<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended February 29, 1996 Commission File Number 0-12353
PLASMA-THERM, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 04-2554632
- ------------------------------ -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
9509 INTERNATIONAL COURT, ST. PETERSBURG, FLORIDA 33716
-------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code (813) 577-4999
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $.01 per share 10,296,561
- -------------------------------------- -----------------------------
Class Outstanding at March 14, 1996
Page 1 of 13 Pages
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PART 1. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Balance Sheets - February 29, 1996 and
November 30, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Statements of Income - Three Months Ended
February 29, 1996 and February 28, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Statements of Cash Flows - Three Months Ended
February 29, 1996 and February 28, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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<PAGE> 3
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 29, November 30,
ASSETS 1996 1995
------------ ------------
(unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 4,285,933 $ 5,058,718
Accounts receivable 7,391,108 7,882,427
Prepaid income taxes - 18,048
Inventories 10,704,592 9,832,853
Prepaid expenses and other 332,459 269,875
Deferred tax asset 421,000 603,000
----------- -----------
Total current assets 23,135,092 23,664,921
----------- -----------
Property and equipment, at cost
Machinery and equipment 2,394,380 2,301,273
Leasehold improvements 420,763 419,263
----------- -----------
2,815,143 2,720,536
Less accumulated depreciation and amortization 2,116,497 1,954,377
----------- -----------
698,646 766,159
Land 786,017 786,017
Construction in process 2,795,691 1,417,353
----------- -----------
4,280,354 2,969,529
----------- -----------
Other assets
Deferred tax asset 189,748 182,850
Other 265,536 91,720
----------- -----------
455,284 274,570
----------- -----------
$27,870,730 $26,909,020
=========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
-3-
<PAGE> 4
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 29, November 30,
LIABILITIES 1996 1995
------------ ------------
<S> <C> <C>
Current liabilities
Short-term borrowings $ 2,000,000 $ 2,000,000
Current portion of notes payable 366,150 343,647
Current maturities of obligations under
capital leases 75,582 73,010
Accounts payable 1,695,897 2,920,079
Accrued payroll and related 352,273 402,649
Accrued expenses 225,708 356,895
Accrued warranty expense 693,515 693,515
Income taxes payable 136,025 -
----------- -----------
Total current liabilities 5,545,150 6,789,795
----------- -----------
Long-term obligations
Notes payable 2,445,864 908,485
Obligations under capital leases 212,342 238,475
----------- -----------
2,658,206 1,146,960
----------- -----------
SHAREHOLDERS' EQUITY
Shareholders' equity
Common stock
$.01 par value
Authorized - 25,000,000 shares
Issued and outstanding - 10,296,561
shares - 1996 and 10,279,561 shares -
1995 102,967 102,797
Additional paid-in capital 14,695,155 14,645,775
Retained earnings 4,869,252 4,223,693
----------- -----------
19,667,374 18,972,265
----------- -----------
$27,870,730 $26,909,020
=========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
-4-
<PAGE> 5
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
February 29, February 28,
1996 1995
------------ ------------
<S> <C> <C>
Net sales $ 8,290,002 $ 4,986,860
----------- -----------
Costs and expenses
Cost of products sold 5,288,305 3,417,513
Research and development 619,323 514,812
Selling and administrative 1,338,436 1,078,000
Interest expense 58,217 35,656
Interest income (71,606) (84,755)
Other (income) expense, net 678 4,151
----------- -----------
7,233,353 4,965,377
----------- -----------
Income before income taxes 1,056,649 21,483
Income taxes 411,090 13,050
----------- -----------
Net income $ 645,559 $ 8,433
=========== ===========
Income per share (primary and fully diluted) $ 0.06 $ -
=========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
-5-
<PAGE> 6
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
February 29, February 28,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities
Net income $ 645,559 $ 8,433
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 162,120 106,740
Loss on disposal of assets - 5,100
Deferred taxes 175,102 -
Compensation - stock options 27,015 6,250
Changes in assets and liabilities
(Increase) decrease in accounts receivable 491,319 (852,984)
(Increase) decrease in income tax deposits 18,048 (109,539)
Increase in inventories (871,739) (1,114,872)
(Increase) decrease in prepaid expenses and other (82,584) 128,223
Increase (decrease) in accounts payable (1,224,182) 697,898
Decrease in accrued payroll and related (50,376) (144,225)
Increase (decrease) in accrued expenses (131,187) 4,998
Increase (decrease) in income taxes payable
(exclusive of tax benefits derived from
exercise of options/warrants) 132,140 (151,962)
----------- ---------
Net cash used in
operating activities (708,765) (1,415,940)
----------- ---------
Cash flows from investing activities
Capital expenditures (1,472,945) (174,813)
Payments received on note receivable 20,000 15,000
Other (173,816) 13,519
----------- ---------
Net cash used in investing activities (1,626,761) (146,294)
----------- ---------
</TABLE>
See accompanying notes to these consolidated financial statements.
-6-
<PAGE> 7
PLASMA-THERM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------
February 29, February 28,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from financing activities
Proceeds from issuance of notes payable 1,643,215 -
Principal payments on notes payable (83,333) (125,000)
Principal payments under capital lease obligations (23,561) (29,896)
Net issuances under line of credit agreements - (1,000,000)
Issuance of common stock and warrants 26,420 205,066
Issuance of common stock in private placement - 5,777,134
----------- -----------
Net cash provided by
financing activities 1,562,741 4,827,304
----------- -----------
Net increase (decrease) in cash and
cash equivalents (772,785) 3,265,070
----------- -----------
Cash and cash equivalents, beginning of period 5,058,718 2,625,850
----------- -----------
Cash and cash equivalents, end of period $ 4,285,933 $ 5,890,920
=========== ===========
</TABLE>
See accompanying notes to these consolidated financial statements.
-7-
<PAGE> 8
PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 1996 AND NOVEMBER 30, 1995
NOTE 1 BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the
financial position as of February 29, 1996 and the results of
operations and cash flows for the three months ended February 29, 1996
and February 28, 1995.
The results of operations for the three months ended February 29, 1996
and February 28, 1995 are not necessarily indicative of results for
the full year.
The November 30, 1995 balance sheet amounts and disclosures included
herein have been derived from the November 30, 1995 audited financial
statements of the Registrant. While the Company believes that the
disclosures presented are adequate to make the information not
misleading, it is suggested that these consolidated financial
statements be read in conjunction with the consolidated financial
statements and the notes included in the Company's latest annual
report on Form 10-K.
NOTE 2 PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
Plasma-Therm, Inc. and its wholly-owned subsidiary, Magnetran Inc..
All significant intercompany transactions and balances have been
eliminated.
NOTE 3 INCOME PER SHARE
Earnings per share is computed based on the weighted average number of
shares of common stock adjusted for the conversion of dilutive common
stock equivalents. The primary and fully diluted income per share are
the same for all periods presented. The following is the weighted
average outstanding share information.
<TABLE>
<CAPTION>
Three Months Ended
--------------------------------------------
February 29, 1996 February 28, 1995
----------------- -----------------
<S> <C> <C>
Primary 10,611,434 10,587,924
Fully Diluted 10,611,017 10,587,610
</TABLE>
-8-
<PAGE> 9
PLASMA-THERM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 1996 AND NOVEMBER 30, 1995
NOTE 4 ACCOUNTING FOR STOCK-BASED COMPENSATION
Management has not yet completely analyzed the provisions of SFAS No.
123 "Accounting for Stock-Based Compensation". Accordingly,
management has not yet determined whether or not SFAS No. 123's
accounting recognition provisions will be adopted or if APB No. 25's
method will be continued. In addition, management has not yet
determined the potential effect that the SFAS No. 123 accounting
provision, if adopted, will have on the Company's financial
statements.
NOTE 5 NOTES PAYABLE
In March 1996 the Company executed a promissory note for $364,000 with
its bank for the purchase of manufacturing software. Monthly
installments of $11,318 including interest at 7.92% is payable through
February, 1999. The note is secured by various machinery and
equipment.
-9-
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL POSITION, LIQUIDITY AND CAPITAL REQUIREMENTS
The Company's cash position decreased by $772,785 from November 30,
1995 to February 29, 1996 while cash used in operating activities
decreased by $708,765 for the same period. Working capital at
February 29, 1996 was $17,589,942, which is an increase of $714,816
from November 30, 1995. The increase in working capital is the result
of a combination of several items, the most significant being an
increase in inventories due to an increase in backlog and an
anticipated increase in sales over 1995 for the remainder of 1996. In
addition, accounts payable decreased which is the result of generating
certain vendor payments earlier than the normal payment schedule in
preparation for the Company's upcoming computer conversion.
Uses of cash included the repayment of $196,897 of notes payable and
capital leases. In addition, the Company has incurred $1,472,945 in
capital expenditures, of which approximately $95,000 relates to cash
outlays for software licensing and various computer hardware. The
remaining balance of approximately $1,378,000 consists of the costs
incurred for the construction of the new building. These costs are
reimbursed to the Company through the construction loan as incurred.
The Company has extensive ongoing capital requirements for research
and development, the repayment of debt, capital equipment and
inventory. The Company believes that its current cash reserves,
together with the proceeds of its private placement, working capital
expected to be generated by operations and additional funds available
under its line of credit, should be sufficient to meet its capital
requirements for the immediate future. Should order input exceed
projected 1996 levels, additional working capital may be required.
The Company believes that inflation has had no material impact upon
its operations.
RESULTS OF OPERATIONS
Net sales of $8,290,002 for the first quarter of 1996 increased by 66%
from net sales of $4,986,860 for the first quarter of 1995. The
increase in net sales was attributable to higher product demand and
sales of the Company's newest product, the Versalock(TM) 700 Series.
Sales of the Versalock(TM) 700 Series began in fourth quarter 1995.
-10-
<PAGE> 11
RESULTS OF OPERATIONS (CONTINUED)
Cost of products sold was 63.8% of net sales for fiscal 1996 as
compared to 68.5% for fiscal 1995, resulting in a decrease of 4.7%.
The decrease is the result of higher margins in the Company's core
(batch) product lines, in addition to higher margins related to the
sales of the Versalock(TM) 700 Series. Field service costs, which
include warranty and non-warranty expenditures, have been classified
in both the cost of products sold and selling and administrative
categories in the Company's financial statements in prior years. To
be consistent with the Company's peer groups, in fiscal 1996 field
service costs are classified entirely in cost of products sold. In
the first quarter of 1995, the Company recognized approximately
$339,000 in field service costs, of which $105,000 was classified in
cost of products sold (relating primarily to warranty) and $234,000
was classified in the selling and administrative category. Total
field service costs for the first quarter of 1996 was approximately
$334,000 which was classified entirely in cost of products sold.
Research and development expense for the first quarter of 1996 and
1995 was $619,323 and $514,812, which is 7.5% and 10.3% of net sales
respectively. Although the percentage of research and development
expense to net sales has decreased, total dollars spent has increased.
A portion of research and development expenses are fixed costs;
therefore the percentage as it relates to net sales is lower in fiscal
1996 as compared to fiscal 1995 since net sales increased
significantly by 66% from fiscal 1996 to fiscal 1996. As sales
increase, certain overhead expenditures increase, however, at a lower
rate. As new product lines continue to be introduced, total dollars
expended on research and development are expected to increase to
typically 9% to 10% of net sales.
Selling and administrative expense for the quarter ended February 29,
1996 was $1,338,436, up from $1,078,000 for the quarter ended February
28, 1995. While actual expenses have increased, the percentage of net
sales was 16.1% and 21.6% for fiscal 1996 and 1995 respectively. As
discussed above, field service costs are classified entirely in cost
of products sold in fiscal 1996 whereas a portion of field service
costs were classified in the selling and administrative category in
fiscal 1995. For comparative purposes, selling and administrative
expense for fiscal 1995, less field service costs of approximately
$234,000, was $844,000 which would be 16.9% of net sales. This
percentage is consistent with 16.1% for fiscal 1996.
Income before income taxes of $1,056,649 for fiscal 1996 as compared
to $21,483 for fiscal 1995 is significantly higher due to increased
sales and higher margins in the core (batch) product lines and the
Versalock(TM) 700 Series, as discussed above. In addition, as
explained above, overhead expenses increase as net sales increase,
however, at a lower rate, thus resulting in higher net income.
-11-
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
10.39 Note and Security Agreement dated March 6, 1996
between the Registrant and NationsBanc Leasing
Corporation.
10.40 Employment Agreement between the Registrant and
Curtis A. Barratt, dated February 28, 1996.
27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the first quarter of fiscal
1996.
-12-
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PLASMA-THERM, INC.
Date: March 18, 1996 By: /s/ STACY WAGNER
----------------------------------
Stacy Wagner
V.P. of Finance
Date: March 18, 1996 By: /s/ RONALD S. DEFERRARI
----------------------------------
Ronald S. Deferrari
President, Chief Operating Officer
-13-
<PAGE> 1
EXHIBIT 10.39
NATIONSBANK(R)
NationsBanc Leasing Corporation Note and Security
Agreement
- -----------------------------------------------------------------------------
This Note and Security Agreement made as of the date set forth below sets forth
the terms and conditions governing the repayment of a loan made by NationsBanc
Leasing Corporation ("Secured Party") to the party identified below as Debtor
for the purpose of financing the personal property identified below as the
"Equipment", and the granting by Debtor to Secured Party of a security interest
in the Equipment and certain related property to secure the repayment of all
Debtor's obligations to Secured Party.
DATE: 2/2/96 AGREEMENT NUMBER:07186-00701
SECURED PARTY: NationsBanc Leasing Corporation
2300 Northlake Centre Drive, Suite 300
Tucker, Georgia 30084-4007
DEBTOR: Plasma-Therm, Inc.
EQUIPMENT: See Exhibit "A" attached hereto and made a part hereof
EQUIPMENT LOCATION:
<TABLE>
<CAPTION>
LOCATION ADDRESS CITY COUNTY ST
- -------- ------- ---- ------ --
ZIP
- ---
<S> <C> <C> <C> <C>
A 9509 International Ct Saint Petersburg Pinellas FL
33716 OR **
* 10050 Sixteenth Street Saint Petersburg Pinellas FL
33716 On or after June 1, 1996.
</TABLE>
PRINCIPAL AMOUNT OF LOAN: $364,000.00
NUMBER OF REPAYMENT INSTALLMENTS (INCLUDING FINAL REPAYMENT INSTALLMENT): 36
AMOUNT OF EACH REPAYMENT INSTALLMENT PRIOR TO FINAL REPAYMENT
INSTALLMENT: $11,318.31
AMOUNT OF FINAL REPAYMENT INSTALLMENT: $11,318.31
DUE DATE OF FIRST REPAYMENT INSTALLMENT: On the date Secured Party funds this
Loan.
<PAGE> 2
INTEREST RATE. A per annum rate of interest equal to (i) 7.92% percent (Seven
And 92/100) or (ii) if less, the highest rate of interest permitted by
applicable law.
LOAN; TERMS OF REPAYMENT. In consideration of the making of a loan by Secured
Party to Debtor for the purpose of financing the Equipment specified above (the
"Loan"), Debtor promises and agrees to pay to the order of Secured Party, at
Secured Party's address stated above or at such other places as Secured Party
may from time to time designate in writing, the principal amount of the Loan,
together with interest calculated as hereinafter provided. Subject to Debtor's
right to prepay such principal amount in whole or in part as hereinafter
provided, Debtor shall pay such principal amount together with interest thereon
in consecutive monthly installments, each in the amount set forth above under
the heading "Amount of Each Repayment Installment Prior to Final Repayment
Installment," due and payable on the "Due Date of First Repayment Installment"
set forth above and on a like date of each calendar month thereafter until the
Loan is fully repaid; provided, however, that the last such installment shall
be in the amount set forth above under the heading "Amount of Final Repayment
Installment" or (if greater) the amount of the then outstanding principal
balance of the Loan together with interest thereon.
INTEREST. Interest shall be calculated on the basis of a year of three hundred
sixty (360) days. Each installment shall include all interest accrued through
the due date of such installment.
PREPAYMENTS. After one (1) year from the date Secured Party funds this Loan,
the outstanding principal balance of the Loan may be prepaid in whole or in
part at any time, together with all interest and late charges accrued through
the date of prepayment. Except as provided herein, the Loan may not be
prepaid.
LATE CHARGES. To the extent permitted by applicable law, Debtor shall pay on
demand, as a late charge, an amount equal to five percent (5%) of each
installment or part thereof that is not paid within ten (10) days of the date
when due, but nothing in this paragraph alters the definitions of events of
default hereunder. Debtor shall pay the late charge, to the extent permitted by
applicable law, regardless of whether or not Debtor's failure to pay such
installment when due is or becomes a default hereunder and regardless of
whether or not Secured Party proceeds under the "Remedies" provisions hereof or
takes any other action, and demand for and collection of the late charge shall
not be deemed a waiver of default or of any other remedies or rights.
<PAGE> 3
SECURITY INTEREST. Debtor hereby grants to Secured Party a security interest in
and security title to the personal property described above as the "Equipment",
together with all parts, additions, accessions, accessories, replacements and
substitutions thereto or therefor, and all proceeds therefrom (including any
proceeds of insurance against fire or other casualty whether or not the
insurance policy contains an endorsement in favor of Secured Party), all of
which is hereinafter called the "Collateral". This security interest is given
to secure payment to Secured Party of all present and future obligations of
Debtor to Secured Party, including without limitation the obligation of Debtor
to repay the Loan and all other liabilities arising under or in connection with
this Agreement; all future advances, if any, made by Secured Party to Debtor,
whether or not made pursuant to any commitment of Secured Party (and nothing in
this Agreement shall be construed to create or imply the existence of any such
commitment); and all other liabilities of Debtor to Secured Party now existing
or hereafter incurred, matured or unmatured, direct or contingent, whether or
not evidenced by a promissory note, and whether owing originally to Secured
Party or acquired by Secured Party from any other party, and any renewals and
extension thereof and substitutions therefor. (All of the above obligations,
including but not limited to obligations in respect of the Loan, are
hereinafter called the "Indebtedness.")
DEBTOR WARRANTS AND REPRESENTS THAT:
GOOD STANDING. Debtor is organized and existing in good standing under the laws
of the jurisdiction of its formation, has the power to own its property and to
carry on its business as now being conducted, and is duly qualified to do
business and is in good standing in each jurisdiction in which the character of
the property owned by it therein or the transaction of its business makes such
qualification necessary.
AUTHORITY. Debtor has full power and authority to enter into this Agreement, to
make the borrowing hereunder, and to incur the obligations provided for herein,
all of which have been duly authorized by all proper and necessary action. No
consent or approval of stockholders, partners, members or co-owners or of any
public authority is required as a condition to the validity of this Agreement.
BINDING AGREEMENT. This Agreement constitutes the valid and legally binding
obligation of Debtor enforceable in accordance with its terms.
LITIGATION. There are no proceedings pending or threatened before any court or
administrative agency that might materially adversely affect the financial
condition or operation of Debtor.
NO CONFLICTING AGREEMENTS. There is no charter, by-law, preference stock or
partnership agreement provision of Debtor and no provision of any other
organizational documents or existing mortgage, indenture, contract or agreement
binding on
<PAGE> 4
Debtor or affecting its property which would conflict with or in any way
prevent the execution, delivery or performance of the terms of this Agreement.
OWNERSHIP FREE OF ENCUMBRANCES. Except for the security interest granted
hereby, Debtor now owns, or will use the proceeds hereof to become the owner
of, the Collateral free from any prior lien, security interest or encumbrance.
No financing statement covering the Collateral or any proceeds thereof is on
file in any public office, except for financing statements showing Secured
Party as the sole secured party thereunder. Debtor has a good right to grant a
security interest in the Collateral to Secured Party.
FIXTURES. None of the Collateral is now a part of or affixed to any real
property.
COLLATERAL LOCATION. Except for items of Collateral that constitute mobile
goods and that are in fact in use by Debtor in the ordinary course of its
business at other locations, all the Collateral comprising goods heretofore
delivered to the Debtor by the seller thereof is located either at (i) Debtor's
address set forth above or (ii) the "Equipment Location" set forth above.
DEBTOR COVENANTS AND AGREES THAT UNTIL ALL THE INDEBTEDNESS IS FULLY SATISFIED:
INSURANCE. Debtor shall maintain continuously, and pay when due all premiums
for, fire and casualty insurance with extended coverage on the Collateral,
insuring the same against loss by fire, explosion, theft and such other
casualties as are usually insured against by companies engaged in the same or
similar businesses with a responsible company or companies satisfactory to
Secured Party, in an amount not less than the unpaid balance of the Loan. Each
of such insurance policies shall have attached thereto a standard loss payable
endorsement, without contribution, in favor of Secured Party as its interest
may
<PAGE> 5
appear; shall provide that it may not be canceled without thirty (30) days'
prior written notice to Secured Party; shall provide that, in respect of
Secured Party's interest in such policy, the insurance shall not be invalidated
by any action or inaction of Debtor or any other person (other than Secured
Party); shall insure Secured Party's interest in the Collateral as it may
appear, regardless of any breach or violation of any warranty, declaration or
condition contained in such policy by Debtor or any other person (other than
Secured Party); and shall otherwise be in form and substance acceptable to
Secured Party. Debtor shall deliver forthwith to Secured Party each such policy
(together with the loss payable endorsement), or certificates of insurance or
other evidence satisfactory to Secured Party of the existence of all required
insurance, its terms and conditions, and the payment of all applicable
premiums. Similar evidence of renewal coverage, satisfactory to Secured Party,
shall be delivered to Secured Party at least fifteen (15) days before the
expiration of any initial insurance coverage. In addition, Debtor shall
maintain, and pay when due all premiums for, liability and other insurance in
such amounts and against such risks as is customarily carried by persons in
similar businesses owning similar property. Debtor irrevocably appoints Secured
Party as Debtor's attorney-in-fact, with full power of substitution, during the
existence of any default under this Agreement, to execute loss claims and other
applications for payment of benefits under any insurance policy in the name of
Debtor or Secured Party, to receive all monies and to endorse drafts, checks
and other instruments for the payment of any proceeds of any insurance. This
appointment shall be deemed a power coupled with an interest and shall not be
terminable by Debtor so long as Debtor remains indebted to Secured Party.
MAINTENANCE AND CLEAR TITLE. Debtor shall keep the Collateral in good condition
and free from liens and security interests, shall not sign or suffer to be
filed any financing statements relating to the Collateral except those showing
Secured Party as sole secured party shall not sell or lease or offer to sell or
lease or otherwise encumber or dispose of any of the Collateral, shall defend
the Collateral against all claims and demands of all persons at any time
claiming any interest or right therein, and shall not use the Collateral
illegally. Upon reasonable notification, Secured Party may examine and inspect
the Collateral at any time, wherever located.
CHANGE OF NAME, RESIDENCE OR PLACE OF BUSINESS. Debtor shall not change its
name, residence or place of business or do business under any assumed or
fictitious name without giving Secured Party at least thirty (30) days prior
written notice.
CHANGE OF STRUCTURE. Debtor shall maintain its existence, and shall not merge
or consolidate with or into any other entity or sell substantially all of its
assets without prior written consent of Secured Party, which consent will not
be unreasonably withheld.
<PAGE> 6
USE OF COLLATERAL. Debtor shall use the Collateral exclusively for business
operations.
FIXTURES. Debtor shall not permit any of the Collateral to become a part of or
affixed to any real property.
LOCATION OF COLLATERAL. Except for items of Collateral that constitute mobile
goods and that are in fact in use by Debtor in the ordinary course of business
at other locations, all the Collateral shall, from and after the moment that
Debtor acquires possession or control of it, be kept either at (i) Debtor's
address set forth above or (ii) the "Equipment Location" set forth above, and
all records relating to the Collateral shall likewise be kept only at such
location or locations. If at any time the Collateral, or any part thereof, is
removed to a new location, Debtor: (a) shall provide written notice thereof to
Secured Party within thirty (30) days from the date of such relocation; and (b)
either (i) the premises in which such Collateral will be installed will be
owned by Debtor free of any liens or encumbrances, or (ii) if not owned by
Debtor free of liens or encumbrances, the owner of such premises and/or the
holder of any such liens or encumbrances on such premises shall have consented
and acknowledge the superiority of Secured Partys interest in such Collateral.
INDEMNIFICATION. Debtor shall indemnify Secured Party against all claims
arising out of or connected with the ownership or use of the Collateral.
MOTOR VEHICLES. If the Collateral consists of or includes motor vehicles or
other equipment for which there is a certificate of title evidencing ownership
thereof, Debtor shall forthwith cause each certificate to be endorsed over and
the lien of Secured Party to be noted so as to show Secured Party's interest,
and Debtor shall deliver forthwith each such certificate to Secured Party.
TAXES. Debtor shall pay promptly when due all taxes, charges and assessments
that are or may become a lien on the Collateral or any part thereof, except to
the extent that the same are contested in good faith and by appropriate
proceedings.
FINANCIAL STATEMENTS. During the term of this Loan, Debtor (i) shall furnish
Secured Party annual balance sheets and profit and loss statements of Debtor
and of any guarantor of Debtors obligations hereunder within 120 days after the
end of Debtors (and any guarantors) fiscal year, and (ii) at Secured Partys
request, shall furnish Secured Party all other public financial information and
reports reasonably requested by Secured Party at any time, including quarterly
balance sheets and profit and loss statement of Debtor and of any such
guarantor. Debtor shall furnish such other information as Secured Party may
reasonably request at any time concerning the Debtor, including without
limitation information concerning the Collateral. Debtor represents and
warrants that all information furnished and to be furnished by Debtor to
Secured Party is accurate and that all
<PAGE> 7
financial statements Debtor has furnished and hereafter may furnish to Secured
Party, including operating statement and statements of condition, are and will
be prepared in accordance with generally accepted accounting principals,
consistently applied, and reasonably reflect and will reflect, as of their
respective dates, results of the operations and financial condition of Debtor
and of any other entity they purport to cover.
REIMBURSMENT FOR EXPENSES. At its option, and with no obligation to do so,
Secured Party may (i) if an event of default exists, discharge taxes or other
encumbrances on the Collateral, or pay for the repair, maintenance and
preservation of the Collateral and (ii) ten (10) days after notifying Debtor of
Secured Partys intent to do so, arrange and pay for insurance on the
Collateral. Debtor agrees to reimburse Secured Party on demand for any payments
so made; Debtor also agrees to reimburse and pay to Secured Party on demand all
expenses incurred or paid by Secured Party in perfecting the security interest
granted hereunder and in collecting the Indebtedness and in protecting or
enforcing Secured Party's rights under this Agreement, including but not
limited to reasonable attorney's fees and legal expenses. Until Debtor makes
such reimbursement, the amount of all such payments and expenses, with interest
at the rate then applicable to principal installments of the Loan not paid when
due, from the date of payment until reimbursement, shall be added to the
Indebtedness and shall be secured by the security interest granted by Debtor
under this Agreement. Nothing in this paragraph relieves Debtor of the duty to
care for, insure and protect the Collateral and Secured Party's interests
therein and to pay tax on or related to the Collateral, or of any other duty.
SALE OR REPLACEMENT OF COLLATERAL. Debtor shall not sell or replace any item or
part of the Collateral without the prior written consent of Secured Party.
POST DEFAULT INTEREST. Any principal balance not paid when due (whether by
acceleration or otherwise) shall accrue interest at the Default Rate until such
principal balance is paid. Default Rate shall be a per annum rate of interest
equal to (i) fifteen percent (15.0%) or (ii), if less, the highest rate of
interest permitted by applicable law. Secured Party may, at its option, apply
late payments (either in full or partial) in the following manner: first to
interest, then to principal, and finally to late charges. To the extent
permitted by applicable law, Debtor shall pay interest on delinquent principal
installments on
<PAGE> 8
demand regardless of whether or not Secured Party proceeds under the Remedies
provisions hereof or takes any other action, and demand for and collection of
interest on such overdue installments at the Default Rate shall not be deemed a
waiver of default or of any other remedies or rights.
EVENTS OF DEFAULT. Debtor shall be in default under this Agreement upon the
happening of any of the following events or conditions, each of which is an
event of default:
1. Default shall be made in the payment of any installment of the Loan,
or in the payment of any other Indebtedness, when and as the same becomes due
and payable, whether at the stated maturity thereof or by acceleration or
otherwise, and such default shall continue unremedied for ten (10) days; or
2. Default shall be made in the due observance or performance of any
term, covenant or agreement contained in this Agreement (other than covenants
and agreements to pay Indebtedness), and such default shall continue unremedied
for ten (10) days after written notice thereof is given by Secured Party to
Debtor; or
3. Any representation or warranty made by Debtor in this Agreement, or
any statement or representation made in any certificate, report or opinion
delivered pursuant hereto, or in connection herewith, shall prove to have been
incorrect in any material respect when made; or
4. The Collateral shall be lost, stolen, substantially damaged, destroyed
(unless (i) such occurrence is fully covered by insurance, and (ii) the Loan is
fully repaid within ninety (90) days after such occurrence), or shall be sold
or encumbered; or Debtor's rights in the Collateral shall be voluntarily or
involuntarily transferred, by way of sale, lease or creation of a security
interest, or by way of attachment, levy, garnishment or other judicial process,
or otherwise; or
5. Debtor shall become insolvent or be generally unable to meet its
obligations as they mature, make an assignment for the benefit of creditors,
admit in writing its inability to pay its debts as they mature, or suspend the
operation of its present business; or
6. A trustee, receiver or custodian shall be appointed for Debtor or for
a substantial part of its property without the consent of Debtor and not be
discharged within thirty (30) days; or
7. Bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings shall be instituted by or against Debtor, and, if instituted
against Debtor, be consented to or remain undismissed for a period of thirty
(30) days; or
8. An event described in Section 6, 7, or 8 shall occur with respect to
any party who is guarantor or surety for the Indebtedness; or
<PAGE> 9
9. Any default shall be made by Debtor in any obligation for the payment
of borrowed money or capitalized leases or any such obligation shall become or
be declared to be due and payable prior to the original stated maturity
thereof; or
10. Liquidation or dissolution of Debtor; or
11. Sale, transfer or exchange, directly or indirectly, in one or more
transactions, of a controlling stock interest in Debtor without the prior
written consent of Secured Party, which consent shall not be unreasonably
withheld; or the suspension of Debtor's present business; or
12. The Pension Benefit Guaranty Corporation shall commence proceedings
under Section 4042 of the Employee Retirement Income Security Act of 1974 to
terminate any employee pension benefit plan of Debtor; or
13. The attempted repudiation of any guaranties for obligations of Debtor
to Secured Party.
REMEDIES. Upon any event of default and at any time thereafter, Secured Party
may declare all the Indebtedness immediately due and payable in full (unless
such event of default comprises one or more of the events described in
paragraphs 7 or 8 above, in which case all the Indebtedness shall become
immediately due and payable in full without declaration, notice or other action
on the part of Secured Party), and may proceed to enforce payment thereof and
exercise any and all of the rights and remedies provided by the Uniform
Commercial Code as well as all other rights and remedies of Secured Party
hereunder or under other applicable law. Upon the occurrence of an event of
default, Debtor shall, upon demand by Secured Party, assemble the Collateral
and make it available to Secured Party at a place designated by Secured Party
reasonably convenient to both parties. Secured Party may, at its election,
enforce its rights under this Agreement by a suit in equity for specific
performance. Debtor grants Secured Party the right to enter upon any premises
of Debtor for the purpose of recovering possession of the Collateral or any
part thereof after the occurrence of an event of default, or for the
preservation or enforcement of Secured Party's other rights hereunder, all
without demand or notice to Debtor and without judicial hearing or proceedings,
which Debtor hereby expressly waives. The requirements of reasonable notice
shall be deemed met if such notice is mailed to an address of Debtor shown at
the beginning of this Agreement at least ten (10) days before the time of the
sale or disposition, but nothing contained herein shall be construed to mean
that other notice or a shorter period of time does not
<PAGE> 10
constitute reasonable notice of the sale or other disposition of the Collateral
Debtor shall reimburse Secured Party for all Secured Party's expenses of
retaking, holding, preparing for sale, selling or otherwise dealing with or
disposing of the Collateral, including attorney's fees in the amount of fifteen
percent (15%) of the outstanding principal balance of and interest on the
Indebtedness (but not to exceed the amount of attorneys fees actually incurred)
if collection is by or through an attorney at law. Subject to applicable law,
Debtor shall pay any Indebtedness remaining unpaid after sale or other
disposition of any or all of the Collateral. Any surplus proceeds from the sale
or other disposition of the Collateral remaining after full satisfaction of the
Indebtedness shall be paid to Debtor or to such other persons as may be
entitled thereto under applicable law.
CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted to Secured Party
hereunder or in connection herewith, or allowed it by law or equity, shall be
cumulative and may be exercised from time to time. No failure on the part of
Secured Party to exercise, and no delay in exercising, any right shall operate
as a waiver thereof, nor shall any single or partial exercise by Secured Party
of any right preclude any other or future exercise thereof or the exercise of
any other right.
FINANCING STATEMENTS. Debtor shall sign and deliver to Secured Party such
financing statements and other documents as Secured Party may deem necessary to
perfect, protect and continue its security interest in the Collateral, in form
satisfactory to Secured Party. Debtor will reimburse Secured Party for all
expenses incurred in the filing of financing statements, continuation
statements, termination statements and any other documents relating to the
perfection of Secured Party's security interest in the Collateral. A carbon,
photographic or other reproduction of this Agreement or of a financing
statement relating to the security interest herein granted is suffficient as a
financing statement. Debtor authorizes Secured Party to file financing
statements as to the Collateral signed only by Secured Party and not by Debtor.
The foregoing authorization shall not, however, be used unless and until an
event of default hereunder has occured.
SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
ASSIGNABILITY. Debtor acknowledges that the rights of Secured Party may be
assigned to any person in whole or in part at the sole discretion of Secured
Party, and Debtor agrees that any defense it may have against Secured Party as
to events occurring prior to any assignment shall not be asserted, and shall be
void, against any assignee of the rights of Secured Party.
<PAGE> 11
Debtor shall not assign any of its rights or obligations under this Agreement
to any person without the prior written consent of Secured Party, and in the
absence of such prior written consent, no such assignment of any right or
obligation of Debtor hereunder shall be binding on Secured Party. Subject to
the foregoing limitations, the terms and conditions of this Agreement shall be
binding on and shall inure to the benefit of the heirs executors,
administrators, successors, and assigns of the parties.
WARRANTY DISCLAIMER. SECURED PARTY IS NOT A MANUFACTURER OR SELLER OF THE
COLLATERAL AND MAKES NO WARRANTIES WHATSOEVER WITH RESPECT TO THE COLLATERAL,
INCLUDING WITHOUT LIMITATION WARRANTIES OF TITLE, MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE. DEBTOR SHALL NOT ASSERT ANY BREACH OF ANY SUCH
WARRANTY AS A DEFENSE TO ANY OF ITS OBLIGATIONS TO SECURED PARTY UNDER THIS
AGREEMENT; HOWEVER, NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED TO IMPAIR ANY
OF DEBTOR'S REMEDIES FOR BREACH OF WARRANTY AGAINST ANY SELLER OR MANUFACTURER
OF THE COLLATERAL.
GOVERNING LAW; CONSENT TO VENUE AND PERSONAL JURISDICTION. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF GEORGIA AS OF THE DATE HEREOF. IF THE ADDRESS OF DEBTOR'S RESIDENCE OR
PRINCIPAL PLACE OF BUSINESS SHOWN HEREIN IS NOT IN THE STATE OF GEORGIA, DEBTOR
CONSENTS TO THE EXERCISE OF PERSONAL JURISDICTION OVER DEBTOR BY ANY COURT OR
RECORD SITTING IN THE STATE OF GEORGIA IN CONNECTION WITH ANY ACTION ARISING
OUT OF THIS AGREEMENT, AND WAIVES ALL OBJECTIONS TO SERVICE OF PROCESS ON
DEBTOR AT SUCH ADDRESS
WAIVER OF JURY TRIAL. SECURED PARTY AND DEBTOR EACH WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES AGAINST THE
OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT.
<PAGE> 12
IN WITNESS WHEREOF, the parties have caused their names to be signed and their
seals affixed as of the date first above written. By execution hereof, each
party intends and agrees to be legally bound by all the provisions of this
Agreement.
NATIONSBANC LEASING CORPORATION (Secured Party)
PLASMA-THERM, INC. (Debtor)
By: /s/ Chad E. Colby By: /s/ Diana DeFerrari
--------------------- -------------------------
Chad E.Colby Diana DeFerrari
A.V.P. V.P. of Administration
<PAGE> 13
NATIONSBANK(R)
EXHIBIT A TO
NATIONSBANC LEASING CORPORATION UCC FINANCING
STATEMENT
- ------------------------------------------------------------------------
DEBTOR: PLASMA-THERM, INC.
SECURED PARTY: NATIONSBANC LEASING CORPORATION
This financing statement covers all of the following property, wherever
located:
(i)
<TABLE>
<CAPTION>
QUANTITY DESCRIPTION SERIAL NUMBER
<S> <C> <C>
1 NESLAB HX750A D+I CP73 Heat Exchanger 293337261
3 Etherlink II 8/16 BNC 5P 3VBH5160
3VBE9165
3VBH5103
1 CWS-D100-lA Welder Power Supply with CWS
Electrode, CWS Welder Motor Module, CWS Weld Head,
CWS Welder Fixture, CWS Welder Cooling Stand and
Welder Bench Bracket
1 SolidStateRF Generator 32095
1 HP Laserjet Printer 4 600 DPI, 2MB, 8PPM USTC088418
2 Symbol 200 Laser Scanners
1 TM4000 E SX/25 Color 120 Notebook Computer with 2646692-0001
TM400 WINSX 4MB Ram Mod
1 Symbol 200 Laser Scanner with Laser SRAM Upgrade
1 HP C2037A Laserjet 4 Plus JPFL002402
1 TM4000 E SX/25 Color 120 Notebook Computer 207B2404561
1 Forms Pro 4003 Printer VFA03814
1 Tri-Win 486/33DX with accessories 417A0004901
1 Ceneral Binding Corp . l l lPM Domestic 115V
Binding Machine
1 Pump Blower Package Lybud CLR700
3 Assy Power Dist. Centers
1 Assy Powerr Dist. Center
2 Laser Through-Beam Photo Sensor Heads 048072
048071
2 Laser Through-Beam Photoelectric Sensor Amp 409639
410113
1 Keithley Instruments Electrometer 582486
1 Edwards E306A Evap. System
2 System,SPM Line-Powered Toxic Gas Detectors
1 Compact Laser Head with Camera
1 ST15150N 4.2G SCSI Barra K4138334
1 Fastlook Plus 7.0 5-User Network Software
</TABLE>
<PAGE> 14
NATIONSBANK(R) EXHIBIT A TO
NATIONSBANC LEASING CORPORATION UCC FINANCING
STATEMENT
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITY DESCRIPTION SERIAL NUMBER
<S> <C> <C>
1 Matlab - Windows Verf 4.2c.1 911836
1 Pentium 90MHZ CPU, 7600 TFT, 256K Cache Notebook
Computer with VLB Docking Station & Fax Modum
1 Xerox Color Copier 7EE-141930
1 Viewsonic, 1280NI 17" Monitor
1 HP Vectra 486DX/2 3438a01196
1 Viewsonic 21" Monitor 145102401
1 HP Vectra 486DX/2 3441s00396
1 HP4+ LaserjetPrinter USFC138872
1 HP 4V Laserjet Printer JPBF008788
1 Vectra 486DX/2 VLE 3506A02753
1 Vectra 486DX/2 VLE 3505A01700
1 Xerox Laser Fax 8HD-023829
1 Viewsonic 17 " Monitor
1 HP Vectra 486DX/2 VLE 3505A02892
1 HP Vectra 486DX/2 VLE 3507A01839
1 HP Vectra 486DX/2 VLE 3515A02725
1 HP Vectra VL3 Pentium Workstation w/21 Video 3521A09997
1 1 Compaq Elite Laptop with CPU 6511HPA51674 & 9
1 HP Laserjet 4+ Printer USFC326873
1 CL7000 486DX/33
1 CL7000 486DX/66
1 CTC CL7000 486DX/66
1 Assy 486DX-33 CPU, VGA
2 Assy 486DX-33 CPU, VGA
1 Phaser 240 Printer w/5MB Ram SI1OCR85
1 20G 20" NI 16x12 Monitor M452600285
1 Compaq Prosignia 500 Pentium System I544HAX19328
</TABLE>
<PAGE> 15
NATIONSBANK(R) EXHIBIT A TO
NATIONSBANC LEASING CORPORATION UCC FINANCING
STATEMENT
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
QUANTITY DESCRIPTION SERIAL NUMBER
<S> <C> <C>
1 Compaq Presario 1500 15" .28 W/speakers and SL544HTK22615
accessories
2 Compaq Pres.9564 P-133 S6542HTG2S779
S6542HTG2S780
Various Software including: Unidata RDBMS Database Software,
20018 SB+ Developer, 20017 SB+ Infoflo Runtime,
Infoflo manufacturing 7.0, Ezxpert Product Configurator,
Infoflo Software Data Collection, Infoflo- Asset Mgt,
Infoflo-Quotations, Infoflo RMA/Service
</TABLE>
; and,
(ii) all accessions to, substitutions for, and replacements, products,
and proceeds of any of the foregoing, including insurance proceeds payable by
reason of loss or damage to any of the foregoing and rental proceeds payable by
reason of any lease of any of the foregoing; and,
(iii) all books and records pertaining to any of the foregoing.
NATIONSBANC LEASING CORPORATION PLASMA-THERM, INC.
(Secured Party) (Debtor)
By: /s/ Chad E. Colby By: /s/ Stacy Wagner
------------------------------ --------------------------
Chad E. Colby Stacy Wagner
A.V.P. V.P. of Finance
<PAGE> 1
EMPLOYMENT AGREEMENT
AGREEMENT made this February 28, 1996, by and between Plasma-Therm
Inc., a Florida Corporation (herein referred to as "Corporation") and Curtis A.
Barratt (herein referred to as "Employee").
BACKGROUND OF AGREEMENT
Employee is presently employed by Corporation. Corporation desires to
employ Employee and Employee desires to continue to accept such employment and
both parties are entering into this Agreement to set forth their entire
understanding with respect to such employment.
NOW, THEREFORE, the parties hereto intending to be legally bound
hereby, and in consideration of the mutual covenants herein contained, agree as
follows:
1. EMPLOYMENT
Corporation hereby employs Employee, and Employee hereby
accepts such employment, upon the terms and subject to the conditions herein
set forth.
2. TERM
The term of this agreement shall commence on February 28, 1996
and shall continue for a period of two years until February 28, 1998 (the
"Term"). Corporation has the option to terminate this agreement upon at least
ninety (90) days written notice prior to the end of the term and Employee has
the option.
3. DUTIES
The Employee shall be Vice President of Technology and Chief
Technical Officer and his particular duties and power in such capacity shall be
such as may be determined from time to time by the President of Corporation,
provided, however, such duties and powers shall be consistent with the position
of an executive Employee of a Florida business corporation. In the performance
of his duties the Employer shall make available to the Employee offices,
support as necessary, facilities and amenities commensurate with his position
and duties.
<PAGE> 2
4. EXTENT OF SERVICES
Employee agrees to devote so much of his time, attention and
energies to the business of the Corporation as shall reasonably be required to
enable him to perform his duties hereunder. Moreover, it is specifically
understood that nothing herein contained shall be deemed to prevent Employee
from engaging in activities in such manner, or investing and managing his
assets in such form or manner, as will not unreasonably interfere with the
services to be rendered by the Employee hereunder, or prevent him from acting
as a director, trustee, officer of, or upon a committee of, any other firm,
trust or corporation where such positions do not unreasonably interfere with
the duties of Employee hereunder.
5. COMPENSATION
The Corporation agrees to pay and Employee agrees to accept as
compensation for all services rendered hereunder:
5.1 a base annual salary, payable in weekly installments, in
the amount of $110,510.00.
5.2 an annual bonus based on 1% of fiscal year net earnings,
to be paid on a quarterly basis and reconciled at year end, not to exceed
$75,000 annually.
5.3 Reimbursement for reasonable car-related expenses
including fuel and oil, but not maintenance or repair items.
6. EXPENSES
The parties recognize that in the course of performing his
duties hereunder, Employee may incur expenses. Corporation agrees to reimburse
Employee upon presentation of vouchers for reasonable expenses incurred by
Employee in the performance of his duties hereunder according to Company
policy.
7. FRINGE BENEFITS
Employee shall be entitled to such fringe benefits paid for or
supplied by the Corporation and shall be further entitled to the following
provisions:
7.1 participation in retirement and Employee benefit plans
such as 401k; education reimbursement; health, dental,
2
<PAGE> 3
accident, disability, life, or other group insurance plans; and other plans as
the President of Corporation determines from time to time to make available
generally to the other executive Employees of Corporation.
7.2 The Corporation may elect to pay for the Employee's entire
health insurance premium payments to the extent that this is offered to the
other executive Employees of the Corporation.
7.3 Those plans in which the Employee participates at the time
of the execution hereof shall not be terminated or otherwise discontinued or
amended in a manner having a detrimental effect on the Employee during the term
of this Agreement without the prior written consent of the Employee.
7.3.1 If the insurance policy permits, the Employee may at any
time direct the Corporation in writing to assign the insurance policy or
policies to the Employee in the event of his termination for any reason
whatsoever, whether or not for cause, following which the Employee shall be
fully responsible for payments on the policy or policies and the Corporation's
obligations under the policy or policies shall cease.
8. DEATH OR DISABILITY
In the event Employee dies or becomes physically or mentally
disabled so that he is unable to perform his duties hereunder, this Agreement
shall not terminate and the compensation then payable by Corporation to
Employee pursuant to Section 5 hereof shall continue to be paid as if Employee
were not disabled in any way or had not died, until the end of the then current
term of employment pursuant to Section 2 hereof, provided however, Corporation
shall be entitled to credit against its obligation hereunder the amount of any
and all disability benefits received by Employee provided or paid for by
Corporation, pursuant to Section 7 hereof.
9. TERMINATION
9.1 Notwithstanding anything herein contained to the
contrary, subject to Section 8 hereof, Corporation shall have the right to
terminate this Agreement upon one day's notice for cause, which term shall mean
a material failing by Employee relating to, affecting adversely or likely to
affect adversely his duties hereunder.
9.2 Notwithstanding anything herein contained to the
contrary, subject to Section 8 hereof, Corporation and Employee
3
<PAGE> 4
shall have the right to terminate the agreement hereunder without cause.
9.2.1 In the event the Corporation terminates the agreement
without cause, pursuant to 9.2 hereunder, Employee shall receive the full
compensation hereunder for the then remaining term of this Agreement pursuant
to Section 2.
9.2.2 In the event Employee terminates the agreement without
cause, pursuant to 9.2 hereunder, Employee must provide the Corporation with at
least one year's written notice.
9.3 Employee shall have the right to terminate the agreement
hereunder with cause upon not less than 30 days written notice for the
following reasons: a) in the event of a change in control of the Corporation as
described in Section 12, b) in the event of a change in control of the
Corporation as described in Section 12, in conjunction with any of the
following: (i) failure of the Corporation to provide the Employee with any one
or more of the provisions of this agreement, (ii) any change in the position of
Employee set forth in Section 3 without prior written consent of Employee, or,
(iii) any material decrease in the Employee's duties, responsibilities and
authorities, without the prior written consent of the Employee.
9.3.1 In the event of termination for cause by the Employee
pursuant to 9.3, Employee will receive full compensation hereunder for the then
remaining term of this Agreement pursuant to Section 2, including the
continuation of benefits as defined in Section 7 and Section 13 hereof, which
is in addition to compensation pursuant to Section 5 and shall not be reduced
by these amounts, as if this Agreement had not been terminated.
10. COVENANTS BY EMPLOYEE
10.1 Employee hereby agrees that he shall not compete with
Corporation, as defined below, whether directly or indirectly, as a principal,
partner, stockholder, officer, director, Employee, or in any other capacity,
for the following periods of time: (i) if the Corporation terminates employment
without cause as defined in Section 9.2 or if the Employee terminates
employment with cause as defined in Section 9.3, the Employee agrees not to
compete for a period equivalent to the remaining term of this Agreement,
whereby Employee receives full compensation hereunder for such remaining term,
but in any case not less than 45 days from the date of termination of this
contract; or (ii) if the Corporation terminates employment with cause pursuant
to Section 9.1 or if the Employee terminates
4
<PAGE> 5
employment without cause, the Employee agrees not to compete for a period of 6
months from the date of termination of this contract.
10.1.1 The Employee agrees that he shall not compete in any
manner whatsoever with the business now or hereafter conducted by Corporation
or any Affiliate (as hereinafter defined); and
10.1.2 The Employee agrees that he shall not solicit or
attempt to solicit, sell, lease or offer to sell or offer to lease, except
on behalf of Corporation or any affiliate, any present or future customer of
Corporation or Affiliate any goods or services competitive to the goods and
services now or hereafter offered for sale or lease by Corporation or any
Affiliate.
10.2 The parties hereto recognize that the covenants
of Employee herein contained are unique and that in the event there is a breach
or threatened breach of such covenants, Corporation shall be entitled, in
addition to any other remedies available to it, to institute and prosecute
proceedings in any court of competent jurisdiction either in law or in equity,
to obtain damages for any breach of covenants or to enforce a specific
performance thereof by Employee, or to enjoin Employee from performing services
or doing any act in breach of such covenants.
10.3 For the purposes of this Agreement, an
"Affiliate" of Corporation shall mean any person, partnership or corporation
which is controlled by, in common control with or controlling Corporation.
10.4 Employee agrees during the Term hereof and after
the termination of employment of Employee for any reason whatsoever the
Employee shall not disclose to any person, firm, partnership or corporation any
information concerning any of the methods of conducting business of Corporation
or any affiliate or any details relating thereto including the names of
suppliers, customers and methods of operation of Corporation or any of its
Affiliates which information is hereby acknowledged to be confidential in
nature. This provision shall not be construed to prevent Employee from using
any knowledge which he possessed at the time he commenced his employment with
corporation or from using any information which is not confidential.
11. INDEMNIFICATION
11.1 If litigation is brought to enforce or interpret any
provision hereof in the event of a change in control
5
<PAGE> 6
as described in section 12, the Corporation shall indemnify the Employee for
his reasonable attorney's fees and disbursements incurred in such litigation.
11.2 The Corporation shall further indemnify the Employee
to the extent of the greater of the indemnification provided for in any
agreement, bylaw or charter provision of the Corporation, or any provision
of law, rule or regulation, any of which may be applicable to the Employee or
generally applicable to other executive officers of the Employee's class.
12. CHANGE OF CONTROL
Change in control" as used in this agreement shall refer
to any one or more of the following: (i) the acquisition in any manner
of the beneficial ownership of shares of the Corporation having 20% or more of
the total number of votes that may be cast for the election of one or more
directors of the Corporation by any person, or persons acting as a group within
the meaning of Section 13(d) of the Securities and Exchange Act of 1934, if the
Board has made a determination that such acquisition constitutes or will
constitute control of the Corporation; (ii) any liquidation, dissolution or
sale of all or substantially all of the assets of the Corporation; or (iii) any
action taken following, as a result of, or in connection with, any tender or
exchange, offer, merger or other business combination, sale of assets, proxy
contest or any combination of the foregoing whereby the persons who were the
Directors of the Corporation immediately prior to such action shall cease to
constitute a majority of the Board of the Corporation or any successor to the
Corporation. The term "person" refers to an individual, corporation, company
or other entity.
13. PAID TIME OFF
Employee shall be entitled to take time off at such times
as shall reasonably be requested by Employee and approved by Corporation
in accordance with Company policy. Paid time off over specified amounts not
used per annum is "cashed out" or forfeited according to Company policy. In
the event of termination without cause by Corporation or by Employee, or with
cause by Employee, Employee will receive cash equivalent of paid time off not
yet taken in accordance with Company policy.
6
<PAGE> 7
14. MISCELLANEOUS PROVISIONS
14.1 NOTICES
Any notice required or permitted to be given under this
Agreement shall be in writing, and shall be deemed to have been given
when delivered personally or sent by registered or certified mail,
postage prepaid, addressed as follows:
14.1.1 If to Corporation:
Diana M. DeFerrari, VP of Administration
Plasma-Therm, Inc.
9509 International Court
St. Petersburg, FL 33716
14.1.2 If to Employee:
Curtis. A. Barratt
2831 Quail Hollow
Clearwater, FL 34621
The designation of the person to be so notified or the
address of such person for the purposes of such notice may be changed from
time to time by a similar notice to be effective ten (10) days after such
changed designation is supplied.
14.2 SITUS
This Agreement shall be governed by and construed in
accordance with the applicable laws of the State of Florida.
14.3 ENTIRE AGREEMENT
This Agreement constitutes the full and
complete understanding and agreement of the parties and supersedes all prior
understandings and agreements, and may not be modified or amended orally, but
only by an agreement in writing, signed by the party against whom enforcement
of any waiver, change, modification, extension or discharge is sought.
7
<PAGE> 8
14.4 BINDING EFFECT
This Agreement shall be binding upon and inure to the
benefit of the Corporation, its successors and assigns, and Employee, his
heirs and personal representatives.
IN WITNESS WHEREOF, the parties have executed
this Agreement the day and year first above written.
FOR PLASMA-THERM, INC.
Ronald H. Deferrari, CEO and
Chairman of the Board
EMPLOYEE
Curtis A. Barratt
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED BALANCE SHEETS AS OF FEBRUARY 29, 1996 AND CONSOLIDATED
STATEMENTS OF INCOME FOR THE THREE MONTHS AND FEBRUARY 29, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1995<F1>
<PERIOD-START> DEC-01-1995
<PERIOD-END> FEB-29-1996
<CASH> 4,285,933
<SECURITIES> 0
<RECEIVABLES> 7,391,108
<ALLOWANCES> 0
<INVENTORY> 10,704,592
<CURRENT-ASSETS> 23,135,092
<PP&E> 6,396,851
<DEPRECIATION> 2,116,497
<TOTAL-ASSETS> 27,870,730
<CURRENT-LIABILITIES> 5,545,150
<BONDS> 0
0
0
<COMMON> 102,967
<OTHER-SE> 19,564,407
<TOTAL-LIABILITY-AND-EQUITY> 27,870,730
<SALES> 8,290,002
<TOTAL-REVENUES> 8,290,002
<CGS> 5,288,305
<TOTAL-COSTS> 7,246,064
<OTHER-EXPENSES> (70,928)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58,217
<INCOME-PRETAX> 1,056,649
<INCOME-TAX> 411,090
<INCOME-CONTINUING> 645,559
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 645,559
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
<FN>
<F1>
"ITEM 27. FINANCIAL DATA SCHEDULE. THIS EXHIBIT SHALL NOT BE DEEMED FILED FOR
PURPOSES OF SECTION 11 OF THE SECURITIES ACT OF 1933 AND SECTION 18 OF THE
SECURITIES EXCHANGE ACT OF 1934, OR OTHERWISE SUBJECT TO THE LIABILITIES OF
SUCH SECTIONS, NOR SHALL IT BE DEEMED A PART OF ANY OTHER FILING WHICH
INCORPORATES THIS REPORT BY REFERENCE UNLESS SUCH OTHER FILING EXPRESSLY
INCORPORATES THIS EXHIBIT BY REFERENCE."
</FN>
</TABLE>
