<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to
---------------- -------------------
Commission file number 0-9607
CENTRUM INDUSTRIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 34-1654011
- ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6135 Trust Drive, Suite 104A, Holland, Ohio 43528
- ------------------------------------------- ----------
(Address of principal executive offices) (Zip code)
(419) 868-3441
--------------
(Registrant's telephone number, including area code)
5580 Monroe Street. Suite 100, Sylvania, Ohio 43560
--------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING at December 31, 1996
----- --------------------------------
Common Stock - $.05 Par Value 8,298,215
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CENTRUM INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
COVER 1
INDEX 2
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
Condensed Consolidated Balance Sheets
as of December 31, 1996 and March 31,1996. 3
Condensed Consolidated Statements of
Income for the three and nine months ended
December 31, 1996 and 1995. 4
Condensed Consolidated Statements of
Cash Flows for the nine months ended
December 31, 1996 and 1995. 5
Notes to Condensed Consolidation
Financial Statements 6
ITEM 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION 11
SIGNATURES 12
</TABLE>
2
<PAGE> 3
PART 1: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTRUM INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(unaudited)
December 31, March 31,
1996 1996
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 1,635,587 $ 2,100,749
Accounts receivable, less allowances of $283,600
and $93,761, respectively 12,197,246 10,979,166
Inventories 11,645,130 9,395,244
Prepaid expense and other assets 1,143,850 720,006
------------- --------------
Total Current Assets 26,621,813 23,195,165
Property, plant and equipment, net 10,803,462 11,151,109
Other Assets 6,486,470 6,265,474
------------- --------------
Total Assets $ 43,911,745 $ 40,611,748
============= ==============
Liabilities and Shareholders' Equity
Current Liabilities:
Bank line of credit $ 10,702,297 $ 7,886,486
Current portion of long-term debt 1,578,999 2,976,425
Accounts payable 7,900,629 9,611,745
Deferred income taxes 269,955 268,394
Accrued expense and other 3,012,865 3,476,627
------------- --------------
Total Current Liabilities 23,464,745 24,219,677
Long-term debt, less current portion 11,625,735 11,982,409
Other liabilities 675,746 826,670
Commitments and Contingent Liabilities (Note D)
Shareholders' Equity:
Common stock - $.05 par value, 15,000,000 authorized
8,298,215 and 6,170,860 issued and outstanding 414,911 308,543
Additional paid-in capital 7,895,766 5,322,267
Accumulated deficit (165,158) (2,047,818)
------------- --------------
Total Shareholders' Equity 8,145,519 3,582,992
Total Liabilities and Shareholders' Equity $ 43,911,745 $ 40,611,748
============= ==============
</TABLE>
See notes to condensed consolidated financial statements.
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CENTRUM INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
For the three For the nine
months ended months ended
December 31 December 31 December 31 December 31
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Sales $ 17,973,545 $ 6,398,426 $ 52,406,892 $ 16,930,644
Cost of sales 13,513,115 4,847,679 38,991,224 12,623,980
-------------- -------------- -------------- ------------
Gross profit 4,460,430 1,550,747 13,415,668 4,306,664
Depreciation 290,314 24,393 897,337 70,485
Selling, general and
administrative expenses 2,888,967 1,165,864 9,080,567 3,309,287
-------------- -------------- -------------- ------------
Operating income 1,281,149 360,490 3,437,764 926,892
-------------- -------------- -------------- ------------
Other income and (expenses)
Interest income 16,704 10,431 147,375 17,866
Interest expenses (740,500) (92,629) (2,009,600) (270,852)
Amortization (34,791) (37,292) (105,284) (112,833)
Miscellaneous 36,096 18,075 90,155 40,552
-------------- -------------- -------------- ------------
(722,491) (101,415) (1,877,354) (325,267)
Income before income taxes 558,658 259,075 1,560,410 601,625
Provision (benefit) for income taxes (452,478) 69,960 (322,250) 162,450
-------------- -------------- -------------- ------------
Net income $ 1,011,136 $ 189,115 $ 1,882,660 $ 439,175
=============== ============== ============== ============
Net income per common
and common equivalent share $ 0.12 $0.03 $0.24 $0.08
=============== ============== ============== ============
Weighted average number of
common and common equivalent
shares outstanding 8,482,626 5,688,117 7,801,458 5,689,525
=============== ============== ============== ============
</TABLE>
See notes to condensed consolidated financial statements.
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CENTRUM INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
For the nine For the nine
Months ended Months ended
December 31, December 31,
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,882,660 $ 439,175
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,002,621 183,318
Deferred income taxes (533,645)
Changes in assets and liabilities that provide
(use) cash:
Accounts receivable (1,218,080) 376,446
Inventory (2,249,886) (288,259)
Prepaid expenses and other assets (214,919) (574,190)
Accounts payable (1,711,116) 213,915
Accrued expenses and other (614,685) 958,909
------------ ------------
Net cash provided by (used in) operating activities (3,657,050) 1,309,314
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (549,690) (65,445)
------------ ------------
Net cash used in investing activities (549,690) (65,445)
------------ ------------
Cash flows from financing activities:
Net proceeds (repayments) on short-term debt 2,815,811 (285,000)
Repayments of notes payable (1,754,100) (255,136)
Proceeds from the issuance of notes payable 550,000
Proceeds from the issuance of common stock 2,679,867 18,000
Repurchase of common stock (60,000)
------------ ------------
Net cash provided by (used in) financing activities 3,741,578 (32,136)
------------ ------------
Increase (decrease) in cash and cash equivalents (465,162) 1,211,733
Cash and cash equivalents at beginning of period 2,100,749 472,673
------------ ------------
Cash and cash equivalents at end of period $ 1,635,587 $ 1,684,406
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
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CENTRUM INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting principally of normal
recurring adjustments) which are, in the opinion of management, necessary for a
fair statement of the results of operations for the three month and nine month
periods ended December 31, 1996 and 1995. Accounting policies followed by the
Company are described in Note 1 to the financial statements in its Annual
Report on Form 10-K for the year ended March 31, 1996.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The condensed financial statements should be
read in conjunction with the financial statements, including notes thereto,
contained in the Company's Annual Report on Form 10-K for the year ended March
31, 1996.
The results of operations for the three months and nine months ended December
31, 1996, are not necessarily indicative of the results to be expected for the
full year. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
Certain amounts within the subsequent year financial statements have been
reclassified in order to be consistent with the current year presentation.
NOTE B: COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS
Inventories consisted of the following at December 31, 1996 and March 31, 1996:
<TABLE>
<CAPTION>
December 31, 1996 March 31, 1996
----------------- --------------
<S> <C> <C>
Raw Materials $ 5,748,811 $ 4,756,954
Work in Progress 4,989,436 4,332,492
Finished Goods 906,883 305,798
------------- ------------
Total Inventories $ 11,645,130 $ 9,395,244
============ ============
</TABLE>
Other assets consisted of the following at December 31, 1996 and March 31,
1996:
<TABLE>
<CAPTION>
December 31, 1996 March 31, 1996
----------------- --------------
<S> <C> <C>
Deferred Income Tax Benefits $ 2,601,599 $ 2,066,393
Goodwill, less accumulated amortization of
$509,778 and $404,494, respectively 2,334,332 2,439,616
Debt Issuance Costs 754,356 1,133,412
Other Assets 796,183 626,053
------------- ------------
Total Other Assets $ 6,486,470 $ 6,265,474
============= ============
</TABLE>
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NOTE C: INCOME TAXES
During the third quarter of the current fiscal year, management recorded a
provision for income tax expense of $195,530 which was offset by a $648,010
credit to deferred income tax expenses. The credit to deferred income tax
expense was to reduce the existing valuation allowance. The reduction of the
valuation allowance was based on new information evaluated during the third
quarter regarding the availability of certain federal net operating loss
carryforwards (NOLs) and the continued improvements in operating profits and
backlogs throughout the Company. These factors have reduced the level of
uncertainties with respect to a portion of these NOLs where management has now
concluded that they expect to realize these tax benefits. At December 31,
1996, a remaining valuation reserve of $1.45 million has been maintained due to
limitations on the usage of certain pre-acquistion NOLs and the continued
existence of uncertainties. The remaining valuation allowance could be
increased or reduced in the near term if estimates of future taxable income
during the carryforward period change substantially or if new information
regarding the uncertainties is received.
Income taxes payable as of December 31, 1996 and March 31, 1996 were $269,955
and $251,143, respectively.
NOTE D: COMMITMENTS AND CONTINGENT LIABILITIES
There has been no significant change from the prior year-end audited
statements.
NOTE E: INCOME PER COMMON AND COMMON EQUIVALENT SHARE
The computation of income per common and common equivalent share is based on
the weighted average number of shares of common stock outstanding during the
respective periods. Common equivalent shares, including shares that would be
issued upon the exercise of outstanding warrants and options, have been
included in the calculations to the extent that they are dilutive in nature.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The changes in sales and operating income for the three and nine month periods
ended December 31, 1996 over the comparable period of a year ago were due
primarily to the inclusion of the metal forming subsidiary in the current
periods results. As discussed in the Form 10-K filed for the year ended March
31, 1996, the metal forming operations were acquired on March 8, 1996 and,
accordingly, the results of these operations were not included in the
comparable prior year periods. The metal forming operations have continued
their contribution to operating income during the current quarter. The metal
forming subsidiary has seen significant growth in sales and improvement in
operating income since its acquisition by
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Centrum and management believes that these trends will continue for the
remainder of the fiscal year.
Sales and operating income at the material handling subsidiary have decreased
compared to the corresponding prior year periods. Sales have decreased
primarily as a result of customer requested delivery reschedules into the next
fiscal year. A weaker margin product mix also impacted operating income.
Management believes that this trend in operating income will continue during
the fourth quarter based upon the composition of product mix in the existing
backlogs.
Sales at the motor production subsidiary have increased substantially over the
prior year period as a result of customer demand. Operating profits have
followed this trend benefiting from increased volume and a more profitable
product mix. These factors are expected to continue during the fourth
quarter.
Both consolidated revenues and operating margins benefited during the current
quarter from the trends discussed above. Sales increased by 6.6% over the
previous quarter of this year and operating margins exceeded 7% for the second
time this year. The Company's year-to-date operating margin has improved to
6.6% as compared to 5.5% for the comparable period in the prior year. In
addition, selling, general and administrative expenses for the year remain at
17% of sales, compared to 20% in the previous year. Depreciation expense
increased significantly due to acquisition of the metal forming operations and
the inclusion of their financial results in the current fiscal year.
Management believes that both the short-term and long-term fundamentals of each
of the Company's business units remain sound. Backlogs in each business
segment remain strong and the mix of products will continue to support
consolidated operating margins during the fourth quarter of fiscal 1997. For
these reasons, management believes that current trends in operating income can
be maintained during the remainder of this fiscal year.
The increase in interest expense for the period ended December 31, 1996 over
the comparable period of a year ago is primarily due to the issuance of debt at
the corporate office level and the metal forming subsidiary. The proceeds were
used primarily in connection with the acquisition of the metal forming
operations.
At March 31, 1996, a deferred tax asset valuation allowance of approximately
$2.3 million was recorded, primarily against NOLs for which ultimate
realization was deemed to be unlikely due to questions regarding the levels of
future profitability required to allow their use prior to expiration and other
uncertainties. During the third quarter of the current fiscal year, management
recorded a provision for income tax expense of $195,530 which was offset by a
$648,010 credit to deferred income tax expenses. The credit to deferred income
tax expense was to reduce the existing valuation allowance. The reduction of
the valuation allowance was based on new information evaluated during the third
quarter regarding the availability of certain NOLs and the continued
improvements in operating profits and backlogs throughout the Company. These
factors have reduced the level of uncertainties with respect to a portion of
these NOLs where management has now concluded that they expect to realize these
tax benefits. At December 31, 1996, a remaining valuation reserve of $1.45
million has been maintained due to limitations on the usage of certain
pre-acquistion NOLs and the continued existence of uncertainties. The
remaining valuation allowance could be increased or reduced
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in the near term if estimates of future taxable income during the carryforward
period change substantially or if new information regarding the uncertainties
is received.
Net income per common and common equivalent share has been diluted as a result
of the issuance of common shares pursuant to a Confidential Private Placement
Memorandum (Private Placement) initiated on November 15, 1995 and completed on
November 15, 1996. Please refer to the Form 10-K filed for the year ended
March 31, 1996 for more detailed discussion of these matters.
Summarized unaudited results of operations by business segment for the three
month and six month periods ended December 31, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
Quarter ended Quarter ended
December 31, 1996 December 31, 1995
Dollars Percent Dollars Percent
------- ------- ------- -------
<S> <C> <C> <C> <C>
Sales
Metal forming $ 11,671,959 64.94% $ 0 0.00%
Material handling 3,888,480 21.63% 4,978,838 77.81%
Motor production 2,405,863 13.39% 1,419,588 22.19%
Corporate 7,243 0.00% 0 0.00%
------------- -------- ------------ --------
Total sales $ 17,973,545 100.00% $ 6,398,426 100.00%
============= ======== ============ ========
Operating income (loss)
Metal forming $ 1,077,637 84.11% $ 0 0.00%
Material handling 169,887 13.26% 345,595 95.87%
Motor production 270,988 21.15% 135,874 37.69%
Corporate (237,363) (18.53%) (120,979) (33.56%)
------------- -------- ------------ --------
Total operating
income $ 1,281,149 100.00% $ 360,490 100.00%
============= ======== ============ ========
<CAPTION>
Nine Months ended Nine Months ended
December 31, 1996 December 31, 1995
Dollars Percent Dollars Percent
------- ------- ------- -------
<S> <C> <C> <C> <C>
Sales
Metal forming $ 34,329,752 65.51% $ 0 0.00%
Material handling 11,789,685 22.50% 12,491,856 73.78%
Motor production 6,280,212 11.98% 4,438,788 26.22%
Corporate 7,243 0.01% 0 0.00%
------------- -------- ------------ --------
Total sales $ 52,406,892 100.00% $ 16,930,644 100.00%
============= ======== ============ ========
Operating income (loss)
Metal forming $ 3,247,573 94.47% $ 0 0.00%
Material handling 327,202 9.52% 870,866 93.96%
Motor production 504,353 14.67% 443,274 47.82%
Corporate (641,364) (18.65%) (387,248) (41.78%)
------------- -------- ------------ --------
Total operating
income $ 3,437,764 100.00% $ 926,892 100.00%
============= ======== ============ ========
</TABLE>
9
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The Company's operations have been classified into four business segments:
metal forming operations, material handling systems, motor production systems,
and corporate office. The metal forming operations segment manufactures steel
forgings for the power generation, compressor and bearing markets along with
nonferrous casting for the glass container and pump and valve industries. The
material handling equipment segment involves the design, manufacture and
installation of material handling equipment for warehouse and distribution
applications. The motor production systems segment involves the manufacture of
armature winding machines and complete production systems for numerous complex
manufacturing processes.
This quarterly report on Form 10-Q contains forward-looking statements within
the meaning of the "safe-harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are based on management's
current expectations and are subject to a number of factors and uncertainties,
as described in the Form 10-K filed for the year-ended March 31, 1996, which
could cause actual results to differ materially from those described in the
forward-looking statements. As a result, the Company's operating results may
fluctuate, especially when measured on a quarterly basis.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operating activities for the nine month period ended December 31,
1996 totaled $3,657,050, as opposed to cash provided by operations of
$1,309,314 in the prior year period. Although net income, taxes and
depreciation and amortization during the period provided $2,351,636 versus
$622,493 in the prior year, the accumulation of additional inventories and
receivables along with the timing of certain payments resulted in the use of
additional capital resources during the first nine months of the year.
Inventories increased at the metal forming operations due to increased backlogs
and customer demand. Accounts receivable increased as a result of higher
shipping levels and the timing of customer payments. Accounts payable were
reduced at both the material handling and metal forming operations primarily as
a result of the timing of vendor payments. Reductions in the accrued expense
category occurred as a result of certain tax and benefit payments.
The cash absorbed in operating activities was financed primarily through the
$15,500,000 bank line of credit facility maintained by the metal forming
subsidiary and the sale of stock through the Private Placement. Management
believes that sufficient availability exists in the bank line of credit to
finance future operating activities at the metal forming subsidiary and
continued emphasis on inventory reductions will provide additional future
working capital.
Cash used in operating activities at the material handling subsidiary was
primarily financed through cash on-hand at the beginning of the period.
Management is currently negotiating a line of credit with a bank to finance
future working capital needs at this subsidiary. The motor production segment
has been successful in financing its growth utilizing cash on-hand and a bank
line of credit instituted this year. Management believes that the Company will
be successful in installing a bank line of credit at the material handling
subsidiary and that both of these segment operations will be able to finance
their growth internally.
The parent company has used cash on-hand and cash from the Private Placement to
finance its operations. In addition, a significant portion of cash raised by
the Private Placement memorandum was used to retire debt incurred during the
acquisition of the metal forming
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operations. The parent company has sufficient cash on-hand to finance the
operations at corporate office level.
The $15,500,000 line of credit agreement places certain restrictions on the
Company's ability to transfer cash between subsidiaries. Management does not
consider this restriction to be significant given the level of cash on hand at
the individual subsidiaries and the existing and planned credit facilities.
PART II - OTHER INFORMATION
During the third quarter, the motor production subsidiary entered into a joint
venture agreement with a European competitor, who offers a complementary
product line. As a result of this alliance, the joint venture company will be
able to offer a much broader array of motor production lines throughout the
North American market. Management believes that the motor production
subsidiary will benefit from this strategic marketing alliance.
The Private Placement closed on November 15, 1996. During the current fiscal
year 1,825,666 shares of common stock have sold for $2,464,650, which is net of
$273,849 in issuance costs and expenses.
On December 13, 1996, interest of $72,252 was paid by the issuance of 48,168
shares of common stock. The interest is attributable to term notes held by
certain of the Company's shareholders and directors. The principal and
interest on the notes has been paid in full. In addition, Board of Directors
fees of $48,000 were paid on December 13, 1996 by the issuance of 32,000
shares of common stock.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTRUM INDUSTRIES, INC.
--------------------------
(Registrant)
Date February 10, 1997 By: /s/ Timothy M. Hunter
-----------------------
Timothy M. Hunter
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
EX 10.13 Amended and Restated Employment Agreement with
George H. Wells executed November 18, 1996.
EX 10.24 Model Board of Directors Stock Option Agreement.
EX 10.25 Model Employee Stock Option Agreement.
EX 10.26 Stock Option Agreement with George H. Wells dated
December 2, 1996.
EX 10.27 Stock Option Agreement with Timothy M. Hunter dated
December 2, 1996.
EX 10.28 Stock Option Agreement with Anthony A. Montani dated
December 2, 1996.
EX 27 Financial Data Schedule.
</TABLE>
<PAGE> 1
EXHIBIT 10.13
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT is effective as of the 1st day of September, 1996, between
GEORGE H. WELLS (the "Employee") and CENTRUM INDUSTRIES, INC. (the
"Corporation"):
WITNESSETH
WHEREAS, the parties hereto entered into an Employment Agreement as of
September 1, 1992 which the parties desire to amend and restate in its
entirety; and
WHEREAS, the Employee desires employment as President and Chief Executive
Officer; and
WHEREAS, the Board of Directors of the Corporation desires to employ
Employee under the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree as follows:
1. EMPLOYMENT.
The Corporation employs the Employee and the Employee accepts such
employment upon the terms and conditions set forth in this Agreement. The
prior Employment Agreement dated as of September 1, 1992 is hereby terminated.
2. TERM.
2.1 The term of this Agreement shall begin on the effective date set
forth above and shall continue for a period of one (1) year.
2.2 This Agreement shall automatically renew for an additional one (1)
year term unless terminated in writing by either party hereto,
notice of termination to be given not less than sixty (60) days
prior to the commencement of a new term.
2.3 Nothing in this Agreement shall be construed to prevent its
termination by
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<PAGE> 2
the Corporation at any time for "Cause". For the purposes of this
Agreement, "Cause" shall mean the commission of any of the
following by Employee:
(a) a violation of any of the terms of this Agreement which
violation causes or may cause material harm to the
Corporation; or
(b) an act of theft, dishonesty, embezzlement, or
misappropriation of funds, or the conviction of or plea of no
contest to a crime involving moral turpitude; or
(c) an act or failure to commit an act in the course of his
duties for the Corporation, which act or failure to act
constitutes willful or wanton misconduct or gross negligence;
or
(d) a breach of any of his duties to the Corporation
which breach results in significant harm to the Corporation.
3. COMPENSATION.
For all services rendered by the Employee under this Agreement (and in
addition to other monetary or other benefits referred to in this Agreement)
compensation shall be paid the Employee as follows:
3.1 The Employee shall be paid a salary of Two Hundred Thousand
Dollars ($200,000.00) per year payable in twenty-four (24)
equal bi-monthly installments on the 15th and last day of each
month.
3.2 In addition to the bi-monthly salary, the Employee shall
receive a stock and/or cash bonus, the amount of which shall be
determined in the sole discretion of the Board of Directors
of the Corporation. The purpose of the bonus will be to make the
total compensation paid annually to the Employee equal to the
reasonable value of his services to the extent the Corporation is
financially able to pay such compensation without incurring
losses. Such bonus may be payable at any time or times during the
year as the Board of Directors may determine but shall be paid at
least annually.
3.3 In addition to the bi-monthly salary and any stock and/or
cash bonus as set forth in paragraph 3.2, and so long as this
Agreement has not terminated
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(but subject to the provisions of paragraph 3.7), Employee shall
be paid a Performance Bonus of five percent (5%) of the
Corporation's consolidated before tax profit for each fiscal year
of the Corporation, payable no later than ninety (90) days after
the end of each fiscal year.
3.4 The Corporation shall reimburse the Employee for travel
and other expenses reasonably and necessarily incurred by the
Employee in the performance of his duties pursuant to this
Agreement.
3.5 The Corporation shall furnish Employee with an automobile of a
make and model to be agreed upon by the parties. The
Corporation shall pay the cost of all major repairs and all
operating expenses, gasoline, oil, insurance, and minor repairs
and maintenance.
3.6 The Corporation shall reimburse Employee for the medical coverage
currently provided to Employee in an amount not to exceed Five
Hundred Dollars ($500.00) per month. Upon termination of this
coverage, the Corporation will cover Employee under its then
existing group policy of medical coverage for employees, if any.
3.7 In the event Employee's employment is terminated other than
for "Cause" (as defined in paragraph 2.3) at any time prior to the
expiration of the then current term of this Agreement, then the
Corporation shall pay to Employee as severance compensation an
amount equal to nine (9) times Employee's base monthly cash
compensation then in effect, together with any bonuses earned
pursuant to paragraph 3.2 hereof but not yet paid and the pro
rata amount of the Performance Bonus that the Employee would
otherwise have earned under the terms of paragraph 3.3 hereof had
this Agreement not been terminated.
4. DUTIES.
The Employee is employed to act as President and Chief Executive Officer
of the Corporation. He shall report to the Board of Directors of the
Corporation. The Employee will use his best efforts to carry out his duties
and responsibilities and to devote his full time, attention, and energy
thereto, unless otherwise authorized. the foregoing shall not be construed
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as preventing the Employee from making investments in other businesses or
enterprises provided that Employee agrees not to become engaged in any other
business enterprise which interferes with his ability to discharge his duties
and responsibilities on a full-time basis.
The Employee agrees to follow and abide by all federal, state and
municipal laws and ordinances relating to or regulating the business of the
Corporation.
The Employee agrees to not take part in any other business or profession
without the prior written consent of the Board of Directors and all pertinent
details in connection with any such involvement shall be made part of the
Board's written decision.
5. WORKING FACILITIES.
The Corporation will furnish the Employee with technical and secretarial
assistance and other facilities and services suitable to his position and
adequate for the performance of his duties.
6. VACATIONS.
The Employee shall be entitled to a vacation of five (5) weeks each year,
during which time his salary shall be paid in full. The Employee shall take
his vacation at such time or times as shall be approved by the Corporation.
7. POST-TERMINATION.
Following any termination of Employee by the Corporation, Employee shall
fully cooperate with the Corporation in all matters relating to the winding up
of his pending work on behalf of the Corporation and the orderly transfer of
any pending work to other employees of the Corporation as may be designated by
the Corporation. The Corporation shall be entitled to such full or part time
service by Employee as it may reasonable require during all or any part of the
sixty (60) day period following notice of termination by Employer.
8. CONFIDENTIAL INFORMATION.
Employee recognizes and acknowledges that by reason of his employment by
and service to the Corporation, he will have access to confidential information
of the Corporation and its affiliates, including without limitation information
and knowledge pertaining to products, inventions, innovations, designs, ideas,
plans, trade secrets, proprietary information, manufacturing, packaging,
advertising, distribution and sales methods and systems, sales and profit
figures, customer and client lists, and relationships between the Company and
its affiliates
4
<PAGE> 5
and dealers, distributors, wholesales, customers, clients, suppliers and others
who have business dealings with the Corporation and its affiliates
("Confidential Information"). Employee acknowledges that such Confidential
Information is a valuable and unique asset and covenants that he will not,
either during or after the term of this Agreement, disclose any such
Confidential Information to any person for any reason whatsoever without the
prior written authorization of the Corporation's Board of Directors, unless
such information is in the public domain through no fault of Employee or except
as may be required by law.
9. NONCOMPETITION.
During the Employment Term and for a period of one (1) year thereafter
(except in the event of a termination of the employment due to the sale of the
assets of the Corporation), Employee will not, unless acting pursuant hereto or
with the prior written consent of the Board of Directors of the Corporation,
directly or indirectly, own, manage, operate, join, control, finance, or
participate in the ownership, management, operation, control, or financing of,
to be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with or use or permit his name to be
used in connection with, any business or enterprise which competes with the
Corporation or any of its subsidiaries; provided, however, that the foregoing
agreement not to compete shall be void in the event the Corporation terminates
the employment of the Employee other than for Cause (as defined in paragraph
2.3).
10. RELATIONSHIP BETWEEN THE PARTIES.
The parties recognize that the Board of Directors of the Corporation, in
accordance with the state statute controlling the organization and
administration of for profit corporations, shall manage the business affairs of
the Corporation.
The relationship between the Corporation and the Employee is that of an
employer and an employee. As such employee, the Employee shall be entitled to
participate in any plans, arrangements or distributions by the Corporation
pertaining to or in connection with any pension, bonus, profit sharing or
similar benefits for its regular employees.
11. BINDING AGREEMENT.
This Agreement is binding on and enforceable by and against the parties,
their successors, heirs, legal representatives, and assigns, and may be
amended, altered, or terminated only by an
5
<PAGE> 6
instrument in writing signed by all parties bound by this Agreement as of the
time of such amendment, alteration, or termination.
12. GOVERNING LAW.
This Agreement shall be governed by and construed according to the laws of
the State of Ohio.
13. SEVERABILITY.
No part if this Agreement shall be affected if any other part of it is
held invalid or unenforceable.
14. NOTICES.
Any notices required or permitted to be given under this Agreement must be
given in writing, and will be deemed received when personally delivered or, if
earlier, when received after mailing by registered or certified United States
mail, postage prepaid, with return receipt requested. Notice to the
Corporation is valid if sent to its principal place of business, and notice to
Employee is valid if sent to him at his address as it appears in the
Corporation's records.
15. HEADINGS.
The headings of this Agreement are inserted for convenience only and are
not part of the Agreement.
16. WAIVER.
Any party's failure to insist on compliance or enforcement of any
provision of this Agreement shall not affect its validity or enforceability or
constitute a waiver of future enforcement of that provision or of any other
provision of this Agreement.
17. COPIES.
More than one (1) copy of this Agreement may be executed and all parties
agree and acknowledge that each executed copy shall be a duplicate original.
18. NUMBER AND GENDER.
Masculine terms used in this Agreement shall include the feminine and
neuter genders, and neuter terms shall include both masculine and feminine
genders. Singular terms shall include the plural, and vice versa, whenever the
context and/or the circumstances require it.
6
<PAGE> 7
IN WITNESS WHEREOF, the parties have executed this Agreement this 18th day
of November 1996.
CENTRUM INDUSTRIES, INC.
By____________________________________
______________________________________
GEORGE WELLS, Employee
7
<PAGE> 1
EXHIBIT-10.24
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this ____ day of ________,199_, by and
between Centrum Industries, Inc., a Delaware corporation ("Centrum") and
_________________ ("Director").
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereto agree as follows:
SECTION 1 - GRANT OF OPTION. Centrum hereby grants to Director the right
and option to purchase from it, on the following terms and conditions, all or
any part of an aggregate of _____________________________________ (_______)
shares of Centrum's common stock $.05 par value (the "Shares"). The purchase
price for all Shares shall be _______-_____ Dollars ($____) per share,
exercisable and payable as hereinafter provided. This price per share
represents the fair market value for these shares as of this date, determined
in accordance with the Performance Award Plan.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. The Director may elect
to exercise the option at any time on or after _______________.
Notwithstanding the above, if Centrum's officers or directors execute a letter
of intent (binding or non-binding) by which Centrum will become a party to a
transaction which will effect a "Change of Control" of Centrum, Director must
exercise his/her options within the thirty (30) day period following the date
of notice to Director that a letter of intent has been entered into, or else
the option and all rights granted by this Agreement, to the extent those rights
have not been exercised, will terminate and become null and void. No partial
exercise of such option may be for less than one (1) full Share. For purposes
of this Agreement "Change of Control" shall be effected if (i) Centrum merges
with or into or consolidates with another corporation following the requisite
approval of the shareholders of Centrum of such merger or consolidation and,
after giving effect to such merger or consolidation, less than fifty-one (51%)
of the then outstanding voting securities of the surviving or resulting
corporation represent or were issued in exchange for voting securities of
Centrum outstanding immediately prior to such merger or consolidation; (ii)
there is a sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of
Centrum following the requisite approval of the shareholders of Centrum of such
transaction or series of transactions; or (iii) the requisite approval of the
shareholders of Centrum is obtained to approve any plan or proposal for the
liquidation or dissolution of Centrum. The option shall be exercisable only by
Director during his/her lifetime and only if Director was a director of Centrum
or a Centrum affiliate on the date three (3) months prior to the date of
exercise. If Director is disabled within the meaning of Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended (the "Code"), the reference to
the three (3) month period above shall be read as one (1) year.
SECTION 3 - METHOD OF EXERCISE. The option granted under this Agreement
shall be exercisable as provided above, upon written notice to Centrum and the
payment in cash to Centrum of the full purchase price of the Shares which the
Director elects to purchase.
<PAGE> 2
SECTION 3 - METHOD OF EXERCISE. The option granted under this Agreement
shall be exercisable as provided above, upon written notice to Centrum and the
payment in cash to Centrum of the full purchase price of the Shares which the
Director elects to purchase.
SECTION 4 - TERMINATION OF DIRECTORSHIP. In the event that a Director
shall cease to serve as a director of Centrum or a Centrum affiliate, whether
voluntarily or involuntarily, for any reason other than death or disability,
all of Director's rights to further exercise his/her option(s) shall expire
three (3) months after the date of termination of the directorship; provided,
however, that no option shall be exercisable after the expiration date set
forth in Section 6. A leave of absence with the express written consent of
Centrum shall not be considered termination of the directorship for purposes of
this Section 4.
SECTION 5 - DEATH OR DISABILITY OF DIRECTOR. In the event of the death
or disability of a Director while a director of Centrum or a Centrum affiliate,
his/her right to purchase Shares may be exercised (to the extent that Director
was entitled to do so at the date of his/her death or disability) by him/her
or, in the case of the death of Director, by his/her personal representative or
by any person or persons who shall have acquired the option directly from
Director by will or by the laws of descent and distribution, at any time within
three (3) months after the date of his/her death or disability; provided that
if Director is disabled as defined in Section 2 of this Agreement, the three
(3) month period referred to above shall be read as one (1) year.
Notwithstanding anything herein to the contrary, no option shall be exercisable
after the expiration of the term of the option set forth in Section 6.
SECTION 6 - TERMINATION OF OPTION. The option and all rights granted by
this Agreement, to the extent those rights have not been exercised will
terminate and become null and void at 5:00 p.m. on _________________.
SECTION 7 - SHARES AS INVESTMENT. By accepting this option, the Director
acknowledges that any and all Shares purchased pursuant to the exercise of the
option under this Agreement shall be acquired for investment and not for
distribution, and upon the delivery of any and all of the Shares due to the
exercise of the option granted hereunder, the Director shall deliver to Centrum
a representation in writing and in a form acceptable to Centrum that such
Shares are being acquired in good faith for investment and not for
distribution. This Section 7 shall not apply in the event that the Shares have
been registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 8 - RESTRICTIONS ON SHARES. The Shares issued pursuant to the
exercise of the option granted in Section 1 shall not be registered under
federal securities laws or the securities of any state and will, therefore, be
deemed restricted and certain restrictions will be applicable upon the resale
of such security. Each Share will, upon issuance, contain a restrictive legend
in substantially the following form:
The common stock represented by this certificate has not been
registered under the Securities Act of 1933, as amended or under
the securities laws of any state. Each holder desiring to
transfer the common stock must furnish Centrum with a written
opinion reasonably satisfactory to Centrum in the form and
substance from counsel reasonably satisfactory to Centrum by
reason of experience to the effect that the holder may transfer
<PAGE> 3
the common stock as desired without registration under the
Securities Act or the securities laws of any state.
This Section 8 shall not apply in the event that the Shares have been
registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 9 - DILUTION OR OTHER AGREEMENT. In the event that additional
Shares are issued pursuant to a stock split or a stock dividend, the number of
Shares then covered by each outstanding option granted hereunder shall be
increased proportionately with no increase in the total purchase price of the
Shares then so covered. If the issued and outstanding Shares are reduced by a
reverse stock split or other combination of Shares, (other than by a
transaction described in Section 2 of this Agreement), the number of Shares
then covered by each outstanding option granted hereunder shall be reduced
proportionately with no reduction in the total price of the Shares then so
covered. In the event that Centrum should transfer assets to another
corporation and distribute the stock of such other corporation without the
surrender of Shares, and if such distribution is not taxable as a dividend and
no gain or loss is recognized by reason of Section 355 of the Code, or some
similar section, then the total purchase price of the Shares shall be reduced
by an amount which bears the same ratio to the total purchase price then in
effect as the market value of the stock distributed with respect to the Shares
immediately following the distribution, bears to the aggregate of the market
value of such time of a Share and the stock distributed in respect thereof. No
fractional shares shall be issued, and any fractional Shares resulting from the
computations pursuant to this Section 9, shall be eliminated from the option.
No adjustment shall be made for cash dividends or the issuance to stockholders
of rights to subscribe for additional Shares or other securities.
SECTION 10 - RIGHT OF SHAREHOLDER. The Director shall not have any
rights or privileges of a shareholder of Centrum in respect with the Shares
transferable upon exercise of the option granted under this Agreement, unless
and until certificates representing such Shares shall have been endorsed,
transferred, and delivered and the transferee has caused his/her name to be
entered as the shareholder of record on the books of Centrum.
SECTION 11 - NON-TRANSFERABILITY. The option shall not be transferable
and the option may be exercised, during the lifetime of the Director only by
him/her. Except as specifically provided in this Agreement, the option may not
be assigned, transferred, pledged or hypothecated in any way, shall not be
assignable by operation of law, including but not limited to a decree in a
domestic relations proceeding, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the option, and the levy of any
execution, attachment, or similar process upon the option in violation of this
Agreement, shall be null and void and without effect.
SECTION 12 - AFFILIATE. As used herein, the term "affiliate" shall mean
any present or any future corporation which would be deemed an affiliate of
Centrum in Rule 12b-2 of the regulations promulgated pursuant to the Securities
Exchange Act of 1934.
SECTION 13 - NOTICES. Any notice to be given under the terms of this
Agreement shall be addressed to Centrum in care of its President at 6135 Trust
Drive, Suite 104A, Holland, Ohio 43528 with a copy to John W. Hilbert II, Esq.,
Fuller & Henry P.L.L., One SeaGate, 17th Floor, P. O. Box 2088, Toledo, Ohio
43603 and any notice to be given to Director shall be addressed to
<PAGE> 4
him/her at the address set forth beneath his/her signature below, or at such
other address as either party may hereafter designate in writing to the other.
Any such notice shall be deemed duly given when mailed by prepaid regular,
registered, or certified mail.
SECTION 14 - BINDING EFFECT. This Agreement shall be binding upon Director
and his/her executors administrators, and representatives and assigns, and upon
Centrum and its successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
CENTRUM INDUSTRIES, INC.
By:_______________________________
George H. Wells, President and
Chief Executive Officer
"DIRECTOR"
__________________________________
DIRECTOR'S ADDRESS FOR NOTICE PURPOSES:
__________________________________
___________________________________
<PAGE> 1
EXHIBIT-10.25
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this ____ day of ________, 199_, by and
between Centrum Industries, Inc., a Delaware corporation ("Centrum") and
_________________ ("Employee").
NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties hereto agree as follows:
SECTION 1 - GRANT OF OPTION. Centrum hereby grants to Employee the
right and option to purchase from it, on the following terms and conditions,
all or any part of an aggregate of _____________________________________
(_______) shares of Centrum's common stock $.05 par value (the "Shares"). The
purchase price for all Shares shall be _______-_____ Dollars ($____) per share,
exercisable and payable as hereinafter provided. This price per share
represents the fair market value for these shares as of this date, determined
in accordance with the Performance Award Plan.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. The Employee may
elect to exercise the option at any time on or after _______________.
Notwithstanding the above, if Centrum's officers or directors execute a letter
of intent (binding or non-binding) by which Centrum will become a party to a
transaction which will effect a "Change of Control" of Centrum, Employee must
exercise his/her options within the thirty (30) day period following the date
of notice to Employee that a letter of intent has been entered into, or else
the option and all rights granted by this Agreement, to the extent those rights
have not been exercised, will terminate and become null and void. No partial
exercise of such option may be for less than one (1) full Share. For purposes
of this Agreement "Change of Control" shall be effected if (i) Centrum merges
with or into or consolidates with another corporation following the requisite
approval of the shareholders of Centrum of such merger or consolidation and,
after giving effect to such merger or consolidation, less than fifty-one (51%)
of the then outstanding voting securities of the surviving or resulting
corporation represent or were issued in exchange for voting securities of
Centrum outstanding immediately prior to such merger or consolidation; (ii)
there is a sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of
Centrum following the requisite approval of the shareholders of Centrum of such
transaction or series of transactions; or (iii) the requisite approval of the
shareholders of Centrum is obtained to approve any plan or proposal for the
liquidation or dissolution of Centrum. The option shall be exercisable only by
Employee during his/her lifetime and only if Employee was an employee of
Centrum or a Centrum affiliate on the date three (3) months prior to the date
of exercise. If Employee is disabled within the meaning of Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended (the "Code"), the reference to
the three (3) month period above shall be read as one (1) year.
<PAGE> 2
SECTION 3 - METHOD OF EXERCISE. The option granted under this Agreement
shall be exercisable as provided above, upon written notice to Centrum and the
payment in cash to Centrum of the full purchase price of the Shares which the
Employee elects to purchase.
SECTION 4 - TERMINATION OF EMPLOYMENT. In the event that an Employee
shall cease to be employed by Centrum or a Centrum affiliate, whether
voluntarily or involuntarily, for any reason other than death or disability,
all of Employee's rights to further exercise his/her option(s) shall expire
three (3) months after the date of termination of employment; provided,
however, that no option shall be exercisable after the expiration date set
forth in Section 6. A leave of absence with the express written consent of
Centrum shall not be considered termination of employment for purposes of this
Section 4.
SECTION 5 - DEATH OR DISABILITY OF EMPLOYEE. In the event of the death
or disability of an Employee while employed by Centrum or a Centrum affiliate,
his/her right to purchase Shares may be exercised (to the extent that Employee
was entitled to do so at the date of his/her death or disability) by him/her
or, in the case of the death of Employee, by his/her personal representative or
by any person or persons who shall have acquired the option directly from
Employee by will or by the laws of descent and distribution, at any time within
three (3) months after the date of his/her death or disability; provided that
if an Employee is disabled as defined in Section 2 of this Agreement, the three
(3) month period referred to above shall be read as one (1) year.
Notwithstanding anything herein to the contrary, no option shall be exercisable
after the expiration of the term of the option set forth in Section 6.
SECTION 6 - TERMINATION OF OPTION. The option and all rights granted by
this Agreement, to the extent those rights have not been exercised will
terminate and become null and void at 5:00 p.m. on _________________.
SECTION 7 - SHARES AS INVESTMENT. By accepting this option, the
Employee acknowledges that any and all Shares purchased pursuant to the
exercise of the option under this Agreement shall be acquired for investment
and not for distribution, and upon the delivery of any and all of the Shares
due to the exercise of the option granted hereunder, the Employee shall deliver
to Centrum a representation in writing and in a form acceptable to Centrum
that such Shares are being acquired in good faith for investment and not for
distribution. This Section 7 shall not apply in the event that the Shares have
been registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 8 - RESTRICTIONS ON SHARES. The Shares issued pursuant to the
exercise of the option granted in Section 1 shall not be registered under
federal securities laws or the securities of any state and will, therefore, be
deemed restricted and certain restrictions will be applicable upon the resale
of such security. Each Share will, upon issuance, contain a restrictive legend
in substantially the following form:
The common stock represented by this certificate has not
been registered under the Securities Act of 1933, as
amended or under the securities laws of any state. Each
holder desiring to transfer the common stock must furnish
Centrum with a written opinion reasonably satisfactory to
Centrum in the form and substance from counsel reasonably
satisfactory to Centrum by reason of experience to the
effect that the holder may transfer the common stock as
desired without registration under the Securities Act or the
securities laws of any state.
<PAGE> 3
This Section 8 shall not apply in the event that the Shares have been
registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 9 - DILUTION OR OTHER AGREEMENT. In the event that additional
Shares are issued pursuant to a stock split or a stock dividend, the number of
Shares then covered by each outstanding option granted hereunder shall be
increased proportionately with no increase in the total purchase price of the
Shares then so covered. If the issued and outstanding Shares are reduced by a
reverse stock split or other combination of Shares, (other than by a
transaction described in Section 2 of this Agreement), the number of Shares
then covered by each outstanding option granted hereunder shall be reduced
proportionately with no reduction in the total price of the Shares then so
covered. In the event that Centrum should transfer assets to another
corporation and distribute the stock of such other corporation without the
surrender of Shares, and if such distribution is not taxable as a dividend and
no gain or loss is recognized by reason of Section 355 of the Code, or some
similar section, then the total purchase price of the Shares shall be reduced
by an amount which bears the same ratio to the total purchase price then in
effect as the market value of the stock distributed with respect to the Shares
immediately following the distribution, bears to the aggregate of the market
value of such time of a Share and the stock distributed in respect thereof. No
fractional shares shall be issued, and any fractional Shares resulting from the
computations pursuant to this Section 9, shall be eliminated from the option.
No adjustment shall be made for cash dividends or the issuance to stockholders
of rights to subscribe for additional Shares or other securities.
SECTION 10 - RIGHT OF SHAREHOLDER. The Employee shall not have any
rights or privileges of a shareholder of Centrum in respect with the Shares
transferable upon exercise of the option granted under this Agreement, unless
and until certificates representing such Shares shall have been endorsed,
transferred, and delivered and the transferee has caused his/her name to be
entered as the shareholder of record on the books of Centrum.
SECTION 11 - NON-TRANSFERABILITY. The option shall not be transferable
and the option may be exercised, during the lifetime of the Employee only by
him/her. Except as specifically provided in this Agreement, the option may not
be assigned, transferred, pledged or hypothecated in any way, shall not be
assignable by operation of law, including but not limited to a decree in a
domestic relations proceeding, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the option, and the levy of any
execution, attachment, or similar process upon the option in violation of this
Agreement, shall be null and void and without effect.
SECTION 12 - AFFILIATE. As used herein, the term "affiliate" shall mean
any present or any future corporation which would be deemed an affiliate of
Centrum in Rule 12b-2 of the regulations promulgated pursuant to the Securities
Exchange Act of 1934.
SECTION 13 - NOTICES. Any notice to be given under the terms of this
Agreement shall be addressed to Centrum in care of its President at 6135 Trust
Drive, Suite 104A, Holland, Ohio 43528 with a copy to John W. Hilbert II, Esq.,
Fuller & Henry P.L.L., One SeaGate, 17th Floor, P. O. Box 2088, Toledo, Ohio
43603 and any notice to be given to Employee shall be addressed to him/her at
the address set forth beneath his/her signature below, or at such other address
as either party may hereafter designate in writing to the other. Any such
notice shall be deemed duly given when mailed by prepaid regular, registered,
or certified mail.
<PAGE> 4
SECTION 14 - BINDING EFFECT. This Agreement shall be binding upon
Employee and his/her executors administrators, and representatives and assigns,
and upon Centrum and its successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
CENTRUM INDUSTRIES, INC.
By:_______________________________
George H. Wells, President and
Chief Executive Officer
"EMPLOYEE"
__________________________________
EMPLOYEE'S ADDRESS FOR NOTICE PURPOSES:
__________________________________
___________________________________
<PAGE> 1
EXHIBIT-10.26
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 2nd day of December, 1996, by and
between Centrum Industries, Inc., a Delaware corporation ("Centrum") and George
H. Wells ("Employee").
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereto agree as follows:
SECTION 1 - GRANT OPTION. Centrum hereby grants to Employee the right and
option to purchase from it, on the following terms and conditions, all or any
part of an aggregate of One Hundred Fifty Thousand (150,000) shares of
Centrum's common stock $.05 par value (the "Shares"). The purchase price for
all Shares shall be $1.50 per share, exercisable and payable as hereinafter
provided. The price per share represents the fair market value for these
shares as of this date, determined in accordance with the Performance Award
Plan.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. The Employee may elect
to exercise the option at any time on or after December 2, 1996.
Notwithstanding the above, if Centrum's officers or directors execute a letter
of intend (binding or non-binding) by which Centrum will become a party to a
transaction which will effect a "Change of Control" of Centrum, Employee must
exercise his/her options within the thirty (30) day period following the date
of notice to Employee that a letter of intent has been entered into, or else
the option and all rights granted by this Agreement, to the extent those rights
have not been exercised, will terminate and become null and void. No partial
exercise of such option may be for less than one (1) full Share. For purposes
of this Agreement "Change of Control" shall be effected if (i) Centrum merges
with or into or consolidates with another corporation following the requisite
approval of the shareholders of Centrum of such merger or consolidation and,
after giving effect to such merger or consolidation, less than fifty-one (51%)
of the then outstanding voting securities of the surviving or resulting
corporation represent or were issued in exchange for voting securities of
Centrum outstanding immediately prior to such merger or consolidation; (ii)
there is a sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all the assets of
Centrum following the requisite approval of the shareholders of Centrum of such
transaction or series of transactions; or (iii) the requisite approval of the
shareholders of Centrum is obtained to approve any plan or proposal for the
liquidation or dissolution of Centrum. The option shall be exercisable only by
Employee during his/her lifetime and only if Employee was a employee of Centrum
or a Centrum affiliate on the date three (3) months prior to the date of
exercise. If Employee is disabled within the meaning of Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended (the "Code"), the reference to
the three (3) month period above shall be read as one (1) year.
<PAGE> 2
SECTION 3 - METHOD OF EXERCISE. The option granted under this Agreement
shall be exercisable as provided above, upon written notice to Centrum and the
payment in cash to Centrum of the full purchase price of the Shares which the
Employee elects to purchase.
SECTION 4 - TERMINATION OF EMPLOYMENT. In the event that a Employee shall
cease to serve as a employee of Centrum or a Centrum affiliate, whether
voluntarily or involuntarily, for any reason other than death or disability,
all of Employee's rights to further exercise his/her option(s) shall expire
three (3) months after the date of termination of employment; provided,
however, that no option shall be exercisable after the expiration date set
forth in Section 6. A leave of absence with the express written consent of
Centrum shall not be considered termination of employment for purposes of this
Section 4.
SECTION 5 - DEATH OR DISABILITY OF EMPLOYEE. In the event of the death or
disability of a Employee while a employee of Centrum or a Centrum affiliate,
his/her right to purchase Shares may be exercised (to the extend that Employee
was entitled to do so at the date of his/her death or disability) by him/her
or, in the case of the death of Employee, by his/her personal representative or
by any person or persons who shall have acquired the option directly from
Employee by will or by the laws of descent and distribution, or at any time
within three (3) month after the date of his/her death or disability;
provided that if Employee is disabled as defined in Section 2 of this
Agreement, the three (3) month period referred to above shall be read as one
(1) year. Notwithstanding anything herein to the contrary, no option shall be
exercisable after the expiration of the term of the option set forth in Section
6.
SECTION 6 - TERMINATION OF OPTION. The option and all rights granted by
this Agreement, to the extent those rights have not been exercised will
terminate and become null and void at 5:00 p.m. on December 2, 2006.
SECTION 7 - SHARES AS INVESTMENT. By accepting this option, the Employee
acknowledges that any and all Shares purchased pursuant to the exercise of the
option under this Agreement shall be acquired for investment and not for
distribution, and upon the delivery of any and all of the Shares due to the
exercise of the option granted hereunder, the Employee shall deliver to Centrum
a representation in writing and in a form acceptable to Centrum that such
Shares are being acquired in good faith for investment and not for
distribution. This Section 7 shall not apply in the event that the Shares have
been registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 8 - RESTRICTIONS ON SHARES. The Shares issued pursuant to the
exercise of the option granted in Section 1 shall not be registered under
federal securities laws or the securities of any state and will, therefore, be
deemed restricted and certain restrictions will be applicable upon the resale
of such security. Each Share will, upon issuance, contain a restrictive legend
in substantially the following form:
The common stock represented by this certificate has not been registered
under the Securities Act of 1933, as amended or under the securities laws
of any state. Each holder desiring to transfer the common stock must
furnish Centrum with a written opinion reasonable satisfactory to Centrum
in the form and substance from counsel reasonable satisfactory to
<PAGE> 3
Centrum by reason of experience to the effect that the holder may
transfer the common stock as desired without registration under the
Securities Act or the securities laws of any state.
The Section 8 shall not apply in the event that the Shares have been registered
pursuant to the Securities Act of 1933 and applicable state securities laws.
SECTION 9 - DILUTION OR OTHER AGREEMENT. In the event that additional
Shares are issued pursuant to a stock split or a stock dividend, the number of
Shares then covered by each outstanding option granted hereunder shall be
increased proportionately with no increase in the total purchase price of the
Shares then so covered. If the issued and outstanding Shares are reduced by a
reverse stock split or other combination of Shares, (other than by a
transaction described in Section 2 of this Agreement), the number of Shares
then covered by each outstanding option granted hereunder shall be reduced
proportionately with no reduction in the total price of the Shares then so
covered. In the event that Centrum should transfer assets to another
corporation and distribute the stock of such other corporation without the
surrender of Shares, and if such distribution is not taxable as a dividend and
no gain or loss is recognized by reason of Section 355 of the Code, or some
similar section, then the total purchase price of the Shares shall be reduced
by an amount which bears the same ratio to the total purchase price then in
effect as the market value of the stock distributed with respect to the Shares
immediately following the distribution, bears to the aggregate of the market
value of such time of a Share and the stock distributed in respect thereof. No
fractional shares shall be issued, and any fractional Shares resulting from the
computations pursuant to this Section 9, shall be eliminated from the option.
No adjustment shall be made for cash dividends or the issuance to stockholders
of rights to subscribe for additional Shares or other securities.
SECTION 10 - RIGHT OF SHAREHOLDER. The Employee shall not have any rights
or privileges of a shareholder of Centrum in respect with the Shares
transferable upon exercise of the option granted under this Agreement, unless
and until certificates representing such Shares shall have been endorsed,
transferred, and delivered and the transferee has caused his/her name to be
entered as the shareholder of record on the books of Centrum.
SECTION 11 - NON-TRANSFERABILITY. The option shall not be transferable
and the option may be exercised, during the lifetime of the Employee only by
him/her. Except as specifically provided in this Agreement, the option may not
be assigned, transferred, pledged or hypothecated in any way, shall not be
assignable by operation of law, including but not limited to a decree in a
domestic relations proceeding, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the option, and the levy of any
execution, attachment, or similar process upon the option in violation of this
Agreement, shall be null and void and without effect.
SECTION 12 - AFFILIATE. As used herein, the term "affiliate" shall mean
any present or any future corporation which would be deemed an affiliate of
Centrum in Rule 12b-2 of the regulations promulgated pursuant to the Securities
Exchange Act of 1934.
SECTION 13 - NOTICES. Any notice to be given under the terms of this
Agreement shall be addressed to Centrum in care of its President at 6135 Trust
Drive, Suite 104A, Holland, Ohio 43528 with a copy to John W. Hilbert II, Esq.,
Fuller & Henry P.L.L., One SeaGate, 17th Floor, P.O. Box 2088, Toledo, Ohio
43603 and any notice to be given to Employee shall be
<PAGE> 4
addressed to him/her at the address set forth beneath his/her signature below,
or at such other address as either party may hereafter designate in writing to
the other. Any such notice shall be deemed duly given when mailed by prepaid
regular, registered, or certified mail.
SECTION 14 - BINDING EFFECT. This Agreement shall be binding upon
Employee and his/her executors administrators, and representatives and assigns,
and upon Centrum and its successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
CENTRUM INDUSTRIES, INC.
By: /s/ William C. Davis
------------------------------------
William C. Davis, Vice President
and Secretary
By: /s/ Timothy M. Hunter
------------------------------------
Timothy M. Hunter, Chief Financial
Officer and Treasurer
"EMPLOYEE"
/s/ George H. Wells
------------------------------------
Employee's Address for Notice Purposes:
------------------------------------
------------------------------------
<PAGE> 1
EXHIBIT-10.27
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 2nd day of December, 1996, by and
between Centrum Industries, Inc., a Delaware corporation ("Centrum") and
Timothy M. Hunter ("Employee").
NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties hereto agree as follows:
SECTION 1 - GRANT OPTION. Centrum hereby grants to Employee the right
and option to purchase from it, on the following terms and conditions, all or
any part of an aggregate of One Thousand Eight Hundred Ninety Eight (1,898)
shares of Centrum's common stock $.05 par value (the "Shares"). The purchase
price for all Shares shall be $2.00 per share, exercisable and payable as
hereinafter provided. The price per share represents the fair market value for
these shares as of this date, determined in accordance with the Performance
Award Plan.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. The Employee may
elect to exercise the option at any time on or after December 2, 1996.
Notwithstanding the above, if Centrum's officers or directors execute a letter
of intend (binding or non-binding) by which Centrum will become a party to a
transaction which will effect a "Change of Control" of Centrum, Employee must
exercise his/her options within the thirty (30) day period following the date
of notice to Employee that a letter of intent has been entered into, or else
the option and all rights granted by this Agreement, to the extent those rights
have not been exercised, will terminate and become null and void. No partial
exercise of such option may be for less than one (1) full Share. For
purposes of this Agreement "Change of Control" shall be effected if (i) Centrum
merges with or into or consolidates with another corporation following the
requisite approval of the shareholders of Centrum of such merger or
consolidation and, after giving effect to such merger or consolidation, less
than fifty-one (51%) of the then outstanding voting securities of the surviving
or resulting corporation represent or were issued in exchange for voting
securities of Centrum outstanding immediately prior to such merger or
consolidation; (ii) there is a sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially
all the assets of Centrum following the requisite approval of the shareholders
of Centrum of such transaction or series of transactions; or (iii) the
requisite approval of the shareholders of Centrum is obtained to approve any
plan or proposal for the liquidation or dissolution of Centrum. The option
shall be exercisable only by Employee during his/her lifetime and only if
Employee was a employee of Centrum or a Centrum affiliate on the date three (3)
months prior to the date of exercise. If Employee is disabled within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"), the reference to the three (3) month period above shall be read
as one (1) year.
<PAGE> 2
SECTION 3 - METHOD OF EXERCISE. The option granted under this
Agreement shall be exercisable as provided above, upon written notice to
Centrum and the payment in cash to Centrum of the full purchase price of the
Shares which the Employee elects to purchase.
SECTION 4 - TERMINATION OF EMPLOYMENT. In the event that a Employee
shall cease to be employed by Centrum or a Centrum affiliate, whether
voluntarily or involuntarily, for any reason other than death or disability,
all of Employee's rights to further exercise his/her option(s) shall expire
three (3) months after the date of termination of employment; provided,
however, that no option shall be exercisable after the expiration date set
forth in Section 6. A leave of absence with the express written consent of
Centrum shall not be considered termination of employment for purposes of this
Section 4.
SECTION 5 - DEATH OR DISABILITY OF EMPLOYEE. In the event of the
death or disability of an Employee while employed by Centrum or a Centrum
affiliate, his/her right to purchase Shares may be exercised (to the extend
that Employee was entitled to do so at the date of his/her death or disability)
by him/her or, in the case of the death of Employee, by his/her personal
representative or by any person or persons who shall have acquired the option
directly from Employee by will or by the laws of descent and distribution, at
any time within three (3) months after the date of his/her death or disability;
provided that if Employee is disabled as defined in Section 2 of this
Agreement, the three (3) month period referred to above shall be read as one
(1) year. Notwithstanding anything herein to the contrary, no option shall be
exercisable after the expiration of the term of the option set forth in Section
6.
SECTION 6 - TERMINATION OF OPTION. The option and all rights granted
by this Agreement, to the extent those rights have not been exercised will
terminate and become null and void at 5:00 p.m. on December 2, 2006.
SECTION 7 - SHARES AS INVESTMENT. By accepting this option, the
Employee acknowledges that any and all Shares purchased pursuant to the
exercise of the option under this Agreement shall be acquired for investment
and not for distribution, and upon the delivery of any and all of the Shares
due to the exercise of the option granted hereunder, the Employee shall deliver
to Centrum a representation in writing and in a form acceptable to Centrum that
such Shares are being acquired in good faith for investment and not for
distribution. This Section 7 shall not apply in the event that the Shares have
been registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 8 - RESTRICTIONS ON SHARES. The Shares issued pursuant to the
exercise of the option granted in Section 1 shall not be registered under
federal securities laws or the securities of any state and will, therefore, be
deemed restricted and certain restrictions will be applicable upon the resale
of such security. Each Share will, upon issuance, contain a restrictive legend
in substantially the following form:
The common stock represented by this certificate has not been
registered under the Securities Act of 1933, as amended or under the
securities laws of any state. Each holder desiring to transfer the
common stock must furnish Centrum with a written opinion reasonable
satisfactory to Centrum in the
<PAGE> 3
form and substance from counsel reasonable satisfactory to Centrum by
reason of experience to the effect that the holder may transfer the
common stock as desired without registration under the Securities Act
or the securities laws of any state.
This Section 8 shall not apply in the event that the Shares have been
registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 9 - DILUTION OR OTHER AGREEMENT. In the event that additional
Shares are issued pursuant to a stock split or a stock dividend, the number of
Shares then covered by each outstanding option granted hereunder shall be
increased proportionately with no increase in the total purchase price of the
Shares then so covered. If the issued and outstanding Shares are reduced by a
reverse stock split or other combination of Shares, (other than by a
transaction described in Section 2 of this Agreement), the number of Shares
then covered by each outstanding option granted hereunder shall be reduced
proportionately with no reduction in the total price of the Shares then so
covered. In the event that Centrum should transfer assets to another
corporation and distribute the stock of such other corporation without the
surrender of Shares, and if such distribution is not taxable as a dividend and
no gain or loss is recognized by reason of Section 355 of the Code, or some
similar section, then the total purchase price of the Shares shall be reduced
by an amount which bears the same ratio to the total purchase price then in
effect as the market value of the stock distributed with respect to the Shares
immediately following the distribution, bears to the aggregate of the market
value of such time of a Share and the stock distributed in respect thereof. No
fractional shares shall be issued, and any fractional Shares resulting from the
computations pursuant to this Section 9, shall be eliminated from the option.
No adjustment shall be made for cash dividends or the issuance to stockholders
of rights to subscribe for additional Shares or other securities.
SECTION 10 - RIGHT OF SHAREHOLDER. The Employee shall not have any
rights or privileges of a shareholder of Centrum in respect with the Shares
transferable upon exercise of the option granted under this Agreement, unless
and until certificates representing such Shares shall have been endorsed,
transferred, and delivered and the transferee has caused his/her name to be
entered as the shareholder of record on the books of Centrum.
SECTION 11 - NON-TRANSFERABILITY. The option shall not be
transferable and the option may be exercised, during the lifetime of the
Employee only by him/her. Except as specifically provided in this Agreement,
the option may not be assigned, transferred, pledged or hypothecated in any
way, shall not be assignable by operation of law, including but not limited to
a decree in a domestic relations proceeding, and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the option, and the levy of any
execution, attachment, or similar process upon the option in violation of this
Agreement, shall be null and void and without effect.
SECTION 12 - AFFILIATE. As used herein, the term "affiliate" shall
mean any present or any future corporation which would be deemed an affiliate
of Centrum in Rule 12b-2 of the regulations promulgated pursuant to the
Securities Exchange Act of 1934.
SECTION 13 - NOTICES. Any notice to be given under the terms of this
Agreement shall be addressed to Centrum in care of its President at 6135 Trust
Drive, Suite 104A, Holland, Ohio 43528 with a copy to John W. Hilbert II, Esq.,
Fuller & Henry P.L.L., One SeaGate, 17th
<PAGE> 4
Floor, P.O. Box 2088, Toledo, Ohio 43603 and any notice to be given to Employee
shall be addressed to him/her at the address set forth beneath his/her
signature below, or at such other address as either party may hereafter
designate in writing to the other. Any such notice shall be deemed duly given
when mailed by prepaid regular, registered, or certified mail.
SECTION 14 - BINDING EFFECT. This Agreement shall be binding upon
Employee and his/her executors administrators, and representatives and assigns,
and upon Centrum and its successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
CENTRUM INDUSTRIES, INC.
By:/s/ George H. Wells
-----------------------------------
George H. Wells, President and
Chief Executive Officer
"EMPLOYEE"
/s/ Timothy M. Hunter
---------------------------------------
Employee's Address for Notice Purposes:
---------------------------------------
---------------------------------------
<PAGE> 1
EXHIBIT-10.28
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 2nd day of December, 1996, by and
between Centrum Industries, Inc., a Delaware corporation ("Centrum") and
Anthony A. Montani ("Employee").
NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties hereto agree as follows:
SECTION 1 - GRANT OPTION. Centrum hereby grants to Employee the right
and option to purchase from it, on the following terms and conditions, all or
any part of an aggregate of One Thousand Eight Hundred Ninety Eight (1,898)
shares of Centrum's common stock $.05 par value (the "Shares"). The purchase
price for all Shares shall be $2.00 per share, exercisable and payable as
hereinafter provided. The price per share represents the fair market value for
these shares as of this date, determined in accordance with the Performance
Award Plan.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. The Employee may
elect to exercise the option at any time on or after December 2, 1996.
Notwithstanding the above, if Centrum's officers or directors execute a letter
of intend (binding or non-binding) by which Centrum will become a party to a
transaction which will effect a "Change of Control" of Centrum, Employee must
exercise his/her options within the thirty (30) day period following the date
of notice to Employee that a letter of intent has been entered into, or else
the option and all rights granted by this Agreement, to the extent those rights
have not been exercised, will terminate and become null and void. No partial
exercise of such option may be for less than one (1) full Share. For
purposes of this Agreement "Change of Control" shall be effected if (i) Centrum
merges with or into or consolidates with another corporation following the
requisite approval of the shareholders of Centrum of such merger or
consolidation and, after giving effect to such merger or consolidation, less
than fifty-one (51%) of the then outstanding voting securities of the surviving
or resulting corporation represent or were issued in exchange for voting
securities of Centrum outstanding immediately prior to such merger or
consolidation; (ii) there is a sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially
all the assets of Centrum following the requisite approval of the shareholders
of Centrum of such transaction or series of transactions; or (iii) the
requisite approval of the shareholders of Centrum is obtained to approve any
plan or proposal for the liquidation or dissolution of Centrum. The option
shall be exercisable only by Employee during his/her lifetime and only if
Employee was a employee of Centrum or a Centrum affiliate on the date three (3)
months prior to the date of exercise. If Employee is disabled within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"), the reference to the three (3) month period above shall be read
as one (1) year.
<PAGE> 2
SECTION 3 - METHOD OF EXERCISE. The option granted under this
Agreement shall be exercisable as provided above, upon written notice to
Centrum and the payment in cash to Centrum of the full purchase price of the
Shares which the Employee elects to purchase.
SECTION 4 - TERMINATION OF EMPLOYMENT. In the event that a Employee
shall cease to be employed by Centrum or a Centrum affiliate, whether
voluntarily or involuntarily, for any reason other than death or disability,
all of Employee's rights to further exercise his/her option(s) shall expire
three (3) months after the date of termination of employment; provided,
however, that no option shall be exercisable after the expiration date set
forth in Section 6. A leave of absence with the express written consent of
Centrum shall not be considered termination of employment for purposes of this
Section 4.
SECTION 5 - DEATH OR DISABILITY OF EMPLOYEE. In the event of the
death or disability of an Employee while employed by Centrum or a Centrum
affiliate, his/her right to purchase Shares may be exercised (to the extend
that Employee was entitled to do so at the date of his/her death or disability)
by him/her or, in the case of the death of Employee, by his/her personal
representative or by any person or persons who shall have acquired the option
directly from Employee by will or by the laws of descent and distribution, at
any time within three (3) months after the date of his/her death or
disability; provided that if Employee is disabled as defined in Section 2 of
this Agreement, the three (3) month period referred to above shall be read as
one (1) year. Notwithstanding anything herein to the contrary, no option
shall be exercisable after the expiration of the term of the option set forth
in Section 6.
SECTION 6 - TERMINATION OF OPTION. The option and all rights granted
by this Agreement, to the extent those rights have not been exercised will
terminate and become null and void at 5:00 p.m. on December 2, 2006.
SECTION 7 - SHARES AS INVESTMENT. By accepting this option, the
Employee acknowledges that any and all Shares purchased pursuant to the
exercise of the option under this Agreement shall be acquired for investment
and not for distribution, and upon the delivery of any and all of the Shares
due to the exercise of the option granted hereunder, the Employee shall deliver
to Centrum a representation in writing and in a form acceptable to Centrum that
such Shares are being acquired in good faith for investment and not for
distribution. This Section 7 shall not apply in the event that the Shares have
been registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 8 - RESTRICTIONS ON SHARES. The Shares issued pursuant to the
exercise of the option granted in Section 1 shall not be registered under
federal securities laws or the securities of any state and will, therefore, be
deemed restricted and certain restrictions will be applicable upon the resale
of such security. Each Share will, upon issuance, contain a restrictive legend
in substantially the following form:
The common stock represented by this certificate has not been
registered under the Securities Act of 1933, as amended or under the
securities laws of any state. Each holder desiring to transfer the
common stock must furnish Centrum with a written opinion reasonable
satisfactory to Centrum in the
<PAGE> 3
form and substance from counsel reasonable satisfactory to Centrum by
reason of experience to the effect that the holder may transfer the
common stock as desired without registration under the Securities Act
or the securities laws of any state.
This Section 8 shall not apply in the event that the Shares have been
registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 9 - DILUTION OR OTHER AGREEMENT. In the event that additional
Shares are issued pursuant to a stock split or a stock dividend, the number of
Shares then covered by each outstanding option granted hereunder shall be
increased proportionately with no increase in the total purchase price of the
Shares then so covered. If the issued and outstanding Shares are reduced by a
reverse stock split or other combination of Shares, (other than by a
transaction described in Section 2 of this Agreement), the number of Shares
then covered by each outstanding option granted hereunder shall be reduced
proportionately with no reduction in the total price of the Shares then so
covered. In the event that Centrum should transfer assets to another
corporation and distribute the stock of such other corporation without the
surrender of Shares, and if such distribution is not taxable as a dividend and
no gain or loss is recognized by reason of Section 355 of the Code, or some
similar section, then the total purchase price of the Shares shall be reduced
by an amount which bears the same ratio to the total purchase price then in
effect as the market value of the stock distributed with respect to the Shares
immediately following the distribution, bears to the aggregate of the market
value of such time of a Share and the stock distributed in respect thereof. No
fractional shares shall be issued, and any fractional Shares resulting from the
computations pursuant to this Section 9, shall be eliminated from the option.
No adjustment shall be made for cash dividends or the issuance to stockholders
of rights to subscribe for additional Shares or other securities.
SECTION 10 - RIGHT OF SHAREHOLDER. The Employee shall not have any
rights or privileges of a shareholder of Centrum in respect with the Shares
transferable upon exercise of the option granted under this Agreement, unless
and until certificates representing such Shares shall have been endorsed,
transferred, and delivered and the transferee has caused his/her name to be
entered as the shareholder of record on the books of Centrum.
SECTION 11 - NON-TRANSFERABILITY. The option shall not be
transferable and the option may be exercised, during the lifetime of the
Employee only by him/her. Except as specifically provided in this Agreement,
the option may not be assigned, transferred, pledged or hypothecated in any
way, shall not be assignable by operation of law, including but not limited to
a decree in a domestic relations proceeding, and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the option, and the levy of any
execution, attachment, or similar process upon the option in violation of this
Agreement, shall be null and void and without effect.
SECTION 12 - AFFILIATE. As used herein, the term "affiliate" shall
mean any present or any future corporation which would be deemed an affiliate
of Centrum in Rule 12b-2 of the regulations promulgated pursuant to the
Securities Exchange Act of 1934.
SECTION 13 - NOTICES. Any notice to be given under the terms of this
Agreement shall be addressed to Centrum in care of its President at 6135 Trust
Drive, Suite 104A, Holland, Ohio 43528 with a copy to John W. Hilbert II, Esq.,
Fuller & Henry P.L.L., One SeaGate, 17th
<PAGE> 4
Floor, P.O. Box 2088, Toledo, Ohio 43603 and any notice to be given to Employee
shall be addressed to him/her at the address set forth beneath his/her
signature below, or at such other address as either party may hereafter
designate in writing to the other. Any such notice shall be deemed duly given
when mailed by prepaid regular, registered, or certified mail.
SECTION 14 - BINDING EFFECT. This Agreement shall be binding upon
Employee and his/her executors administrators, and representatives and assigns,
and upon Centrum and its successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
CENTRUM INDUSTRIES, INC.
By: /s/ George H. Wells
-----------------------------------
George H. Wells, President and
Chief Executive Officer
"EMPLOYEE"
/s/ Anthony A. Montani
---------------------------------------
Employee's Address for Notice Purposes:
---------------------------------------
---------------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> MAR-31-1997 MAR-31-1996
<PERIOD-END> DEC-31-1996 DEC-31-1995
<CASH> 1,635,587 1,684,406
<SECURITIES> 0 0
<RECEIVABLES> 12,197,246 2,897,273
<ALLOWANCES> 283,600 92,159
<INVENTORY> 11,645,130 1,399,455
<CURRENT-ASSETS> 26,621,813 6,867,703
<PP&E> 12,025,673 1,428,866
<DEPRECIATION> 1,222,211 223,729
<TOTAL-ASSETS> 43,911,745 11,127,199
<CURRENT-LIABILITIES> 23,464,745 5,406,307
<BONDS> 0 0
0 0
3,500 3,500
<COMMON> 414,911 284,869
<OTHER-SE> 7,727,108 1,614,555
<TOTAL-LIABILITY-AND-EQUITY> 43,911,745 11,127,199
<SALES> 52,406,892 16,930,644
<TOTAL-REVENUES> 52,644,422 16,989,062
<CGS> 38,991,224 12,623,980
<TOTAL-COSTS> 49,074,412 16,116,585
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,009,600 270,852
<INCOME-PRETAX> 1,560,410 601,625
<INCOME-TAX> (322,250) 162,450
<INCOME-CONTINUING> 1,882,660 439,175
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,882,660 439,175
<EPS-PRIMARY> 0.24 0.08
<EPS-DILUTED> 0.24 0.08
</TABLE>
