<PAGE>
FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1996
--------------
Commission File Number 1-6018
--------
TOKHEIM CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
INDIANA 35-0712500
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10501 CORPORATE DR., FORT WAYNE, IN 46845
- ------------------------------------------ --------------
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number including area code) (219) 470-4600
--------------
NOT APPLICABLE
- ----------------------------------------------------------------------------
(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 for 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
--- ---
As of May 31, 1996, 7,938,595 shares of voting common stock were outstanding.
In addition, 795,696 shares of convertible preferred stock were held by the
Retirement Savings Plan for Employees of Tokheim Corporation and Subsidiaries.
The exhibit index is located on page 7.
<PAGE>
PART I. FINANCIAL INFORMATION
TOKHEIM CORPORATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT AMOUNTS PER SHARE)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- -----------------------
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
----------------------- -----------------------
<S> <C> <C> <C> <C>
NET SALES................................. $57,620 $54,127 $107,167 $99,972
Cost of sales, exclusive of items
listed below............................. 43,497 40,554 81,356 76,967
Selling, general, and administrative
expenses................................. 12,071 10,730 23,054 19,964
Depreciation and amortization............. 1,067 1,167 2,137 2,327
Interest expense (net of interest
income of $75 and $172 in 1996 and $60
and $107 in 1995 for the three-month
and six-month periods, respectively).... 718 907 1,466 1,701
Foreign currency (gains) losses........... 40 1 (250) (177)
Other expenses, net....................... 42 153 42 89
------- ------- -------- -------
Earnings (loss) before income taxes....... 185 615 (638) (899)
Income taxes.............................. (351) 89 (506) (62)
------- ------- -------- -------
NET EARNINGS (LOSS)....................... $ 536 $ 526 $ (132) $ (837)
======= ======= ======== =======
Preferred stock dividends................. $ 385 $ 395 $ 774 $ 796
Net earnings (loss) applicable to
common stock............................ $ 151 $ 131 $ (906) $(1,633)
Earnings (loss) per common share:
Primary:
Net earnings (loss)................... $ 0.02 $ 0.02 $ (0.11) $ (0.21)
======= ======= ======== =======
Weighted average shares outstanding... 8,009 7,904 7,938 7,864
Fully Diluted:
Net earnings (loss)................... $ 0.02 $ 0.01 $ (0.11) $ (0.21)
======= ======= ======== =======
Weighted average shares outstanding... 9,681 9,659 7,938 7,864
</TABLE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring items) necessary to present fairly its financial position as of
May 31, 1996 and the results of operations and cash flows for the three month
and six month periods ended May 31, 1996 and 1995.
Amounts for interim periods are unaudited. Amounts for the year ended November
30, 1995 were derived from audited financial statements included in the 1995
Annual Report to Stockholders.
Certain prior year amounts in these financial statements have been reclassified
to conform with current year presentations.
See financial statements and accompanying notes in the Company's 1995 Annual
Report.
2
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CONSOLIDATED CONDENSED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
May 31, November 30,
1996 1995
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 2,005 $ 2,966
Receivables, net......................................... 37,530 45,649
Inventories:
Raw materials and supplies............................. 9,329 7,649
Work in process........................................ 25,935 25,535
Finished goods......................................... 6,617 4,911
-------- --------
41,881 38,095
Less amount necessary to reduce certain
inventories to LIFO method........................... 3,105 3,100
-------- --------
38,776 34,995
Prepaid expenses......................................... 2,519 3,188
-------- --------
Total current assets..................................... 80,830 86,798
Property, plant, and equipment, net...................... 27,372 28,558
Other assets and deferred charges........................ 10,695 5,876
-------- --------
Total assets............................................. $118,897 $121,232
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt..................... $ 441 $ 351
Notes payable, banks..................................... 2,969 2,364
Accounts payable......................................... 19,473 18,689
Accrued expenses......................................... 14,489 18,141
-------- --------
Total current liabilities................................ 37,372 39,545
Long-term debt........................................... 23,468 21,321
Guaranteed Employees' Stock Ownership
Plan Obligation........................................ 13,064 14,576
Postretirement benefit liability......................... 14,202 13,882
Minimum pension liability................................ 3,868 3,868
Other long-term liabilities.............................. -- 110
Deferred income taxes.................................... 717 807
-------- --------
92,691 94,109
-------- --------
Redeemable convertible preferred stock................... 24,000 24,000
Guaranteed Employees' Stock Ownership
Plan Obligation........................................ (12,761) (13,790)
Treasury stock, at cost.................................. (4,105) (3,784)
-------- --------
7,134 6,426
-------- --------
Common stock............................................. 19,409 19,409
Guaranteed Employees' Stock Ownership
Plan Obligation........................................ (303) (786)
Minimum pension liability................................ (3,868) (3,868)
Foreign currency translation adjustments................. (4,759) (3,542)
Retained earnings........................................ 8,796 9,715
-------- --------
19,275 20,928
Treasury stock, at cost.................................. (203) (231)
-------- --------
19,072 20,697
-------- --------
Total liabilities and stockholders' equity............... $118,897 $121,232
======== ========
</TABLE>
3
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CONSOLIDATED CONDENSED
STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
---------------------------
May 31, May 31,
1996 1995
---------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................. $ (132) $ (837)
Adjustments to reconcile net loss to net cash
provided from (used in) operations:
Depreciation and amortization......................... 2,137 2,327
Gain on sale of property, plant, and equipment........ (65) (73)
Deferred income taxes................................. (55) (151)
Changes in assets and liabilities:
Receivables, net................................... 7,289 399
Inventories........................................ (4,262) (2,168)
Prepaid expenses................................... 639 (1,254)
Accounts payable................................... 1,277 3,355
Accrued expenses................................... (2,604) (1,206)
U.S. and foreign income taxes...................... (663) 35
Other.............................................. (6,444) (21)
-------- --------
Net cash provided from (used in) operations.............. (2,883) 406
-------- --------
CASH FLOWS FROM INVESTING AND OTHER ACTIVITIES:
Plant and equipment additions............................ (1,986) (3,613)
Proceeds from sale of property, plant, and equipment..... 977 106
-------- --------
Net cash used in investing and other activities.......... (1,009) (3,507)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in term debt.................................... 3,295 1,379
Increase in notes payable, banks......................... 725 712
Treasury stock, net...................................... (310) 185
Preferred Stock dividends................................ (774) (796)
-------- --------
Net cash provided from financing activities.............. 2,936 1,480
-------- --------
EFFECT OF TRANSLATION ADJUSTMENT ON CASH................. (5) 81
CASH AND CASH EQUIVALENTS:
Decrease in cash......................................... (961) (1,540)
Beginning of year........................................ 2,966 3,933
-------- --------
End of period............................................ $ 2,005 $ 2,393
======== ========
</TABLE>
4
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Sales for the second quarter reflected a 6.5% increase over those recorded in
the same quarter in the prior year with domestic sales up 5.7% and international
sales up 7.6%
SALES: Consolidated sales for the fiscal 1996 second quarter were $57,620,000
versus sales of $54,127,000 reported in the comparable period in 1995. Second
quarter sales were 16.3% over the $49,548,000 reported in the fiscal 1996 first
quarter. Sales of $107,167,000 for the first six months were up 7.2% over sales
of $99,972,000 reported in the same period last year. The improvement in sales
is attributable principally to the acceptance of new products by the domestic
market place and the continued penetration of foreign markets.
EARNINGS: Consolidated net earnings in the fiscal 1996 second quarter were
$536,000, or $0.02 per common share on a primary basis, compared to earnings of
$526,000, or $0.02 per common share, reported in the previous year's second
quarter. A net loss of $132,000, or $0.11 per share on a primary basis, was
reported for the first six months of 1996 compared to a net loss of $837,000, or
$0.21 per share, incurred for the same period last year.
COSTS AND EXPENSES:
Gross margin as a percent of sales was 24.5% compared to 25.1% reported in the
fiscal 1995 second quarter. This decrease was due to product development costs
primarily attributable to work on the three-year supply contract announced April
3, with Royal Dutch Shell for the Asian region. Sales related to this contract
are estimated at $50 to $70 million over a three year period. The Company
expects to begin realizing the financial benefit of this contract in the third
quarter. Gross margin as a percent of sales for the six month periods ended May
31, 1996 and 1995 were 24.1% and 23.0%, respectively. This increase is
attributable to the favorable first quarter results primarily due to higher
sales volumes, actions taken to improve the Company's cost structure and a
favorable product sales mix, partially offset by the costs described above.
Selling, general, and administrative expenses increased as a percent of sales by
1.1 percentage points and 1.5 percentage points over comparable 1995 levels for
the three month and six month periods, respectively. These increases are
generally attributable to legal fees to defend the Company against certain
pending cases, wages and fringe benefits, and costs associated with a customer
satisfaction program related to previously sold dispensers.
Net interest expense decreased by $189,000 and $235,000 from the prior year for
the three and six month periods ended May 31, 1996 due to a decrease in average
borrowings through most of the six month period. Amortization of debt
restructuring charges included in interest expense was $112,000 and $243,000 in
1996 and $107,000 and $241,000 in 1995 for the three month and six month
periods, respectively.
Depreciation and amortization decreased $100,000 and $190,000 for the three and
six month periods ended May 31, 1996 from the same periods one year ago. These
decreases were largely due to certain assets becoming fully depreciated in
recent periods and utilization of operating leases to finance the current
capital needs.
Foreign currency and other expenses as a percent of sales did not change
significantly compared to the three and six month periods ended May 31, 1995.
OTHER: Cash used in operations for the six month period ended May 31, 1996 was
$2,883,000 versus $406,000 provided from operations in the prior year's second
quarter. The decrease relative to the prior year reflects the financial effect
of deposits made on the purchase of manufacturing equipment to be installed at
the Fort Wayne, Indiana manufacturing facility during the third and fourth
quarters of 1996. The equipment purchase is part of the previously announced
$12.8 million capital expenditure program to improve plant productivity and
manufacturing, capacity, product design capability and quality of both products
and processes. Deposits related to the proposed acquisition of the fuel pump
business of Sofitam S.A. discussed below are also included in quarterly
cash usage. These items are classified under the caption "other assets and
deferred charges" in the Balance Sheet.
Funds used in investing and other activities were $1,009,000 in 1996,
representing $1,986,000 in capital expenditures less $977,000 in proceeds from
the sale of property and equipment. Cash used in investing and other activities
in the 1995 second quarter was $3,507,000 reflecting capital expenditures of
$3,613,000 offset by proceeds from the sale of equipment of $106,000.
Cash generated from financing activities of $2,936,000 in 1996 and $1,480,000 in
1995 principally represented increases in debt less preferred stock dividend
payments. The aggregate increase in 1996 Borrowings is an increase due to
deposits on machinery and equipment and deposits for the Acquisition.
DIVIDENDS: No cash dividends on common stock were declared during the period.
OTHER DEVELOPMENTS: On June 25, 1996, Tokheim announced an agreement to
purchase the fuel pump business of Paris, France-based Sofitam S.A. in a
transaction having an aggregate purchase price of approximately $107.4 million,
subject to post-closing adjustments.
The Sofitam acquisition has major strategic significance to Tokheim in that the
merged businesses create the world's largest independent designer, manufacturer
and servicer of electronic and mechanical petroleum dispensing marketing
5
<PAGE>
systems, including service station equipment, point-of-sale control systems and
cash-and-credit card-activated transaction systems. The combined global entity
would have proforma revenues of approximately $399.0 million and have
complementary facilities throughout Europe, the United Kingdom, Africa, the
United States and Canada. The acquisition is anticipated to be completed by
the early fall.
This combination of two companies, who have enjoyed strong industry positions on
two separate continents, consolidates our respective relative strengths in
Northern and Southern Europe and Africa. It represents a significant
augmentation to Tokheim's recently established strong base in Asia Pacific and
Eastern and Central Europe by creating and combining an unparalleled global
service network, we are creating a structure that is congruent with the
globalization strategies of our major oil customers. It also creates the
requisite critical infrastructure to support broader and more advanced
technological development. Sofitam International and Satam are highly respected
names in our industry with good management, and we look forward to realizing the
full potential of this global partnership.
6
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
2 Option Agreement, dated as of May 7, 1996, between the
Registrant and Sofitam S.A. (incorporated by reference to the
Registrant's Current Report on Form 8-K, File No. 96-633231,
dated September 6, 1996).
3.1 Restated Articles of Incorporation of the Registrant, as filed
with the Indiana Secretary of State on August 17, 1990 (incor-
porated by reference to the Registrant's Annual Report on Form
10-K/A for the year ended November 30, 1995, filed November
20, 1996.)
3.2 Bylaws of the Registrant, as restated on Annual Report on FormJuly
12, 1995 (incorporated by reference to the Registrant's 10-K/A for
the year ended November 30, 1995, filed November 20, 1996).
4 Rights Agreement, dated as of January 28, 1987, between the
Registrant and Harris Trust and Savings Bank, as Rights Agent
(incorporated by reference to the Registrant's Registration
Statement on Form 8-A, File No. 1-6018, dated February 10,
1987).
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established
December 15, 1992 (incorporated by reference to the Registrant's
Registration Statement on Form S-8, File No. 33-52167, dated
February 4, 1994).
10.2 Retirement Savings Plan for Employees of Tokheim Corporation
and Subsidiaries (incorporated by reference to Amendment No. 1
to the Registrant's Registration Statement on Form S-8, File
No. 33-29710, dated August 1, 1989).
10.3 Tokheim Corporation 1996 Key Management Incentive Bonus Plan
(incorporated by reference to the Registrant's Report on Form
10-Q/A, for the quarter ended February 29, 1996, filed November
20, 1996).
10.4 Employment Agreement, dated September 22, 1995, between the
Registrant and Douglas K. Pinner (incorporated by reference to
the Registrant's Annual Report on Form 10-K/A for the year
ended November 30, 1995, filed November 20, 1996).
10.5 Employment Agreement dated April 1, 1996, between the
Registrant and C. B. Ellis, Jr.
10.6 Employment Agreement dated September 22, 1995, between the
Registrant and Terry M. Fulmer (incorporated by reference to
the Registrant's Annual Report on Form 10-K/A for the year
ended November 30, 1995, filed November 20, 1996).
11 Statement re: Computation of Per Share Earnings.
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed on April 12, 1996. This Form was
filed to report a significant strengthening of the Company's relationship
with the Royal Dutch Shell Group of companies through having been chosen as
the exclusive supplier of fuel dispensing equipment for Shell's operating
companies in 6 Asian countries, including Hong Kong, Malaysia, Pakistan, the
Philippines, Singapore, and Thailand. The report was dated April 3, 1996.
A Current Report on Form 8-K was filed on July 9, 1996. This Form was filed
to report the signing of an agreement to acquire the petroleum dispensing
marketing and service business of Paris-based Sofitam International in a
transaction having an aggregate purchase price of approximately $108 million,
subject to post-closing adjustments. The report was dated June 26, 1996.
7
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOKHEIM CORPORATION
-------------------------------
Date: November 20, 1996 DOUGLAS K. PINNER
------------------ --------------------------------
Chairman of the Board, President and
Chief Executive Officer and Director
Date: November 20, 1996 JOHN A. NEGOVETICH
------------------ --------------------------------
President, Tokheim, North
America and Acting
Chief Financial Officer
8
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S> <C>
2 Option Agreement, dated as of May 7, 1996, between the
Registrant and Sofitam S.A. (incorporated by reference to the
Registrant's Current Report on Form 8-K, File No. 96-633231,
dated September 6, 1996).
3.1 Restated Articles of Incorporation of the Registrant, as filed
with the Indiana Secretary of State on August 17, 1990 (incor-
porated by reference to the Registrant's Annual Report on Form
10-K/A for the year ended November 30, 1995, filed November
20, 1996.)
3.2 Bylaws of the Registrant, as restated on Annual Report on FormJuly
12, 1995 (incorporated by reference to the Registrant's 10-K/A for
the year ended November 30, 1995, filed November 20, 1996).
4 Rights Agreement, dated as of January 28, 1987, between the
Registrant and Harris Trust and Savings Bank, as Rights Agent
(incorporated by reference to the Registrant's Registration
Statement on Form 8-A, File No. 1-6018, dated February 10,
1987).
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established
December 15, 1992 (incorporated by reference to the Registrant's
Registration Statement on Form S-8, File No. 33-52167, dated
February 4, 1994).
10.2 Retirement Savings Plan for Employees of Tokheim Corporation
and Subsidiaries (incorporated by reference to Amendment No. 1
to the Registrant's Registration Statement on Form S-8, File
No. 33-29710, dated August 1, 1989).
10.3 Tokheim Corporation 1996 Key Management Incentive Bonus Plan
(incorporated by reference to the Registrant's Report on Form
10-Q/A, for the quarter ended February 29, 1996, filed November
20, 1996).
10.4 Employment Agreement, dated September 22, 1995, between the
Registrant and Douglas K. Pinner (incorporated by reference to
the Registrant's Annual Report on Form 10-K/A for the year
ended November 30, 1995, filed November 20, 1996).
10.5 Employment Agreement dated April 1, 1996, between the
Registrant and C. B. Ellis, Jr.
10.6 Employment Agreement dated September 22, 1995, between the
Registrant and Terry M. Fulmer (incorporated by reference to
the Registrant's Annual Report on Form 10-K/A for the year
ended November 30, 1995, filed November 20, 1996).
11 Statement re: Computation of Per Share Earnings.
27 Financial Data Schedule
</TABLE>
<PAGE>
Exhibit 10.5
TOKHEIM CORPORATION
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (hereinafter "Agreement"), dated this 1st day of
April, 1996, by and between TOKHEIM CORPORATION, an Indiana corporation
(hereinafter "the Company"), and C.B. Ellis, Jr. (hereinafter "the Employee"),
which Agreement shall be deemed to replace any and all previously existing
Employment Agreements between the parties.
WHEREAS, the Company desires to employ the Employee in an executive
capacity and the Employee desires to be so employed, all upon the following
terms and conditions.
NOW, THEREFORE, in consideration of the premises hereinafter set forth, it
is mutually agreed as follows:
1. The Company agrees to employ the Employee, and the Employee agrees to
serve the Company, on a full-time basis in the capacity hereinafter designated
and upon the terms hereinafter specified. Said employment shall continue from
this date until November 30, 1998 and until such time as it may be terminated by
one or more of the parties, it being expressly recognized that either party may
terminate this Agreement, with cause, upon the giving of thirty (30) days'
written notice to the other, and in such event, the parties shall each be
entitled only to such continuing rights as may be provided in this Agreement or
as may otherwise be available to them in law or equity. In the event Employee
is terminated without cause, Employee shall be entitled to severance pay equal
to the unexpired portion of the agreement.
2. The Employee shall serve in the capacity of VP, Domestic Sales.
1
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The Employee shall have such duties and responsibilities and shall supply
such services in the carrying out of such duties and responsibilities as the
Company, through the Board of Directors, the duty appointed Committees of the
Board, the Chief Executive Officer of the Company or such other Executive
Officers as may be designated by the Board, shall, from time to time, direct,
and said parties shall be free to alter or amend the position, responsibilities,
duties or services to be performed by the Employee in such manner as to them
shall be deemed to be in the best interest of the Company. During the term of
employment, the employee shall devote his best efforts and skills to the
business interest of the Company and shall not engage in any commercial
enterprise or activity, either directly or indirectly, in conflict with the
Company's business, or which may in any way interfere with his employment,
without the consent of the Company.
3. The Employee hereby recognizes the Company's proprietary rights in the
tangible and intangible property of the Company and acknowledges that
notwithstanding the relationship of employment, the Employee will not obtain or
acquire through such employment any personal property rights in any of the
property of the Company, including, but not limited to, any writings,
communications, manuals, documents, instruments, contracts, agreements, files,
literature, data, technical information, know-how secrets, formulas, products,
methods, procedures, processes, devices, apparatuses, trademarks, tradenames,
trade styles, service marks, logos, copyrights, patents or other matters which
are properly the property of the Company.
4. The Employee shall, during the term of employment, use his best
efforts and exercise his utmost diligence to protect and safeguard the
confidential information of the Company, including, but not limited to, trade
secrets, know-how, product formulas, recipes,
2
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methods, procedures, processes, devices, apparatuses, materials or other matters
which are confidential to the Company. The Employee further agrees that he shall
not, during the term of employment or thereafter, personally use or disclose to
others information which shall be confidential to the Company, except at such
use or disclosure may be required during the course of employment with the
Company or as may be consented to by the Company.
5. The Employee agrees that during the term of his employment, any and all
inventions and discoveries, whether or not patentable, which the Employee may
conceive or make, either alone or in conjunction with others and related or in
any way connected with the business of the Company, shall be the sole and
exclusive property of the Company. The Employee shall, without further
compensation or consideration, but at the expense of the Company, and as and
when requested to do so by the Company, promptly execute and assign any and all
applications, assignments and other instruments which the Company shall deem
necessary in order to apply for and obtain letters patent of the United States
and of foreign countries for said inventions and discoveries, and in order to
assign and convey to the Company, or to the Company's nominee the sole and
exclusive right, title and interest in and to said inventions, discoveries or
any applications or patents thereon. As promptly as known or possessed by the
Employee, the Employee shall disclose to the Company all information with
respect to said inventions and discoveries. The Employee further agrees that
during the term of employment, trademarks, tradenames, service marks, trade
styles, logos, emblems, labels, slogans and writings, whether or not
copyrighted, originated by the Employee, alone or in conjunction with others,
and related or in any way connected with the business of the Company, shall be
the sole and exclusive property of the Company.
3
<PAGE>
6. The Employee shall be entitled to compensation as follows:
a. The Employee shall be entitled to a monthly base salary of Twelve
Thousand Five Hundred Dollars ($12,500.00). The Base Pay will be reviewed
annually. Such Base Pay will be payable in such semi-monthly or monthly
installments as is consistent with the policy of the Company in such matters.
The Employee shall also be eligible for the officer's bonus program, a copy of
which has been supplied to the Employee.
b. The Employee shall be granted participation in all employee benefit
plans applicable to executive officers of the Company, including, but not
limited to, medical plans, disability plans, life insurance plans, savings
plans, stock option plans and such other plans as may from time to time be made
available and applicable to the Employee, consistent with the policies of the
Company and the terms and conditions of such plans. Nothing herein shall be
deemed to alter the terms and conditions of such plans or the policy of the
Company with respect thereto, and nothing herein shall be deemed to entitle the
Employee to any rights therein which would not otherwise be made available to
the Employee pursuant to the implementations of such plans in accordance with
the terms, conditions and provisions set forth therein. It shall be further
understood that nothing herein shall prevent the Company, through its Board of
Directors, the duly appointed Committees of the Board or such other Executive
Officers of the Company as the Board may designate, from altering or amending
any of the aforesaid plans or eliminating or adding to them as they shall from
time to time deem appropriate and in the interests of the Company.
c. Except as may otherwise be expressly provided herein, the Employee
shall be granted, upon his termination from the Company, such rights as may be
available to him
4
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pursuant to any plan or plans hereinabove referred to, and, in addition thereto,
any termination benefits accorded terminated executives, consistent with any
existing policy or practice of the Company with respect to such termination. In
the event there shall be no such policy or practice with respect to termination,
then such termination benefits, if any, as may be deemed appropriate to the
Board of Directors, its duly appointed Committees or such other Executive
Officers as may be directed by the Board to act in such matters.
7. In the event there shall occur (i) a merger, consolidation or other
combination of the Company with or into any other corporation, (ii) the
acquisition, subsequent to the date of this Agreement, directly or indirectly,
by any person, entity or group of persons of ownership of the power to vote in
excess of twenty percent (20%) of the voting securities of the Company followed
by the election by said party of one or more representatives to the Board of
Directors, (iii) the acquisition, subsequent to the date of this Agreement,
directly or indirectly, by any person, entity or group of persons of ownership
of the power to vote in excess of fifty percent (50%) of the voting securities
of the Company, whether or not followed by the election by said party or parties
of one or more representatives to the Board of Directors or (iv) any other
event, including, but not limited to, the matters set forth in (i) through (iii)
above which shall have the effect of vesting effective control of the business
and affairs of the Company in a person, entity or group of person other or
different than the present stockholders of the Company, or which shall have the
effect of causing a change in management of the Company, then and in that event,
the right of the Company and the Employee to unilaterally terminate this
employment upon thirty (30) days' written notice as provided in Paragraph 1
above shall continue, but shall be subject to the following express provision:
If such termination shall be initiated by the Company
5
<PAGE>
within thirty-six (36) months of any of the events described in (i), (ii), (iii)
or (iv) of this Paragraph; or if such termination shall be initiated by the
employee within thirty-six (36) months of any of the events described in (i),
(ii), (iii), (iv) of this Paragraph, and any one of the following also occurs:
(a) a change of the Chief Executive Officer, (b) change of job, (c) change of
salary, or (d) move of job responsibilities to a distance greater than fifty
(50) miles from the current office location, then upon the effective date of
termination, the Employee shall be entitled to the termination benefits set
forth in this Paragraph 7 in addition to any other termination rights which may
have accrued to him during his employment; provided, however, that the following
provisions with respect to direct severance pay (i.e., salary and bonus
payments) shall be exclusive and shall replace any other rights of the Employee
to direct severance payments:
a. The Employee shall be entitled to receive the greater of 299.99% of the
base salary or twice the employees total compensation at the same rate at which
it existed at the date of the event referenced in (i) through (iv) of this
Paragraph 7 above. The Employee shall further be entitled to receive as direct
severance pay, bonuses during the subsequent twenty-four (24) months on the same
dates that he would otherwise have been entitled to them had his employment
continued; provided, however, that the amount of such bonuses shall not be
contingent upon any matters arising after the date of termination, but shall on
an annual basis be equal to the average annual sum paid in bonuses to the
Employee during the last three (3) bonus periods preceding his termination, or
the average annual bonuses of such lesser bonus periods if his employment was
for less than three (3) bonus periods prior to termination. In the event that
during any part of such twenty-four (24) month period, the executive officer's
activities involved returning the corporation to profitability which limited
bonus potential, the bonus shall be paid for such twenty-four month
6
<PAGE>
period as if the company had been profitable. To the extent the twenty-four (24)
months shall expire in the middle of a bonus period, then for such partial year,
the Employee shall be entitled to that percentage of the average annual bonus
that the partial year bears to a total year, and he shall be paid any remaining
and unpaid bonus amounts due him at the expiration of said twenty-four (24)
month period. In the event the Employee is terminated within said 36 month
period, severance shall be payable in a single lump sum. In the event the
Employee shall die during any period in which payments shall be due hereunder,
the balance of any salary and bonus payments shall be paid to the Employee's
estate within six (6) months of the date of his death.
b. The Employee shall immediately be paid a lump sum amount equal to the
value of any outstanding stock options which by their terms cannot be exercised
the day following the Employee's termination of employment (the value of each
option shall be equal to the average of the high and low price of a share of
stock, as quoted on the composite transactions table covering transactions on
the New York Stock Exchange on the first date that the stock was traded on that
Exchange which next precedes the date the Employee's employment terminated minus
the stock option's exercise price). The Executive shall immediately be paid a
lump sum amount equal to the value of any unvested shares of restricted stock as
if all restrictions had been removed the day preceding the Change of Control;
c. In addition to the continuation of his base salary and bonus as
provided above, the Employee shall further be entitled for twenty-four (24)
months following termination to receive medical insurance, life insurance and
disability insurance benefits from the Company on terms comparable to the
benefits provided by the Company to the Employee in such matters as of the date
of the event referenced in (I) through (iv) of this Paragraph 7 above; provided,
that
7
<PAGE>
any severance payments provided for hereinabove shall be reduced by the amount
of any disability benefits paid pursuant to this Paragraph 7B for the period
that such disability payments shall continue; and, provided further, that
notwithstanding anything hereinabove set forth, any medical, life and disability
benefits shall terminate automatically at any time that the Employee shall
secure and begin alternate employment. The employee may elect in writing at the
time of severance to receive the cash value of any or all of these benefits in
lieu of coverage.
d. If the Employee shall be fifty (50) years of age or older at the time
of any termination governed by the terms of this Paragraph 7, and if the twenty-
four (24) months of continued salary and bonus shall expire prior to the
Employee's sixtieth (60th) birthday, then the Employee shall additionally be
entitled to receive his base salary and bonus from the date of expiration of the
twenty-four (24) months until the date of his sixtieth (60th) birthday at
one-half (1/2) the rate of salary and bonus payable to him during the first
twenty-four (24) months following his termination.
e. If the Employee shall be sixty-three (63) years of age or older at the
time of any termination governed by the terms of this Paragraph 7, then all
benefits provided for above shall run not for a period of twenty-four (24)
months as hereinabove set forth, but rather for that number of months occurring
between the date of termination and the date of the Employee's sixty-fifth
(65th) birthday and all benefits otherwise running for twenty-four (24) months
shall run for that period of time.
f. It is expressly understood and agreed that if the receipt or the right
to receive all or any part of the payments contemplated by this Paragraph 7,
either alone or with other payments, which the Employee has received or has the
right to receive from the Company
8
<PAGE>
and which are "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code, as amended, would result in some or all of the payments
contemplated by this Paragraph 7 or the parachute payments being "excess
parachute payments", as defined in Section 280G of the Internal Revenue Code,
and/or if such payments would result in the Employee suffering an excise tax or
other extraordinary tax upon the receipt thereof, the Company shall make such
additional payments to the Employee as shall be necessary to cause the net
after-tax benefit to the Employee to be the same as would have been the case had
there been no excise or extraordinary tax applied to such payments.
g. In the event the Employee shall be required to employ counsel or bring
suit to enforce any of the terms or conditions of this Paragraph 7 and shall be
successful in securing enforcement of any of such terms and conditions, the
Employee shall be entitled to all reasonable expenses, including, but not
limited to, attorneys' fees incurred in such enforcement efforts.
8. Nothing contained herein shall be construed as conferring upon the
Employee the right to continue in the employ of the Company as an executive or
in any other capacity.
9. All payments provided under this Agreement shall be paid in cash from
the general funds of the Company and no special or separate fund shall be
established and no other segregation of assets shall be made to assure payment.
The Employee shall have no right, title or interest whatever in or to any
investments which the Company may make to aid the Company in meeting its
obligations hereunder. Nothing contained in this Agreement, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind or a fiduciary relationship, between the Company and the Employee or
any other person. To the extent that any
9
<PAGE>
person acquires a right to receive payments from the Company hereunder, such
right shall be no greater than the right of an unsecured creditor of the
Company.
10. The Company may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
11. Neither this Agreement or any right or interest hereunder shall be
assignable by the Employee, his beneficiaries or legal representatives, without
the Company's prior written consent; provided however, that nothing in this
Paragraph shall preclude the Employee from designating a beneficiary to receive
any benefit payable hereunder upon his death, or the executors, administrators
or other legal representatives of the Employee or his estate from assigning any
rights hereunder to the person or persons entitled thereunto.
12. Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, communication, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
13. This Agreement shall be binding upon and inure to the benefit of the
Employee and the Company and their respective permitted successors and assigns.
In the event the Company merges or consolidates with or into any other
corporation or corporations or sells or otherwise transfers substantially all
its assets to another corporation, the provisions of this Agreement shall be
binding upon and inure to the benefit of the corporation surviving or resulting
from the merger or consolidation or to which such assets are sold or
transferred. All references
10
<PAGE>
herein to the Company refer with equal force and effect to any corporate or
other successor of the Company which acquires, directly or indirectly, by
merger, consolidation, purchase of otherwise, all or substantially all of the
assets or stock of the Company.
14. No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any
provisions of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver
shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
15. If, for any reason, any provisions of this Agreement is held invalid,
such invalidity shall not affect any other provision of this Agreement not held
so invalid, and each such other provision shall to the full extent consistent
with law continue in full force and effect. If any provision of this Agreement
shall be held invalid in part, such invalidity shall in no way affect the rest
of such provision not held so invalid, and the rest of such provision, together
with all other provisions of this Agreement, shall to the full extent consistent
with law continue in full force and effect.
16. This Agreement has been executed delivered in the State of Indiana,
and its validity, interpretation, performance and enforcement shall be governed
by the laws of said State.
17. The Agreement shall supercede the Consulting Agreement dated the 22nd
day of September, 1995, between Employee and Company, and that Employee and
Company shall
11
<PAGE>
Exhibit 11
TOKHEIM CORPORATION AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE MONTH AND SIX MONTH PERIODS
ENDED MAY 31, 1996 and MAY 31, 1995
Primary earnings per share are based on the weighted average number of shares
outstanding during each year and the assumed exercise of dilutive employees'
stock options less the number of treasury shares assumed to be purchased from
the proceeds using the average market price of the Company's common stock.
The following table presents information necessary to calculate earnings per
share for the three month and six month periods ended May 31, 1996 and
May 31, 1995:
<TABLE>
<CAPTION>
PRIMARY
----------------------------------------
Three Months Ended Six Months Ended
------------------- --------------------
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
--------------------------------------------
<S> <C> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding............................................ 7,938 7,877 7,938 7,864
Share equivalents....................................................... 71 27 -- --
------ ------ ------ -------
Adjusted outstanding.................................................... 8,009 7,904 7,938 7,864
====== ====== ====== =======
Net earnings (loss)...................................................... $ 536 $ 526 $ (132) $ (837)
Preferred stock dividends................................................ (385) (395) (774) (796)
------ ------ ------ -------
Net earnings (loss) applicable to
common stock............................................................ $ 151 $ 131 $ (906) $(1,633)
====== ====== ====== =======
Net earnings (loss) per common share..................................... $ 0.02 $ 0.02 $(0.11) $ (0.21)
====== ====== ====== =======
</TABLE>
For financial reporting purposes, the loss per share, assuming full dilution, is
considered to be the same as primary since the effect of the common stock
equivalents would be antidilutive.
<TABLE>
<CAPTION>
FULLY DILUTED
-------------------------------------------
Three Months Ended Six Months Ended
------------------- --------------------
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
-------------------------------------------
<S> <C> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding............................................ 7,938 7,877 7,938 7,864
Share equivalents....................................................... 71 33 63 33
Weighted conversion of preferred
stock.................................................................. 1,672 1,749 1,714 1,693
------ ------ ------ -------
Adjusted outstanding.................................................... 9,681 9,659 9,715 9,590
====== ====== ====== =======
Net earnings (loss)...................................................... $ 536 $ 526 $ (132) $ (837)
Incremental RSP expense.................................................. (385) (395) (774) (796)
------ ------ ------ -------
Net earnings (loss) applicable to common
stock................................................................... $ 151 $ 131 $ (906) $(1,633)
====== ====== ====== =======
Net earnings (loss) per common share..................................... $ 0.02 $ 0.01 $(0.09) $ (0.17)
====== ====== ====== =======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Tokheim
Corporation's May 31, 1996, quarterly financial statements and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000098559
<NAME> TOKHEIM CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-END> MAY-31-1996
<CASH> 2005
<SECURITIES> 0
<RECEIVABLES> 38668
<ALLOWANCES> (1138)
<INVENTORY> 38776<F1>
<CURRENT-ASSETS> 80830
<PP&E> 84289<F2>
<DEPRECIATION> 56917
<TOTAL-ASSETS> 118897
<CURRENT-LIABILITIES> 37372
<BONDS> 0
7134<F3>
0
<COMMON> 18903<F4>
<OTHER-SE> 169<F5>
<TOTAL-LIABILITY-AND-EQUITY> 118897
<SALES> 107167
<TOTAL-REVENUES> 107167
<CGS> 81356<F6>
<TOTAL-COSTS> 81356<F6>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1466
<INCOME-PRETAX> (638)
<INCOME-TAX> (506)
<INCOME-CONTINUING> (132)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (132)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
<FN>
<F1>Represents gross intentory net of LIFO and loss reserves.
<F2>Represents gross PP&E.
<F3>Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of
$12,761 and treasury stock of $4,105.
<F4>Represents common stock of $19,409 less Guaranteed ESOP of $303 and treasury
stock of $203.
<F5>Represents retained earnings of $8,796 less minimum pension liability of
$3,868 and foreign currency translation adjustments of $4,759.
<F6>Includes product development expenses and excludes depreciation.
</FN>
</TABLE>
