-----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, Cs9jzBFxOjZIi7fZAUgS/MGuWq83YAlTsIJZuUmS4tMuOHH7K8e3Bl0yZE9NO/QG GOcRCz7O9OSAJaShyD97HQ== 0000892569-98-001860.txt : 19980626 0000892569-98-001860.hdr.sgml : 19980626 ACCESSION NUMBER: 0000892569-98-001860 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 19 CONFORMED PERIOD OF REPORT: 19980327 FILED AS OF DATE: 19980625 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRINTRONIX INC CENTRAL INDEX KEY: 0000311505 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 952903992 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-09321 FILM NUMBER: 98654314 BUSINESS ADDRESS: STREET 1: 17500 CARTWRIGHT RD STREET 2: P O BOX 19559 CITY: IRVINE STATE: CA ZIP: 92713 BUSINESS PHONE: 7148631900 MAIL ADDRESS: STREET 1: ATTN GENERAL ACCOUNTING STREET 2: PO BOX 19559 CITY: IRVINE STATE: CA ZIP: 92713 10-K 1 FORM 10-K FOR PERIOD ENDING MARCH 27, 1998 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 27, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 0-9321 PRINTRONIX, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 95-2903992 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 17500 CARTWRIGHT ROAD 92623 P.O. BOX 19559, IRVINE, CALIFORNIA (Zip Code) (Address of Principal Executive Offices) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (949) 863-1900 ---------- SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, PAR VALUE $.01, INCLUDING COMMON SHARE PURCHASE RIGHTS 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 [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] On May 22, 1998, there were 7,376,597 shares of the Registrant's Common Stock outstanding. The aggregate market value of the Common Stock (based upon the closing price of $16.25 per share in the over-the-counter market on May 22, 1998) held by non-affiliates of the Registrant was $90,412,108. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant's Annual Report to Stockholders for the fiscal year ended March 27, 1998 are incorporated by reference into Parts I, II, and IV of this report. Portions of the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held on August 11, 1998 are incorporated by reference into Part III of this report. ================================================================================ 2 PART I ITEM 1. BUSINESS Certain geographic information for Item 1 is contained in the Company's 1998 Annual Report to Stockholders on page 22, which information is incorporated herein by reference (and except for that page, the Company's Annual Report to Stockholders for the fiscal year ended March 27, 1998 is not deemed filed as part of this report). GENERAL Printronix, Inc. designs, manufactures, and markets medium and high speed printers used on a wide range of computer systems and associated networks. Printronix printers produce "hard copy" output using line matrix, laser and thermal printing technologies. The Company's products are designed primarily for business and industrial applications where performance and reliability are paramount. All of the Company's printers have extensive graphics capabilities allowing them to support most popular graphics languages while printing most output types such as text, reports, tabular data, computer graphics, bar codes, forms, labels, logos, etc. Printronix, Inc. was incorporated in California in 1974 and was reincorporated in Delaware in December 1986. Unless the context otherwise requires, the terms "Company" and "Printronix" refer to Printronix, Inc. and its consolidated subsidiaries. ACQUISITION In January 1998, the Company, through a 91.5% majority-owned subsidiary, acquired the assets and rights to the bar code verification business and the RJS name from Eltron International Inc. in a cash expenditure of $2.9 million in a business combination accounted for as a purchase. The Subsidiary, RJS System International is primarily engaged in barcode verification products. See Note 2 of Notes to Consolidated Financial Statements for more detail on the acquisition. COMPUTER PRINTERS Computer printers are output devices that use electromechanical techniques to convert digitized information sent from a host computer to printed form. The printed output produced can then be read by people and/or machines, depending upon the format of the output. Such devices can print on paper and other substances, such as card stock or mylar, by means of impact or non-impact technologies. Impact printers are generally classified as being either text or graphics printers and as either serial or line printers. Text printers print a predetermined set of fully formed characters. Graphics printers print dots anywhere on the paper and are used for text and graphics applications. Serial printers print one character at a time and line printers print one line at a time. Impact printers can print both single-part and multi-part forms. Graphic printers form characters by printing dots in combinations of patterns. Such printers are called dot matrix or line matrix printers. Serial dot matrix printers create characters one at a time in horizontal sweeps across the page. Printronix manufactures line matrix printers, which print a complete line of dots, thus combining the flexibility of the matrix printing technique with the reliability and durability of a line printer. Non-impact printers print on paper by means of thermal, electrostatic, inkjet, laser, LED, and other techniques that deliver high resolution printed output for letter quality and graphics applications, but print only single-part forms. TECHNOLOGY Printronix products include line matrix printers, laser printers and thermal printers. This product line is unified by a common printer controller architecture called Printronix System Architecture ("PSA(TM)"). This architecture permits all three printing technologies to be application compatible by supporting common graphics languages and computer host communication protocols. -2- 3 LINE MATRIX PRINTERS The Printronix line matrix printers, the Printronix P5000 Series, operate at 500, 800, 900, 1200 and 1400 lines per minute as summarized below. Printing is accomplished as the hammer bank shuttles a small distance back and forth, enabling the hammers to place dots anywhere along a row across the paper. Successive dot rows are produced by the paper advancing while the hammer bank reverses for printing the next dot row. Dots overlap horizontally and vertically to produce graphics as well as alphanumeric characters.
LINE MATRIX SPEED PRINTER MODEL (LINES PER MINUTE) HAMMERS ------------- ------------------ ------- P5X05 500 28 P5X08 800 49 P5X09 900 49 P5212 1,200 91 P5214 1,400 91
The dot placement of Printronix line matrix printers is very precise, permitting accurate character alignment. The combination of precise dot placement anywhere on the page and the use of overlapping dots rather than fully formed characters enables Printronix printers, under computer control, to produce graphic output. Another key feature of the line matrix technology is that hammer energy is optimized to print only dots, resulting in improved print quality on multi-part forms. A new option offered for the Printronix P5000 Series line printers in fiscal 1998 was PrintNet(TM), which is a network interface card that can be installed in a Printronix P5000 Series printer during manufacturing or in the after market as a kit. The interface card allows the user to remotely manage the printer through the network (intranet) or the Internet using a web browser. LASER PRINTERS The Company's laser printers create images on paper electrographically like a copier machine. The image is fixed to the paper with toner in the same manner as copiers. The controllers, designed by the Company, are integrated with print engines purchased from outside suppliers. All models are available with optional power stackers. During the fourth quarter of fiscal 1998, the Company introduced the L5020 (20 pages per minute) for continuous form applications utilizing a wide array of paper and label material, including cloth-type synthetics. The printer uses a flash fusing process, which fuses via a xenon lamp rather than heat or pressure typically employed by others, enabling printing on different materials. Also introduced in the fourth quarter of fiscal 1998 was the L5035 (35 pages per minute) which replaces the L5031 (31 pages per minute). The L5031 was completely phased out of production by the end of the fiscal year.
SPEED (PAGES DPI LASER MODEL PAPER PER MINUTE) (DOTS PER INCH) ----------- ----- ------------ --------------- L1024 A-Size Continuous Form 24 PPM 300 L5020 14.6 Print Width Continuous Form 20 PPM 300 L5035 14.6 Print Width Continuous Form and Cutsheet 35 PPM 300
-3- 4 THERMAL PRINTERS The Company's thermal printers create images on paper by heating thermal sensitive media. The image is created either by heating an ink-based ribbon which transfers its ink to the paper label material (transfer) or by heating paper label material in which the thermally sensitive ink is already impregnated (direct). This type of printer is especially useful in "on-demand" label applications. These models use print engines purchased from outside suppliers and are integrated with PSA(TM).
DIRECT OR SPEED DPI THERMAL MODEL PRINT WIDTH TRANSFER (INCHES PER SECOND) (DOTS PER INCH) ------------- ----------- --------- ------------------- --------------- T1006 6.3 Inch Label Both 6 IPS 203 T2204 4.1 Inch Label Both 6 IPS 203 T3204 4.1 Inch Label Both 10 IPS 203 T3306 6.4 Inch Label Both 8 IPS 300 T3308 8.5 Inch Label Both 5 IPS 300
PRODUCTS Line matrix models include the new Printronix P5000 Series line printer family with speeds ranging from 500 to 1400 lines per minute. The new P5000 Series models were introduced in fiscal 1996 and replace the Company's previous generation models in the MVP, P3000, P4000, P6000, and P9000 series. The 800 and 1200 line per minute models are in the process of being phased out of production and have been upgraded to 900 and 1400 lines per minute. After the introductory phase, these upgrades were accomplished without an increase in price to our distribution or OEM customers. Applications for line matrix printers include reports, multi-part forms, bar codes, labels, and program listings. The new L5035 continuous form laser printer began shipping in Q4 of fiscal 1998 and replaces the older L5031. The L5035 operates at up to 35 pages per minute and has a unique flash fusing process, known as DuraFusion(TM), which produces output of exceptional durability and quality. And, unlike other laser printers, the L5035 can print on a wide variety of media including synthetics and plastic cards. The L5035's wide carriage, duty cycle, and durability of the output makes it particularly well suited for high volume utility type billing and labeling applications. The L1024 continuous form laser printer operates at up to 24 pages per minute. Utilizing the more conventional heat/pressure fusing process, the L1024, with its 8-1/2 inch wide carriage and more modest duty cycle, is primarily used for medium volume billing and labeling applications. The ThermaLine(TM) family of thermal printers is dedicated to bar code/label printing applications. Ranging in print width from 4.1 to 8.5 inches and in speed from 10 to 5 inches per second, respectively. ThermaLine printers address a wide range of label printing applications in the manufacturing, distribution, retail, and healthcare sectors. The Company's Printronix P5000 Series, LaserLine(TM), and ThermaLine(TM) printers employ PSAt design which provides software compatibility among its printer families. All of the Company's printers support Printronix IGP/PGL(R)[GRAPHIC OMITTED] and IGP/VGL bar code label printing languages. MARKETING AND CUSTOMERS The market for the Company's products is related to the market for computer and bar code systems. Printronix printers are marketed worldwide directly to original equipment manufacturers ("OEM's") and to end users through a network of full-service distributors and resellers. The Company's 10 largest customers accounted for an aggregate of approximately 59%, 62%, and 64% of net sales during the fiscal years ended March 1998, 1997, and 1996, respectively. During fiscal 1998, the Company sold its products to OEMs, and distributors/resellers, which accounted for approximately 49% and 51% of net sales, respectively. -4- 5 In fiscal 1998, the Company had two customers which individually represented 10 percent or more of consolidated net sales. Sales to the largest customer, IBM, represented 28%, 29% and 30% of net sales for fiscal years 1998, 1997, and 1996, respectively. Sales to the second largest customer represented 10% of consolidated net sales for fiscal years 1998, 1997, and 1996. A significant decline in sales to either customer could have an adverse effect on the Company's operations. COMPETITION The Company has a wide range of printers that compete in the overall market for medium and high speed computer printers. The overall market includes serial, line matrix, band, laser, and thermal transfer printers. This overall market includes a large captive market which consists of computer systems manufacturers that formerly produced their own printers and in the past have not bought from independent printer manufacturers. Due to the increasing competitive nature and the level of investment now required for ongoing printer development, most of these OEMs are now buying from independent manufacturers. The Company competes on a direct basis with several companies of varying sizes, including some of the largest businesses in the United States and Japan, in the non-captive market. Competing products include high end serial printers, medium and high speed line printers, laser printers, thermal printers, and other non-impact technologies. Competitive factors in the Company's markets include reliability, durability, price, print quality, versatility of special performance features, and after-sales support. The Company believes that its printers are highly competitive with regard to price/performance and cost of ownership, and that the Company rates highly in after-sales support. The Company has periodically evaluated other printing technologies and intends to continue to do so. Introduction of products with superior performance or substantially lower prices could adversely affect the Company's business. ORDER BACKLOG The Company's order backlog at March 27, 1998 was approximately $16.1 million, compared with $13.4 million at March 28, 1997 and $23.7 million at March 29, 1996. The increase over prior year represents increased orders from the Company's largest customer. The decrease over 1996 reflect the conversion of the Company's customers to a just-in-time delivery process. The backlog represents orders for which the majority of products have a delivery date and expected ship date of three months or less. RAW MATERIALS The Company purchases basic mechanical and standard electronic components from numerous outside vendors. Most of those components used in the Company's impact printers are immediately available from alternate sources. The Company also purchases certain components from sole sources and has no reason to believe that it will be unable to obtain those components. However, if the Company were to lose any sole source for a component, there could be a delay in shipment of printers using those components until an alternate source begins production. The Company's laser and thermal printer products are designed to use specific print engines and printer assemblies manufactured by outside vendors. The Company has entered into written purchase agreements for these printer components and has no reason to believe that it will be unable to obtain the materials required. ENGINEERING AND DEVELOPMENT The Company operates in an industry which is subject to rapid technological change, and its ability to compete successfully depends upon, among other things, its ability to react to change. Accordingly, the Company is committed to the development of new products. The Company's engineering and development expenditures incurred were approximately $15.6 million in fiscal 1998 (excluding a one time charge of $0.9 million for in-process engineering related to the acquisition of RJS) $14.3 million in fiscal 1997, and $13.7 million in fiscal 1996. Engineering personnel are located in all three key regions, the Americas; Europe, Middle East, and Africa; and Asia Pacific. Substantially all expenditures were Company sponsored in fiscal 1998 and a substantial portion of engineering and development expenditures were associated with the continued development of lower cost and higher speed line matrix printers, laser and printers, and software development of PSA(TM) and the next generation PSA2(TM) for laser, thermal, and line matrix printers. -5- 6 PATENTS AND LICENSES The Company has been issued 35 United States patents, and related foreign patents (primarily in Canada, the United Kingdom, France, and Germany) associated with various aspects of its printers. Two of the United States patents will expire in March and July 1998, respectively. The Company believes that its patented line matrix printing technology has competitive value and intends to continue its practice of enforcing its patent rights against potential infringers where it deems appropriate. Although there can be no assurance that the Company will be successful in defending its rights to any of its patents, the Company believes that its patents are valid. The Company has no material licenses from others pertaining to the manufacture of its products, including those under development, and believes that none are currently required. The Company believes that, based on industry practice, any such licenses as might be required in the future could be obtained on terms which would not have a material effect on it. However, the Company does have licenses for the use of IPDS and PCL5 graphic languages. IPDS is a registered trademark of International Business Machines Corporation. PCL 5 is a trademark of Hewlett-Packard Corporation. EMPLOYEES The Company had 922 employees as of March 27, 1998 including 520 in the United States, 337 in Singapore, and 65 in Europe. None of the Company's employees in North America or Singapore are subject to a collective bargaining agreement. Printronix Nederland BV is a member of the Employers Union F.M.E., and some of its employees have elected to become members of an employee union. This employee union is not government sponsored and is supported by contributions from its members. The Company believes that its relationship with its employees is good. FOREIGN OPERATIONS The Company has manufacturing facilities in Singapore, wherein line matrix, printer products and some printed circuit board assemblies are produced. Also provided out of the Singapore facility are product support and customer service for the Asia Pacific region. In the Netherlands, the Company has a facility that provides product support, customer service, line matrix, and thermal product distribution and assembly of selected models of laser printers. International sales represented approximately 44%, 44%, and 41% of the Company's total sales in fiscal years 1998, 1997, and 1996, respectively. The Company has sales offices within Germany, France, the United Kingdom, Austria, and Singapore. The Company is not aware of any significant risks with respect to its foreign business other than those inherent in the competitive nature of the business and fluctuations in foreign currency exchange rates. Selected financial information regarding foreign and export sales by geographic area is set forth in Note 8 of Notes to Consolidated Financial Statements. ITEM 2. PROPERTIES The Company's executive, manufacturing, engineering, administrative, and marketing offices are located in a total of approximately 169,000 square feet of leased facilities in Irvine, California. During the fourth quarter of fiscal 1998, the Company purchased land in Irvine for $8.1 million to consolidate into one complex the corporate headquarters, research and development, and manufacturing, which are currently housed in five buildings in the area. Construction of the new complex is scheduled to begin the summer of 1998 with an expected move date during the fall of 1999. The Company's foreign operations are located in the Netherlands and Singapore. The Netherlands operations are in leased facilities of approximately 34,000 square feet. The Singapore operations were moved to a new 74,000 square foot state-of-the-art building purchased in fiscal 1997 for approximately $3.8 million with an additional $3.0 million spent in capital improvements in fiscal 1997. The Company also leases several small offices, generally on short-term leases, throughout the United States and Europe for sales or service. See Note 9 of Notes to Consolidated Financial Statements for a summary of the expiration dates and lease or rental commitments. -6- 7 ITEM 3. LEGAL PROCEEDINGS ENVIRONMENTAL ASSESSMENT In January 1994, the Company was notified by the California Regional Water Quality Control Board - Santa Ana Region ("the Board") that groundwater monitoring reports indicated that the groundwater under one of the Company's former production plants was contaminated with various chlorinated volatile organic compounds ("VOCs"). Evidence adduced from site studies undertaken to date indicates that compounds containing the VOCs were used by the prior tenant during its long-term occupancy of the site. The tests also indicate that the composition of the soil is such that off-site migration of contamination is very slow and contamination is most likely confined to the site. Investigation indicates that the prior occupant is a well established business enterprise which has substantial assets and is affiliated with a publicly traded company. In March 1996, the Company received a request from the Board for information regarding chemicals used by the Company or others on property adjacent to the former production plant site. Although the Company previously occupied a small portion of this adjacent property, primarily for office space and a machine shop, initial review indicates that the Company did not use compounds containing VOCs on this adjacent property. There are presently no Board remediation orders outstanding against the Company. As of March 27, 1998, the Company has reserved $214,000 to cover further legal fees or any additional expenses related to environmental tests which could be requested by the Board at the site. To date, the Company has incurred only minimal expense in its initial response to the Board's request for information and for environmental testing. However, the Company could be subject to charges related to remediation of the site. These charges on a preliminary (and very general) basis, could be estimated as follows: Remediation involves a two-step procedure. The first step would include the installation of a soil vapor extraction system. The cost of installation could range from $50,000 to $100,000. There would also be annual operating costs of up to $50,000 for a period of several years. The second step would be the installation of a pump and water treatment system to cleanse the groundwater. The cost of installation would range from $100,000 to $200,000. The annual operating costs which could be as high as $100,000 for a period which cannot now be ascertained. The Company is convinced that it bears no responsibility for any contamination at the site and intends to vigorously defend any action which might be brought against it in respect thereto. Furthermore, the Company believes it has adequately accrued for any future expenditures in connection with further legal fees or additional environmental tests that could be requested by the Board at the site, and that such expenditures will not have a materially adverse effect on its financial condition or results of operations. However, because of the uncertainty of this matter there is no assurance the actual costs will not exceed management's estimate. -7- 8 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company did not submit any matter during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the Company and their ages as of May 22, 1998 are as follows: Robert A. Kleist 69 President, Chief Executive Officer and Director J. Edward Belt, Ph.D. 64 Senior Vice President, Engineering, Chief Technical Officer, and Assistant Corporate Secretary George L. Harwood 53 Senior Vice President, Finance and Information Systems (IS), Chief Financial Officer, and Corporate Secretary C. Victor Fitzsimmons 50 Senior Vice President, Worldwide Manufacturing Richard A. Steele 53 Senior Vice President, Sales and Marketing
Officers are appointed by and hold office at the pleasure of the Board of Directors. Mr. Kleist is one of the founders of the Company and has served as a director and its President and Chief Executive Officer since its formation in 1974. In addition, Mr. Kleist served as Chief Financial Officer from February 1987 to October 1988, a position he also held from August 1985 until January 1986. Mr. Kleist is a director of Seagate Technology, a manufacturer of computer disk drives. Dr. Belt joined the Company in December 1985 as Vice President, Engineering, Line Matrix Division. In February 1987, he was appointed Senior Vice President, Engineering and Chief Technical Officer. Dr. Belt was appointed to the additional position of Assistant Corporate Secretary in August 1989. From October 1984 to December 1985, Dr. Belt was Manager of Engineering, Large Communication Systems Division of Rolm Corp. From December 1979 to October 1984, he was Manager of Engineering, Schlumberger Sentry. In prior years, Dr. Belt has held engineering management positions at General Electric Co. and Pertec Computer Corp. He was also a founder and Engineering Vice President of Courier Terminal Systems in 1969. Mr. Harwood joined the Company in October 1988 as Senior Vice President, Finance and Chief Financial Officer. Mr. Harwood was appointed to the additional office of Corporate Secretary in January 1989. In October 1994, Mr. Harwood assumed responsibility for the Company's Information Systems. From December 1984 to October 1988, Mr. Harwood was Chief Financial Officer and Vice President, Finance at Qume Corporation. From December 1982 to December 1984, Mr. Harwood was Group Controller of ITT Automotive Products, Worldwide. In prior years, Mr. Harwood has held various senior financial positions at ITT in Brussels, London, and Zambia. Mr. Harwood is a Fellow of the Institute of Chartered Accountants in England and has had seven years of public accounting experience, primarily at Price Waterhouse LLP. Mr. Fitzsimmons joined the Company in September 1985 as Director of Information Systems. In December 1988, he was appointed Vice President, Information Systems. In May 1990, Mr. Fitzsimmons assumed responsibility for Printronix B.V., the Company's Netherlands subsidiary. Mr. Fitzsimmons was appointed to the additional office of Vice President, Irvine Manufacturing in October 1990. In July 1991, he assumed responsibility for Printronix A.G., the Company's Singapore subsidiary. From May 1992 to October 1994 Mr. Fitzsimmons was Senior Vice President, Manufacturing and Information Systems. In October 1994, he was appointed Senior Vice President, Worldwide Manufacturing. From September 1979 to September 1985, Mr. Fitzsimmons held various senior IS positions at Magnavox. -8- 9 Mr. Steele joined the Company in July 1991 as Senior Vice President, Sales and Marketing. From May 1990 to June 1991, Mr. Steele was Senior Vice President, Sales and Marketing at DataWare. From May 1989 to May 1990, Mr. Steele was Vice President, Sales and Marketing at Talaris. From April 1972 to January 1987, Mr. Steele held various positions including District Sales Manager, National Sales Manager, and Vice President, Sales and Marketing at Datagraphix. In January 1987, Datagraphix became Anacomp, Inc. and Mr. Steele was appointed Senior Vice President, Sales and Marketing, a position he held until October 1988. In prior years, Mr. Steele held various positions in sales management and systems engineering at IBM. PART II Information for Items 5, 6, 7, and 8 is contained in the Company's 1998 Annual Report to Stockholders on the following pages, which information is incorporated herein by reference (and except for these pages, the Company's Annual Report to Stockholders for the fiscal year ended March 27, 1998 is not deemed filed as part of this report):
ANNUAL REPORT TO STOCKHOLDERS ITEM NO. TITLE PAGE REFERENCE - -------- ----- ---------------- Item 5. Market for Registrant's Common Equity and 15, 24, back cover Related Stockholder Matters Item 6. Selected Financial Data inside cover Item 7. Management's Discussion and Analysis of 8-10 Results of Operations and Financial Condition Item 8. Financial Statements and Supplementary 11-24 Data
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None PART III Information required under Item 10 "Directors and Executive Officers of the Registrant" (except for certain information concerning the Executive Officers provided in Part I of this report), Item 11 "Executive Compensation," Item 12 "Security Ownership of Certain Beneficial Owners and Management," and Item 13 "Certain Relationships and Related Transactions" has been omitted from this report. Such information is hereby incorporated by reference from Printronix's Proxy Statement for its Annual Meeting of Stockholders to be held on August 11, 1998, which the Company intends to file with the Securities and Exchange Commission not later than July 10, 1998. -9- 10 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Index to Financial Statements *Page in Annual Report 1. Financial Statements included in Part II of this report: Report of Independent Public Accountants 24 Consolidated Balance Sheets as of March 27, 1998 and March 28, 1997 11 Consolidated Statements of Income for each of the three years in the period ended March 27, 1998 12 Consolidated Statements of Stockholders' Equity for each of the three years in the period ended March 27, 1998 13 Consolidated Statements of Cash Flows for each of the three years in the period ended March 27, 1998 14 Notes to Consolidated Financial Statements 15-23 * Incorporated by reference from the indicated pages of the Company's Annual Report to Stockholders for the fiscal year ended March 27, 1998 (and except for these pages, the Company's Annual Report to Stockholders for the fiscal year ended March 27, 1998, is not deemed filed as part of this report). 2. Schedules supporting the Consolidated Financial Statements: Page in this report Report of Independent Public Accountants on Schedules 11 Schedule II - Valuation and Qualifying Accounts 13
All schedules except Schedule II have been omitted for the reason that the required information is shown in financial statements or notes thereto, the amounts involved are not significant or the schedules are not applicable. (b) Reports on Form 8-K None (c) Exhibits Reference is made to the Index of Exhibits beginning at page 14 of this report which index is incorporated herein by reference. (d) Other Financial Statements There are no financial statements required to be filed by Regulation S-X which are excluded from the annual report to stockholders by Rule 14a-3(b)(1). -10- 11 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Stockholders of Printronix, Inc.: We have audited in accordance with generally accepted auditing standards, the financial statements included in Printronix, Inc.'s annual report to stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated April 24, 1998. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in the index above is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. ARTHUR ANDERSEN LLP Orange County, California April 24, 1998 -11- 12 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. Dated: June 25, 1998 PRINTRONIX, INC. BY ROBERT A. KLEIST --------------------------- Robert A. Kleist, President 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.
SIGNATURE TITLE DATE - --------- ----- ---- ROBERT A. KLEIST President, Chief June 25, 1998 - ---------------- Executive Officer and Robert A. Kleist Director (Principal Executive Officer) GEORGE L. HARWOOD Senior Vice President, June 25, 1998 - ----------------- Finance & IS, Chief George L. Harwood Financial Officer and Corporate Secretary (Principal Accounting and Financial Officer) BRUCE T. COLEMAN Director June 25, 1998 - ---------------- Bruce T. Coleman JOHN R. DOUGERY Director June 25, 1998 - ---------------- John R. Dougery RALPH GABAI Director June 25, 1998 - ---------------- Ralph Gabai ERWIN A. KELEN Director June 25, 1998 - ---------------- Erwin A. Kelen
-12- 13 PRINTRONIX, INC. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS For Each of the Three Years in the Period Ended March 27, 1998
Additions ------------------------------- Balance at Charged to Charged Balance Beginning Cost and to Other at End Description of Period Expenses Accounts Deductions of Period - ------------------------ ---------- ---------- ----------- ----------- ---------- YEAR ENDED MARCH 27, 1998 Allowance for doubtful accounts $1,010,000 $1,089,000 $ -- $ 179,000 A $1,920,000 ========== ========== =========== =========== ========== YEAR ENDED MARCH 28, 1997 Allowance for doubtful accounts $ 937,000 $ 961,000 $ -- $ 888,000 A $1,010,000 ========== ========== =========== =========== ========== YEAR ENDED MARCH 29, 1996 Allowance for doubtful accounts $ 908,000 $ 141,000 $ -- $ 112,000 A $ 937,000 ========== ========== =========== =========== ==========
Descriptions of other additions and deductions: A - Write-off of bad debt -13- 14 INDEX OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION 3.1 Certificate of Incorporation of Printronix, Inc. 3.2 By-laws of Printronix, Inc. currently in effect (incorporated by reference to Exhibit 3.2 to the Company's Report on Form 10-K for fiscal year ended March 31, 1989). 4.1 Copies of certain instruments, which in accordance with paragraph (b)(4)(iii) of Item 601 of Regulation S-K are not required to be filed as exhibits to Form 10-K, have not been filed by Printronix. Printronix agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. 4.2 Common Shares Rights Agreement dated as of March 17, 1989 between Printronix, Inc. and Chemical Trust Company of California, including the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A and B, respectively (incorporated by reference to Exhibit 1 to the Company's Registration Statement on Form 8-A filed on or about March 17, 1989). 10.1 Printronix, Inc. 1980 Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibits 4.1 and 4.2 to Post-Effective Amendment No. 5 to Registration Statement No. 2-70035 on Form S-8). 10.2 Printronix, Inc. 1984 Stock Incentive Plan, as amended (incorporated by reference to Exhibits 4.3 and 4.4 to Registration Statement No. 33-14288 on Form S-8). 10.3 Form of Indemnification Agreement between Printronix, Inc. and its directors (incorporated by reference to Exhibit 10.4 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1987). 10.4 Printronix, Inc. Executive Health Insurance Plan (incorporated by reference to Exhibit 10.5 to the Company's Report on Form 10-K for the fiscal year ended March 29, 1985). 10.5 Restricted Stock Purchase Agreement dated July 6, 1990 between the Company and Robert A. Kleist (incorporated by reference to Exhibit 10.7 to the Company's Report on Form 10-K for the fiscal year ended March 29, 1991). 10.6 Restricted Stock Purchase Agreement dated July 6, 1990 between the Company and J. Edward Belt (incorporated by reference to Exhibit 10.8 to the Company's Report on Form 10-K for the fiscal year ended March 29, 1991). 10.7 Restricted Stock Purchase Agreement dated July 6, 1990 between the Company and George L. Harwood (incorporated by reference to Exhibit 10.9 to the Company's Report on Form 10-K for the fiscal year ended March 29, 1991). 10.8 Restricted Stock Purchase Agreement dated May 7, 1992 between the Company and C. Victor Fitzsimmons (incorporated by reference to Exhibit 10.10 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1992). 10.9 Restricted Stock Purchase Agreement dated May 7, 1992 between the Company and Richard A. Steele (incorporated by reference to Exhibit 10.11 to the Company's Report on Form 10-K for the fiscal year ended March 27, 1992). 10.10 Printronix, Inc. 1994 Stock Incentive Plan (incorporated by reference to Exhibit 10.10 to the Company's Report on Form 10-K for the fiscal year ended March 25, 1994).
-14- 15 INDEX OF EXHIBITS (CONTINUED)
EXHIBIT NUMBER DESCRIPTION 10.11 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Robert A. Kleist. 10.12 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and J. Edward Belt. 10.13 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and George L. Harwood. 10.14 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and C. Victor Fitzsimmons. 10.15 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Richard A. Steele. 10.16 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Gordon B. Barrus. 10.17 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Theodore A. Chapman. 10.18 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Philip Low Fook. 10.19 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Bruce T. Coleman. 10.20 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and John R. Dougery. 10.21 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Ralph Gabai. 10.22 Restricted Stock Purchase Agreement dated October 8, 1997 between the Company and Erwin A. Kelen. 11 Computation of net income per share for the three years ended March 27, 1998. 13 The Company's Annual Report to Stockholders for the fiscal year ended March 27, 1998, (with the exception of the information incorporated by reference into Items 5, 6, 7, and 8 of this report, the Annual Report to Stockholders is not deemed to be filed as part of this report). 21 List of Printronix's subsidiaries. 23 Consent of Independent Public Accountants, Arthur Andersen LLP, to the incorporation of their reports herein to Registration Statement Nos. 2-70035, 33-14288, and 33-83156. 27 Financial Data Schedule (This schedule contains summary financial information extracted from the Company's Annual Report for the fiscal year ended March 27, 1998 and is qualified in its entirety by reference to such financial statements.)
EX-3.1 2 CERTIFICATION OF INCORPORATION OF PRINTRONIX, INC. 1 EXHIBIT 3.1 CERTIFICATION OF INCORPORATION OF PRINTRONIX, INC. ARTICLE 1 - NAME The name of this Corporation is Printronix, Inc. ARTICLE 2 - REGISTERED OFFICE AND AGENT The name and address of the registered office of the Corporation in the State of Delaware is the United States Corporation Company, 229 South State Street, Dover, County of Kent, Delaware. The name of the Corporation's registered agent at that address is the United States Corporation Company. ARTICLE 3 - PURPOSE The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, as amended from time to time. ARTICLE 4 - AUTHORIZED CAPITAL The total number of shares of capital stock which this Corporation has the authority to issue is 12,000,000. All such shares are of one class and are Common Stock, $0.01 par value per share. ARTICLE 5 - INCORPORATOR The name and mailing address of the Incorporator of the Corporation are as follows: Susan J. Glass c/o Printronix, Inc. 17500 Cartwright Road, C-5 Irvine, California 92714 2 EXHIBIT 3.1 ARTICLE 6 - NUMBER AND ELECTION OF DIRECTORS (a) The Board of Directors shall consist of not less than 5 nor more than 9 members. The exact number of authorized directors shall initially be 7 and, thereafter, shall be fixed from time to time, within the foregoing limits, in a By-law or amendment thereto duly adopted by the Board of Directors or the stockholders. The limits specified above may be changed, or a definite number fixed without provision for a variable number, only by an amendment to this Certificate of Incorporation. (b) At all elections of directors of the Corporation, subject to the requirements of the next sentence, each holder of Common Stock shall be entitled to as many votes as shall equal the number of votes which (except for this provision as to cumulative voting) such holder would be entitled to cast for the election of directors with respect to his shares of stock multiplied by the number of directors to be elected, and such holder may cast all of such votes for a single director or may distribute them among the number to be voted for or for any two or more of them as such holder may see fit. No stockholder shall be entitled to cumulate votes unless the name of the candidate for whom such votes would be cast has been placed in nomination prior to the voting, and any stockholder has given notice at the meeting prior to the voting of such stockholder's intention to cumulate his votes. (c) Elections of directors need not be by written ballot unless otherwise provided in the By-laws. ARTICLE 7 - LIMITATION OF DIRECTORS' LIABILITY (a) The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of Section 102 of the General Corporation Law of the State of Delaware, as the same may be amended and supplemented from time to time. (b) Any repeal or modification of the foregoing provisions of this Article 7 by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE 8 - AMENDMENT OF BY-LAWS The Board of Directors of the Corporation shall have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the By-laws of the Corporation. 3 ARTICLE 9 - AMENDMENT OF CERTIFICATE OF INCORPORATION The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation or to adopt new provisions, in the manner now or hereafter prescribed by the General Corporation Law of the State of Delaware, as amended from time to time, and all rights conferred on stockholders and directors herein are granted subject to this reservation. I, THE UNDERSIGNED, being the incorporator, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate of Incorporation, do certify that the facts herein stated are true under the penalties of perjury, and accordingly, have hereto set my hand this 29th day of September, 1986. ------------------------ Susan J. Glass 4 EXHIBIT 3.1 CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF INCORPORATION OF PRINTRONIX, INC. A Delaware Corporation Printronix, Inc., a corporation organized and existing under the laws of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That at a meeting of the Board of Directors of Printronix, Inc., resolutions were duly adopted setting forth a proposed amendment to the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and authorizing said amendment to be presented to the stockholders for their consideration at the annual meeting. The resolution setting forth the proposed amendment is as follows: RESOLVED, that it is fair to and in the best interests of the corporation and its stockholders and it is advisable that Article 4 of the Certificate of Incorporation of this corporation be amended to read: "The total number of shares which this Corporation has the authority to issue is 30,000,000. All such shares are of one class and are Common Stock, $.01 par value per share." SECOND: That thereafter, at the annual meeting of stockholders held on August 12, 1997, pursuant to notice duly given in accordance with Section 222 of the General Corporation Law of the State of Delaware, the necessary number of shares as required by statute were voted in favor of the amendment. THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. 5 EXHIBIT 3.1 IN WITNESS WHEREOF, the undersigned declares under penalty of perjury that the foregoing is true and correct, that he is the duly elected and acting Senior Vice President, Finance, Chief Financial Officer and Secretary of Printronix, Inc. and this instrument is the act and deed of the corporation. Executed on August 12, 1997. Printronix, Inc. By -------------------------------------- George L. Harwood, Senior Vice President, Finance, Chief Financial Officer and Secretary EX-10.11 3 STOCK INCENTIVE PLAN ROBERT A. KLEIST 1 EXHIBIT 10.11 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Robert A. Kleist (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 40,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $400,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $400,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (i) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: GEORGE L. HARWOOD ROBERT A. KLEIST ----------------------------- --------------------------------- George L. Harwood Robert A. Kleist Sr. Vice President & CFO PROMISSORY NOTE -4- 5 $400,000 Irvine, California October 8, 1997 For value received, the undersigned, Robert A. Kleist, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Four Hundred Thousand Dollars ($400,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. ROBERT A. KLEIST ---------------------------- Robert A. Kleist Exhibit A -5- EX-10.12 4 STOCK INCENTIVE PLAN J. EDWARD BELT 1 EXHIBIT 10.12 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and J. Edward Belt (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 30,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $300,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $300,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (i) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST J. EDWARD BELT ------------------------- ---------------------------- Robert A. Kleist, J. Edward Belt President PROMISSORY NOTE -4- 5 $300,000 Irvine, California October 8, 1997 For value received, the undersigned, J. Edward Belt, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Three Hundred Thousand Dollars ($300,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. J. EDWARD BELT ------------------------------ J. Edward Belt Exhibit A -5- EX-10.13 5 STOCK INCENTIVE PLAN GEORGE L. HARWOOD 1 EXHIBIT 10.13 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and George L. Harwood (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 30,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $300,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $300,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (i) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST GEORGE L. HARWOOD ---------------------- ------------------------ Robert A. Kleist, George L. Harwood President PROMISSORY NOTE -4- 5 $300,000 Irvine, California October 8, 1997 For value received, the undersigned, George L. Harwood, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Three Hundred Thousand Dollars ($300,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. GEORGE L. HARWOOD ----------------------------- George L. Harwood Exhibit A -5- EX-10.14 6 STOCK INCENTIVE PLAN C. VICTOR FITZSIMMONS 1 EXHIBIT 10.14 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and C. Victor Fitzsimmons (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 30,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $300,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $300,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (I) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST C. VICTOR FITZSIMMONS ---------------------------- ---------------------------- Robert A. Kleist, C. Victor Fitzsimmons President PROMISSORY NOTE -4- EX-10.15 7 STOCK INCENTIVE PLAN RICHARD A. STEELE 1 EXHIBIT 10.15 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Richard A. Steele (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 30,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $300,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $300,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (I) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST RICHARD A. STEELE ----------------------------- ----------------------------- Robert A. Kleist, Richard A. Steele President PROMISSORY NOTE -4- 5 $300,000 Irvine, California October 8, 1997 For value received, the undersigned, Richard A. Steele, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Three Hundred Thousand Dollars ($300,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. RICHARD A. STEELE ----------------------------- Richard A. Steele Exhibit A -5- EX-10.16 8 STOCK INCENTIVE PLAN GORDON B. BARRUS 1 EXHIBIT 10.16 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Gordon B. Barrus (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 20,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $200,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $200,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (I) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST GORDON B. BARRUS ------------------------------- ----------------------------- Robert A. Kleist, Gordon B. Barrus President PROMISSORY NOTE -4- 5 $200,000 Irvine, California October 8, 1997 For value received, the undersigned, Gordon B. Barrus, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Two Hundred Thousand Dollars ($200,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. GORDON B. BARRUS ----------------------------- Gordon B. Barrus Exhibit A -5- EX-10.17 9 STOCK INCENTIVE PLAN THEODORE A. CHAPMAN 1 EXHIBIT 10.17 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Theodore A. Chapman (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 20,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $200,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $200,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (i) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST THEODORE A. CHAPMAN -------------------------- ----------------------------- Robert A. Kleist, Theodore A. Chapman President PROMISSORY NOTE -4- 5 $200,000 Irvine, California October 8, 1997 For value received, the undersigned, Theodore A. Chapman, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Two Hundred Thousand Dollars ($200,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. THEODORE A. CHAPMAN ----------------------------- Theodore A. Chapman Exhibit A -5- EX-10.18 10 STOCK INCENTIVE PLAN PHILIP LOW FOOK 1 EXHIBIT 10.18 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Philip Low Fook (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 20,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $200,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $200,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (I) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST PHILIP LOW FOOK ---------------------------- ----------------------------- Robert A. Kleist, Philip Low Fook President PROMISSORY NOTE -4- 5 $200,000 Irvine, California October 8, 1997 For value received, the undersigned, Philip Low Fook, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Two Hundred Thousand Dollars ($200,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. PHILIP LOW FOOK ----------------------------- Philip Low Fook Exhibit A -5- EX-10.19 11 STOCK INCENTIVE PLAN BRUCE T. COLEMAN 1 EXHIBIT 10.19 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Bruce T. Coleman (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 4,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $40,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $40,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (i) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST BRUCE T. COLEMAN -------------------------- ----------------------------- Robert A. Kleist, Bruce T. Coleman President PROMISSORY NOTE -4- 5 $40,000 Irvine, California October 8, 1997 For value received, the undersigned, Bruce T. Coleman, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Forty Thousand Dollars ($40,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. BRUCE T. COLEMAN ----------------------------- Bruce T. Coleman Exhibit A -5- EX-10.20 12 STOCK INCENTIVE PLAN JOHN R. DOUGERY 1 EXHIBIT 10.20 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and John R. Dougery (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 4,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $40,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $40,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (i) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST JOHN R. DOUGERY -------------------------- ----------------------------- Robert A. Kleist, John R. Dougery President PROMISSORY NOTE -4- 5 $40,000 Irvine, California October 8, 1997 For value received, the undersigned, John R. Dougery, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Forty Thousand Dollars ($40,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. JOHN R. DOUGERY ---------------------------- John R. Dougery Exhibit A -5- EX-10.21 13 STOCK INCENTIVE PLAN RALPH GABAI 1 EXHIBIT 10.21 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Ralph Gabai (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 4,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $40,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $40,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (i) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST RALPH GABAI ----------------------- ---------------------------- Robert A. Kleist, Ralph Gabai President PROMISSORY NOTE -4- 5 $40,000 Irvine, California October 8, 1997 For value received, the undersigned, Ralph Gabai, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Forty Thousand Dollars ($40,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. RALPH GABAI --------------------------- Ralph Gabai Exhibit A -5- EX-10.22 14 STOCK INCENTIVE PLAN ERWIN A. KELEN 1 EXHIBIT 10.22 PRINTRONIX, INC. 1994 STOCK INCENTIVE PLAN RESTRICTED STOCK PURCHASE AGREEMENT This Agreement is made as of October 8, 1997 between PRINTRONIX, INC., a Delaware corporation (hereinafter referred to as the "Company") and Erwin A. Kelen (hereinafter referred to as "Participant"). 1. Purposes. This Agreement is entered into pursuant to the terms of the Printronix, Inc. 1994 Stock Incentive Plan to provide Participant with an additional interest in and incentive to serve the Company. Nothing contained in this Agreement, however, shall be construed as obligating either Participant or the Company to continue Participant's employment or other affiliation with the Company. 2. Sale of Shares. (a) Subject to the terms and conditions set forth in this Agreement, the Company hereby agrees to sell to Participant and Participant hereby agrees to purchase from the Company 4,000 shares of Common Stock, $.01 par value, of the Company (hereinafter collectively referred to as the "Shares" or singularly as a "Share") for a purchase price of $10.00 per Share, equal to an aggregate purchase price of $40,000. (b) As consideration for the Shares, Participant shall execute and deliver to the Company a promissory note in the principal amount of $40,000, payable as, and to the extent that, the Shares vest (as hereinafter defined), together with interest on the unpaid principal balance at the rate of 8.0% per annum. Participant may from time to time prepay all or any part of the balance due on the note without penalty. However, such prepayment shall not accelerate the vesting of any Shares. Participant shall be personally liable on the note, which shall be in the form set forth in Exhibit A hereto (the "Note"). -1- 2 3. Restrictions. Except as provided in this Paragraph 3 (as to the Company's right to repurchase the Shares) and in Paragraph 4 (as to the pledge of Shares to the Company), Participant agrees not to sell, assign, transfer, pledge, or hypothecate in any way any of the Shares until they have "vested" (as hereinafter defined) and have been paid for and until they are no longer subject to divestment. The Company shall initially have the right to repurchase all of the Shares. The right to repurchase shall lapse as to 50% of the Shares at the end of each fiscal year, commencing with 1999, in which both of the following occur: (I) sales for that fiscal year are at least 7% greater than for the immediately preceding fiscal year, and (ii) pre-tax earnings per share for that fiscal year are at least 15% greater than for the immediately preceding fiscal year. At the end of fiscal year 2001 or upon termination of employment or other affiliation, whichever occurs first, the Company shall repurchase all Shares as to which the right of repurchase has not lapsed. Because in the event of termination of employment or other affiliation, the Company's right to repurchase may again come into existence, as described below, none of the Shares can be sold prior to the end of the fiscal year 1999. Notwithstanding the foregoing, the Company shall repurchase all of the Shares at any time until the end of fiscal year 2001 if Participant voluntarily leaves the employ of or ceases affiliation with the Company, dies, or is terminated for cause. As the foregoing conditions have been satisfied as to any portion of the Shares, those Shares as to which the conditions have been satisfied and as to which the Company has no right to repurchase shall be deemed to be "vested." Repurchase by the Company shall be for a purchase price per Share equal to the price per Share paid by Participant, together with interest on the amount of said purchase price at a rate of 8.0% per annum from the date of purchase by Participant to the date of repurchase by the Company. -2- 3 At such time that Participant's interest in any of the Shares is vested and is not subject to divestment, then to that extent Participant shall repay the Note and upon such repayment shall receive a certificate or certificates representing such vested shares. If repayment has not been made within 90 days of vesting, then the Company may repurchase the Shares. 4. Pledge of Shares. Upon issuance and sale of the Shares to Participant, Participant shall deliver the certificate(s) representing the Shares to the Company, along with appropriate stock powers executed by Participant, to secure performance by Participant of his obligations under this Agreement. Participant agrees that in the event that any stock dividends, stock splits, reclassification, or other change is declared or made in the capital structure of the Company, all new, substituted and additional shares, or other securities, issued by reason of such change in respect to Shares that have not "vested" (as defined in Paragraph 3 hereof), shall be delivered forthwith to the Company and shall be held by the Company under the terms of this Agreement. The Company shall release from this pledge and deliver to Participant the certificate(s) representing any Shares that become "vested" as soon as reasonably practicable after they have become "vested", together with any additional shares or other securities under this pledge which may have been issued in respect to such "vested" Shares by reason of a change in the capital structure of the Company as provided above. 5. Rights Incident to Shares. Subject to the provisions of this Agreement, Participant shall retain the right to vote the Shares and all other rights incidental to the ownership of the Shares; provided, however, that any cash dividends paid in respect to Shares that have not "vested" shall be used by Participant to pay the balance due on the Note. 6. Participant hereby acknowledges that this transaction is subject to his reading and understanding the Summary of Certain Tax Consequences of Purchase of Restricted Stock attached hereto as Exhibit B. -3- 4 7. Participant understands and agrees that the certificate(s) evidencing the Shares shall bear a legend evidencing the restrictions set forth in this Agreement and such other legend or legends as the Company may deem to be necessary or appropriate. 8. This Agreement shall be binding upon the heirs, representatives, executors and successors of the parties hereto. 9. This Agreement shall be construed and governed by the laws of the state of California. Executed at Irvine, California, as of the date first above written. PRINTRONIX, INC. PARTICIPANT By: ROBERT A. KLEIST ERWIN A. KELEN ------------------------- ----------------------------- Robert A. Kleist, Erwin A. Kelen President PROMISSORY NOTE -4- 5 $40,000 Irvine, California October 8, 1997 For value received, the undersigned, Erwin A. Kelen, hereby promises to pay to PRINTRONIX, INC., a Delaware corporation, at 17500 Cartwright Road, Irvine, California 92614-9559, on order, the principal sum of Forty Thousand Dollars ($40,000) together with interest on the unpaid principal balance from the date hereof at the rate of Eight percent (8.0%) per annum, until said principal and interest have been paid in full. Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. The principal and interest are payable in lawful money of the United States of America. This note may be prepaid in whole or at any time or in part from time to time without penalty. Should default be made in payment of any installment when due, the remaining principal balance and interest accrued shall become immediately due and payable at the option of the holder of this note. In the event action shall be instituted for the collection of any amounts due under this note, the undersigned promises to pay such sum as the court may fix as attorneys' fees. This note is made in connection with that certain Printronix, Inc. 1994 Stock Incentive Plan Restricted Stock Purchase Agreement dated as of October 8, 1997, between the undersigned and Printronix, Inc. Repayment of this note shall be made in installments as the Shares vest as provided in that Agreement, the terms of which are incorporated herein by reference. This is a full recourse obligation. The undersigned understands that he is personally liable for the payments due under this Note. ERWIN A. KELEN ---------------------------------------- Erwin A. Kelen Exhibit A -5- EX-11 15 COMPUTATION OF COMMON STOCK 1 PRINTRONIX, INC. EXHIBIT 11 - COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
Years Ended March, --------------------------------------------- 1998 1997 1996 ----------- ----------- ----------- Net income $15,064,000 $11,671,000 $ 6,771,000 ----------- ----------- ----------- Weighted average number of common shares outstanding 7,884,024 7,913,010 7,689,978 Basic net income per common share $ 1.91 $ 1.47 $ 0.88 ----------- ----------- ----------- Effect of dilutive securities: Weighted average number of common shares outstanding 7,884,024 7,913,010 7,689,978 Stock options 345,255 396,738 556,489 ----------- ----------- ----------- 8,229,279 8,309,748 8,246,467 Diluted net income per common share $ 1.83 $ 1.40 $ 0.82 ----------- ----------- -----------
EXHIBIT 11 EX-13 16 PRINTRONIX 1998 ANNUAL REPORT 1 EXHIBIT 13 Printronix 1998 Annual Report From the corporate office to the middle of the factory floor, from Peoria, Illinois to Frankfurt and Bangalore -- Printronix printers are interwoven tightly into the fabric of commerce and society. Our global strategy -- triangulated with operations in California, Singapore and Holland -- combines with localized software to make our printers competitive in developed and emerging markets around the world. Our industry leadership supports continuing technology and product enhancement. Printronix supplies over 50% of line matrix printers worldwide. Our manufacturing efficiency enables quick delivery of products to customers -- typically under two days from order -- as well as fast response to changing market conditions, lower inventory and higher productivity. 2 To Our Stockholders Fiscal 1998 saw record net income for Printronix for the second year in a row. The increase was driven largely by increased margins from manufacturing efficiencies companywide as well as cost reductions realized by the move of our Singapore operations to a new facility in October 1996 and the successful conversion to the Printronix P5000 Series line matrix products. Sales did not grow due to lower sales to certain OEM customers in Europe and the Americas, lower sales of laser products due to increased competition in Europe and lower sales in much of Asia. Sales increased in China and India despite the generally slower Asia/Pacific market conditions that arose during the fiscal year. Revenue for fiscal 1998 decreased 2% to $170.4 million, while net income increased 29% to a record $15.1 million. Diluted earnings per share were $1.83 vs. $1.40. The gross margin increased to 31.7% from 26.5% and the net margin was 8.8% vs. 6.7%. Order backlog at fiscal year end advanced to $16.1 million from $13.4 million at the end of fiscal 1997 due to increased orders from our largest OEM customer. Printronix has a strong financial position with no debt and $10.3 million in cash and cash equivalents at fiscal year end vs.$12.8 million at the end of fiscal 1997. Uses of cash during fiscal 1998 included the purchase of land for a new facility in Irvine, California for $8.1 million, the RJS acquisition for $2.9 million and repurchase of 741,400 shares of common stock for $11.4 million. Going forward, our operations are efficient and product development and channel development programs are vigorous. The challenge is to spur top-line growth, which we believe will result from continuing, steady implementation of our global product and marketing strategy. In essence, we are offering a "plug-and-play" print solution with quick delivery to virtually anywhere in the world for any major computer system using different local languages. That has led to Printronix's commanding market share in line matrix printers worldwide. The line matrix market is characterized by some as "mature," but that refers largely to developed countries, not emerging economies whose business growth and industrial development are increasing. Sales to the Americas accounted for 59% of total sales last year, 34% in Europe/Middle East/Africa and 7% in Asia/Pacific. Printronix's overall market share in line matrix printers is composed of individual markets where market share ranges from 80% in some cases to as low as 10% in others, giving room for growth in under-served markets. Printronix pioneered line matrix printing and is continually reinventing the technology to advance the state of our art. In fiscal 1998, we made several upgrades to the P5000 Series line matrix printers, introduced just one year before. In the laser printer line, we introduced two companion products, the L5020 (20 pages per minute-ppm) for continuous form applications utilizing a wide array of paper and label media, including cloth-type synthetics. It uses a flash fusing process, which fuses via a xenon lamp rather than heat or pressure typically employed by others. We also introduced the L5035 (35 ppm), which switches between continuous form and cut sheets on command. Its duty cycle of 300,000 pages per month makes it the ultimate "industrial strength laser printer." This process of continuous product enhancement, which distinguishes Printronix as the technology leader, continues unabated as evidenced by our commitment of 9.2% of sales to R&D during fiscal 1998. Another product introduced in fiscal 1998 for line matrix printers has already begun to contribute to sales and, we believe, should be a major factor in the future. PrintNet(TM) enables network administrators to access, monitor and control P5000 Series line matrix printers anywhere on a LAN or WAN using a standard web browser. As customers expand networking throughout their operations, this is a distinct advantage, enabling easier management of networked printers. We are finding PrintNet encourages the purchase of additional Printronix printers due to its efficient management of printing resources. The next-generation Printronix System Architecture, PSA(TM)2, allows all printers across our three product lines to work and interact compatibly with customers' software. Increasingly, customers are employing all three printing technologies (line matrix, laser, thermal) for different needs throughout their operations. PSA2 is a strong driver of sales both to new customers and to those we already serve. Importantly, all Printronix products are Year 2000 compliant. In fiscal 1998, we made a strategic acquisition of the RJS bar code verification technology and intend to use that asset as a base to expand the technology and become the leader in online verification (simultaneous printing and bar code verification), as well as verification instruments. By adding this 3 technology, we are broadening our service to the many customers who are increasing their use of bar code labeling and printing as a means of product and inventory control, requiring 100% accuracy for bar coded products shipped around the world. Currently, online verification is only used on thermal printers, but Printronix intends to expand the application to line matrix and laser printers in the future. To enhance sales reach, we increased the number of distributors for Printronix products in fiscal 1998 and opened a new sales office in Vienna, Austria to better serve the expanding Eastern European markets. To increase efficiency and control future facility costs, we purchased land in Irvine, California where we plan to consolidate our corporate headquarters, R&D and U.S. manufacturing operations now housed in five buildings in the area. To continue to enhance stockholder value, the Company announced on May 15, 1998 that the Board of Directors authorized the repurchase of 1,000,000 shares of Printronix common stock, in addition to the 1,000,000 shares authorized in 1997. As of June 22, 1998, 1,138,400 shares had been repurchased. We believe Printronix is ready for the future. The Company's technology leadership is delivering increasingly valuable products to the marketplace. Our global strategy gives Printronix strong presence wherever markets are growing. Quick response enables shipment of products built-to-order in just two days -- down from four days last year and 18 days the year before -- to satisfy users' needs. Dedicated customer service helps retain loyal and satisfied users of a broad range of Printronix products. Operations are increasingly efficient even as we add products and markets. Printronix has strong cash flow and no debt. In fiscal 1999, we anticipate moderate sales growth as we continue investment in product and market development aimed at reporting stronger top-line results in the year 2000 and beyond. The Company's continuing success is attributable to the steady efforts of our employees and management team, supported by industry partners and affiliates. We appreciate the loyalty of our customers, who have committed to Printronix for their printing needs, and the oversight of our Board of Directors as we continue to expand our role as a global printing solution provider. We look forward to reporting continuing improvement in fiscal 1999. Robert A. Kleist President and Chief Executive Officer June 15, 1998 4 Management's Discussion and Analysis of Results of Operations and Financial Condition General In January 1998, the Company, through a 91.5% majority-owned subsidiary, acquired the assets and rights to the bar code verification business and the RJS name from Eltron for $2.9 million in a business combination accounted for as a purchase. RJS is primarily engaged in bar code verification products (See Note 2). Results of Operations Net sales Revenue of $170.4 million for fiscal 1998 decreased $2.9 million, or 2%, compared to fiscal 1997. The decrease resulted from lower sales to certain OEM customers in the Americas and Europe, lower sales of laser products due to increased competition in Europe, partially offset by increased sales in China and India in the Asia Pacific Region. Sales to the Americas decreased $1.3 million, and sales to Europe, Middle East and Africa decreased $2.9 million compared to fiscal 1997. Fiscal 1998 decreases in sales were partially offset by increased sales to Asia Pacific of $1.3 million, or a 12% increase, compared to fiscal 1997. OEM sales decreased to $82.7 million in fiscal 1998 compared to $89.9 million in fiscal 1997, a decrease of 8%. The Printronix P5000 Series line matrix products accounted for revenue of $122.9 million, or 72% of fiscal 1998 sales. Sales of consumable products increased $2.6 million, or 14%, over fiscal 1997, representing 13% of total revenue. Fiscal 1997 revenue of $173.3 million was up $14.0 million, or 9%, over fiscal 1996 sales of $159.3 million. Year-over-year revenue growth came from increased sales in the Company's Printronix P5000 Series line matrix printers. Printronix P5000 Series accounted for revenue of $116.2 million, or 67% of fiscal 1997 sales. Sales of consumable products were 11% of total revenue, an increase of $2.1 million, or 12%, over fiscal 1996. OEM sales grew to $89.9 million in fiscal 1997 compared to $78.0 million in fiscal 1996, an increase of 15%. Gross profit Gross profit as a percentage of sales was 32% in 1998 compared with 27% and 24% in fiscal years 1997 and 1996, respectively. The increase in gross profit percentage in 1998 and 1997 resulted from manufacturing efficiencies and cost reductions on the new Printronix P5000 Series line matrix printers. Margins in 1996 were unfavorably impacted from both the start-up costs related to the development and production ramp-up of the Printronix P5000 Series product family and the manufacturing phase down of the mature line matrix products. The majority of start-up costs were related to establishing suppliers for new component parts, (including controller boards), developing new production processes for the printer hammerbank, integrating new equipment into the production process, and training employees. Manufacturing of the Printronix P5000 Series commenced in the second quarter of fiscal 1996 and was at full production by the first quarter of fiscal 1997. Meanwhile, production of the previous generations of line matrix printers were being phased out, with production ending in mid fiscal 1997. Operating expenses Engineering and development spending increased to $15.6 million (excluding a one-time acquisition related charge of $0.9 million) compared with $14.3 million in fiscal 1997, and as a percentage of sales, increased to 9% from 8% in fiscal 1997. The growth in engineering spending reflects the Company's commitment to continuous improvement of the Printronix P5000 Series line matrix, LaserLine and ThermaLine industrial strength printers. In fiscal 1997, the Company spent $14.3 million on engineering and development compared with $13.7 million in fiscal 1996. The growth in engineering and development spending over fiscal 1996 resulted from the Company's commitment to continuous improvement in all three print technologies and also increasing customer support and development around the world. Selling, general and administrative spending increased to $23.2 million compared with $19.9 million in fiscal 1997, while spending as a percentage of sales increased to 14% compared with 11% in fiscal 1997. Spending increased over the prior year as a result of increased sales coverage and marketing emphasis on developing the Americas, Europe, Middle East, and Asia Pacific markets. 5 Selling, general and administrative expenses, as a percentage of sales, remained flat at 11% in fiscal 1997 compared with fiscal 1996. Spending increased partly due to increased provision for bad debts and partly due to increased sales and marketing expenses. Other income and expenses Foreign currency remeasurement gains were $732,000 in fiscal 1998 compared with losses of $35,000 in fiscal 1997 and losses of $45,000 in fiscal 1996. Foreign currency remeasurement gains in fiscal 1998 were due to the Company's Singapore manufacturing operations. Interest and other income, net, increased $0.5 million in fiscal 1998 compared with fiscal 1997 due to increased interest income resulting from higher average cash balances and decreased interest expense. Interest and other income, net, decreased $0.2 million in fiscal 1997 compared with fiscal 1996 due to increased interest expense resulting from a $5.0 million loan to fund the Singapore building purchase. By fiscal end 1997, all outstanding debt was repaid. Income taxes For Federal income tax purposes, the Company currently has available a net operating loss carryforward of $11.9 million. Accordingly, there were no Federal taxes owed for fiscal years 1998, 1997, and 1996. The California net operating losses were fully utilized in the fourth quarter of fiscal 1997. The provision for taxes consists of certain state and foreign income taxes. Liquidity and Capital Resources Cash and equivalents totaled $10.3 million at the end of fiscal 1998 compared with $12.8 million for fiscal 1997. The decrease in cash is due primarily to the purchase of land for the new corporate facilities, purchases of Printronix stock totaling $11.4 million and $2.9 million for the RJS acquisition, which were funded by current year operations. Capital expenditures during fiscal 1998 consisted of $8.1 million for the purchase of land in Irvine to consolidate into one complex the corporate headquarters, research and development, and manufacturing, which are currently housed in five buildings in the area. Capital expenditures related to machinery, equipment, furniture, and fixtures totaled $6.9 million and $0.5 million for buildings and improvements. Fiscal 1998 year-end inventory was lower than fiscal 1997 due to ongoing improvements in the JIT inventory system. The Company's increased manufacturing efficiencies have reduced the time from order to shipment from an average of eighteen days in 1996 and four days in 1997 to an average of only two days in 1998. This reduction in lead time has enabled the Company to maintain lower inventory levels while increasing inventory turns. Unsecured lines of credit at March 27, 1998 totaled $10.2 million of which $8.4 million was available for borrowing. At the end of fiscal 1998, the Company continues to reserve $0.2 million for an environmental issue associated with the closing down of the Company's Irvine hammerbank factory in fiscal 1994 (see Note 9). The Company believes that its internally-generated funds, together with available bank credit agreements, will adequately provide for working capital requirements, capital expenditures and engineering and development needs through fiscal 1999. Supplemental Information Fiscal years 1998, 1997, and 1996 utilized a fifty-two week period. During fiscal 1998, the Company completed the implementation of a year 2000 compliant enterprise-wide information system. The Company has also initiated an assessment project, both within the Company and with its business partners, which addresses those other significant systems that may have year 2000 compliance issues. The Company presently believes that with the implementation of the new system and modification to existing software, year 2000 compliance will not pose a significant operational challenge for the Company. However, if these modifications are not completed on a timely basis, including implementation by its business partners, the Company's financial position, results of operations, and cash flows may materially and adversely be affected. 6 For fiscal 1999, the Company will be required to adopt Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income." The impact of the adoption of this pronouncement is not expected to have a material impact on the Company's presentation of financial position or results of operations. For fiscal 1999, the Company will be required to adopt SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The Company is currently evaluating what impact this pronouncement will have on the Company's disclosures. For fiscal 1999, the Company will be required to adopt SFAS No. 132, "Employees Disclosures About Pensions and Other Postretirement Benefits." The impact of the adoption of this pronouncement is not expected to have a material impact on the Company's disclosures. For fiscal 2000, the Company will be required to adopt SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." The impact of the adoption of this pronouncement is not expected to have a material impact on the Company's presentation of financial position or results of operations. The Company believes that the effects of inflation on its operations and financial condition are minimal. 7 Consolidated Balance Sheets
1998 1997 --------------------------------- $ in thousands, except share data As of March 27, 1998 and March 28, 1997 Assets Current Assets Cash and cash equivalents $ 10,264 $ 12,766 Accounts receivable, net of allowance for doubtful accounts of $1,920 in 1998 and $1,010 in 1997 26,739 23,086 Inventories Raw materials, subassemblies and work in process 15,782 16,253 Finished goods 1,826 3,775 -------- -------- 17,608 20,028 Prepaid expenses 1,015 792 -------- -------- Total Current Assets 55,626 56,672 -------- -------- Property and Equipment, at Cost Machinery and equipment 32,740 32,690 Furniture and fixtures 18,435 13,581 Land 8,100 -- Buildings 7,046 6,769 Leasehold improvements 2,104 2,008 -------- -------- 68,425 55,048 Less: Accumulated depreciation and amortization (37,159) (31,520) -------- -------- 31,266 23,528 Intangible assets, net 1,166 -- Other assets 806 453 -------- -------- Total Assets $ 88,864 $ 80,653 ======== ======== Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 9,988 $ 8,621 Accrued expenses Payroll and employee benefits 4,590 4,087 Warranty 1,681 1,536 Other 1,385 1,326 Income taxes 760 641 Environmental 214 214 -------- -------- Total Current Liabilities 18,618 16,425 -------- -------- Other long-term liabilities 794 720 Minority interest in subsidiary 215 -- Commitments and contingencies Stockholders' Equity Common stock, $0.01 par value (Authorized 30,000,000 shares; issued and outstanding 7,649,901 shares in 1998 and 8,032,303 shares in 1997) 77 80 Additional paid-in capital 30,054 30,887 Retained earnings 39,106 32,541 -------- -------- Total Stockholders' Equity 69,237 63,508 -------- -------- Total Liabilities and Stockholders' Equity $ 88,864 $ 80,653 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 8 Consolidated Statements of Income
For each of the three years March 27, March 28, March 29, in the period ended March 1998 1998 % 1997 % 1996 % ----------- --- ----------- --- ----------- --- $ in thousands, except share data Net sales $ 170,391 $ 173,290 $ 159,261 Cost of sales 116,461 127,347 121,765 ----------- --- ----------- --- ----------- --- Gross profit 53,930 31.7% 45,943 26.5% 37,496 23.5% ----------- --- ----------- --- ----------- --- Operating expenses Engineering and development 15,621 9.2% 14,324 8.3% 13,694 8.6% In-process engineering charge 942 0.6% -- -- -- -- Selling, general & administrative 23,223 13.6% 19,920 11.5% 17,457 11.0% ----------- --- ----------- --- ----------- --- 39,786 23.3% 34,244 19.8% 31,151 19.6% ----------- --- ----------- --- ----------- --- Income from operations 14,144 8.3% 11,699 6.8% 6,345 4.0% Foreign currency remeasurement gain (loss) 732 (35) (45) Interest and other income, net 926 476 627 ----------- --- ----------- --- ----------- --- Income before minority interest and taxes 15,802 9.3% 12,140 7.0% 6,927 4.3% Minority interest in loss in subsidiary (48) -- -- Provision for income taxes 786 469 156 ----------- --- ----------- --- ----------- --- Net income $ 15,064 8.8% $ 11,671 6.7% $ 6,771 4.3% =========== === =========== === =========== === Net income per share Basic $ 1.91 $ 1.47 $ 0.88 Diluted $ 1.83 $ 1.40 $ 0.82 Number of common shares used in the computation of net income per share Basic 7,884,024 7,913,010 7,689,978 Diluted 8,229,279 8,309,748 8,246,467
The accompanying notes are an integral part of these consolidated financial statements. 9 Consolidated Statements of Stockholders' Equity
Common Stock -------------------------- For each of the three years Number of Additional Retained in the period ended March 1998 Shares Amount Paid-in Capital Earnings --------- ---------- ---------- ---------- $ in thousands, except share data B a l a n c e , M a r c h 3 1 , 1 9 9 5 7,458,842 $ 75 $ 27,368 $ 14,099 Exercise of stock options 366,060 3 896 -- Compensation expense for restricted stock -- -- 784 -- Purchase price of vested portion of restricted stock -- -- 83 -- Repurchase and retirement of shares of common stock (1,536) -- (6) -- Net income -- -- -- 6,771 --------- ---------- ---------- ---------- B a l a n c e , M a r c h 2 9 , 1 9 9 6 7,823,366 78 29,125 20,870 Exercise of stock options 209,019 2 532 -- Compensation expense for restricted stock -- -- 1,147 -- Purchase price of vested portion of restricted stock -- -- 83 -- Redemption and retirement of fractional common shares (82) -- -- -- Net income -- -- -- 11,671 --------- ---------- ---------- ---------- B a l a n c e , M a r c h 2 8 , 1 9 9 7 8,032,303 80 30,887 32,541 Exercise of stock options 358,998 4 812 -- Compensation expense for restricted stock -- -- 1,257 -- Repurchase and retirement of shares of common stock (741,400) (7) (2,902) (8,499) Net income -- -- -- 15,064 --------- ---------- ---------- ---------- B a l a n c e , M a r c h 2 7 , 1 9 9 8 7,649,901 $ 77 $ 30,054 $ 39,106 ========= ========== ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 10 Consolidated Statements of Cash Flows
March 27, March 28, March 29, For each of the three years in the period ended March 1998 1998 1997 1996 -------- -------- -------- $ in thousands Cash Flows From Operating Activities: Net income $ 15,064 $ 11,671 $ 6,771 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 7,533 7,091 5,626 Compensation expense for restricted stock 1,257 1,147 784 In-process engineering charge 942 -- -- Loss (gain) on sale of property and equipment 222 52 (12) Minority interest in loss in subsidiary (48) -- -- Changes in assets and liabilities: Accounts receivable (3,045) 490 (1,274) Inventories 3,079 2,682 (3,612) Other long-term assets (353) (202) 19 Accounts payable 1,146 (3,225) 654 Accrued warranty expenses 100 400 -- Accrued income taxes 119 312 (50) Other long-term liabilities 14 (97) (668) Other current assets and liabilities, net 268 864 (998) -------- -------- -------- Net cash provided by operating activities 26,298 21,185 7,240 -------- -------- -------- Cash Flows From Investing Activities: Purchase of machinery, equipment, furniture and fixtures (6,904) (9,024) (9,796) Purchase of land (8,100) -- -- Purchase of buildings and leasehold improvements (498) (6,769) -- Acquisition of RJS (2,900) -- -- Proceeds from disposition of property and equipment 194 476 178 -------- -------- -------- Net cash used in investing activities (18,208) (15,317) (9,618) -------- -------- -------- Cash Flows From Financing Activities: Payments against debt borrowing -- (5,205) (460) Issuance of term loan -- 5,000 -- Proceeds from exercise of stock options 816 617 985 Repurchase and retirement of shares of common stock (11,408) -- (6) -------- -------- -------- Net cash (used in) provided by financing activities (10,592) 412 519 -------- -------- -------- Decrease (increase) in cash and cash equivalents (2,502) 6,280 (1,859) Cash and cash equivalents at beginning of year 12,766 6,486 8,345 -------- -------- -------- Cash and cash equivalents at end of year $ 10,264 $ 12,766 $ 6,486 ======== ======== ======== Supplementary Disclosures of Cash Flow Information: Interest paid $ 80 $ 244 $ 534 Taxes paid $ 956 $ 119 $ 498
The accompanying notes are an integral part of these consolidated financial statements. 11 Notes to Consolidated Financial Statements As of March 27, 1998 and March 28, 1997 and for each of the three years in the period ended March 27, 1998. Note 1 Summary of Significant Accounting Policies General Printronix, Inc. ("the Company") was incorporated in California in 1974 and was reincorporated in Delaware in December 1986. The Company designs, manufactures, and markets medium and high speed printers which support a wide range of computer systems and software platforms. Printronix printers produce "hard copy" through the application of impact, laser, and thermal technologies. The Company's product line is designed primarily for business and industrial applications, quickly and reliably producing every type of printed computer output, from reports and labels to bar codes. The Company also produces and markets Intelligent Graphics Printing (IGPTM) which resides in the printer, enabling it to produce bar codes, forms, and logos. Basis of consolidation The consolidated financial statements include the accounts of the Company, Printronix, Inc., and its wholly and majority owned subsidiaries. All intercompany accounts and transactions have been eliminated. Accounting period The Company utilizes a fifty-two, fifty-three week fiscal year ending on the last Friday of March. The Company is reporting a fifty-two week fiscal year for all periods presented. Cash equivalents For cash flow reporting purposes, the Company considers all highly liquid temporary cash investments with original maturities of three months or less at the time of purchase to be cash equivalents. The effect of exchange rate changes on cash balances held in foreign currencies was not material for the periods presented. Inventories Inventories, which include material, labor, and overhead costs, are valued at the lower of cost (first-in, first-out method) or market. Property and equipment Depreciation and amortization of property and equipment are provided using the straight-line method over the following estimated useful lives: Machinery and equipment 3 to 5 years Furniture and fixtures 3 to 7 years Buildings 30 years Leasehold improvements Lesser of useful life or term of lease
Maintenance, repairs and minor renewals are charged directly to expense as incurred. Additions and betterments to property and equipment are capitalized at cost. When assets are disposed of, the applicable costs and accumulated depreciation and amortization thereon are removed from the accounts and any resulting gain or loss is included in operations. Depreciation expense was $7.5 million, $7.1 million, and $5.6 million for the years ended 1998, 1997, and 1996, respectively. Intangible assets The Company recorded certain intangible assets of $1.2 million resulting from the purchase of RJS in fiscal 1998. The intangible assets are being amortized over a period of five years using the straight-line basis. Amortization expense of $33,000 was charged to operations in fiscal 1998. Long-term assets The carrying value of long-term assets is periodically reviewed by management, and impairment losses, if any, are recognized when the expected non-discounted future operating cash flows derived from such assets are less than their carrying value. Sales recognition Sales are recorded as of the date shipments are made to customers. The Company's products are sold primarily to customers in the computer and bar code industry and accordingly, the majority of the Company's accounts receivable are concentrated among such customers. Sales returns and allowances are reflected as a reduction in 12 sales and reflected in inventory at cost or expected net realizable value, whichever is lower. Every six months the Company allows North American distributors a stock rotation, whereby 2% of the prior six months sales can be returned, subject to various limitations, in exchange for other products. The Company has not experienced sales returns of a material amount. Products that are defective upon arrival are handled under the Company's warranty policy. Income on maintenance contracts The Company generates revenue on extended maintenance contracts through the sale of the service obligation to a third party provider. The third party provider is responsible for the performance of all maintenance services for the contract period. The net income on such contracts is recognized fully in the period the contract is sold to the third party provider as the Company assumes no further material obligation after the date of sale. Revenue generated from maintenance contracts was not material in any fiscal year presented. Warranty costs The Company's financial statements reflect accruals for potential warranty claims based on the Company's claim experience. Engineering and development Company-funded engineering and development costs are expensed as incurred. A substantial portion of the engineering and development expense is related to developing new products and making significant improvements to existing products or processes. Advertising The Company expenses advertising costs including promotional literature, brochures, and trade shows as incurred. Advertising expense was $2.1 million, $1.3 million, and $1.2 million for the years 1998, 1997, and 1996, respectively. Foreign currency remeasurement and translation The United States dollar is the functional currency for all of the Company's foreign subsidiaries. For these subsidiaries, the assets and liabilities have been remeasured at the end of the period exchange rates, except inventories and property and equipment which have been remeasured at historical rates. The statements of operations have been remeasured at average rates of exchange for the period, except cost of sales and depreciation which have been remeasured at historical rates. Income taxes The Company accounts for income taxes in accordance with SFAS No. 109 "Accounting for Income Taxes." SFAS No. 109 requires the use of the asset and liability method for financial accounting and reporting for income taxes, and further prescribes that current and deferred tax balances be determined based on the difference between the financial statement and tax basis of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. Net income per common share During the year ended March 27, 1998, the Company adopted SFAS No. 128, "Earnings per Share." In accordance with SFAS No. 128, basic net income per common share is computed using the weighted average number of shares of common stock outstanding and diluted net income per common share is computed using the weighted average number of shares of common stock outstanding and potential shares outstanding, if dilutive. Net income per share amounts for all periods presented have been restated to conform with SFAS No. 128 requirements.
March 27, March 28, March 29, 1998 1997 1996 ---------- ---------- ---------- $ in thousands, except share data Numerator: Net income $ 15,064 $ 11,671 $ 6,771 Denominator for basic net income per share 7,884,024 7,913,010 7,689,978 Basic net income per share $ 1.91 $ 1.47 $ 0.88 Effect of dilutive securities: Weighted average shares outstanding 7,884,024 7,913,010 7,689,978 Stock options 345,255 396,738 556,489 ---------- ---------- ---------- Denominator for diluted net income per share 8,229,279 8,309,748 8,246,467 Diluted net income per share $ 1.83 $ 1.40 $ 0.82
13 Capital stock In June 1996, the Company completed a stock split effected in the form of a fifty percent (50%) stock dividend. Retroactive effect has been given to the stock split in all share, price, and per share data presented. Accounting for stock-based compensation The Company accounts for stock-based compensation issued to employees using the intrinsic value based method as prescribed by the Accounting Principles Board Opinion (APB) No. 25, "Accounting for Stock Issued to Employees". Under the intrinsic value based method, compensation is the excess, if any, of the fair value of the stock at the grant date or other measurement date over the amount an employee must pay to acquire the stock. Compensation expense, if any, is recognized over the applicable service period, which is usually the vesting period (See Note 6). New pronouncements For Fiscal 1999, the Company will be required to adopt SFAS No. 130, "Reporting Comprehensive Income." The impact of the adoption of this pronouncement is not expected to have a material impact on the Company's presentation of financial position or results of operations. For Fiscal 1999, the Company will be required to adopt Statement of SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The Company is currently evaluating what impact this pronouncement will have on the Company's disclosures. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain amounts for previous fiscal years have been reclassified to conform with the fiscal 1998 presentation. Note 2 Acquisition In January 1998, the Company, through a 91.5% majority-owned subsidiary, acquired the assets, rights to the bar code verification business and the RJS name, and assumed certain liabilities from Eltron in a cash expenditure of $2.9 million in a business combination accounted for as a purchase. RJS is primarily engaged in bar code verification products. The results of operations of RJS are included in the consolidated financial statements since the date of acquisition. The fair value of assets acquired exceeded the purchase price by $0.9 million based upon appraised values and the excess has been allocated to reduce the value of noncurrent assets acquired. The acquisition also resulted in a $1.2 million intangible asset (See Note 1). Fourth quarter results include a one-time charge for in-process engineering expenses of $0.9 million before tax benefit, or $0.6 million after tax. Note 3 Land Purchase During the fourth quarter of fiscal 1998, the Company purchased land in Irvine, California for $8.1 million. The Company plans to consolidate into one complex the corporate headquarters, research and development and U.S. manufacturing operations now housed in five buildings in the area. Construction of the building is scheduled to begin the summer of 1998 with an expected move date during the fall of 1999. Note 4 Bank Borrowing and Debt Arrangements The Company maintains an unsecured line of credit of $7.5 million with a United States bank. The line of credit agreement generally provides for interest at the prime rate or LIBOR plus 2%, contains certain standard financial and non-financial covenants, provides for an annual commitment fee of 1/2% of the unused portion of the line, and is renewable in August of 1998. At the end of fiscal years 1998 and 1997, there were no cash borrowings against this line of credit. At March 27, 1998, one of the Company's foreign subsidiaries maintained unsecured lines of credit with foreign banks of $2.7 million which include a standby Letter of Credit of $1.8 million. These credit facilities are subject to parent guarantees, require payment of certain loan fees, and provide for interest at approximately 3/4 to 1% above the bank's cost of raising capital. During fiscal years 1998 and 1997, there were no cash borrowings against these lines of credit. 14 The Company entered into an agreement in fiscal 1997 to secure a five-year term loan of $5.0 million to acquire a manufacturing facility in Singapore. During fiscal 1997, the Company borrowed $5.0 million on the term loan and paid off the entire balance by the end of fiscal 1997. Note 5 401(k) Savings, Profit-Sharing, and Bonus Plans Effective January 1, 1985, the Company adopted a 401(k) Savings and Investment Plan (the "401(k) Plan"), for all elegible employees, which is designed to be tax deferred in accordance with the provisions of Section 401(k) of the Internal Revenue Code. All United States employees (including officers, but not outside directors) may contribute from 1% to 17% of compensation per week (subject to certain limitations) on a tax-free basis through a "salary reduction" arrangement. The Company matches employee contributions up to a maximum of 2% of salary or $1,000 per year, whichever is less. Employee contributions are always 100% vested. All Company contributions become fully vested after four full years of employment. Company contributions to the 401(k) plan were $515,000, $434,000, and $306,000 for fiscal years 1998, 1997, and 1996, respectively. The Company also maintains a discretionary worldwide profit-sharing plan for qualified employees. Employees who have been with the Company for 90 days of continuous service are eligible to participate in the profit-sharing plan. The Company allocates a percentage of pre-tax profits to a profit-sharing pool which is then distributed to employees pro rata based on quarterly salary. In addition, certain executives are eligible to participate in a bonus plan which is contingent upon achieving specific operating performance targets established by the Board of Directors. Company contributions to these plans were $3.0 million, $3.1 million, and $2.4 million for fiscal years 1998, 1997, and 1996, respectively. Note 6 Stock Option and Stock Incentive Plans and Common Share Purchase Rights Stock option and stock incentive plans The Company has one stock option plan under which options may be granted to purchase shares of its common stock. A total of 1,525,000 shares are authorized for issuance under this plan. An additional plan which expired April 30, 1994 has options outstanding, but no further options may be granted under this plan. Options under the plan are generally granted at prices not less than the fair market value of the common stock on the date of grant and can become exercisable in installments at dates ranging from one to ten years from the date of grant, as determined by the Stock Option Committee of the Board of Directors. Generally, outstanding options become exercisable at the rate of 25% per year, and expire five years from the date of grant. The following is a summary of the transactions, including restricted stock, as discussed below, relating to the plans for fiscal years ended 1998, 1997 and 1996:
1998 1997 1996 ----------------------- ----------------------- ----------------------- Weighted Weighted Weighted Average Average Average Common Stock Options and Exercise Exercise Exercise Restricted Stock Purchases Shares Price Shares Price Shares Price ------- --------- ------- --------- ------- --------- Beginning, outstanding 782,437 $ 9.04 963,332 $ 7.34 920,354 $ 3.16 Granted 485,525 11.41 69,575 13.55 430,557 12.20 Exercised (358,998) 8.84 (209,019) 2.55 (366,060) 2.51 Canceled (25,918) 11.48 (41,451) 10.38 (21,519) 6.69 ------- --------- ------- --------- ------- --------- Ending, outstanding 883,046 $ 10.35 782,437 $ 9.04 963,332 $ 7.34 ------- --------- ------- --------- ------- --------- Options exercisable 377,200 294,837 180,251 ------- --------- ------- --------- ------- --------- Weighted average fair value of options granted $ 8.15 $ 6.16 $ 5.94
As of March 27, 1998 options to acquire 372,648 shares remained available to grant. A detail of options outstanding and exercisable as of March 27, 1998 is presented below:
Options outstanding Options exercisable - --------------------------------------------- ---------------------------------- Weighted Average Weighted Weighted Remaining Average Average Range of Number Contractual Exercise Number Exercise exercise prices Outstanding Life in Years Price Exercisable Price - --------------- ----------- ------------- --------- ----------- --------- $2.00 - $4.11 208,883 0.96 $ 3.39 171,734 $ 3.26 11.00 - 11.83 181,081 2.93 11.07 93,482 11.12 11.92 - 12.17 228,225 3.76 12.02 24,297 12.16 12.33 - 18.44 264,857 2.92 13.91 87,687 13.37 - --------------- ------- ---- --------- ------- --------- $ 2.00 - $18.44 883,046 2.68 $ 10.35 377,200 $ 8.13 =============== ======= ==== ========= ======= =========
15 Had compensation cost for these plans been determined consistent with SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's net income and diluted net income per share would have been reduced to the following pro forma amounts for the three fiscal years ended March 1998:
March 27, March 28, March 29, 1998 1997 1996 ---------- ---------- --------- $in thousands, except share data Net Income as reported $ 15,064 $ 11,671 $ 6,771 Pro forma 13,310 10,700 6,178 Diluted net income per share as reported $ 1.83 $ 1.40 $ 0.82 Pro forma $ 1.62 $ 1.29 $ 0.75
The fair value of each option granted to employees and directors is estimated using the Black-Scholes option-pricing model on the date of grant using the following assumptions: no dividend yield, average volatility of 54% for fiscal year 1998 and 65% for fiscal years 1997 and 1996, weighted average risk-free interest rate of approximately 5.8, 6.2 and 5.7% for fiscal years 1998, 1997 and 1996, respectively, and an average expected life of 3.2 years for fiscal year 1998 and 3.3 years for fiscal years 1997 and 1996, respectively. Under the now expired 1984 Stock Incentive Plan ("the 1984 Plan") and the 1994 Stock Incentive Plan ("the 1994 Plan"), grants of restricted stock can be made at any price. In fiscal 1991 and fiscal 1993, 258,750 shares and 112,500 shares were issued, respectively, under the 1984 Plan and an additional 236,000 shares were issued in fiscal 1998 under the 1994 Plan. The shares issued under both plans are subject to certain repurchase agreements and performance criteria which lapse over an extended period not exceeding seven years for the 1984 Plan and two years for the 1994 Plan beginning in fiscal 1999. All repurchase agreements on shares issued in fiscal 1991 and fiscal 1993 expired prior to March 27,1998. The excess of the fair market value on the date of vesting over the purchase price is charged to operations as compensation expense as the restrictions lapse. As discussed in Note 1 above, the Company accounts for the above plans under APB No. 25. In each of fiscal 1998, 1997, and 1996, 92,816 or 25% of the issued shares vested, with $1.3 million, $1.1 million, and $0.8 million, respectively, charged to operations under the 1984 Plan. Compensation expense for shares issued in 1998 under the 1994 Plan will be recognized in fiscal years 1999 and 2000, if the performance criteria are met. Common share purchase rights On March 16, 1989, the Company declared a dividend payable on April 4, 1989 of 10,311,603 common share purchase rights. Each right, when exercisable, entitles a stockholder to buy one share of the Company's common stock at an exercise price of $15.55, subject to adjustment. The rights become exercisable ten days after certain persons or groups announce acquisition of 20% or more, or announce an offer for 30% or more, of the Company's common stock. The rights are nonvoting, expire in ten years and may be redeemed prior to becoming exercisable. In the event that the Company was acquired in a merger or other business combination, each outstanding right would entitle a holder to purchase, at the current exercise price, that number of shares of common stock of the surviving company having a market value equal to two times the exercise price of the right. The foregoing is a general description only and is subject to the detailed terms and conditions set forth in the Common Share Rights Agreement, dated as of March 17, 1989, between the Company and Chemical Trust Company of California. Note 7 Income Taxes Provision for income taxes
March 27, March 28, March 29, 1998 1997 1996 - ---------------------------------------------------------------------------------- $in thousands Current Federal $ 262 $ 155 $ (6) State 538 205 (22) Foreign 294 289 184 Deferred (308) (180) -- ----- ----- ----- Total $ 786 $ 469 $ 156
Components of income before taxes 16
March 27, March 28, March 29, 1998 1997 1996 ------- ------- ------- $in thousands United States $ 9,824 $11,820 $ 4,215 Foreign 6,026 320 2,712 ------- ------- ------- Total $15,850 $12,140 $ 6,927
Amounts for tax provision and components of income before taxes shown in the two tables above are classified based on location of the taxing authority and not on geographic region. Deferred income tax provision
March 27, March 28, March 29, 1998 1997 1996 ------- ----- ----- $in thousands Capitalized research and development $ (308) $ -- $ -- Tax depreciation (under) over depreciation for financial reporting purposes (137) (191) 65 Inventory costs capitalized for tax and expensed for financial reporting (210) 198 (114) (Increase) decrease in liability reserves (670) (217) 1,176 Utilization (nonutilization) of net operating losses and credits 4,618 3,263 (1,873) Foreign tax credit expiration -- -- 2,700 AMT credit carryforward (255) (180) -- Valuation reserve (3,346) (3,053) (1,954) ------- ------- ------- Total $ (308) $ (180) $ --
Deferred income taxes are not provided on the undistributed earnings (which totaled approximately $43.1 million as of March 27, 1998) of the Company's foreign subsidiaries as the Company intends to reinvest these earnings indefinitely outside of the United States. Deferred income taxes result from differences in the timing of reporting income and expenses for financial statement and income tax reporting purposes. Deferred income tax asset
March 27, March 28, 1998 1997 -------- -------- $in thousands Capitalized research and development $ 308 $ -- Tax depreciation under (over) depreciation for financial reporting purposes 118 (19) Inventory costs capitalized for tax and expensed for financial reporting 666 456 Liability reserves 1,432 762 Net operating loss carryforward 4,056 8,674 AMT credit carryforward 472 217 -------- -------- Gross deferred tax asset 7,052 10,090 Valuation reserve (6,527) (9,873) -------- -------- Total $ 525 $ 217
At March 27, 1998, the Company had available net operating loss carryforwards for Federal income tax purposes of approximately $11.9 million expiring in 2002 to 2010. Approximately $3.6 million of the valuation reserve for the net operating loss carryforward is related to the deduction of stock options and will be allocated directly to capital when utilized. 17 Reconciliation of Effective Tax Rate to Statutory Federal Tax Rate
March 27, 1998 March 28, 1997 March 29, 1996 Amount % Amount % Amount % ------- ---- ------- ---- ------- ---- $in thousands Provision computed at statutory rates $ 5,548 35.0 $ 4,248 35.0 $ 2,355 34.0 State income taxes, net of Federal tax benefit (provision) 350 2.2 180 1.5 (22) (0.3) Book income from which Federal benefit is utilized (3,260) (20.6) (4,136) (34.0) (1,439) (20.8) Rate increase (reductions) due to foreign operations (including carryback) (1,852) (11.6) 177 1.4 (738) (10.7) ------- ---- ------- ---- ------- ---- Total $ 786 5.0 $ 469 3.9 $ 156 2.2
The Company has a favorable pioneer tax status in Singapore for income generated from the manufacture of new Printronix P5000 Series line matrix products. The pioneer status started in April 1996, lasts for a duration of five years, and is extendible to eight years. The pioneer status mandates that the Company meet certain requirements, including meeting specific levels of capital investment and engineering headcount. Earnings generated there are exempt from tax liability through 2001, extendible to 2004. The aggregate dollar effect of the pioneer status was to reduce foreign taxes by $1.8 million, $0.1 million, and $0.7 million for fiscal years 1998, 1997, and 1996, respectively. The diluted net income per share effects of this pioneer status would be 22 cents, one cent, and eight cents for fiscal years 1998, 1997, and 1996, respectively. Note 8 Segment and Customer Data Printronix operates in one industry segment -- the design, manufacture and marketing of medium and high speed printers which support a wide range of computer systems and software platforms. Regional segment data is as follows:
Europe, Middle The Americas East & Africa Asia Pacific Eliminations Consolidated ------------ -------------- ------------ ------------ ------------ $in thousands 1998 Revenues: Net sales $ 118,267 $ 39,235 $ 12,889 $-- $ 170,391 Transfers between geographic locations 10,957 1,949 42,128 (55,034) --------- --------- --------- ------- --------- 129,224 41,184 55,017 (55,034) 170,391 Income from operations $ 8,264 $ 4,643 $ 1,237 $-- $ 14,144 Identifiable assets $ 55,260 $ 13,750 $ 19,849 $-- $ 88,864 1997 Revenues: Net sales $ 120,439 $ 41,731 $ 11,120 $-- $ 173,290 Transfers between geographic locations 18,307 601 42,658 (61,566) -- --------- --------- --------- ------- --------- 138,746 42,332 53,778 (61,566) 173,290 Income from operations $ 6,217 $ 4,239 $ 1,243 $-- $ 11,699 Identifiable assets $ 44,993 $ 12,257 $ 23,403 $-- $ 80,653 1996 Revenues: Net sales $ 116,368 $ 34,712 $ 8,181 $-- $ 159,261 Transfers between geographic locations 18,487 403 38,737 (57,627) -- --------- --------- --------- ------- --------- 134,855 35,115 46,918 (57,627) 159,261 Income from operations $ 2,811 $ 2,441 $ 1,093 $-- $ 6,345 Identifiable assets $ 43,380 $ 10,795 $ 14,955 $-- $ 69,130
18 Geographic information is based upon the principal location of the Company's operations and not necessarily on the location of the customers. Transfers between geographic locations are billed at manufacturing costs plus a margin representing a reasonable rate of return for activities performed. Certain operating expenses have been redistributed among geographic regions to reflect a reasonable allocation of operating expenses which support worldwide operations. The Americas' sales included export sales of approximately $22.1 million, $23.5 million, and $22.9 million for fiscal years 1998, 1997, and 1996, respectively. Export sales are principally to Europe, Canada, and Asia. Sales based on the location of the customers were as follows for fiscal years 1998, 1997, and 1996, respectively: The Americas -- $100.5 million, $101.8 million and $99.0 million; Europe, the Middle East, and Africa -- $57.9 million, $60.8 million, and $51.8 million; and Asia Pacific -- $12.0 million, $10.7 million, and $8.5 million. In fiscal 1998, 1997, and 1996, the Company had two customers each of which represented 10% or more of consolidated net sales. Sales to the largest customer, IBM, represented 28%, 29%, and 30% of net sales for fiscal years 1998, 1997, and 1996, respectively. Sales to the second largest customer represented 10% of net sales for fiscal years 1998, 1997, and 1996. A significant decline in sales to either customer could have an adverse effect on the Company's operations. Note 9 Commitments and Contingencies Operating leases The Company conducts its operations using leased facilities under non-cancelable operating leases which expire at various dates beginning fiscal year 1999 through 2026. Leases, other than the land lease for the Company's building in Singapore, expire at various dates through fiscal year 2005. The following is a summary of rental expense of non-cancelable building and equipment operating leases incurred for each of the three years in the period ended March 1998:
March 27, March 28, March 29, 1998 1997 1996 -------- -------- -------- $ in thousands Gross rental expenses $ 2,949 $ 3,560 $ 3,703 ------- ------- ------- Less: sublease rental income -- (25) (82) ------- ------- ------- Net rental expense $ 2,949 $ 3,535 $ 3,621
The minimum rental commitments required under existing non-cancelable operating leases are as follows:
1999 2000 2001 2002 2003 Thereafter Total ------ ------ ----- ----- ----- ---------- ------- $ in thousands $2,994 $1,612 $ 566 $ 352 $ 293 $4,873 $10,690
The minimum annual rental commitment for the land located at the Singapore manufacturing facility represents $5.7 million of the above $10.7 million commitment under non-cancelable operating leases. Environmental assessment In January 1994, the Company was notified by the California Regional Water Quality Control Board --Santa Ana Region (the "Board") that groundwater monitoring reports indicated that the groundwater under one of the Company's former production plants was contaminated with various chlorinated volatile organic compounds (VOCs). Evidence adduced from site studies undertaken to date indicate that compounds containing the VOCs were not used by the Company during its tenancy, but were used by the prior tenant during its long-term occupancy of the site. The tests also indicate that the composition of the soil is such that off-site migration of contamination is very slow and contamination is most likely confined to the site. In March 1996, the Company received a request from the Board for information regarding chemicals used by the Company or others on property adjacent to the former production plant site. Although the Company previously occupied a small portion of this adjacent property, primarily for office space and a machine shop, initial review indicates that the Company did not use compounds containing VOCs on this adjacent property. 19 Presently, the Board continues to investigate the source of the VOCs and there are currently no further orders outstanding against the Company. As of March 27, 1998, the Company has reserved $214,000 which is a reasonable estimate to cover further legal fees or any additional expenses related to environmental tests which could be requested by the Board at either site. To date, the Company has incurred only minimal expense in its initial response to the Board's request for information and for environmental testing. The Company is convinced that it bears no responsibility for any contamination at the sites and intends to vigorously defend any action which might be brought against it with respect thereto. Furthermore, the Company believes that it has adequately accrued for any future expenditures in connection with environmental matters and that such expenditures will not have a materially adverse effect on its financial condition or results of operations. Note 10 Subsequent Event (unaudited) Subsequent to year-end, the Board of Directors authorized the Company to repurchase up to an additional 1,000,000 shares of the Company's outstanding common stock, resulting in a total of 2,000,000 shares authorized for repurchase. Subsequent to year-end, a total of 397,000 shares of common stock were purchased at fair market value and retired, at a cost of $6.4 million. To date, the Company has repurchased and retired 1,138,400 shares of common stock at a cost of $17.8 million. Future purchases of up to 861,600 shares may be made from time to time at the discretion of management. To The Board of Directors and Stockholders of Printronix, Inc.: We have audited the accompanying consolidated balance sheets of Printronix, Inc. (a Delaware Corporation) and subsidiaries as of March 27, 1998 and March 28, 1997, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended March 27, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Printronix, Inc. and subsidiaries as of March 27, 1998 and March 28, 1997, and the results of their operations and their cash flows for each of the three years in the period ended March 27, 1998 in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Orange County, California April 24, 1998 Quarterly Data (unaudited)
1st quarter 2nd quarter 3rd quarter 4th quarter ---------- ---------- ---------- ---------- $ in thousands, except share data Fiscal 1998 Net sales $ 43,667 $ 40,788 $ 42,528 $ 43,408 Gross profit 12,924 13,192 13,810 14,004 Net income 3,639 3,739 4,529 3,157 Net income per share Basic $ 0.46 $ 0.47 $ 0.56 $ 0.41 Diluted $ 0.45 $ 0.45 $ 0.54 $ 0.39 Stock Price High $ 15.13 $ 21.25 $ 21.63 $ 18.00 Low $ 10.63 $ 14.63 $ 16.63 $ 14.38
20
1st quarter 2nd quarter 3rd quarter 4th quarter ------- ------- ------- ------- $ in thousands, except share data Fiscal 1997 Net sales $44,619 $43,193 $44,521 $40,957 Gross profit 10,983 11,192 11,915 11,853 Net income 2,492 2,401 3,240 3,538 Net income per share Basic $0.32 $0.30 $0.41 $0.44 Diluted $0.30 $0.29 $0.39 $0.42 Stock Price High $19.00 $17.50 $17.00 $18.13 Low $11.00 $10.75 $12.25 $12.44
21 Corporate Information Board of Directors Bruce T. Coleman Chief Executive Officer, El Salto Advisors (Advice and interim CEO services) John R. Dougery* (Venture capital investments) Ralph Gabai* President Bi-Coastal Consulting Ltd. (Strategic Business Planning) Erwin A. Kelen* President, Kelen Ventures (Venture Investments) Robert A. Kleist President and Chief Executive Officer, Printronix, Inc. *member of the Audit Committee Corporate Officers Robert A. Kleist President and Chief Executive Officer J. Edward Belt Ph.D. Senior Vice President, Engineering, Chief Technical Officer and Assistant Corporate Secretary George L. Harwood Senior Vice President, Finance & IS, Chief Financial Officer and Corporate Secretary C. Victor Fitzsimmons Senior Vice President, Worldwide Manufacturing Richard A. Steele Senior Vice President, Sales and Marketing Gordon B. Barrus Vice President, Advanced Development Theodore A. Chapman Vice President, Product Development J. Jeffrey Gibbons Vice President, Marketing 22 Claus Hinge Vice President, European Sales & Marketing Michael K. Jacobs Vice President, Distribution Sales, Americas Philip F. Low Vice President, Singapore Operations Juli A. Mathews Vice President, Human Resources Bruce E. Menn Vice President, Product Management Corporate Directory Printronix Corporate Offices 17500 Cartwright Road P.O. Box 19559 Irvine, California 92623 Tel: (949) 863-1900 Fax: (949) 660-8682 Legal Counsel Kirshman, Harris & Branton A Professional Corporation, General Counsel 315 S. Beverly Drive Suite 315 Beverly Hills, California 90212 Tel: (310) 277-2323 Independent Auditors Arthur Andersen LLP 18201 Von Karman Avenue Suite 800 Irvine, California 92615 Tel: (949) 757-3100 Registrar and Transfer Agent ChaseMellon Stockholder Services 400 S. Hope Street Fourth Floor Los Angeles, California 90071 Tel: (800) 647-4273 Annual Meeting Annual meeting will be held at 9:00 a.m., August 11, 1998, at Printronix Corporate Offices, located at 17500 Cartwright Road, Irvine, California. Printronix Common Stock Traded OTC, NASDAQ, National Market System, Stock Symbol: PTNX Stockholders As of March 27, 1998, there were 4,539 record holders of the Company's Common Stock. Corporate and Investor Information 23 A copy of Printronix's annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) will be furnished without charge to any stockholder. To obtain a copy, please write to: Investor Relations Department, Printronix, Inc. 17500 Cartwright Road P.O. Box 19559 Irvine, California 92623 Tel : (949) 863-1900 http://www.printronix.com EX-21 17 LIST OF SUBSIDIARIES 1 LIST OF SUBSIDIARIES
STATE OR OTHER JURISDICTION OF NAME INCORPORATION ---- --------------- Printronix Nederland B.V. The Netherlands Printronix Latinoamericana, S.A. de C.V. Mexico Printronix Foreign Sales Corporation B.V. The Netherlands Printronix GmbH West Germany Printronix A.G. Switzerland RJS Systems International California
EXHIBIT 21 EX-23 18 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 1 EXHIBIT 23.01 ARTHUR ANDERSEN LLP CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports incorporated by reference in this Form 10-K, into the Company's previously filed Registration Statement File Nos. 2-70035, 33-14288 and 33-83156. /s/ ARTHUR ANDERSEN LLP ------------------------------ ARTHUR ANDERSEN LLP Orange County, California June 25, 1998 EX-27 19 FINANCAIL DATA SCHEDULE
5 1,000 12-MOS MAR-27-1998 MAR-29-1997 MAR-27-1998 10,264 0 28,659 1,920 17,608 55,626 68,425 37,159 88,864 18,618 0 0 0 77 69,160 88,864 170,391 170,391 116,461 156,247 1,658 0 0 15,850 786 15,064 0 0 0 15,064 1.91 1.83
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