Press Release from M.T.H. Electric Trains

M.T.H. Electric Trains® previously announced the misappropriation of our train designs from the Samhongsa production facility. Files were copied from the Samhongsa computer system onto disks, removed from the facility, and loaded onto the computers of the chief of design for Korea Brass. These files contained the advanced design of mechanical and electrical integration. These design packages typically include electro-mechanical and articulation details, information on the design of motors and gears, and other details about form, fit, and function. The stolen files contain design information on many of the mechanical advances that distinguish M.T.H. trains from those sold by our competitors.

All the relevant data and material for tool making were also part of the stolen material. Because the unique tooling used to make O Scale locomotives costs hundreds of thousands of dollars and months of work to develop and cut, the theft and use of such drawings by a competing contractor represents a serious misappropriation of M.T.H.-Samhongsa technology and intellectual property.

While it is not illegal, in some circumstances, to reverse engineer models that are made by competing model railroad manufacturers, that is not what the evidence indicates happened in this case. Rather, it appears that Korea Brass based their production of articulated steam engines on the designs they received on computer disks stolen from M.T.H.-Samhongsa.

Misappropriation of this technology and intellectual property enables competitors to avoid the time consuming and expensive design and tooling process undertaken by M.T.H. as part of our commitment to provide innovative products to our customers.

Press Release from Lionel, LLC

Prosecution drops charges brought against Lionel supplier, Korea Brass

CHESTERFIELD, MI -- March 10, 2000-- In the interest of accurate reporting, Lionel LLC has been cautious in communicating information on recent accusations brought by M.T.H.® and Samhongsa® against Lionel supplier, Korea Brass. The current information from our Korean attorneys follows:

At an early stage of the investigation, it appears that the Korean government has dropped the criminal case brought against Korea Brass. The criminal action brought against a Samhongsa® employee and an independent contractor to Korea Brass (formerly a Samhongsa® employee) appears to remain. The persons being detained are charged with alleged trade secret theft under the Unfair Competition Prevention Act (UCPA). The subject of the alleged trade secret theft remains unknown.

Lionel feels certain that the previously named, sold-out Class A locomotives will arrive in the near future. A few surprise features on the Class A locomotives will make this release even more exciting and desirable such as:

-Lighted ash pan with brightness determined by engine effort
-Tender features lighted doghouse with painted window frames and lenses
-Painted window frames and lenses on cab
-Illuminated market lights and number board

"I believe that the schedule of products planned for 2000, our triumphant centennial year, will be uninterrupted and delivered on time," said Richard N. Maddox, Lionel president & COO.

Lionel remains an American icon that designs, manufactures and markets train sets for children and limited-edition trains and accessories for hobbyists and collectors. Lionel trains are the most valued toy trains in the market today, being collected or operated by over 100,000 toy train hobbyists. The success of Lionel is the result of a 100-year tradition of painstaking attention to quality. Lionel sells its products through a nationwide distributor and dealer network, the largest in existence today.

Today, the Lionel legend continues to move towards the 21st century, providing kids and "kids at heart" with the finest quality toy trains. Thanks to a history of innovation and quality, Lionel -- the world-renowned manufacturer and marketer of electric toy trains -- is as timeless as the trains it produces.

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