<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 June 30, 1997
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-9607
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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)
--------------------------------------
(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 July 31, 1997
----- ----------------------------
Common Stock - $.05 Par Value 8,463,237
1
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CENTRUM INDUSTRIES, INC.
INDEX
Page
COVER 1
INDEX 2
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
Condensed Consolidated Balance Sheets
as of June 30, 1997 and March 31,1997. 3
Condensed Consolidated Statements of
Income for the three months ended
June 30, 1997 and 1996. 4
Condensed Consolidated Statements of
Cash Flows for the three months ended
June 30, 1997 and 1996. 5
Notes to Condensed Consolidation
Financial Statements 6
ITEM 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
ITEM 6: Exhibits and Reports on Form 8-K 11
Part II - OTHER INFORMATION 11
SIGNATURES 12
2
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PART 1: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTRUM INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(unaudited)
June 30 March 31,
1997 1997
---- ----
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 2,094,002 $ 2,758,219
Accounts receivable, less allowances of $163,682
and $78,161, respectively 12,054,086 11,080,819
Cost and estimated earnings in excess of billings
on uncompleted contracts 887,276 1,513,808
Inventories, net 11,619,082 9,897,925
Prepaid expense and other 597,558 517,656
------------ ------------
Total Current Assets 27,252,004 25,768,427
Property, plant and equipment, net 17,254,930 10,627,764
Other Assets 6,627,268 6,604,456
------------ ------------
Total Assets $ 51,134,202 $ 43,000,647
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Bank line of credit $ 10,555,346 $ 10,644,724
Current portion of long-term debt 2,462,039 1,607,629
Accounts payable 9,696,682 6,640,781
Accrued expense and other 4,065,323 3,747,301
------------ ------------
Total Current Liabilities 26,779,390 22,640,435
Long-term debt, less current portion 14,429,071 11,021,938
Other liabilities 582,435 595,636
SHAREHOLDERS' EQUITY:
Preferred stock - $.05 par value, 1,000,000 shares
authorized, 70,000 shares issued and outstanding
(liquidation preference of $10 per share) 3,500 3,500
Common stock - $.05 par value, 15,000,000 authorized
8,463,237 and 8,368,904 issued and outstanding 423,162 418,445
Additional paid-in capital 8,125,520 7,918,233
Retained Earnings 791,124 402,460
------------ ------------
Total Shareholders' Equity 9,343,306 8,742,638
------------ ------------
Total Liabilities and Shareholders' Equity $ 51,134,202 $ 43,000,647
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
3
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CENTRUM INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
For the three
months ended
June 30, June 30,
1997 1996
---- ----
<S> <C> <C>
Sales $ 17,055,717 $ 17,579,196
Costs and expenses
Cost of sales 12,391,988 12,754,415
Depreciation 408,484 311,578
Amortization 115,188 119,428
Selling, general and
administrative expenses 2,985,021 3,195,837
--------------- --------------
15,900,681 16,381,258
--------------- --------------
Operating income 1,155,036 1,197,938
--------------- --------------
Other income and (expenses)
Interest income 22,983 44,253
Interest expenses (591,715) (574,355)
Miscellaneous 15,961 10,428
--------------- --------------
(552,771) (519,674)
--------------- --------------
Income before income taxes 602,265 678,264
Provision for income 213,601 102,000
--------------- --------------
Net income $ 388,664 $ 576,264
=============== ==============
Net income per common
and common equivalent share $ 0.04 $ 0.08
--------------- --------------
Weighted average number of
common and common equivalent
shares outstanding 9,211,924 7,114,299
=============== ==============
</TABLE>
See notes to condensed consolidated financial statements.
4
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CENTRUM INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
For the three For the three
Months ended Months ended
June 30, June 30,
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 388,664 $ 576,264
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 523,672 431,006
Deferred income taxes 158,540 112,387
Changes in assets and liabilites that provide (use) cash:
Accounts receivable 190,326 719,955
Cost and estimated earnings in excess of billings
on uncompleted contracts 626,532 (459,113)
Inventory (261,402) (1,027,107)
Prepaid expenses and other (261,166) (280,465)
Accounts payable 980,813 (1,137,359)
Accrued expenses and other (166,595) (850,486)
Customer deposits 4,135 252,222
------------ ------------
Net cash provided by (used in) operating activities 2,183,519 (1,662,696)
------------ ------------
Cash flows from investing activities:
Investment in unconsolidated subsidiary 22,991 0
Purchase of property and equipment (226,070) (132,685)
Purchase of Taylor, net of cash acquired and common stock issued (6,808,437) 0
------------ ------------
Net cash used in investing activities (7,011,516) (132,685)
------------ ------------
Cash flows from financing activities:
Net proceeds (repayments) on short-term debt (89,377) 1,362,677
Repayments of notes payable 0 (243,037)
Proceeds from Issuance of Debt 4,252,654 0
Proceeds from the issuance of common stock 503 555,351
Other financing activities 0 202,773
------------ ------------
Net cash provided by (used in) financing activities 4,163,780 1,877,764
------------ ------------
Increase (decrease) in cash and cash equivalents (664,217) 82,383
Cash and cash equivalents at beginning of period 2,758,219 2,100,749
------------ ------------
Cash and cash equivalents at end of period $ 2,094,002 $ 2,183,132
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
5
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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 periods ended
June 30, 1997 and 1996. 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, 1997.
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, 1997.
The results of operations for the three months ended June 30, 1997, 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. In
this document, years reflect the fiscal year ended March 31, unless otherwise
noted.
NOTE B: COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS
Inventories consisted of the following at June 30, 1997 and March 31, 1997:
<TABLE>
<CAPTION>
June 30, 1997 March 31, 1997
------------- --------------
<S> <C> <C>
Raw Materials $ 5,865,494 $ 5,407,088
Work in Progress 4,571,659 3,834,537
Finished Goods 1,181,929 656,300
------------- -------------
Total Inventories $ 11,619,082 $ 9,897,925
============= =============
Other assets consisted of the following at June 30, 1997 and March 31, 1997:
<CAPTION>
June 30, 1997 March 31, 1997
------------- ---------------
<S> <C> <C>
Deferred Income Tax Benefits $ 2,672,360 $ 2,830,901
Goodwill, less accumulated amortization of
$439,284 and $404,494, respectively 2,264,052 2,298,842
Debt Issuance Costs, less accumulated
amortization of $601,220 and $520,822, 718,956 805,630
respectively
Other Assets 971,900 669,083
------------ -------------
Total Other Assets $ 6,627,268 $ 6,604,456
============ =============
</TABLE>
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NOTE C: INCOME TAXES
Income taxes payable as of June 30, 1997 was $40,000 and none as of March 31,
1997.
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
Centrum acquired substantially all of the assets of Taylor Forge International,
Inc., through a subsidiary of McInnes, which is now known as Taylor Forge
Company (Taylor) on June 4, 1997. This transaction was accounted for as a
purchase and Taylor's operations have been included in the consolidated
financial statements as part of the metal forming operations since that date.
CONSOLIDATED RESULTS
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 and compressor industries,
steel seamless rolled rings for bearing, off-road construction manufacturers,
oil and gas, mining and specialty machine manufacturers along with nonferrous
castings for the glass container, 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.
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Summarized unaudited results of operations by business segment for the three
month period ended June 30, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
Quarter ended Quarter ended
June 30, 1997 June 30, 1996
Dollars Percent Dollars Percent
------- ------- ------- -------
<S> <C> <C> <C> <C>
Sales
Metal forming $ 12,503,780 73.31% $ 11,689,731 66.50%
Material handling 2,901,606 17.01% 3,924,990 22.33%
Motor production 1,649,106 9.68% 1,964,475 11.17%
Corporate 1,225 0.00% 0 0.00%
------------- ------ ------------ ------
Total sales $ 17,055,717 100.00% $ 17,579,196 100.00%
============= ====== ============ ======
Operating income (loss)
Metal forming $ 1,236,551 107.06% $ 1,202,055 100.34%
Material handling 39,151 3.39% 83,529 6.97%
Motor Production 174,709 15.13% 123,062 10.27%
Corporate (295,375) (25.57%) (210,708) (17.59%)
------------- ------- ------------ -------
Total operating $ 1,155,036 100.00% $ 1,197,938 100.00%
income ============= ======= ============ =======
</TABLE>
Revenue is comparable to the prior year period on a consolidated basis.
However, gross margins have decreased slightly from 25.7% for the first quarter
of the prior year to 24.9% for the current year quarter. This has been offset
by a reduction in the selling, general and administrative costs on a
consolidated basis. As a result of this, operating income as a percentage of
sales was 6.8% for both periods. Interest expense increased slightly due to
the acquisition of Taylor. The effective tax rate utilized for the current
period is 35% as compared to 15% in the prior year. Management does not
anticipate tax benefits to be realized in fiscal 1998 to the extent experienced
in fiscal 1997.
Management believes that both the short-term and long-term fundamentals of each
of the Company's business segments remain sound. Backlogs in each business
segment are stable and the mix of products will continue to support operating
margins at the manufacturing segments. For these reasons, management believes
that current trends in revenues and margins can be maintained during the
remainder of this fiscal year.
METAL FORMING OPERATIONS
The metal forming operations sales increased over the comparable period of the
prior year mainly due to the inclusion of Taylor in the current period's
results. The gross margin rate of 25.6%, compared to 27.1% in the prior year
period, decreased as a result of changes in the mix of products sold. In
addition, selling, general and administrative costs decreased as a percentage
of sales from 16.4% in the prior year period to 15.3% for current period.
Continued emphasis on controls over fixed costs and increased sales contributed
to this improvement. As a result of these items, the operating margin was 9.9%
for the current quarter as compared to 10.3% in the comparable prior year
period. Interest expense increased slightly during the period as a result of
the debt related to the Taylor acquisition.
8
<PAGE> 9
MATERIAL HANDLING SYSTEMS
Sales and operating income at the material handling systems segment have
decreased compared to the corresponding prior year period. The decrease is
primarily due to customer requested delivery reschedules from fiscal 1997 into
the second and third quarters of fiscal 1998. Work on the largest project,
which had been rescheduled, was begun in July 1997. Management anticipates
that work on the balance of the rescheduled jobs will begin in the second
and third quarters of fiscal 1998. More effective cost controls resulted in a
gross margin of 25.1% for the current quarter compared to 23.3% for the first
quarter of 1997. Selling, general and administrative expenses were 22.5% of
sales as compared to 20.3% in the prior year period. Although, selling,
general and administrative expenses decreased in total amount, the decreased
sales revenue covered a lesser portion of fixed costs. As a result of these
items, operating margins were 1.7% in the first quarter of 1998 as compared to
2.2% in the prior year quarter. Management anticipates that the revenue stream
and operating margins will benefit over the remaining quarters of the this year
through the completion of orders rescheduled from the prior year.
MOTOR PRODUCTION SYSTEMS
Sales revenue decreased compared to the same quarter of the previous year as a
result of the pricing for sales distributed through a marketing joint venture.
The reduction in sales price is offset by reduced selling, general and
administrative costs at the motor production systems segment. These costs have
been reduced by utilizing the joint venture for marketing. For this reason,
selling, general and administrative costs were 9.1% of sales for the first
quarter of 1998 compared to 15.4% for the corresponding quarter of the prior
year. Gross margin improvement coupled with fixed cost economies with the
joint venture resulted in a 10.7% operating margin this year as compared to the
6.3% experienced in the prior year period.
CORPORATE OFFICE
Corporate administrative expenses increased primarily due to increased
professional fees and additional administrative expenses associated with the
overall growth of the business, however, these costs are comparable to the costs
incurred during the most recent prior year quarter. Interest expense decreased
at the corporate level, as a result of principal repayments of existing debt.
The number of common and common equivalent shares outstanding has increased 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, 1997 for more detailed discussion of these matters.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities for the quarter ended June 30, 1997
totaled $2.2 million, as opposed to cash used by operations of $1.7 million in
the prior year period. This improvement is a direct result of management's
continued emphasis on enhancing the overall working capital position of the
Company and comes in the midst of adding new debt related to the Taylor
acquisition. Net income, taxes and depreciation and amortization kept pace
with the prior year period providing $1.1 million in cash. In addition, the
timing of payments to vendors and the reduction of costs and estimated
earnings in excess of billing on uncompleted contracts contributed $1.6
million in cash during the current quarter.
The $6.9 million purchase price of Taylor was financed by debt agreements and
the issuance of 94,000 shares of the Company's common stock. The purchase
price is subject to adjustment through the issuance of up to 30,000 additional
shares, or the return of the issued shares. Financing for the transaction was
provided by
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an increase in the metal forming operations line of credit and a new term note.
Approximately, $2.2 million was drawn on the line of credit and a $4 million,
five year term note was obtained. Please refer to the Form 10-K filed for the
year ended March 31, 1997 for a more detailed discussion of these matters.
The primary sources of funds available to the Company in 1998 for operations,
planned capital expenditures and debt repayments include available cash,
operating income and funds available under the line of credit agreement.
Although the 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.
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, 1997, 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.
10
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PART II - OTHER INFORMATION
A collectively bargained agreement with approximately 50 employees within the
metal forming operations segment was reached on July 16, 1997. The terms of
the agreement, which do not materially differ from those of the previous
agreement, are for a five year period.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(B): Reports on Form 8-K
On June 6, 1997 the Company filed a Form 8-K for the purpose of reporting the
pending acquisition of substantially all the asset of Taylor Forge
International, Inc.
On June 19, 1997 the Company filed a Form 8-K for the purpose of reporting the
acquisition of substantially all the assets of Taylor Forge International, Inc.
on June 4, 1997.
11
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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 August 13, 1997 By: /s/ Timothy M. Hunter
-----------------------
Timothy M. Hunter
Chief Financial Officer
12
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
EX 10.30 Model Employee Stock Option Agreement
EX 10.31 Stock Option Agreement with Timothy M. Hunter
dated July 21, 1997
EX 10.32 Stock Option Agreement with Anthony A. Montani
dated July 21, 1997
EX 10.33 Amendment to Employment Agreement with George H. Wells
executed June 27, 1997.
EX 27 Financial Data Schedule
13
<PAGE> 1
Agreement No. [NUMBER]
EXHIBIT 10.30
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 21st day of July, 1997, by and
between Centrum Industries, Inc., a Delaware corporation ("Centrum") and NAME
("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 SHARES (SHARE#) 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, as
determined by Centrum's Board of Directors.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. The Employee may
elect to exercise the option at any time. 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 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.
1
<PAGE> 2
Agreement No. [NUMBER]
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 July 21, 2007.
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. Initially the Shares issued
pursuant to the exercise of the option granted in Section 1 may not be
registered under federal securities laws or the securities of any state and
may, therefore, be deemed restricted and certain restrictions will be
applicable upon the resale of such security. Each Share may, 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
2
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Agreement No. [NUMBER]
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
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.
It is Centrum's present intention to file a registration statement with the
Securities and Exchange Commission to register this option and the underlying
Shares in the near future. This Section 8 will 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
3
<PAGE> 4
Agreement No. [NUMBER]
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.
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, Chairman of The Board,
Chief Executive Officer and President
"EMPLOYEE"
__________________________________________
Employee's Address for Notice Purposes:
__________________________________________
__________________________________________
4
<PAGE> 1
Agreement No. 043
EXHIBIT 10.31
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 21st day of July, 1997, 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 Fifty Five Thousand Six Hundred Seventy One
(55,671) 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, as determined by Centrum's Board of
Directors.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. The Employee may
elect to exercise the option at any time. 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 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.
1
<PAGE> 2
Agreement No. 043
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 July 21, 2007.
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. Initially the Shares issued
pursuant to the exercise of the option granted in Section 1 may not be
registered under federal securities laws or the securities of any state and
may, therefore, be deemed restricted and certain restrictions will be
applicable upon the resale of such security. Each Share may, 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
2
<PAGE> 3
Agreement No. 043
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
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.
It is Centrum's present intention to file a registration statement with the
Securities and Exchange Commission to register this option and the underlying
Shares in the near future. This Section 8 will 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
3
<PAGE> 4
Agreement No. 043
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.
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, Chairman of The Board,
Chief Executive Officer and President
"EMPLOYEE"
/s/ Timothy M. Hunter
------------------------------------------
Employee's Address for Notice Purposes:
------------------------------------------
------------------------------------------
4
<PAGE> 1
Agreement No. 042
EXHIBIT 10.32
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 21st day of July, 1997, 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 Fifty Five Thousand Six Hundred Seventy One
(55,671) 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, as determined by Centrum's Board of
Directors.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. The Employee may
elect to exercise the option at any time. 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 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.
1
<PAGE> 2
Agreement No. 042
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 July 21, 2007.
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. Initially the Shares issued
pursuant to the exercise of the option granted in Section 1 may not be
registered under federal securities laws or the securities of any state and
may, therefore, be deemed restricted and certain restrictions will be
applicable upon the resale of such security. Each Share may, 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
2
<PAGE> 3
Agreement No. 042
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
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.
It is Centrum's present intention to file a registration statement with the
Securities and Exchange Commission to register this option and the underlying
Shares in the near future. This Section 8 will 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
3
<PAGE> 4
Agreement No. 042
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.
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, Chairman of The Board,
Chief Executive Officer and President
"EMPLOYEE"
___________________________________________
Employee's Address for Notice Purposes:
___________________________________________
___________________________________________
4
<PAGE> 1
EXHIBIT 10.33
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT is made and entered into as this 10th day of June 1997,
by and between GEORGE H. WELLS ("Employee") and CENTRUM INDUSTRIES, INC.
("Corporation").
WITNESSETH
WHEREAS, Employee and Corporation entered into an Amended and Restated
Employment Agreement ("Agreement") effective as of the 1st day of September
1996 whereby the Corporation employed the Employee as President and Chief
Executive Officer, and
WHEREAS, the parties hereto desire to amend the Agreement and paragraph
11 of the Agreement requires that all amendments shall be in writing.
NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Paragraph 3.1 is amended in its entirety to read as follows:
"3.1 The Employee shall be paid a salary of Two Hundred Ten
Thousand Dollars ($210,000.00) per year payable in
twenty-four (24) equal bi-monthly installments on the 15th
and last day of each month."
2. Except as expressly amended hereby, all other terms and conditions
of the Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Employment Agreement this 27 day of June 1997.
CENTRUM INDUSTRIES, INC.
/s/ George H. Wells By /s/ William C. Davis
- ------------------------- -----------------------------
George H. Wells William C. Davis, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 2,094,002
<SECURITIES> 0
<RECEIVABLES> 12,054,086
<ALLOWANCES> 163,682
<INVENTORY> 11,619,082
<CURRENT-ASSETS> 27,252,004
<PP&E> 19,322,514
<DEPRECIATION> 2,067,584
<TOTAL-ASSETS> 51,134,202
<CURRENT-LIABILITIES> 26,779,390
<BONDS> 0
0
3,500
<COMMON> 423,162
<OTHER-SE> 8,916,644
<TOTAL-LIABILITY-AND-EQUITY> 51,134,202
<SALES> 17,055,717
<TOTAL-REVENUES> 17,094,661
<CGS> 12,800,472
<TOTAL-COSTS> 15,785,493
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 591,715
<INCOME-PRETAX> 602,265
<INCOME-TAX> 213,601
<INCOME-CONTINUING> 388,664
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 388,664
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
