<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------- --------
Commission File Number: 1-13780
-----------
M & F WORLDWIDE CORP.
(Formerly Power Control Technologies Inc.)
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 02-0423416
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
35 EAST 62ND STREET, NEW YORK, NEW YORK 10021
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
212-572-8600
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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 for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirement for the past 90 days. [X] Yes [ ] No
As of August 5, 1997, the Registrant had 20,656,502 outstanding shares of
common stock of which 5,939,400 shares were held by Mafco Consolidated Group
Inc.
<PAGE>
M & F WORLDWIDE CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH PERIODS ENDED SIX MONTH PERIODS ENDED
------------------------- -----------------------
JUNE 29, JUNE 30, JUNE 29, JUNE 30,
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales $24.3 $ - $51.5 $ -
Cost of sales (12.6) - (28.3) -
----- ------ ----- ------
Gross profit 11.7 - 23.2 -
Selling, general and administrative expenses (2.4) 0.7 (4.8) 1.0
Amortization of intangibles (1.0) - (2.1) -
----- ------ ----- ------
Operating income 8.3 0.7 16.3 1.0
Interest (expense) income, net (1.8) 2.2 (3.5) 2.2
----- ------ ----- ------
Income from continuing operations before income
taxes 6.5 2.9 12.8 3.2
Provision for income taxes (0.9) - (1.7) -
----- ------ ----- ------
Income from continuing operations 5.6 2.9 11.1 3.2
Discontinued operations:
Income from operations of aerospace
business, net of taxes - - - 4.4
Gain on sale of aerospace business, net
of taxes - 153.7 - 153.7
----- ------ ----- ------
Net income 5.6 156.6 11.1 161.3
Preferred stock dividend (0.4) (0.4) (0.8) (0.8)
----- ------ ----- ------
Net income available to common stockholders $ 5.2 $156.2 $10.3 $160.5
===== ====== ===== ======
Income per common and common equivalent share:
Continuing operations $ .25 $ .12 $ .50 $ .12
Discontinued operations - 7.44 - 7.62
----- ------ ----- ------
Net income $ .25 $ 7.56 $ .50 $ 7.74
===== ====== ===== ======
Fully diluted income per common share:
Continuing operations $ .24 $ .13 $ .48 $ .14
Discontinued operations - 6.64 - 6.80
----- ------ ----- ------
Net income $ .24 $ 6.77 $ .48 $ 6.94
===== ====== ===== ======
Weighted average shares outstanding:
Primary 20.7 20.7 20.7 20.7
===== ====== ===== ======
Fully diluted 23.2 23.2 23.2 23.2
===== ====== ===== ======
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
2
<PAGE>
M & F WORLDWIDE CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 29, DECEMBER 31,
1997 1996
---------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 11.9 $ 5.7
Trade accounts receivable, net 11.7 11.3
Inventories 43.6 46.0
Prepaid expenses and other 1.1 3.3
------ ------
Total current assets 68.3 66.3
Property, plant and equipment, net 26.0 26.3
Deferred tax asset, net 38.4 38.4
Intangible assets related to business acquired, net 170.5 172.7
Other assets 17.4 14.4
------ ------
$320.6 $318.1
====== ======
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short term borrowings $ 0.4 $ -
Trade accounts payable 5.0 5.2
Accrued interest 1.2 1.3
Accrued compensations and benefits 3.4 3.1
Taxes payable 2.1 1.4
Deferred cash payments due to Mafco 7.2 7.2
Other accrued expenses 6.4 5.5
------ ------
Total current liabilities 25.7 23.7
Long-term debt 91.3 100.1
Other liabilities 8.4 8.3
Redeemable preferred stock 20.0 20.0
Commitments and contingencies - -
STOCKHOLDERS' EQUITY:
Common stock, par value $.01; 250.0 shares authorized;
20.7 shares issued and outstanding in 1997 and 1996 0.2 0.2
Additional paid-in-capital 26.7 26.7
Retained earnings 149.6 139.3
Currency translation adjustment (1.3) (0.2)
------ ------
Total stockholders' equity 175.2 166.0
------ ------
$320.6 $318.1
====== ======
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
3
<PAGE>
M & F WORLDWIDE CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTH PERIODS ENDED
-----------------------
JUNE 29, JUNE 30,
1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $11.1 $161.3
----- ------
Adjustments to reconcile net income to total cash
provided by operating activities:
Income from operations of discontinued businesses - (4.4)
Gain on sale of aerospace business - (153.7)
Depreciation and amortization 3.2 -
Changes in assets and liabilities:
Increase in trade accounts receivables (0.7) -
Decrease in inventories 1.7 -
Other, net 1.3 (0.8)
----- ------
Cash provided by operating activities 16.6 2.4
----- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of aerospace business, net of transaction costs - 196.9
Capital expenditures (1.1) -
Investment in joint venture, net (1.4) -
----- ------
Cash (used in) provided by investing activities (2.5) 196.9
----- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of borrowings, net (6.9) -
Preferred dividends (0.8) (0.8)
----- ------
Cash used in financing activities (7.7) (0.8)
----- ------
Effect of exchange rate changes on cash (0.2) -
----- ------
Net increase in cash and cash equivalents 6.2 198.5
Cash and cash equivalents at beginning of period 5.7 -
----- ------
Cash and cash equivalents at end of period $11.9 $198.5
===== ======
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
4
<PAGE>
M & F WORLDWIDE CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS)
(UNAUDITED)
1. BACKGROUND AND BASIS OF PRESENTATION
M & F Worldwide Corp. ( the "Company") changed its name from Power
Control Technologies Inc. in May 1997. The Company was incorporated in Delaware
on June 1, 1988 and is a holding company which conducts its operations through
its indirect wholly-owned subsidiary Pneumo Abex Corporation ("Pneumo Abex").
As a result of the sale of the Company's aerospace business in 1996,
the Company has classified those operations as discontinued in the consolidated
financial statements.
On November 25, 1996, the Company acquired (the "Flavors Acquisition")
all the issued and outstanding shares of capital stock of Flavors Holdings Inc.
("Flavors"), the direct parent of Mafco Worldwide Corporation ("Mafco
Worldwide"). Subsequently, Mafco Worldwide merged into Pneumo Abex.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the interim
periods are not necessarily indicative of the results that may be expected for
a full year.
The unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes
contained in the Company's 1996 Form 10-K. All terms used but not defined
elsewhere herein have the meanings ascribed to them in the Company's 1996 Form
10-K.
2. INVENTORIES
Inventories are valued at the lower of cost or market and consist of
the following:
JUNE 29, DECEMBER 31,
1997 1996
-------- ------------
Raw materials and supplies $29.9 $32.2
Work-in-process 0.4 0.4
Finished goods 13.3 13.4
----- -----
$43.6 $46.0
===== =====
3. INCOME PER COMMON SHARE
Income per common share has been computed based on 20.7 weighted
average shares outstanding in the 1997 and 1996 periods. Fully diluted income
per share is computed assuming the conversion of the Preferred Stock for all
periods presented.
5
<PAGE>
M & F WORLDWIDE CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(IN MILLIONS)
RESULTS OF OPERATIONS:
GENERAL
As a result of the sale of the Company's aerospace business in 1996,
the Company has classified those operations as discontinued in the condensed
consolidated financial statements. Accordingly, the results of operations below
do not reflect the sales, cost of sales or selling, general and administrative
("SG&A") expenses from the discontinued aerospace business for the three and
six month periods ended June 30, 1996.
The discussion of historical results reflects the results of
operations of Flavors' licorice extract and other flavoring agents' business
since November 25, 1996, the date of the Flavors Acquisition. The historical
results of operations data presented below reflects the application of the
purchase method of accounting for the Flavors Acquisition based on the purchase
price allocation.
Certain results of operations data of Flavors prior to the Flavors
Acquisition, which exclude purchase accounting adjustments, are also presented
below for comparative purposes.
Three months ended June 29, 1997 compared to the three months ended June 30,
1996
Net sales were $24.3 in the second quarter of 1997. Net sales of
Flavors, prior to the Flavors Acquisition, were $26.6 in the second quarter of
1996. The decrease of $2.3 was due to lower sales of non licorice flavors and a
shift in the timing of licorice flavor sales between the first and second
quarters as compared to the year ago period.
Cost of sales were $12.6 in the second quarter of 1997. Cost of sales
of Flavors in the second quarter of 1996, prior to the Flavors Acquisition, was
$14.3. The decrease was due to the lower sales volume and lower raw material
costs. As a percentage of net sales, the Company's cost of sales was 51.9% in
1997 and Flavors' cost of sales, prior to the Flavors Acquisition, was 53.8% in
1996. This decrease was due to the lower raw material costs in 1997.
SG&A expenses were $2.4 in the second quarter of 1997. The 1997
expenses reflect SG&A expenses of the business of Flavors and ongoing corporate
costs, partially offset by income recognized on the Company's overfunded
pension plan. SG&A expenses of the Company in 1996 reflect income recognized on
the Company's overfunded pension plan partially offset by ongoing corporate
costs.
Interest expense, net was $1.8 in the second quarter of 1997 which
primarily relates to the debt assumed in connection with the Flavors
Acquisition. Interest income of $2.2 in 1996 primarily reflects interest income
on the cash proceeds received from the Aerospace Sale.
The provision for income taxes as a percentage of earnings before
income taxes was 13.8% in 1997. The tax provision in the second quarter of 1997
reflects a benefit of approximately 25% of
6
<PAGE>
M & F WORLDWIDE CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(IN MILLIONS)
income from continuing operations before taxes relating primarily to net
deferred tax assets which have been recorded by way of a reduction in the
valuation allowance. The net deferred tax assets recorded represent a portion
of the Company's net operating loss carryforwards expected to be utilized.
Based upon the historical results of Flavors projected for a period which takes
into consideration the current operating environment in the tobacco industry,
the Company believes that it is more likely than not that it will be able to
utilize these benefits.
Six month period ended June 29, 1997 compared with the six month period ended
June 30, 1996
Net sales were $51.5 for the six months ended June 29, 1997. Net sales
of Flavors prior to the Flavors Acquisition, were $52.7 for the six months
ended June 30, 1996. The decrease of $1.2 was due to lower sales of non
licorice flavors partially offset by slightly higher licorice sales.
Cost of sales were $28.3 for the six months ended June 29, 1997. Cost
of sales of Flavors in the six month period ended June 30, 1996, prior to the
Flavors Acquisition, was $29.4. The decrease was primarily due to the lower
sales volume and lower material costs partially offset by purchase price
accounting amortization and depreciation of $1.4 in 1997. As a percentage of
net sales, the Company's cost of sales was 55.0% in 1997 and Flavors' cost of
sales, prior to the Flavors Acquisition, was 55.8% in 1996.
SG&A expenses were $4.8 for the six months ended June 29, 1997. The
1997 expenses reflect SG&A expenses of the business of Flavors and ongoing
corporate costs partially offset by income recognized on the Company's
overfunded pension plan. SG&A expenses of the Company in 1996 reflect income
recognized on the Company's overfunded pension plan partially offset by ongoing
corporate costs.
Interest expense, net was $1.8 in the second quarter of 1997 which
primarily relates to the debt assumed in connection with the Flavors
Acquisition. Interest income of $2.2 in 1996 primarily reflects interest income
on the cash proceeds received from the Aerospace Sale.
The provision for income taxes as a percentage of earnings before
income taxes was 13.3% in 1997. The tax provision for the six months ended June
29, 1997 reflects a benefit of approximately 26% of income from continuing
operations before taxes relating primarily to net deferred tax assets which
have been recorded by way of a reduction in the valuation allowance. The net
deferred tax assets recorded represent a portion of the Company's net operating
loss carryforwards expected to be utilized. Based upon the historical results
of Flavors projected for a period which takes into consideration the current
operating environment in the tobacco industry, the Company believes that it is
more likely than not that it will be able to utilize these benefits.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash flows from operating activities were $16.6 and
$2.4 for the six months ended June 29, 1997 and June 30, 1996, respectively.
The increase in cash flow from operating activities primarily reflects
operating cash flows of the Flavors business acquired in November 1996.
7
<PAGE>
M & F WORLDWIDE CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(IN MILLIONS)
The Company's working capital requirements, especially for accounts receivable
and inventory, are affected by customer demand, by current and prospective
supplies of raw materials and raw material prices. Management believes the
current inventory of $43.6 is adequate to meet customer requirements. Inventory
levels may fluctuate in the future as the Company takes advantage of
opportunities to purchase quality raw materials at favorable prices while
maintaining its policy of purchasing licorice root from all available sources
to maintain relationships with its suppliers. Capital expenditures for the six
month period ended June 29, 1997 were $1.1.
Under the Senior Credit agreement as amended, Pneumo Abex may borrow
up to $12.5 under a revolving credit facility. At June 29, 1997, there were no
borrowings under the facility and approximately $4.2 of this facility had been
reserved to support lender guarantees for outstanding letters of credit.
Management believes the remaining availability of approximately $8.3 under
Pneumo Abex's revolving credit facility, cash on hand and cash flow from
operations will be sufficient to meet the Company's working capital, capital
expenditure and debt service needs through the end of 1997. The Company's
French subsidiary has an agreement with a local bank whereby it may borrow up
to six million French francs (approximately $1.0) for working capital. At June
30, 1997, approximately $0.4 was outstanding. The Company anticipates that it
will call the 11 7/8 Senior Subordinated Notes due 2002 for redemption on
November 15, 1997, the first call date.
RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"), "Earnings
Per Share", which established new standards for computing and presenting
earnings per share. SFAS No. 128 will be effective for interim and annual
financial statements after December 15, 1997. The Company believes that the
adoption of SFAS No. 128 will not have a material impact on the Company's
reported earnings per share.
8
<PAGE>
M & F WORLDWIDE CORP.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27* Financial Data Schedule
28* 1997 Annual Meeting of Shareholders Certificate of Inspector
of Election
* filed herein
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the period covered by
this report.
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.
M & F WORLDWIDE CORP.
(Registrant)
Date: August 5, 1997 By: /s/Irwin Engelman
------------------------------
Irwin Engelman
Executive Vice President and
Chief Financial Officer
Date: August 5, 1997 By: /s/ Laurence Winoker
------------------------------
Laurence Winoker
Vice President and Controller
(Principal Accounting Officer)
9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the M&F
Worldwide Corp. (formerly Power Control Technologies Inc.) Consolidated Balance
Sheet and Statement of Income and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<CIK> 0000945235
<NAME> M&F Worldwide Corp. (formerly Power Control Technologies Inc.)
<MULTIPLIER> 1,000,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-29-1997
<CASH> 12
<SECURITIES> 0
<RECEIVABLES> 12
<ALLOWANCES> 0
<INVENTORY> 44
<CURRENT-ASSETS> 68
<PP&E> 26
<DEPRECIATION> 0
<TOTAL-ASSETS> 321
<CURRENT-LIABILITIES> 26
<BONDS> 0
20
0
<COMMON> 0
<OTHER-SE> 175
<TOTAL-LIABILITY-AND-EQUITY> 321
<SALES> 52
<TOTAL-REVENUES> 52
<CGS> 28
<TOTAL-COSTS> 28
<OTHER-EXPENSES> 7
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4
<INCOME-PRETAX> 13
<INCOME-TAX> 2
<INCOME-CONTINUING> 11
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.48
</TABLE>
<PAGE>
POWER CONTROL TECHNOLOGIES INC.
1997 ANNUAL MEETING OF STOCKHOLDERS
CERTIFICATE OF INSPECTOR OF ELECTION
------------------------------------
I, the duly appointed Inspector of Election for the 1997 Annual
Meeting of Stockholders (the "Meeting") of Power Control Technologies Inc., a
Delaware corporation (the "Corporation"), do hereby certify as follows:
The Meeting was held at The St. Regis Hotel, Two East 55th Street, New
York, New York, on May 15, 1997, at 9:30 a.m., pursuant to notice given in
accordance with Section 222 of the Delaware General Corporation Law.
Before entering upon the discharge of the duties as Inspector of
Election at the Meeting, I took and subscribed the Oath annexed hereto. It was
determined by me that there were 20,656,502 shares of Common Stock issued and
outstanding on March 30, 1997 (including 60,531 shares which were subject to
issuance upon the exchange by former stockholders of Abex, Inc.), the record
date fixed by the Board of Directors of the Corporation for determining stock
eligible to vote at the Meeting. All of the proxies presented at the Meeting
were examined by me and found to be in due form.
There were present at the Meeting, either in person or by proxy,
19,486,458 shares entitled to vote thereat, constituting a quorum of such
shares.
I. A vote was taken by ballot at the meeting for the re-election of
Messrs. Gittis, Hanson and Meister to the Board of Directors to serve
until the annual meeting in 2000 and until such directors' successors
are duly elected and qualified.
As a result of said vote, 19,443,046 shares of Common Stock of the
Corporation were voted in favor of the election of Mr. Gittis as
Director, 43,412 shares of common stock were voted against the
election of Mr. Gittis as Director; the holders of 0 shares of Common
Stock abstained; and there were 0 non-votes. Accordingly, Mr. Gittis
was elected as Director of the Corporation for a term to expire in
2000 and until his successor is duly elected and qualified.
As a result of said vote, 19,444,586 shares of Common Stock of the
Corporation were voted in favor of the election of Mr. Hanson as
Director; 41,872 shares of Common Stock were voted against the
election of Mr. Hanson as Director; the holders of 0 shares of Common
Stock abstained; and there were 0 non-votes.
<PAGE>
Accordingly, Mr. Hanson was elected as Director of the Corporation for
a term to expire in 2000 and until his successor is duly elected and
qualified.
As a result of said vote, 19,444,676 shares of Common Stock of the
Corporation were voted in favor of the election of Mr. Meister as
Director; 41,782 shares of Common Stock were voted against the
election of Mr. Meister as Director; the holders of 0 shares of Common
Stock abstained; and there were 0 non-votes. Accordingly, Mr. Meister
was elected as Director of the Corporation for a term to expire in
2000 and until his successor is duly elected and qualified.
II. A vote was taken by ballot at the Meeting for the approval of the
proposed amendment to the Corporation's Restated Certificate of
Incorporation to change the name of the Corporation to M&F
Worldwide Corp.
As a result of said vote, 19,441,163 shares of Common Stock of the
Corporation were voted in favor of said proposal; 27,151 shares of
Common Stock were voted against said proposal; the holders of 18,144
shares of Common Stock abstained; and there were 0 non-votes.
Accordingly, the proposal as presented to the Meeting was duly
adopted.
III. A vote was taken by ballot at the Meeting for the approval of the
adoption of the Corporation's 1997 Stock Option Plan.
As a result of said vote, 18,935,654 shares of Common Stock of the
Corporation were voted in favor of said proposal; 444,042 shares of
Common Stock were voted against said proposal; the holders of 20,604
shares of Common Stock abstained; and there were 86,158 non-votes.
Accordingly, the proposal as presented to the Meeting was duly
adopted.
IV. A vote was taken by ballot at the Meeting for the approval and
adoption of the Corporation's Performance Bonus Plan.
As a result of said vote, 19,218,642 shares of Common Stock of the
Corporation were voted in favor of said proposal; 252,878 shares of
Common Stock were voted against said proposal; the holders of 14,938
shares of Common Stock abstained; and there were 0 non-votes.
Accordingly, the proposal as presented to the Meeting was duly
adopted.
V. A vote was taken by ballot at the Meeting for the ratification of the
selection of Ernst & Young as the Corporation's independent
auditors for 1997.
2
<PAGE>
As a result of said vote, 19,472,209 shares of Common Stock of the
Corporation were voted in favor of said proposal; 6,434 shares of
Common Stock were voted against said proposal; the holders of 7,815
shares of Common Stock abstained; and there were 0 non-votes.
Accordingly, the proposal as presented to the Meeting was duly
ratified.
/s/ Joram C. Salig
------------------
Joram C. Salig
3
<PAGE>
POWER CONTROL TECHNOLOGIES INC.
A DELAWARE CORPORATION
OATH OF INSPECTOR OF ELECTION
-----------------------------
Joram C. Salig, the duly appointed Inspector of Election at the 1997
Annual Meeting of Stockholders of Power Control Technologies Inc., a Delaware
Corporation, being held at The St. Regis Hotel, Two East 55th Street, New York,
New York 10022 on May 15, 1997 (the "Meeting"), being duly sworn, deposes and
says, in accordance with Section 231 of the General Corporation Law of the
State of Delaware, that he will faithfully execute the duties of Inspector of
Election at the Meeting with strict impartiality and according to the best of
his ability.
/s/ Joram C. Salig
------------------
Joram C. Salig
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
Subscribed and sworn to before me this 15th day of May, 1997.
/s/ Glenn Dickes
----------------
Notary Public
