<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________
Commission File No. 001-11835
THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
(Exact name of small business issuer as specified in its charter)
Delaware 33-0659916
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5915 Rodeo Road
Los Angeles, CA 90016
(Address of principal executive offices)
Issuer's telephone number, including area code: (310) 841-5200
Check whether the issuer (1) 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 and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
State the number of shares of each of the issuer's classes of common stock as of
the latest practicable date: Common stock, $.01 par value, 4,439,755 shares
issued and outstanding on July 15, 1998.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE> 2
THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ------------
<S> <C> <C>
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 103 $ 92
Restricted cash -- 2,528
Accounts receivable, net 5,785 4,107
Inventories 4,497 3,742
Prepaid expenses and other current assets 448 659
-------- --------
Total current assets 10,833 11,128
Property and equipment, net of accumulated
depreciation of $2,019 and $1,589, respectively 5,971 6,235
Goodwill 4,984 5,078
Other assets 643 618
-------- --------
$ 22,431 $ 23,059
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 704 $ 4,212
Accounts payable 7,231 4,875
Accrued liabilities 2,032 3,137
-------- --------
Total current liabilities 9,967 12,224
Long-term debt, less current installments 4,467 4,205
Stockholders' equity:
Preferred stock, $.01 par value. Authorized 5,000 shares; none issued -- --
Common stock, $.01 par value. Authorized 15,000 shares; 4,442 and 4,394
issued and outstanding, respectively 44 44
Additional paid-in capital 12,296 12,194
Accumulated deficit (4,327) (5,237)
Treasury stock, at cost (16) (371)
-------- --------
Total stockholders' equity 7,997 6,630
-------- --------
Total liabilities and stockholders' equity $ 22,431 $ 23,059
======== ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
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THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 11,456 $ 9,396 $ 23,171 $ 16,548
Costs and expenses:
Materials 5,707 3,877 11,529 7,261
Manufacturing 2,384 2,524 4,897 4,293
Selling, general and administrative 2,126 2,154 4,477 3,587
Research and development 510 373 1,010 666
-------- -------- -------- --------
10,727 8,928 21,913 15,807
-------- -------- -------- --------
Income from operations 729 468 1,258 741
Other income (expense):
Interest expense (168) (160) (375) (244)
Interest and other income (1) 145 27 226
Minority interest -- 33 -- 103
-------- -------- -------- --------
(169) 18 (348) 85
-------- -------- -------- --------
Income before income taxes 560 486 910 826
Income tax expense -- 53 0 119
-------- -------- -------- --------
Net income $ 560 $ 433 $ 910 $ 707
======== ======== ======== ========
Net income per share:
Basic $ 0.13 $ 0.10 $ 0.21 $ 0.16
======== ======== ======== ========
Diluted $ 0.11 $ 0.10 $ 0.19 $ 0.16
======== ======== ======== ========
Weighted average number of shares:
Basic 4,440 4,394 4,400 4,338
======== ======== ======== ========
Diluted 4,920 4,555 4,730 4,506
======== ======== ======== ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
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THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 910 $ 707
Depreciation and amortization 694 512
Other non-cash charges -- 184
Changes in assets and liabilities (excluding acquisitions):
Accounts receivable (1,678) (2,045)
Inventories (755) (1,692)
Prepaid expenses and other assets 158 (770)
Accounts payable and accrued liabilities 1,251 1,062
Income taxes payable -- 111
-------- --------
Net cash provided by (used in) operating activities 580 (1,931)
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (280) (2,461)
Cash paid for acquisition -- (6,502)
-------- --------
Net cash used in investing activities (280) (8,963)
-------- --------
Cash flows from financing activities:
Borrowings under revolving credit lines 20,100 26,854
Repayments of revolving credit lines (19,706) (22,542)
Borrowings (repayments) of term loans (161) 544
Other notes payable (979) 1,383
Issuance of common stock 457 --
-------- --------
Net cash (used in) provided by financing activities (289) 6,239
-------- --------
Net increase (decrease) in cash and cash equivalents 11 (4,655)
Cash and cash equivalents at beginning
of period 92 4,655
-------- --------
Cash and cash equivalents at end of period $ 103 $ --
======== ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
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THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands)
(Unaudited)
1. Basis of Presentation
The information contained in the consolidated financial statements and
footnotes is condensed from that which would appear in the Company's annual
consolidated financial statements. Accordingly, these condensed consolidated
financial statements should be reviewed in conjunction with the consolidated
financial statements and related notes contained in the Annual Report on Form
10-KSB for the year ended December 31, 1997, filed with the Securities and
Exchange Commission. The unaudited condensed consolidated financial statements
as of June 30, 1998 and for the three-month and six-month periods ended June 30,
1998 and 1997 include all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation. The results of
operations for interim periods are not necessarily indicative of the results
that may be expected for the entire year. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.
The condensed consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries, Culver City Composites
Corporation and Grafalloy Corporation. All significant intercompany accounts and
transactions have been eliminated.
2. New Accounting Standards
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This statement
requires that all items recognized under accounting standards as components of
comprehensive earnings be reported in an annual financial statement. It also
requires that an entity classify items of other comprehensive earnings (e.g.,
foreign currency translation adjustments and unrealized gains and losses on
certain marketable securities) by their nature in an annual financial statement.
The Company's total comprehensive earnings for the three-month and six-month
periods ended June 30, 1998 and 1997 were the same as reported net income for
those periods.
The Company has also adopted Statement of Financial Accounting
Standards No. 131, "Disclosures About Segments of an Enterprise and Related
Information." This statement does not require interim period information in the
year of adoption.
Statement of Financial Accounting Standards No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits," is effective for
the year beginning January 1, 1998. The statement requires additional
information about changes in the benefit obligation and fair value of plan
assets. The company will include such disclosures in its annual financial
statements.
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3. Earnings per Share
Basic earnings per share amounts are computed by dividing net income by
the weighted-average number of common shares outstanding during the period.
Diluted per share data also includes the effect of stock options and warrants:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
----- ----- ----- -----
<S> <C> <C> <C> <C>
Weighted average shares 4,440 4,394 4,400 4,338
Effect of stock options/warrants 480 161 330 168
----- ----- ----- -----
Weighted average shares, assuming dilution 4,920 4,555 4,730 4,506
</TABLE>
4. Long-Term Debt
Long-term debt consisted of the following at June 30, 1998 and December
31, 1997:
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------ ------
<S> <C> <C>
Borrowings under revolving credit facilities $3,944 $3,167
Term loans, payable in monthly installments through 2000 702 863
Industrial development bond -- 2,500
Other 525 1,887
------ ------
5,171 8,417
Less current portion 704 4,212
------ ------
$4,467 $4,205
====== ======
</TABLE>
5. Subsequent Event
On July 8, 1998, the Company entered into an agreement with Cytec
Industries Inc. ("Cytec") pursuant to which Cytec will acquire all of the
outstanding shares of the Company in exchange for Cytec common shares in a
transaction designed to qualify as a tax-free reorganization. The Company's
stockholders will receive the equivalent of $6.00 per share in Cytec shares. The
transaction is subject to approval by the Company's stockholders and by
regulatory authorities, and is expected to close in the fourth quarter of 1998.
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THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Dollar amounts in thousands, except per share)
RESULTS OF OPERATIONS
The American Materials & Technologies Corporation ("AMT" or "the
Company") was incorporated in March 1995 to acquire and manage businesses in the
advanced materials and technologies industries. AMT acquired Culver City
Composites Corporation ("CCC"), a supplier of prepreg materials to the aerospace
industry, on December 19, 1995, and Grafalloy Corporation ("Grafalloy"), a
manufacturer of graphite golf club shafts, on February 27, 1997. The results of
operations of the acquired companies are included in the Company's financial
statements from the respective dates of acquisition.
The Company's operations, particularly those of Grafalloy, are subject
to seasonal fluctuations. Sales are strongest in the first two quarters of the
year and weakest in the fourth quarter.
Three months ended June 30, 1998 compared to three months ended June 30, 1997
Sales for the quarter ended June 30, 1998 were $11,456, an increase of
22% over sales of $9,396 in the corresponding quarter of 1997. CCC experienced
unit sales growth, while Grafalloy had flat unit sales with a 28% increase in
average selling price.
Gross profit (net sales less materials and manufacturing costs) for the
quarter ended June 30, 1998 was $3,365, or 29.4% of sales. This was an increase
of $370 compared to the second quarter of 1997, when gross profit was $2,995, or
31.9% of sales. The decline in gross margin percentage resulted from higher
material costs at CCC from changes in sales mix and raw material price increases
that were not passed on to customers. This negative impact was partially offset
by higher margins at Grafalloy. Material costs were 50% of sales in the second
quarter of 1998, compared to 41% in the second quarter of 1997. However,
manufacturing costs decreased significantly, to 21% of sales compared to 27% in
the prior year period because of product mix changes and efficiencies from
higher production volumes.
Research and development expenses were $510 in the second quarter of
1998 compared to $373 in the prior year's second quarter, an increase of 37%. As
a percentage of sales, research and development increased to 4.5% from 4%. The
Company has expanded its activities to develop new products and to qualify
existing and new products with additional customers.
Selling, general and administrative expenses were $2,126 in the quarter
ended June 30, 1998, or 19% of sales. In the prior year quarter, these expenses
were $2,154 or 23% of sales. The lower percentage reflects the timing of certain
sales and promotional expenses in the first and second quarters of 1998, as well
as the impact of expense reductions instituted late in 1997.
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Interest expense for the second quarter of 1998 was $168 compared to
$160 in the prior year's quarter. The increase of 5% reflects higher average
amounts borrowed on the Company's credit facilities to support higher levels of
accounts receivable and inventories.
No income tax was provided in the quarter ended June 30, 1998, due to
the availability of net operating loss carryforwards. In the second quarter of
1997 taxes were accrued at an effective rate of 11%.
The Company reported net income of $560 or $0.11 per share for the
quarter ended June 30, 1998, compared to net income of $433 or $.10 per share in
the same period of 1997, an increase in net income of 29%. The percentage
increase in diluted earnings per share was 20%.
Six months ended June 30, 1998 compared to six months ended June 30, 1997
Sales for the six months ended June 30, 1998 were $23,171, an increase
of 40% over sales of $16,548 in the corresponding period of 1997. The pro forma
sales growth, assuming Grafalloy had been acquired on January 1, 1997, was 27%.
Unit sales increased at CCC, while at Grafalloy most of the sales growth came
from higher average selling prices.
Gross profit for the first six months of 1998 was $6,745, or 29.1% of
sales, compared to $4,994 (30.2% of sales) in the first six months of 1997. The
lower gross margin percentage is the result of higher material costs--50% vs.
44%--due to a change in product mix and higher raw material costs at CCC. This
was partly offset by lower manufacturing costs. These costs were 21% of sales in
the first half of 1998 compared to 26% of sales in the first half of 1997,
because of efficiencies from higher production volumes and changes in product
mix.
Research and development expenses rose to $1,010 in the six months
ended June 30, 1998, an increase of 52% over R&D expenses of $666 in the
corresponding prior year period. As noted above, the Company has expanded its
activities to develop new products and to qualify its products with additional
customers. The increase also reflects the inclusion of Grafalloy for six months
in 1998 compared to four months in the 1997 period.
Selling, general and administrative expenses were $4,477 for the first
six months of 1998, an increase of $890, or 25% compared to expenses of $3,587
in the comparable period of 1997. The percentage increase was substantially less
than the 40% increase in sales, reflecting a renewed emphasis on cost controls.
Interest expense was $375 for the first six months of 1998 compared to
$244 in the comparable 1997 period. The Company's borrowings increased in
February 1997 with the acquisition of Grafalloy. Average interest rates have
been largely unchanged. The Company recorded royalties and interest income of
$329 in the first half of 1997, representing an advance on royalties under a
five-year license renewal to a foreign company and interest income on invested
cash prior to the Grafalloy purchase.
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No income taxes were provided in the first half of 1998, while taxes
were accrued at an effective rate of 14% in the first half of 1997, both rates
reflecting the availability of net operating loss carryforwards.
The Company had net income of $910 for the first six months of 1998,
with diluted earnings per share of $0.19. In the comparable period of 1997, net
income was $657, while diluted earnings per share were $0.16. Net income
increased 29%, and diluted per share earnings rose 23%.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations in the first six months of 1998 was $580,
compared to cash used in operations of $1,931 in the first half of 1997,
reflecting higher earnings and improved working capital management. Working
capital increased to $916 at June 30, 1998, compared to a deficit of $1,096 at
December 31, 1997, while long-term debt increased by only $262.
In January 1998 the Company issued 172,582 shares of common stock (from
shares held in treasury) upon the exercise of employee stock options. Payment
was made by the cancellation of notes payable of $345. In April 1998 the Company
issued 47,985 shares of common stock in payment of professional services (valued
at $100,000).
At June 30, 1998, a total of $3,944 was borrowed under the Company's
revolving credit lines, and approximately $1,800 was available based on eligible
collateral. Because of seasonal factors in its business, the Company expects to
incur an operating loss for the second half of 1998. However, credit line
availability is expected to be sufficient to meet cash operating requirements,
including capital expenditures.
At December 31, 1997, the Company had a net operating loss carryforward
for federal income tax purposes of $3,900 available to offset taxable income of
the Company through 2012. Additional carryforwards of approximately $32,165 are
available as a result of the acquisition of CCC in December 1995. The
change-in-ownership provisions of Section 382 of the Internal Revenue Code limit
the amount available to offset future taxable income to approximately $500 per
year through 2010.
FUTURE OPERATING RESULTS
The matters discussed in this Form 10-QSB other than historical
material are forward-looking statements under the federal securities laws. The
Company advises readers not to place undue reliance on such statements in light
of the risks and uncertainties to which they are subject. Actual events or
results may differ materially as a result of risks and uncertainties facing the
Company, including:
Competition - The Company encounters significant competition in
domestic markets from a number of well-established manufacturers in each of its
product lines, and from foreign sources for some products. In most product
markets the Company faces competition from other manufacturers that have larger
market shares or other competitive advantages.
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Pending Acquisition - The Company's proposed merger with Cytec
Industries Inc. is subject to various regulatory reviews and the approval of the
Company's stockholders. A failure to complete the transaction would likely have
a material adverse effect on the market price of the Company's common stock.
Pricing Pressures - The aerospace and defense industries have seen
increased concentration in recent years as a result of a number of business
combinations. These larger companies are in a position to negotiate favorable
pricing terms from their suppliers, including the Company. The Company's ability
to maintain its profit margins will depend on the technical and functional
features of its products and the development of new products.
Dependence on Major Customers - Approximately 29% of the Company's
sales in 1997 were made to three customers. The loss of a significant amount of
business from any of these customers would have a material adverse effect on the
sales and operating results of the Company.
Cyclical Nature of the Aerospace Industry - The aerospace industry,
including transportation and communications, accounted for approximately 60% of
the Company's sales in 1997. This industry historically has been subject to
cyclical downturns. For example, after increasing each year from 1985 to 1991,
annual revenues in the aerospace industry dropped significantly in 1992 and
remained depressed through late 1995.
Raw Material Costs - In the past few years, prices paid by the Company
for certain raw materials, such as fabric and resins, have fluctuated. When
prices have increased, the Company has not always been able to pass along the
full effect of such increases to its customers in order to maintain or enhance
its market position.
New Products - The Company's ability to enhance existing products and
introduce new products on a timely and cost-effective basis that meet evolving
customer requirements will be important to its future operating results. Delays
in introduction or a disappointing market acceptance could have an adverse
effect on the Company's business.
Government Regulation - The Company must comply with a number of
federal and state environmental regulations. Although these regulations have not
had a significant adverse effect on the overall operations of the Company, the
costs of compliance could increase in future years.
International Operations - A small but increasing portion of the
Company's sales in recent years has been derived from its international
operations. The Company's operating results could be significantly affected by
such factors as foreign exchange fluctuations, difficulties in staffing and
managing foreign operations, and other risks associated with international
activities.
The Company disclaims any obligation to update any of the factors that
may affect future operating results or to announce publicly the result of any
revisions to any of the forward-looking statements contained in this Form
10-QSB, or to make corrections to reflect future events or developments.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's annual meeting of stockholders, held on May 28, 1998,
Mr. Paul W. Pendorf was elected as a Class I Director for a three-year term. Mr.
Pendorf received the affirmative vote of 3,878,537 shares, while authority was
withheld on 34,000 shares. Messrs. Steven Georgiev, Robert V. Glaser and Buster
C. Glosson continued as directors, with terms expiring in 1999, 2000 and 2000,
respectively.
The Company's stockholders approved an amendment to the 1997 Stock
Option Plan to provide for an annual increase in the number of shares available
for grant. The amendment received 1,746,125 affirmative votes, while 174,323
shares voted against and 38,225 shares abstained. There were 1,953,864 broker
non-votes.
Stockholders also ratified the selection of Feldman Sherb Ehrlich &
Co., PC (formerly Feldman Radin & Co., P.C.) as the Company's auditors, with
3,875,237 affirmative votes, 28,750 negative votes, and 8,550 shares abstaining.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Number Description
- ------ -----------
<S> <C>
10.54 Employment Agreement dated March 13, 1998, between the Company and Paul W. Pendorf
10.55 Employment Agreement dated April 16 , 1998, between the Company and Leslie J. Cohen
10.56 Fifth Amendment to Lease Agreement, dated April 22, 1998, between Grafalloy, Inc. and Robert and
Alice C. Campbell
10.57 Employment Agreement dated October 13, 1997, as restated, between the Company and James L. Russell
10.58 Consulting Agreement dated March 13, 1998 between the Company and Steven Georgiev
10.59* 1997 Stock Option Plan, as amended
27 Financial Data Schedule
</TABLE>
- --------------------------
* Incorporated by reference to the definitive proxy statement for the
Company's annual meeting of stockholders held on May 28, 1998.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30,
1998.
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THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
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.
THE AMERICAN MATERIALS &
TECHNOLOGIES CORPORATION
Date: July 24, 1998 /s/ James L. Russell
----------------------------------------
James L. Russell
Vice President and
Chief Financial Officer
(Principal Financial Officer)
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Exhibit 10.54
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") made as of March 25, 1998,
between The American Materials & Technologies Corporation, a Delaware
corporation (the "Company"), and Paul W. Pendorf, an individual (the
"Employee"),
W I T N E S S E T H T H A T:
WHEREAS, the Company desires to employ Employee as its President and
Chief Executive Officer for the period and upon and subject to the terms herein
provided; and
WHEREAS, the Company desires to be assured that Employee will not
compete with the Company for the period and within the geographical areas
hereinafter specified; and
WHEREAS, Employee is willing to agree to be employed by the Company for
the period and upon and subject to the terms herein provided; and
WHEREAS, Employee does not desire to work for the Company in a position
lower than that of President and Chief Executive Officer and is willing to agree
not to compete with the Company;
NOW, THEREFORE, in consideration of the premises, the parties hereto
covenant and agree as follows:
Section 1. Term of Employment; Compensation. The Company agrees to
employ Employee from the date hereof until March 25, 2001 as President and Chief
Executive Officer, with the responsibilities normally associated with such
position. The Company will pay Employee for his services during the term of the
Employee's employment hereunder at an annual rate of One Hundred Sixty Five
Thousand Dollars ($165,000) (the "Base Salary"), payable in arrears, in equal
installments, in accordance with standard Company practice, but in any event not
less often than monthly, subject only to such payroll and withholding deductions
as are required by law. The Base Salary shall be reviewed, and may be increased,
annually by the Board of Directors. Employee also shall receive a bonus in
January, 1999 of 60% of the Base Salary if the Company's earnings per share for
fiscal 1998 equal or exceed $0.16 and 100% of the Base Salary if the Company's
earnings per share for fiscal 1998 equal or exceed $0.36 per share. In addition,
there shall be an annual extraordinary bonus of 20% of the Base Salary if
additional criteria to be agreed upon by Employee and the Company are achieved.
Employee is entitled to similar or larger bonuses in January 2000 and January
2001 based upon appropriate criteria agreed on by the Company and Employee.
The Company shall pay for and be named beneficiary of a $1,000,000 "key
man" life insurance policy. The Company shall pay for, and Employee (or a person
or entity designated by Employee) shall be the beneficiary of, a $1,000,000 life
insurance policy. In the event that
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Employee shall cease to be employed by the Company, this policy shall be
transferred to Employee at his cost.
Section 2. Office and Duties. Employee shall have the usual duties of
President and Chief Executive Officer and shall have responsibility, subject to
the Board of Directors of the Company, for participating in the management and
direction of the Company's business and operations and shall perform such
specific other tasks, consistent with the Employee's position as President and
Chief Executive Officer as may from time to time be assigned to the Employee by
the Board of Directors. Employee shall devote substantially all of his business
time, labor, skill, undivided attention and best ability to the performance of
his duties hereunder in a manner which will faithfully and diligently further
the business and interests of the Company. During the term of his employment,
Employee shall not directly or indirectly pursue any other business activity,
without the Company's prior written consent, which shall not be unreasonably
withheld. Employee agrees that he will travel to whatever extent is reasonably
necessary in the conduct of the Company's business.
Section 3. Expenses. Employee shall be entitled to (i) $1,500 per month
of temporary housing allowance, (ii) a rental car provided by the Company and
(iii) reimbursement for expenses incurred by him in connection with the
performance of his duties hereunder upon receipt of vouchers therefore in
accordance with such procedures as the Company has heretofore or may hereafter
establish.
Section 4. Vacation During Employment. Employee shall be entitled to
such reasonable vacations as may be allowed by the Company in accordance with
general practices to be established, but in any event not less than four (4)
weeks during each twelve (12) month period.
Section 5. Additional Benefits. Nothing herein contained shall preclude
Employee, to the extent he is otherwise eligible, from participation in all
group insurance programs or other fringe benefit plans which the Company may
hereafter in its sole and absolute discretion make available generally to its
employees, but neither the Company shall be required to establish or maintain
any such program or plan.
Section 6. Termination of Employment. Notwithstanding any other
provision of this Agreement, Employee's employment may be terminated:
(a) By the Company in the event of his willful misconduct in the
performance of his duties hereunder, or his conviction of a crime involving
moral turpitude.
(b) By the Company upon thirty (30) days' notice to Employee if he
should be prevented by illness, accident or other disability (mental or
physical) from discharging his duties hereunder for one or more periods totaling
three (3) months during any consecutive twelve (12) month period. This judgment
should be based upon the reasonable medical opinion of a qualified physician
after reasonable accommodations have been made consistent with the Americans
with Disabilities Act.
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(c) In the event of Employee's death during the term of his employment,
the Company's obligation to pay further compensation hereunder shall cease
forthwith, except that Employee's legal representative shall be entitled to
receive his fixed compensation for the period up to six (6) months after the
month in which such death shall have occurred.
(d) By the Company without cause upon not less than thirty (30) days'
written notice in which event the Company shall pay to Employee an amount equal
to the greater of (i) 1.6 times all Base Salary remaining to be paid hereunder
or (ii) two times the Base Salary.
(e) By the Company within twelve months of a "Change in Control" (as
hereinafter defined) Employee shall be paid the greater of (i) the amounts which
would be due under clause (e) of this Section 6 or (ii) two years of Base
Salary; and in addition to the forgoing, all unvested options granted to the
Employee shall vest immediately. "Change of Control" shall mean (a) any change
in the board of directors of the Company after which the current directors of
the Company, or persons nominated or appointed to serve as directors by the
current directors of the Company, shall cease to constitute a majority of the
directors of the Company or (b) any change in the ownership of the capital stock
of the Company after which any individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity shall
acquire capital stock with a majority of the voting power of the capital stock
of the the Company necessary to elect directors to the board of directors of the
Company.
Section 7. Disclosure and Assignment of Intellectual Property. Employee
shall promptly disclose to the Company and any successor or assign of the
Company, and grant to the Company, and its successors and assigns (without any
separate remuneration or compensation other than that received by him from time
to time in the course of his employment) his entire right, title and interest
throughout the world in and to all research, information, inventions, designs,
procedures, developments, discoveries, improvements, patents and applications
therefor, trademarks and applications therefor, copyrights and applications
therefor, trade secrets, drawings, plans, systems, methods, specifications, and
all other manufacturing, engineering, technical, research and development data
and know-how (herein sometimes "Intellectual Property") made, conceived,
developed and/or acquired by him solely or jointly with others during the period
of his employment with the Company or within one year thereafter, which relate
to the manufacture, production or processing of any products developed or sold
by the Company during the term of this Agreement or which are within the scope
of or usable in connection with the Company's business as it may, from time to
time, hereafter be conducted or proposed to be conducted. (It is understood and
agreed that Employee has heretofore disclosed to the Company, and assigned to
it, all Intellectual Property now known to him over which he has any control.)
Section 8. Confidentiality. Employee shall not, either during the
period of his employment with the Company or thereafter, reveal or disclose to
any person outside the Company or use for his own benefit, without the Company's
specific written authorization, whether by private communication or by public
address or publication or otherwise, any information not already lawfully
available to the public concerning any Intellectual Property, or any marketing
technique or cost method, or any customer, mailing or supplier list, whether or
not supplied by the Company, and whether or not made, developed and/or conceived
by Employee or by others in the employ of the Company. All originals and copies
of any of the foregoing,
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relating to the business of the Company, however and whenever produced, shall be
the sole property of the Company, not to be removed from the premises or custody
of the Company without in each instance first obtaining written consent or
authorization of the Company. Upon the termination of Employee's employment in
any manner or for any reason, Employee shall promptly surrender to the Company
all copies of any of the foregoing, together with any other documents,
materials, data, information and equipment belonging to or relating to the
Company's business and in his possession, custody or control, and Employee shall
not thereafter retain or deliver to any other person, any of the foregoing or
any summary or memorandum thereof.
Section 9. Restriction. The Company has invested and may in the future
be required to invest substantial sums of money, directly or indirectly, to
continue and expand the business heretofore conducted by it and in connection
therewith, and as Employee recognizes that the Company would be substantially
injured by Employee disclosing to others, or by Employee using for his own
benefit, any Intellectual Property or any of the other types of information
referred to in Section 8 or other confidential or secret information he has
obtained or shall obtain as an employee of the Company, or which he may now
possess and which he has made available to the Company, Employee agrees that
during the period of his employment hereunder and for a period ending one (1)
year after the term of this Agreement:
(a) Neither he nor any member of his family will be interested,
directly or indirectly, as an investor in any other business or enterprise in
the United States similar to that of the Company or in competition with the
Company (except as an investor in securities listed on a national securities
exchange or actively traded over the counter so long as such investments are in
amounts not significant as compared to his total investments or to the aggregate
of the outstanding securities of the issuer of the same class or issue); and
(b) He will not, directly or indirectly, for his own account or as
employee, officer, director, partner, joint venturer or otherwise, engage within
the United States, in any phase of the business of preimpregnated paper and
fabric used in aerospace or sporting goods applications or otherwise compete
with the Company in such geographic area in any other business in which the
Company is engaged and for which he has responsibility.
Employee and the Company are of the belief that the period of time and
the area herein specified are reasonable, in view of the nature of the business
in which the Company is engaged and proposes to engage, the state of its product
development and Employee's knowledge of this business. However, if such period
or such area should be adjudged unreasonable in any judicial proceeding, then
the period of time shall be reduced by such number of months or such area shall
be reduced by elimination of such portion of such area, or both, as are deemed
unreasonable, so that this covenant may be enforced in such area and during such
period of time as is adjudged to be reasonable.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered or
three (3) days after mailing if mailed by first-class, registered or certified
mail, postage prepaid, addressed (a) if to Employee, at his home address of
record or to such other person(s) or address(es) as Employee shall have
furnished to the Company in writing; and (b) if to the Company, The American
Materials &
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Technologies Corporation, Attn: Chairman of the Board, or to such other
person(s) or address(es) as the Company shall have furnished to Employee in
writing.
Section 11. Assignability. In the event that the Company shall be
merged with, or consolidated into, any other corporation, or in the event that
it shall sell and transfer substantially all of its assets to another
corporation, the terms of this Agreement shall inure to the benefit of, and be
assumed by, the corporation resulting from such merger or consolidation, or to
which the Company's assets shall be sold and transferred. This Agreement shall
not be assignable by Employee, but it shall be binding upon, and to the extent
provided in Section 6 shall inure to the benefit of, his heirs, executors,
administrators and legal representatives.
Section 12. Entire Agreement. This Agreement contains the entire
agreement between the Company and Employee with respect to the subject matter
thereof and there have been no oral or other agreement of any kind whatsoever as
a condition precedent or inducement to the signing of this Agreement or
otherwise concerning this Agreement or the subject matter hereof.
Section 13. Expenses. Each party shall pay its own expenses incident to
the performance or enforcement of this Agreement, including all fees and
expenses of its counsel for all activities of such counsel undertaken pursuant
to this Agreement, except as otherwise herein specifically provided.
Section 14. Equitable Relief. Employee recognizes and agrees that the
Company's remedy at law for any breach of the provisions of Sections 7, 8 or 9
hereof would be inadequate, and he agrees that for breach of such provisions,
the Company shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in this Agreement, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by law. Should Employee engage in any activities prohibited by
this Agreement, he agrees to pay over to the Company all compensation,
remunerations or moneys or property of any sort received in connection with such
activities; such payment shall not impair any rights or remedies of the Company
or obligations or liabilities of Employee which such parties may have under this
Agreement or applicable law.
Section 15. Waivers and Further Agreements. Any waiver of any terms or
conditions of this Agreement shall not operate as a waiver of any other breach
of such terms or conditions or any other term or condition, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof; provided, however, that no such written waiver,
unless it, by its own terms, explicitly provides to the contrary, shall be
construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance with such provision. Each of the parties hereto agrees to execute all
such further instruments and documents and to take all such further action as
the other party may reasonably require in order to effectuate the terms and
purposes of this Agreement.
Section 16. Amendments. This Agreement may not be amended, nor shall
any waiver, change, modification, consent or discharge be effected except by an
instrument in writing
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<PAGE> 6
executed by or on behalf of the party against whom enforcement of any waiver,
change, modification, consent or discharge is sought.
Section 17. Severability. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative or unenforceable
as applied to any particular case in any jurisdiction or jurisdictions, or in
all jurisdictions or in all cases, because of the conflicting of any provision
with any constitution or statute or rule of public policy or for any other
reason, such circumstance shall not have the effect of rendering the provision
or provisions in question, invalid, inoperative or unenforceable in any other
jurisdiction or in any other case or circumstance or of rendering any other
provision or provisions herein contained invalid, inoperative or unenforceable
to the extent that such other provisions are not themselves actually in conflict
with such constitution, statute or rule of public policy, but this Agreement
shall be reformed and construed in any such jurisdiction or case as if such
invalid, inoperative or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case.
Section 18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement, it shall not be necessary to produce
more than one of such counterparts.
Section 19. Section Headings. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 20. General Provisions.
(a) Employee further agrees that his obligations under
Sections 7, 8 and 9 of this Agreement shall be binding upon him irrespective of
the duration of his employment by the Company, the reasons for any cessation of
his employment by the Company, or the amount of his compensation and shall
survive the termination of this Agreement (whether such termination is by the
Company, by Employee, upon expiration of this Agreement or otherwise).
(b) Employee represents and warrants to the Company that he is
not now under any obligations to any person, firm or corporation, and has no
other interest which is inconsistent or in conflict with this Agreement, or
which would prevent, limit or impair, in any way, the performance by him of any
of the covenants or his duties in his said employment.
Section 21. Gender. Whenever used herein, the singular number shall
include the plural, the plural shall include the singular, and the use of any
gender shall include all genders.
Section 22. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of the State of California.
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<PAGE> 7
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
By: /s/ Buster C. Glosson Date: March 13, 1998
-------------------------------------- -------------------
Buster C. Glosson
Chairman, Compensation Committee
/s/ Paul W. Pendorf Date: March 13, 1998
- -------------------------------------------- --------------------
Employee
7
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Exhibit 10.55
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") made as of April 17, 1998,
between The American Materials & Technologies Corporation, a Delaware
corporation (the "Company"), and Leslie J. Cohen, an individual (the
"Employee"),
WITNESSETH THAT:
WHEREAS, the Company desires to employ Employee as its Vice President
for the period and upon and subject to the terms herein provided; and
WHEREAS, the Company desires to be assured that Employee will not
compete with the Company for the period and within the geographical areas
hereinafter specified; and
WHEREAS, Employee is willing to agree to be employed by the Company for
the period and upon and subject to the terms herein provided; and
WHEREAS, Employee does not desire to work for the Company in a position
lower than that of Vice President and is willing to agree not to compete with
the Company;
NOW, THEREFORE, in consideration of the premises, the parties hereto
covenant and agree as follows:
Section 1. Term of Employment; Compensation. The Company agrees to
employ Employee from the date hereof until April 16, 1999 as Vice President,
with the responsibilities normally associated with such position. Thereafter,
the Agreement shall continue in one year increments or on an "evergreen" basis.
The Company will pay Employee for his services during the term of the Employee's
employment hereunder at an annual rate of One Hundred and Three Thousand Dollars
($103,000) (the 'Base Salary"), payable in arrears, in equal installments, in
accordance with standard Company practice, but in any event not less often than
monthly, subject only to such payroll and withholding deductions as are required
by law. Employee also is eligible to receive a bonus in April, 1999 of up to 25%
of the Base Salary if criteria to be agreed upon by Employee and the Company are
achieved.
The Company shall pay for, and Employee shall designate the Company as
beneficiary of a $l,000,000 life insurance policy. Mrs. Cohen has waived her
marital rights as beneficiary.
Section 2. Office and Duties. Employee shall have the usual duties of
Vice President and shall have responsibility, subject to the President and CEO
of the Company, for participating in the management and direction of the
Company's business and operations and shall perform such specific other tasks,
consistent with the Employee's position as Vice President as may from time to
time be assigned to the Employee by the President of the Company. Employee shall
devote substantially all of his business time, labor, skill, undivided attention
and best ability to the performance of his duties hereunder in a manner which
will faithfully and diligently further
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<PAGE> 2
the business and interests of the Company. During the term of his employment,
Employee shall not directly or indirectly pursue any other business activity
without the Company's prior written consent, which shall not be unreasonably
withheld. Employee agrees that he will travel to whatever extent is reasonably
necessary in the conduct of the Company's business. Air travel shall be coach
class, with upgrade to business class on a trip by trip basis with the advance
written approval of the Company President.
Section 3. Expenses. Employee shall be entitled to (i) a rental car
provided by the Company and (ii) reimbursement for expenses incurred by him in
connection with the performance of his duties hereunder upon receipt of vouchers
therefore in accordance with such procedures as the Company has heretofore or
may hereafter establish.
Section 4. Vacation During Employment. Employee shall be entitled to
such reasonable vacations as may be allowed by the Company in accordance with
general practices to be established, but in any event not less than four (4)
weeks annually.
Section 5. Additional Benefits. Nothing herein contained shall preclude
Employee, to the extent he is otherwise eligible, from participation in all
group insurance programs or other fringe benefit plans which the Company may
hereafter in its sole and absolute discretion make available generally to its
employees, but neither the Company shall be required to establish or maintain
any such program or plan.
Section 6. Termination of Employment. Notwithstanding any other
provision of this Agreement, Employee's employment may be terminated:
(a) By the Company in the event of his failure, refusal or inability
satisfactorily to perform the services required of him hereby, or to carry out
any proper direction by the Company with respect to the services to be rendered
by him hereunder of the manner of rendering such services, his willful
misconduct in the performance of his duties hereunder, or his conviction of a
crime involving moral turpitude.
(b) By the Company upon thirty (30) days' notice to Employee if he
should be prevented by illness, accident or other disability (mental or
physical) from discharging his duties hereunder for one or more periods totaling
three (3) months during any consecutive twelve (12) month period. This judgment
should be based upon the reasonable medical opinion of a qualified physician
after reasonable accommodations have been made consistent with the American with
Disabilities Act.
(c) In the event of Employee's death during the term of his employment,
the Company's obligation to pay further compensation hereunder shall cease
forthwith, except that Employee's legal representative shall be entitled to
receive his fixed compensation for the period up to the last day of the month in
which such death shall have occurred. All unvested stock option shall vest upon
employee's death.
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(d) By the Company without cause upon not less than thirty (30) days'
written notice in which event the Company shall pay to Employee an amount equal
to six months Base Salary.
(e) By the Company within twelve months of a "Change in Control" (as
hereinafter defined) Employee shall be paid two years Base Salary, and all
unvested options granted to the Employee shall vest immediately. "Change of
Control" shall mean (a) any change in the board of directors of the Company
after which the current directors of the Company, or persons nominated or
appointed to serve as directors by the current directors of the Company, shall
cease to constitute a majority of the directors of the Company or (b) any change
in the ownership of the capital stock of the Company after which any individual,
corporation, partnership, joint venture, association, trust, unincorporated
organization or other entity shall acquire capital stock with a majority of the
voting power of the capital stock of the Company necessary to elect directors to
the board of directors of the Company.
Section 7. Disclosure and Assignment of Intellectual Property. Employee
shall promptly disclose to the Company and any successor or assign of the
Company, and grant to the Company, and its successors and assigns (without any
separate remuneration or compensation other than that received by him from time
to time in the course of his employment) his entire right, title and interest
throughout the world in and to all research, information, inventions, designs,
procedures, developments, discoveries, improvements, patents and applications
therefor, trademarks and applications therefor, copyrights and applications
therefor, trade secrets, drawings, plans, systems, methods, specifications, and
all other manufacturing, engineering, technical, research and development data
and know-how (herein sometimes "Intellectual Property") made, conceived,
developed and/or acquired by him solely or jointly with others during the period
of his employment with the Company or within one year thereafter, which relate
to the manufacture, production or processing of any products developed or sold
by the Company during the term of this Agreement or which are within the scope
of or usable in connection with the Company's business as it may, from time to
time, hereafter be conducted or proposed to be conducted. (It is understood and
agreed that Employee has heretofore disclosed to the Company, and assigned to
it, all Intellectual Property now known to him over which he has any control).
Section 8. Confidentiality. Employee shall not, either during the
period of his employment with the Company or thereafter, reveal or disclose to
any person outside the Company or use for his own benefit, without the Company's
specific written authorization, whether by private communication or by public
address or publication or otherwise, any information not already lawfully
available to the public concerning any Intellectual Property, or any marketing
technique or cost method, or any customer, mailing or supplier list, whether or
not supplied by the Company, and whether or not made, developed and/or conceived
by Employee or by others in the employ of the Company. All originals and copies
of any of the foregoing, relating to the business of the Company, however and
whenever produced, shall be the sole property of the Company, not to be removed
from the premises or custody of the Company without in each instance first
obtaining written consent or authorization of the Company. Upon the termination
of Employee's employment in any manner or for any reason, Employee shall
promptly surrender to the Company all copies of any of the foregoing, together
with any other documents, materials, data, information and equipment belonging
to or relating to the Company's
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business and in his possession, custody or control, and Employee shall not
thereafter retain or deliver to any other person, any of the foregoing or any
summary or memorandum thereof.
Section 9. Restriction. The Company has invested and may in the future
be required to invest substantial sums of money, directly or indirectly, to
continue and expand the business heretofore conducted by it and in connection
therewith, and as Employee recognizes that the Company would be substantially
injured by Employee disclosing to others, or by Employee using for his own
benefit, any Intellectual Property or any of the other types of information
referred to in Section 8 or other confidential or secret information he has
obtained or shall obtain as an employee of the Company, or which he may now
possess and which he has made available to the Company, Employee agrees that
during the period of his employment hereunder and for a period ending one (1)
year after the term of this Agreement:
(a) Neither he nor any member of his family will be interested,
directly or indirectly, as an investor in any other business or enterprise in
the United States similar to that of the Company or in competition with the
Company (except as an investor in securities listed on a national securities
exchange or actively traded over the counter so long as such investments are in
amounts not significant as compared to his total investments or to the aggregate
of the outstanding securities of the issuer of the same class or issue); and
(b) He will not, directly or indirectly, for his own account or as
employee, officer, director, partner, joint venturer or otherwise, engage within
the United States, in any phase of the business of preimpregnated paper and
fabric used in aerospace or sporting goods applications or otherwise compete
with the Company in such geographic area in any other business in which the
Company is engaged and for which he has responsibility.
Employee and the Company are of the belief that the period of time and
the area herein specified are reasonable, in view of the nature of the business
in which the Company is engaged and proposes to engage, the state of its product
development and Employee's knowledge of this business. However, if such period
or such area should be adjudged unreasonable in any judicial proceeding, then
the period of time shall be reduced by such number of months or such area shall
be reduced by elimination of such portion of such area, or both, as are deemed
unreasonable, so that this covenant may be enforced in such area and during such
period of time as is adjudged to be reasonable.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered or
three (3) days after mailing if mailed by first-class, registered or certified
mail, postage prepaid, addressed (a) if to Employee, at 701 Holmby Avenue, Los
Angeles, California 90024 or to such other person(s) or address(es) as Employee
shall have furnished to the Company in writing; and (b) if to the Company, The
American Materials & Technologies Corporation, Attn: President, or to such other
person(s) or address(es) as the Company shall have furnished to Employee in
writing.
Section 11. Assignability. In the event that the Company shall be
merged with, or consolidated into, any other corporation, or in the event that
it shall sell and transfer substantially all of its assets to another
corporation, the terms of this Agreement shall inure to the benefit of,
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<PAGE> 5
and be assumed by, the corporation resulting from such merger or consolidation,
or to which the Company's assets shall be sold and transferred. This Agreement
shall not be assignable by Employee, but it shall be binding upon, and to the
extent provided in Section 6 shall inure to the benefit of, his heirs,
executors, administrators and legal representatives.
Section 12. Entire Agreement. This Agreement contains the entire
agreement between the Company and Employee with respect to the subject matter
thereof and there have been no oral or other agreement of any kind whatsoever as
a condition precedent or inducement to the signing of this Agreement or
otherwise concerning this Agreement or the subject matter hereof.
Section 13. Expenses. Each party shall pay its own expenses incident to
the performance or enforcement of this Agreement, including all fees and
expenses of its counsel for all activities of such counsel undertaken pursuant
to this Agreement, except as otherwise herein specifically provided.
Section 14. Equitable Relief. Employee recognizes and agrees that the
Company's remedy at law for any breach of the provisions of Sections 7, 8 or 9
hereof would be inadequate, and he agrees that for breach of such provisions,
the Company shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in this Agreement, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by law. Should Employee engage in any activities prohibited by
this Agreement, he agrees to pay over to the Company all compensation,
remunerations or moneys or property of any sort received in connection with such
activities; such payment shall not impair any rights or remedies of the Company
or obligations or liabilities of Employee which such parties may have under this
Agreement or applicable law.
Section 15. Waivers and Further Agreements. Any waiver of any terms or
conditions of this Agreement shall not operate as a waiver of any other breach
of such terms or conditions or any other term or condition, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof; provided, however, that no such written waiver,
unless it, by its own terms, explicitly provides to the contrary, shall be
construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance with such provision. Each of the parties hereto agrees to execute all
such further instruments and documents and to take all such further action as
the other party may reasonably require in order to effectuate the terms and
purposes of this Agreement.
Section 16. Amendments. This Agreement may not be amended, nor shall
any waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any waiver, change, modification, consent or discharge is sought.
Section 17. Severability. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative or unenforceable
as applied to any particular case in any jurisdiction or jurisdictions, or in
all jurisdictions or in all cases, because of the conflicting of
5
<PAGE> 6
any provision with any constitution or statute or rule of public policy or for
any other reason, such circumstance shall not have the effect of rendering the
provision or provisions in question, invalid, inoperative or unenforceable in
any other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute or rule of public policy,
but this Agreement shall be reformed and construed in any such jurisdiction or
case as if such invalid, inoperative or unenforceable provision had never been
contained herein and such provision reformed so that it would be valid,
operative and enforceable to the maximum extent permitted in such jurisdiction
or in such case.
Section 18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement, it shall not be necessary to produce
more than one of such counterparts.
Section 19. Section Headings. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 20. General Provisions.
(a) Employee further agrees that his obligations under
Sections 7, 8 and 9 of this Agreement shall be binding upon him irrespective of
the duration of his employment by the Company, the reasons for any cessation of
his employment by the Company, or the amount of his compensation and shall
survive the termination of this Agreement (whether such termination is by the
Company, by Employee, upon expiration of this Agreement or otherwise).
(b) Employee represents and warrants to the Company that he is
not now under any obligations to any person, firm or corporation, and has no
other interest which is inconsistent or in conflict with this Agreement, or
which would prevent, limit or impair, in any way, the performance by him of any
of the covenants or his duties in his said employment.
Section 21. Gender. Whenever used herein, the singular number shall
include the plural, the plural shall include the singular, and the use of any
gender shall include all genders.
Section 22. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of the State of California.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
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THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
By: /s/ Paul W. Pendorf
------------------------------------
Paul W. Pendorf, President
/s/ Leslie J. Cohen
- ----------------------------------------
Employee
7
<PAGE> 1
Exhibit 10.56
FIFTH AMENDMENT TO LEASE
This Fifth Amendment to Lease is entered into this 22nd day of April,
1998, between ROGER KUSKE ("Lessor") and GRAFALLOY CORPORATION ("Lessee") with
reference to the following facts:
RECITALS
A. Lessor (by virtue of an Assignment and Assumption Agreement) and
Lessee (also by virtue of an Agreement of Assignment and Assumption) are parties
to a Standard Industrial/Commercial Single-Tenant Lease-Net dated July 21, 1993
and to Amendments dated August 31, 194, March 5, 1996, February 24, 1997, and
August 29, 1997, respectively (the "Lease"), pursuant to which lessee has leased
that certain improved real property commonly known as 1020 North Marshall
Avenue, El Cajon, California ("the Property").
B. The Lessor and Lessee desire to extend the term of the Lease,
provide the Lessee with an option to expand the space included in the Property
and to modify the Base Rent.
NOW THEREFORE, in consideration of the mutual promises and covenants
between the parties, and for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Lessor and Lessee agree as follows:
1. Term. The Term of the Lease shall be extended up to and including
September 30, 1999 ("Expiration Date").
2. Base Rent. Commencing on October 1, 1998, the Base Rent payable
under the Lease, as amended, shall be adjusted to sixteen thousand dollars
($16,000.00) per month, net, net, net.
3. Option to Extend. Prior to December 31, 1998, Lessee shall have the
option to extend the term of this Lease until September 30, 2003, provided that:
a. Lessor must receive written notice from Lessee of Lessee's intent
to exercise this option by 5:00 p.m. on December 31, 1998;
b. The square footage of the space included in the Property shall be
increased to approximately 33,200 square feet not less than sixty (60) days
after Lessor's receipt of Lessee's notice or later than March 1, 1999;
c. The Base Rent for the first year following the delivery of the
additional space to lessee shall be increased to $18,260.00 per month, net, net,
net; and
d. The Base Rent shall be increased annually on the anniversary of the
delivery of the additional space at the rate of four percent (4%) per annum.
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4. All other terms of the Lease shall remain in full force and effect.
LESSOR:
/s/ Roger Kuske
--------------------------------
Roger Kuske
LESSEE:
GRAFALLOY CORPORATION
/s/ William M. Gerhart
- ------------------------------------
By: William M. Gerhart
Its: President
2
<PAGE> 1
Exhibit 10.57
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") made as of October 13,
1997, between The American Materials & Technologies Corporation, a Delaware
corporation (the "Company"), and James L. Russell, an individual (the
"Employee"),
WITNESSETH THAT:
WHEREAS, the Company desires to employ Employee as its Vice President
and Chief Financial Officer for the period and upon and subject to the terms
herein provided; and
WHEREAS, the Company desires to be assured that Employee will not
compete with the Company for the period and within the geographical areas
hereinafter specified; and
WHEREAS, Employee is willing to agree to be employed by the Company for
the period and upon and subject to the terms herein provided; and
WHEREAS, Employee does not desire to work for the Company in a position
lower than that of Vice President and Chief Financial Officer and is willing to
agree not to compete with the Company;
NOW, THEREFORE, in consideration of the premises, the parties hereto
covenant and agree as follows:
Section 1. Term of Employment; Compensation. The Company agrees to
employ Employee from the date hereof until October 12, 1999 as Vice President
and Chief Financial Officer, with the responsibilities normally associated with
such position. The Company will pay Employee for his services during the term of
the Employee's employment hereunder at an annual rate of One Hundred Thirty Five
Thousand Dollars ($135,000) (the "Base Salary"), in equal installments, in
accordance with standard Company practice, but in any event not less often than
monthly, subject only to such payroll and withholding deductions as are required
by law. Executive's base salary shall be subject to annual review commencing
December 31, 1998. Executive shall be entitled to receive an annual bonus for
each year of employment under this Agreement, in an amount to be determined by
the Compensation Committee of the Company's Board of Directors. The President
and CEO of the Company and the Employee shall agree upon appropriate criteria
for the bonuses. In addition, the Company shall cause Executive to be granted an
option to purchase 25,000 shares of common stock, $.01 par value, of the Company
at a purchase price equal to the closing market price on the day prior to the
date of the next meeting of the Company's Board of Directors. Such option will
have a term of ten years and vest in equal annual installments over a period of
four years from the date of grant, and shall be subject to the other terms and
conditions customarily attached to options issued by the Company under its
Incentive and Nonqualified Stock Option Plans.
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<PAGE> 2
Section 2. Office and Duties. Employee shall have the usual duties of
Vice President and Chief Financial Officer and shall have responsibility,
subject to the President and CEO of the Company, for participating in the
management and direction of the Company's business and operations and shall
perform such specific other tasks, consistent with the Employee's position as
Vice President and Chief Financial Officer as may from time to time be assigned
to the Employee by the President of the Company. Employee shall devote
substantially all of his business time, labor, skill, undivided attention and
best ability to the performance of his duties hereunder in a manner which will
faithfully and diligently further the business and interests of the Company.
During the term of his employment, Employee shall not directly or indirectly
pursue any other business activity, without the Company's prior written consent
which shall not be unreasonably withheld. Employee agrees that he will travel to
whatever extent is reasonably necessary in the conduct of the Company's
business. Air travel shall be coach class, with upgrade to business class on a
trip by trip basis with the advance written approval of the Company President.
Section 3. Expenses. Executive shall be entitled to prompt
reimbursement for expenses incurred by him in connection with the performance of
his duties hereunder upon submission of vouchers therefore in accordance with
the Company's established procedures. In addition, the Company agrees to pay
$1,500 per month for temporary living expenses for a period of ten months in
connection with Executive's relocation to the Los Angeles area. The Company also
agrees to pay for moving Executive's household goods, furniture and personal
property from La Jolla, California to Los Angeles, and to reimburse real estate
commissions (up to 6%) upon the sale of Executive's current residence. Effective
September 1, 1998, Employee shall receive an automobile allowance of $500 per
month.
Section 4. Vacation During Employment. Employee shall be entitled to
such reasonable vacations as may be allowed by the Company in accordance with
general practices to be established, but in any event not less than four (4)
weeks per year during the term of this Agreement.
Section 5. Additional Benefits. Nothing herein contained shall preclude
Employee, to the extent he is otherwise eligible, from participation in all
group insurance programs or other fringe benefit plans which the Company may
hereafter in its sole and absolute discretion make available generally to its
employees, but neither the Company shall be required to establish or maintain
any such program or plan.
Section 6. Termination of Employment. Notwithstanding any other
provision of this Agreement, Employee's employment may be terminated:
(a) By the Company in the event of his failure, refusal or inability
satisfactorily to perform the services required of him hereby, or to carry out
any proper direction by the Company with respect to the services to be rendered
by him hereunder or the manner of rendering such services, his willful
misconduct in the performance of his duties hereunder, or his conviction of a
crime involving moral turpitude.
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<PAGE> 3
(b) By the Company upon thirty (30) days' notice to Employee if he
should be prevented by illness, accident or other disability (mental or
physical) from discharging his duties hereunder for one or more periods totaling
three (3) months during any consecutive twelve (12) month period. This judgment
should be based upon the reasonable medical opinion of a qualified physician
after reasonable accommodations have been made consistent with the American with
Disabilities Act.
(c) In the event of Employee's death during the term of his employment,
the Company's obligation to pay further compensation hereunder shall cease
forthwith, except that Employee's legal representative shall be entitled to
receive his fixed compensation for the period up to the last day of the month in
which such death shall have occurred. All unvested stock options shall vest upon
employee's death.
(d) By the Company without cause upon not less than thirty (30) days'
written notice in which event the Company shall pay to Employee an amount equal
to one years Base Salary.
(e) By the Company within twelve months of a "Change in Control" (as
hereinafter defined), Employee shall be paid two years of Base Salary, and all
unvested options granted to the Employee shall vest immediately. "Change of
Control" shall mean (a) any change in the board of directors of the Company
after which the current directors of the Company, or persons nominated or
appointed to serve as directors by the current directors of the Company, shall
cease to constitute a majority of the directors of the Company or (b) any change
in the ownership of the capital stock of the Company after which any individual,
corporation, partnership, joint venture, association, trust, unincorporated
organization or other entity shall acquire capital stock with a majority of the
voting power of the capital stock of the Company necessary to elect directors to
the board of directors of the Company.
Section 7. Disclosure and Assignment of Intellectual Property. Employee
shall promptly disclose to the Company and any successor or assign of the
Company, and grant to the Company, and its successors and assigns (without any
separate remuneration or compensation other than that received by him from time
to time in the course of his employment) his entire right, title and interest
throughout the world in and to all research, information, inventions, designs,
procedures, developments, discoveries, improvements, patents and applications
therefor, trademarks and applications therefor, copyrights and applications
therefor, trade secrets, drawings, plans, systems, methods, specifications, and
all other manufacturing, engineering, technical, research and development data
and know-how (herein sometimes "Intellectual Property") made, conceived,
developed and/or acquired by him solely or jointly with others during the period
of his employment with the Company or within one year thereafter, which relate
to the manufacture, production or processing of any products developed or sold
by the Company during the term of this Agreement or which are within the scope
of or usable in connection with the Company's business as it may, from time to
time, hereafter be conducted or proposed to be conducted. (It is understood and
agreed that Employee has heretofore disclosed to the Company, and assigned to
it, all Intellectual Property now known to him over which he has any control).
Section 8. Confidentiality. Employee shall not, either during the
period of his employment with the Company or thereafter, reveal or disclose to
any person outside the
3
<PAGE> 4
Company or use for his own benefit, without the Company's specific written
authorization, whether by private communication or by public address or
publication or otherwise, any information not already lawfully available to the
public concerning any Intellectual Property, or any marketing technique or cost
method, or any customer, mailing or supplier list, whether or not supplied by
the Company, and whether or not made, developed and/or conceived by Employee or
by others in the employ of the Company. All originals and copies of any of the
foregoing, relating to the business of the Company, however and whenever
produced, shall be the sole property of the Company, not to be removed from the
premises or custody of the Company without in each instance first obtaining
written consent or authorization of the Company. Upon the termination of
Employee's employment in any manner or for any reason, Employee shall promptly
surrender to the Company all copies of any of the foregoing, together with any
other documents, materials, data, information and equipment belonging to or
relating to the Company's business and in his possession, custody or control,
and Employee shall not thereafter retain or deliver to any other person, any of
the foregoing or any summary or memorandum thereof.
Section 9. Restriction. The Company has invested and may in the future
be required to invest substantial sums of money, directly or indirectly, to
continue and expand the business heretofore conducted by it and in connection
therewith, and as Employee recognizes that the Company would be substantially
injured by Employee disclosing to others, or by Employee using for his own
benefit, any Intellectual Property or any of the other types of information
referred to in Section 8 or other confidential or secret information he has
obtained or shall obtain as an employee of the Company, or which he may now
possess and which he has made available to the Company, Employee agrees that
during the period of his employment hereunder and for a period ending one (1)
year after the term of this Agreement:
(a) Neither he nor any member of his family will be interested,
directly or indirectly, as an investor in any other business or enterprise in
the United States similar to that of the Company or in competition with the
Company (except as an investor in securities listed on a national securities
exchange or actively traded over the counter so long as such investments are in
amounts not significant as compared to his total investments or to the aggregate
of the outstanding securities of the issuer of the same class or issue); and
(b) He will not, directly or indirectly, for his own account or as
employee, officer, director, partner, joint venturer or otherwise, engage within
the United States, in any phase of the business of preimpregnated paper and
fabric used in aerospace or sporting goods applications or otherwise compete
with the Company in such geographic area in any other business in which the
Company is engaged and for which he has responsibility.
Employee and the Company are of the belief that the period of time and
the area herein specified are reasonable, in view of the nature of the business
in which the Company is engaged and proposes to engage, the state of its product
development and Employee's knowledge of this business. However, if such period
or such area should be adjudged unreasonable in any judicial proceeding, then
the period of time shall be reduced by such number of months or such area shall
be reduced by elimination of such portion of such area, or both, as are deemed
unreasonable, so that this covenant may be enforced in such area and during such
period of time as is adjudged to be reasonable.
4
<PAGE> 5
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been given when delivered or
three (3) days after mailing if mailed by first-class, registered or certified
mail, postage prepaid, addressed (a) if to Employee, at his home address of
record or to such other person(s) or address(es) as Employee shall have
furnished to the Company in writing; and (b) if to the Company, The American
Materials & Technologies Corporation, Attn: President, or to such other
person(s) or address(es) as the Company shall have furnished to Employee in
writing.
Section 11. Assignability. In the event that the Company shall be
merged with, or consolidated into, any other corporation, or in the event that
it shall sell and transfer substantially all of its assets to another
corporation, the terms of this Agreement shall inure to the benefit of, and be
assumed by, the corporation resulting from such merger or consolidation, or to
which the Company's assets shall be sold and transferred. This Agreement shall
not be assignable by Employee, but it shall be binding upon, and to the extent
provided in Section 6 shall inure to the benefit of, his heirs, executors,
administrators and legal representatives.
Section 12. Entire Agreement. This Agreement contains the entire
agreement between the Company and Employee with respect to the subject matter
thereof and there have been no oral or other agreement of any kind whatsoever as
a condition precedent or inducement to the signing of this Agreement or
otherwise concerning this Agreement or the subject matter hereof.
Section 13. Expenses. Each party shall pay its own expenses incident to
the performance or enforcement of this Agreement, including all fees and
expenses of its counsel for all activities of such counsel undertaken pursuant
to this Agreement, except as otherwise herein specifically provided.
Section 14. Equitable Relief. Employee recognizes and agrees that the
Company's remedy at law for any breach of the provisions of Sections 7, 8 or 9
hereof would be inadequate, and he agrees that for breach of such provisions,
the Company shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in this Agreement, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by law. Should Employee engage in any activities prohibited by
this Agreement, he agrees to pay over to the Company all compensation,
remunerations or moneys or property of any sort received in connection with such
activities; such payment shall not impair any rights or remedies of the Company
or obligations or liabilities of Employee which such parties may have under this
Agreement or applicable law.
Section 15. Waivers and Further Agreements. Any waiver of any terms or
conditions of this Agreement shall not operate as a waiver of any other breach
of such terms or conditions or any other term or condition, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof; provided, however, that no such written waiver,
unless it, by its own terms, explicitly provides to the contrary, shall be
construed to effect a continuing waiver of the provision being waived and no
such waiver in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom such waiver
is claimed in all other instances or for all other purposes to require full
compliance with such provision. Each of the parties hereto agrees to execute all
such
5
<PAGE> 6
further instruments and documents and to take all such further action as the
other party may reasonably require in order to effectuate the terms and purposes
of this Agreement.
Section 16. Amendments. This Agreement may not be amended, nor shall
any waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any waiver, change, modification, consent or discharge is sought.
Section 17. Severability. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative or unenforceable
as applied to any particular case in any jurisdiction or jurisdictions, or in
all jurisdictions or in all cases, because of the conflicting of any provision
with any constitution or statute or rule of public policy or for any other
reason, such circumstance shall not have the effect of rendering the provision
or provisions in question, invalid, inoperative or unenforceable in any other
jurisdiction or in any other case or circumstance or of rendering any other
provision or provisions herein contained invalid, inoperative or unenforceable
to the extent that such other provisions are not themselves actually in conflict
with such constitution, statute or rule of public policy, but this Agreement
shall be reformed and construed in any such jurisdiction or case as if such
invalid, inoperative or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case.
Section 18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and in pleading or
proving any provision of this Agreement, it shall not be necessary to produce
more than one of such counterparts.
Section 19. Section Headings. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 20. General Provisions.
(a) Employee further agrees that his obligations under Sections 7, 8
and 9 of this Agreement shall be binding upon him irrespective of the duration
of his employment by the Company, the reasons for any cessation of his
employment by the Company, or the amount of his compensation and shall survive
the termination of this Agreement (whether such termination is by the Company,
by Employee, upon expiration of this Agreement or otherwise).
(b) Employee represents and warrants to the Company that he is not now
under any obligations to any person, firm or corporation, and has no other
interest which is inconsistent or in conflict with this Agreement, or which
would prevent, limit or impair, in any way, the performance by him of any of the
covenants or his duties in his said employment.
Section 21. Gender. Whenever used herein, the singular number shall
include the plural, the plural shall include the singular, and the use of any
gender shall include all genders.
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<PAGE> 7
Section 22. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of the State of California.
IN WITNESS WHEREOF, the parties have executed or caused to be executed
this Agreement as of the date first above written.
THE AMERICAN MATERIALS & TECHNOLOGIES CORPORATION
By: /s/ Paul W. Pendorf
-----------------------------------
Paul W. Pendorf, President
/s/ James L. Russell
-----------------------------------
Employee
7
<PAGE> 1
Exhibit 10.58
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement"), made and entered into as
of this 13th day of March, 1998, by and between The American Materials &
Technologies Corporation, a Delaware corporation ("Employer"), and Steven
Georgiev, an individual (the "Consultant"),
W I T N E S S E T H T H A T :
WHEREAS, Employer and Consultant are parties to that certain Consulting
Agreement, dated July 30, 1996 (the "Existing Agreement");
WHEREAS, Employer and Consultant desire to terminate the Existing
Agreement and enter into this Agreement;
WHEREAS, Employer shall from time to time require the knowledge and
expertise of Consultant in regard to financial strategy and implementation; and
WHEREAS, Employer desires to draw upon and benefit from Consultant's
expertise and the availability thereof and Consultant desires to advise and
consult with Employer and to be available therefor;
NOW, THEREFORE, for and in consideration of the foregoing and intending
to be legally bound hereby, the parties agree as follows:
1. Termination of Existing Agreement. In consideration of all amounts
paid under the Existing Agreement, including all amounts received as advances
against future obligations, Consultant and Employer hereby terminate the
Existing Agreement and agree that neither party will have any further obligation
or liability to the other thereunder.
2. Appointment. Employer hereby appoints and employs Consultant to act
as its advisor and consultant upon and subject to the terms and conditions
hereinafter set forth, and Consultant hereby accepts such appointment and
undertakes to advise and consult with Employer during the term of this Agreement
upon and subject to the terms and conditions hereinafter set forth.
3. Term. The services of Consultant under this Agreement shall be for a
term commencing on February 1, 1998 and expiring on July 1, 1999 (the
"Expiration Date"), unless earlier terminated by (i) Consultant for any reason
upon thirty days' written notice to Employer, or (ii) Employer for Cause (as
hereinafter defined) upon thirty days' written notice to Consultant. For the
purposes of this Agreement, "Cause" shall mean the happening of any of the
following with respect to Consultant: (a) the conviction of, or pleading nolo
contendere to, embezzlement or any other act of dishonesty against the company,
(b) conviction of, or pleading nolo contendere to, a felony, or (c) willful
failure or gross negligence in the performance of duties hereunder.
1
<PAGE> 2
4. Duties of Consultant. Consultant shall furnish consulting and
advisory services to Employer in connection with acquisition strategy and
implementation. Such services shall be rendered at such times and in such manner
as shall be mutually agreeable to Employer and Consultant.
5. Compensation. Consultant shall be paid $10,000 per month during the
term of this Agreement.
6. Relationship of the Parties. In performing its services under this
Agreement, the Consultant shall be an independent contractor and, as between
Employer and Consultant, Employer shall not be responsible for withholding,
collection or payment of income taxes or for other taxes of any nature on behalf
of Consultant. Nothing contained herein shall make Consultant the agent,
employee, joint venturer or partner of Employer or provide Consultant with the
power or authority to bind Employer to any contract, agreement or arrangement
with any individual or entity except with the prior written approval of
Employer.
7. Assignment. Neither party hereto may assign, without the other
party's prior written consent, this Agreement, or any right or obligation
hereunder, and any and all assignments without such prior written consent shall
be null and void.
8. Indemnification. The Employer shall indemnify, defend and hold
Consultant harmless from and against any and all losses, claims, damages or
liabilities, joint or several, in connection with any pending or threatened
action, proceeding or investigation to which Consultant may be subject in
connection with the performance by Consultant of his services hereunder; in
addition, the Employer will reimburse Consultant periodically for any reasonable
legal or other expenses (including the cost of any investigation and
preparation) incurred by Consultant and arising from or in connection with any
pending or threatened action, proceeding or investigation, which might give rise
to a claim for indemnification hereunder, whether or not actually resulting in
any liability; provided that Employer shall not be liable under this Section 8
to the extent that a court of competent jurisdiction shall have determined by
final judgment that any such losses, claims, damages, or liabilities resulted
from Consultant's gross negligence or willful misconduct in the performance of
such services; and further provided that (i) Consultant shall have promptly
provided Employer written notice of the commencement of any action, proceeding
or investigation and shall provide reasonable cooperation, information and
assistance in connection therewith, and (ii) Employer shall have sole control
and authority with respect to the defense, settlement, or compromise thereof.
The indemnity contained in this Section 8 shall extend upon the same terms and
conditions to each person, if any, who may be determined to control Consultant
and to any employee or agent of Consultant performing services hereunder. The
provisions of this Section 8 shall survive termination of this Agreement.
9. General Provisions.
9.1 Amendment of this Agreement. No supplement, modification,
or amendment of this Agreement shall be binding unless executed in writing by
both parties hereto. No waiver of any of the provisions of this Agreement shall
operate as a waiver of any other provisions hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver. Except as
2
<PAGE> 3
specifically provided herein, no failure to exercise or any delay in exercising
any right or remedy hereunder shall constitute a waiver thereof.
9.2 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, spouses, heirs, and personal and legal
representatives.
9.3 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
9.4 Notices. Any notice required or permitted by this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery or, if mailed, upon deposit with the United States Post Office
by certified mail, return receipt requested, postage prepaid, to the address for
the recipient set forth on the signature page hereto or to such other address as
the recipient shall hereafter have noticed the sending party in the manner set
forth above.
9.5 Headings. Descriptive headings contained herein are for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.
9.6 Severability. Any provision of this Agreement which is
unenforceable in any jurisdiction shall be ineffective in such jurisdiction to
the extent of such unenforceability without invalidating the remaining
provisions of this Agreement, and any unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.8 Applicable Law. The rights and obligations under this
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware applicable to contracts between Delaware residents made
and to be performed entirely within such State.
IN WITNESS WHEREOF, this Agreement has been entered into as of the date
set forth above.
CONSULTANT: EMPLOYER:
STEVEN GEORGIEV THE AMERICAN MATERIALS &
TECHNOLOGIES CORPORATION
/s/ Steven Georgiev By: /s/ Paul W. Pendorf
- ------------------------------- ------------------------------------
Name: Steven Georgiev Paul W. Pendorf, President
3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1998 AND THE CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 103
<SECURITIES> 0
<RECEIVABLES> 5,987
<ALLOWANCES> 202
<INVENTORY> 4,497
<CURRENT-ASSETS> 10,833
<PP&E> 7,990
<DEPRECIATION> 2,019
<TOTAL-ASSETS> 22,431
<CURRENT-LIABILITIES> 9,967
<BONDS> 4,467
0
0
<COMMON> 44
<OTHER-SE> 7,953
<TOTAL-LIABILITY-AND-EQUITY> 22,431
<SALES> 23,171
<TOTAL-REVENUES> 23,171
<CGS> 16,426
<TOTAL-COSTS> 21,913
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 375
<INCOME-PRETAX> 910
<INCOME-TAX> 0
<INCOME-CONTINUING> 910
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 910
<EPS-PRIMARY> 0.21<F1>
<EPS-DILUTED> 0.19
<FN>
<F1>For Purposes of This Exhibit, Primary means Basic.
</FN>
</TABLE>
