1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended May 31, 1995 Commission File Number 0-12353
PLASMA-THERM, INC.
------------------
(Exact name of registrant as specified in its charter)
FLORIDA 04-2554632
- ------------------------------ -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
9509 INTERNATIONAL COURT, ST. PETERSBURG, FLORIDA 33716
-------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (813) 577-4999
--------------
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $.01 per share 10,234,561
- -------------------------------------- ----------------------------
Class Outstanding at June 28, 1995
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INDEX
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PART I. FINANCIAL INFORMATION
PAGE
NUMBER
------
Item 1. Consolidated Financial Statements
Balance Sheets - May 31, 1995 and
November 30, 1994................................................. 3
Statements of Income - Three Months and Six Months Ended
May 31, 1995 and May 31, 1994..................................... 5
Statements of Cash Flows - Six Months Ended
May 31, 1995 and May 31, 1994..................................... 6
Notes to Consolidated Financial Statements......................... 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............ 11
PART II. OTHER INFORMATION
Item 2. Changes in Securities........................................ 13
Item 4. Submission of Matters to a Vote of Security-Holders.......... 13
Item 6. Exhibits and Reports on Form 8-K............................. 14
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PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
May 31, November 30,
ASSETS 1995 1994
------------ ------------
(Unaudited) (Note 1)
Current assets
Cash and cash equivalents $ 5,244,694 $ 2,625,850
Accounts receivable 6,514,420 4,725,876
Income tax deposits 598,653 -
Inventories 8,955,307 7,219,340
Current portion - note receivable 75,771 60,000
Prepaid expenses and other 282,432 218,569
Deferred tax asset 208,000 208,000
----------- -----------
Total current assets 21,879,277 15,057,635
----------- -----------
Property and equipment, at cost
Machinery and equipment 2,323,100 2,118,537
Leasehold improvements 416,696 375,099
----------- -----------
2,739,796 2,493,636
Less accumulated depreciation and
amortization 1,685,238 1,633,535
----------- -----------
1,054,558 860,101
----------- -----------
Other assets
Note receivable, less current portion 15,000 45,000
Deferred tax asset 498,380 498,380
Deferred offering costs - 86,878
Other 12,152 35,904
----------- -----------
525,532 666,162
----------- -----------
$23,459,367 $16,583,898
=========== ===========
See accompanying notes to these consolidated financial statements.
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PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
May 31, November 30,
LIABILITIES 1995 1994
------------- -----------
(Unaudited) (Note 1)
Current liabilities
Short-term borrowings $ 800,000 $ 1,000,000
Current portion of notes payable 333,333 375,000
Current maturities of obligations under
capital leases 86,098 111,565
Accounts payable 2,478,139 1,544,791
Billings in excess of costs and estimated
earnings on uncompleted contracts - 27,330
Accrued payroll and related 315,585 390,913
Accrued expenses 564,227 327,958
Income taxes payable - 151,962
Customer deposits 351,400 738,000
----------- -----------
Total current liabilities 4,928,782 4,667,519
----------- -----------
Long-term obligations
Notes payable 333,333 500,000
Obligations under capital leases 275,866 311,484
----------- -----------
609,199 811,484
----------- -----------
SHAREHOLDERS' EQUITY
Shareholders' equity
Common stock
$.01 par value
Authorized - 25,000,000 shares
Issued and outstanding - 10,234,561
shares - 1995 and 8,428,561 shares -
1994 102,347 84,287
Additional paid-in capital 14,499,818 7,885,857
Retained earnings 3,319,221 3,134,751
----------- -----------
17,921,386 11,104,895
----------- -----------
$23,459,367 $16,583,898
=========== ===========
See accompanying notes to these consolidated financial statements.
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PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
May 31, May 31,
-------------------------- -----------------------------
1995 1994 1995 1994
---------- ---------- ----------- -----------
Net sales $7,159,661 $5,540,371 $12,116,521 $10,909,925
License income - - 30,000 -
---------- ---------- ----------- -----------
7,159,661 5,540,371 12,146,521 10,909,925
---------- ---------- ----------- -----------
Costs and expenses
Cost of products sold 4,776,213 3,500,530 8,193,726 6,723,875
Research and development 673,725 561,919 1,188,537 1,106,402
Selling and administrative 1,484,766 1,156,418 2,562,766 2,299,257
Interest expense 38,889 8,229 74,545 19,054
Other (income) expense, net (94,157) 8,870 (174,761) 23,376
---------- ---------- ----------- -----------
6,879,436 5,235,966 11,844,813 10,171,964
---------- ---------- ----------- -----------
Income before income taxes and cumulative
effect of change in accounting principle 280,225 304,405 301,708 737,961
Income taxes 104,188 80,891 117,238 185,356
---------- ---------- ----------- -----------
Income before cumulative effect of change
in accounting principle 176,037 223,514 184,470 552,605
Cumulative effect of change in
accounting for income taxes - - - 350,000
---------- ---------- ----------- -----------
Net income $ 176,037 $ 223,514 $ 184,470 $ 902,605
========== ========== =========== ===========
Income per share (primary and fully dilutive)
Income per share before cumulative effect
of change in accounting principle $ 0.02 $ 0.02 $ 0.02 $ 0.06
Cumulative effect of change
in accounting principle - - - 0.04
---------- ---------- ----------- -----------
$ 0.02 $ 0.02 $ 0.02 $ 0.10
========== ========== =========== ===========
See accompanying notes to these consolidated financial statements.
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PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended May 31,
---------------------------------
1995 1994
---------- -------------
Cash flows from operating activities
Net income $ 184,470 $ 902,605
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 212,143 216,365
Gain on disposal of assets 5,100 (21,070)
Deferred taxes - (346,278)
Compensation - stock options 17,043 144,966
Changes in assets and liabilities
(Increase) decrease in accounts receivable (1,788,544) 330,200
Increase in income tax deposits (115,100) -
Increase in inventories (1,735,967) (1,249,991)
Increase in prepaid expenses and other (63,863) (71,678)
(Decrease) in accounts payable 933,348 (73,846)
Decrease in billings in excess of costs and
estimated earnings on uncompleted contracts (27,330) -
Increase (decrease) in accrued payroll and related (75,328) 81,891
Increase in accrued expenses 236,269 (83,458)
Increase (decrease) in income taxes payable (151,962) 111,809
Increase (decrease) in customer deposits (386,600) 1,204,580
----------- -----------
Net cash provided by (used in)
operating activities (2,756,321) 1,146,095
----------- -----------
Cash flows from investing activities
Capital expenditures (411,700) (184,225)
Proceeds from sale of assets - 61,500
Payments received on loan to former subsidiary 30,000 30,000
Issuance of note receivable (15,771) -
Other 23,752 1,222
----------- -----------
Net cash used in investing activities (373,719) (91,503)
----------- -----------
See accompanying notes to these consolidated financial statements.
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PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited)
Six Months Ended May 31,
-------------------------------
1995 1994
---------- ----------
Cash flows from financing activities
Proceeds from issuance of notes payable - 1,033,649
Principal payments on notes payable (208,334) (162,132)
Principal payments under capital lease obligations (61,085) -
Net payments under line of credit agreements (200,000) -
Issuance of common stock 6,131,425 59,060
Deferred offering costs 86,878 -
---------- ----------
Net cash provided by (used in)
financing activities 5,748,884 930,577
---------- ----------
Net increase in cash and cash
equivalents 2,618,844 1,985,169
---------- ----------
Cash and cash equivalents, beginning of period 2,625,850 1,496,113
---------- ----------
Cash and cash equivalents, end of period $5,244,694 $3,481,282
========== ==========
See accompanying notes to these consolidated financial statements.
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PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1995 AND NOVEMBER 30, 1994
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the
financial position as of May 31, 1995 and 1994 and the results of
operations and cash flows for the six months ended May 31, 1995 and
1994.
The results of operations for the six months ended May 31, 1995 and
1994 are not necessarily indicative of results for the full year.
The November 30, 1994 balance sheet amounts and disclosures included
herein have been delivered from the November 30, 1994 audited
financial statements of the Registrant. While the Company believes
that the disclosures presented are adequate to make the information
not misleading, it is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial
statements and the notes included in the Company's latest annual
report on Form 10-K.
NOTE 2 PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
Plasma-Therm, Inc. (the Company) and its wholly owned subsidiary. All
significant intercompany transactions and balances have been
eliminated.
NOTE 3 INCOME PER SHARE
Earnings per share is computed based on the weighted average number of
shares of common stock adjusted for the conversion of dilutive common
stock equivalents. The primary and fully dilutive income per share
are the same for all periods presented. The following is the weighted
average outstanding share information.
Three Months Ended
----------------------------------------
May 31, 1995 May 31, 1994
------------ ------------
Primary 10,723,039 9,007,961
Fully Dilutive 10,723,020 8,887,730
Six Months Ended
----------------------------------------
May 31, 1995 May 31, 1994
------------ ------------
Primary 10,662,953 9,027,477
Fully Dilutive 10,676,119 9,015,085
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PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1995 AND NOVEMBER 30, 1994
(UNAUDITED)
NOTE 4 SHORT TERM BORROWINGS
In January 1995, the Company replaced its existing line of credit with
a $2,000,000 line due May 19, 1996. Interest is payable monthly at
the bank's prime rate. The line is collateralized by accounts
receivable. The bank has a security interest in the proceeds for the
collection of accounts receivable in the Company's depository
account(s).
NOTE 5 NOTES PAYABLE
In January 1995, the note payable, payable in monthly installments of
$27,788 plus interest at 8.28%, was amended to change the collateral
requirements from all the assets of the Company to accounts receivable
and inventory only. The bank has a security interest in the proceeds
for the collection of accounts receivable in the Company's depository
account(s).
NOTE 6 SHAREHOLDERS' EQUITY
Changes in the Company's common stock and additional paid-in capital
during the six months ended May 31, 1995 consist of the following:
COMMON STOCK
----------------------------- ADDITIONAL
SHARES PAID-IN-
ISSUED AMOUNT CAPITAL
------ ------ -------
Balance at November 30, 1994 8,428,561 $ 84,287 $ 7,885,857
Exercise of stock options 56,000 560 135,788
Compensation on unexercised
stock options 17,043
Exercise of warrants 250,000 2,500 632,680
Sale of 1,500,000 shares of
common stock 1,500,000 15,000 5,744,097
Repayment of obligations under
Section 16(b) of the Securities
Exchange Act of 1934 - - 84,353
---------- -------- -----------
Balance at February 28, 1995 10,234,561 $102,347 $14,499,818
========== ======== ===========
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PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1995 AND NOVEMBER 30, 1994
(UNAUDITED)
NOTE 6 SHAREHOLDERS' EQUITY (CONTINUED)
In connection with the Company's borrowing from its former
primary bank, The Company's president and chief operating officer
executed a limited guarantee of the Company's indebtedness which was
released in 1989. The Company agreed to compensate the Company's
president for giving such guarantee by issuing to him a warrant
expiring in April 2002, for the purchase of 500,000 shares of the
Company's common stock at a purchase price per share of $.875. In
accordance with the anti-dilution provisions contained in the above
warrants, the exercise price of the warrants was adjusted as a result
of the spin-off of the Company's subsidiary in 1992. The adjusted
conversion price of the warrants is $.7721 per share. One hundred
thousand warrants were exercised in April 1995 for $77,210.
In conjunction with previous financing agreements, two warrants
expiring in 1995 were issued to a third party in November 1988 and
June 1989 to purchase 50,000 and 100,000 shares of common stock,
respectively, at a price of $1.25 per share. In accordance with the
anti-dilution provisions contained in the above warrants, the exercise
price of the warrants was adjusted as a result of the spin-off of the
Company's subsidiary in 1992. The adjusted conversion price of the
warrants is $1.1029 per share. Both warrants were exercised in
February 1995 for $165,435.
The Company completed a private placement offering of its Common Stock
in December 1994, raising $6,375,000 from the sale of 1,500,000
shares. Costs, including commissions, associated with the offering
were approximately $631,000. Part of these proceeds were used to pay
off the Company's line of credit balance of $1,000,000 at November 30,
1994.
NOTE 7 DISTRIBUTORSHIP AGREEMENT
The Company is not renewing its exclusive distributorship agreement
with its current Japanese distributor, Nissin Hi-Tech, Inc./Nissin
Electric Co., Ltd., which expires in August 1995. The Company expects
to have a replacement distributor by the end of the third quarter.
The transition from Nissin Electric to the new distributor is
anticipated to be smooth.
NOTE 8 CONSTRUCTION OF NEW FACILITY
The Company is progressing toward its goal of constructing a
manufacturing facility and expects to finalize its bank financing and
begin construction in the third quarter.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL POSITION, LIQUIDITY AND CAPITAL REQUIREMENTS
The Company's cash position increased by $2,618,844 from November 30,
1994 to May 31, 1995. Working capital at May 31, 1995 was $16,950,495
which is an increase of $6,560,379 over November 30, 1994. The
increases were due primarily to the completion of a private placement
offering of the Company's Common Stock in December 1994,
raising net cash of approximately $5,744,000. A portion of the
proceeds have been used to invest in working capital requirements,
including inventory which increased approximately $1,700,000.
Additional inventory has turned into accounts receivable at May 31,
1995 which can be seen by the increase in accounts receivable of
approximately $1,800,000 over November 30, 1994. These two items
primarily account for the difference between the increase in cash and
the cash received from the private placement of approximately
$3,100,000 and the difference between the increase in cash and the
increase in working capital of approximately $3,900,000.
Uses of cash included the repayment of approximately $269,000 of notes
payable and capital lease obligations and $200,000 of short-term
borrowings under the line of credit agreement. In addition, the
Company has incurred $411,700 in capital expenditures, of which
approximately $208,000 incurred to date relates to the computer
software and hardware required for current and anticipated growth and
approximately $128,000 relates to the initial costs associated with
the construction of the new building (See Note 8 to the financial
statements).
The Company has extensive ongoing capital requirements for research
and development, the repayment of debt, capital equipment and
inventory. The Company believes that its current cash reserves,
together with the proceeds of the private placement, working capital
expected to be generated by operations and additional funds available
under its line of credit, should be sufficient to meet its capital
requirements for the immediate future. Should order input exceed
projected 1995 levels, additional working capital may be required.
The Company believes that inflation has had no material impact upon
its operations.
RESULTS OF OPERATIONS
Net sales of $7.2 million for the second quarter of 1995 increased by
29% from net sales of $5.5 million for the second quarter of 1994.
For the first half of 1995, the Company reported net sales of $12.1
million, 11% higher than net sales of $10.9 million for the first six
months of 1994. The increase in net sales for both the second quarter
and six month period was attributable to an increase in Clusterlock(R)
7000 sales.
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RESULTS OF OPERATIONS - CONTINUED
Cost of products sold of $4.8 million for the second quarter of 1995
was 67% of net sales, compared to 63% for the same period last year.
Cost of products sold of $8.2 million for the first six months of 1995
was 68% of net sales compared to 62% for the same period last year.
The increase for both the quarter and the six month period relates
primarily to lower margins on Clusterlock(R) 7000 orders which shipped
during the second quarter. The initial Clusterlock(R) 7000 sales were
taken at lower margins to enable the Company to gain market share. In
addition, the planned recognition of approximately $311,000 for field
service costs (principally warranty costs) and a planned inventory
provision of $150,000 through May 31, 1995 contributed to higher cost
of products sold.
Research and development expense for the second quarter and first half
of 1995 was consistent with the same periods of 1994. For the second
quarter of 1995 research and development expense was $673,725 compared
to $561,919 in the same quarter in 1994 which are 9.4% and 10.1% of
net sales, respectively. Research and development expense for the
first half of 1995 was $1,188,537 (9.8% of sales), compared to
$1,106,402 (10.1% of sales) for the first half of 1994.
Selling and administrative expense was $1,484,766 in the second
quarter of 1995, up from $1,156,418 in the second quarter of 1994.
Selling and administrative expense for the first six months of 1995
was $2,562,766, up from $2,299,257 for the first six months of 1994.
Although actual expenses have increased, as a percentage of net sales,
selling and administrative expense has remained constant at 21% both
for the second quarter and first six months of 1995 and 1994.
The Company recorded income before income taxes of $280,225 in the
second quarter of 1995, down from $304,405 in the second quarter of
1994. Income before income taxes for the first half of 1995 was
$301,708, a $436,253 decrease from $737,961 earned the first half of
1994. The decrease is the result of an increase in cost of products
sold, as discussed above.
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PART II. OTHER INFORMATION
Item 2. CHANGES IN SECURITIES
See the discussion under Item 4, Submission of Matters to a Vote of
Security-Holders.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
The Company held its Annual Meeting of Stockholders on April 25, 1995.
At the meeting, the stockholders voted on the election of directors,
the adoption of the Company's 1995 Stock Incentive Plan and an
amendment to the Company's certificate of incorporation.
Two directors were elected to the Board of Directors of the Company,
for the terms of office expiring at the next annual meeting of
Stockholders: Ronald H. Deferrari and A.S. Gianoplus. No other
director's term of office continued after the meeting. A total of
8,489,945 votes each were cast for Mr. Deferrari and Mr. Gianoplus,
respectively. A total of 54,161 votes each were withheld with respect
to the election of Mr. Deferrari and Mr. Gianoplus, respectively.
At the annual meeting the Company's 1995 Stock Incentive Plan (the
"Plan"), adopted by the Company's Board of directors on March 17, 1995,
was approved by a total of 4,609,982 votes for the Plan. A total of
591,108 votes were cast against approval of the Plan. There were a
total of 59,525 abstentions and 3,518,888 broker non-votes with
respect to this vote.
The amendment to the Company's certificate of incorporation that was
submitted to a vote of stockholders increased the number of authorized
shares of Common Stock of the Company, par value $.01 per share, from
12,000,000 shares to 25,000,000. The amendment to the certificate of
incorporation was approved by a total of 7,869,543 votes in favor of
the amendment. A total of 633,016 votes were cast against approval of
the amendment. There were a total of 45,547 abstentions and broker
non-votes with respect to this vote.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
3.1 Amendment to the Company's Certificate of Incorporation.
10.1 Employment Agreement between the Company and Diana M.
DeFerrari, dated February 9, 1995.
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the second quarter of fiscal
1995.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PLASMA-THERM, INC.
Dated: July 10, 1995 /s/ RONALD H. DEFERRARI
-------------------------------
Ronald H. Deferrari, President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number DESCRIPTION
------- -----------
3.1 Amendment to the Company's Certificate of Incorporation.
10.1 Employment Agreement between the Company and Diana M. DeFerrari, dated February 9, 1995.
27 Financial Data Schedule (for SEC use only)
17
EXHIBIT 3.1
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
PLASMA-THERM, INC.
Plasma-Therm, Inc., a corporation organized and existing under the,
laws of the State of Florida (the "Corporation"), in order to amend its Articles
of Incorporation in accordance with the requirements of Chapter 607, Florida
Statutes, does hereby certify as follows:
1. The Amendment to the existing Articles of Incorporation being
effected hereby is to delete Article V. of the Articles of Incorporation and
substitute in its place the following:
**********************************
ARTICLE V. CAPITAL STOCK
The stock of the corporation shall be 25,000,000 shares of common
stock, with a par value of $.01 per share.
**********************************
2. This Amendment to the Articles of Incorporation was approved
by a majority vote of the stockholders, on the 25th day of April, 1995, and
such vote of the stockholders was sufficient for approval of this Amendment.
3. These Articles of Amendment of the Articles of Incorporation
shall be effective immediately upon filing by the Secretary of the State of
Florida, all required taxes and fees having been paid.
IN WITNESS WHEREOF, Plasma-Therm, Inc. has caused these Articles of
Amendment of the Articles of Incorporation to be executed by its President and
Secretary this 13th day of June, 1995.
ATTEST: PLASMA-THERM, INC.
(CORPORATE SEAL)
/s/ Diana M. DeFerrari /s/ Ronald H. Deferrari
- -------------------------------- ---------------------------------
Diana M. DeFerrari, Secretary Ronald H. Deferrari, President
18
STATE OF FLORIDA
[STATE LOGO]
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles of Amendment,
filed on June 15, 1995, to Articles of Incorporation for PLASMA-THERM, INC., a
Florida corporation, as shown by the records of this office.
The document number of this corporation is P94000023490.
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capitol, this the
TWENTY-FIRST day of June, 1995
(State Seal) /s/ Sandra B. Mortham
----------------------
CR2E022(2-95) Sandra B. Mortham
Secretary of State
19
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made this February 9, 1995, by and between Plasma-Therm
Inc., a Florida Corporation (herein referred to as "Corporation") and Diana M.
DeFerrari (herein referred to as "Employee").
BACKGROUND OF AGREEMENT
Employee is presently employed by Corporation. Corporation desires to
employ Employee and Employee desires to continue to accept such employment and
both parties are entering into this Agreement to set forth their entire
understanding with respect to such employment.
NOW, THEREFORE, the parties hereto intending to be legally bound
hereby, and in consideration of the mutual covenants herein contained, agree as
follows:
1. EMPLOYMENT
Corporation hereby employs Employee, and Employee hereby
accepts such employment, upon the terms and subject to the conditions herein
set forth.
2. TERM
The term of this agreement shall commence on Feburary 8, 1995
and shall continue for a period of three years until February 8, 1998 (the
"Term"). Upon the expiration of the Term, the employment of Employee shall
continue in full force and effect for an additional period of three years and
thereafter for three year extension periods unless at least ninety (90) days
prior to the end of the then current term, either Corporation or Employee has
given written notice to the other of her or its election to terminate the
employment at the end of such term.
3. DUTIES
The Employee shall be Vice President of Administration and
Corporate Secretary and her particular duties and power in such capacity shall
be such as may be determined from time to time by the President of Corporation,
provided, however, such duties and powers shall be consistent with the position
of an executive employee of a Florida business corporation. In the performance
of her duties the Employer shall make available to the Employee offices,
secretarial and other support as necessary, facilities and amenities
commensurate with her position and duties. Except with the written consent of
Employee, her principal office in performing her duties hereunder shall be
situated at Corporation's headquarters in St. Petersburg, Florida.
4. EXTENT OF SERVICES
20
Employee agrees to devote so much of her time, attention and
energies to the business of the Corporation as shall reasonably be required to
enable her to perform her duties hereunder. Moreover, it is specifically
understood that nothing herein contained shall be deemed to prevent Employee
from engaging in activities in such manner, or investing and managing her
assets in such form or manner, as will not unreasonably interfere with the
services to be rendered by the Employee hereunder, or prevent her from acting
as a director, trustee, officer of, or upon a committee of, any other firm,
trust or corporation where such positions do not unreasonably interfere with
the duties of Employee hereunder.
5. COMPENSATION
The Corporation agrees to pay and Employee agrees to accept as
compensation for all services rendered hereunder:
5.1 a base annual salary, payable in weekly installments, in
the amount of $101,000.00.
5.2 an annual bonus based on 2 1/2% of fiscal year net
earnings, to be paid on a quarterly basis and reconciled at year end, not to
exceed $100,000 annually.
5.3 Reimbursement for reasonable car-related expenses
including fuel and oil, but not maintenance or repair items.
6. EXPENSES
The parties recognize that in the course of performing her
duties hereunder, Employee may incur expenses. Corporation agrees to reimburse
Employee upon presentation of vouchers for reasonable expenses incurred by
Employee in the performance of her duties hereunder.
7. FRINGE BENEFITS
Employee shall be entitled to such fringe benefits paid for or
supplied by the Corporation and shall be further entitled to the following
provisions:
7.1 participation in retirement and employee benefit plans
such as 401k; stock options; education reimbursement; health, dental, accident,
disability, life, or group insurance plans; and other plans as the President of
Corporation determines from time to time to make available generally to the
other executive employees of Corporation.
7.2 the Corporation may elect to pay for the employee's entire
health insurance premium payments to the extent that this is offered to the
other executive employees of the Corporation.
7.3 those plans in which the Employee participates at the time
of the execution hereof shall not be terminated or otherwise discontinued or
amended in a manner having a detrimental effect on the Employee during the term
of this Agreement without the prior written consent of the Employee. In the
event of the termination of the Employee's employment by the Corporation for
any reason other than for cause or in the event the Employee terminates
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the agreement for cause or for any reason other than for cause, as set forth
herein, the Corporation shall continue to provide the benefits and make the
payments under those plans for the remaining term of this agreement.
7.3.1 The Employee may at any time direct the Corporation in
writing to assign the insurance policy or policies to the Employee in the event
of his termination for any reason whatsoever, whether or not for cause,
following which the Employee shall be fully responsible for payments on the
policy or policies and the Corporation's obligations under the policy or
policies shall cease.
8. DEATH OR DISABILITY
In the event Employee dies or becomes physically or mentally
disabled so that she is unable to perform her duties hereunder, this Agreement
shall not terminate and the compensation then payable by Corporation to
Employee pursuant to Section 5 hereof shall continue to be paid as if Employee
were not disabled in any way or had not died, until the end of the then current
term of employment pursuant to Section 2 hereof, provided however, Corporation
shall be entitled to credit against its obligation hereunder the amount of any
and all disability benefits received by Employee provided or paid for by
Corporation, pursuant to Section 7 hereof.
9. TERMINATION
9.1 Notwithstanding anything herein contained to the
contrary, subject to Section 8 hereof, Corporation shall have the right to
terminate this Agreement upon one day's notice for reasonable cause, which term
shall mean a material failing by Employee relating to, affecting adversely or
likely to affect adversely his duties hereunder.
9.1.1 In the event the Corporation terminates the agreement
for cause pursuant to 9.1 hereunder, Employee shall receive the full
compensation hereunder for a term of one year from date of notification of such
termination and shall include the continuation of benefits as defined in
Section 7 and Section 13 hereof, which is in addition to compensation pursuant
to Section 5 and shall not be reduced by these amounts, as if this Agreement
had not been terminated.
9.2 Notwithstanding anything herein contained to the
contrary, subject to Section 8 hereof, Corporation and Employee shall have the
right to terminate the agreement hereunder without cause.
9.2.1 In the event the Corporation terminates the agreement
without cause, pursuant to 9.2 hereunder, Employee shall receive the full
compensation hereunder for the then remaining term of this Agreement pursuant
to Section 2, including the continuation of benefits as defined in Section 7
and Section 13 hereof, which is in addition to compensation pursuant to Section
5 and shall not be reduced by these amounts, as if this Agreement had not been
terminated.
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9.3 Employee shall have the right to terminate the agreement
hereunder with cause upon not less than 30 days written notice for the
following reasons: a) in the event of a change in control of the Corporation as
described in Section 12, b) in the event of a change in control of the
Corporation as described in Section 12, in conjunction with any of the
following: (i) failure of the Corporation to provide the employee with any one
or more of the provisions of this agreement, (ii) any change in the position of
Employee set forth in Section 3 without prior written consent of employee, or,
(iii) any material decrease in the Employee's duties, responsibilities and
authorities, without the prior written consent of the Employee.
9.3.1 In the event of termination for cause by the Employee
pursuant to 9.3, employee will receive full compensation hereunder for the then
remaining term of this Agreement pursuant to Section 2, including the
continuation of benefits as defined in Section 7 and Section 13 hereof, which
is in addition to compensation pursuant to Section 5 and shall not be reduced
by these amounts, as if this Agreement had not been terminated.
10. COVENANTS BY EMPLOYEE
10.1 Employee hereby agrees that he shall not compete
with Corporation, as defined below, whether directly or indirectly, as a
principal, partner, stockholder, officer, director, employee, or in any other
capacity, for the following periods of time: (i) if the Corporation terminates
employment without cause as defined in Section 9.2 or if the employee
terminates employment with cause as defined in Section 9.3, the employee agrees
not to compete for a period of 45 days from the date of termination of this
contract; or (ii) if the Corporation terminates employment with cause pursuant
to Section 9.1 or if the employee terminates employment without cause, the
employee agrees not to compete for a period of 6 months from the date of
termination of this contract.
10.1.1 Compete in any manner whatsoever with the
business now or hereafter conducted by Corporation or any Affiliate (as
hereinafter defined); and
10.1.2 Solicit or attempt to solicit, sell, lease or
offer to sell or offer to lease, except on behalf of Corporation or any
affiliate, any present or future customer of Corporation or Affiliate any goods
or services competitive to the goods and services now or hereafter offered for
sale or lease by Corporation or any Affiliate.
10.2 The parties hereto recognize that the covenants
of Employee herein contained are unique and that in the event there is a breach
or threatened breach of such covenants, Corporation shall be entitled, in
addition to any other remedies available to it, to institute and prosecute
proceedings in any court of competent jurisdiction either in law or in equity,
to obtain damages for any breach of covenants or to enforce a specific
performance thereof by Employee, or to enjoin Employee from performing services
or doing any act in breach of such covenants.
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10.3 For the purposes of this Agreement, an
"Affiliate" of Corporation shall mean any person, partnership or corporation
which is controlled by, in common control with or controlling Corporation.
10.4 Employee agrees during the Term hereof and after
the termination of employment of Employee for any reason whatsoever the
Employee shall not disclose to any person, firm, partnership or corporation any
information concerning any of the methods of conducting business of Corporation
or any affiliate or any details relating thereto including the names of
suppliers, customers and methods of operation of Corporation or any of its
Affiliates which information is hereby acknowledged to be confidential in
nature. This provision shall not be construed to prevent Employee from using
any knowledge which she possessed at the time he commenced her employment with
corporation or from using any information which is not confidential.
11. INDEMNIFICATION
11.1 If litigation is brought to enforce or
interpret any provision hereof in the event of a change in control as described
in section 12, the Corporation shall indemnify the Employee for her reasonable
attorney's fees and disbursements incurred in such litigation.
11.2 The Corporation shall further indemnify
the Employee to the extent of the greater of the indemnification provided for
in any agreement, bylaw or charter provision of the Corporation, or any
provision of law, rule or regulation, any of which may be applicable to the
Employee or generally applicable to other executive officers of the Employee's
class.
12. CHANGE OF CONTROL
"Change in control" as used in this agreement
shall refer to any one or more of the following: (i) the acquisition in any
manner of the beneficial ownership of shares of the Corporation having 20% or
more of the total number of votes that may be cast for the election of one or
more directors of the Corporation by any person, or persons acting as a group
within the meaning of Section 13(d) of the Securities and Exchange Act of 1934,
if the Board has made a determination that such acquisition constitutes or will
constitute control of the Corporation; (ii) any liquidation, dissolution or
sale of all or substantially all of the assets of the Corporation; or (iii) any
action taken following, as a result of, or in connection with, any tender or
exchange, offer, merger or other business combination, sale of assets, proxy
contest or any combination of the foregoing whereby the persons who were the
Directors of the Corporation immediately prior to such action shall cease to
constitute a majority of the Board of the Corporation or any successor to the
Corporation. The term "person" refers to an individual, corporation, company
or other entity.
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13. VACATION
Employee shall be entitled to take vacations
at such time as shall reasonably be approved by Corporation which shall be not
more than three weeks per annum. Vacation over specified amounts per Company
policy not used per annum is forfeited. In the event of termination without
cause by Corporation or by Employee or with cause by Employee, Employee will
receive cash equivalent of vacation time not yet taken in accordance with
Company policy.
14. MISCELLANEOUS PROVISIONS
14.1 NOTICES
Any notice required or permitted to be given
under this Agreement shall be in writing, and shall be deemed to have been
given when delivered personally or sent by registered or certified mail,
postage prepaid, addressed as follows:
14.1.1 If to Corporation:
Ronald H. Deferrari, President
Plasma-Therm, Inc.
9509 International Court
St. Petersburg, FL 33716
14.1.2 If to Employee:
Diana DeFerrari
7119 Yardley Way
Tampa, FL 33647
The designation of the person to be so
notified or the address of such person for the purposes of such notice may be
changed from time to time by a similar notice to be effective ten (10) days
after such changed designation is supplied.
14.2 SITUS
This Agreement shall be governed by and
construed in accordance with the applicable laws of the State of Florida.
14.3 ENTIRE AGREEMENT
This Agreement constitutes the full and
complete understanding and agreement of the parties and supersedes all prior
understandings and agreements, and may not be modified or amended orally, but
only by an agreement in writing, signed by the party against whom enforcement
of any waiver, change, modification, extension or discharge is sought.
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14.4 BINDING EFFECT
This Agreement shall be binding upon
and inure to the benefit of the Corporation, its successors and assigns, and
Employee, her heirs and personal representatives.
IN WITNESS WHEREOF, the parties have executed
this Agreement the day and year first above written.
FOR PLASMA-THERM, INC.
/s/ Ronald H. Deferrari
----------------------------
Ronald H. Deferrari, CEO and
Chairman of the Board
EMPLOYEE
/s/ Diana DeFerrari
- -------------------
Diana DeFerrari