-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TPoDajHJv5Xj6YI/CXemVHFF0zyJl7h1MuEKsE7aL2y/3aiO/W6FLDuSZZ8ZFpxq KUyghmhj6bR0BpcG3dLPDA== /in/edgar/work/20000804/0000950172-00-001388/0000950172-00-001388.txt : 20000921 0000950172-00-001388.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950172-00-001388 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000531 FILED AS OF DATE: 20000804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOKHEIM CORP CENTRAL INDEX KEY: 0000098559 STANDARD INDUSTRIAL CLASSIFICATION: [3580 ] IRS NUMBER: 350712500 STATE OF INCORPORATION: IN FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-06018 FILM NUMBER: 685756 BUSINESS ADDRESS: STREET 1: 10501 CORPORATE DRIVE CITY: FORT WAYNE STATE: IN ZIP: 46845 BUSINESS PHONE: 2194704600 MAIL ADDRESS: STREET 1: 10501 CORPORATE DRIVE CITY: FORT WAYNE STATE: IN ZIP: 46845 10-Q/A 1 0001.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q/A (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, 2000 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 DRIVE, 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, 2000, 12,698,593 shares of voting common stock were outstanding. The exhibit index is located on page 18
TOKHEIM CORPORATION AND SUBSIDIARIES ====================================================================================================== Unaudited Consolidated Condensed Statement of Earnings --------------------------------------- (Amounts in thousands except amounts per share) Three Months Ended Six Months Ended May 31, May 31, 2000 1999 2000 1999 --------------------------------------- Net sales................................................... $ 134,837 $ 177,010 $ 267,249 $ 343,204 Cost of sales, exclusive of items listed below.............. 105,851 131,775 210,214 265,071 Selling, general, and administrative expenses............... 24,456 27,939 50,176 53,706 Depreciation and amortization............................... 6,510 6,068 12,584 12,960 Merger and acquisition costs and other unusual items........ 2,723 3,700 5,448 4,823 ---------- --------- --------- --------- Operating profit (loss).................................. (4,703) 7,528 (11,173) 6,644 ---------- --------- --------- --------- Interest expense, net....................................... 14,875 12,358 29,522 24,665 Foreign currency (gain) loss .............................. (28) 1,417 (197) 2,855 Minority interest in subsidiaries........................... 51 (5) 49 89 Other income, net .......................................... (718) (1,155) (1,008) (1,309) ---------- ---------- ---------- ---------- Loss before income taxes and extraordinary loss............. (18,883) (5,087) (39,539) (19,656) Income tax benefit.......................................... (1,532) (89) (1,683) (482) ---------- ---------- ---------- --------- Loss before extraordinary loss.............................. (17,351) (4,998) (37,856) (19,174) Extraordinary loss on debt extinguishment................... -- -- -- 6,249 ---------- ---------- ---------- -------- Net loss..................................................... (17,351) (4,998) (37,856) (25,423) Preferred stock dividends ($1.94 per share)................. 381 374 768 747 --------- ---------- ---------- -------- Loss applicable to common stock............................. $ (17,732) $ (5,372) $ (38,624) $(26,170) ========== ========== ========== ========= Loss per common share: Basic Before extraordinary loss.............................. $ (1.40) $ (0.42) $ (3.05) $ (1.57) Extraordinary loss on debt extinguishment.............. -- -- -- (0.50) ---------- ---------- ---------- --------- Net loss............................................... $ (1.40) $ (0.42) $ (3.05) $ (2.07) ========== ========== ========== ========= Weighted average shares outstanding.................... 12,669 12,669 12,669 12,666 ========== ========== ========== ========= Diluted Before extraordinary loss.............................. $ (1.40) $ (0.42) $ (3.05) $ (1.57) Extraordinary loss on debt extinguishment.............. -- -- -- (0.50) ---------- ---------- ---------- --------- Net loss............................................... $ (1.40) $ (0.42) $ (3.05) $ (2.07) =========== ========== ========== ========= Weighted average shares outstanding.................... 12,669 12,669 12,669 12,666 =========== ========== ========== =========
TOKHEIM CORPORATION AND SUBSIDIARIES ========================================================================================================== Consolidated Condensed Balance Sheet Unaudited Audited (Amounts In thousands) --------- ------- May 31, November 30, 2000 1999 -------------------------------------- ASSETS Current assets: Cash and cash equivalents................................... $ 20,719 $ 14,437 Accounts receivable, net.................................... 116,856 168,565 Inventories: Raw materials, service parts, and supplies.............. 62,716 68,122 Work in process.......................................... 14,145 16,389 Finished goods........................................... 8,076 9,017 ----------- --------- 84,937 93,528 Other current assets........................................ 15,318 12,598 ----------- ----------- Total current assets........................................ 237,830 289,128 Property, plant, and equipment, net......................... 67,909 71,976 Other tangible assets....................................... 2,068 2,328 Intangible assets, net...................................... 290,333 308,552 Other non-current assets, net............................... 16,849 18,818 ----------- ----------- Total assets................................................ $ 614,989 $ 690,802 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current maturities of long-term debt........................ 10,727 10,731 Notes payable, bank credit agreement........................ 215,414 -- Senior subordinated notes................................... 193,337 -- Junior subordinated payment in kind notes................... 47,762 -- Guaranteed Employees' Stock Ownership Plan obligation....... 2,956 -- Cash overdrafts............................................. 14,464 12,321 Accounts payable............................................ 66,308 84,511 Accrued expenses............................................ 91,072 111,507 ----------- ----------- Total current liabilities................................... 642,040 219,070 Notes payable, bank credit agreement........................ -- 204,284 Senior subordinated notes................................... -- 198,681 Junior subordinated payment in kind notes................... -- 45,020 Other long-term debt, less current maturities............... 2,866 3,168 Guaranteed Employees' Stock Ownership Plan obligation....... -- 4,351 Post-retirement benefit liability........................... 18,651 18,693 Other long-term liabilities................................. 953 4,926 ----------- ----------- 664,510 698,193 ----------- ----------- Redeemable convertible preferred stock...................... 24,000 24,000 Guaranteed Employees' Stock Ownership Plan obligation....... (2,956) (4,351) Treasury stock, at cost..................................... (4,366) (4,210) ----------- ----------- 16,678 15,439 ----------- ----------- Common stock................................................ 90,375 90,375 Common stock warrants....................................... 26,187 20,000 Accumulated comprehensive loss.............................. (80,009) (69,077) Accumulated deficit......................................... (102,221) (63,597) ----------- ----------- (65,668) (22,299) Less treasury stock, at cost................................ (531) (531) ----------- ----------- (66,199) (22,830) ----------- ----------- Total liabilities and shareholders' equity (deficit)........ $ 614,989 $ 690,802 =========== ===========
TOKHEIM CORPORATION AND SUBSIDIARIES ========================================================================================================== Consolidated Condensed Unaudited Statement of Cash Flows ------------------------------ (In thousands) Six Months Ended May 31, May 31, 2000 1999 ------------ ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss.................................................... $ (37,856) $ (25,423) Adjustments to reconcile net loss to cash used in operating activities: Payment in kind interest............................... 2,742 2,436 Extraordinary loss on debt extinguishment.............. -- 6,249 Depreciation and amortization.......................... 12,584 12,960 Gain on sale of property, plant, and equipment......... (94) (1,238) Changes in assets and liabilities: Accounts receivable, net............................... 43,566 9,790 Inventories............................................ 4,608 12,298 Other current assets................................... (3,438) (1,866) Accounts payable....................................... (14,347) (7,820) Accrued expenses....................................... (17,649) (6,977) Other.................................................. (353) (4,512) ----------- ----------- Net cash used in operating activities....................... (10,237) (4,103) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale of property, plant, and equipment........ 593 1,890 Property, plant, and equipment additions.................... (5,090) (10,994) ----------- ----------- Net cash used in investing activities....................... (4,497) (9,104) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Redemption of senior notes.................................. -- (22,500) Proceeds from 11.375% senior subordinated notes............ -- 209,647 Redemption of senior subordinated notes..................... -- (170,000) Increase in other debt...................................... 147 1,091 Increase (decrease) in notes payable, banks................. 16,490 (500) Increase (decrease) in cash overdraft....................... 2,976 (583) Deferred debt issuance costs................................ (177) (7,613) Premiums paid on debt extinguishment........................ -- (555) Other....................................................... (156) 1,050 Preferred stock dividends................................... (768) (747) ----------- ----------- Net cash provided from financing activities................. 18,512 9,290 ----------- ----------- EFFECT OF TRANSLATION ADJUSTMENT ON CASH.................... 2,504 (3,778) ------------ ----------- Increase (decrease) in cash................................. 6,282 (7,695) CASH AND CASH EQUIVALENTS: Beginning of year........................................... 14,437 26,801 ----------- ----------- End of period............................................... $ 20,719 $ 19,106 =========== ===========
Notes to the Consolidated Condensed Financial Statements The interim financial statements are unaudited and reflect all adjustments (consisting solely of normal recurring adjustments) that, in the opinion of management, are necessary for a fair presentation of the financial statements of the interim periods presented. This report includes information in a condensed format and should be read in conjunction with the audited consolidated financial statements included in Tokheim Corporation's (the "Company") Annual Report to Shareholders filed on form 10-K for the year ended November 30, 1999. The results of operations for the three and six months ended May 31, 2000 are not necessarily indicative of the results to be expected for the full year or any other interim period. New Accounting Pronouncements SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was issued in June 1998 and is effective for the year ending November 30, 2001. SFAS No. 133 establishes a new model for accounting for derivatives in the balance sheet as either assets or liabilities and measures them at fair value. Certain disclosures concerning the designation and assessment of hedging relationships are also required. Additionally, the Securities and Exchange Commission ("SEC") has issued Staff Accounting Bulletin No. 101, "Revenue Recognition", that deals with principles of revenue recognition. Management has not yet determined the impact of this bulletin on the Company's consolidated financial statements. Segment Reporting For the three and six month periods ended May 31, 2000 and 1999, respectively, the Company had only one reportable industry segment-the design, manufacture and servicing of petroleum dispensing systems. The Company has three reportable operating segments: North America; Europe; and Africa. The accounting policies of these segments are the same as described in the summary of significant accounting policies in the Company's form 10-K for the year ended November 30, 1999. The Company evaluates the performance of each operating segment based upon income from operations before merger and acquisition costs and other unusual items. The Company's selling, general, and administrative expenses are charged to each segment based upon the operating segment where the costs are incurred. Segment results for the three and six month periods ended May 31, 2000 and 1999 are summarized in the table below. For the three month period ended May 31,:
2000 North Europe Africa Eliminations Consolidated America* Customer sales.............................. $ 50,343 $ 80,206 $ 4,288 $ 0 $ 134,837 Intercompany sales.......................... 1,395 773 0 (2,168) 0 Depreciation and amortization............... 2,799 3,621 90 0 6,510 Operating profit (loss), before merger & acquisition costs and other unusual items............................. (5,076) 3,443 (312) (35) (1,980) Total assets................................ $607,268 $353,160 $12,070 $(357,509) $ 614,989 1999 Customer sales.............................. $ 68,933 $102,297 $ 5,780 $ 0 $ 177,010 Intercompany sales.......................... 859 1,220 118 (2,197) 0 Depreciation and amortization............... 2,257 3,730 81 0 6,068 Operating profit, before merger & acquisition costs and other unusual items............................. 4,385 6,461 308 74 11,228 Total assets................................ $610,106 $430,968 $14,963 $(357,387) $ 698,650
For the six month period ended May 31;
2000 North Europe Africa Eliminations Consolidated America* Customer sales.............................. $100,805 $157,982 $ 8,462 $ 0 $ 267,249 Intercompany sales.......................... 2,148 1,718 0 (3,866) 0 Depreciation and amortization............... 5,557 6,871 156 0 12,584 Operating profit (loss), before merger & acquisition costs and other unusual items............................. (10,667) 5,073 (33) (98) (5,725) Total assets................................ $607,268 $353,160 $12,070 $(357,509) $ 614,989 1999 Customer sales.............................. $125,226 $207,848 $10,130 $ 0 $ 343,204 Intercompany sales.......................... 1,670 2,052 121 (3,843) 0 Depreciation and amortization............... 4,634 8,170 156 0 12,960 Operating profit, before merger & acquisition costs and other unusual items............................. 2,341 8,911 187 28 11,467 Total assets................................ $610,106 $430,968 $14,963 $(357,387) $ 698,650 * Includes corporate expenses.
Reconciliation from segment reporting to consolidated condensed statement of earnings:
Three months ended Six months ended May 31, May 31, 2000 1999 2000 1999 ------------------ ----------------- Segment operating profit (loss)......... $ (1,980) $ 11,228 $ (5,725) $ 11,467 Merger and acquisition costs and other unusual items......................... (2,723) (3,700) (5,448) $ (4,823) -------------------- -------------------- Operating profit (loss)............... $ (4,703) $ 7,528 $(11,173) $ 6,644 ==================== ====================
Comprehensive Loss The table below summarizes comprehensive loss for the three and six month periods ended May 31, 2000 and 1999.
Three months Six months ended ended May 31, May 31, 2000 1999 2000 1999 --------------------- -------------------- Net loss.................................... $ (17,351) $ (4,998) $ (37,856) $ (25,423) Other comprehensive loss: Minimum pension liability adjustment........ (3,135) (3,135) Foreign currency translation adjustments.... (5,679) (9,865) (10,933) (35,189) ---------- --------- ---------- --------- Comprehensive loss.......................... $ (23,030) $(17,998) (48,789) (63,747) ========== ========= ========== =========
Bank Credit Agreement On December 22, 1999, the Company amended its bank credit agreement. Among the items amended were the removal of the requirement to obtain $50.0 million through the issuance of equity type securities and the provision for the mandatory reduction of the term loan by $50.0 million. Other terms of the bank credit agreement that were amended include the addition of $5.7 million to the borrowing availability under the working capital facility; changes to the consolidated net worth covenant; changes to the leverage and senior leverage ratio covenants; changes to the minimum EBITDA covenant; the addition of a clean down or availability covenant on the working capital facility; and an acceleration of the termination date of the bank credit agreement from September 24, 2004 to September 30, 2003. In consideration for the amendment to the bank credit agreement, the Company paid certain fees and expenses to the bank group including warrants to purchase 16.5% of the outstanding common stock of the Company at a purchase price of $3.95 per share. The warrants are exercisable for an aggregate of 2,097,427 shares. The Company has the right, subject to the terms and conditions of the bank credit agreement, to purchase 100% of the warrants upon termination of the bank credit agreement or 50% by meeting specified de-leveraging conditions at various discount rates. The term loan under the amended bank credit agreement calls for equal quarterly principal payments aggregating $7.3 million in 2000; $9.8 million in 2001; and $12.2 million in 2002. The principal payments in 2003 include equal quarterly payments in the first three quarters of $3.7 million each with the remainder due at maturity on September 30, 2003. The bank credit agreement requires the Company to meet certain consolidated financial tests, including minimum level of consolidated net worth, minimum level of EBITDA (as defined in the Bank credit agreement), minimum level of consolidated interest coverage, maximum consolidated leverage ratio and senior leverage ratio and minimum consolidated fixed charge coverage ratio. The bank credit agreement also contains covenants which, among other things, limit the incurrence of additional indebtedness, the payment of dividends, transactions with affiliates, asset sales, acquisitions, investments, mergers and consolidations, prepayments of certain other indebtedness, amendments to certain other indebtedness, liens and encumbrances and other matters customarily restricted in such agreements. The bank credit agreement requires the Company to maintain specified financial ratios and satisfy certain financial tests. During the year ended November 30, 1999 and in December 1999, the Company was required to enter into three amendments to the bank credit agreement to avoid the occurrence of events of default relating to certain financial ratios and tests. At May 31, 2000, the Company was in violation of several of its financial covenants under the bank credit agreement, including covenants relating to the senior leverage ratio, total leverage ratio, interest expense coverage ratio, fixed charge coverage ratio, minimum EBITDA and the clean down or availability covenant on the working capital facility. Additionally, the Company was in violation of its June 30, 2000, and July 31, 2000, clean down or availability covenant on the working capital facility. The Company has received waivers from its senior lenders for these violations which expire on August 16, 2000. Management believes that the Company will be unable to meet such financial ratios and tests in the foreseeable future. If the waivers are not extended, or if amendments to the bank credit agreement are not obtained, the Company will be in default under its bank credit agreement on August 17, 2000. In the event of default, the lenders could elect to declare all amounts borrowed under the bank credit agreement to be due and payable, which election would also result in a default under the indentures because of certain cross-default provisions in the indentures. As a result, the Company has classified all of its long term borrowings as current. In addition, management believes that the Company will have insufficient liquidity with which to make the Senior Subordinated Note interest payment due August 1, 2000. As a result of the foregoing, among other reasons, the Company has determined that the best alternative for recapitalizing the Company over the long-term and maximizing the recovery of creditors and senior equity interest holders of the Company is through a prepackaged plan of reorganization for the Company and its U.S. subsidiaries pursuant to Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"). Toward that end, during the second and third quarters of 2000, the Company has engaged in negotiations with representatives of the Company's senior lenders and an informal committee (the "Committee") of holders of its Notes regarding the terms of the plan of reorganization. On July 25, 2000, those negotiations resulted in agreements in principle (the "Agreement") with both groups on the terms of a plan of reorganization (the "Plan") which sets forth the terms of a restructuring of the debt outstanding under the Company's bank credit agreement and the Notes. In summary, the Plan, if accepted by certain classes of creditors whose votes will be solicited and, if confirmed by a bankruptcy court, would provide, among other things, that: (i) the existing bank credit agreement will be restructured to comprise a 5 year senior term facility of $140 million, and a 5 year trust debt facility of $100 million on which trust debt interest will be accrued but not paid until at least December 31, 2002; (ii) the Company's bank group will provide, in addition to the $240 million facilities detailed above, a debtor-in-possession facility of $50 million, which will be converted into a revolving facility upon the Company's emergence from the reorganization and will receive nominal price warrants for 10% of the equity of the Company; (iii) the holders of the Notes will receive 90% of the equity of the Company, subject to dilution for warrants to be issued to existing shareholders and management options, upon exchange of their Notes; (iv) the Company's employees' rights to receive cash redemption of preferred stock held by the Company's Employee Stock Option Plan will be preserved, and; (v) existing common stock will be cancelled and existing holders of common stock will receive "out of the money" warrants. The Company will continue to pay its employees and unsecured trade creditors in the normal course of business. The restructuring plan will include continuing payment of these obligations during the restructuring period. The Company is currently preparing documentation to reflect the terms of the Plan and to solicit acceptances of the Plan from the senior lenders and holders of Notes. The Company expects to be in a position to commence such solicitation shortly and anticipates that such solicitation will be conducted over a period of approximately one month. Immediately following the completion of the solicitation, assuming the requisite acceptances by certain classes of creditors are obtained, the Company and its U.S. subsidiaries expect to commence cases under Chapter 11 of the Bankruptcy Code. Upon such commencement, the Company intends to ask the bankruptcy court to set a hearing on confirmation of the Plan as expeditiously as possible. Notwithstanding the foregoing, there can be no assurance that the Company will be in a position to commence the Chapter 11 proceedings as expeditiously as contemplated; that requisite acceptances of the Plan will be obtained; that the terms of the Plan will not change; that the bankruptcy court, if and when Chapter 11 proceedings are commenced, will confirm the Plan (whether or not requisite acceptances are obtained) within the anticipated time frame or at all; or that the Plan will be consummated (even if it is confirmed). Furthermore, even if the Company is successful in implementing the Plan or any of its other strategic alternatives and initiatives, no assurance can be given as to the effect of any such success on the Company's results of operations or financial condition. In connection with the Company's restructuring efforts, the Company has decided not to make the August 1, 2000 interest payments on its Notes. Following a 30 day grace period, the continued deferral of the interest payments on the Notes will constitute a default pursuant to the respective indentures under which the securities were issued and will also constitute a default under the Company's existing bank credit facility. Additionally, the Company is currently operating under a waiver of certain financial covenant defaults and other defaults with respect to its bank credit facility, which waiver expires on August 16, 2000, and is in discussions with the lenders party to the bank credit facility concerning an extension of such waiver. The accompanying financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. As a result of the proposed reorganization proceedings, or any other action that the Company may be required to take, the Company may have to sell or otherwise dispose of assets and liquidate or settle liabilities for amounts different than those reflected in the financial statements. Further, a plan of reorganization approved by the bankruptcy court could materially change the amounts currently recorded in the financial statements. The financial statements do not give effect to all adjustments to the carrying value of assets, or amounts and reclassification of liabilities that might be necessary as a consequence of these proposed reorganization proceedings or any other actions that the Company may be required to take. The appropriateness of using the going concern basis is dependent upon, among other things, confirmation of the plan of reorganization, success of future operations and the ability to generate sufficient cash flows from operations and financial sources to meet obligations. Restructuring Charges Included in accrued liabilities are certain costs the Company will incur to effect an integration and rationalization plan for the RPS Division's operations. These costs represent involuntary termination and other closure costs in connection with closing redundant manufacturing and service operations. These accrued costs do not include costs associated with consolidation of previously existing Tokheim subsidiaries, which will be expensed as incurred or separately accrued once all criteria for accrual are met, nor do these costs benefit future periods. The Company expects the integration and rationalization plan to be substantially completed by the end of fiscal year 2000. The table below summarizes the accrued liability activity by major category and initiative for the three and six month periods ended May 31, 2000.
Charges Charges November 30, to February 29, to May 31, 1999 Accrual 2000 Accrual 2000 Involuntary termination benefits...........$8,006 $(1,029) $6,977 $ (965) $6,012 Facility closure and other closure costs... 211 (41) 170 (117) 53 Lease and contract termination fees........ 381 (141) 240 (47) 193 ------ ------- ------ ------- ------ Total accrued integration and rationalization costs....................$8,598 $(1,211) $7,387 $(1,129) $6,258 ====== ======= ====== ======= ======
During 1999, as a result of the continuing integration and rationalization of the RPS Division with other business units, the Company accrued approximately $2.7 million as a charge to operations to establish an accrual for involuntary termination benefits and related costs for approximately 69 employees that served in primarily service and administration roles at various service facilities in France. This amount also included amounts for lease termination and other exit costs and was added to an amount of $0.3 million that remained accrued at November 30, 1999 for pension payments due to retirees who formerly worked at the Company's Glenrothes, Scotland facility. The table below summarizes the accrued liability activity by major category and initiative for the three and six month periods ended May 31, 2000.
Charges Charges November 30, to February 29, to May 31, 1999 Accrual 2000 Accrual 2000 Involuntary termination benefits...........$2,442 $(164) $2,278 $ (732) $1,546 Facility closure and other closure costs... 460 (37) 423 (5) 418 Lease and contract termination fees........ 138 (25) 113 (88) 25 ------ ----- ------ ------ ------ Total accrued integration and rationalization costs....................$3,040 $(226) $2,814 $ (825) $1,989 ====== ===== ====== ====== ======
Guarantor and Nonguarantor Financial Statements In connection with the RPS Division acquisition and as part of the subsequent financing, the Company issued $123.0 million of 11.375% U.S. dollar denominated senior subordinated notes and 75.0 million of 11.375% Euro denominated senior subordinated notes. The senior subordinated notes are general unsecured obligations of the Company, subordinated in right of payment to all existing and future senior indebtedness of the Company, and guaranteed on a full, unconditional, joint and several basis by the Company's wholly owned domestic subsidiaries. The following unaudited condensed consolidating financial information presents: 1) Condensed consolidating financial statements as of May 31, 2000, and November 30, 1999 and for the three and six month periods ended May 31, 2000 and May 31, 1999, of (a) Tokheim Corporation, the parent; (b) the guarantor subsidiaries; (c) the nonguarantor subsidiaries; and (d) the Company on a consolidated basis. 2) Elimination entries necessary to consolidate Tokheim Corporation, the parent, with guarantor and nonguarantor subsidiaries. Investments in subsidiaries are accounted for by the parent using the equity method of accounting. The guarantor and nonguarantor subsidiaries are presented on a combined basis. The principal elimination entries eliminate investments in subsidiaries and intercompany transactions and balances. Separate financial statements for the guarantor subsidiaries and the nonguarantor subsidiaries are not presented because management believes that such financial statements would not be meaningful.
Consolidated Condensed Statement of Earnings For the three months ended May 31, 2000 (Amounts in thousands) Guarantor Nonguarantor Consolidated Parent Subsidiaries Subsidiaries Eliminations Total ----------- ------------ ------------ ------------ ------------ Net sales.................................................. $ 39,342 $ 12,706 $ 86,809 $ (4,020) $ 134,837 Cost of sales, exclusive of items listed below............. 31,428 8,906 69,537 (4,020) 105,851 Selling, general, and administrative expenses.............. 6,934 6,945 10,577 24,456 Depreciation and amortization.............................. 2,152 634 3,724 6,510 Merger and acquisition costs and other unusual items....... 149 1,744 830 2,723 ---------- --------- ---------- ----------- ---------- Operating profit (loss).................................... (1,321) (5,523) 2,141 (4,703) Interest (income) expense, net............................. 23,344 (15,470) 7,001 14,875 Foreign currency (gain) loss............................... (61) (351) 384 (28) Equity in (earnings) loss of consolidated subsidiaries..... (3,455) 3,455 Minority Interest.......................................... 51 51 Other (income) expense, net ............................... (2,155) 6,654 (5,217) (718) ---------- ---------- ----------- ------------ ------------ Earnings (loss) before income taxes........................ (26,097) 3,644 (78) 3,648 (18,883) Income taxes............................................... (1,643) 75 36 (1,532) ---------- ---------- ----------- ------------ ------------ Net earnings (loss)........................................ $ (17,351) $ 3,569 $ (112) $ 3,648 $ (17,351) ========== ========== ============ ============ =========== Consolidated Condensed Statement of Earnings For the three months ended May 31, 1999 (Amounts in thousands) Guarantor Nonguarantor Consolidated Parent Subsidiaries Subsidiaries Eliminations Total --------- ------------ ------------ ------------ ------------ Net sales.................................................. $ 47,606 $ 24,657 $ 110,776 $ (6,029) $ 177,010 Cost of sales, exclusive of items listed below............. 33,470 17,473 86,861 (6,029) 131,775 Selling, general, and administrative expenses.............. 6,974 7,605 13,360 27,939 Depreciation and amortization.............................. 681 1,564 3,823 6,068 Merger and acquisition costs and other unusual items....... 887 2,813 3,700 ---------- --------- ---------- ----------- ---------- Operating profit (loss).................................... 5,594 (1,985) 3,919 7,528 Interest (income) expense, net............................. 2,586 (85) 9,857 12,358 Foreign currency gain...................................... 122 4,468 (3,173) 1,417 Equity in (earnings) loss of consolidated subsidiaries..... 10,480 (10,480) Minority Interest.......................................... (5) (5) Other (income) expense, net ............................... (2,613) 7,426 (5,968) (1,155) ---------- ---------- ----------- ----------- ------------ Earnings (loss) before income taxes........................ (4,981 (13,794) 3,208 10,480 (5,087) Income taxes............................................... 17 142 (248) (89) ----------- ---------- ------------ ------------ ------------ Net earnings (loss)........................................ $ (4,998) $ (13,936) $ 3,456 $ 10,480 $ (4,998) =========== ========== ============ ============ ============ Consolidated Condensed Statement of Earnings For the six months ended May 31, 2000 (Amounts in thousands) Guarantor Nonguarantor Consolidated Parent Subsidiaries Subsidiaries Eliminations Total -------- ------------ ------------ ------------ ------------ Net sales.................................................. $ 77,926 $ 25,234 $ 170,718 $ (6,629) $ 267,249 Cost of sales, exclusive of items listed below............. 61,780 17,666 137,397 (6,629) 210,214 Selling, general, and administrative expenses.............. 14,723 13,877 21,576 50,176 Depreciation and amortization.............................. 4,239 1,292 7,053 12,584 Merger and acquisition costs and other unusual items....... 363 3,300 1,785 5,448 ---------- ---------- ---------- ----------- ---------- Operating profit (loss).................................... (3,179) (10,901) 2,907 (11,173) Interest (income) expense, net............................. 24,431 (9,123) 14,214 29,522 Foreign currency gain...................................... (136) (393) 332 (197) Equity in (earnings) loss of consolidated subsidiaries..... 14,569 (14,569) Minority Interest.......................................... 49 49 Other (income) expense, net ............................... (4,293) 13,514 (10,229) (1,008) ---------- ---------- ----------- ------------ ---------- Earnings (loss) before income taxes........................ (37,750) (14,899) (1,459) 14,569 (39,539) Income taxes............................................... 106 (1,892) 103 (1,683) ---------- ---------- ----------- ------------ ---------- Net earnings (loss)........................................ $ (37,856) $ (13,007) $ (1,562) $ 14,569 $ (37,856) ========== =========== =========== ============ ========== Consolidated Condensed Statement of Earnings For the six months ended May 31, 1999 (Amounts in thousands) Guarantor Nonguarantor Consolidated Parent Subsidiaries Subsidiaries Eliminations Total --------- ------------ ------------ ------------ ------------ Net sales.................................................. $ 75,152 $ 55,591 $ 221,844 $ (9,383) $ 343,204 Cost of sales, exclusive of items listed below............. 55,805 40,912 177,737 (9,383) 265,071 Selling, general, and administrative expenses.............. 12,991 13,712 27,003 53,706 Depreciation and amortization.............................. 1,949 2,660 8,351 12,960 Merger and acquisition costs and other unusual items....... 887 83 3,853 4,823 ---------- ---------- ----------- ------------ ---------- Operating profit (loss).................................... 3,520 (1,776) 4,900 6,644 Interest (income) expense, net............................. 9,781 (4,477) 19,361 24,665 Foreign currency loss (gain).............................. 316 1,138 1,401 2,855 Equity in (earnings) loss of consolidated subsidiaries..... 10,163 (10,163) Minority Interest.......................................... 89 89 Other (income) expense, net ............................... 2,398 (16,499) 12,792 (1,309) ---------- ----------- ----------- ------------ ---------- Earnings (loss) before income taxes........................ (19,138) 18,062 (28,743) 10,163 (19,656) Income taxes............................................... 36 (222) (296) (482) ---------- ---------- ------------ ------------ ---------- Earnings (loss) before extraordinary item.................. (19,174) 18,284 (28,447) 10,163 (19,174) Extraordinary loss on debt extinguishment.................. 6,249 6,249 ----------- ---------- ------------ ------------ ---------- Net earnings (loss)........................................ $ (25,423) $ 18,284 $ (28,447) $ 10,163 $ (25,423) =========== ========== =========== ============ ========== Consolidated Condensed Balance Sheet As of May 31, 2000 (Amounts In thousands) Guarantor Nonguarantor Consolidated Parent Subsidiaries Subsidiaries Eliminations Total ------ ------------ ------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents.................................. $ 1,832 $ 11,423 $ 7,464 $ $ 20,719 Accounts receivables, net.................................. 52,570 80,581 91,208 (107,503) 116,856 Inventories, net........................................... 23,831 8,036 53,291 (221) 84,937 Other current assets....................................... 2,135 940 12,243 15,318 --------- -------- ----------- ------------- ---------- Total current assets....................................... 80,368 100,980 164,206 (107,724) 237,830 Investments in subsidiaries................................ 71,345 44,541 6,426 (122,312) Property, plant, and equipment, net....................... 25,800 10,797 31,312 67,909 Goodwill, net.............................................. 116,265 10,045 164,023 290,333 Other non-current assets and deferred charges, net......... 189,984 257,561 5,007 (433,635) 18,917 --------- --------- ------------ ------------- ---------- Total assets............................................... $483,762 $ 423,924 $ 370,974 $ (663,671) $ 614,989 ========= ========= =========== ============= ========== LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT) Current maturities of long-term debt....................... $ $ 8,565 $ 1,965 $ $ 10,530 Notes payable, bank credit agreement....................... 29,817 185,505 92 215,414 Senior subordinated notes.................................. 193,337 193,337 Junior subordinated payment in kind note................... 47,762 47,762 Guaranteed employee stock ownership obligation............. 2,956 2,956 Notes payable to banks..................................... 197 197 Cash overdrafts............................................ 14,464 14,464 Accounts payable........................................... 67,992 35,750 70,116 (107,550) 66,308 Accrued expenses........................................... 43,655 9,533 37,884 91,072 --------- -------- --------- ------------ --------- Total current liabilities.................................. 337,757 287,115 124,718 (107,550) 642,040 Other long-term debt, less current maturities.............. 6,000 193,337 237,164 (433,635) 2,866 Post-retirement benefit liability.......................... 15,071 3,580 18,651 Other long-term liabilities................................ 476 (217) 799 (105) 953 ---------- --------- ---------- ------------ --------- 359,304 480,235 366,261 (541,290) 664,510 ---------- -------- ---------- ------------ --------- Redeemable convertible preferred stock..................... 24,000 24,000 Guaranteed Employees' Stock Ownership Plan obligation...... (2,956) (2,956) Treasury stock, at cost.................................... (4,366) (4,366) ----------- ---------- ----------- ------------ ---------- 16,678 16,678 Common stock............................................... 90,375 66,484 (66,484) 90,375 Common stock warrants...................................... 26,187 26,187 Accumulated comprehensive loss............................. (8,023) (11,746) (17,814) (42,426) (80,009) Accumulated deficit........................................ (228) (44,565) (43,957) (13,471) (102,221) ---------- -------- ----------- ------------ ---------- 108,311 (56,311) 4,713 (122,381) (65,668) Less treasury stock, at cost............................... (531) (531) ---------- -------- ------------- ------------ ---------- 107,780 (56,311) 4,713 (122,381) (66,199) ---------- ---------- ------------- ------------ ---------- Total liabilities and shareholders' equity (deficit)....... $483,762 $ 423,924 $ 370,974 $ (663,671) $ 614,989 ========== ========== ============ ============ ========== Consolidated Condensed Balance Sheet As of November 30, 1999 (Amounts In thousands) Guarantor Nonguarantor Consolidated Parent Subsidiaries Subsidiaries Eliminations Total ------- ------------ ------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents............................... $ 1,657 $ 2,705 $ 10,075 $ $ 14,437 Accounts receivables, net............................... 56,905 83,987 132,423 (104,750) 168,565 Inventories, net........................................ 27,438 10,087 56,068 (65) 93,528 Other current assets.................................... 1,941 1,066 9,591 12,598 -------- -------- --------- --------- -------- Total current assets.................................... 87,941 97,845 208,157 (104,815) 289,128 Investments in subsidiaries............................. 66,312 250,201 6,527 (323,040) Property, plant, and equipment, net..................... 24,665 11,244 36,067 71,976 Goodwill, net........................................... 97,673 10,175 181,390 289,238 Other non-current assets and deferred charges, net...... 216,588 75,200 5,549 (256,877) 40,460 -------- -------- --------- ---------- -------- Total assets............................................ $493,179 $444,665 $437,690 $(684,732) $690,802 ======== ======== ========= ========== ======== LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT) Current maturities of long-term debt.................... $ $ 7,500 $ 2,944 $ $ 10,444 Notes payable to banks.................................. 287 287 Cash overdrafts......................................... 514 11,807 12,321 Accounts payable........................................ 79,968 25,303 83,989 (104,749) 84,511 Accrued expenses........................................ 45,619 14,943 50,945 111,507 -------- -------- --------- --------- -------- Total current liabilities............................... 125,587 48,260 149,972 (104,749) 219,070 Notes payable, bank credit agreement.................... 19,599 184,685 204,284 Senior subordinated notes............................... 198,681 198,681 Junior subordinated Payment In Kind note................ 45,020 45,020 Other long-term debt, less current maturities........... 6,000 254,895 (257,727) 3,168 Guaranteed Employees' Stock Ownership Plan obligation... 4,351 4,351 Post-retirement benefit liability....................... 14,842 3,851 18,693 Other long-term liabilities............................. 476 (216) 4,764 (98) 4,926 -------- -------- --------- --------- -------- 369,536 277,749 413,482 (362,574) 698,193 -------- -------- --------- --------- -------- Redeemable convertible preferred stock.................. 24,000 24,000 Guaranteed Employees' Stock Ownership Plan obligation... (4,351) (4,351) Treasury stock, at cost................................. (4,210) (4,210) --------- ------- --------- --------- --------- 15,439 15,439 Common stock............................................ 90,375 234,966 65,046 (300,012) 90,375 Common stock warrants................................... 20,000 20,000 Accumulated comprehensive loss.......................... (8,023) (35,360) (17,013) (8,681) (69,077) Retained earnings (accumulated deficit)................. 6,383 (32,690) (23,825) (13,465) (63,597) -------- -------- --------- --------- --------- 108,735 166,916 24,208 (322,158) (22,299) Less treasury stock, at cost............................ (531) (531) --------- -------- --------- --------- -------- 108,204 166,916 24,208 (322,158) (22,830) -------- -------- --------- ---------- -------- Total liabilities and shareholders' equity (deficit).... $493,179 $444,665 $437,690 $(684,732) $690,802 ======== ======== ========= ========== ======== Consolidated Condensed Statement of Cash Flows (Amounts in thousands) For the six months ended May 31, 2000 ------------------------------------------------ Guarantor Nonguarantor Consolidated Parent Subsidiaries Subsidiaries Eliminations Total -------------------------------------------------------------------------- Cash flows from operating activities: Net cash provided from (used in) ------------------------------------------------------------------------ operating activities.................................... $ (14,063) $ (4,062) $ (6,680) $ 14,569 $ (10,237) ------------------------------------------------------------------------ Cash flows from investing activities: Plant and equipment additions/transfers.................. (3,114) (269) (1,707) (5,090) Proceeds from the sale/tranfers of property and equipment.......................................... 593 593 Investments in and advances to subsidiaries, net...................................... 14,569 (14,569) Net cash provided from (used in) investing............... ----------------------------------------------------------------------- activities............................................. 11,455 (269) (1,114) (14,569) (4,497) ----------------------------------------------------------------------- Cash flows from financing activities: Increase (decrease) in other debt........................ 973 (826) 147 Increase in notes payable banks, bank credit agreement... 10,894 5,596 16,490 Increase (decrease) in cash overdraft.................... (515) 3,491 2,976 Deferred debt issuance costs............................. (177) (177) Other.................................................... (156) (156) Preferred stock dividends................................ (768) (768) ----------------------------------------------------------------------- Net cash provided from financing activities.............. 9,793 6,054 2,665 18,512 ----------------------------------------------------------------------- Effect of translation adjustments on cash................ (7,010) 6,995 2,518 2,504 ----------------------------------------------------------------------- Increase (decrease) in cash.............................. 175 8,718 (2,611) 6,282 Beginning of year........................................ 1,657 2,705 10,075 14,437 ----------------------------------------------------------------------- End of period............................................ $ 1,832 $ 11,423 $ 7,464 $ 20,719 ======================================================================= Consolidated Condensed Statement of Cash Flows (Amounts in thousands) For the six months ended May 31, 1999 ---------------------------------------------------------------------- Guarantor Nonguarantor Consolidated Parent Subsidiaries Subsidiaries Eliminations Total ---------------------------------------------------------------------- Cash flows from operating activities: Net cash provided from (used in) -------------------------------------------------------------------- operating activities.............................. $ (8,220) $ (2,102) $ (3,944) $ 10,163 $ (4,103) -------------------------------------------------------------------- Cash flows from investing activities: Plant and equipment additions/transfers............. (5,556) (1,086) (4,352) (10,994) Proceeds from the sale of property, plant and equipment......................................... 1,890 1,890 Investments in and advances to subsidiaries, net................................. 3,285 6,878 (10,163) Net cash provided from (used in) investing -------------------------------------------------------------------- activities........................................ (381) 5,792 (4,352) (10,163) (9,104) -------------------------------------------------------------------- Cash flows from financing activities: Redemption of senior notes.......................... (22,500) (22,500) Proceeds from 11.375% senior subordinated notes..... 209,647 209,647 Redemption of senior subordinated notes............. (170,000) (170,000) Increase (decrease)in notes payable, banks.......... (500) (500) Increase (decrease) in cash overdraft............... (131) 31 (483) (583) Increase in term debt............................... 641 (151) 601 1,091 Deferred debt issuance costs........................ (7,613) (7,613) Premiums paid on debt extinguishment................ (555) (555) Other............................................... 1,050 1,050 Preferred stock dividends........................... (747) (747) --------------------------------------------------------------------- Net cash provided from (used in) financing activities 9,792 (120) (382) 9,290 -------------------------------------------------------------------- Effect of translation adjustments on cash........... (4,381) 603 (3,778) -------------------------------------------------------------------- Increase (decrease) in cash......................... 1,191 (811) (8,075) (7,695) Beginning of year................................... 849 5,381 20,571 26,801 ------------------------------------------------------------------- End of period....................................... $ 2,040 $ 4,570 $12,496 $19,106 ====================================================================
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations General Tokheim Corporation, including its subsidiaries ("Tokheim" or the "Company"), is the world's largest manufacturer and servicer of electronic and mechanical petroleum dispensing systems. These systems include petroleum dispensers and pumps, retail automation systems (including point-of-sale ("POS") systems), dispenser payment or "pay-at-the-pump" terminals, replacement parts and upgrade kits. The Company provides products and services to customers in more than 80 countries. The Company is the largest supplier of petroleum dispensing systems in Europe, Africa, Canada and Mexico, and one of the largest in the United States. The Company also has established operations in Asia and Latin America. Results of Operations Consolidated sales for the three month period ended May 31, 2000 were $134.8 million compared to $177.0 million for the comparable 1999 three month period. Sales for North America decreased 27.0% for the three month period from $68.9 million in 1999 to $50.3 million in 2000. European sales decreased 21.6% from $102.3 million in 1999 to $80.2 million in the three month period ended May 31, 2000. African sales decreased 25.9% from $5.8 million in 1999 to $4.3 million in the 2000 three month period. Consolidated sales for the six month period ended May 31, 2000 were $267.2 million compared to $343.2 million in the comparable 1999 six month period. Sales for North America decreased 19.5% from $125.2 million in 1999 to $100.8 million for the six month period in 2000. European sales decreased 24.0% from $207.8 million in 1999 to $158.0 million in 2000. African sales decreased 15.8% from $10.1 million in the 1999 six month period to $8.5 million in the comparable 2000 period. Sales for the three and six month periods of 2000 were adversely affected by exchange rates, especially the weakness of the EURO, less POS sales attributable to Y2K purchases last year, and industry declines in the distributor and commercial channels of distribution. Gross margins as a percent of sales (defined as net sales less cost of sales divided by net sales) decreased from 25.6% in the three month period ended May 31, 1999 to 21.5% in the 2000 three month period. For the six month period ended May 31, gross margins decreased from 22.8% in 1999 to 21.3% in 2000. The decline in gross margin for the three and six month periods of 2000 was primarily due to a greater proportion of service contract sales which provide a lower margin than dispenser sales. Selling, general, and administrative ("SG&A") expenses as a percent of sales for the three and six month periods ended May 31, 2000 were 18.1% and 18.8%, respectively, compared to 15.8% and 15.6% in the three and six month periods of 1999. These increases are due to lower sales in the three and six month periods of 2000 compared to 1999. SG&A expenses have decreased from $27.9 million in the three month period ended May 31, 1999 to $24.5 million in the comparable 2000 period. SG&A expenses have decreased from $53.7 million in the six month period ended May 31, 1999 to $50.2 million in the 2000 period. This improvement was driven by the continued integration and rationalization of the RPS division and realization of cost savings through these programs. Depreciation and amortization expense for the three and six month periods ended May 31, 2000 was $6.5 million and $12.6 million, respectively, compared to $6.1 million and $13.0 million in the comparable 1999 periods. Net interest expense for the three and six month periods ended May 31, 2000 was $14.9 million and $29.5 million, respectively, compared to $12.4 million and $24.7 million in the comparable 1999 periods. This increase was due to increased borrowings, higher interest rates, and amortization of fees associated with amending the Company's credit agreement, which are charged to interest expense. Foreign currency gain for the three and six month periods ended May 31, 2000 was $0.0 and $0.2 million, respectively compared to losses of $1.4 million and $2.9 million in the 1999 three and six month periods. Foreign currency gains and losses were caused by fluctuations in the EURO and other foreign currency exchange rates relative to the dollar. The Company adjusted, on a monthly basis, current obligations payable in foreign currencies, including, but not limited to, interest owed on 75,000,000 EURO denominated senior subordinated notes. Income taxes for the three and six month periods ended May 31, 2000 were a benefit of $1.5 million and $1.7 million, respectively, compared to benefits of $0.1 million and $0.5 million in the comparable three and six month 1999 periods. These benefits resulted primarily from changes to prior year income tax estimates. As a result of the above mentioned items, loss applicable to common stock was $17.7 million or $1.40 per diluted common share for the three months ended May 31, 2000 compared to a loss applicable to common stock of $5.4 million or $0.42 per diluted common share for the same period in 1999. Loss applicable to common stock was $38.6 million or $3.05 per diluted common share for the six month period ended May 31, 2000, compared to a net loss of $26.2 million or $2.07 per diluted common share for the comparable 1999 period. The six month net loss for 1999 consisted of a loss before extraordinary loss, including preferred stock dividends, of $19.9 million or $1.57 per diluted common share plus and extraordinary loss from debt extinguishment of $6.2 million or $0.50 loss per diluted common share. Liquidity and Capital Resources Cash used in operations for the six month period ended May 31, 2000 was $10.2 million versus $4.1 million in the comparable period of 1999. During the six month period of 2000 the Company reduced customer receivables by $43.6 million. The Company used these funds to reduce accounts payable and accrued expenses by $14.3 million and $17.7 million, respectively, and for general operating purposes. Cash used in investing activities for the six month period ended May 31, 2000 was $4.5 million compared to a cash usage of $9.1 million in the comparable 1999 period. The reduction in capital expenditures in the six month period of 2000 was caused by restricting capital spending as a result of the current liquidity situation. Cash provided from financing activities for the six month period ended May 31, 2000 was $18.5 million compared to cash provided in the comparable 1999 period of $9.3 million. The cash provided in the 2000 period is primarily attributable to increased borrowings from the Company's revolving credit facility. On December 22, 1999, the Company amended its bank credit agreement. Among the items amended were the removal of the requirement to obtain $50.0 million through the issuance of equity type securities and the provision for the mandatory reduction of the term loan by $50.0 million. Other terms of the bank credit agreement that were amended include the addition of $5.7 million to the borrowing availability under the working capital facility; changes to the consolidated net worth covenant; changes to the leverage and senior leverage ratio covenants; changes to the minimum EBITDA covenant; the addition of a clean down or availability covenant on the working capital facility; and an acceleration of the termination date of the bank credit agreement from September 24, 2004 to September 30, 2003. In consideration for the amendment to the bank credit agreement, the Company paid certain fees and expenses to the bank group including warrants to purchase 16.5% of the outstanding common stock of the Company at a purchase price of $3.95 per share. The warrants are exercisable for an aggregate of 2,097,427 shares. The Company has the right, subject to the terms and conditions of the New Credit Agreement, to purchase 100% of the warrants upon termination of the New Credit Agreement or 50% by meeting specified de-leveraging conditions at various discount rates. The term loan under the amended bank credit agreement calls for equal quarterly principal payments aggregating $7.3 million in 2000; $9.8 million in 2001; and $12.2 million in 2002. The principal payments in 2003 include equal quarterly payments in the first three quarters of $3.7 million each with the remainder due at maturity on September 30, 2003. The bank credit agreement requires the Company to meet certain consolidated financial tests, including minimum level of consolidated net worth, minimum level of EBITDA (as defined in the Bank credit agreement), minimum level of consolidated interest coverage, maximum consolidated leverage ratio and senior leverage ratio and minimum consolidated fixed charge coverage ratio. The bank credit agreement also contains covenants which, among other things, limit the incurrence of additional indebtedness, dividends, transactions with affiliates, asset sales, acquisitions, investments, mergers and consolidations, prepayments of certain other indebtedness, amendments to certain other indebtedness, liens and encumbrances and other matters customarily restricted in such agreements. The bank credit agreement requires the Company to maintain specified financial ratios and satisfy certain financial tests. During the year ended November 30, 1999 and in December 1999, the Company was required to enter into three amendments to the bank credit agreement to avoid the occurrence of events of default relating to certain financial ratios and tests. At May 31, 2000, the Company was in violation of several of its financial covenants under the bank credit agreement, including covenants relating to the senior leverage ratio, total leverage ratio, interest expense coverage ratio, fixed charge coverage ratio, minimum EBITDA and the clean down or availability covenant on the working capital facility. Additionally, the Company was in violation of its June 30, 2000, and July 31, 2000, clean down or availability covenant on the working capital facility. The Company has received waivers from its senior lenders for these violations which expire on August 16, 2000. Management believes that the Company will be unable to meet such financial ratios and tests in the foreseeable future. If the waivers are not extended, or if amendments to the bank credit agreement are not obtained, the Company will be in default under its bank credit agreement on August 17, 2000. In the event of default, the lenders could elect to declare all amounts borrowed under the bank credit agreement to be due and payable, which election would also result in a default under the indentures because of certain cross-default provisions in the indentures. As a result, the Company has classified all of its long term borrowings as current. In addition, management believes that the Company will have insufficient liquidity with which to make the Senior Subordinated Note interest payment due August 1, 2000. As a result of the foregoing, among other reasons, the Company has determined that the best alternative for recapitalizing the Company over the long-term and maximizing the recovery of creditors and senior equity interest holders of the Company is through a prepackaged plan of reorganization for the Company and its U.S. subsidiaries pursuant to Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code"). Toward that end, during the second and third quarters of 2000, the Company has engaged in negotiations with representatives of the Company's senior lenders and an informal committee (the "Committee") of holders of its Notes regarding the terms of the plan of reorganization. On July 25, 2000, those negotiations resulted in agreements in principle (the "Agreement") with both groups on the terms of a plan of reorganization (the "Plan") which sets forth the terms of a restructuring of the debt outstanding under the Company's bank credit agreement and the Notes. In summary, the Plan, if accepted by certain classes of creditors whose votes will be solicited and, if confirmed by a bankruptcy court, would provide, among other things, that: (i) the existing bank credit agreement will be restructured to comprise a 5 year senior term facility of $140 million, and a 5 year trust debt facility of $100 million on which trust debt interest will be accrued but not paid until at least December 31, 2002; (ii) the Company's bank group will provide, in addition to the $240 million facilities detailed above, a debtor-in-possession facility of $50 million, which will be converted into a revolving facility upon the Company's emergence from the reorganization and will receive nominal price warrants for 10% of the equity of the Company; (iii) the holders of the Notes will receive 90% of the equity of the Company, subject to dilution for warrants to be issued to existing shareholders and management options, upon exchange of their Notes; (iv) the Company's employees' rights to receive cash redemption of preferred stock held by the Company's Employee Stock Option Plan will be preserved, and; (v) existing common stock will be cancelled and existing holders of common stock will receive "out of the money" warrants. The Company will continue to pay its employees and unsecured trade creditors in the normal course of business. The restructuring plan will include continuing payment of these obligations during the restructuring period. The Company is currently preparing documentation to reflect the terms of the Plan and to solicit acceptances of the Plan from the senior lenders and holders of Notes. The Company expects to be in a position to commence such solicitation shortly and anticipates that such solicitation will be conducted over a period of approximately one month. Immediately following the completion of the solicitation, assuming the requisite acceptances by certain classes of creditors are obtained, the Company and its U.S. subsidiaries expect to commence cases under Chapter 11 of the Bankruptcy Code. Upon such commencement, the Company intends to ask the bankruptcy court to set a hearing on confirmation of the Plan as expeditiously as possible. Notwithstanding the foregoing, there can be no assurance that the Company will be in a position to commence the Chapter 11 proceedings as expeditiously as contemplated; that requisite acceptances of the Plan will be obtained; that the terms of the Plan will not change; that the bankruptcy court, if and when Chapter 11 proceedings are commenced, will confirm the Plan (whether or not requisite acceptances are obtained) within the anticipated time frame or at all; or that the Plan will be consummated (even if it is confirmed). Furthermore, even if the Company is successful in implementing the Plan or any of its other strategic alternatives and initiatives, no assurance can be given as to the effect of any such success on the Company's results of operations or financial condition. In connection with the Company's restructuring efforts, the Company has decided not to make the August 1, 2000 interest payments on its Notes. Following a 30 day grace period, the continued deferral of the interest payments on the Notes will constitute a default pursuant to the respective indentures under which the securities were issued and will also constitute a default under the Company's existing bank credit facility. Additionally, the Company is currently operating under a waiver of certain financial covenant defaults and other defaults with respect to its bank credit facility, which waiver expires on August 16, 2000, and is in discussions with the lenders party to the bank credit facility concerning an extension of such waiver. The accompanying financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. As a result of the proposed reorganization proceedings, or any other action that the Company may be required to take, the Company may have to sell or otherwise dispose of assets and liquidate or settle liabilities for amounts different than those reflected in the financial statements. Further, a plan of reorganization approved by the bankruptcy court could materially change the amounts currently recorded in the financial statements. The financial statements do not give effect to all adjustments to the carrying value of assets, or amounts and reclassification of liabilities that might be necessary as a consequence of these proposed reorganization proceedings or any other actions that the Company may be required to take. The appropriateness of using the going concern basis is dependent upon, among other things, confirmation of the plan of reorganization, success of future operations and the ability to generate sufficient cash flows from operations and financial sources to meet obligations. As part of the purchase price of the RPS Division, the Company has provided for certain costs it expects to incur to close down redundant operations in connection with the reorganization and rationalization of the RPS Division's operations. The Company has incurred $2.3 million of expenditures in the the six month period ended May 31, 2000 and expects to incur an additional $6.3 million which consists of $6.0 million of involuntary termination costs to reduce redundant staffing levels, approximately $0.1 million of facility closure and other exit costs, and approximately $0.2 million associated with lease breakage fees. These costs have been aggregated and included in accrued liabilities. These amounts do not include costs associated with the consolidation of previously existing Tokheim subsidiaries, which will be expensed as incurred, nor do these costs benefit future periods. The Company estimates the cash expenditures necessary to close or consolidate certain of the existing Tokheim subsidiaries to approximate $3.0 million in 2000, of which $1.0 million was incurred in the six month period ended May 31, 2000. Through the planning and corrective actions identified by the Company's Year 2000 program office, the Company did not experience any system critical failures. The Company incurred costs of approximately $4.0 million related to the Year 2000 program office. The Year 2000 program office was officially closed on January 31, 2000. New Accounting Pronouncements The Company has considered the impact that accounting pronouncements recently issued by the Financial Accounting Standards Board and American Institute of Certified Public Accountants will have on the Consolidated Condensed Financial Statements as of May 31, 2000. None of the pronouncements that have been issued but not yet adopted by the Company are expected to have a material impact on the Company's financial position, results of operations or cash flows. See the Notes to the Consolidated Financial Statements for additional information regarding recently issued accounting pronouncements. PART II. OTHER INFORMATION Item 1. Legal Proceedings On February 29, 2000, a three member arbitration panel ruled in favor of Bennett Pump Company ("Bennett") concerning arbitration between the Company and Bennett. The dispute concerned the minimum purchase requirements by the Company for Bennett's products over a five year period beginning September 1, 1996. The Company has maintained it could reduce the minimum purchase commitment by not ordering any pumping units and pay Bennett for the lost profit on the pumping units not ordered. The arbitration panel ruled that the minimum purchase agreement entered into as part of the Sofitam acquisition could not be reduced. The Company was required to pay a one time payment of $1.2 million for the shortfall in purchases in 1998 and 1999 and $1.6 million for the shortfall in purchases in 2000 and 2001, which were discounted to present value. The payment of $2.8 million was charged against this liability. The Company had elected not to purchase any additional units from Bennett due to quality and delivery problems that it had experienced with Bennett. The Company is currently building the required pumping unit in-house. In December 1997, the Company acquired Management Solutions, Inc. ("MSI"). MSI develops and distributes retail automation systems (includes POS software), primarily for the convenience store, petroleum dispensing and fast food service industries. The Company paid MSI's stockholders an initial amount of $12.0 million. The Company is also obligated to make contingent payments of up to $13.2 million through 2000 based upon MSI's performance. The Company was not obligated to make any performance payments in 1999 or 1998 under the purchase agreement. The four former shareholders of MSI filed a $30.0 million arbitration claim against the Company with the American Arbitration Association on July 7, 1999 alleging fraud, breach of contract, tortious interference with contractual relations and breach of implied covenant of good faith and fair dealing. The claims relate to the Company's acquisition of MSI in 1997 and the termination for cause of its president and chief executive officer in February 1999. The Company has filed counterclaims and is also seeking damages in excess of $4.0 million for breaches of representations and warranties in the purchase agreement. The Company believes that the claims of the former shareholders are without merit and will vigorously defend against the allegations. New York Stock Exchange On February 18, 2000, the Company announced that it failed to meet newly effective New York Stock Exchange ("NYSE") continued listing standards requiring total market capitalization and total stockholders equity of not less than $50.0 million each. The Company submitted a plan on January 31, 2000 to the Listings and Compliance Committee (the "NYSE Committee") of the NYSE demonstrating how the Company planned to comply with the newly effective standards. Based upon management estimates, the Company believed it would satisfy the new standards of the NYSE. After reviewing the plan, the NYSE Committee informed the Company in a letter dated April 6, 2000, that it had agreed to accept the Company's submitted plan, and that senior NYSE management had acknowledged such acceptance. As a result, the NYSE was prepared to continue the listing of the Company at that time. The NYSE would perform quarterly reviews during the 18 months from receipt of its initial December 30, 1999 letter to the Company for compliance with the goals and initiatives as outlined in the Company's plan. Failure to achieve these goals could result in the Company being subject to NYSE trading suspension at the point the initiative or goal was not met. The Company was informed that it would need to achieve the new minimum continued listing standards of market capitalization of not less than $50.0 million and total stockholders' equity of not less $50.0 million at the end of the 18 month plan period. Failure to achieve any of the minimum requirements at the appropriate time would result in the Company being suspended by the NYSE with application made to the SEC to delist the Company's common stock. During the first quarterly review, the Company advised the NYSE that, due to continuing low levels of business activity, it had decided not to proceed with a key element of the plan. On July 3, 2000, the Company was notified that it would be delisted from the NYSE as of July 14, 2000, for failing to meet the continued listing criteria. The Company's common stock began trading on the OTC Bulletin Board on Friday July 14, 2000, under the symbol "TOKM". Item 6. Exhibits and Reports on Form 8-K a. Exhibits Exhibit No. Document 2.1 Stock Purchase Agreement, dated as of December 29, 1997 between Tokheim Corporation and Arthur S. ("Rusty") Elston, Ronald H. Elston, Eric E. Burwell and Curt E. Burwell (incorporated herein by reference to the Company's Current Report on Form 8-K, dated December 31, 1997). 2.2 Master Agreement for Purchase and Sale of Shares, Assets, and Liabilities, dated as of June 19, 1998, between Tokheim Corporation and Schlumberger Limited (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 2.3 Amendment No. 1 to the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of September 30, 1998 between Tokheim Corporation and Schlumberger Limited (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 3.1 Restated Articles of Incorporation of Tokheim Corporation, as amended, as filed with the Indiana Secretary of State on February 5, 1997 (incorporated herein by reference to the Company's Annual Report on Form 10-K/A for the year ended November 30, 1996). 3.2 Bylaws of Tokheim Corporation, as restated on July 12, 1995 and amended March 2, 1998 (incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the period ended May 31, 1998). 4.1 Rights Agreement, dated as of January 22, 1997, between Tokheim Corporation and Harris Trust and Savings Bank, as Rights Agent (incorporated herein by reference to the Company's Current Report on Form 8-K, filed February 23, 1997). 4.2 Amendment No. 1 to Rights Agreement, dated as of September 30, 1998, between Tokheim Corporation and Harris Trust and Savings Bank (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.3 Securities Purchase Agreement, dated September 30, 1998, between Tokheim Corporation and Schlumberger Limited (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.4 12% Senior Subordinated Note due January 28, 1999 in the amount of $170,000,000 (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.5 Senior Subordinated Note Indenture, dated as of September 30, 1998, among Tokheim Corporation, Management Solutions, Inc., Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum Equipment, Inc., Envirotronic Systems, Inc., Gasboy International, Inc., Tokheim Automation Corporation, Tokheim Investment Corp., as guarantors, and Harris Trust and Savings Bank, as trustee (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.6 12% Junior Subordinated Note due 2008 in the amount of $40,000,000 (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.7 Junior Subordinated Note Indenture, dated as of September 30, 1998, among Tokheim Corporation, Management Solutions, Inc., Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum Equipment, Inc., Envirotronic Systems, Inc., Gasboy International, Inc., Tokheim Automation Corporation, Tokheim Investment Corp., as guarantors, and Harris Trust and Savings Bank, as trustee (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.8 Amendment No. 1 to Junior Subordinated Note Indenture, dated as of January 25, 1999 (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended November 30, 1998). 4.9 Warrant to Purchase up to 19.9% of the Shares of Common Stock of Tokheim Corporation (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.10 Registration Rights Agreement, dated September 30, 1998, between Tokheim Corporation and Schlumberger Limited (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.11 Note Purchase Agreement, dated as of September 30, 1998, among Tokheim Corporation, the Subsidiaries and the Purchasers (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.12 Amended and Restated Credit Agreement, dated as of September 30, 1998, among Tokheim Corporation, the Borrowing Subsidiaries, the Lenders and NBD Bank, N.A. as administrative agent and Credit Lyonnais as documentation and collateral agent and Gleacher NatWest Inc. and Bankers Trust Company as co-syndication agents (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998). 4.13 Second Amended and Restated Credit Agreement, dated as of December 14, 1998, among Tokheim Corporation, the Borrowing Subsidiaries, the Lenders and NBD Bank, N.A. as administrative agent and Credit Lyonnais as documentation and collateral agent and Gleacher NatWest Inc. and Bankers Trust Company as co-syndication agents (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended September 30, 1998). 4.14 Consent and Amendment No. 1 to Amended and Restated Credit Agreement, dated as of January 11, 1999 (incorporated herein by reference to the Company's Quarterly Report on Form 10-Q, for the quarter ended February 28, 1999). 4.15 Amendment No. 2 to Amended and Restated Credit Agreement, dated as of March 1, 1999 (incorporated herein by reference to the Company's Quarterly Report on Form 10-Q, for the quarter ended February 28, 1999). 4.16 Amendment No. 3 to Second Amended and Restated Credit Agreement, dated as of February 27, 1999 (incorporated herein by reference to the Company's Quarterly Report on Form 10-Q, for the quarter ended February 28, 1999). 4.17 Amendment No. 4 and Waiver to Second Amended and Restated Credit Agreement, dated as of October 14, 1999 (incorporated herein by reference to the Company's Quarterly Report on Form 10-Q, for the quarter ended August 31, 1999). 4.18 Amendment No. 5 to Second Amended and Restated Credit Agreement, dated as of December 22, 1999 (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended September 30, 1999). 4.19 Amendment No. 6 to Second Amended and Restated Credit Agreement, dated as of December 22, 1999. 4.20 Warrant and Registration Rights Agreement, dated as of December 22, 1999, among Tokheim Corporation, Bank One, Indiana, National Association, Credit Lyonnais, Chicago Branch, Bankers Trust Company, ABN Amro Bank, N.V., Credit Agricole Indosuez, Harris Trust and Savings Bank, Compagnie Financiere de Cic et de L'Union Europeene, Mercantile Bank N.A., The Provident Bank, Finova Capital Corporation, Imperial Bank, Natexis Banque BFCE, Bank Polska Kasa Opieke S.A.-- Pekao S.A. Group, New York Branch, Senior Debt Portfolio, Eaton Vance Senior Income Trust, Oxford Strategic Income Fund, Octagon Loan Trust, Octagon Investment Partners II, LLC, Indosuez Capital Funding IIA, Limited, Indosuez Capital Funding IV, L.P., Alliance Investment Opportunities Fund, L.L.C., Amsouth Bank and ARES Leveraged Investment Fund II, L.P. (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended September 30, 1999). 4.21 Form of Warrant Certificate, dated as of December 22, 1999 (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended September 30, 1999). 4.22 Dollar Notes Indenture, dated as of January 29, 1999, among Tokheim Corporation, certain subsidiary guarantors of Tokheim Corporation, and U.S. Bank Trust National Association, as trustee (incorporated herein by reference to Amendment No. 140 to the Company's Registration Statement on Form S-4, dated June 15, 1999, as amended). 4.23 Euro Notes Indenture, dated as of January 29, 1999, among Tokheim Corporation, certain subsidiary guarantors of Tokheim Corporation, and U.S. Bank Trust National Association, as trustee (incorporated herein by reference to Amendment No. 140 to the Company's Registration Statement on Form S-4, dated June 15, 1999, as amended). 4.24 Dollar Registration Rights Agreement, dated as of January 29, 1999, among Tokheim Corporation, BT Alex. Brown Incorporated, Credit Lyonnais Securities (USA) Inc., First Chicago Capital Markets, Inc., Gleacher NatWest International, ABN AMRO Incorporated, PaineWebber Incorporated, Schroder & Co. Inc. and certain subsidiary guarantors of Tokheim Corporation (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended November 30, 1998). 4.25 Euro Registration Rights Agreement, dated as of January 29, 1999, among Tokheim Corporation, BT Alex. Brown Incorporated, Credit Lyonnais Securities (USA) Inc., First Chicago Capital Markets, Inc., Gleacher NatWest International, ABN AMRO Incorporated, PaineWebber Incorporated, Schroder & Co. Inc. and certain subsidiary guarantors of Tokheim Corporation (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended November 30, 1998). 10.1 Tokheim Corporation 1992 Stock Incentive Plan, established December 15, 1992 (incorporated herein by reference to the Company'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 herein by reference to Amendment No. 1 to the Company'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 herein by reference to the Company's Report on Form 10-Q/A, for the quarter ended February 29, 1996). 10.4 Tokheim Corporation Deferred Compensation Plan (incorporated herein by reference to the Company's Report on Form 10-Q, for the quarter ended August 31, 1999). 10.5 Tokheim Corporation Supplemental Executive Retirement Plan (incorporated herein by reference to the Company's Report on Form 10-Q, for the quarter ended August 31, 1999). 10.6 Employment Agreement, dated July 15, 1999, between Tokheim Corporation and Douglas K. Pinner (incorporated herein by reference to the Company's Report on Form 10-Q, for the quarter ended August 31, 1999). 10.7 Employment Agreement, dated May 15, 2000, between Tokheim Corporation and Robert L. Macdonald. 10.8 Employment Agreement, dated July 15, 1999, between Tokheim Corporation and John A. Negovetich (incorporated herein by reference to the Company's Report on Form 10-Q, for the quarter ended August 31, 1999). 10.9 Employment Agreement, dated July 15, 1999, between Tokheim Corporation and Jacques St-Denis (incorporated herein by reference to the Company's Report on Form 10-Q, for the quarter ended August 31, 1999). 10.10 Employment Agreement, dated July 15, 1999, between Tokheim Corporation and Norman L. Roelke (incorporated herein by reference to the Company's Report on Form 10-Q, for the quarter ended August 31, 1999). 10.11 Employment Agreement, dated July 15, 1999, between Tokheim Corporation and Scott A. Swogger (incorporated herein by reference to the Company's Report on Form 10-Q, for the quarter ended August 31, 1999). 10.12 Technology License Agreement, effective as of December 1, 1997, between Tokheim Corporation and Gilbarco, Inc. (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended November 30, 1997). 10.13 Tokheim Corporation 1997 Incentive Plan (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended November 30, 1997). 10.14 Employment Agreement, dated December 31, 1997, between Management Solutions, Inc. and Arthur S. Elston (incorporated herein by reference to the Company's Annual Report on Form 10-K, for the year ended November 30, 1997). 11.1 Statement re computation of per share earnings. 27.1 Financial Data Schedule. b. Reports on Form 8-K None. 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. TOKHEIM CORPORATION Date: /s/ Douglas K. Pinner --------------------- Chairman, President and Chief Executive Officer Date: /s/ Robert L. MacDonald ---------------------- Executive Vice-President, Finance and Chief Financial Officer Exhibit Index Exhibit No. Document ------- -------- 4.19 Amendment No. 6 to Second Amended and Restated Credit Agreement, dated as of December 22, 1999. 10.7 Employment Agreement, dated May 15, 2000, between Tokheim Corporation and Robert L. Macdonald. 11.1 Statement re computation of per share earnings. 27.1 Financial Data Schedule. EX-4 2 0002.txt EXHIBIT 4.19 - AMENDMENT NO. 6 AND LIMITED WAIVER WITH RESPECT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT Exhibit 4.19 AMENDMENT NO. 6 AND LIMITED WAIVER WITH RESPECT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT THIS AMENDMENT NO. 6 AND LIMITED WAIVER WITH RESPECT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Amendment") is made as of July 26, 2000 by and among TOKHEIM CORPORATION, an Indiana corporation (the "Company"), GASBOY INTERNATIONAL, INC., a Pennsylvania corporation ("Gasboy"), TOKHEIM-SOFITAM S.A., a societe anonyme organized under the laws of France ("Tokheim- Sofitam"), TOKHEIM SOFITAM APPLICATIONS S.A., a societe anonyme organized under the laws of France ("Sofitam Applications"), TOKHEIM SERVICES FRANCE ("Tokheim France"), TOKHEIM UK LIMITED ("Tokheim UK"), the financial institutions party hereto, ABN AMRO BANK N.V., in its individual capacity as a Lender and as administrative agent on behalf of the Lenders (the "Administrative Agent"), CREDIT LYONNAIS, as Documentation and Collateral Agent, and BANKERS TRUST COMPANY, as Co-Syndication Agent under that certain Second Amended and Restated Credit Agreement dated as of December 14, 1998 by and among the Company, Gasboy, Tokheim-Sofitam, Sofitam Applications, the financial institutions party thereto (the "Lenders"), the Administrative Agent, the Documentation and Collateral Agent, and the Co-Syndication Agent (collectively, the "Agents"), as amended by an Amendment No. 1, an Amendment No. 2, an Amendment No. 3, an Amendment No. 4 and an Amendment No. 5, dated as of January 11, 1999, March 1, 1999, February 27, 1999, October 14, 1999 and December 22, 1999, respectively (as amended and as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement. WITNESSETH WHEREAS, the Company, Gasboy, Tokheim-Sofitam, Sofitam Applications Tokheim France, Tokheim UK, the Lenders, the Administrative Agent, the Documentation and Collateral Agent, and the Co-Syndication Agent are parties to the Credit Agreement; WHEREAS, the Company has notified the Administrative Agent and the Lenders that the Company may be in violation of the financial covenants set forth in Sections 6.12, 6.23, 6.24, 6.25 and 6.33 of the Credit Agreement, in each case, for the fiscal quarter ending on May 31, 2000 and, after the date hereof, a Default under Section 7.6 of the Credit Agreement may occur as the result of the failure by the Company to make scheduled interest payments due on August 1, 2000 on its US$123,000,000 11-3/8% Senior Subordinated Notes due 2008 and its (U)75,000,000 11-3/8% Senior Subordinated Notes due 2008; WHEREAS, the Borrowers have requested that the Administrative Agent and the Required Lenders waive the "Applicable Defaults" (as described below) and the Required Lenders and the Administrative Agent are willing to waive the Applicable Defaults on the terms and conditions set forth herein, it being expressly understood that the waiver set forth herein shall in no event constitute a waiver by the Lenders or the Administrative Agent of any other breach of the Credit Agreement or any of the Lenders' or Administrative Agent's rights or remedies with respect thereto; NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, Gasboy, Tokheim-Sofitam, Sofitam Applications and the Required Lenders have agreed as follows: 1. Amendments to Credit Agreement. Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 3 below, the Credit Agreement is hereby amended as follows: 1.1 Section 2.5.3(B)(ii)(z) of the Credit Agreement shall be amended and restated to read in its entirety as follows: (z) If on the last Business Day of any week: (A) the Dollar Amount of the Revolving Credit Obligations exceeds 100% of the Maximum Revolving Credit Amount, upon demand of the Agent the Company for the ratable benefit of the Lenders shall or shall cause the other Borrowers to prepay Loans (to be applied to such Loans as the Company shall direct at the time of such payment) on the next succeeding Business Day in an aggregate amount such that after giving effect thereto the Dollar Amount of the Revolving Credit Obligations is less than or equal to the Maximum Revolving Credit Amount; or (B) the Dollar Amount of all outstanding Alternate Currency Loans under the Alternate Currency Addenda exceeds 100% of the aggregate Alternate Currency Commitments with respect thereto, upon demand of the Agent the applicable Borrowers shall on the next succeeding Business Day prepay Alternate Currency Loans in an aggregate amount such that after giving effect thereto the Dollar Amount of all such Alternate Currency Loans is less than or equal to the aggregate Alternate Currency Commitments with respect thereto; or (C) the Dollar Amount of the aggregate outstanding principal amount of Alternate Currency Loans exceeds $80,000,000, upon demand of the Agent the applicable Borrowers shall on the next succeeding Business Day prepay Alternate Currency Loans in an aggregate amount such that after giving effect thereto the Dollar amount of all Alternate Currency Loans is less than or equal to $80,000,000. 2. Waiver. Upon the effectiveness of this Amendment in accordance with the provisions of Section 3 below, the Administrative Agent and the Required Lenders hereby waive, for all purposes other than the purpose of delivering one or more Blockage Notices as set forth in the immediately succeeding sentence, (i) until the Waiver Expiration Date any violation of the financial covenants set forth in Sections 6.12, 6.23, 6.24, 6.25 and 6.33 of the Credit Agreement, in each case, for the fiscal quarter ending on May 31, 2000, (ii) any violation of Section 6.1(ix) of the Credit Agreement to the extent the Company has not delivered cash forecasts or updates on synergies required to be delivered for the calendar months ending during the period commencing on November 30, 1999 through the date hereof, (iii) compliance with any requirement pursuant to Section 2.5.3(B)(ii)(x) of the Credit Agreement that the Company make a prepayment of the Additional Revolving Loans or the Obligations during the period from May 31, 2000 to the Waiver Expiration Date, (iv) until the Waiver Expiration Date any violation of Section 6.34 of the Credit Agreement with respect to June 25, 2000 and July 25, 2000, (v) any violation prior to the date hereof of Section 10(a) of the Security Agreement with respect to the failure of the Company to provide 30 days' prior written notice of the locations of certain Collateral listed on Schedule I hereto and (vi) until the Waiver Expiration Date any Default under Section 7.6 of the Credit Agreement arising from any failure by the Company to make scheduled interest payments on August 1, 2000 on its US$123,000,000 11-3/8% Senior Subordinated Notes due 2008 and its (U)75,000,000 11-3/8% Senior Subordinated Notes due 2008 (collectively, the "Applicable Defaults"), and (subject to the immediately succeeding sentence) the Lenders' and the Administrative Agent's rights and remedies arising therefrom. Notwithstanding the immediately preceding sentence, the Lenders and the Administrative Agent do not waive any Applicable Default for the purpose of, and may use any Applicable Default as grounds for, delivering a Blockage Notice to any holder of Indebtedness that is subordinated to the Obligations, or any trustee for or representative of any such holder, and the Applicable Defaults are not waived and shall continue to exist for such purpose. When used herein, (i) "Waiver Expiration Date" means August 16, 2000 and (ii) "Blockage Notice" means any notice to any holder of Indebtedness, or any trustee for or representative of any such holder, that such Indebtedness may not be paid under the terms governing such Indebtedness due to the existence of a Default. 3. Conditions of Effectiveness. This Amendment shall become effective and be deemed effective as of July 26, 2000 upon the delivery of duly executed originals of this Amendment to the Administrative Agent from the Required Lenders, Gasboy, Tokheim-Sofitam, Sofitam Applications Tokheim France, Tokheim UK and the Company. 4. Representations and Warranties of the Company. The Company, Gasboy, Tokheim-Sofitam and Sofitam Applications (each a "Credit Party") hereby represent and warrant as follows: (a) This Amendment and the Credit Agreement constitute legal, valid and binding obligations of such Credit Party and are enforceable against such Credit Party in accordance with their terms. The Obligations are absolute and unconditional, and there exists no right of set off or recoupment, counterclaim or defense of any nature whatsoever to repayment of the Obligations. (b) Upon the effectiveness of this Amendment each Credit Party hereby reaffirms all covenants, representations and warranties made in the Credit Agreement, to the extent the same are not waived hereby, and agree that all such covenants, representations and warranties shall be deemed to have been remade as of the effective date of this Amendment (unless expressly made as of a different date). (c) No Default or Unmatured Default, other than the Applicable Defaults, exists under the Credit Agreement or under any other document, agreement or instrument executed and delivered by any Credit Party in connection therewith or pursuant thereto. 5. Reference to and Effect on the Credit Agreement. 5.1. Except as specifically set forth herein, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. 5.2. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agents or any of the Lenders, including the right to declare a default based on the Applicable Defaults after the Waiver Expiration Date, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith except to the limited extent specifically set forth herein. 6. Costs and Expenses. The Company agrees to pay all reasonable costs, fees and out- of-pocket expenses (including reasonable attorneys' fees and expenses charged to the Administrative Agent) incurred by the Administrative Agent in connection with the preparation, execution and enforcement of this Amendment. 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING WITHOUT LIMITATION, 735 ILCS 105/5-1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS) OF THE STATE OF ILLINOIS. 8. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose. 9. Counterparts. This Amendment may be executed by one or more of the parties to the Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 10. Agreement. The Borrowers agree that if there exists any Revolving Credit Availability after the date hereof as a result of fluctuations in currency exchange rates, the Borrowers will not request Revolving Loans, Additional Revolving Loans, Swing Loans or Letters of Credit to the extent of such availability. IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written. TOKHEIM CORPORATION, as a Borrower By:__________________________________ Name: Title: GASBOY INTERNATIONAL, INC., as a Borrower By:__________________________________ Name: Title: TOKHEIM-SOFITAM S.A., as a Borrower By:__________________________________ Name: Title: TOKHEIM SOFITAM APPLICATIONS S.A., as a Borrower By:__________________________________ Name: Title: TOKHEIM UK LIMITED By:__________________________________ Name: Title: TOKHEIM SERVICES FRANCE By:__________________________________ Name: Title: ABN AMRO BANK N.V., as Administrative Agent and as a Lender By:__________________________________ Name: Title: By:__________________________________ Name: Title: CREDIT LYONNAIS, CHICAGO BRANCH, as Documentation and Collateral Agent and as a Lender By:__________________________________ Name: Title: BANKERS TRUST COMPANY, as Co-Syndication Agent and as a Lender By:__________________________________ Name: Title: BANK ONE, INDIANA, NATIONAL ASSOCIATION, formerly known as NBD BANK, N.A., as a Lender By:__________________________________ Name: Title: CREDIT AGRICOLE INDOSUEZ, as a Lender By:__________________________________ Name: Title: By:__________________________________ Name: Title: CREDIT INDUSTRIEL ET COMMERCIAL, as a Lender By:__________________________________ Name: Title: By:__________________________________ Name: Title: MERCANTILE BANK N.A., as a Lender By:__________________________________ Name: Title: THE PROVIDENT BANK, as a Lender By:__________________________________ Name: Title: FINOVA CAPITAL CORPORATION, as a Lender By:__________________________________ Name: Title: IMPERIAL BANK, as a Lender By:__________________________________ Name: Title: NATEXIS BANQUE BFCE, as a Lender By:__________________________________ Name: Title: By:__________________________________ Name: Title: BANK POLSKA KASA OPIEKI S.A. - PEKAO S.A GROUP, NEW YORK BRANCH, as a Lender By:__________________________________ Name: Title: SENIOR DEBT PORTFOLIO, as a Lender By: Boston Management and Research, as Investment Advisor By:__________________________________ Name: Title: EATON VANCE SENIOR INCOME TRUST, as a Lender By: Eaton Vance Management, as Investment Advisor By:__________________________________ Name: Title: OXFORD STRATEGIC INCOME FUND, as a Lender By: Eaton Vance Management, as Investment Advisor By:__________________________________ Name: Title: EATON VANCE INSTITUTIONAL SENIOR LOAN FUND, as a Lender By: Eaton Vance Management, as Investment Advisor By:__________________________________ Name: Title: OCTAGON LOAN TRUST, as a Lender By: Octagon Credit Investors, as Manager By:__________________________________ Name: Title: OCTAGON INVESTMENT PARTNERS II, LLC, as a Lender By:__________________________________ Name: Title: DLJ CAPITAL FUNDING, INC., as a Lender By:__________________________________ Name: Title: OAKTREE CAPITAL MANAGEMENT, LLC, as a Lender By:__________________________________ Name: Title: AMSOUTH BANK, as a Lender By:__________________________________ Name: Title: ARES LEVERAGED INVESTMENT FUND II, L.P., as a Lender By: ARES Management II, L.P., its General Partner By:__________________________________ Name: Title: HALCYON/ALAN B. SLIFKA MANAGEMENT COMPANY, LLC, as a Lender on behalf of the funds it manages/advises By:__________________________________ Name: Title: EXHIBIT A REAFFIRMATION Each of the undersigned hereby acknowledges receipt of a copy of the foregoing Amendment No. 6 and Limited Waiver to the Second Amended and Restated Credit Agreement dated as of December 14, 1998 by and among TOKHEIM CORPORATION, an Indiana corporation (the "Company"), GASBOY INTERNATIONAL, INC., a Pennsylvania corporation ("Gasboy"), TOKHEIM-SOFITAM S.A., a societe anonyme organized under the laws of France ("Tokheim-Sofitam"), TOKHEIM SOFITAM APPLICATIONS S.A., a societe anonyme organized under the laws of France ("Sofitam Applications", and, together with the Company, Gasboy and Tokheim-Sofitam, the "Borrowers") and the financial institutions from time to time party thereto (the "Lenders"), as amended by an Amendment No. 1, an Amendment No. 2, an Amendment No. 3, an Amendment No. 4 and an Amendment No. 5, dated as of January 11, 1999, March 1, 1999, February 27, 1999, October 14, 1999 and December 22, 1999, respectively (as amended and as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), which Amendment No. 6 and Limited Waiver is dated as of July 26, 2000 (the "Amendment"). Capitalized terms used in this Reaffirmation and not defined herein shall have the meanings given to them in the Credit Agreement. Without in any way establishing a course of dealing by any Agent or any Lender, each of the undersigned reaffirms the terms and conditions of the Guaranty, Pledge Agreement, Security Agreement and any other Loan Document executed by it and acknowledges and agrees that such agreement and each and every such Loan Document executed by the undersigned in connection with the Credit Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed. All references to the Credit Agreement contained in the above-referenced documents shall be a reference to the Credit Agreement as so modified by Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5 and the Amendment and as the same may from time to time hereafter be amended, modified or restated. Dated as of July 26, 2000 TOKHEIM AUTOMATION CORPORATION ENVIROTRONIC SYSTEMS, INC. TOKHEIM INVESTMENT CORP. SUNBELT HOSE & PETROLEUM EQUIPMENT, INC. GASBOY INTERNATIONAL, INC. MANAGEMENT SOLUTIONS, INC. TOKHEIM EQUIPMENT CORPORATION TOKHEIM RPS, LLC By: Gasboy International, Inc. TOKHEIM-SOFITAM S.A. TOKHEIM SOFITAM APPLICATIONS S.A. By:__________________________________ Name: Title: Schedule I Company Locations of Collateral 510 Independence Parkway Suite 100 Chesapeake, Virginia (Independent City) 2935 West 47th Street Chicago, Illinois 60632 EX-10 3 0003.txt EXHIBIT 10.7 - EMPLOYMENT AGREEMENT Exhibit 10.7 EMPLOYMENT AGREEMENT FOR CORPORATE OFFICER THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of this 15TH day of MAY, 2000, by and between Tokheim Corporation, an Indiana Corporation ("Company") and ROBERT L. MACDONALD ("Employee"). RECITALS A. Company acknowledges and recognizes the value of Employee's services and deems it necessary and desirable to retain Employee's full-time services. B. Employee and Company desire to embody the terms and conditions of Employee's employment in a written agreement, which will supersede all prior employment agreements, whether written or oral. AGREEMENT NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: EMPLOYMENT. Company agrees to employ Employee, and Employee agrees to serve Company, on a full time basis in the capacity of EXECUTIVE VICE PRESIDENT FINANCE AND CHIEF FINANCIAL OFFICER, subject to the terms and conditions of this Agreement. 1. TERM. Employee's employment shall commence on the effective date of this Agreement and continue for an indefinite period and until such time as it may be terminated by one or both of the parties as provided below. 2. DEFINED TERMS. For purposes of this Agreement, the following terms shall have the following meanings, when capitalized: "Base Monthly Rate" means the sum of (i) Employee's monthly salary payable under Section 4.1 as of the determination date and (ii) one-twelfth of the average bonus paid to Employee for the two fiscal years of the Company preceding the determination date. For purposes of Section 5, the determination date shall be the date on which this Agreement terminates, and, for purposes of Section 7, the determination date shall be the date on which the Change in Control occurs. For purposes of clause (ii) of the first sentence of this definition, if Employee was not employed for the two full fiscal years immediately preceding the determination date, the amount under clause (ii) shall be one-twelfth of Employee's bonus for the fiscal year immediately preceding the determination date. "Board" means the Company's Board of Directors. "Cause" has the meaning specified in Section 5.1.1. "Change in Control" has the meaning specified in Section 7.1.2. "Code" or "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from time to time. "Committee" means a duly authorized committee of the Board. "Confidential Information" has the meaning specified in Section 8. "Deferred Compensation Plan" means the Tokheim Corporation Deferred Compensation Plan, as in effect on the earlier of Executive's termination of employment or a Change in Control. "Disabled" or "Disability" means a mental or physical illness of Employee that prevents Employee from performing the essential functions of his position in a satisfactory manner and that the Board determines is likely to continue for at least six months or the remainder of Employee's life. The Board's determination of the existence or non-existence of Disability shall be made in good faith based on medical evidence acceptable to the Board. "Supplemental Executive Retirement Plan" means the Tokheim Corporation Supplemental Executive Retirement Plan, as in effect on the earlier of Executive's termination of employment or a Change in Control. 3. DUTIES. 3.1 During the term of this Agreement, Employee shall have such duties and responsibilities and shall supply such services in the carrying out of such duties and responsibilities as Company, through its Board, a Committee, its Chief Executive Officer, or another executive officer designated by the Board or a Committee shall from time to time direct. Subject to the provisions of Section 7, Company retains the right to change the position, responsibilities, duties, or services to be performed by Employee in such manner as it deems appropriate. During the term of employment, Employee shall devote his best efforts and skills to the business interests of Company and shall not engage in any commercial enterprise or activity, either directly or indirectly, in conflict with Company's business, or which may in any way interfere with his employment, without the consent of the Board. 3.2 Employee agrees that, during the term of his employment, any and all inventions and discoveries, whether or not patentable, which Employee may conceive or make (collectively, "Inventions"), either alone or in conjunction with others and related or in any way connected with the business of Company, shall be the sole and exclusive property of Company. Employee shall, without further compensation or consideration, but at the expense of Company, and as and when requested to do so by Company, promptly execute and assign any and all applications, assignments, and other instruments which Company shall deem necessary to apply for and obtain letters patent of the United States and foreign countries for any Inventions and to assign and convey to Company or its nominee the sole and exclusive right, title, and interest in and to any Inventions or applications or patents thereon. As promptly as known or possessed by Employee, Employee shall disclose to Company all information with respect to any Invention. Employee further agrees that, during the term of employment, any trademarks, tradenames, service marks, trade styles, logos, emblems, labels, slogans, and writings, whether or not copyrighted (collectively, "Marks"), originated by Employee, alone or in conjunction with others, and related or in any way connected with the business of Company, shall be the sole and exclusive property of Company. Employee shall, without further compensation or consideration, but at the expense of Company, and as and when requested to do so by Company, take all action necessary to register or otherwise perfect Company's interest in and to any Marks. 4. COMPENSATION. During the term of this Agreement, Company shall compensate Employee for his services as follows: 4.1 Employee shall be entitled to an initial monthly base salary of $ 27,083.34. Employee's base salary shall be payable in semi-monthly or monthly installments in accordance with the policy of Company at the time of such payments. Employee's base salary shall be reviewed by the Board or a Committee at least annually and, subject to the provisions of Section 7, shall be subject to adjustment by the Board or such Committee. 4.2 Employee shall be eligible for such bonus program as may from time to time be made available and applicable to Employee by the Board or a Committee. 4.3 Employee shall be granted participation in all employee benefit plans applicable to Employee's position with 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 Employee (collectively, "Plans"), consistent with the policies of Company and the terms and conditions of the Plans, as in effect from time to time, or as provided for in your offer/confirmation letter dated April 12, 2000. Except as provided in Section 7, nothing in this Agreement shall be deemed to alter the terms and conditions of any Plan or the policy of Company with respect to any Plan, and nothing in this Agreement shall be deemed to entitle Employee to any rights in any Plan which would not otherwise be made available to Employee pursuant to the terms, conditions, and provisions of the Plan. 4.3.1 Except as may otherwise be expressly provided, Employee shall be granted, upon termination of this Agreement, such rights as may be available to him pursuant to any Plan or Plans then in effect. 5. TERMINATION. Either Company or Employee may terminate this Agreement upon providing written notice to the other. 5.1 BY THE COMPANY. In the event this Agreement is terminated with Cause, Employee shall be entitled to no severance pay, and 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. 5.1.1 WITH CAUSE. For purposes of this Agreement, the termination of this Agreement shall be deemed to have been made with Cause only upon the occurrence of one or more of the following circumstances: 5.1.1.1 Employee engages in any breach of fiduciary duty, act of dishonesty, or theft involving Company; 5.1.1.2 Employee is convicted of a felony; 5.1.1.3 Employee discloses Confidential Information in violation of Section 8 or competes with Company in violation of Section 9; 5.1.1.4 Employee refuses or fails to carry out the duties which may have been assigned to him; or 5.1.1.5 Employee continues to violate any written Company policy after written notice by Company of the violation. Before the Board terminates Employee's employment for Cause, it shall provide Employee an opportunity, after reasonable notice, to appear before the Board. To terminate Employee for Cause, the Board must adopt a resolution terminating Employee by affirmative vote of at least 75% of its members, after having given Employee the opportunity to present his case to the Board. The Board's resolution must state that the Board finds in good faith that (i) Employee is guilty of conduct constituting Cause, specifying the details of such conduct, and (ii), for cause described in Section 5.1.1.5, Employee failed to cure such conduct within 30 days after receiving written notice from Company detailing such conduct. The effective date of Employee's termination for Cause shall be the date on which Employee receives a copy of the resolution adopted by the Board or such later date specified in the resolution. 5.1.2 WITHOUT CAUSE. In the event Company terminates this Agreement without Cause, Employee shall be entitled to severance pay equal to 18 months of Employee's base salary payable pursuant to Section 4.1 in effect at the time of the termination, payable at the same interval as his salary at the time of the termination. Employee shall have no obligation to mitigate damages by seeking other employment. 5.1.3 The right to severance pay under this Section 5.1.2 shall vest upon notice of termination and shall not be affected by Employee's subsequent death or disability. 5.1.3.1 Employee shall also be entitled to the following for 18 months or until Employee begins alternative employment: i Medical insurance, life insurance, and disability insurance benefits from Company comparable to such benefits provided with respect to Employee as of the date of the termination of this Agreement. ii Continued accrual of benefits under the Supplemental Executive Retirement Plan, if Employee is a Participant therein, as if Employee's employment had continued at the Base Monthly Rate. 5.2 BY EMPLOYEE. Subject to Section 7, in the event Employee terminates this Agreement, Employee shall be entitled to no severance pay and shall be entitled only to such other rights as may be provided in this Agreement or as may otherwise be available to him in law or equity. 5.3 DEATH OR DISABILITY. In the event Employee dies or becomes permanently Disabled during the term of this Agreement or any extension of it, this Agreement shall terminate upon the date of such death or Disability. In the event this Agreement terminates by Employee's death or Disability, Company shall pay Employee's pro-rata base salary under Section 4.1 through the termination date, and Employee shall be entitled to such continuing benefits as may be provided in any plan or by law, but Employee shall not be entitled to severance pay. 6. RETURN OF COMPANY PROPERTY. Upon termination of this Agreement for any reason, Employee shall immediately surrender to Company, in the same condition as existed prior to termination of this Agreement, all property of Company in his possession or control, including Confidential Information, computers, files, and any other property owned by Company. Employee and Company acknowledge and agree that the damages suffered as a result of the breach of this Section would be difficult to ascertain. Accordingly, the parties agree that Company shall be entitled to liquidated damages in the amount of $5,000 in the event of a breach by Employee of this Section. 7. CHANGE IN CONTROL. 7.1 BENEFITS PAYABLE. Notwithstanding anything in this Agreement to the contrary, Employee shall be entitled to the termination benefits set forth below, if this Agreement is terminated by a "Triggering Event." The benefits set forth below shall be in addition to any other benefits which may have accrued to Employee during the term of employment; provided, however, the provisions regarding direct severance pay shall be exclusive and shall replace any other rights of Employee to direct severance payments as set forth in Section 5. 7.1.1 TRIGGERING EVENT. For purposes of this Agreement, a Triggering Event shall be deemed to have occurred if: 7.1.1.1 there is a Change in Control; and 7.1.1.2 within 12 months after the Change in Control: (a) Company terminates this Agreement without Cause, or (b) (1) Company or Employee terminates this Agreement, and (2) in combination with the Change in Control, there has been one or more of the following: (i) a change in the President and/or Chief Executive Officer of Tokheim Corporation or the principle managing corporation, (ii) a change of Employee's job authority or responsibilities, (iii) a reduction of Employee's base salary payable pursuant to Section 4.1 or a material reduction of aggregate benefits provided to Employee, or (iv) the relocation of Employee's primary office location to a distance greater than 50 miles from the current office location. 7.1.2 CHANGE IN CONTROL. As used in this Agreement, a "Change in Control" shall be deemed to have occurred if there has been one or more of the following: 7.1.2.1 any "person" (as such term is used in Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended from time to time), other than a retirement plan sponsored by Company, becomes a beneficial owner, directly or indirectly, of securities of Company representing 20% or more of the combined voting power of Company's then outstanding securities; 7.1.2.2 less than 51% of the members of the Board are Incumbent Directors (as defined in the Company's Deferred Compensation Plan, as in effect on the date of this Agreement): 7.1.2.3 any corporation or group of associated persons acting in concert, owns more than 25% of the outstanding shares of voting stock of Company coupled with or followed by the exercise of the voting power of such shares by the election of two or more directors of Company in any one election at the instance of such corporation or group; 7.1.2.4 Company becomes a party to an agreement of merger, consolidation, or other reorganization pursuant to which Company will be a constituent corporation, and either (i) Company is not the surviving or resulting corporation, or (ii) the transaction will result in less than 60% of the outstanding voting securities of the surviving or resulting entity being owned by former shareholders of Company; 7.1.2.5 Company becomes a party to an agreement providing for Company's sale or other disposition of all or substantially all of its assets to any individual, partnership, joint venture, association, trust, corporation, or other entity or person which is not an Affiliate (as defined in the Company's Deferred Compensation Plan, as in effect on the date of this Agreement); 7.1.2.6 an event that triggers the exercisability of rights under the Company's Shareholder Rights Plan, as in effect at the time of the Triggering Event; or 7.1.2.7 the occurrence of another event that the Board designates a Change in Control. 7.2 BENEFITS. In the event this Agreement is terminated by a Triggering Event, Employee shall be entitled to the following: 7.2.1 A lump sum severance payment equal to Employee's Base Monthly Rate multiplied by 24, payable within 30 days following termination of the Agreement. 7.2.2 Employee shall also be entitled to the following for 24 months or until Employee begins alternative employment. 7.2.2.1 Medical, life, accidental death and dismemberment, disability, pension, and split dollar life insurance benefits from Company comparable to such benefits with respect to Employee as of the date of the termination of this Agreement. 7.2.2.2 Continued accrual of benefits under the Supplemental Executive Retirement Plan as if Employee's employment had continued at the Base Monthly Rate. 7.3 Notwithstanding any provision of this Section 7 to the contrary, if Company reasonably determines that any payment or benefit provided pursuant to this Section is an "excess parachute payment" within the meaning of Code Section 280G or any successor thereof, Company may limit the total payment or benefit to Employee to the maximum amount payable by Company that would not constitute an "excess parachute payment." 7.4 Employee shall have the right to enforce his rights under this Section 7 in any court with jurisdiction over the parties and matter or pursuant to the arbitration procedures of Section 15. Company shall be responsible for Employee's reasonable expenses and attorneys' fees in any such court proceeding or arbitration and shall pay all costs of arbitration relating to Employee's enforcement of his rights under this Section. 8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. For purposes of this Agreement, Confidential Information is defined as trade secrets (as defined in Indiana Code 24-2-3-2, as amended), software programs, customer reports, customer lists, vendor reports, vendor lists, and other information regarding customers and vendors utilized by Company in the course of its business, and any information regarding Company's present or future business plans. 8.1 Employee acknowledges his position with Company will expose Employee to certain Confidential Information and that Confidential Information constitutes a valuable, special, and unique asset of Company's business. Employee shall not, during or at any time after the term of his employment, disclose any Confidential Information acquired by Employee during his employment to any person, firm, corporation, association, or other entity for any purpose, or use Confidential Information for any purpose, other than for the performance of services for Company. 8.2 In the event of Employee's actual or threatened breach of the provisions of this Section, Company shall be entitled to obtain an injunction enjoining Employee from committing such actual or threatened breach. In the event Company obtains an injunction enjoining Employee from violating this provision, Company shall be entitled to recover all costs incurred in connection with the injunction, including reasonable attorneys' fees. Company shall also be permitted to pursue any other available remedies available for such breach or threatened breach, including the recovery of damages, costs, and attorneys' fees from Employee. 8.3 Employee acknowledges that all Confidential Information is the sole and exclusive property of Company. Employee shall surrender possession of all Confidential Information, including documents, computers, software, disks, tapes or video recordings, or any other written, recorded, or graphic matter, however produced or reproduced, containing Confidential Information to Company upon any suspension or termination of Employee's employment. If, after the suspension or termination of Employee's employment, Employee becomes aware of any Confidential Information in his possession, Employee shall immediately surrender possession of the Confidential Information to Company. 9. RESTRICTIVE COVENANT. For purposes of this Agreement, "Competing Business" is defined as Gilbarco, Wayne, Schlumberger, Bennett, and Tatsuno, and their respective affiliates and subsidiaries, both domestic and international, and any other company engaged in the petroleum dispensing manufacturing business or point of sale equipment business related to petroleum dispensing. 9.1 Employee hereby covenants and agrees that, for the greater of 18 months after termination of this Agreement, or such time as Employee is receiving any severance pay from Company (the "Restricted Period"), Employee shall not, directly or indirectly own, manage, operate, control, be controlled by, participate in, be employed by, or be connected in any manner with the ownership, management, operation, or control of any Competing Business. Employee further covenants and agrees that he shall not during the Restricted Period contact or attempt to contact, either directly or indirectly, any customers of Company as they may exist at the time of termination of Employee's employment for the purpose of soliciting such customer's business for or on behalf of any Competing Business. Employee specifically acknowledges and agrees that Company's business is international in scope and that the restriction as contained in this section is intended to cover activity by Employee both domestically and internationally. Employee further stipulates, covenants, and agrees that a reasonable geographic restriction, as that term is used and defined by Indiana law, on Employee's activities under this Section is the entire world. 9.2 In the event of Employee's actual or threatened breach of the provisions of this Section, Company shall be entitled to obtain an injunction enjoining Employee from committing such actual or threatened breach. In the event Company obtains an injunction enjoining Employee from violating this provision, Company shall be entitled to recover all costs incurred in connection with the injunction, including reasonable attorneys' fees. Company shall also be permitted to pursue any other available remedies available for such breach, including the recovery of damages and reasonable costs and attorneys' fees from Employee. 9.3 If a court of competent jurisdiction or any arbitrator determines that any provision or restriction in this Section is unreasonable or unenforceable, the court or arbitrator shall modify such restriction or provision so that the agreement then becomes an enforceable restriction of the activities of Employee. 10. FORFEITURE OF BENEFITS. If Employee breaches his obligations under either Section 8 or Section 9, Employee shall forfeit all future payments or compensation payable or provided by Company, except as required pursuant to the terms of a Plan. 11. NO CONTINUING OBLIGATION. Employee acknowledges and agrees that this Agreement does not grant Employee the right to continue as an employee of Company as an executive or in any other capacity. 12. NO TRUST ESTABLISHED. All payments provided under this Agreement shall be paid in cash from the general funds of Company, and no separate or special fund has been or shall be established, and no segregation of assets has been or shall be made to assure payment. Employee shall have no right, title, or interest in or to any investments or other assets which Company may acquire or obtain to assist in meeting its obligations under this Agreement. 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 Company and Employee or any other person. The right of any person to receive payments from Company under this Agreement shall be no greater than the rights of a general unsecured creditor of Company. 13. WITHHOLDING. Company may withhold from any payments or benefits provided under this Agreement: 13.1 all federal, state, city, or other taxes as required pursuant to any law or governmental regulation or ruling; and 13.2 any amounts owed by Employee to Company for any reason at the time of the termination of this Agreement. 14. NO ASSIGNMENT OR ALIENATION. This Agreement shall not be assignable by Employee without Company's prior written consent; provided, however, nothing in this Section shall preclude Employee from designating a beneficiary to receive any benefit payable upon his death or preclude Employee's executors, administrators, or other legal representatives of his estate from assigning any rights hereunder to the person or persons entitled thereto. Further, 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. 15. ARBITRATION. Employee and Company recognize and agree that the arbitration of disputes provides mutual advantages in terms of facilitating the fair and expeditious resolution of disputes. In consideration of these mutual advantages, the parties agree as follows: 15.1 LIMITATION OF SECTION. The provisions of this Section are subject to and limited by the provisions of Sections 7.4, 8.2, and 9.2. Except to the extent elected by Employee under Section 7.4, or by the Company under Section 8.2 or 9.2, the provisions of this Section shall not apply to any action brought pursuant to Sections 7.4, 8.2, or 9.2. 15.2 SCOPE OF ARBITRATION. The parties shall submit to arbitration, in accordance with these provisions, any and all disputes either party may have arising from or related to this Agreement, and any other disputes between the parties arising from or related to their employment relationship, including but not limited to, any disputes regarding alleged common law tort violations or violations of state or federal statutory rights. The parties further agree that the arbitration process set forth below shall be the exclusive means for resolving all disputes made subject to arbitration but that no arbitrator shall have authority to determine whether disputes fall within the scope of these arbitration provisions. 15.3 GOVERNING LAW. Employee and Company agree that the interpretation and enforcement of the arbitration provisions of this Agreement, including any right to appeal, shall be governed by the Indiana Uniform Arbitration Act, I.C. 34-4-2-1, et seq. 15.4 TIME LIMITS ON SUBMITTING DISPUTES. Employee and Company acknowledge and agree that one of the objectives of this arbitration provision is to resolve disputes expeditiously, as well as fairly, and that it is the obligation of both parties, to those ends, to raise any disputes subject to arbitration under this Agreement in an expeditious manner. Accordingly, the parties agree to waive all statutes of limitations that might otherwise be applicable, and agree further that, as to any dispute subject to arbitration pursuant to this Agreement, notice of a demand for arbitration must be provided to the other party: 15.4.1 In the event of a dispute arising out of a termination of this Agreement, within six months of the date of termination; 15.4.2 In the event of a breach of Section 8 or 9, within four months after the full Board has actual knowledge of the breach; or 15.4.3 In the event of any other dispute, within three months after the dispute arises. Failure to demand arbitration on claims within these time limits is intended to, and shall to the furthest extent permitted by law, be a waiver and release with respect to such claims, and, in the absence of a timely submitted written demand for arbitration, an arbitrator has no authority to resolve the disputes or render an award. 15.5 AVAILABILITY OF PROVISIONAL RELIEF. Notwithstanding anything herein to the contrary, nothing in this Section shall prevent Company or Employee from obtaining injunctive relief from a court of competent jurisdiction to enforce the obligations of Sections 8 and 9 and for which either party may require provisional relief pending a decision on the merits by the arbitrator. 15.6 AMERICAN ARBITRATION ASSOCIATION RULES APPLY AS MODIFIED HEREIN. Any arbitration of disputes shall be conducted under the Model Employment Procedures of the American Arbitration Association (AAA), as modified in this Agreement. 15.7 INVOKING ARBITRATION. Either party may invoke the arbitration procedures described in this Agreement by written notice of a demand for arbitration (an "Arbitration Notice"). An Arbitration Notice shall contain a statement of the matter to be arbitrated in sufficient detail to establish the timeliness of the demand. The parties shall then have ten business days within which they may identify a mutually agreeable arbitrator. After the ten day period has expired, the parties shall prepare and submit to the AAA a joint submission, with each party to contribute half of the appropriate administrative fee. In their submission to the AAA, the parties shall either designate a mutually acceptable arbitrator or request a panel of arbitrators from the AAA according to the procedure described in section, below. 15.8 ARBITRATOR SELECTION. In the event the parties cannot agree upon an arbitrator within ten business days after the Arbitration Notice is received, their joint submission to the AAA shall request a panel of seven arbitrators from the joint Labor and Commercial Arbitration Panels who are practicing attorneys with professional experience in the field of labor and/or employment law, and the parties shall attempt to select an arbitrator from the panel according to AAA procedures. If the parties remain unable to select an arbitrator, they shall request from AAA a panel of three comparably qualified arbitrators from which the AAA shall reject the least preferred candidate of each party and select the candidate with the highest joint ranking of the parties. In the event of the death or disability of an arbitrator, the parties shall select a new arbitrator as provided above. The substitute arbitrator shall have the power to determine the extent to which he or she shall act on the record already made in arbitration. 15.9 PREHEARING PROCEDURES. Upon accepting assignment as arbitrator, the arbitrator shall promptly conduct a preliminary hearing at which each party shall be entitled to submit a brief statement of their respective positions, and at which the arbitrator shall establish a timetable for prehearing activities and the conduct of the hearing, and may address initial requests from the parties for prehearing disclosure of information. At the preliminary hearing and/or thereafter, the arbitrator shall have the discretion and authority to order, upon request or otherwise, the prehearing disclosure of information to the parties. Such disclosure may include, without limitation, production of requested documents, exchange of witness lists and summaries of the testimony of proposed witnesses, and examination by deposition of potential witnesses, to the end that information disclosure shall be conducted in the most expeditious and cost-effective manner possible, and shall be limited to that which is relevant and for which each party has a substantial, demonstrable need. The arbitrator shall further have the authority, upon request or otherwise, to confer with the parties or their designated representatives concerning any matter, and to set or modify timetables for all aspects of the arbitration proceeding. The arbitrator may award either party its reasonable attorneys' fees and costs, including reasonable expenses associated with production of witnesses or proof, upon a finding that the other party (i) engaged in unreasonable delay, (ii) failed to comply with the arbitrator's discovery order, or (iii) failed to comply with requirements of confidentiality hereunder. The arbitrator shall also have the authority, upon request or otherwise, to entertain and decide motions for prehearing judgment. 15.10 STENOGRAPHIC RECORD. There shall be a stenographic record of the arbitration hearing, unless the parties agree to record the proceedings by other reliable means. The costs of recording the proceedings shall be borne equally by the parties. 15.11 LOCATION. Unless otherwise agreed by the parties, arbitration hearings shall take place in Fort Wayne, Allen County, Indiana at a mutually agreeable place or, if no agreement can be reached, at a place designated by the AAA. 15.12 THE HEARING. At any hearing, the party bearing the burden of proof according to the governing substantive law shall present its evidence first. 15.13 POSTHEARING BRIEFS. After the close of the arbitration hearing, and on any issue concerning prehearing procedures, the arbitrator shall allow the parties to submit written briefs. 15.14 CONFIDENTIALITY. All arbitration proceedings hereunder shall be confidential. Neither party shall disclose any information about the evidence produced by the other in the arbitration proceeding or about documents produced by the other in connection with the proceeding, except in the course of a judicial, regulatory or arbitration proceeding, or as may be requested by governmental authority. Before making any disclosure permitted by the preceding sentence, the party shall give the other party reasonable written notice of the intended disclosure and an opportunity to protect its interests. Expert witnesses and stenographic reporters shall sign appropriate nondisclosure agreements. 15.15 COSTS. Except as otherwise expressly provided in this Agreement, as to any disputes arising from the termination of the Agreement, each party shall be responsible for its costs, including attorneys' fees, incurred in any arbitration, and the arbitrator shall not have authority to include all or any portion of said costs and fees in his or his award. The costs and fees of the arbitrator and of the AAA shall be borne equally by the parties. 15.15.1 Notwithstanding anything herein to the contrary, Company shall be entitled to recover its reasonable costs and attorneys' fees incurred in enforcing the provisions of Section 8 or Section 9, provided that it prevails in such enforcement action. 15.15.2 Notwithstanding anything herein to the contrary, Employee shall be entitled to recover from the Company all costs and expenses incurred in enforcing his rights under this Agreement, including all expenses of the arbitration and attorneys' fees and costs, provided that he prevails in whole or in part in such enforcement action. 15.16 REMEDIES. The arbitrator shall have authority to award any remedy or relief that a federal or state court situated in the State of Indiana could grant in conformity to applicable law. 15.17 LAW GOVERNING THE ARBITRATOR'S AWARD. In rendering an award, the arbitrator shall determine the rights and obligations of the parties, including employment discrimination issues, according to federal law and the substantive law of the State of Indiana (excluding conflicts of laws principles) as though the matter were before a court of law. 15.18 WRITTEN AWARDS AND ENFORCEMENT. Any arbitration award shall be accompanied by a written statement containing a summary of the issues in controversy, a description of the award, and an explanation of the reasons for the award. The parties agree that a competent court shall enter judgment upon the award of the arbitrator, provided it is in conformity with the terms of this Agreement. 15.19 CONFLICT IN PROCEDURE. If any part of this arbitration procedure is in conflict with any mandatory requirement of applicable law, the mandatory requirement shall govern, and the procedure set forth above shall be reformed and construed to the maximum extent possible in conformance with the applicable law. The procedure shall remain otherwise unaffected and enforceable. 16. MISCELLANEOUS. 16.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties and all prior negotiations and agreements, whether written or oral, are merged into this Agreement. 16.2 SEVERABILITY. If any provision of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision or part of a provision of this Agreement; but this Agreement shall be reformed and construed as if such provision had never been contained in it, and any such provision shall be reformed so that it would be valid, legal and enforceable to the maximum extent permitted. 16.3 COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which counterparts collectively shall constitute one document representing the agreement among the parties. 16.4 BINDING AGREEMENT. This Agreement shall be binding upon and shall inure to the benefit of the parties to this Agreement and their respective successors and assigns. 16.5 AMENDMENT. This Agreement may not be amended, discharged, terminated, or changed orally; and any such proposed amendment, discharge, termination, or change shall be in writing and signed by the party against whom such amendment, change, discharge, or termination is sought. 16.6 WAIVER OF BREACH. The waiver by any party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach; and no waiver shall be valid unless it is in writing and is signed by the party against whom such waiver is sought. 16.7 EXTENSION OF NONCOMPETE PERIOD. The periods of time during which Employee is prohibited from engaging in such business practices pursuant to this Agreement shall be extended by any length of time during which Employee is in breach of any of such covenants. 16.8 APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana. 16.9 SURVIVAL. The provisions and restrictions contained in Sections 8 and 9 shall survive the termination of this Agreement and Employee's employment with Company. 16.10 FULL DISCLOSURE. Employee acknowledges that Employee's employment with Company is conditioned upon the execution of this Agreement. Employee represents and acknowledges that Employee has carefully reviewed all of the terms and conditions in this Agreement and has been advised of Employee's right to seek independent legal counsel prior to execution of this Agreement. 16.11 NOTICES. Any notice, request, or other communication required or permitted under this Agreement shall be in writing. Notice shall be deemed to have been given only if personally delivered or sent by registered or certified mail, return receipt requested. Any notice so mailed shall be deemed given on the postmark date. Failure or refusal to accept or receive any notice or communication shall not affect the validity of the notice. All such notices shall be given to the respective parties at the addresses designated below, or to such other address as a party may designate in a like manner. If to Company: TOKHEIM CORPORATION C/O NORMAN L. ROELKE, VICE PRESIDENT, SECRETARY & GENERAL COUNSEL P.O. BOX 360 FORT WAYNE, IN 46801 If to Employee: ROBERT L. MACDONALD _________________________ _________________________ IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first written above. TOKHEIM CORPORATION EMPLOYEE _________________________________ ______________________________ DOUGLAS K. PINNER ROBERT L. MACDONALD CHAIRMAN, PRESIDENT, AND CEO _________________________________ By: NORMAN L. ROELKE Its: VICE PRESIDENT, SECRETARY & GENERAL COUNSEL EX-11 4 0004.txt EXHIBIT 11.1 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS EX-11.1 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS Tokheim Corporation and Subsidiaries Exhibit (11) - Earnings Per Share For the three and six month periods ended May 31, 2000 and 1999. Basic earnings per share ("EPS") is calculated based on earnings (loss) available to common shareholders and the weighted average number of common stock shares outstanding during each period. Diluted EPS includes additional dilution from potential common stock equivalents such as stock issued pursuant to the conversion of preferred stock or the exercise of stock options outstanding. The following table presents information necessary to calculate EPS
Basic Basic ---------------------------- ------------------------ Three Months Ended Six Months Ended ---------------------------- ------------------------ May 31, May 31, May 31, May 31, 2000 1999 2000 1999 ------------ ------------ ---------- ---------- Shares outstanding (in thousands): Weighted average outstanding................... 12,669 12,669 12,669 12,666 ======== ======== ======== ======== Net earnings (loss): Before extraordinary item...................... $(17,350) $ (4,998) $(37,856) $(19,174) Extraordinary loss on debt extinguishment...... -- -- -- (6,249) -------- -------- -------- -------- Net loss....................................... (17,350) (4,998) (37,856) (25,423) Preferred stock dividends...................... 381 374 768 747 -------- -------- -------- -------- Loss applicable to common stock................ $(17,731) $ (5,372) $(38,624) $(26,170) ======== ======== ======== ======== Net loss per common share: Before extraordinary item...................... $ (1.40) $ (0.42) $ (3.05) $ (1.57) Extraordinary loss on debt extinguishment...... -- -- -- (0.50) -------- -------- -------- -------- Net loss....................................... $ (1.40) $ (0.42) $ (3.05) $ (2.07) ======== ======== ======== ======== For financial reporting purposes, the loss per share, assuming full dilution, is considered to be the same as basic since the effect of the common stock equivalents would be anti-dilutive. Diluted Diluted ---------------------------- ------------------------ Three Months Ended Six Months Ended ---------------------------- ------------------------ May 31, May 31, May 31, May 31, 2000 1999 2000 1999 ------------ ------------ ---------- ---------- Shares outstanding (in thousands): Weighted average outstanding................... 12,669 12,669 12,669 12,666 Share equivalents.............................. 2,518 259 2,518 205 Weighted conversion of preferred stock......... 786 787 786 787 -------- -------- -------- -------- Adjusted outstanding........................... 15,973 13,715 15,973 13,658 ======== ======== ======== ======== Net loss: Before extraordinary item...................... $(17,350) $ (4,998) $(37,856) $(19,174) Extraordinary loss on debt extinguishment...... -- -- -- (6,249) -------- -------- -------- -------- Net loss....................................... (17,350) (4,998) (37,856) (25,423) Incremental RSP expense........................ 381 374 768 747 -------- -------- -------- -------- Loss applicable to common stock................ $(17,731) $ (5,372) $(38,624) $(26,170) ======== ======== ======== ======== Net loss per common share: Before extraordinary item...................... $ (1.18) $ (0.39) $ (2.62) $ (1.46) Extraordinary loss on debt extinguishment...... -- -- -- (0.46) -------- -------- -------- -------- Net loss....................................... $ (1.18) $ (0.39) $ (2.62) $ (1.92) ======== ======== ======== ========
EX-27 5 0005.txt EXHIBIT 27.1 - FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Form 10-Q and is qualified in its entirety by reference to such financial statements. 0000098559 Tokheim Corporation 1,000 6-MOS NOV-30-2000 MAY-31-2000 20,719 0 122,633 5,777 84,937 237,830 156,175 88,266 614,989 642,040 0 16,678 0 116,031 (182,230) 614,989 267,249 267,249 210,214 210,214 68,208 0 29,522 (39,539) (1,683) (37,856) 0 0 0 (37,856) (3.05) (3.05) Represents gross inventory net of loss reserves. Represents gross PP&E. Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of $2,956 and treasury stock of $4,366. Represents common stock of $90,375, common stock warrants of $26,187 less treasury stock of $531. Represents accumulated deficit of $(102,221) and foreign currency translation adjustments of $(80,009). Includes product development expenses and excludes depreciation and amortization.
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