<PAGE>   1

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                             -----------------------

                                    FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934
                             -----------------------

          For the fiscal year ended               Commission File Number
              December 31, 1999                          0-14903



                          Baldwin Piano & Organ Company
             (Exact name of registrant as specified in its charter)


Delaware                                             31-1091812
(State or other jurisdiction of                      (IRS Employer
 incorporation or organization)                      Identification No.)


4680 Parkway Drive, Suite 200
Mason, Ohio                                       45040-7198
(Address of Principal Executive Offices)          (Zip Code)

Registrant's telephone number, including area code (513) 754-4500

Securities registered pursuant to Section 12(b) of the Act:

                                      None

Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value

         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 (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of 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. { }

         The aggregate market value of the voting stock held by non-affiliates
of the registrant is $12,095,661 based upon the $7.875 per share price at which
the Common Stock was last sold as reported on the Nasdaq National Market through
March 27, 2000.

         The number of outstanding shares of Common Stock of Baldwin Piano &
Organ Company ("Company"), as of March 22, 1999, is 3,462,826.

                       DOCUMENTS INCORPORATED BY REFERENCE

         All of the information required by Items 6-8 of Part II of this Form
10-K is incorporated by reference from the Company's Annual Report to
Shareholders for the fiscal year ended December 31, 1999 ("1999 Annual Report to
Shareholders"), which is attached hereto as Exhibit 13.1. The 1999 Annual Report
to Shareholders will be mailed to the Company's shareholders along with the
Company's definitive proxy statement for its 2000 Annual Meeting of
Shareholders. The Company currently anticipates that its 2000 Annual Meeting
will be held in June 2000, although the exact date has not yet been established
by the Company's Board of Directors.




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                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
PART I.                                                                             Page
                                                                                    ----

<S>                                                                             <C>
Item  1.            Business                                                         1-14

Item  2.            Properties                                                       14

Item  3.            Legal Proceedings                                                15

Item  4.            Submission of Matters to a Vote of
                    Security Holders                                                 15

PART II.

Item  5.            Market for Registrant's Common Equity                            17
                    and Related Stockholder Matters

Item  6.            Selected Financial Data                                          18

Item  7.            Management's Discussion and Analysis of                          18
                    Financial Condition and Results of Operation

Item 7A.            Quantitative and Qualitative Disclosures                         18
                    about Market Risk

Item  8.            Financial Statements and Supplementary Data                      18

Item  9.            Changes in and Disagreements with Accountants                    18
                    on Accounting and Financial Disclosure


PART III.

Item 10.            Directors and Executive Officers of the                         18-20
                    Registrant

Item 11.            Executive Compensation                                          21-30

Item 12.            Security Ownership of Certain Beneficial                        31-40
                    Owners and Management

Item 13.            Certain Relationships and Related                                40
                    Transactions
</TABLE>

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<TABLE>
<CAPTION>
PART IV.

<S>                                                                             <C>
Item 14.          Exhibits, Financial Statement Schedules,                        41-48
                  and Reports on Form 8-K


SIGNATURES                                                                         49
</TABLE>


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                                     PART I
                                     ------

                                ITEM 1. BUSINESS
                                        --------

         As used herein, the terms "Company" or "Baldwin" refer to Baldwin Piano
& Organ Company and its subsidiaries and the Company's predecessors, unless the
context otherwise indicates.

         As a leader in the U.S. keyboard market, the Company's core business,
Baldwin manufactures and markets a full range of high quality keyboard
instruments featuring the Baldwin(R), Wurlitzer(R), Chickering(TM),
ConcertMaster(TM) and Pianovelle(TM) trademarks. From artist-accepted concert
grand pianos to innovative digital keyboards, renowned Baldwin instruments are
found in homes, academic institutions and concert halls across the nation.

         Through its Contract Electronics Division, Baldwin offers printed
circuit board assemblies, design, engineering, testing, assembly,
post-production repair and order fulfillment services for original equipment
manufacturers.

         As one of its businesses, Baldwin provided in-house consumer
installment financing of musical products through its wholly-owned subsidiaries,
Keyboard Acceptance Corporation and Signature Leasing Company (together referred
to as "Retail Financing"). On March 10, 2000, Baldwin concluded the sale of
these subsidiaries to Deutsche Financial Services Corporation (DFS) for $35.0
million.

         Sales of the Company's products and other revenue are set forth by
segment in the following table:

                                            (dollars in millions)

                                           Year Ended December 31,
                                           -----------------------
                                           1999      1998      1997
                                         -------   -------   -------

Music and Related ....................   $  79.3   $  91.6   $ 107.5
Electronic Contracting ...............      45.0      42.7      35.6
                                         -------   -------   -------
Continuing Operations ................     124.3     134.3     143.1
Retail Financing
    (discontinued operations)  .......       8.8      10.4       8.6
                                         -------   -------   -------
             Total ...................   $ 133.1   $ 144.7   $ 151.7
                                         =======   =======   =======

         Beginning in 1997 and concluding in 1998, Baldwin phased out its
historical consignment inventory program. Under its historical consignment
inventory program, the consigned pianos in a dealer's possession remained part
of Baldwin's inventory until actually sold by the dealer. In 1997, as a result
of Baldwin's development and implementation of a more attractive flooring plan,
the dealers opted

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out of the existing consignment program and most of the Company inventory in
each of these dealers' possession was immediately sold to the dealers. This
created a non-recurring increase in Baldwin's 1997 sales and net earnings of
$14.6 million and $0.9 million, respectively.

         Additional financial information regarding industry segments is shown
in this Form 10-K in Note 15 to the Consolidated Financial Statements of the
Company, incorporated herein and attached hereto as Exhibit 13.1.


MUSICAL PRODUCTS

         Since 1862, Baldwin's keyboard products have been recognized for their
high quality, value and performance by professional musicians, educators and
consumers. Today, Baldwin's keyboard products are consistent with the Company's
fine heritage and represent a broad range of acoustic and electronic instruments
aimed at a broad consumer base. Baldwin's musical products are sold through
domestic wholesale dealers (82%), Company-owned retail stores (14%), and an
international dealer network (4%).

         ACOUSTIC PIANOS

                  The Company's premier product is the Baldwin(R) concert grand
         piano, a product which is widely accepted for concert performances.
         Baldwin is the only domestic manufacturer of concert grand pianos which
         also produces a full line of vertical pianos. The Company has
         successfully incorporated a number of enhancements and construction
         techniques originally designed for Baldwin(R) grand pianos into its
         vertical piano lines. The Company believes that the quality and
         durability of the Baldwin(R) concert grand pianos enhance the
         reputation and marketability of its entire line of acoustic keyboard
         instruments.

                  Baldwin offers three brands of pianos, under the Baldwin(R),
         Chickering(TM) and Wurlitzer(R) names, each earmarked for a different
         segment of the market on the basis of price and product positioning.
         Together, these three brands have represented nearly 50% of all
         domestic new piano sales over the past four decades and provide a
         significant competitive advantage to the Company. Product development
         activity is focused on the development of improved designs, periodic
         cabinetry changes, other aesthetic features and electronic
         enhancements.



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                  Overall, the Company's product line offering covers all key
         price points, piano styles, finishes, and sizes -- ranging from 37-inch
         vertical pianos to 9-foot concert grand pianos.

         DIGITAL KEYBOARDS

                  During the 2000 Music Trade Show (NAMM) Baldwin introduced all
         new pattern-based or ensemble digital pianos. The new line consists of
         5 different models available in numerous finish options. In addition,
         Baldwin introduced a new entry-level digital piano to round out the
         non-pattern based product offering, a total of 5 models, available in
         multiple finish options.

                  Pianovelle(TM) products are manufactured to Baldwin's
         specifications in Italy by GeneralMusic, Europe's largest digital
         keyboard manufacturer. GeneralMusic provides Baldwin with an efficient
         source of cutting-edge technology to compete in this rapidly changing
         category without incurring any significant costs of its own. Baldwin
         enjoys exclusive North American rights to market these products and is
         working with GeneralMusic to design a new generation of products with
         superior tone and touch.

         PRODUCT DEVELOPMENT

                  The Company's research staff, in conjunction with outside
         consulting and design services, continually refines existing products
         and develops new products.

                  During the NAMM 2000 music trade show, Baldwin introduced
         significant changes to its flagship Artist Grand Piano line. Changes
         involved not only performance-based improvements to the touch response
         and tone quality of the instrument, but also new aesthetic features
         improving the overall look of the piano. These new products are
         scheduled to begin shipping in March, 2000.

                  In Music, in the third quarter of 1998, Baldwin began dealer
         shipments of a new line of grand pianos featuring the Company's new
         super high-gloss polyester finishes. These new pianos have a
         mirror-like appearance with proven customer appeal. The finish is
         extremely hard and durable, is resistant to chemicals, scratches or
         abrasions, and is easily repaired should it be damaged. This
         achievement was the culmination of years of planning. It was a team
         effort including long-term employees and newly-hired experts, thorough
         training, and a multi-million-dollar capital investment for
         state-of-the-art polyester finishing equipment. The Company is
         expanding the rate of production to meet the increase in demand. The
         Company believes



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         that polyester finish is a prerequisite for entering into Asian and
         European piano markets. The Company believes approximately 70% of the
         grand pianos sold in the United States have a polyester finish.

                  Also in Music, in 1996, the Company completed development of a
         unique digital player system for acoustic pianos. This system, called
         Baldwin ConcertMaster(TM), was introduced in January 1997 and began
         shipping during the second quarter of 1997. It employs unique
         multi-media storage of music and recording capabilities. It is
         available for factory or field installation only on acoustic pianos
         with the Company's brand names.

                  In September, 1998, competing against a large field of
         technologically innovative consumer electronics products,
         ConcertMaster(TM) won top honors for technical excellence at the New
         Orleans EXPO '98 show of the Custom Electronic Design and Installation
         Association. Additional features, software and other capabilities are
         under development to further enhance the competitiveness of
         ConcertMaster(TM). The demand for Baldwin grand pianos continued to
         increase -- in no small part due to the consumer appeal of
         ConcertMaster(TM).

                  In early 2000, Baldwin also introduced a new player piano
         system called ConcertMaster CD. This new product is targeted at an
         entry level price point and is available as a field retrofit kit that
         can be installed on any brand of piano, new or used.

                           In electronic-based keyboard products, the Company
         uses outside sources for the development and production of its
         products, under strict specifications developed by the Company.
         Outsourcing has enabled the Company to benefit from other companies'
         expertise in advanced electronic technology and new material
         development and to minimize operating costs.

                  In early February 1999, Baldwin announced that it had signed
         an exclusive 10-year agreement to purchase piano plates from Southland
         Marketing - an Arkansas firm with approximately $50 million in annual
         sales, operating for 25 years as a primary designer and supplier of
         machined complex castings for a wide variety of manufacturing
         applications. In connection with that agreement, Baldwin made a capital
         investment to help finance the purchase of equipment needed to produce
         the piano plates, including computer-numerically-controlled five-axis
         drilling and machining equipment unique to the piano plates, and
         state-of-the-art powder finishing. Baldwin's investment includes
         equipment which can be relocated, but excludes the casting process
         itself, which is financed by Southland and its manufacturing
         affiliates.



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                  Plates from the manufacturing facility are made in accordance
         with stringent Baldwin performance requirements. Unlike traditional
         plates with very high scrap content, Baldwin's will be from a process
         that relies almost exclusively on virgin iron ore to produce plates of
         the very high chemical purity that the Company believes improves the
         sound of the piano and sets a standard for the piano industry.

                  The new arrangement and facilities generates significant cost
         advantages, a major improvement in quality and long-term pricing
         stability for this costly key component.

         MARKETING AND DISTRIBUTION

                  The Company distributes its keyboard musical instruments in
         North America through approximately 375 independent dealers. The
         Company also operates 15 Company-owned stores in seven large
         metropolitan areas.

                  In 1999, no single dealer accounted for more than 5.5% of the
         Company's keyboard musical instrument sales. The top ten dealers in
         terms of net sales accounted for approximately 27% of the Company's
         keyboard musical instrument sales, excluding sales through Baldwin's
         retail stores.

                  The Company's domestic unit sales leadership is attributable,
         in part, to its excellent dealer network. The Company believes that it
         has been able to attract and maintain dealers by offering a superior
         product line and numerous programs and services designed to assist
         dealers and promote the Company's products, including:

                  - A Concert and Artist program in which many of the world's
                  most renowned pianists, composers, conductors, vocalists and
                  musical institutions endorse Baldwin grand pianos. This
                  provides Baldwin dealers with extensive national and local
                  product publicity and a method of product differentiation.
                  This promotes wide use of Baldwin's pianos in broadcast media
                  and provides for in-store merchandising materials which
                  promote these endorsements.

                  - A dealer support program, providing training, promotional
                  programs and assistance, and sales incentives.

                  - Institutional loan programs, which provide for short term
                  piano loans to universities followed by selling events at the
                  end of the loan term.



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                  - Sponsorship of educational activities, including piano
                  competitions.


         CONSIGNMENT CONVERSION TO THIRD PARTY FINANCING

                  Under Baldwin's historical consignment inventory program,
         Baldwin placed Baldwin-owned inventory in dealers' retail showrooms,
         and charged the dealers interest for use of the consigned inventory
         after 90 days. The consigned pianos in a dealer's possession remained
         part of Baldwin's inventory until actually sold by the dealer. Baldwin
         was the sole piano manufacturer operating in the United States under a
         consignment program.

                  During 1997, in conjunction with Deutsche Financial Services,
         a premier financier of musical instrument inventory, Baldwin developed
         and implemented the Baldwin Inventory Finance Program. This was widely
         accepted as a more attractive floor plan for its dealers to finance the
         dealers' purchase of Baldwin pianos from the Company. The new Baldwin
         Inventory Finance Program provides better financial terms to dealers
         than the previous consignment program and is cost-neutral to the
         Company. Dealer reaction to this new program has been favorable, and
         most of the dealers accepted the Plan. Some chose, for various reasons,
         to arrange other third-party financing.

                  As a result of the consignment phase out in 1997, most of the
         Baldwin inventory in each of these dealers' possession was immediately
         sold to the dealers. These sales by the Company to the dealers created
         a non-recurring increase in Baldwin's 1997 sales of $14.6 million.

         TRUCKING

                  The Company ceased its Company-managed trucking of pianos to
         dealers during 1997, and converted these operations to an independent
         company which specializes in piano transport. Via a contractual
         arrangement, this independent trucking company absorbed the Company's
         leased fleet and provides cartage at rates competitive with the
         Company's. The benefits to the Company were three-fold:



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         (1)      The Company's delivery time to dealers was improved
                  dramatically, particularly to dealers on the west coast of the
                  U.S. because the transport company ships full loads on a more
                  frequent basis utilizing the economies of scale of shipping
                  pianos for many piano manufacturers.

         (2)      The specialized expertise of the independent contractor
                  reduced in-transit damage to the Company's pianos.

         (3)      The Company reduced administrative costs and increased
                  business focus by outsourcing trucking to an independent
                  supplier.

         RETAIL STORES

                  The 15 Company-owned retail outlets are located in Atlanta,
         Georgia; Cincinnati, Ohio; Indianapolis and Fort Wayne, Indiana;
         Louisville and Lexington, Kentucky; and Memphis, Tennessee. These
         Company-owned retail outlets sell only Company piano lines and are
         generally situated in areas where they do not compete directly with the
         Company's independent dealers. The Company believes that the existence
         of Company-owned stores has not adversely affected the Company's good
         relationships with its independent dealers.

                  In addition to accounting for approximately 14% of the
         Company's total keyboard sales in 1999, Baldwin's retail stores provide
         the Company with the opportunity to test new retailing concepts and
         dealer promotional ideas. Baldwin's retail stores also provide a better
         understanding of dealer issues and provide a source of knowledgeable
         future management talent.

         INTERNATIONAL SALES

                  The Company's products are distributed in Canada through
         approximately 30 independent dealers representing approximately 3% of
         the Company's total keyboard sales in 1999. The Company markets
         products through a number of other international distributors in
         markets such as Mexico, France, Taiwan, Japan and England representing
         approximately 1% of the Company's total keyboard sales in 1999.

         MARKETS AND COMPETITION

                  The principal targets for the Company's acoustic and
         electronic pianos are families with children aged 6 to 12, young
         adults, and educational institutions.



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                  In the U.S. the piano category has averaged approximately 5%
         to 6% growth over the past three years (1997; 1998; and 1999). Because
         available industry data reports unit sales from manufacturers to
         dealers, and not dealers to consumers, it is difficult to determine
         real consumption in any given year. Based on available information from
         a variety of sources, we believe 1998 and 1999 were atypical. The
         unusually strong growth reported by the industry in 1998 followed by a
         decline in 1999 is, in our view, a result of trade inventory loading in
         1998. The dealers stocked up because the Asian economic crisis caused a
         surge of Asian piano imports into the U.S. at dramatically discounted
         piano pricing. Then in 1999 the dealers worked off their excess
         inventory before reordering. Therefore, we believe averages over
         several years are probably a better predictor of real category growth
         dynamics. Nevertheless, average growth of acoustic pianos in the past
         three years has been stronger than the previous three years, an
         indication of a strong domestic economy, a reduction in the number of
         used pianos in the marketplace, and strong media and public interest in
         newly published research linking keyboard study to enhance intellectual
         development.

                  Sales of the Company's keyboard products are affected by the
         market for used keyboard instruments, particularly used acoustic
         instruments, although the Company is unaware of any reliable data for
         evaluating the size or impact of these used instruments on the sales of
         new products. Company sales data include the sales of new instruments,
         as well as a small number of used and non-Baldwin instruments sold by
         the Company's retail stores. The revenue represented by these used or
         non-Baldwin instruments is nominal.

                  The Company competes with a number of domestic and foreign
         acoustic piano manufacturers based on price relative to tone quality,
         performance characteristics, styling, finish options and electronic
         enhancement options.

                  The Company believes that its domestic unit market share for
         new acoustic pianos was approximately 28% in 1997, approximately 24% in
         1998 and approximately 22% in 1999. The Company believes that no single
         manufacturer has a domestic market share larger than the Company's. The
         Company's domestic market share for digital pianos was approximately,
         6% in 1997, and 5% in 1998 and 1999.



                                      -8-
<PAGE>   12

         CHURCH ORGANS

                  In early 1997, the Company reached agreement to sell its
         church organ business, the sale of which was completed in the fourth
         quarter of 1997. The church organ business was considered a non-core
         business because of its unique dealer and customer base. Exit from this
         business was consistent with the Company's focus on its core piano
         business aimed at the consumer market.

CONTRACT ELECTRONICS

         In 1984, the Company began manufacturing printed circuit board
assemblies for original equipment manufacturers outside the music industry.
Currently, the Baldwin Contract Electronics Division provides electronic and
electromechanical products and services to a broad range of original equipment
manufacturers. Final applications include commercial and industrial power
controls, heating and air conditioning systems, vending machines, mail handling
systems, exercise equipment and semiconductor fabrication equipment.

         The Contract Electronics Division has increased resource investment,
improved its work systems and expanded its customer/supplier partnerships. Since
1996, this Division has strategic partnerships with two of its top five
customers. In one strategic partnership, Baldwin has enjoyed preferred supplier
status - increasing the likelihood for preferential access to new business being
outsourced by this customer. In the other, Baldwin has entered into long term
supply arrangements that give the Company preferred supplier status for new
business.

         The Contract Electronics Division is a full-service contract supplier,
offering complete system-build services, including engineering, design, testing,
repair and rework services, assembly of electronic and electromechanical
products and order fulfillment. Baldwin engineering and operations personnel
work closely with customers to take a concept or design, develop it, test it and
turn it into a manufactured circuit board assembly or finished product
component.

         The Company sells electronic assemblies to manufacturers through
Company representatives and independent electronics manufacturers'
representatives with territories covering 28 states. There are many contract
manufacturers of electronic assemblies, and the Company does not have a
significant share of the market of such products. In terms of sales, the Company
believes that this Division is ranked in the top 65 out of approximately 1,000
contract electronics manufacturers in the U.S. The industry remains highly
fragmented with predominantly small players and a few large ones. Baldwin has
established a niche



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in low-to-medium volume assembly. This Division has developed a strong
reputation among its customers in the consistency of its quality and flexibility
in meeting rapidly changing customer demands.


RETAIL FINANCING OPERATIONS (DISCONTINUED OPERATIONS)

         The Company's retail financing units, "Retail Financing", operated
through its installment financing subsidiary, Keyboard Acceptance Corporation
(KAC) and its lease finance subsidiary, Signature Leasing Company (SLC), created
in 1997. Retail Financing provided point-of-sale consumer financing through
keyboard dealers located throughout the United States. On March 10, 2000,
Baldwin completed the sale of its two wholly owned retail financing units to
Deutsche Financial Services Corporation (DFS). Baldwin received gross proceeds
of $35 million. After transaction expenses, Baldwin expects to net approximately
$32.5 million for an after-tax gain of $700,000, or 20 cents per share. Key
elements of the transaction include commitments from Baldwin to continue to
exclusively use KAC and SLC to service the retail financing needs of its
company-owned stores and to use Baldwin's retail outlets to sell pianos
repossessed by KAC and SLC. Baldwin also agreed to retain a contingent
obligation for certain past-due installment receivables for a period of two
years.

         DFS is a financially strong strategic buyer with extensive knowledge of
the piano business. They are in an excellent position to maintain Retail
Financing's long-term dealer relationships and continue the high quality service
that Baldwin dealers have come to expect. Based on Baldwin's strong relationship
with DFS, DFS's relationship with piano dealers, including Baldwin dealers, and
other sources of available financing to piano consumers, the Company expects
that the sale of Retail Financing will have no adverse impact on Baldwin's piano
business going forward. Further, with the net proceeds of approximately $32.5
million from the sale of Retail Financing, the Company's balance sheet will be
significantly deleveraged, strengthening Baldwin's remaining businesses.

         During the last few years Retail Financing had expanded its focus. In
addition to financing keyboard products sold by Baldwin dealers, Retail
Financing made its consumer financing available through music dealers that do
not carry the Company's keyboard products.

         Retail Financing offered music dealers consumer financing programs
which included competitive interest rates, leasing, rent-to-own options and
prompt credit approval. In addition to these services, Retail Financing both
originated and cooperated in special promotional programs with dealers.



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         Prior to the March 2000 sale to DFS, Keyboard Acceptance Corporation
maintained agreements to sell substantially all of its installment receivable
contracts up to a maximum outstanding principal amount of $150 million with
General Electric Capital Corporation and affiliates. Those installment
receivables which were not eligible for sale were retained. Retail Financing
continued to service all installment receivables sold.

         At the time of each installment receivable sale, Retail Financing
received cash equal to the unpaid balance of the contracts, less a purchase
discount applied to the principal balance of the contracts sold. The purchase
discount was adjusted at each receivable sale and was determined using the loss
experience and effective yield of the portfolio. The buyer of the installment
receivables earned interest on the outstanding principal balance of the
contracts based upon a floating interest rate provision. Over the duration of
the contracts, the difference between the actual yield on the installment
contracts sold, and the amount retained by the buyer under the floating interest
rate provision, was remitted to Retail Financing as a service fee.

         Under the sale agreement with the independent entity, Retail Financing
was required to repurchase accounts that become more than 120 days past due or
accounts that were deemed uncollectible by the independent purchaser. The
repurchase price was equal to the remaining unpaid principal balance of the
contract on the date repurchased, less the related purchase discount.

         At December 31, 1999, Retail Financing remained contingently liable on
approximately $114 million of installment receivables. Retail Financing was
responsible for all credit losses associated with the sold receivables.
Historically, credit losses have been approximately one percent of the Retail
Financing portfolio. Installment receivables were secured by the keyboard
instruments.

         Prior to the fourth quarter of 1997, in the event of repossession of an
instrument financed by Retail Financing, the dealer originally selling the
instrument bore some risk of the bad debt loss, but had the right to sell the
repossessed product. The dealer's potential liability to the Company was known
as recourse. In the fourth quarter of 1997, in order to increase the number of
contracts entered into, Retail Financing initiated a program of acquiring
receivables without recourse, and the Company began selling repossessed pianos
through its own retail stores -- primarily through a repossession center located
in the Atlanta metropolitan area. The Company believes an adequate allowance has
been provided for all uncollectible receivables.



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MANUFACTURING

         The Company has integrated acoustic piano manufacturing capability
beginning with the treatment of raw lumber; proceeding through the fabrication
and finishing of the cabinetry and assembly of the inner workings; and
culminating in the creation of a completed keyboard instrument. Since 1996, the
Company has implemented an aggressive initiative to modernize and simplify its
piano manufacturing operations.

         Utilizing synchronous manufacturing techniques, the Company is gaining
greater process efficiencies, reducing manufacturing costs and inventories,
improving cycle times, increasing capacity and usable space, and producing
consistently higher-quality pianos for its dealer network and consumers.

         During the first half of 1999, Baldwin reduced its costs by
approximately $2 million annually by consolidating the production of its Artist
Grand pianos into its Trumann, Arkansas piano assembly plant, and ceasing
assembly at Conway, Arkansas. Previous to this consolidation, Baldwin had been
assembling some of Baldwin's Artist Grand pianos at the Trumann plant for over a
year. Synchronous manufacturing techniques made the relocation possible. The
Company incurred one-time expenses of $1.5 million and a capital investment of
approximately $0.5 million in connection with this consolidation. The Company's
polyester finishing operations at Conway were not affected.

         In September, 1999, Baldwin sold its Juarez, Mexico manufacturing
facility to an unrelated third party for $7.2 million. The implementation of
synchronous manufacturing techniques at our Juarez facility allowed the Company
to maintain production using only a third of the space once required for the
same operations. The Company's manufacturing in Juarez will remain in Juarez,
but operating in a smaller, leased facility.

         The Company's Contract Electronics manufacturing facility utilizes
specialized, computer-controlled production and testing equipment to assemble
and test printed circuit boards and electromechanical assemblies for its
original equipment manufacturing customers.


                                      -12-
<PAGE>   16

RAW MATERIALS

         Raw materials required for the Company's acoustic piano manufacturing
operations are primarily purchased in the United States. Due to the Company's
unique products, a limited number of vendors are available for certain
specialized parts needed for keyboard instruments. The Company has not
experienced significant difficulties in obtaining adequate supplies of raw
materials. However, the failure of one or more such vendors to continue to
supply its products could cause delays in the Company's manufacturing process
until suitable alternate sources could be obtained.

         In electronic contracting, electronic components are purchased from
major electronic parts manufacturers and distributors. To minimize costs and
facilitate availability of major components, the Company designs products to
employ standard components wherever possible.


SEASONALITY

         The Company's business is somewhat seasonal in nature with fourth
quarter musical products sales generally increasing during the holiday season.
In 1999, the fourth quarter accounted for approximately 29% of net sales. This
is slightly higher than fourth quarter results in the previous three years.



BACKLOG

         At both December 31, 1999 and 1998, the Company had sales orders for
keyboard products of approximately $9 million and $5 million, respectively. The
sales orders for electronic contracting totaled approximately $30 million at
December 31, 1999 and 1998, respectively. These sales orders are not firm sales
orders and are subject to cancellation by the ordering customers. The Company
anticipates that all such 1999 orders will be filled during 2000.


WORKING CAPITAL

         The Company requires significant working capital to support its
operations. The Company builds piano inventory levels during the year to support
its high fourth quarter seasonal sales demand.

         The Company finances its working capital needs under a $35 million
Revolving Credit Facility with Fifth Third Bank and Bank One



                                      -13-
<PAGE>   17

(formerly known as NBD Bank). The Company can terminate this Credit Facility at
any time with sixty days' notice without penalty. Under the Credit Facility, the
lenders have made available a line of credit based upon certain percentages of
the carrying value of the Company's inventories and accounts receivable. Retail
Financing had entered into agreements to sell substantially all of its
installment receivable contracts up to a maximum outstanding principal amount of
$150 million, subject to certain repurchase provisions, as described above under
the caption "Retail Financing Operations".

         For more information about the Company's credit facilities, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operation - Liquidity and Capital Resources" incorporated herein and attached
hereto as Exhibit 13.1.


EMPLOYEES

         As of December 31, 1999, the Company had approximately 1,500 full-time
employees. Approximately 291 hourly workers at the Company's Greenwood,
Mississippi facility are represented by the International Chemical Workers
Union, Local Union No. 800 and approximately 210 hourly workers at Fabricantes
Tecnicos, S.A. (wholly-owned subsidiary of the Company) Juarez, Mexico facility
are represented by the National Labor Union of Workers of Electronic Products.
All other employees are not represented by collective bargaining units. The
Company considers its relations with its employees to be good.

                               ITEM 2. PROPERTIES
                                       ----------

         The Company operates the following manufacturing facilities, all of
which are owned, except for Juarez, Mexico, which is leased. These properties
are pledged as collateral under the Company's various credit facilities.

<TABLE>
<CAPTION>
      Location                              Industry Segment                      Principal Products
      --------                              ----------------                      ------------------
<S>                                         <C>                                   <C>
Greenwood, Mississippi                      Music and related                     Piano cases and wood
                                                                                  components

Conway, Arkansas                            Music and related                     Polyester Finishing
</TABLE>



                                      -14-
<PAGE>   18

<TABLE>
<S>                                         <C>                                   <C>
Fayetteville, Arkansas                      Electronic                            Circuit boards and
                                            Contracting                           electromechanical and
                                                                                  mechanical assemblies

Trumann, Arkansas                           Music and related                     Vertical pianos/
                                                                                  Grand pianos

Juarez, Mexico                              Music and related                     Keys and actions
</TABLE>


         The Company's corporate offices are located in a 28,000 square foot
leased facility in a suburban office park in the greater Cincinnati, Ohio
metropolitan area. Generally, properties are utilized at normal capacity levels
on a single shift basis.


                            ITEM 3. LEGAL PROCEEDINGS
                                    -----------------

         The Company is involved in legal proceedings arising in its normal
course of business. The Company does not believe that any existing claim or suit
will have a material adverse effect on the business or financial condition of
the Company.

         The operations of the Company and its predecessors are subject to
federal, state and local laws regulating the discharge of pollutants into the
environment. The Company does not anticipate that any environmental matters
currently known to the Company will result in proceedings against the Company or
in any material liability.

           ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
                   ---------------------------------------------------

         The Company submitted no matters to a vote of its shareholders during
the fourth quarter of the Company's 1999 fiscal year.

                      EXECUTIVE OFFICERS OF THE REGISTRANT
                      ------------------------------------

         The following are the Company's current executive officers. They have
been elected by the Company's Board of Directors to serve until their respective
successors are elected.

         KAREN L. HENDRICKS, age 52, is the Company's Chairman of the Board,
Chief Executive Officer and President. Prior to joining the Company in 1994, Ms.
Hendricks served as the Executive Vice President and General Manager, Skin Care
Division of The Dial Corporation since 1992, where she had full responsibility
for Dial's United States bar and liquid soap business and their industrial
products. Ms. Hendricks previously was employed for over twenty years by The
Procter & Gamble



                                      -15-
<PAGE>   19

Company in various executive positions in product development and was promoted
to General Manager of its Vidal Sassoon Hair Care Company in 1987. In her last
two years at Procter & Gamble, she was Manager of Worldwide Strategic Planning
for their hair care business. She also currently serves as a director of
ACNielsen Corporation and Columbia Energy Group.

         DUANE D. KIMBLE, age 39, is Executive Vice President, Chief Financial
Officer and Corporate Secretary. Mr. Kimble joined the Company in August 1998 as
Vice President, Strategic Planning and then was named Chief Financial Officer in
December 1998. Prior to joining the Company, Mr. Kimble had been director of
financial and operations analysis for Equistar Chemicals, L.P., a leading
producer of industrial chemicals, since 1997. From 1986 to 1997, Mr. Kimble held
a variety of key financial positions with Millennium Petrochemicals, Inc., the
nation's largest domestic producer of polyethylene plastic.

         DANIEL B. BAKER, Age 48, is Senior Vice President, Worldwide Music
Sales. Prior to joining Baldwin in November 1996, Mr. Baker was Vice President,
Professional Health Care Systems, a startup professional healthcare company.
Prior to October 1994, Mr. Baker spent 14 years in Sales at Procter & Gamble,
leaving at the Division Manager level. Prior to his employment with P&G, Mr.
Baker was in the U.S. Army (from 1973 to 1980), leaving the Army with the rank
of captain.

         PERRY H. SCHWARTZ, age 61, is the Company's Senior Vice President and
Treasurer. Mr. Schwartz joined the Company as Executive Vice President and Chief
Financial Officer in November 1996 and then in December 1998, Mr. Schwartz was
appointed to his current position. Prior to joining the Company, Mr. Schwartz
served as Vice President and Chief Financial Officer of Richwood
Pharmaceuticals, Inc., and from January 1994 to May 1996, he served as Senior
Vice President and Chief Financial Officer of Brockway Standard Holdings
Corporation. From October 1984 to January 1994, Mr. Schwartz was Senior Vice
President and Chief Financial Officer of Heekin Can, Inc.

         There are no family relationships among any of the directors nor among
any of the directors and any executive officers of the Company.


                                      -16-
<PAGE>   20

                                     PART II


  ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
          ---------------------------------------------------------------------

         The Company's common stock is not listed on any national securities
exchange, and its principal United States trading market is through the Nasdaq
Stock Market's National Market.

<TABLE>
<CAPTION>
               Year 1999                                                      Year 1998
               ---------                                                      ---------
        Common Stock Price Range                                         Common Stock Price Range
--------------------------------------------                  ---------------------------------------------
Quarter              High            Low                      Quarter              High             Low
-------              ----            ---                      -------              ----             ---
<S>                  <C>             <C>                      <C>                  <C>              <C>
First                $11 1/2         $7 1/2                   First                $17              $15 1/2
Second               $9 5/8          $7 1/8                   Second               $16 7/8          $14 7/8
Third                $9 1/4          $6                       Third                $15 3/4          $10 3/4
Fourth               $9 1/4          $7                       Fourth               $11 3/4          $ 8 1/2
</TABLE>

         As of March 29, 2000, the number of outstanding shares of the Company's
common stock was 3,462,826. The approximate number of record holders of such
shares was 102.

         The Company has paid no dividends since its inception and intends to
continue its policy of retaining earnings to finance future growth.

         No changes have been made to the instruments defining the right of
holders of the Company's common stock or the rights of such shareholders.

         On September 4, 1996, the Company and The Provident Bank, as Rights
Agent, entered into a rights agreement. Pursuant to the terms of that 1996
rights agreement, the Board of Directors of the Company authorized the issuance
of one common share purchase right with respect to each common share of common
stock as of September 10, 1996. On April 20, 1998, the Board of Directors of the
Company authorized the redemption of those rights at the redemption price of one
cent ($0.01) per right specified in the 1996 rights agreement which amount
subsequently was paid to the holders of the outstanding rights as of April 20,
1998.

         On October 13, 1998, the Company announced that its Board of Directors
had adopted an innovative Shareholder Rights Plan (the "Rights Agreement") and
declared a shareholder dividend of one Stock Purchase Right for each common
share owned on October 22, 1998. For more information about the Rights
Agreement, see "Item 12. Security Ownership of Certain Beneficial Owners and
Management - Rights Agreement".



                                      -17-
<PAGE>   21

                         ITEM 6. SELECTED FINANCIAL DATA
                                 -----------------------

         Incorporated by reference to Baldwin's 1999 Annual Report to
Shareholders under the heading of "Baldwin Piano & Organ Company and
Subsidiaries Five-Year Summary."

                 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                         ---------------------------------------
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                  ---------------------------------------------

         Incorporated by reference to Baldwin's 1999 Annual Report to
Shareholders under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

                ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                         ----------------------------------------
                                ABOUT MARKET RISK
                                -----------------

         Incorporated by reference to Baldwin's 1999 Annual Report to
Shareholders under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Market Risk".

               ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                       --------------------------------------------

         Incorporated by reference to the financial statements contained in
Baldwin's 1999 Annual Report to Shareholders.

              ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                      ---------------------------------------------
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE
                     --------------------------------------

         On September 10, 1998, the Registrant dismissed the firm of KPMG Peat
Marwick LLP ("KPMG") as the Registrant's principal independent accountant. Also
on September 16, 1998, the Registrant engaged the firm of Deloitte & Touche LLP
to serve as its principal independent accountant. Such actions were approved by
the Audit Committee of the Board of Directors of the Registrant.

         The reports of KPMG on the Registrant's consolidated financial
statements for the fiscal year 1997 did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles.

         In connection with the audits of the fiscal year ended December 31,
1997 and during subsequent interim periods, there were no disagreements on any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope and procedures which, if not resolved to the satisfaction of
KPMG, would have caused KPMG to make reference to the matter in its report.

         Additional information regarding the change of accountants is
contained in Baldwin's Form 8-K dated September 10, 1998 as filed with the
Securities and Exchange Commission.



                                    PART III
                                    --------

                      ITEM 10. DIRECTORS OF THE REGISTRANT
                               ---------------------------

         The size of the Company's Board of Directors is currently fixed at
seven members, each of whom holds office until the next annual meeting



                                      -18-
<PAGE>   22

of the Company's shareholders. The date of the 2000 annual meeting has not yet
been fixed, but is expected to be held in June 2000.

         The following persons are the current directors of the Company:

         KAREN L. HENDRICKS, age 52, is the Company's Chairman of the Board,
Chief Executive Officer and President. Prior to joining the Company in 1994, Ms.
Hendricks served as the Executive Vice President and General Manager, Skin Care
Division of The Dial Corporation since 1992, where she had full responsibility
for Dial's United States bar and liquid soap business and their industrial
products. Ms. Hendricks previously was employed for over twenty years by The
Procter & Gamble Company in various executive positions in product development
and was promoted to General Manager of its Vidal Sassoon Hair Care Company in
1987. In her last two years at Procter & Gamble, she was Manager of Worldwide
Strategic Planning for their hair care business. She also currently serves as a
director of ACNielsen Corporation and Columbia Energy Group.

         GEORGE E. CASTRUCCI, age 62, has served as a director of the Company
since May 1987, and served as Chairman of the Board from August 1993 until
December 1994. Prior to his retirement in March 1992, he served as Chairman and
Chief Executive Officer of Great American Broadcasting Company, a
Cincinnati-based broadcast company, and as President and Chief Operating Officer
of its parent company, Great American Communications Company. Mr. Castrucci also
currently serves as a director of LanVision Systems, Inc., The Ohio National
Fund, Inc., and ONE Fund, Inc.

         WILLIAM B. CONNELL, age 59, has served as a director of the Company
since July 1995. In January 1997, Mr. Connell was named Lead Director by the
Board of Directors. Since 1994, he has also served as the Chairman of EDB
Holdings, Inc., a privately-held company engaged in the international retail
sale of optical eyewear, and has been a director since 1988. From 1990 to 1994,
Mr. Connell served as President and Vice Chairman of Whittle Communications, a
limited partnership which specialized in multi-media services. Mr. Connell was
formerly Vice President of the Procter & Gamble Company from 1984 to 1989. He
also currently serves as a director of Remington Products Company and
Information Resources, Inc.

         HERBERT A. DENTON, age 52, is President and co-founder of Providence
Capital, Inc., a private merchant bank and registered broker dealer. He was
formerly a managing director with Jeffries & Company, Inc. of New York. Mr.
Denton sits on the board of directors for Chic by H.I.S., Inc. and Mesa Air
Group, Inc.



                                      -19-
<PAGE>   23

         JOHN H. GUTFREUND, age 70, is President of Gutfreund & Company, Inc., a
New York based financial consulting firm which specializes in advising select
corporations and financial institutions in the United States, Europe and Asia.
Mr. Gutfreund was the former Chairman and Chief Executive Officer of Salomon
Brothers from 1981 to 1991. He also currently serves as a director of Foamex
International Inc., LCA-Vision, Inc., Universal Bond Fund, Ascent Assurance,
Inc., Evercel, Inc. and AMBI, Inc.

         JOSEPH H. HEAD, JR., age 67, has been a director of the Company since
May 1987 and was previously a director from November 1983 until June 1986. He
also served as Secretary of the Company from its formation until May 1989. Mr.
Head is Chairman, former Chief Executive Officer and a director of Atkins &
Pearce, Inc., a manufacturer of industrial textiles, since 1990. He also
currently serves as a director of Fifth Third Bancorp, since 1987.

         ROGER L. HOWE, age 65, has been a director of the Company since August
1993. Mr. Howe was formerly the Chairman of the Board of U.S. Precision Lens,
Inc., a manufacturer of optical components used in industrial and consumer
products. Mr. Howe retired from U.S. Precision Lens, Inc. on September 1, 1997,
where he had been employed in various executive positions since 1970. He also
currently serves as a director of Convergys Corporation, Cintas Corporation, and
Firstar Corporation.

         There are no family relationships among any of the directors nor among
any of the directors and any executive officers of the Company.

         Ms. Hendricks' employment agreement with the Company provides that she
will be nominated as a director of the Company for each year of her employment
as described under "Item 11. Executive Compensation - Employment Contracts and
Change of Control Agreements".

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
                           -----------------------------------------

         To the best of the Company's knowledge, all of the Company's directors,
officers and 10% or more shareholders have timely filed with the Securities and
Exchange Commission all reports required to be so filed pursuant to Section 16
of the Securities Exchange Act of 1934 for the Company's 1999 fiscal year.


                                      -20-
<PAGE>   24

                         ITEM 11. EXECUTIVE COMPENSATION
                                  ----------------------

SUMMARY COMPENSATION TABLE

         The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by the Company's Chief Executive
Officer, each of the Company's other four most highly compensated executive
officers in 1999 and one additional individual who would have been one of the
Company's most highly compensated executive officers if he had still been an
executive officer of the Company on December 31, 1999. Information is provided
for each of the last three fiscal years or such shorter period during which the
named executive served as an executive officer of the Company.

<TABLE>
<CAPTION>
                                                                       Long Term Compensation
                                                                               Awards
                                                                  ----------------------------------
                                         Annual Compensation     Restricted Securities
                                    -----------------------------  Stock    Underlying   All Other
Name and                                     Salary      Bonus     Awards     Options Compensation
Principal Position                   Year    (1)($)     (2)($)     (3)($)       (#)     (4)($)
------------------                   ----    ------     ------     ------       ---     ------
<S>                                  <C>    <C>        <C>        <C>        <C>        <C>
Karen L. Hendricks                   1999   $372,000   $    -0-     10,000     10,000   $ 13,245
  Chairman, Chief Executive          1998    350,000        -0-        -0-     10,000     30,039
  Officer and President              1997    350,000     98,000     12,500     29,000     27,100

Duane D. Kimble                      1999    175,000        -0-        -0-      4,000   $ 19,426
  Executive Vice President,          1998     67,282        -0-        -0-     10,000     12,373
  Chief Financial Officer            1997        -0-        -0-        -0-        -0-        -0-
  And Corporate Secretary

Daniel B. Baker                      1999   $144,130        -0-        -0-      2,500   $  4,825
  Senior Vice President,             1998    132,275        -0-        -0-      2,500      9,529
  Music Sales                        1997    115,000     24,200        -0-      2,000      5,158

George C. Huebner(5)                 1999   $129,229   $ 15,000        -0-      3,000   $  5,938
   Former Senior Vice                1998    120,750     39,159        -0-      3,000      8,591
   President and General             1997    116,917      8,962        -0-      3,000      7,783
   Manager, Keyboard
   Acceptance Corporation

Perry H. Schwartz                    1999   $143,833        -0-        -0-        -0-   $  2,827
   Senior Vice President and         1998    186,000        -0-        -0-      2,500     13,306
   Treasurer                         1997    180,000     30,240        -0-      3,000      7,049

Randolph R. Marks(6)                 1999   $160,000        -0-        -0-      5,000   $ 20,046
   Former Executive Vice             1998    215,000     38,700        -0-     20,000     19,775
   President, Piano Operations       1997        -0-        -0-        -0-        -0-        -0-
</TABLE>


                                      -21-
<PAGE>   25


(1)      Includes amounts contributed by the following named executives to the
         Baldwin Piano & Organ Company Retirement Plan for Salaried Employees
         and the Baldwin Piano & Organ Company Non-Qualified Deferred
         Compensation Plan as elective salary reduction contributions.

<TABLE>
<CAPTION>
                                                               1999                      1998                  1997
                                                               ----                      ----                  ----
<S>                                                         <C>                       <C>                   <C>
         Karen L. Hendricks                                 $21,160                   $20,500               $20,000
         Duane D. Kimble                                     15,730                     6,198                   -0-

         Daniel B. Baker                                     12,712                     7,817                 6,797
         George C. Huebner                                    7,122                     7,666                 6,910
         Perry H. Schwartz                                    4,315                    10,993                 5,400
         Randolph R. Marks                                   12,942                    12,185                   -0-
</TABLE>

(2)      The bonuses are shown for the years earned, but were paid in the
         following year except for Mr. Huebner's 1999 bonus which was paid in
         1999. That bonus was for the purpose of inducing Mr. Huebner to assist
         with the transition of the Keyboard Acceptance Corporation operations
         to its buyer.

(3)      In 1994, the Company's Board of Directors adopted the Company's 1994
         Long Term Incentive Plan pursuant to which awards of restricted stock
         based upon the Company's stock performance in comparison to the Russell
         2000 index could be made. No shares of restricted stock have been
         earned to date under this Plan. The 12,500 shares of restricted stock
         granted to Ms. Hendricks in 1997 were issued pursuant to the terms of
         her employment agreement with the Company. The 10,000 shares of
         restricted stock granted to her in 1999 were issued pursuant to the
         Company's 1998 Omnibus Stock Plan and will vest 100% on the third
         anniversary of the grant date. At December 31, 1999, 15,000 shares of
         restricted stock granted to Ms. Hendricks were unvested and had a
         market value of $127,500.

(4)      "All Other Compensation" includes, as shown below, amounts contributed
         by the Company under the Baldwin Piano & Organ Company Retirement Plan
         for Salaried Employees; amounts contributed by the Company under the
         Baldwin Piano & Organ Company Non-Qualified Deferred Compensation Plan;
         group term life insurance premiums paid by the Company on policies
         obtained by the Company for all employees; relocation expenses incurred
         by Mr. Marks and Mr. Kimble; special incentive payments to Messrs.
         Kimble and Marks; life insurance premiums paid by the Company for
         $500,000 of executive life insurance on the life of Ms. Hendricks; and
         insurance premiums paid by the Company for supplemental disability
         coverage for Ms. Hendricks providing $10,000 in excess disability
         coverage per month. The net proceeds of the executive life policy is
         payable to the estate of Ms. Hendricks.


                                      -22-
<PAGE>   26


                             ALL OTHER COMPENSATION
                             ----------------------

                             1999      1998      1997
                          -------   -------   -------
Karen L. Hendricks
------------------
   Retirement Plan        $11,160   $23,939   $21,000
   Executive Insurance          0     2,400     2,400
   Disability Insurance       885     1,480     1,480
   Group Life Insurance     1,200     2,220     2,220
                          -------   -------   -------
       Totals             $13,245   $30,039   $27,100
                          =======   =======   =======

Duane D. Kimble
---------------
   Retirement Plan        $ 2,850   $     0   $     0
   Group Life Insurance       576       355         0
   Relocation Expenses          0    12,018         0
   Incentive Payment       16,000         0         0
                          -------   -------   -------
         Totals           $19,426   $12,373         0
                          =======   =======   =======

Daniel B. Baker
---------------
   Retirement             $ 4,324   $ 8,663   $ 4,425
   Group Life Insurance       501       866       733
                          -------   -------   -------
          Totals          $ 4,825   $ 9,529   $ 5,158
                          =======   =======   =======

George C. Huebner
-----------------
   Retirement Plan        $ 5,502   $ 7,783   $ 7,015
   Group Life Insurance       436       808       768
                          -------   -------   -------
         Totals           $ 5,938   $ 8,591   $ 7,783
                          =======   =======   =======

Perry H. Schwartz
-----------------
   Retirement Plan        $ 2,158   $12,067   $ 5,850
   Group Life Insurance       669     1,239     1,199
                          -------   -------   -------
         Totals           $ 2,827   $13,306   $ 7,049
                          =======   =======   =======

Randolph R. Marks
-----------------
   Retirement Plan        $ 6,570   $     0   $     0
   Group Life Insurance       576     1,315         0
   Relocation Expenses          0    18,460         0
   Incentive Payment       12,900         0         0
                          -------   -------   -------
       Totals             $20,046   $19,775   $     0
                          =======   =======   =======


(5)      Mr. Huebner's employment with the Company terminated on March 10, 2000
         in connection with the sale of Keyboard Acceptance Corporation.

(6)      The Company hired Mr. Marks effective January 1, 1998. His employment
         terminated effective August 13, 1999.


                                      -23-
<PAGE>   27

EMPLOYMENT CONTRACTS AND CHANGE IN CONTROL ARRANGEMENTS

         The Company entered into a new Employment Agreement with Karen L.
Hendricks in June 1997, which was amended in September 1999. Pursuant to the
terms of her Employment Agreement, Ms. Hendricks will be employed as the Chief
Executive Officer, President and Chairman of the Board of the Company and she
will be nominated as a director for each year of her employment. Her Employment
Agreement provides that Ms. Hendricks will continue in the Company's employ
until August 31, 2002, and thereafter, without a specified term, until
terminated by the Company or Ms. Hendricks. Ms. Hendricks will receive an annual
base salary of no less than $350,000. She will participate in the Company's
management incentive plans at the highest participant level and will receive all
other benefits normally accorded to the Company's senior officers. Ms.
Hendricks' Employment Agreement further provides that, in addition to the
customary insurance provided to Company employees, the Company will purchase a
$500,000 term life insurance policy on her life payable to her beneficiaries and
supplemental disability coverage providing $10,000 in excess disability coverage
per month. As an added inducement for Ms. Hendricks to enter into the Employment
Agreement, her Employment Agreement further provided that she would receive a
grant of an additional 19,000 non-qualified stock options, such options having
an exercise price equal to the fair market value of the Company's Common Stock
as of such date. As a further inducement for Ms. Hendricks to enter into the
Employment Agreement, her Employment Agreement provided that she would receive a
restricted stock grant of 12,500 shares of the Company's common stock in 1997,
with 20% of such shares vesting on execution of the Employment Agreement and the
remaining shares vesting 20% on January 1 of each year through January 1, 2001,
but only if Ms. Hendricks is employed by the Company on such vesting dates. In
March 1999, Ms. Hendricks was granted 10,000 additional shares of restricted
stock pursuant to the Company's 1998 Omnibus Stock Plan which will vest 100% on
the third anniversary of the grant date. Her Employment Agreement provides that
she may receive additional restricted stock grants in the future.

         Ms. Hendricks' Employment Agreement provides that in the event the
Company terminates her employment without cause, the Company will continue to
pay her as severance pay her normal monthly salary for 36 months following
termination. At Ms. Hendricks' option, she may elect to be paid a single lump
sum, discounted to present value, within thirty (30) days following termination.
In the event the Company terminates Ms. Hendricks' employment without cause, the
Company shall also pay the cost of out placement services for Ms. Hendricks up
to an amount equal to 15% of her annual base salary at the time her employment
is terminated. In the event Ms. Hendricks is terminated for cause, she shall
receive her salary through the effective date of termination and



                                      -24-
<PAGE>   28

all incentive payments earned by but not yet paid to her prior to such date.
Such amounts shall be paid by the Company within 30 days of the effective date
of such termination. Ms. Hendricks' Employment Agreement contains covenants by
Ms. Hendricks not to compete with the Company for a period of one year after
termination of her Employment Agreement by Ms. Hendricks or by the Company for
cause or upon her disability.

         If Ms. Hendricks voluntarily terminates her employment with the Company
for any reason prior to December 1, 2001, she shall receive her salary through
the effective date of termination and all incentive payments earned but not yet
paid to her prior to such date. If Ms. Hendricks voluntarily terminates her
employment with the Company for any reason after December 1, 2001 and (1) she
delivers written notice to the Board of Directors of such termination, (2) such
termination is effective no later than nine months after receipt of that notice
by the Board of Directors, (3) she devotes her full time efforts to her
responsibilities to the Company through the effective date of her termination,
(4) no circumstances exist that would constitute termination for cause, and (5)
she cooperates in good faith with the Board of Directors to recruit a qualified
successor and, if a successor is recruited prior to her termination, to
accomplish an effective transition, then Ms. Hendricks will be entitled to the
same severance payment described above as if she had been terminated without
cause by the Company.

         The Company has entered into agreements with Karen L. Hendricks, Daniel
B. Baker, Duane D. Kimble, and Perry H. Schwartz (the "Change in Control
Agreements"). These Change in Control Agreements provide that if there is a
change in control of the Company and such executive officer's employment with
the Company is terminated within a stated time period thereafter, the Company
must pay certain compensation and provide certain perquisites to the executive
officer. The Change in Control Agreements have a term of five years, except for
Ms. Hendricks' agreement which expires on August 31, 2003.

         Ms. Hendricks' Change in Control Agreement provides that if a change in
control occurs during the term of the agreement and either the Company or Ms.
Hendricks terminates her employment under the circumstances described below,
then, Ms. Hendricks will receive 2.99 times the average annual salary and
average annual bonus and/or incentive compensation that she received over the
five years immediately preceding her termination. At Ms. Hendricks' option, such
severance compensation may be paid by the Company over 36 months or in a lump
sum discounted to present value. The change in control payment to Ms. Hendricks
will become payable in the following circumstances: (1) termination of her
employment, with or without cause, within three years following any change in
control other than a change in control related



                                      -25-
<PAGE>   29

to the Company's sale simultaneously or sequentially of all or substantially all
of the assets of operations of any two of the Company's three businesses of
music, contract electronics or finance; (2) termination of her employment within
45 days prior to a change in control relating to the sale of two divisions, for
reasons other than for cause; and (3) termination of her employment within three
years following a change in control relating to the sale of two divisions,
either by the Company without cause or by Ms. Hendricks for any reason, provided
that if termination is by Ms. Hendricks she delivers nine months' prior written
notice of termination to the Board of Directors and satisfies the same
conditions described above as would entitle her to receive a severance payment
under her employment agreement if she were to terminate her employment after
December 1, 2001. No change in control payment shall be paid if the termination
of Ms. Hendricks' employment is due to her death, disability or retirement after
her normal retirement date.

         Ms. Hendricks' Change in Control Agreement also provides that health
and life insurance coverage will be maintained by the Company at the level in
existence at the time of her termination, and that Ms. Hendricks will be fully
vested and continue her participation in all employee retirement plans
maintained by the Company on the date of her termination, either for 36 months
or until Ms. Hendricks becomes employed by any other employer. Pursuant to Ms.
Hendricks' Change in Control Agreement, any agreement not to compete entered
into by the Company and Ms. Hendricks shall remain in effect.

         The Change in Control Agreements of Messrs. Baker, Kimble, and Schwartz
are substantially identical. Pursuant to Mr. Kimble's Change in Control
Agreement, if a change in control occurs during the term of the agreement and
the Company terminates his employment, either by actual termination or by
constructive termination, within two years after the change in control or within
45 days prior to the change in control, then Mr. Kimble will receive two times
his average annual salary and average annual bonus and/or incentive compensation
that he received over the five years immediately preceding his termination.
Pursuant to the Change in Control Agreements for Messrs. Baker and Schwartz, if
a change in control occurs during the term of the agreement and the Company
terminates the employment of the executive officer within one year after the
change in control, the executive officer will receive the average annual salary
and average annual bonus and/or incentive compensation that he received over the
five years immediately preceding his termination. At the executive officer's
option, such severance compensation may be paid by the Company over 24 months
(in the case of Mr. Kimble) and over 12 months (in the case of Messrs. Baker and
Schwartz) or in a lump sum discounted to present value. These Change in Control
Agreements further provide that health and life insurance



                                      -26-
<PAGE>   30

coverage will be maintained at the level in existence at the time of his
termination, and that the executive officer will be fully vested and continue
his participation in all employee retirement plans maintained by the Company on
the date of his termination, either for 24 months (in the case of Mr. Kimble)
and for 12 months (in the case of Messrs. Baker and Schwartz) or until the
executive officer becomes employed by any other employer. Also, pursuant to
these Change in Control Agreements, the executive officers are subject to an
agreement not to compete with the Company for one year following the date of
termination.

         The Change in Control Agreements for each of Ms. Hendricks and Messrs.
Baker, Kimble, and Schwartz also provide that all stock options, restricted
stock and other incentive awards granted to such executive officers will, upon
termination of employment, immediately vest in full and the executive officers
will be entitled to receive immediately upon termination the cash value of any
long term incentives payable under any long term incentive compensation plans
maintained by the Company on the date of termination.

OPTION GRANTS IN LAST FISCAL YEAR

         The following table sets forth certain information regarding grants by
the Company of stock options to each of the named executives during 1999.


<TABLE>
<CAPTION>
                                       Individual Grants(1)
                                       -------------------
                                                                                                           Potential Realizable
                                  Number of        % of Total                                                 Annual Rate of
                                 Securities           Options                                                  Stock Price
                                 Underlying        Granted to                                                Appreciation for
                                    Options         Employees      Exercise or                                Option Terms(4)
                                    Granted         in Fiscal       Base Price        Expiration              ---------------
     Name                            (#)(2)           Year(3)        ($/Share)              Date             5%($)           10%($)
-------------------                --------        ----------      -----------        ----------          --------        ---------
<S>                                  <C>                <C>             <C>             <C>   <C>          <C>             <C>
Karen L. Hendricks                   10,000             20.8%           $7.625          04/12/09           $47,953         $121,523
Duane D. Kimble                       4,000              8.3%           $7.625          04/12/09           $19,181          $48,609

Daniel B. Baker                       2,500              5.2%           $7.625          04/12/09           $11,988          $30,381

George C. Huebner                     3,000             6.25%           $7.625          04/12/09           $14,386          $36,457
Perry H. Schwartz                         0               ---              ---               ---                 0                0
Randolph R. Marks                     5,000             10.4%           $7.625          04/12/09           $23,977          $60,762

-------------
</TABLE>

                                      -27-
<PAGE>   31

(1)      All grants were made at the fair market value on the grant date.

(2)      Options vest over a four year period, 20% on the grant date and 20% on
         each anniversary of the grant date.

(3)      Total options granted to all executive officers and other employees of
         the Company in 1999 were for an aggregate of 48,000 shares of Common
         Stock.

(4)      Calculated based upon assumed stock prices for the Company's Common
         Stock assuming 5% and 10% annual rates of stock appreciation are
         achieved over the full term of the options granted to the executive
         officers reflected in the table. The potential realizable gain equals
         the product of the number of shares underlying the stock option grant
         and the difference between the assumed stock price and the exercise
         price of each option.


                                      -28-
<PAGE>   32


AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
     VALUES

         The following table sets forth certain information regarding individual
exercises of stock options during 1999 by each of the named executives.

<TABLE>
<CAPTION>
                                                            Number of
                                                            Securities       Value of
                                                            Underlying      Unexercised
                                                            Unexercised    In-the-Money
                                                             Options at     Options at
                                                              12/31/99       12/31/99
                                Shares
                             Acquired on      Value        Exercisable/     Exercisable/
                               Exercise     Realized       Unexercisable   Unexercisable
Name                             (#)           ($)           (1)   (#)      (2) (3) ($)
----------------------      ------------    --------       -------------   -------------
<S>                               <C>        <C>              <C>           <C>
Karen L. Hendricks               -0-         $  -0-           131,400/      $ 41,750/
                                                               27,600          7,000

Duane D. Kimble                  -0-            -0-             4,800/      $    700/
                                                                9,200          2,800

Daniel B. Baker                  -0-            -0-             8,700/      $    438/
                                                                5,800          1,750


George C. Huebner                -0-            -0-            17,400/      $    525/
                                                                9,600          2,100

Perry H. Schwartz                -0-            -0-            10,800/      $      0/
                                                                4,700              0

Randolph R. Marks                -0-            -0-                 0/      $      0/
                                                                    0              0
</TABLE>


(1)      See note (2) to the table appearing under "Option Grants in Last Fiscal
         Year" regarding the vesting of options granted in 1999.

(2)      The shares of the Company's Common Stock issuable upon the exercise of
         non-qualified stock options (except as noted below), have not been
         registered under the Securities Act of 1933 ("1933 Act"). Generally,
         such shares may not be resold by the holder for a minimum period of one
         year following exercise of the option. The shares of the Company's
         Common Stock issuable upon the exercise of outstanding stock options
         granted under the Company's 1994 Incentive Stock Option Plan and 1998
         Omnibus Stock Plan, and the shares issuable upon the exercise of
         100,000 non-qualified stock options granted to Ms. Hendricks under her
         employment



                                      -29-
<PAGE>   33

         agreement, have been registered under the 1933 Act and generally can be
         resold immediately upon exercise.

(3)      Based on a December 31, 1999 closing sale price on the Nasdaq National
         Market of $8.50 per share.

COMPENSATION OF DIRECTORS

         In 1999, non-employee directors of the Company were compensated for
serving on the Board of Directors and the committees thereof, in the amount of
$10,000 per year, payable in quarterly installments, and received an additional
$900 for each Board of Directors meeting and each committee meeting attended in
person or by telephone. Such directors are reimbursed for all reasonable
expenses incurred in connection with their services and receive an annual grant
of 2,000 non-qualified stock options under the 1998 Omnibus Stock Plan having an
exercise price equal to the market price on the date of the grant. Ms. Hendricks
receives no additional compensation for serving on the Board of Directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         Messrs. Head and Howe comprised the Company's entire Executive
Compensation Committee during 1999, and were both non-employee directors of the
Company. No director or executive officer of the Company serves on any board of
directors or compensation committee of any entity which compensates Messrs. Head
or Howe.


                                      -30-
<PAGE>   34

         ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                           MANAGEMENT

HOLDERS OF MORE THAN FIVE PERCENT BENEFICIAL OWNERSHIP

         The following table sets forth information regarding all persons known
to the Company to be the beneficial owners of more than five percent of the
Company's Common Stock as of March 16, 2000.

                                       Amount and
                                       Nature of
     Name and Address of               Beneficial           Percent of
     Beneficial Owner(1)               Ownership               Class
     -------------------               ---------               -----

Heartland Advisors, Inc.............  727,100(1)(2)           21.1%

Cameron Baird Foundation............  455,400(3)              13.2%

Bolero Investment Group, L.P........  403,569(4)              11.7%

State of Wisconsin Investment
 Board..............................  300,000(5)               8.7%

Dimensional Fund Advisors Inc.        285,500(6)               8.3%

Herbert A. Denton...................  262,300(7)               7.6%

Franklin Resources, Inc. ...........  173,600(8)               5.0%

-------

(1)      Based upon the Schedule 13D's and Schedule 13G's provided to the
         Company by the named shareholders: the address of Heartland Advisors,
         Inc. is 790 North Water Street, Milwaukee Wisconsin 53202; the address
         of Cameron Baird Foundation is 1350 One M&T Plaza, Buffalo, New York
         14203; the address of State of Wisconsin Investment Board is P.O. Box
         7842, Madison, Wisconsin 53707; the address of Bolero Investment Group,
         L.P. is 25 S.E. 2nd Avenue, Suite 720, Miami, Florida 33131; the
         address of Herbert A. Denton is 730 Fifth Avenue, New York, New York
         10019; the address of Dimensional Fund Advisors Inc. is 1299 Ocean
         Avenue, 11th Floor, Santa Monica, California 90401; and the address of
         Franklin Resources, Inc. is 777 Mariners Island Boulevard, San Mateo,
         California 94404.

(2)      Pursuant to Amendment No. 8 to Schedule 13G dated January 12, 2000,
         Heartland Advisors, Inc., last informed the Company that it is a
         registered investment adviser that may be deemed the beneficial owner
         of 727,100 shares of Common Stock. Heartland Advisors, Inc.



                                      -31-
<PAGE>   35

         has sole dispositive power and sole voting power over all 727,100
         shares.

(3)      Pursuant to Amendment No. 2 to Schedule 13D dated March 23, 2000 filed
         by The Cameron Baird Foundation (the "Foundation"), Brent D. Baird,
         Anne S. Baird, Bridget B. Baird, successor trustee, Jane D. Baird,
         Bruce C. Baird, Brian D. Baird, successor trustee, and Aries Hill
         Corp.(collectively, the "Baird Parties"), the Baird Parties
         beneficially own 455,400 shares of Common Stock in the aggregate. The
         Baird Parties have informed the Company that the Foundation is a
         charitable private foundation, that Aries Hill Corp., is a private
         holding company owned by various members of the Baird family, and that
         the other Baird Parties are individuals and/or individuals serving as
         trustees of various trusts under trust agreements with Cameron Baird
         and Flora M. Baird. Each of the Baird Parties has sole voting and
         dispositive power over the number of shares as follows: the
         Foundation--199,000 shares; Brent D. Baird--35,000 shares; Anne S.
         Baird--10,000 shares; Bridget B. Baird, successor trustee--69,700
         shares; Jane D. Baird--100,000 shares; Bruce C. Baird--10,000 shares;
         Brian D. Baird, successor trustee--20,000 shares; and Aries Hill
         Corp.--11,700 shares.

(4)      Pursuant to Amendment No. 14 to Schedule 13D filed on January 18, 2000
         by Bolero Investment Group, L.P. ("Bolero"), Kenneth W. Pavia, Sr.
         ("Pavia"), FHI, Inc. ("FHI"), Florence Partners Inc. ("Florence") and
         Charles Powers ("Powers") (collectively, "Bolero Investment Group, et.
         al"), Bolero, a limited partnership whose principal business is
         investing in marketable securities, directly owns 300,260 shares of
         Common Stock. FHI, whose principal business is private investment
         banking, directly owns 51,000 shares of Common Stock, and Florence, a
         corporation whose principal business is investing in marketable
         securities, directly owns 52,309 shares of Common Stock. As a result,
         Pavia, whose principal business is to make and hold investments, and
         who is the sole general partner of Bolero and the founder, a director,
         and the sole executive officer and shareholder of FHI and the managing
         director of Florence, may be deemed the beneficial owner of 403,569
         shares of Common Stock. Powers, whose principal business is to make and
         hold investments, and who is the sole director, executive officer and
         shareholder of Florence, and a limited partner of Bolero, may be deemed
         the beneficial owner of 52,309 shares of Common Stock. In these
         Amendments, Messrs. Pavia and Powers have disclaimed beneficial
         ownership of the shares that may be attributed to them and the
         reporting persons have stated that they have not affirmed the existence
         of a "group" as defined in Section 13(d) of the Securities Exchange Act
         of 1934.



                                      -32-
<PAGE>   36

(5)      Pursuant to Amendment No. 6 to Schedule 13G dated February 10, 2000,
         State of Wisconsin Investment Board last informed the Company that it
         is a government agency which manages public pension funds and that it
         may be deemed the beneficial owner of 300,000 shares of Common Stock.
         State of Wisconsin Investment Board has sole dispositive power and sole
         voting power over all 300,000 shares.



                                      -33-
<PAGE>   37



(6)      Pursuant to Amendment No. 1 to Schedule 13D dated September 9, 1999,
         Herbert A. Denton is the beneficial owner of 260,300 shares of Common
         Stock. Of these shares, 185,300 are owned of record by U.S. Value
         Investment Co., plc ("USVI") to which Mr. Denton is sole advisor, and
         75,000 are owned of record by Providence Investors, LLC, to which Mr.
         Denton is co-advisor. Mr. Denton and USVI may be deemed to have sole
         power to vote and dispose of 185,300 shares and Mr. Denton is deemed to
         have shared power to vote and dispose of 75,000 shares. Mr. Denton also
         has the right to acquire 2,000 shares of Common Stock pursuant to
         outstanding stock options granted by the Company to him upon his
         becoming a director of the Company in September 1999.

(7)      Pursuant to Schedule 13G, as last amended dated February 4, 2000,
         Dimensional Fund Advisors Inc. stated that it is a registered
         investment adviser that may be deemed the beneficial owner of 285,500
         shares of Common Stock as a result of its role as investment advisor to
         four investment companies and investment manager to certain other
         investment vehicles, including commingled group trusts. Dimensional
         Fund Advisors Inc. disclaims beneficial ownership of all such shares.
         Dimensional Fund Advisors Inc. has sole dispositive power and sole
         voting power over all 285,500 shares.

(8)      Pursuant to Amendment No. 2 to Schedule 13G, dated January 13, 2000,
         Franklin Resources, Inc. ("Franklin") last informed the Company that it
         is a holding company through which it is the beneficial owner of
         173,600 shares of Common Stock. Franklin's investment subsidiary,
         Franklin Mutual Advisers, LLC, is an investment advisor that has sole
         dispositive power and sole voting power over all 173,600 shares.
         Charles B. Johnson and Rupert H. Johnson, Jr. each own in excess of 10%
         of the outstanding common stock of Franklin.


                                      -34-
<PAGE>   38

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

         The following table sets forth information regarding the ownership of
Common Stock of the Company for each director, each nominee, each named
executive and all executive officers and directors as a group as of March 16,
2000.

                                            Amount and
                                            Nature of
                                            Beneficial            Percent of
    Name of Beneficial Owner                Ownership               Class
    ------------------------                ---------               -----

CURRENT DIRECTORS AND NOMINEES

Karen L. Hendricks .................        196,500(1)(2)            5.6%

Herbert A. Denton ..................        262,300(2)               7.6%

Joseph H. Head, Jr .................         30,000(2)               0.9%

Roger L. Howe ......................         29,000(2)               0.9%

George E. Castrucci ................         22,000(2)               0.6%

William B. Connell .................         11,000(2)               0.3%

John H. Gutfreund ..................         14,000(2)               0.4%

NAMED EXECUTIVE OFFICERS

Duane D. Kimble ....................         19,000(1)               0.5%

Daniel B. Baker ....................         14,500(1)               0.4%

George C. Huebner ..................         24,000(1)               0.7%

Perry H. Schwartz ..................         15,500(1)               0.4%

Randolph R. Marks ..................          5,000                  0.1%

All executive officers and directors
 as a group (10 persons) ...........        613,800(1)(2)           16.4%

-----------

(1)      Includes shares owned beneficially subject to the holder's right to
         exercise outstanding incentive stock options: 40,000 shares for Ms.
         Hendricks, 24,000 shares for Mr. Huebner, 15,500 shares for Mr.

                                      -35-
<PAGE>   39

         Schwartz, 14,000 shares for Mr. Kimble and 14,500 shares for Mr. Baker.


                                      -36-
<PAGE>   40


(2)      Includes shares owned beneficially subject to the holder's right to
         exercise outstanding non-qualified stock options: 119,000 shares for
         Ms. Hendricks, 20,000 shares for each of Messrs. Head and Castrucci,
         14,000 shares for Mr. Howe, 10,000 shares for Mr. Connell, 4,000 shares
         for Mr. Gutfreund and 2,000 shares each for Messrs. Denton and Huebner.

         No agreements, formal or informal, exist among the various officers and
directors to vote their shares collectively. Except as otherwise indicated
herein, no director is a party to any contracts, arrangements or understandings
with any person with respect to any securities of the Company. In addition,
except as otherwise indicated herein, no director nor any associate of any
director has any arrangements or understandings with any person with respect to
any future employment by the Company or with respect to any future transaction
to which the Company will or may be a party. See "Item 11. Executive
Compensation-Employment Contracts and Change in Control Agreements."

RIGHTS AGREEMENT

         The preceding tables under "Holders of More than Five Percent
Beneficial Ownership" and "Security Ownership of Directors and Executive
Officers" do not reflect the effect of the Rights Agreement entered into by the
Company in October 1998 (the "Rights Agreement"). Pursuant to the terms of the
Rights Agreement, the Board of Directors of the Company authorized the issuance
of one common share purchase right (a "Right") with respect to each outstanding
share of Common Stock. The Rights were issued on October 23, 1998 to the holders
of record of Common Stock on October 22, 1998. Each Right entitles the
registered holder to purchase from the Company one share of Common Stock at a
price of $45.00 (the "Purchase Price"), subject to adjustment. All of the rights
previously issued by the Company under its September 1996 rights agreement were
redeemed in April 1998.

         Initially, the Rights will attach to all Common Stock certificates
representing outstanding shares and no separate Right Certificate will be
distributed. The Rights will separate from the Common Stock and a distribution
date (the "Distribution Date") will occur upon the earlier of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
15% or more of the outstanding Voting Shares (as defined below) of the Company
other than pursuant to a Qualifying Offer (as defined below), or such earlier or
later date (not beyond the thirtieth day after the share acquisition date) as
the Company's Board of Directors may from time to time by resolution adopted
prior to the Distribution Date that otherwise would have occurred, or (ii) 10


                                      -37-
<PAGE>   41

business days following the commencement or announcement of an intention to
commence a tender offer or exchange offer the consummation of which would result
in any person becoming an Acquiring Person. "Voting Shares" means (i) the Common
Stock and (ii) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with the
Common Stock in respect of any merger or consolidation of the Company, any sale
of all or substantially all of the Company's assets or any liquidation,
dissolution or winding up of the Company.

         Until the Distribution Date, (or earlier redemption or expiration of
the rights), the Rights will be transferred with and only with the Common Stock.
Common Stock certificates issued after October 22, 1998, but prior to the
Distribution Date shall evidence one Right for each share of Common Stock
represented thereby and shall contain a legend incorporating by reference the
terms of the Rights Agreement. Promptly following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of Common Stock at the Distribution Date.

         The Rights are not exercisable until the Distribution Date. The Rights
will expire on October 12, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.

         If any person becomes an Acquiring Person, each Right then outstanding
(other than Rights beneficially owned by the Acquiring Person which would become
null and void) would become a right to buy that number of shares of Common Stock
that at the time of such acquisition would have a market value of two times the
purchase price of the Right.

         If, at any time after a person becomes an Acquiring Person, the Company
were acquired in a merger or other business combination transaction or more than
50% of its consolidated assets or earning power were sold, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction would have a market value of two times the purchase
price of the Right.

         The offer and sale of the Common Stock issuable upon the exercise of
the Rights will be registered with the Securities and Exchange Commission, but
such registration will not be effective until the Rights become exercisable. As
described above, however, the Rights will not be



                                      -38-
<PAGE>   42


transferable separately from the Common Stock until the Distribution Date.

         The number of shares of Common Stock or other securities or property
issuable upon exercise of the Rights, and the Purchase Price payable, are
subject to customary adjustments from time to time to prevent dilution.

         The number of outstanding Rights and the number of shares of Common
Stock issuable upon exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in shares of Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.

         At any time after a person becomes an Acquiring Person and before the
acquisition by a person or group of 50% or more of the outstanding Voting Shares
(other than pursuant to a Qualifying Offer), the Company's Board of Directors,
may, at its option, issue Common Stock in mandatory redemption of, or in
exchange for, all or part of the then outstanding and exercisable Rights (other
than Rights owned by such Acquiring Person or group which would become null and
void) at an exchange ratio of one share of Common Stock for each two shares for
which each Right is then exercisable, subject to adjustment.

         At any time before a person becomes an Acquiring Person, the Board of
Directors, may redeem all, but not less than all, of the then outstanding Rights
at a price of $0.001 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.

         Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.

         The terms of the Rights may be amended by the Company's Board of
Directors without the consent of the holders of the Rights, including an
amendment to extend the Final Expiration Date, and, provided a Distribution Date
has not occurred, to extend the period during which the Rights may be redeemed,
except that after the Distribution Date no such amendment may materially and
adversely affect the interests of the holders of the Rights.



                                      -39-
<PAGE>   43

         The Rights will not be exercisable if a person or group were to acquire
15% or more of the Voting Shares pursuant to a "Qualifying Offer." A "Qualifying
Offer" is defined as an all cash tender offer for all outstanding voting shares
of the Company which meets the requirements specified in the Agreement,
including:

         (1)      the offer is accompanied by firm written commitments from
                  responsible financial institutions to provide funds for such
                  offer which, when added to the offeror's available cash, will
                  be sufficient to pay for all shares on a fully-diluted basis
                  and the second-step transaction described below; and

         (2)      after consummation of the offer, the offeror will own at least
                  75% of the then outstanding voting shares of the Company; and

         (3)      the offer remains open for at least 45 business days; and

         (4)      the offer is accompanied by a written opinion of a nationally
                  recognized investment banking firm stating that the price to
                  be paid in the offer is fair from a financial point of view to
                  the Company's stockholders; and

         (5)      the offeror agrees to consummate the second-step transaction
                  in which all shares not acquired upon completion of the tender
                  offer will be acquired at the same price per share paid in
                  such offer.

         The Independent Directors Committee of the Company will review the
Rights Plan at least every two years and, if a majority of the members of the
Independent Directors Committee deems it appropriate, may recommend a
modification or termination of the Rights Plan.

         This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights agreement. A copy of
the Rights Agreement has been filed with the Securities and Exchange Commission
as an Exhibit to the Company's Form 8-K dated October 12, 1998. Shareholders may
obtain a copy of the Rights Agreement free of charge from the Company.

         ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         None.


                                      -40-
<PAGE>   44


                                     PART IV
                                     -------

    ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
             ----------------------------------------------------------------

(a)  FINANCIAL STATEMENT SCHEDULES

1.1      The following Consolidated Financial Statements of Baldwin Piano &
         Organ Company and Subsidiaries are incorporated by reference to
         Baldwin's 1999 Annual Report to Shareholders, which is attached hereto
         as Exhibit 13.1.


<TABLE>
<CAPTION>
                                                                        Annual Report
                                                                         Page Number
                                                                         -----------
<S>                                                                      <C>
              Independent Auditors' Report
              for the years ended December 31, 1999 and 1998.               6


              Consolidated Statements of Earnings,
              years ended December 31, 1999, 1998 and 1997.                 7

              Consolidated Statements of Shareholders' Equity,
              years ended December 31, 1999, 1998 and 1997.                 8

              Consolidated Balance Sheets,
              as of December 31, 1999 and 1998.                             9

              Consolidated Statements of Cash Flows,
              years ended December 31, 1999, 1998 and 1997.                10

              Notes to Consolidated Financial Statements,
              years ended December 31, 1999, 1998 and 1997.                11
</TABLE>


<TABLE>
<CAPTION>
                                                                      Page Number
                                                                      -----------
<S>                                                                   <C>
1.2  Independent Auditors' Report (including Schedule)
     for the year ended December 31, 1997.                                 51

2.1  Consolidated Financial Statement Schedules of
     Baldwin Piano & Organ Company and Subsidiaries:

              Independent Auditors' Report                                 52

              Schedule for the years ended
              December 31, 1999, 1998 and 1997:
                  VIII.  Valuation and Qualifying Accounts.                53
</TABLE>

                                      -41-
<PAGE>   45

              All other schedules are omitted, as the required information is
              inapplicable or the information is presented in the consolidated
              financial statements or related notes.


                                      -42-
<PAGE>   46


(b)  REPORTS ON FORM 8-K

                  The Company filed a report on Form 8-K on December 10, 1999
         announcing that the Company had entered into an agreement to sell its
         retail financing operations as conducted by Keyboard Acceptance
         Corporation and Signature Leasing Company to Deutsche Financial
         Services Corporation. On March 27, 2000, the Company filed a report on
         Form 8-K disclosing the completion of such sale on March 10, 2000.

(c)      EXHIBITS

2.1      Stock Purchase Agreement dated December 8, 1999 between the Company and
         Deutsche Financial Services Corporation. (23)

3.1      Certificate of Incorporation of the Company, as amended. (1)

3.2      Amended and Restated Bylaws of the Company dated as of February 10,
         1997. (9)

4.1      Rights Agreement dated as of October 12, 1998 between the Company and
         the Provident Bank as Rights Agreement. (15)


            MANAGEMENT CONTRACTS, COMPENSATORY PLANS AND ARRANGEMENTS
            =========================================================


10.1     Baldwin Piano & Organ Company Retirement Plan for Salaried Employees,
         as amended. (1)

10.2     Baldwin Piano & Organ Company Retirement Trust for Salaried Employees
         dated September 28, 1984. (1)

10.3     Baldwin Piano & Organ Company 1994 Incentive Stock Option Plan. (4)

10.4     Baldwin Piano & Organ Company 1994 Management Incentive Plan. (5)

10.5     Baldwin Piano & Organ Company 1994 Long Term Incentive Plan. (5)

10.6     Baldwin Piano & Organ Company 1998 Omnibus Stock Plan. (16)

10.7     Agreement of Employment between the Company and Karen L. Hendricks
         dated as of June 19, 1997. (10)

10.8     Amendment to Agreement of Employment between the Company and Karen L.
         Hendricks dated September 1, 1999. (22)



                                      -43-
<PAGE>   47

10.9     Change in Control Agreement between the Company and Karen L. Hendricks
         dated June 26, 1996. (7)

10.10    Amendment to Change in Control Agreement between the Company and Karen
         L. Hendricks dated September 17, 1999. (22)

10.11    Form of Indemnification Agreements between the Company and the
         Company's Officers and Directors dated June 30, 1986 and accompanying
         schedule. (1)

10.12    Change in Control Agreement between the Company and Stephen P. Brock
         dated June 11, 1996. (7)(8)

10.13    Amendment to Change in Control Agreement between the Company and Duane
         D. Kimble dated September 24, 1999. (22)

10.14    Letter of employment between the Company and Duane D. Kimble as Senior
         Vice President, Strategic Planning, dated as of June 30, 1998. (20)

10.15    Agreement of Employment between the Company and Perry H. Schwartz dated
         as of November 5, 1996, as amended on November 11, 1996. (11)

10.16    Baldwin Piano & Organ Company Non-Qualified Deferred Compensation Plan.
         (2)

10.17    Baldwin Piano & Organ Company Non-Qualified Deferred Compensation Rabbi
         Trust Agreement as amended and restated as of October 4, 1993. (2)

OTHER CONTRACTS AND ARRANGEMENTS


10.18    Credit Agreement by and among the Company as Borrower, the Fifth Third
         Bank as Agent and The Fifth Third Bank and NBD Bank, N.A. as Lenders
         dated October 16, 1997 (excluding nonmaterial exhibits). (14)

10.19    First Amendment dated October 16, 1997 to the Credit Agreement by and
         among the Company as Borrower, the Fifth Third Bank as Agent and The
         Fifth Third Bank and NBD Bank, N.A. as Lenders dated October 16, 1997.
         (14)



                                      -44-
<PAGE>   48

10.20    Second Amendment to Credit Agreement, among the Company and The Fifth
         Third Bank and NBD Bank, N.A., dated April 27, 1998. (17)

10.21    Third Amendment to Credit Agreement, among the Company and The Fifth
         Third Bank and NBD Bank, N.A., dated June 19, 1998. (18)

10.22    Fourth Amendment to Credit Agreement, among the Company and The Fifth
         Third Bank and NBD Bank, N.A., dated September 21, 1998. (19)

10.23    Fifth Amendment to Credit Agreement, among the Company and the Fifth
         Third Bank and NBD Bank, N.A. dated January 29, 1999 (21)

10.24    Sixth Amendment to Credit Agreement, among the Company and the Fifth
         Third Bank and Bank One, Indiana (formerly NBD Bank) dated July 15,
         1999. (22)

10.25    Waiver and Seventh Amendment to Credit Agreement, among the Company and
         the Fifth Third Bank and Bank One, Indiana dated December 3, 1999

10.26    Waiver and Eighth Amendment to Credit Agreement, among the Company and
         the Fifth Third Bank and Bank One, Indiana dated February 28, 2000.

10.27    Form of Subsidiary Security Agreement dated October 16, 1997 between
         the Fifth Third Bank and certain subsidiaries of the Company. (12) (14)

10.28    Form of Subsidiary Guaranty dated October 16, 1997 by certain
         subsidiaries of the Company in favor of the Fifth Third Bank and NBD
         Bank, N.A. (13) (14)

10.29    Amended and Restated Term Loan Agreement, among the Company, Baldwin
         Piano Company (Canada) Limited, The Wurlitzer Company, Baldwin Trading
         Company, Signature Leasing Company, The Fifth Third Company and NBD
         Bank, N.A., dated May 15, 1998.(18)

10.30    First Amendment to Amended and Restated Term Loan Agreement among the
         Company, Fifth Third Bank and Bank One, Indiana (formerly NBD Bank)
         dated July 15, 1999. (22)

10.31    Waiver and Second Amendment to Amended and Restated Term Loan Agreement
         among the Company, Fifth Third Bank and Bank One, Indiana (formerly NBD
         Bank) dated December 3, 1999.



                                      -45-
<PAGE>   49

10.32    Amended and Restated Inventory Purchase and Consignment Agreement,
         between Baldwin Piano & Organ Company and Deutsche Financial Services
         Corporation, dated October 28, 1998. (19)

10.33    Irrevocable Standby Letter of Credit issued August 13, 1993 by The
         Fifth Third Bank on behalf of the Company in favor of Harold S. Smith.
         (3)

10.34    Letter of Credit Reimbursement Agreement dated as of August 13, 1993
         between the Company and The Fifth Third Bank. (3)

10.35    Office lease between Baldwin Piano & Organ Company and Duke Realty
         Limited Partnership, dated July 2, 1998. (19)

10.36    Distribution Agreement between Baldwin Piano & Organ Company and
         GeneralMusic S.p.A. dated as of July 1, 1995. (6)

10.37    Amended and Restated Amendment and Supplemental Agreement between
         Baldwin Piano & Organ Company and GeneralMusic S.p.A. dated as of
         January 1, 1997. (11)

10.38    Land Lease Agreement between Fabricantes Tecnicos, S.A. DE C.V. and
         Delphi Automotive Systems, S.A. DE C.V. dated as of December 13, 1996.
         (11)

13.1     Information incorporated by reference to Baldwin's 1999 Annual Report
         to Shareholders for the year ended December 31, 1999: "Independent
         Auditors' Report", "Financial Statements" (including Notes thereto),
         "Five Year Summary" and "Management's Discussion and Analysis of
         Financial Condition and Results of Operation".

22.1     Subsidiaries of the Company.

23.1     Consent of Independent Accountants - Deloitte & Touche LLP

23.2     Consent of Independent Accountants - KPMG LLP

27.1     Financial Data Schedule.

99.1     Baldwin Stock Repurchase Plan. (2)

99.2     Amendment No. 1 to Baldwin Stock Repurchase Plan. (3)

99.3     Amendment No. 2 to Baldwin Stock Repurchase Plan. (4)

                                      -46-
<PAGE>   50

99.4     Press Release dated March 13, 2000

(1)      Incorporated by reference from the Company's Form S-1 Registration
         Statement as declared effective by the Commission on October 8, 1986.

(2)      Incorporated by reference from the Company's Form 10-Q for the period
         ended September 30, 1993.

(3)      Incorporated by reference from the Company's Form 10-K for the period
         ended December 31, 1993.

(4)      Incorporated by reference from the Company's proxy statement relating
         to its May 10, 1994 Annual Meeting of Shareholders.

(5)      Incorporated by reference from the Company's Form 10-Q for the period
         ended June 30, 1994.

(6)      Incorporated by reference from the Company's Form 10-Q for the period
         ended September 30, 1995.

(7)      Incorporated by reference from the Company's Form 10-Q for the period
         ended June 30, 1996.

(8)      Substantially identical documents were entered into by Baldwin Piano &
         Organ Company with Perry H. Schwartz, Duane D. Kimble and Daniel B.
         Baker dated November 12, 1996, July 5, 1998 and February 26, 1998,
         respectively.

(9)      Incorporated by reference from the Company's Form 8-K dated February
         10, 1997 as filed with the Commission on February 27, 1997.

(10)     Incorporated by reference from the Company's Form 10-Q for the period
         ended June 30, 1997.

(11)     Incorporated by reference from the Company's Form 10-K for the period
         ended December 31, 1996.

(12)     Subsidiary Security Agreements with The Fifth Third Bank were entered
         into by The Wurlitzer Company, Baldwin Trading Company, Signature
         Leasing Company and The Baldwin Piano Company Limited.

(13)     Subsidiary Guaranty was executed by each of The Wurlitzer Company,
         Baldwin Trading Company, Signature Leasing Company and The Baldwin
         Company Limited.



                                      -47-
<PAGE>   51

(14)     Incorporated by reference from the Company's Form 10-K for the period
         ended December 31, 1997.

(15)     Incorporated by reference to the Company's Form 8-K dated October 12,
         1998.

(16)     Incorporated by reference to the Company's Proxy Statement dated April
         27, 1998 relating to the Company's 1998 Annual Meeting of Shareholders.

(17)     Incorporated by reference from the Company's Form 10-Q for the period
         ended March 31, 1998.

(18)     Incorporated by reference from the Company's Form 10-Q for the period
         ended June 30, 1998.

(19)     Incorporated by reference from the Company's Form 10-Q for the period
         ended September 30, 1998.

(20)     Incorporated by reference from the Company's Form 10-K for the period
         ended December 31, 1998.

(21)     Incorporated by reference from the Company's Form 10-Q for the period
         ended March 31, 1999.

(22)     Incorporated by reference from the Company's Form 10-Q for the period
         ended September 30, 1999.

(23)     Incorporated by reference from the Company's Form 8-K dated December 9,
         1999.

Index to Exhibits - pages 46-55.


                                      -48-
<PAGE>   52

                                   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.

                                    BALDWIN PIANO & ORGAN COMPANY


                                    By: /s/ Karen L. Hendricks
                                       -----------------------------------
                                        Karen L. Hendricks, Chairman,
                                    Chief Executive Officer and President

                                    Date: March  30, 2000

         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.

                                      Principal Executive Officer:

Date:  March 30, 2000                 /s/ Karen L. Hendricks
      ---------------                 ------------------------------------
                                      Karen L. Hendricks, Chairman, Chief
                                      Executive Officer, President
                                      and Director

Date:  March 30, 2000                 /s/ George E. Castrucci
      ---------------                 ------------------------------------
                                      George E. Castrucci, Director

Date:  March 30, 2000                 /s/ William B. Connell
      ---------------                 ------------------------------------
                                      William B. Connell, Director

Date:  March 30, 2000                 /s/ Herbert A. Denton
      ---------------                 ------------------------------------
                                      Herbert A. Denton, Director

Date:  March 30, 2000                 /s/ John H. Gutfreund
       --------------                 ------------------------------------
                                      John H. Gutfreund, Director

Date:  March 30, 2000                 /s/ Joseph H. Head, Jr.
      ---------------                 ------------------------------------
                                      Joseph H. Head, Jr., Director

Date:  March 30, 2000                 /s/ Roger L. Howe
      ---------------                 ------------------------------------
                                      Roger L. Howe, Director


                                      Principal Financial and Accounting


                                      -49-
<PAGE>   53

                                      Officer:

Date:  March 30, 2000                 /s/ Duane Kimble
      ---------------                 ------------------------------------
                                      Duane Kimble, Executive Vice
                                      President and Chief Financial Officer



                                      -50-
<PAGE>   54

INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Shareholders
Baldwin Piano & Organ Company

We have audited the consolidated statements of earnings, shareholders' equity,
and cash flows of Baldwin Piano & Organ Company and subsidiaries for the year
ended December 31, 1997. In connection with our audit of the consolidated
financial statements, we have also audited the financial statement schedule of
valuation and qualifying accounts for the year ended December 31, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. We conducted our audit 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 audit provides a
reasonable basis for our opinion. In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the
results of operations and cash flows of Baldwin Piano & Organ Company for the
year ended December 31, 1997, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule for
the year ended December 31, 1997 when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.



KPMG LLP
Cincinnati, Ohio
February 23, 1998


                                      -51-
<PAGE>   55

INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
Baldwin Piano & Organ Company:

We have audited the financial statements of Baldwin Piano & Organ Company as of
December 31, 1999 and 1998, and have issued our report thereon dated March 13,
2000. Such financial statements and report are included in your Annual Report to
Shareholders and are incorporated herein by reference. Our audits also included
the financial statement schedule of Baldwin Piano & Organ Company for the years
ended December 31, 1999 and 1998, (listed in Item 14). This financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.



Deloitte & Touche LLP
Cincinnati, Ohio
March 13, 2000

                                      -52-
<PAGE>   56

                                  SCHEDULE VIII

                 BALDWIN PIANO & ORGAN COMPANY AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
                  Years ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
Description                                    Beginning            Additions        Other       Charge-offs         Ending
                                               Balance                                                               Balance

ALLOWANCE FOR DOUBTFUL ACCOUNTS:
<S>                                            <C>                  <C>                <C>       <C>                 <C>
Year ended December 31, 1999                   $   707,000          $ 300,000          $ -       $   108,000(1)      $   899,000
Year ended December 31, 1998                   $ 1,020,000          $ 264,000          $ -       $   577,000(1)      $   707,000
Year ended December 31, 1997                   $ 3,228,000          $ 290,800          $ -       $ 2,498,800(1)      $ 1,020,000
</TABLE>


(1) Represents adjustments and accounts charged off, less recoveries.


                                      -53-
<PAGE>   57





                                INDEX TO EXHIBITS



<TABLE>
<CAPTION>
Exhibit                                          Exhibit                                                   Sequentially
Number                                           ------                                                      Numbered
------                                                                                                         Page
                                                                                                               ----

<S>               <C>                                                                                      <C>
2.1               Stock Purchase Agreement dated December 8, 1999 between the Company and Deutsche               *
                  Financial Services Corporation. (23)


3.1               Certificate of Incorporation of the Company, as amended. (1)                                   *


3.2               Amended and Restated Bylaws of Baldwin Piano & Organ Company dated as of February              *
                  10, 1997. (9)


4.1               Rights Agreement dated as of October 12, 1998 between the Company and the                      *
                  Provident Bank as Rights Agreement. (15)


                              MANAGEMENT CONTRACTS, COMPENSATORY PLANS AND ARRANGEMENTS
                              =========================================================

10.1              Baldwin Piano & Organ Company Retirement Plan for Salaried Employees, as amended.              *
                  (1)


10.2              Baldwin Piano & Organ Company Retirement Trust for Salaried Employees dated                    *
                  September 28,
</TABLE>


                                      -54-
<PAGE>   58


<TABLE>
<CAPTION>
Exhibit                                          Exhibit                                                   Sequentially
Number                                           ------                                                      Numbered
------                                                                                                         Page
                                                                                                               ----

<S>               <C>                                                                                      <C>
                  1984. (1)


10.3              Baldwin Piano & Organ Company 1994 Incentive Stock Option Plan. (4)                            *


10.4              Baldwin Piano & Organ Company 1994 Management Incentive Plan. (5)                              *


10.5              Baldwin Piano & Organ Company 1994 Long Term Incentive Plan. (5)                               *


10.6              Baldwin Piano & Organ Company 1998 Omnibus Stock Plan. (16)                                    *


10.7              Agreement of Employment between the Company and Karen L. Hendricks dated as of                 *
                  June 19, 1997. (10)


10.8              Amendment to Agreement of Employment between the Company and Karen L. Hendricks                *
                  dated September 1, 1999. (22)


10.9              Change in Control Agreement between the Company and Karen L. Hendricks dated June              *
                  26, 1996. (7)


10.10             Amendment to Change in Control Agreement between the Company and Karen L.                      *
                  Hendricks
</TABLE>


                                      -55-
<PAGE>   59

<TABLE>
<CAPTION>
Exhibit                                          Exhibit                                                   Sequentially
Number                                           ------                                                      Numbered
------                                                                                                         Page
                                                                                                               ----

<S>               <C>                                                                                      <C>
                  dated September 17, 1999. (22)
</TABLE>


                                      -56-
<PAGE>   60




<TABLE>
<S>            <C>                                                                                         <C>
10.11          Form of Indemnification Agreements between the Company and the Company's Officers and             *
               Directors dated June 30, 1986 and accompanying schedule. (1)


10.12          Change in Control Agreement between the Company and Stephen P. Brock dated June 11,               *
               1996. (7) (8)


10.13          Amendment to Change in Control Agreement between the Company and Duane D. Kimble                  *
               dated September 24, 1999. (22)


10.14          Agreement of Employment between the Company and Duane D. Kimble as Senior Vice                    *
               President, Strategic Planning, dated June 30, 1998. (20)


10.15          Agreement of Employment between the Company and Perry H. Schwartz dated as of                     *
               November 5, 1996 as amended on November 11, 1996. (11)


10.16          Baldwin Piano & Organ Company Non-Qualified Deferred Compensation Plan. (2)                       *


10.17          Baldwin Piano & Organ Company Non-Qualified Deferred Compensation Rabbi Trust                     *
               Agreement as amended and restated as of October 4, 1993. (2)


                        OTHER CONTRACTS AND ARRANGEMENTS
                        ================================
</TABLE>

                                      -57-
<PAGE>   61


<TABLE>
<S>            <C>                                                                                         <C>
10.18          Credit Agreement by and among the Company as Borrower, the Fifth Third Bank as Agent              *
               and The Fifth Third Bank and NBD Bank, N.A. as Lenders dated October 16, 1997
               (excluding nonmaterial exhibits). (14)


10.19          First Amendment dated October 16, 1997 to the Credit Agreement by and among the                   *
               Company as Borrower, the Fifth Third Bank as Agent and The Fifth Third Bank and NBD
               Bank, N.A. as Lenders dated October 16, 1997. (14)


10.20          Second Amendment to Credit Agreement among the Company and The Fifth Third Bank and               *
               NBD Bank, N.A., dated April 27, 1998. (17)


10.21          Third Amendment to Credit Agreement among the Company, The Fifth Third Bank and NBD               *
               Bank, N.A., dated June 19, 1998. (18)


10.22          Fourth Amendment to Credit Agreement among the Company, The Fifth Third Bank and NBD              *
               Bank, N.A., dated September 21, 1998. (19)


10.23          Fifth Amendment to Credit Agreement, among the Company and the Fifth Third Bank and               *
               NBD Bank, N.A. dated January 29, 1999. (21)
</TABLE>


                                      -58-
<PAGE>   62


<TABLE>
<S>            <C>                                                                                        <C>
10.24          Sixth Amendment to Credit Agreement, among the Company and the Fifth Third Bank and               *
               Bank One, Indiana (formerly NBD Bank) dated July 15, 1999. (22)


10.25          Waiver and Seventh Amendment to Credit Agreement, among the Company and the Fifth                 #
               Third Bank and Bank One, Indiana dated December 3, 1999.


10.26          Waiver and Eighth Amendment to Credit Agreement, among the Company and the Fifth                  #
               Third Bank and Bank One, Indiana dated February 28, 2000.


10.27          Form of Subsidiary Security Agreement dated October 16, 1997 between The Fifth Third              *
               Bank and Certain subsidiaries of the Company. (12) (14)


10.28          Form of Subsidiary Guaranty dated October 16, 1997 by certain subsidiaries of the                 *
               Company in favor of The Fifth Third Bank and NBD Bank, N.A. (13) (14)


10.29          Amended and Restated Term Loan Agreement among the Company, Baldwin Piano Company                 *
               (Canada) Limited, The Wurlitzer Company, Baldwin Trading Company, Signature Leasing
               Company, The Fifth Third Company and NBD Bank, N.A., dated May 15, 1998. (18)

# Included, but not page numbered.
</TABLE>


                                      -59-
<PAGE>   63




<TABLE>
<S>            <C>                                                                                         <C>
10.30          First Amendment to Amended and Restated Term Loan Agreement among the Company, Fifth              *
               Third Bank and Bank One, Indiana (formerly NBD Bank) dated July 15, 1999. (22)


10.31          Waiver and Second Amendment to Amended and Restate Term Loan Agreement among the                  #
               Company, Fifth Third Bank and Bank One, Indiana (formerly NBD Bank) dated December 3,
               1999.


10.32          Amended and Restated Inventory Purchase and Consignment Agreement between Baldwin                 *
               Piano & Organ Company and Deutsche Financial Services Corporation, dated October 28,
               1998. (19)


10.33          Irrevocable Standby Letter of Credit issued August 13, 1993 by The Fifth Third Bank               *
               on behalf of the Company in favor of Harold S. Smith. (3)


10.34          Letter of Credit Reimbursement Agreement dated as of August 13, 1993 between the                  *
               Company and The Fifth Third Bank. (3)


10.35          Office lease between Baldwin Piano & Organ Company and Duke Realty Limited                        *
               Partnership, dated July 2, 1998. (19)


10.36          Distribution Agreement between Baldwin Piano & Organ Company and GeneralMusic S.p.A.              *
               dated as of July 1, 1995. (6)
</TABLE>



                                      -60-
<PAGE>   64

# Included, but not page numbered.


                                      -61-
<PAGE>   65


<TABLE>
<S>            <C>                                                                                         <C>
10.37          Amended and Restated Amendment and Supplemental Agreement between Baldwin Piano &                 *
               Organ Company and GeneralMusic S.p.A. dated as of January 1, 1997. (11)


10.38          Land Lease Agreement between Fabricantes Tecnicos, S.A. DE C.V. and Delphi Automotive             *
               Systems, S.A. DE C.V. dated as of December 13, 1996. (11)


13.1           Information incorporated by reference to Baldwin's 1999 Annual Report to Shareholders             #
               for the year ended December 31, 1998:  "Independent Auditors' Report", "Financial
               Statements" (including Notes thereto), "Five Year Summary", and "Management's
               Discussion and Analysis of Financial Condition and Results of Operation".


22.1           Subsidiaries of the Registrant.                                                                   67


23.1           Consent of Independent Accountants                                                                68

               -Deloitte & Touche LLP


23.2           Consent of Independent Accounts                                                                   69

               -KPMG LLP


27.1           Financial Data Schedule.                                                                          70

</TABLE>


                                      -62-
<PAGE>   66




<TABLE>
<S>            <C>                                                                                         <C>
99.1           Baldwin Stock Repurchase Plan. (2)                                                                *




99.2           Amendment No. 1 to Baldwin Stock Repurchase Plan. (3)                                             *


99.3           Amendment No. 2 to Baldwin Stock Repurchase Plan. (4)                                             *


99.4           Press Release dated March 13, 2000.                                                             59-60

*        Incorporated by reference as indicated in the applicable footnote.
</TABLE>



(1)      Incorporated by reference from the Company's Form S-1 Registration
         Statement as declared effective by the Commission on October 8, 1986.



(2)      Incorporated by reference from the Company's Form 10-Q for the period
         ended September 30, 1993.



(3)      Incorporated by reference from the Company's Form 10-K for the period
         ended December 31, 1993.



(4)      Incorporated by reference from the Company's Proxy Statement relating
         to its May 10, 1994 Annual Meeting of Shareholders.



                                      -63-
<PAGE>   67

(5)      Incorporated by reference from the Company's Form 10-Q for the period
         ended June 30, 1994.



(6)      Incorporated by reference from the Company's Form 10-Q for the period
         ended September 30, 1995.



(7)      Incorporated by reference from the Company's Form 10-Q for the period
         ended June 30, 1996.



(8)      Substantially identical documents were entered into by Baldwin Piano &
         Organ Company with Perry Schwartz, Duane D. Kimble and Daniel B. Baker
         dated November 12, 1996, July 5, 1998 and February 26, 1999,
         respectively.



(9)      Incorporated by reference from the Company's Form 8-K dated February
         10, 1997 as filed with the Commission on February 27, 1997.



(10)     Incorporated by reference from the Company's Form 10-Q for the period
         ended June 30, 1997.



(11)     Incorporated by reference from the Company's Form 10-K for the period
         ended December 31, 1996.



(12)     Subsidiary Security Agreements with The Fifth Third Bank were entered
         into by The Wurlitzer Company, Baldwin Trading Company, Signature
         Leasing Company and The Baldwin Piano Company Limited.



(13)     Subsidiary Guaranty was executed by each of The Wurlitzer Company,
         Baldwin Trading Company, Signature Leasing Company and The Baldwin
         Company Limited.



                                      -64-
<PAGE>   68

(14)     Incorporated by reference from the Company's Form 10-K for the period
         ended December 31, 1997.



(15)     Incorporated by reference to the Company's Form 8-K dated October 12,
         1998.



(16)     Incorporated by reference to the Company's Proxy Statement dated April
         27, 1998 relating to the Company's 1998 Annual Meeting of Shareholders.



(17)     Incorporated by reference from the Company's Form 10-Q for the period
         ended March 31, 1998.



(18)     Incorporated by reference from the Company's Form 10-Q for the period
         ended June 30, 1998.



(19)     Incorporated by reference from the Company's Form 10-Q for the period
         ended September 30, 1998.



(20)     Incorporated by reference from the Company's Form 10-K for the period
         ended December 31, 1998.



(21)     Incorporated by reference from the Company's Form 10-Q for the period
         ended March 31, 1999.



(22)     Incorporated by reference from the Company's Form 10-Q for the period
         ended September 30, 1999.


                                      -65-
<PAGE>   69


(23)     Incorporated by reference from the Company's Form 8-K dated December 9,
         1999.


                                      -66-