each month that
you are still performing services under the terms of this Agreement, the Company
shall accrue for your benefit a supplemental retirement benefit (the
"Supplemental Retirement Benefit") in the amount of four thousand two hundred
($4,200.00).The sum of all such monthly accruals of Supplemental Retirement
Benefit shall constitute the "Aggregate Supplemental Retirement Benefit". The
Aggregate Supplemental Retirement Benefit, to the extent vested, is to be paid
to you in equal monthly installments, over a ten (10) year period
beginning at such times as are set forth in this Agreement. Wherever so used in
this Agreement, the term "Monthly Supplemental Retirement Benefit" shall mean
the Aggregate Supplemental Retirement Benefit divided by one-hundred-twenty
(120) months. The Aggregate Supplemental Retirement Benefit will vest, in each
case assuming you are then employed by the Company, as follows: 40% as of April
27, 2000; as of April 27, 2001 it shall be vested to the extent of 60%, as of
April 27, 2002 it shall be vested to the extent of 80%, as of April 27, 2003 it
shall be vested to the extent of 100% so that as of the latter
date the full amount of the Aggregate Supplemental Retirement Benefit shall be
due and payable in the instances set forth elsewhere in this Agreement. In
recognition of your many prior years of service with the Company, (1) the
vesting schedule of your Aggregate Supplemental Retirement Benefit has been
accelerated so that as of the effective date of this Agreement, it is 40%
vested, and (2) the beginning balance of your Aggregate Supplemental Retirement
Benefit on the effective date of this Agreement shall be an accrued lump sum of
One Hundred Fifty Thousand ($150,000) Dollars.
3. Stock and Loans. In order to permit you (but only if you, in your sole
discretion so elect) to purchase shares of the Company's Class B Common Stock,
par value $.01 per share (the "Class B Stock"), that may become available from
time to time, you shall be eligible, to the extent allowable under the Company's
various loan covenants or any other legal restrictions under which the Company
may operate, to obtain loans from the Company in the aggregate principal amount
of up to twice your then-current base salary which shall be used by you to
purchase such shares of Class B Stock. Any loans made
under this section shall (i) not exceed one million dollars ($1,000,000.00) in
the aggregate, (ii) bear interest, payable annually, at a rate equal to the
Company's borrowing rate (as adjusted on the first day of each calendar quarter)
on its U.S. short-term banking facilities, (iii) require pledging by you to the
Company of all shares of Class B Stock purchased using the proceeds of any such
loans (until sold in part or in full as described herein), and (iv) require
repayment by you within six (6) months of the last day of your employment by the
Company, except in case of your death, in which instance repayment shall be
within twelve (12) months of the date of your death. Notwithstanding anything
to the contrary contained in this Paragraph 3, if at any time you sell any of
such shares of Class B Stock while any amount of any said loan remains unpaid,
you shall, within five (5) days of receipt of the
funds from such sale, pay to the Company, in repayment of part or all, as the
case may be, of any said loan, an amount equal to (a) that amount (the
"Principal Repayment") equal to the product of (i) the aggregate unpaid amount
of all such loans, multiplied by (ii) a fraction, the numerator of which is the
number of shares of the Class B Stock sold and the
denominator of which is the number of shares of Class B Stock purchased using
the proceeds of all such loans (provided, however that the Principal Repayment
shall not exceed the unpaid balance of all such loans), plus (b) any accrued but
unpaid interest on the amount of the Principal Repayment to the date of such
repayment.
4. INSURANCE. During the term of your employment hereunder, the Company,
subject to your insurability, shall (i) pay the premiums on a contract or
contracts of life insurance on your life providing for an aggregate death
benefit of five hundred thousand dollars ($500,000), which contract or contracts
will be owned by you, your spouse or such other party as may be designated by
you; (ii) purchase key person term life insurance on your life in the aggregate
amount of one million dollars ($1,000,000), which contract or
contracts will be owned by the Company; provided, however, that upon your death
if there are any loans outstanding between you and the Company pursuant to
Section 3 of this Agreement, the Company agrees to pay to your survivors or
estate an amount equal to the unpaid balance of such loans, up to but not
exceeding five hundred thousand dollars ($500,000), of the death benefits
received by the Company from such key person term life insurance policy.
5. REIMBURSEMENT OF EXPENSES. In addition to the compensation provided for
herein, the Company shall reimburse to you, or pay directly, in accordance with
the policies of the Company as in effect at the time, all reasonable expenses
incurred by you in connection with the business of the Company, and its
subsidiaries and affiliates, including but not limited to business-class travel
if overseas, reasonable accommodations, and entertainment, subject to
documentation in accordance with the Company's policy.
6. EXTENT OF SERVICES.
A. In General. During the term of your employment hereunder, you shall
devote your best and full-time efforts to the business and affairs of the
Company.
B. Limitation on Other Services. During the term of your employment
hereunder, you shall not undertake employment with, or participate in the
conduct of the business affairs of, any other person, corporation, or entity,
except at the direction or with written approval of the Board of Directors of
the Company.
C. Personal Investments. Nothing herein shall preclude you from having,
making, or managing personal investments which do not involve your active
participation in the affairs of the entities in which you so invest, but, unless
approved in writing by the Board of Directors of the Company, during the term of
your employment hereunder, you shall not have more than a one percent (1%)
ownership interest in any entity which is directly competitive with any business
conducted by the Company at that time. The phrase "conducted by the Company" as
used in this Paragraph 6C and in Paragraph 13 hereof shall mean the business
conducted by the Company or by any corporation or other entity in which the
Company owns fifty percent (50%) or more of the stock or equity interests
(either voting or non-voting) in such other entity (a "Subsidiary").
7. LOCATION. Your duties hereunder shall be performed for the Company
worldwide, with substantial time in the Company's current offices in Norwalk,
Connecticut. This location may change in the future.
8. VACATION; OTHER BENEFITS.
A. Vacation. During the term of your employment hereunder, you shall be
entitled to a vacation or vacations, with pay, in accordance with the Company's
vacation policy as in effect at the time. You may accumulate up to twelve (12)
weeks vacation, but not more than three (3) weeks from any single prior year.
Any such accumulated vacation may be used in any subsequent year or years (but
no more than two (2) weeks of such accumulated vacation in any one year) in
addition to the vacation to which you are entitled for each such year.
B. The Company's Benefit Plans. During the term of your employment
hereunder, you shall be eligible for inclusion, to the extent permitted by law,
as a full-time employee of the Company, in any and all (i) pension, profit
sharing, savings, and other retirement plans and programs as in effect at
the time, (ii) life and health (medical, dental, hospitalization, short-term
and long-term disability) insurance plans and programs as in effect at the time,
(iii) stock option and stock purchase plans and programs as in effect at
the time, (iv) accidental death and dismemberment protection plans and programs
as in effect at the time, (v) travel accident insurance plans and programs as in
effect at the time, and (vi) other plans and programs sponsored by the Company
or any Subsidiary for employees or executives generally as in effect at the
time, including any and all plans and programs that supplement any or all of the
foregoing types of plans or programs.
C. Automobile. During the term of your employment hereunder, the Company
shall provide an automobile for your use pursuant to the Company's written
policy on company autos as in effect at that time.
9. TERMINATION OF EMPLOYMENT.
In the event your employment is terminated for any of the reasons set forth
under this Paragraph 9, the Company shall pay to you or your legal
representative, estate or heirs, as the case may be, the following amounts,
which are in addition to the amounts stipulated under any subparagraph of
this Paragraph 9:
(i) A single lump sum payment, not later than the last day of your
employment, of:
(a) Any accrued but unpaid salary set forth in Paragraph 2A (as
adjusted by Paragraph 2B) hereof, including salary in respect of any accrued
and accumulated vacation, due to you at the date of such termination; and
(b) Any amounts owing, but not yet paid, pursuant to Paragraph 5
hereof.
(ii) Any accrued but unpaid incentive compensation as set forth in
Paragraph 2C hereof due to you at the date of such termination for the fiscal
year ending on or immediately prior to the date of such termination which shall
be paid within three (3) months of the end of such fiscal year.
A. Termination by the Company Without Cause. The Company may, without
cause, terminate your employment hereunder at any time upon ten (10) or more
days' written notice to you. In the event your employment is terminated under
this Paragraph 9A, the Company shall pay to you the following:
(i) A single lump sum payment, not later than the last day of your
employment, of severance pay in an amount equal to your then current annual
base salary as defined in Paragraph 2A (as adjusted by Paragraph 2B) hereof;
(ii) A single lump sum payment of any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year of the termination of your
employment, which incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, and shall be pro-rated
through the last day of your employment, and shall be paid within three (3)
months of such June 30;
(iii) To the extent vested, the Monthly Supplemental Retirement
Benefit with the first payment beginning on the first day of the month
immediately succeeding the last day of employment;
(iv) Continuation of medical benefits for a period of six (6) months;
and
(v) Executive outplacement services for a period of six (6) months.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof.
B. Termination by the Company With Cause. The Company may, for cause,
terminate your employment hereunder at any time by written notice to you. In
the event your employment is terminated under this Paragraph 9B, you shall
forfeit the incentive compensation set forth in Paragraph 2C hereof for the
fiscal year in which such termination or resignation occurs. In the event your
employment is terminated under this paragraph 9B, the Company shall pay to you,
to the extent vested, the Monthly Supplemental Retirement Benefit as set forth
in Paragraph 2D with the first payment beginning on the first day of the month
immediately succeeding the month in which you attain the age of 55.
The Company shall have no further obligation to you under this Agreement and you
shall have no further obligation to the Company under this Agreement except as
provided in Paragraph 12 and Paragraph 13 hereof. For purposes of this
Agreement, the term "cause" shall mean (1) a failure by you to remedy, within
ten (10) days of the Company's written notice to you, either (a) a continuing
neglect in the performance of your duties under this Agreement, or (b) any
action taken by you that seriously prejudices the interests of the Company,
or (2) your conviction of a felony.
C. Termination by Mutual Consent. You may terminate your employment
hereunder at any time with the written consent of the Company. In the event your
employment is terminated pursuant to this paragraph 9C, the Company shall pay to
you the following:
(i) A single lump sum payment, of any incentive compensation set forth
in Paragraph 2C hereof earned in the fiscal year of the termination of your
employment, which incentive compensation shall be determined on the basis of the
Company's operations through June 30 of such fiscal year, and shall be pro-rated
through the last day of your employment, and shall be paid within three (3)
months of such June 30; and
(ii) To the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the last day of employment.
The Company shall have no further obligation to you under this Agreement and
you shall have no further obligation to the Company under this Agreement except
as provided in Paragraph 12 and Paragraph 13 hereof.
D. Disability. If you should suffer a Permanent Disability at any time,
the Company may terminate your employment hereunder upon ten (10) or more days'
prior written notice to you. For purposes of this Agreement, a "Permanent
Disability" shall be deemed to have occurred only when you are qualified for
benefits under the Company's Long Term Disability Insurance Policy. In the
event of the termination of your employment hereunder by reason of Permanent
Disability, the Company shall pay to you or your legal representative:
(i) In conformity with regular payroll dates for salaried personnel of
the Company, an amount equal to fifty percent (50%) of the base salary you were
receiving at the date of such termination under Paragraph 2A hereof (as adjusted
by Paragraph 2B hereof), payable until you attain the age of 65 or die,
whichever occurs first; provided, however, that the amount payable under this
Paragraph 9D(i) shall be reduced to the extent of any payments made to you
through any Company-sponsored group long term disability plan and also to the
extent of any payments made to you under any other long term disability
insurance policy (the "Supplemental LTD Policy") where the premiums for
said Supplemental LTD Policy have either been paid by the Company or reimbursed
to you by the Company.
(ii) Any incentive compensation set forth in Paragraph 2C hereof earned
in the fiscal year in which the termination of your employment occurs, which
incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated through
the last day of your employment, and shall be paid within three (3) months of
such June 30;
(iii) Upon your attainment of age 65 or your death, whichever
occurs first, to the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the month in which you attained
the age of 65 or died. The Company shall have no further obligation to you under
this Agreement and you shall have no further obligation to the Company under
this Agreement except as provided in Paragraph 12 and Paragraph 13 hereof.
E. Termination by Death. In the event of the termination of your
employment by reason of death, at any time, the Company shall pay to your legal
representative, estate or heirs:
(i) Any incentive compensation set forth in Paragraph 2C hereof earned
in the fiscal year in which the termination of your employment occurs, which
incentive compensation shall be determined on the basis of the Company's
operations through June 30 of such fiscal year, and shall be pro-rated
through the last day of your employment, andshall be paid within three (3)
months of such June 30;
(ii) To the extent vested, the Monthly Supplemental Retirement Benefit
as set forth in Paragraph 2D with the first monthly payment beginning on the
first day of the month immediately succeeding the last day of your employment.
The Company shall have no further obligation to you under this Agreement and
you shall have no further obligation to the Company under this Agreement except
as provided in Paragraph 12 and Paragraph 13 hereof.
F. Termination Upon Expiration of Agreement. If not previously
terminated, this Agreement and your employment with the Company shall be
automatically extended for additional three-year periods, unless and until
either party notifies the other, in writing, one year prior to the expiration
of the then-current term of this Agreement. After the expiration of this
agreement, the Company shall pay to you the Monthly Supplemental Retirement
Benefit as set forth in Paragraph 2D hereof, with the first monthly payment
beginning on the first day of the month immediately succeeding the month in
which you shall have attained the age of 55.
The Company shall have no further obligation to you under this Agreement and
you shall have no further obligation to the Company under this Agreement except
as provided in Paragraph 12 and Paragraph 13 hereof.
G. Events. If any of the following described events occurs during the
term of your employment hereunder, you may terminate your employment hereunder
by written notice to the Company either prior to, or not more than six (6)
months after the happening of such event. In such event, your employment
hereunder will be terminated effective as of the later of ten (10) days after
the notice or ten (10) days after the event, and the
Company shall make to you the same payments that the Company would have been
obligated to make to you under Paragraph 9A hereof if the Company had terminated
your employment hereunder effective on such date. The events, the occurrence of
which shall permit you to terminate your employment hereunder under this
Paragraph 9G, are as follows:
(i) Any merger or consolidation by the Company with or into any
other entity or any sale by the Company of substantially all of its assets;
provided, however, that such event shall not be deemed to have occurred under
this clause if consummation of the transaction would result in at least fifty
(50%) percent of the total voting power represented by the voting securities of
the Company outstanding immediately after such transaction being beneficially
owned by holders of outstanding voting securities of the Company immediately
prior to the transaction.
(ii) Any change of a majority of the directors of the Company
occurring within any thirteen (13) month period.
(iii) The adoption by the Company of any plan of liquidation
providing for the distribution of all or substantially all of its assets.
(iv) A material diminution in your duties, or the assignment to
you of duties that are materially inconsistent with your duties or that
materially impair your ability to function as the Vice President of Marketing
and Business Development of the Company if such diminution or assignment has not
been agreed to by you in writing or cured within thirty (30) days after written
notice thereof has been given by you to the Company.
10. SOURCE OF PAYMENTS. All payments provided for hereunder shall be paid from
the general funds of the Company. The Company may, but shall not be required
to, make any investment or investments whatsoever, including the purchase of a
life insurance contract or contracts on your life, to provide it with funds to
satisfy its obligations hereunder; provided, however, that neither you nor your
beneficiary or beneficiaries, nor any other person, shall have any right, title,
or interest whatsoever in or to any such investments or contracts. If the
Company shall elect to purchase a life insurance contract
or contracts on your life to provide the Company with funds to satisfy its
obligations hereunder, the Company shall at all times be the sole and complete
owner and beneficiary of such contract or contracts, and shall have the
unrestricted right to use all amounts and to exercise all options and privileges
thereunder without the knowledge or consent of you, your beneficiary or
beneficiaries, or any other person, it being expressly agreed that neither
you, any such beneficiary or beneficiaries, nor any other person shall have any
right, title, or interest whatsoever in or to any such contract or contracts
unless expressly provided otherwise in this Agreement.
11. ENFORCEMENT OF RIGHTS. Nothing in this Agreement, and no action taken
pursuant to its terms, shall create or be construed to create a trust or escrow
account of any kind, or a fiduciary relationship between the Company and you,
your beneficiary or beneficiaries, or any other person. You, your beneficiary
or beneficiaries, and any other person or persons claiming a right to any
payments or interests hereunder shall rely solely on the unsecured promise of
the Company, and nothing herein shall be construed to give
you, your beneficiary or beneficiaries, or any other person or persons, any
right, title, interest, or claim in or to any specific asset, fund, reserve,
account, or property of any kind whatsoever owned by the Company or in which it
may have any right, title, or interest now or in the future, but you or your
beneficiary or beneficiaries shall have the right to enforce
a claim for benefits hereunder against the Company in the same manner as any
unsecured creditor.
12. INVENTIONS AND CONFIDENTIAL INFORMATION. So long as you shall be
employed by the Company, you agree promptly to make known to the Company the
existence of any and all creations, inventions, discoveries, and improvements
made or conceived by you, either solely or jointly with others, during the
term of this Agreement and for three (3) years thereafter, and to assign to the
Company the full exclusive right to any and all such creations, inventions,
discoveries, and improvements relating to any subject matter with which the
Company is now or shall become concerned, or relating to any other subject
matter if made with the use of the Company's time, materials, or facilities.
To the fullest extent permitted by law, any and all of the foregoing creations,
inventions, discoveries and improvements shall be considered as
"work-made-for-hire" and the Company shall be the owner thereof. You further
agree, without charge to the Company but at its expense, if requested to do so
by the Company, to execute, acknowledge, and deliver all papers, including
applications or assignments for patents, trademarks, and
copyrights relating thereto, as may be considered by the Company to be necessary
or desirable to obtain or assign to the Company any and all patents, trademarks,
or copyrights for any and all such creations, inventions, discoveries, and
improvements in any and all countries, and to vest title thereto in the Company
in all such creations, inventions, discoveries, and improvements as indicated
above conceived during your employment by the Company, and for three (3) years
thereafter. You further agree that you will not disclose to any third person
any trade secrets or proprietary information of the Company,
or use any trade secrets or proprietary information of the Company in any
manner, except in the pursuit of your duties as an employee of the Company, and
that you will return to the Company all materials (whether originals or copies)
containing any such trade secrets or proprietary information (in whatever
medium) on termination of your employment by the Company. The obligations set
forth in this Paragraph 12 shall survive the termination of
your employment hereunder. This Paragraph 12 replaces a previous agreement
pertaining to this subject, which was executed by you on May 27, 1977 with a
predecessor Company, which prior agreement is now null and void.
13. RESTRICTIVE COVENANT. For a period of three (3) years after the termination
of your employment by the Company, you shall not, in any geographical location
at which there is at that time business conducted by the Company which was
conducted by the Company at the date of such termination, directly or
indirectly, own, manage, operate, control, be employed by, participate in, or be
connected in any manner with, the ownership, management, operation, or control
of, any business similar to or competitive with such
business conducted by the Company without the written consent of the Company;
provided, however, that you may have an ownership interest of up to one percent
(1%) in any entity, notwithstanding that such entity is directly competitive
with any business conducted by the Company at the date of such termination.
14. ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the breach or asserted breach thereof, shall be settled by
arbitration to be held in New York, New York in accordance with the rules
then obtaining of the American Arbitration Association, and the judgment upon
the award rendered may be entered in any
court having jurisdiction thereof. The arbitrator shall determine which party
shall bear the costs of such arbitration, including attorneys' fees.
15. NON-ASSIGNABILITY. Your rights and benefits hereunder are personal to you,
and shall not be alienated, voluntarily or involuntarily, assigned or
transferred.
16. BINDING EFFECT. This Agreement shall be binding upon the parties hereto,
and their respective assigns, successors, executors, administrators, and heirs.
In the event the Company becomes a party to any merger, consolidation, or
reorganization, this Agreement shall remain in full force and effect as an
obligation of the Company or its successors in interest. None of the payments
provided for by this Agreement shall be subject to seizure for payment of any
debts or judgments against you or your beneficiary or beneficiaries, nor
shall you or any such beneficiary or beneficiaries have any right to transfer or
encumber any right or benefit hereunder; provided, however, that the
undistributed portion of the Aggregate Supplemental Retirement Benefit shall at
all times be subject to set-off by the Company for debts owed by you to the
Company.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement relating to
your employment by the Company. It may only be changed by written agreement
signed by the party against whom enforcement of any waiver, change,
modification, extension, deletion or revocation is sought.
18. NOTICES. All notices and communications hereunder shall be in writing, sent
by certified or registered mail, return receipt requested, postage prepaid; by
facsimile transmission, time and date of receipt noted thereon; or by
hand-delivery properly receipted. The actual date of receipt as shown by the
receipt therefor shall determine the time at which notice was given. All
payments required hereunder by the Company to you shall be sent postage prepaid,
or, at your election, shall be transferred to you electronically to such bank as
you designate in writing to the Company, including designation of the applicable
electronic address. The foregoing items (other than any electronic transfer to
you) shall be addressed as follows (or to such other address as the Company or
you may designate in writing from time to time):
To you: To the Company:
Peter E. Anselmo Baldwin Technology Company, Inc.
20 Revere Place One Norwalk West
Ridgefield, CT 06877 40 Richards Avenue
Norwalk, CT 06854
19. LAW TO GOVERN. This Agreement shall be governed by, and construed and
enforced according to, the laws of the State of Connecticut without giving
effect to the principles of conflict of laws.
Very truly yours,
BALDWIN TECHNOLOGY COMPANY, INC.
By:__________________________________
Gerald A. Nathe
Its President
Duly Authorized
AGREED TO AND ACCEPTED:
_________________________________
Peter E. Anselmo
