Item 1. Business The Company General
Smith Corona Corporation (the "Company") designs, manufactures and sells portable and compact electronic typewriters, personal word processors, printers and related accessories and supplies. These products are generally used in the home, at school and in small offices. The Company also manufactures and sells customized printed products.
The Company was incorporated in 1985 in the State of Delaware. Prior to 1986, the businesses of the Company were operated by SCM Corporation ("SCM") which was acquired by Hanson PLC ("Hanson") in March 1986. At the time it was acquired, SCM consisted of a number of businesses, including the current businesses of the Company and businesses in the chemical, paper and food industries. Although Hanson owned the businesses of the Company through various subsidiaries, the typewriter and personal word processor operations were managed as an integrated business. On August 3, 1989, the Company completed a registered public offering of 14,750,000 shares of common stock, par value $.01 per share (the "Common Stock"), in the United States and abroad (the "Offerings"). In connection with the Offerings, Hanson initiated a series of transactions to combine the electronic typewriter, personal word processor and office supplies business under a single parent entity being the Company (the "Reorganization").
History of the Business
The Company's typewriter and personal word processor business traces its origins back to the 1880's with the development of office typewriters. The Company introduced the world's first portable electric typewriter in 1957 and, for the next decade, the Company had the only portable electric typewriter available in the marketplace. In 1973, the Company introduced its revolutionary cartridge ribbon system, which is still used today. Beginning in 1979, the Company moved into electronics with major research and development efforts and, in 1981, introduced its first electronic product to the marketplace.
During the early 1980's, as the market shifted to electronic typewriters, Japanese manufacturers became a significant factor in the world marketplace. In order to compete effectively, between 1984 and 1986 the Company developed and implemented a major business restructuring of its typewriter operations which resulted in substantially reduced manufacturing costs, a streamlined product line, a 50% reduction in worldwide employment and the consolidation of certain of its United States operations.
In 1985, the Company developed and introduced the industry's first personal word processors, and, in 1989, the Company introduced the industry's first laptop personal word processor.
On July 5, 1994 the Company sold substantially all the assets and liabilities of SCM Office Supplies, Inc., its wholly-owned subsidiary. The results of operations, provision for loss on sale and net assets and liabilities related to SCM Office Supplies, Inc. are presented as discontinued operations in the 1994 financial statements incorporated herein by reference. As a result, the Company currently consists of one business segment, typewriters and word processors.
Products
The Company designs, manufactures and sells, domestically and internationally, portable and compact electronic typewriters, personal word processors and related accessories and supplies for use in the home, at school and in small offices. These products are developed with focus on meeting the major desires of purchasers: ease of use, incorporation of monitors or displays, full array of word processing features including dictionary spell checkers and grammar features. The Company's installed base of typewriters and personal word processors results in a substantial accessories and supplies business.
The Company also manufactures and sells customized printed products. During the fiscal year, the Company began selling various other products for use in the home, at school and in small offices. These items include facsimile machines, laminators, calculators, home office furniture, product labelers and envelope printers.
The only products or classes of similar products that accounted for 10% or more of net sales of the Company in any of the Company's last three fiscal years were (i) portable and compact electronic typewriters, which accounted for 37.3%, 38.5% and 53.6% of net sales in the fiscal years ended June 30, 1994, 1993 and 1992 respectively, and (ii) personal word processors, which accounted for 34.0%, 32.4% and 21.3% of net sales in the fiscal years ended June 30, 1994, 1993 and 1992, respectively.
Marketing, Sales and Distribution
Domestically, the Company extensively advertises, markets and promotes its electronic typewriters and personal word processors through national print media, both consumer and trade. Advertisements focus on the key features and benefits of the various product lines. The Company also supports local advertising campaigns of its customers, if the campaigns comply with certain standards set by the Company.
The Company makes available for use, at retail store locations, various point-of-sale materials and other in-store visual supports. In addition, the Company provides training support for its customers' sales staffs conducted by Company field-based marketing support representatives.
In the United States, the Company distributes its products through over 15,000 outlets in all major channels of distribution, including (i) national retail chain stores, such as K-Mart, Montgomery Ward, Sears and Wal-Mart; (ii) department stores and department store chains, such as Federated Department Stores & May Co; (iii) catalog merchandisers, such as Best Products, and Service Merchandise; (iv) national television and appliance dealers, such as Best Buy and Circuit City; (v) office superstores, such as Staples, Office Max and Office Depot; (vi) office equipment dealers; (vii) regional discount stores, such as Bradlees and Caldor; and (viii) the United States military exchanges. The Company does not enter into long-term contracts with its customers and, accordingly, there can be no assurance that the Company will continue to receive sales revenues from any particular source.
The Company offers various derivative product lines for each of its major channels of distribution. In addition, the Company supplies private label products to K-Mart, and private brand products (which identify only the retailer brand name) to Singer and Metro.
The Company also conducts sales activities in Canada, the United Kingdom, Australia, the Benelux countries, France, Germany and in other international markets. The channels of distribution in the international markets are similar to those in the United States market and include national retail chains, catalog merchandisers, department stores, office equipment dealers, discount stores, stationers and direct mail accounts. In other international markets, the Company currently has over twenty-two distributors serving the Far East, Latin America, Europe and the Caribbean. Reference is made to Note 9 to the Consolidated Financial Statements (see index on page 19 of this Form 10-K Annual Report) for information regarding the Company's business operations within and outside the United States.
Payment terms granted to customers reflect general practices in the industry. Terms vary with product and competitive conditions, but generally require payment within 30 to 90 days. Historically, bad debts have been insignificant. Sales to the Company's largest customer, Wal-Mart Stores, Inc., amounted to 11.4%, 11.4% and 6.0% of consolidated net sales during 1994, 1993 and 1992, respectively, and was the only customer responsible for more than 10% of net sales.
Service
The Company's typewriter and personal word processor products are serviced in the United States by Smith Corona Factory Service Centers and at Factory-Appointed Service Stations. These Service Centers and Stations employ trained technicians, maintain parts inventory and perform warranty and other repairs.
Seasonality
The Company believes that its business in the aggregate is not seasonal; however, certain of its products sell more heavily in gift-giving seasons such as the Christmas and school graduation seasons.
Foreign Operations
Over the past few years, the Company has faced intense competition from foreign producers. In July 1992, in order to maintain its leadership as the low-cost producer in a highly competitive worldwide business, the Board of Directors approved and the Company announced a plan to phase out the Company's manufacturing operations in Cortland, New York and relocate them to a new facility in Mexico. As a result of this decision, during fiscal 1993, the Company provided $16.5 million in restructuring charges, of which approximately $3.0 million was non-cash in nature. Once the Mexico facility is fully operational, this action is expected to result in lower manufacturing costs of approximately $15.0 million annually, primarily due to lower labor costs in Mexico.
The Company phased the relocation through the initial move of assembly line operations in the third and fourth quarters of fiscal 1993 into a temporary Mexico location while site selection activities for the permanent facility were undertaken. The relocation plan, originally anticipated to take approximately one year to complete, was delayed as a consequence of heavy spring 1993 rainfall in Baja California together with a reevaluation of lease versus purchase of the facility. By the end of fiscal 1994, the Company had essentially completed the relocation of the entire manufacturing operation into the permanent Mexico facility. The annual savings resulting from the restructuring originally anticipated in 1994 were not realized as cost of sales continued to reflect the higher Cortland manufacturing labor costs.
The Company's foreign manufacturing operations are in Mexico, Singapore and Indonesia. Reference is made to Note 14 to the Consolidated Financial Statements (see index on page 19 of this Form 10-K Annual Report) for additional information. The Company's foreign manufacturing operations are in Mexico, Singapore and Indonesia. The Company also sells a portion of its products internationally and expects to sell more products in international markets in the future. As a result, the Company's results of operations are subject to the risks of doing business abroad, including currency exchange rate fluctuations, nationalization, expropriation, limits on repatriation of funds and other risks associated with economic or political uncertainty in countries in which significant sales are made or manufacturing operations are located. Reference is made to Note 9 to the Consolidated Financial Statements (see index on page 19 of this Form 10-K Annual Report) for financial information regarding the Company's business operations within and outside the United States.
Competition
The portable and compact electronic typewriter and personal word processor business is highly competitive. Competition focuses on price, product features and product quality. The Company faces competition from various Japanese and other companies which manufacture portable and compact electronic typewriters and personal word processors, some of which may have greater financial resources than the Company. It also faces competition from companies which manufacture office typewriters and word processors, though these manufacturers currently serve a somewhat different segment of the industry than the Company. The Company believes that its products have significant competitive advantages, including low-cost production, numerous product features, ease of use, the Company's brand name and availability in all major channels of distribution. As the portable and compact electronic typewriter and personal word processor market has continued to mature, competition has increased. To remain competitive, the Company has been required to reduce the prices of its typewriters and personal word processors. Unless these price reductions are offset by corresponding reductions in manufacturing and other costs, the Company's results of operations will continue to be adversely affected.
Patents, Trademarks and Licenses
The Company owns or licenses a number of patents and patent applications which are valuable to its business but are not material to the business of the Company as a whole. The Company is the owner of a number of trademarks and U.S. and foreign registrations thereof, the most important of which is the trademark, "Smith Corona."
Employees
As of June 30, 1994, the Company employed approximately 3,000 people. The manufacturing workers of Histacount Corporation, a wholly-owned subsidiary, are represented by the Communication Workers of America-Printing Sector. The Company's Singapore manufacturing workers are represented by the United Workers of Electronic and Electrical Industries, a trade union registered under Singapore law. Management considers its employee relations to be good.
Research and Development
The Company's expenditures for research and development activities were approximately 4.1% - 5.7% of typewriter and personal word processor sales in each of its last three fiscal years. Research and development expenses are concentrated primarily in improving product manufacturing integration of products/technology to the Company's product lines and development of new products such as labelers, envelope printers and software architecture for personal word processors.
Raw Materials
The Company's products are manufactured from a wide variety of electronic components, plastics, metals, paper and other materials. The Company generally is not dependent on any one source for the materials or purchased components essential to its business and believes that such materials and components will be available from a variety of sources in adequate quantities to meet anticipated production schedules.
Item 2.
Item 2. Properties
As of June 30, 1994, the Company utilized approximately 1,426,000 square feet of space, of which about 837,000 square feet is in the United States and the remaining 589,000 square feet is outside the United States, primarily in Singapore and Mexico. Of the total of 1,426,000 square feet, approximately 619,000 square feet is owned and 807,000 square feet is leased. The Company believes that its properties are adequate for its needs and in good condition. Information with respect to the principal facilities used by Smith Corona is set forth below:
Item 3.
Item 3. Legal Proceedings
Certain past practices of the Company regarding hazardous substances and/or hazardous wastes are the subject of investigation by federal and state regulatory authorities, or are the subject of lawsuits filed by such authorities. At June 30, 1994 and 1993, the Company has recorded approximately $3.3 million and $5.0 million, respectively, related to environmental matters, of which $.6 million and $2.5 million, respectively, are classified as a current liability in the consolidated balance sheets. Certain estimated costs of performing environmental remediation were discounted at a rate of 5% per annum based on the estimated timing of such payments. Because of the uncertainties associated with assessing environmental matters, the related ultimate liability is not determinable. However, based on facts presently known, management does not believe that these investigations or lawsuits, if resolved adversely to the Company, would individually or in the aggregate have a material adverse effect on the Company's financial position or results of operations.
The Company is involved in proceedings with the New York Department of Environmental Conservation (DEC) and the United States Environmental Protection Agency regarding the clean-up of a now- closed manufacturing facility and certain waste disposal sites in upstate New York. The remedial investigation and feasibility study of the now-closed manufacturing facility site has been completed. The feasibility study report has been approved by the DEC and the record of decision has been finalized. On March 31, 1993, the Company executed a final signed consent order from the DEC and remedial actions commenced. Remediation activities at the site have been delayed as a result of an extension of the public comment period to address the remediation plan approved by the DEC. Management believes that the Company has made adequate provision for the approved remediation activities.
In June 1992, the Company was served with a summons and complaint in a private contribution action. The action, which lists the Company as a defendant with fourteen other defendants, seeks contribution for response costs incurred to date, and to be incurred in the future, for the remediation of a site in Cortland, New York. Management does not believe it disposed of any hazardous substances at this site and is vigorously contesting this matter.
On April 18, 1991, an antidumping proceeding was commenced against the Company at the Department of Commerce (Commerce) and before the International Trade Commission, concerning portable electric typewriters imported from Singapore. Subsequently, on June 22, 1993, the Company and Commerce signed a suspension agreement, suspending the antidumping investigation and calling for the Company to monitor its international prices. On February 4, 1994, all of the parties signed a settlement agreement covering the antidumping investigation and related litigation. Under the terms of the agreement, the petitioner withdrew its petition against the Company's Singapore imports and the Company sought revocation of various antidumping duty orders against typewriters and word processors from Japan. Pursuant to the agreement, the antidumping proceedings have been terminated.
On June 8, 1990, the Company filed suit in the United States District Court for the District of Tennessee against Pelikan, Inc. alleging patent infringement and false advertising. On February 24, 1992, the Court entered a judgment awarding the Company approximately $3.1 million plus post-judgment interest. Pelikan filed an appeal, petitioning for a rehearing by the Court of Appeals, and subsequently offered to pay to the Company a portion of the judgment aggregating approximately $1.9 million. The $1.9 million portion of the judgment was reflected in the June 30, 1993 financial statements. Pelikan's petition for rehearing was subsequently denied and on August 9, 1993, the Company and Pelikan entered into an agreement pursuant to which Pelikan agreed to pay $.5 million to the Company for fees, expenses and costs incurred in the suit along with the remaining $1.2 million judgment. On August 11, 1993, Pelikan paid the settlement amount to the Company and satisfied the judgment, including interest.
The Company is also a defendant or plaintiff in various other legal actions which have arisen in the ordinary course of its business. It is the opinion of management, based on advice of counsel with respect to legal matters, that the ultimate resolution of these matters and the environmental matters discussed above will not have a material adverse effect on the Company's financial position or results of operations.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
The officers of the Company are elected by and serve at the pleasure of the Board of Directors. The executive officers of the Company and their respective positions, ages at September 14, 1994 and backgrounds are as follows:
Mr. Thompson was elected as Chairman of the Board of the Company in June 1989. Mr. Thompson served as President of the Company from 1986 until July 1, 1990 and has served as Chief Executive Officer of the Company since 1986. Prior to that time, he was President of SCM/Consumer Products, the division of SCM that manufactured and sold Smith Corona typewriters and Durkee Famous Foods products, for two years from 1984 to 1985.
Mr. Henderson has served as President and Chief Operating Officer since July 1, 1990. Previously, he spent nine years as an executive officer and group vice president of Hanson Industries. He has also served as President and Chief Executive Officer of Durkee Famous Foods and as an executive at FMC Corp.
Mr. DeFazio has served as Executive Vice President and Chief Financial Officer of the Company since April 1, 1991. Prior to joining the Company, Mr. DeFazio served as an officer of General Instrument Corporation from 1986 to 1990, most recently as Vice President-Finance, Chief Financial Officer and Treasurer.
Mr. Bendik has served as President of Histacount since September 1986.
Mr. Cutrone has served as Senior Vice President/Marketing and Sales since November 1993. He previously served as Vice President, New Product Development since May 1993. Prior to joining the Company, Mr. Cutrone served as President of Vertical Marketing Corporation, a consulting firm for consumer electronics companies, from 1989 to 1993. From 1990 to 1992, Mr. Cutrone served as President of Faxnet Corporation ("Faxnet"), a company which provided public telecopying facilities. In November 1991, while Mr. Cutrone was President of Faxnet, Faxnet filed for bankruptcy under Chapter 7 of the United States Bankruptcy Code. In July 1993, Mr. Cutrone filed for personal bankruptcy under Chapter 7 of the United States Bankruptcy Code.
Mr. Diener has served as Senior Vice President/Sales since January 1, 1992. Prior to that time, he served as Vice President/Sales of the Company and its predecessor, SCM/Consumer Products, since 1978 and as Secretary of Smith Corona International since July 25, 1989.
Mr. Driscoll was named Vice President/Operations and Engineering on July 1, 1992. He served as Director of Materials from February 17, 1992 to July 1, 1992. Prior to joining the Company, Mr. Driscoll was president and a director of Code-A-Phone, a telephone sales company, from February through August, 1991 and was chief executive officer and a director of Technology Applications, Ltd., an electronic and telecommunications manufacturing company from November, 1986 through August, 1991.
Mr. Eckhardt has served as Vice President/Treasurer since September 1989. Prior to that time, from October 1988 to September 1989, he served as Vice President/Treasurer and Chief Financial Officer of HM Anglo-American Ltd., a Hanson holding company, and from January 1986 to October 1988, he served as Group Controller for Hanson Industries. For the 21 years prior to 1986, Mr. Eckhardt served in various positions with SCM, most recently as Director of Budgets and Financial Analysis from 1980 to 1986.
Ms. McRae was named Vice President/Product Development on July 1, 1994. Prior to that time, she served as Vice President/Product Marketing of the Company from July 1, 1993 through June 30, 1994 and as Vice President/Product Development from May 1991 through June 1993. She served as Staff Vice President, Advanced Product Development from December 1990 through April 1991. Prior to that time, Ms. McRae was Director, Strategic Planning and Advanced Product Development from February 1987 through November 1990.
Mr. Piontkowski was named Vice President/Controller of the Company on July 1, 1993. He previously served as Director of Accounting and Financial Reporting since December 1991. Prior to joining the Company, Mr. Piontkowski was Chief Financial Officer of Pyramid Management Group, a shopping mall management company, from 1989 through 1991, and was Senior Vice President and Chief Financial Officer of Addis & Dey's, a department store, prior to that time.
Mr. Scallon has served as Vice President/International Operations of the Company since 1987. Prior to that time, he served as Director of Private Brand Sales for the Company for three years.
Mr. Verostko was named Vice President/Human Resources of the Company on January 1, 1992. He served as Corporate Director/Human Resources from September 1, 1990 to January 1, 1992. Prior to that time, Mr. Verostko was Director, Employee Relations for 7 years.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Common Stock of the Company (NYSE symbol: SCO) commenced trading on the New York Stock Exchange on July 28, 1989. Prior to that time, there was no market for the Common Stock of the Company. The following table sets forth the range of high and low sale prices of the Company's Common Stock on the Exchange during the two most recent fiscal years.
As of July 6, 1994, there were approximately 1,081 holders of record of the Common Stock.
For each of the four quarters of fiscal 1994 and fiscal 1993, the Company declared cash dividends of $0.05 per share of Common Stock. On August 18, 1994, the Board of Directors declared a quarterly cash dividend of $0.05 per share of Common Stock payable on October 5, 1994 to holders of record as of September 20, 1994.
The Company intends to continue to declare and pay quarterly cash dividends on its Common Stock. The declaration and payment of dividends is at the discretion of the Board of Directors of the Company and subject to certain limitations of the Delaware General Corporation Law. The ability to pay dividends is further limited by covenants under the Company's bank indebtedness which provide, among other things, that dividends may not be paid if the Company is in default under such indebtedness and that the Company must maintain certain minimum levels of net worth, interest coverage and debt-equity ratios. Under the most restrictive of these provisions, the minimum consolidated net worth will increase by 50% of net income. The timing and amount of dividends (if any) will be dependent, among other things, upon the Company's results of operations, financial condition, cash requirements and other factors deemed relevant by the Board of Directors. Accordingly, there can be no assurance that the Board of Directors will declare and pay dividends.
The calculation of the number of shares of Common Stock held by non-affiliates shown on the cover of this Form 10-K Annual Report was made on the assumption that there were no affiliates other than the executive officers and directors of the Company and Hanson.
Item 6.
Item 6. Selected Financial Data
The information required by this item is incorporated by reference from the table entitled "Selected Five-Year Financial Data" contained in the Company's Annual Report to Security Holders for the fiscal year ended June 30, 1994.
Item 7.
Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition
The information required by this item is incorporated by reference from Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Company's Annual Report to Security Holders for the fiscal year ended June 30, 1994.
Item 8.
Item 8. Financial Statements and Supplementary Data
The information required by this item relative to the Consolidated Financial Statements is incorporated by reference from the Company's Annual Report to Security Holders for the fiscal year ended June 30, 1994.
See Index to Consolidated Financial Statements and Schedules which appears on page 19 of this Form 10-K Annual Report.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant
The information required by this item (except for information regarding the Company's executive officers, which appears in Part I of this Form 10-K Annual Report) is incorporated by reference from the Company's definitive Proxy Statement for the 1994 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission on or about October 10, 1994.
Item 11.
Item 11. Executive Compensation
The information required by this item is incorporated by reference from the Company's definitive Proxy Statement for the 1994 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission on or about October 10, 1994.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is incorporated by reference from the Company's definitive Proxy Statement for the 1994 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission on or about October 10, 1994.
Item 13.
Item 13. Certain Relationships and Related Transactions
The information required by this item is incorporated by reference from the Company's definitive Proxy Statement for the 1994 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission on or about October 10, 1994.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) Financial Statements. See Index to Consolidated Financial Statements and Schedules which appears on page 19 of this Form 10-K Annual Report.
(a)(2) Financial Schedules. See Index to Consolidated Financial Statements and Schedules which appears on page 19 of this Form 10-K Annual Report. All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(b) Report on Form 8-K. One Current Report on Form 8-K was filed with the Commission during the last quarter of the Company's 1994 fiscal year.
1. The Form 8-K Current Report dated June 9, 1994 reported a press release under Item 5 announcing the Company had entered into an agreement to sell substantially all the assets and liabilities of SCM Office Supplies, Inc.
(c) Exhibits (filed herewith or incorporated by reference; see index to exhibits).
3.1 Amended and Restated Certificate of Incorporation of Smith Corona Corporation (incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 3.2 By-Laws of Smith Corona Corporation (incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on file with the Commission (Registration No. 33- 29101)). 4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.1 Lease Agreement between Cherry Street Associates and Smith Corona Corporation dated March 13, 1992 (incorporated by reference to Exhibit 10.1 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1992, which is on file with the Commission). 10.2 Lease between REBA Properties, Inc. and SCM Corporation dated June 15, 1970 (incorporated by reference to Exhibit 10.1b to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.3 Lease between the Housing and Development Board and Corona Manufacturers (PTE) Limited dated April 18, 1975 (incorporated by reference to Exhibit 10.1e to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.4 Tenancy between Jurong Town Corporation and Smith Corona (Private) Limited dated February 16, 1989 (incorporated by reference to Exhibit 10.1f to the Company's Registration Statement on file with the Commission (Registration No. 33- 29101)). 10.5 Lease between HM Holdings, Inc. and Histacount Corporation dated June 1, 1989 (incorporated by reference to Exhibit 10.1g to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). *10.6 Memorandum dated August 11, 1994 evidencing Lease Extension between HM Holdings, Inc. and Histacount Corporation dated June 1, 1989. 10.7 SCM Office Supplies, Inc. Salaried Employees' Retirement Plan as amended and restated as of January 1, 1989 (incorporated by reference to Exhibit 10.9 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1992, which is on file with the Commission). 10.8 Smith Corona Corporation Retirement Savings and Investment Plan adopted effective July 1, 1989, as amended through April 5, 1993 (incorporated by reference to exhibit 10.8 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.9 Histacount Corporation Retirement Savings and Investment Plan adopted effective July 1, 1989, as amended through March 9, 1992 (incorporated by reference to Exhibit 10.11 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1992, which is on file with the Commission). 10.10 Histacount Corporation Salaried and Non-Union Hourly Employees' Pension Plan as amended and restated effective October 1, 1989 (incorporated by reference to Exhibit 10.12 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1992, which is on file with the Commission). 10.11 Smith Corona Corporation Supplemental Executive Retirement Plan as restated and amended as of July 28, 1989, through November 17, 1992 (incorporated by reference to Exhibit 10.11 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.12 Smith Corona Corporation 1990 Stock Option Plan, effective as of December 1, 1989, amended through November 16, 1993 (incorporated by reference to Exhibit 10.12 to the Company's Form 10-Q Quarterly Report for the quarter ended December 31, 1993, which is on file with the Commission). 10.13 Trust Agreement between SCM Corporation, The Chase Manhattan Bank, N.A. and Kwasha Lipton dated October 7, 1985 (incorporated by reference to Exhibit 10.8 to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.14 Smith Corona Corporation Short Term Incentive Compensation Plan (incorporated by reference to Exhibit 10.17 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1992, which is on file with the Commission). 10.15 Export Enterprise Certificate No. 156 granted to Smith- Corona Private Limited by the Ministry of Trade and Industry, Republic of Singapore, dated May 12, 1981 (incorporated by reference to Exhibit 10.15 to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.16 Pioneer Certificate No. 942 granted to Smith Corona PTE Ltd. by the Ministry of Trade and Industry, Republic of Singapore, dated March 23, 1987 (incorporated by reference to Exhibit 10.16 to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.17 Stockholders' Agreement between Smith Corona Corporation and HM Holdings, Inc. dated as of June 2, 1989 (incorporated by reference to Exhibit 10.17 to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.18 Memorandum of Sale dated May 22, 1991 between HM Holdings, Inc. and Hanson Natural Resources Company; Consent and Amendment Agreement dated May 21, 1991 between Smith Corona Corporation and HM Holdings, Inc.; and Letter of George H. Hempstead III to G. Lee Thompson dated May 28, 1991 (incorporated by reference to Exhibit 10.17 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1991, which is on file with the Commission). 10.19 Amended and Restated Cross-Indemnification Agreement between Smith Corona Corporation and HM Holdings, Inc. dated as of July 14, 1989 (incorporated by reference to Exhibit 10.18 to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.20 Amended and Restated Tax Sharing and Indemnification Agreement between Smith Corona Corporation and HM Holdings, Inc. dated as of June 2, 1989 (incorporated by reference to Exhibit 10.19 to the Company's Registration Statement on file with the Commission (Registration No. 33-29101)). 10.21 Stock Purchase Agreement by and among Smith Corona Overseas Holdings, Inc., SCM Industries Limited and Smith Corona Corporation dated as of June 2, 1989 (incorporated by reference to Exhibit 10.21 to the Company's Registration Statement on file with the Commission (Registration No. 33- 29101)). 10.22 Retention Agreement for Pension Consulting Services between Smith Corona Corporation and Hartland & Co. dated March 31, 1992 (incorporated by reference to Exhibit 10.25 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1992, which is on file with the Commission). 10.23 Employment Agreement between Smith Corona Corporation and William D. Henderson, dated as of May 22, 1990 (incorporated by reference to Exhibit 10.29 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1990, which is on file with the Commission). 10.24 One year extension, effective June 30, 1992, of Employment Agreement described in 10.29 (incorporated by reference to Exhibit 10.30 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.25 Two year extension, effective June 30, 1993, of Employment Agreement described in 10.29 (incorporated by reference to Exhibit 10.31 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.26 Severance Letter between Smith Corona Corporation and G. Lee Thompson, dated as of June 1, 1990 (incorporated by reference to Exhibit 10.30 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1990, which is on file with the Commission). 10.27 Employment Agreement between Smith Corona Corporation and Thomas C. DeFazio, dated as of January 23, 1991 (incorporated by reference to Exhibit 10.30 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1991, which is on file with the Commission). 10.28 Two year extension, effective June 30, 1993, of Employment Agreement described in 10.33 (incorporated by reference to Exhibit 10.34 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.29 Severance Letter between Histacount Corporation and John F. Bendik dated as of June 1, 1990 (incorporated by reference to Exhibit 10.38 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1992, which is on file with the Commission). 10.30 Two year extension, effective June 30, 1993, of Employment Agreement described in 10.35 (incorporated by reference to Exhibit 10.36 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.31 Severance Letter between SCM Office Supplies, Inc. and John Noblitt dated as of June 1, 1990 (incorporated by reference to Exhibit 10.39 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1992, which is on file with the Commission). 10.32 Two year extension, effective June 30, 1993, of Employment Agreement described in 10.37 (incorporated by reference to Exhibit 10.38 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.33 Memorandum evidencing severance agreement between Smith Corona Corporation and Manfred J. Eckhardt (incorporated by reference to exhibit 10.31 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1991, which is on file with the Commission). 10.34 Smith Corona Corporation Salaried Employees Retirement Plan, as amended and restated as of January 1, 1989 (incorporated by reference to Exhibit 10.36 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1991, which is on file with the Commission). 10.35 Supplemental pension benefit arrangement between Smith Corona Corporation and William D. Henderson dated November 19, 1992 (incorporated by reference to Exhibit 10.40 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.36 Supplemental pension benefit arrangement between Smith Corona Corporation and Thomas C. DeFazio dated November 19, 1992 (incorporated by reference to Exhibit 10.41 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). *10.37 Memorandum dated January 14, 1994 evidencing retention agreement between John R. Noblitt and Smith Corona Corporation. 10.38 Credit Agreement dated as of June 25, 1993 among Smith Corona Corporation, the lenders party thereto and Chemical Bank, as Agent (incorporated by reference to Exhibit 10.42 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.39 Lease Agreement between City of Marion, Indiana and SCM Corporation dated as of March 1, 1971 (incorporated by reference to Exhibit 10.44 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.40 Lease Agreement between Inmobiliarian Mex-Hong, S.A. De E.V. and Smith Corona De Mexico, S.A. De C.V. dated November 24, 1992 (incorporated by reference to Exhibit 10.47 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.41 Lease Agreement between Inmobiliarian Mex Hong, S.A. De E.V. and Smith Corona De Mexico, S.A. De C.V. dated June 4, 1993 (incorporated by reference to Exhibit 10.48 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.42 Lease Agreement between Turnberry Associates and Smith Corona Corporation dated May 5, 1993 (incorporated by reference to Exhibit 10.49 to the Company's Form 10-K Annual Report for the fiscal year ended June 30, 1993, which is on file with the Commission). 10.43 Asset Purchase Agreement, dated as of June 8, 1994, among Ampad Corporation (the "Purchaser"), SCM Office Supplies, Inc. (the "Seller") and Smith Corona Corporation (the "Stockholder") (incorporated by reference to exhibit 1 to the Company's Form 8-K Current Report dated July 19, 1994, which is on file with the Commission). *13 Pages 14 through 30 of the Smith Corona Corporation Annual Report to Security Holders for the year ended June 30, 1994 *21 Schedule of Subsidiaries of the Registrant *23 Consent of Deloitte & Touche LLP *27 Financial Data Schedule
* filed herewith
Stockholders may, upon payment of a fee therefore, obtain copies of any of the exhibits to this Form 10-K annual report by writing to the Secretary, Smith Corona Corporation, 65 Locust Avenue, New Canaan, Connecticut 06840.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SMITH CORONA CORPORATION
October 6, 1994 By /s/ G. Lee Thompson G. Lee Thompson Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Index to Consolidated Financial Statements and Financial Statement Schedules
Page
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . .20
Consolidated Balance Sheets as of June 30, 1994 and 1993 . . . . . . . . *
Consolidated Income Statements for the Years Ended June 30, 1994, 1993 and 1992. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Consolidated Statements of Changes in Stockholders' Equity for the Years Ended June 30, 1994, 1993 and 1992. . . . . . . . . . . . . . . . . . *
Consolidated Statements of Cash Flows for the Years Ended June 30, 1994, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . *
Consolidated Supplemental Financial Statement Schedule for the Years Ended June 30, 1994, 1993 and 1992
Schedule X -Supplementary Income Statement Disclosure. . . . .21
* The information required is incorporated by reference from the Company's Annual Report to Security Holders for the fiscal year ended June 30, 1994.
INDEPENDENT AUDITORS' REPORT
SMITH CORONA CORPORATION:
We have audited the consolidated financial statements of Smith Corona Corporation and its subsidiaries as of June 30, 1994 and 1993 and for each of the three years in the period ended June 30, 1994 and have issued our report thereon dated July 27, 1994; such consolidated financial statements and report are included in your 1994 Annual Report to Security Holders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Smith Corona Corporation and subsidiaries listed on page 19 of this Form 10-K Annual Report. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
\s\ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP Stamford, Connecticut July 27, 1994
SCHEDULE X
SMITH CORONA CORPORATION SUPPLEMENTARY INCOME STATEMENT DISCLOSURE For the years ended June 30, 1994, 1993 and 1992 (In thousands)
EXHIBIT INDEX
EXHIBIT #
10.6 Memorandum dated August 11, 1994 evidencing Lease Extension between HM Holdings, Inc. and Histacount Corporation dated June 1, 1989
13 Pages 14 through 30 of the Smith Corona Corporation Annual Report to Security Holders for the year ended June 30, 1994
21 Schedule of Subsidiaries of the Registrant
23 Consent of Deloitte & Touche LLP
27 Financial Data Schedule
10.37 Memorandum dated January 14, 1994 evidencing retention agreement between John R. Noblitt and Smith Corona Corporation