<PAGE>
UNITED STATES
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 April 28, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
Commission File Number 0-14365
ALPHA TECHNOLOGIES GROUP, INC.
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware 76-0079338
- -------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
750 Lexington Avenue, 27th Floor, New York, New York 10022-1208
---------------------------------------------------------------
(Address of principal executive offices)
(212)-446-5258
--------------
(Registrant's telephone number, including area code)
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
----- -----
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.
Common Stock, $.03 par value 6,200,773
------------------------------ ---------
Class Outstanding at May 31, 1996
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC.
FORM 10-Q
APRIL 28, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I FINANCIAL INFORMATION.................................................... 3
CONSOLIDATED BALANCE SHEETS - OCTOBER 29, 1995 AND APRIL 28, 1996................ 3
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED APRIL 30, 1995 AND APRIL 28, 1996.......... 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30, 1995 AND APRIL 28, 1996....................... 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS....................................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.................................................................... 9
PART II - OTHER INFORMATION...................................................... 14
</TABLE>
2
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - OCTOBER 29, 1995 AND APRIL 28, 1996
(In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
October 29, April 28,
1995 1996
----------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash $ 6,058 $ 4,739
Accounts receivable, net 11,982 11,789
Inventories, net 8,191 9,219
Prepaid expenses 1,119 1,593
-------- --------
Total current assets 27,350 27,340
PROPERTY AND EQUIPMENT, at cost 10,930 13,217
Less - Accumulated depreciation
and amortization 1,313 2,171
-------- --------
Property and equipment, net 9,617 11,046
GOODWILL, net 2,813 2,955
OTHER ASSETS, net 2,476 2,433
-------- --------
$ 42,256 $ 43,774
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable, trade $ 5,166 $ 6,028
Accrued compensation and related
benefits 2,329 1,690
Other accrued liabilities 2,426 2,137
Current portion of long-term debt 850 930
Current portion of other long-term
liabilities 883 868
-------- --------
Total current liabilities 11,654 11,653
LONG-TERM DEBT 9,093 10,349
OTHER LONG-TERM LIABILITIES 1,010 722
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARY 1,736 1,701
STOCKHOLDERS' EQUITY:
Preferred stock, $100 par value;
shares authorized 180,000 - -
Common stock, $.03 par value;
shares authorized 17,000,000;
issued 6,977,845 at October 29, 1995
and 7,127,845 at April 28, 1996 209 214
Additional paid-in capital 39,114 39,412
Retained deficit (17,459) (17,178)
Cumulative translation adjustment,
net of income taxes - 2
Treasury stock, at cost (935,404
common shares at October 29, 1995
and April 28, 1996) (3,101) (3,101)
-------- --------
18,763 19,349
-------- --------
$ 42,256 $ 43,774
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS AND SIX MONTHS ENDED APRIL 30, 1995 AND APRIL 28, 1996
(Unaudited)
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
----------------------- ---------------------
April 30, April 28, April 30, April 28,
1995 1996 1995 1996
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
SALES $15,953 $17,726 $ 27,161 $34,789
COST OF SALES 11,726 13,725 19,934 27,043
------- ------- -------- -------
Gross profit 4,227 4,001 7,227 7,746
OPERATING EXPENSES
Research and development 302 373 545 707
Selling, general and administrative 2,806 3,228 5,364 6,293
------- ------- -------- -------
Total operating expenses 3,108 3,601 5,909 7,000
------- ------- -------- -------
OPERATING INCOME 1,119 400 1,318 746
INVESTMENT INCOME 61 - 72 -
INTEREST AND OTHER INCOME (EXPENSE), net (100) (159) (164) (372)
------- ------- -------- -------
INCOME BEFORE TAXES 1,080 241 1,226 374
PROVISION FOR INCOME TAXES 227 69 278 128
------- ------- -------- -------
INCOME BEFORE MINORITY INTEREST 853 172 948 246
MINORITY INTEREST IN (INCOME) LOSSES OF
CONSOLIDATED SUBSIDIARY (102) (24) (96) 35
------- ------- -------- -------
NET INCOME $ 751 $ 148 $ 852 $ 281
======= ======= ======== =======
PER COMMON AND COMMON EQUIVALENT SHARE:
Income before minority interest $ 0.13 $0.02 $ 0.14 $ 0.03
Minority interest ($0.02) - ($0.01) $ 0.01
------- ------- -------- -------
Net income $ 0.11 $0.02 $ 0.13 $ 0.04
======= ======= ======== =======
SHARES USED IN COMPUTING NET INCOME PER
COMMON EQUIVALENT SHARE 6,415 6,613 6,504 6,670
======= ======= ======== =======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED APRIL 30, 1995 AND APRIL 28, 1996
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
April 30, April 28,
1995 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 852 $ 281
Adjustments to reconcile net
income to net cash (used)
by operating activities:
Deferred income taxes 86 25
Gain on sale of marketable
securities-available-for-sale (55) -
Depreciation and amortization 541 1,028
Minority interest in earnings
of subsidiary 96 (35)
Cumulative translation
adjustment - 2
Changes in assets and liabilities:
(Increase) in marketable
securities -- trading
securities (14) -
(Increase) decrease in notes
receivable 2,000 -
(Increase) decrease in
accounts receivable (2,322) 193
(Increase) in inventories (2,315) (1,028)
(Increase) in prepaid expenses (244) (474)
(Increase) in goodwill (662) (244)
Increase in accounts payable 1,443 862
Increase (decrease) in
accrued compensation and
related benefits 262 (639)
(Decrease) in other accrued
liabilities (480) (289)
(Decrease) in other long-term
liabilities (527) (303)
-------- --------
Total adjustments (2,191) (902)
-------- --------
Net cash (used) by operating
activities (1,339) (621)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities
- available-for-sale (175) -
Proceeds from sale of marketable
securities - available-for-sale 687 -
Purchase of property and
equipment, net (1,793) (2,297)
(Increase) in other assets, net (46) (40)
-------- --------
Net cash (used) by investing
activities (1,327) (2,337)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common
stock 136 303
Payments to repurchase common stock (2,016) -
Proceeds from debt 19,156 28,795
Payments on debt (16,247) (27,459)
-------- --------
Net cash provided by
financing activities 1,029 1,639
NET (DECREASE) IN CASH (1,637) (1,319)
-------- --------
CASH, beginning of year 7,406 6,058
-------- --------
CASH, end of period $ 5,769 $ 4,739
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) ORGANIZATION
The consolidated financial statements include the accounts of Alpha Technologies
Group, Inc. ("Alpha" or the "Company") and its wholly- and majority-owned
subsidiaries. All material intercompany transactions and balances have been
eliminated. The Company designs, manufactures and sells thermal management
products and connectors. Thermal management products, principally heat sinks,
are designed, manufactured and sold by Wakefield Engineering, Inc.
("Wakefield"), a wholly-owned subsidiary of the Company. Heat sinks remove
excess heat generated by electronic components. The thermal management products
serve the microprocessor, computer, consumer electronics, transportation and
power supply industries. The Company's connector products, which are sold
through an 80%-owned subsidiary, Uni-Star Industries, Inc. ("Uni-Star"), include
miniature, micro-miniature and nano-miniature connectors designed and
manufactured by the Company to meet rigid industrial and military
specifications. The connector products serve the aerospace, telecommunications,
medical electronics, automotive and defense industries.
The Company was incorporated under its original corporate name, Synercom
Technology, Inc. in Texas in 1969, as a software company, and was reincorporated
in Delaware in 1983. The shareholders, at the Annual Meeting of the Company on
April 19, 1995, approved a name change of the corporation to Alpha Technologies
Group, Inc.
(2) CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
In the opinion of the Company, the accompanying interim unaudited consolidated
financial statements contain all material adjustments, consisting only of normal
recurring adjustments necessary to present fairly the financial condition, the
results of operations and the changes in cash flows of Alpha Technologies
Group, Inc. and Subsidiaries for interim periods. The results for such interim
periods are not necessarily indicative of results for a full year.
Users of financial information produced for interim periods are encouraged to
refer to the footnotes contained in the Annual Report to Stockholders when
reviewing interim financial results.
6
<PAGE>
(3) INVENTORIES
<TABLE>
<CAPTION>
Inventories consisted of the following on October 29, April 28,
(in thousands): 1995 1996
----------- ----------
<S> <C> <C>
Raw materials and components $ 5,260 $5,231
Work in process 1,803 1,899
Finished goods 1,548 2,666
------- ------
8,611 9,796
Valuation reserve (420) (577)
------- ------
$ 8,191 $9,219
======= ======
</TABLE>
4. LONG-TERM DEBT
Long-term debt consisted of the following on:
<TABLE>
<CAPTION>
October 29, April 28,
1995 1996
----------- --------
(In Thousands)
<S> <C> <C>
Variable-rate revolving credit
facility $6,104 $ 7,166
(effective interest rates
of 8.25% and 8.75% at April 28,
1996), interest payable monthly,
principal is repaid and
reborrowed based on cash
requirements
Variable-rate revolving credit
commitment 1,000 1,400
(effective interest rate
of 8.75% at April 28, 1996),
interest payable monthly,
principal is repaid and
reborrowed based on
cash requirements
Variable-rate
equipment notes 2,839 2,713
(effective interest rate
of 9.00% at April 28, 1996),
payable in monthly
installments ranging from
$3,444 to $20,833, plus
accrued interest, with
maturities ranging from
October of 1997 through
June of 1999
------ -------
9,943 11,279
Less current portion 850 930
------ -------
$9,093 $10,349
====== =======
</TABLE>
On January 30, 1996, Wakefield Engineering, Inc. entered into the Second
Amendment to its Loan and Security Agreement dated June 22, 1994 (the "Loan
Agreement"), to increase the revolving credit facility from $7,000,000 to
$9,000,000, to make Specialty Extrusion Corp., a wholly-owned subsidiary of
Wakefield ("Specialty"), a co-borrower under the Loan Agreement and to extend
revolving loans to Specialty and make available to Specialty a $200,000
Equipment Facility Loan which will be used to repay, in part, borrowings from
Wakefield. On March 29, 1996, Wakefield entered into the Third Amendment to the
Loan Agreement to allow for interest payable on the Revolving Credit Loans to be
computed based on a margin above the Prime Rate and/or a margin above the London
Interbank Offered Rate ("LIBOR"). At April 28, 1996, interest on $6,500,000 of
the revolving credit facility, accrues at the relevant adjusted LIBOR plus 275
basis points (8.25% per annum on April 28, 1996), and the remainder of the
revolving credit facility accrues at the bank's prime rate plus .50%
7
<PAGE>
(8.75% per annum on April 28, 1996). The equipment loans accrue at the bank's
prime rate plus .75% (9% per annum on April 28, 1996). The obligations under the
Loan Agreement are secured by a first lien on and assignment of all of the
assets of the thermal management operations which in aggregate total
$25,325,000. The Loan Agreement includes various financial covenants with which,
on April 28, 1996, Wakefield was in compliance. On April 28, 1996, $7,166,000
was outstanding under the revolving credit facility.
Uni-Star has available a revolving credit commitment of up to $2.5 million and
an equipment acquisition facility of $300,000, which must be borrowed prior to
August 31, 1996, under an accounts receivable loan agreement entered into on
August 31, 1995. The proceeds from the equipment acquisition facility may be
used only for the purchase of capital equipment. Interest on the funds advanced
under the revolving credit commitment ($1,400,000 on April 28, 1996) accrues at
the bank's prime corporate rate plus .50% (8.75% per annum on April 28, 1996)
and interest on the equipment loans accrues at the bank's prime rate plus .75%
(9% per annum on April 28, 1996). All Uni-Star credit facilities are secured by
a first lien and assignment of substantially all Uni-Star's assets, including
its accounts receivable, inventory, equipment and general intangibles which in
aggregate total $11,287,000.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
- ---------------------
Quarter to Quarter Comparison
- -----------------------------
Sales. Sales for the second quarter of fiscal 1996 were $17,726,000, an
increase of $1,773,000 or 11.1%, compared to sales of $15,953,000 for the second
quarter of fiscal 1995. Thermal management sales increased 16.4% to $12,138,000
for the 1996 quarter from $10,424,000 for the quarter ended April 30, 1995.
This increase was primarily due to the inclusion of sales by Specialty Extrusion
Corp., which was acquired in June 1995 and increased sales of Penguin Cooler
heat sinks, which serve the high performance microprocessor market. These
increases were partially offset by lower sales of active cooling components.
Connector sales were $5,588,000 during the second quarter of fiscal 1996
compared to $5,529,000 during the second quarter of the prior fiscal year. This
increase is primarily attributable to sales by the Company's international
operations. International sales of connector products are supported by two
facilities located in England and France, which assemble and sell micro-
miniature connectors for the European market. These operations were established
in June and July of 1995.
Gross Profit. The Company's overall gross profit as a percentage of total
revenues ("gross profit percentage") for the quarter ended April 28, 1996 was
22.6% versus 26.5% for the quarter ended April 30, 1995. The decrease in gross
profit percentage was primarily due to the inclusion in the 1996 period of
Specialty's sales, which have lower gross profit margins than the Company's
other products. In addition, gross profit was adversely affected by the Company
incurring higher manufacturing costs reflecting capacity added in anticipation
of a substantial increase in demand for Penguin Cooler heat sinks which has not
yet materialized, and a change in the mix of products sold by Wakefield and Uni-
Star. Sales of Penguin Cooler heat sinks were lower than anticipated as a direct
result of elevated inventory levels experienced throughout the personal computer
industry. Furthermore, gross profits from connector revenues decreased in the
second quarter as a result of manufacturing inefficiencies and a decrease in
sales of a particular high margin product due to excess inventory levels at a
major customer.
9
<PAGE>
Research and Development Expense. Research and development expenses for the
second quarter of fiscal 1996 were $373,000 compared to $302,000 for the second
quarter of fiscal 1995. This increase was due primarily to an increase in
engineering staff as well as increased licensing costs for engineering software
in the thermal management business.
Selling, General and Administrative Expense. Selling, general and
administrative expenses for the second quarter of fiscal 1996 were $3,228,000,
or 18.2% of sales, compared to $2,806,000, or 17.6% of sales, for the second
quarter of fiscal 1995. The increase of selling, general and administrative
expenses as a percentage of sales was primarily attributable to the startup of
the Company's international operations which were established in June and July
of 1995.
Interest and Other Income (Net). Interest income, which was $55,000 in the
second quarter of fiscal 1996 and $78,000 in the second quarter of fiscal 1995,
was earned on excess cash. The Company holds cash at the parent level to help
fund future acquisitions. Interest expense was $266,000 and $180,000 for the
quarters ended April 28, 1996 and April 30, 1995, respectively. This increase
was due to a higher borrowing base.
Income Taxes. The provision for income taxes for the quarter ended April 28,
1996, was $69,000 which included federal income tax expense of $30,000, state
income tax expense of $16,000 and foreign income tax expense of $23,000. For
the quarter ended April, 1995, the income tax provision included federal income
taxes of $98,000 and state income taxes of $129,000. The provision for federal
income taxes includes the benefit of net operating loss carryforwards.
Minority Interest. The minority interest not acquired by the Company related to
the Uni-Star business was included in income before provision for income taxes
on the consolidated statement of operations and as a separate item on the
consolidated balance sheet and statement of cash flows. The Company owns 80% of
the outstanding common stock of Uni-Star.
Six Months to Six Months Comparison
- -----------------------------------
Sales. Sales for the first six months of fiscal 1996 increased $7,628,000, or
28.1%, to $34,789,000 from $27,161,000 for the comparable period of fiscal 1995.
Thermal management sales increased 35.6% to $24,469,000 for the 1996 period from
$18,048,000 for the first six months of fiscal 1995. This increase was due to
internal growth and the inclusion of sales by Specialty Extrusion Corp., which
was acquired in June 1995. The internal growth of sales from the thermal
management business was due to increased sales of Penguin Cooler heat sinks,
which serve the high performance microprocessor market, and extruded heat sinks.
These increases were partially offset by lower sales of active cooling
components.
Connector sales were $10,320,000 during the six months ended April 28, 1996
compared to $9,113,000 during the first six months of the prior fiscal year.
This increase is primarily attributable to sales by the Company's international
operations. International sales of connector products are supported by two
facilities located in England and France, which assemble and sell micro-
miniature connectors for the European market. These operations were established
in June and July of 1995.
Gross Profit. The Company's overall gross profit as a percentage of total
revenues for the six months ended April 28, 1996 was 22.3% compared to 26.6% for
the six months ended April 30, 1995. The decrease in gross profit percentage
was primarily due to the inclusion in the 1996 period of Specialty's sales,
which have lower
10
<PAGE>
gross profit margins than the Company's other products, and a change in the mix
of products sold by Wakefield and Uni-Star. The Company also incurred higher
manufacturing costs to add capacity in anticipation of a substantial increase in
demand for Penguin Cooler heat sinks. Sales of Penguin Cooler heat sinks were
lower than anticipated as a result of elevated inventory levels experienced
throughout the personal computer industry. Furthermore, gross profit from
connector revenues decreased in the first six months as a result of
manufacturing inefficiencies and a decrease in sales of a particular high margin
product due to excess inventory levels at a major customer.
Research and Development Expense. Research and development expenses were
$707,000 and $545,000 for the first six months of fiscal 1996 and 1995,
respectively. This increase was due primarily to an increase in engineering
staff as well as increased licensing costs for engineering software in the
thermal management business.
Selling, General and Administrative Expense. Selling, general and
administrative expenses for the six months ended April 28, 1996 were $6,293,000,
or 18.1% of sales, compared to $5,364,000, or 19.7% of sales, for the six months
ended April 30, 1995. The decrease of selling, general and administrative
expenses as a percentage of sales was primarily attributable to increased sales
volume without a proportional increase in selling, general and administrative
expenses.
Interest and Other Income (Net). Interest income, which was $112,000 in the
first six months of fiscal 1996 and $157,000 in the comparable period of fiscal
1995, was earned on cash held at the parent level. The decrease in interest
income was primarily attributable to a decrease in the average cash balance
invested. Interest expense was $526,000 and $318,000 for the six months ended
April 28, 1996 and April 30, 1995, respectively. This increase was due to a
higher borrowing base.
Income Taxes. The provision for income taxes for the six months ended April 28,
1996, was $128,000 which included federal income tax expense of $30,000, state
income tax expense of $41,000 and foreign income tax expense of $57,000. For
the six months ended April 30, 1995, the income tax provision included federal
income taxes of $111,000 and state income taxes of $167,000. Because the
Company was able to utilize net operating loss carryforwards, the effective
federal income tax rates were 8% and 9% for the six months ended April 28,
1996 and April 30, 1995, respectively.
Minority Interest. The minority interest not acquired by the Company related to
the Uni-Star business was included in income before provision for income taxes
on the consolidated statement of operations and as a separate item on the
consolidated balance sheet and statement of cash flows. The Company owns 80% of
the outstanding common stock of Uni-Star.
11
<PAGE>
Liquidity and Capital Resources
- -------------------------------
On April 28, 1996, the Company had cash of approximately $4,739,000 compared to
$6,058,000 on October 29, 1995. Existing cash plus advances under the Wakefield
and Uni-Star loan agreements and funds received from the issuance of common
stock upon the exercise of stock options were used for operating activities and
for purchases of capital equipment.
For the six months ended April 28, 1996, $621,000 were used to fund operations,
primarily to increase inventories and prepaid expenses and to decrease accrued
liabilities. This use of funds was partially offset by collections on accounts
receivable. In addition to operating activities, $2,297,000 were used to
purchase capital equipment including machinery, to increase manufacturing
capacity in the thermal management business and to improve efficiency in the
connector business, and tooling to expand the low power heat sink product line.
On January 30, 1996, Wakefield Engineering, Inc. entered into the Second
Amendment to its Loan and Security Agreement dated June 22, 1994 (the "Loan
Agreement"), to increase the revolving credit facility from $7,000,000 to
$9,000,000, to make Specialty Extrusion Corp., a wholly-owned subsidiary of
Wakefield ("Specialty"), a co-borrower under the Loan Agreement and to extend
revolving loans to Specialty and make available to Specialty a $200,000
Equipment Facility Loan which will be used to repay, in part, borrowings from
Wakefield. On March 29, 1996, Wakefield entered into the Third Amendment to the
Loan Agreement to allow for interest payable on the Revolving Credit Loans to be
computed based on a margin above the Prime Rate and/or a margin above the London
Interbank Offered Rate ("LIBOR"). At April 28, 1996, interest on $6,500,000 of
the revolving credit facility, accrues at the relevant adjusted LIBOR plus 275
basis points (8.25% per annum on April 28, 1996), and the remainder of the
revolving credit facility accrues at the bank's prime rate plus .50% (8.75% per
annum on April 28, 1996). The equipment loans accrue at the bank's prime rate
plus .75% (9% per annum on April 28, 1996. The obligations under the Loan
Agreement are secured by a first lien on and assignment of all of the assets of
the thermal management operations which in aggregate total $25,325,000. The
Loan Agreement includes various financial covenants with which, on April 28,
1996, Wakefield was in compliance. On April 28, 1996, $7,166,000 was
outstanding under the revolving credit facility.
Uni-Star has available a revolving credit commitment of up to $2.5 million and
an equipment acquisition facility of $300,000, which must be borrowed prior to
August 31, 1996, under an accounts receivable loan agreement entered into on
August 31, 1995. The proceeds from the equipment acquisition facility may be
used only for the purchase of capital equipment. Interest on the funds advanced
under the revolving credit commitment ($1,400,000 on April 28, 1996) accrues at
the bank's prime corporate rate plus .50% (8.75% per annum on April 28, 1996)
and interest on the equipment loans accrues at the bank's prime rate plus .75%
(9% per annum on April 28, 1996). All Uni-Star credit facilities are secured by
a first lien and assignment of substantially all Uni-Star's assets, including
its accounts receivable, inventory, equipment and general intangibles which in
aggregate total $11,287,000.
12
<PAGE>
The Company believes that its currently available cash, anticipated cash flow
from operations and availability under credit facilities should be sufficient to
fund its operations in the near-term.
13
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's annual meeting of stockholders held on April 15, 1996 in New
York, New York, the stockholders elected the following management nominees:
<TABLE>
<CAPTION>
Nominee Votes For Votes Withheld
- ------- ----------- --------------
<S> <C> <C>
Marshall D. Butler 5,483,407 295,200
Lawrence Butler 5,483,107 295,500
Donald K. Grierson 5,355,407 423,200
Frederic A. Heim 5,480,907 297,700
Warren G. Lichtenstein 5,483,407 295,200
Dr. Kenneth W. Rind 5,476,266 302,341
Michael J. Konigsberg 5,482,407 296,200
</TABLE>
In addition the following items were approved:
The approval of an amendment to the Company's 1994 Stock Option Plan
to increase the number of options that may be granted thereunder.
For Against Abstain
--- ------- -------
3,103,747 599,227 27,958
The designation of Arthur Andersen LLP as independent auditors of the
Company for fiscal 1996.
For Against Abstain
--- ------- -------
5,760,650 7,901 10,056
14
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
10.24 Third Amendment to Loan and Security Agreement dated as of
June 22, 1994 entered into by and between Fleet National Bank of
Massachusetts and Wakefield Engineering, Inc.
10.25 Employment Agreement with Ernest C. Hartland, Jr. dated
April 13, 1996. (The exhibit to the Employment Agreement is
listed on the last page of such Agreement. Such exhibit has not
been filed by the Issuer, who hereby undertakes to file such
exhibit upon request of the Commission.)
11.1 Statement re Computation of Per Share Earnings for the quarters
and six months ended April 30, 1995 and April 28, 1996.
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
There were no reports for Form 8-K filed by the Company during the quarter
ended April 28, 1996.
15
<PAGE>
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.
Alpha Technologies Group, Inc.
-----------------------------------
(Registrant)
Date: June 12, 1996 By: /s/ Lawrence Butler
----------------------------- --------------------------------
Lawrence Butler
President and Chief Executive
Officer
(Principal Executive Officer)
Date: June 12, 1996 By: /s/ Johnny J. Blanchard
----------------------------- --------------------------------
Johnny J. Blanchard
Chief Financial Officer
(Principal Financial and
Accounting Officer)
16
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page No.
------- --------
<C> <S> <C>
10.24 Third Amendment to Loan and Security Agreement dated as of June 22, 1994
entered into by and between Fleet National Bank of Massachusetts and
Wakefield Engineering, Inc.
10.25 Employment agreement with Ernest C. Hartland, Jr. dated April 13, 1996.
(The exhibit to the Employment Agreement is listed on the last page of such
Agreement. Such exhibit has not been filed by the Issuer, who hereby undertakes
to file such exhibit upon request of the Commission.)
11.1 Statement re Computation of Per Share Earnings for the quarters and six
months ended April 30, 1995 and April 28, 1996.
27 Financial Data Schedule
</TABLE>
17
<PAGE>
EXHIBIT 10.24
WAKEFIELD ENGINEERING, INC.
60 Audubon Road
Wakefield, MA 01880
As of March 29, 1996
FLEET NATIONAL BANK OF MASSACHUSETTS
f/k/a Shawmut Bank, N.A.
One Federal Street
Boston, MA 02211
Re: Third Amendment to Loan Agreement
---------------------------------
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement dated June 22, 1994,
as amended by the First Amendment thereto dated May 5, 1995 and a Second
Amendment thereto dated as of January 30, 1996 (together the "Loan Agreement")
and all promissory notes, agreements, documents and instruments entered into by
Wakefield Engineering, Inc. and Specialty Extrusion Corp. (collectively, the
"Borrower") and any other person or obligor pursuant thereto (collectively, the
"Loan Documents") with or for the benefit of Fleet National Bank of
Massachusetts (f/k/a Shawmut Bank, N.A.) ("Bank"). Except as otherwise defined
herein, capitalized terms used herein shall have the meanings given them in the
Loan Agreement. This Third Amendment to Loan Agreement is referred to as the
"Third Amendment".
Background. Borrower has requested that (a) the Bank modify one of the
----------
Events of Default under the Loan Agreement and (b) allow for interest payable on
the Revolving Credit Loans be computed based on a margin above the Prime Rate
(as hereinafter defined) or a margin above the LIBOR Rate (as hereinafter
defined).
Subject to the satisfaction of the terms and conditions hereof, Bank and
Borrower have agreed that the Loan Agreement shall be amended as follows:
1. Definition of Corporate Base Rate. The definition of "Corporate Base Rate"
---------------------------------
in Section 1 and Section 2(d) of the Agreement is deleted and the following
definition is inserted in the definitions in appropriate alphabetical order:
1
<PAGE>
"Prime Rate" shall mean the Prime Rate of interest announced from time to
time by the Lender as its prime rate, it being understood that such rate is a
reference rate, not necessarily the lowest, established from time to time by the
Lender, and serves as the basis upon which effective interest rates are
calculated for loans making reference thereto."
All references in the Loan Agreement and other Loan Documents to "Corporate
Base Rate" or "Base Rate" are hereinafter changed to "Prime Rate".
2. Interest Rates Amendment. Subsection 2(d) of the Loan Agreement is hereby
------------------------
deleted and the following is substituted in lieu thereof:
(d)(i) Interest Rates. Borrower agrees to pay interest in respect of
--------------
all unpaid principal amounts of the Revolving Credit Loans from the
respective dates such principal amounts are advanced until paid (whether at
stated maturity, on acceleration, or otherwise) at a rate per annum equal
to the applicable rate indicated below:
(A) For each Prime Rate Advance, the Prime Rate plus one half of
one percent (1/2%), and
(B) For each LIBOR Rate Advance, the relevant Adjusted LIBOR
Rate for the applicable Interest Period selected by Borrower in
conformity with this Agreement plus 275 basis points.
Upon determining the Adjusted LIBOR Rate for any Interest Period
requested by Borrower, Lender shall promptly notify Borrower thereof by
telephone or in writing and each such notification to Borrower shall be
confirmed promptly in writing by Borrower. Such determination shall,
absent manifest error, be final, conclusive and binding on all parties and
for all purposes. The applicable rates of interest with respect to all
Prime Rate Advances shall be increased or decreased, as the case may be, by
an amount equal to any increase or decrease in the Prime Rate, with such
adjustments to be effective as of the opening of business on the date that
any such change in the Prime Rate becomes effective.
(ii) Interest Periods. In connection with the making or continuation
----------------
of, or conversion into, a LIBOR Rate Advance, Borrower shall select an
interest period (each an "Interest Period") to be applicable to such LIBOR
Rate Advance, which Interest Period shall commence on the date such LIBOR
Rate Advance is made and shall end on a numerically corresponding date in
the third, sixth or twelfth month thereafter; provided, however, that:
(A) the initial Interest Period for a LIBOR Rate Advance shall
commence on the date of such borrowing (including the date of any
conversion from an Advance of other type) and each Interest Period
occurring thereafter in respect of such Advance shall commence on the
date on which the next preceding Interest Period expires;
2
<PAGE>
(B) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period in
respect of a LIBOR Rate Advance would otherwise expire on a day which
is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(C) any Interest Period which begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period shall expire on the last Business Day of such
calendar month; and
(D) no Interest Period shall extend beyond the Termination Date
of this Agreement.
(iii) Interest Rate Not Ascertainable. If Lender shall determine in
-------------------------------
good faith (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for determining
the Adjusted LIBOR Rate for any Interest Period, by reason of any changes
arising after the date of this Agreement affecting the London interbank
market or Lender's position in such market, adequate and fair means do not
exist for ascertaining the applicable interest rate on the basis provided
for in the definition of Adjusted LIBOR Rate, then, and in any such event,
Lender shall forthwith give notice (by telephone confirmed in writing) to
Borrower of such determination. Until Lender notifies Borrower that the
circumstances giving rise to the suspension described herein no longer
exist, the obligation of Lender to make LIBOR Rate Advances shall be
suspended, and such affected Loans then outstanding shall, at the end of
the then applicable Interest Period or at such earlier time as may be
required by Applicable Law, bear the same interest as Prime Rate Advances.
(iv) Funding Losses. Borrower shall compensate Lender, upon Lender's
--------------
written request (which request shall set forth the basis for requesting
such amounts and which request shall, absent manifest error, be final,
conclusive and binding upon all of the parties hereto), for all actual
losses, expenses and liabilities (including any interest paid by Lender to
lenders of funds borrowed by Lender to make or carry any LIBOR Rate
Advances to the extent not recovered by Lender in connection with the re-
employment of such funds), which Lender may sustain: (A) if for any reason
(other than a default by Lender) a borrowing of, or conversion to or
continuation of, LIBOR Rate Advances does not occur on the date specified
therefor in a Notice of Borrowing or Notice of Conversion/Continuation
(whether or not withdrawn), (B) if any repayment (including prepayments and
any conversions pursuant to this Agreement) of any of its LIBOR Rate
Advances occurs on a date that is not the last day of an Interest Period
applicable thereto, or (C) if, for any reason, Borrower defaults in its
obligation to repay LIBOR Rate Advances when required by the terms of this
Agreement.
(v) Increased Costs. If, by reason of (x) after the date hereof, the
---------------
introduction of or any change (including any change by way of imposition or
increase of statutory
3
<PAGE>
reserves or other reserve requirements) in or in the interpretation of any
law or regulation, or (y) the compliance with any guideline or request from
any central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions generally
(whether or not having the force of law):
(A) Lender shall be subject to any tax, duty or other charge with
respect to any LIBOR Rate Advance or its obligation to make LIBOR
Rate Advances, or shall change the basis of taxation of payment to
a Lender of the principal of or interest on any LIBOR Rate
Advances or its obligation to make LIBOR Rate Advances (except for
changes in the tax rate on the overall net income of Lender
imposed by the jurisdiction in which Lender's principal executive
office is located); or
(B) any reserve (including any imposed by the Board of Governors of
the Federal Reserve System), special deposits or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, Lender shall be imposed or deemed
applicable or any other condition affecting LIBOR Rate Advances or
its obligation to make LIBOR Rate Advances shall be imposed on
Lender or the London interbank market;
and as a result thereof there shall be any increase in the cost to Lender
of agreeing to make or making, funding or maintaining LIBOR Rate Advances
(except to the extent already included in the determination of the
applicable Adjusted LIBOR Rate), or there shall be a reduction in the
amount received or receivable by Lender, then Borrower shall from time to
time, upon written notice from and demand by Lender (with a copy of such
notice and demand to Agent), pay to Lender, within five (5) Business Days
after the date specified in such notice and demand, an additional amount
sufficient to indemnify Lender against such increased cost. A certificate
as to the amount of such increased cost, showing such calculations in
reasonable detail, submitted to Borrower by Lender, shall, except for
manifest error, be final, conclusive and binding for all purposes.
If Lender shall advise Borrower at any time that, because of the
circumstances described hereinabove or any other circumstances arising
after the date of this Agreement affecting Lender or the London interbank
market or Lender's position in such market, the Adjusted LIBOR Rate, as
determined by Lender, will not adequately and fairly reflect the cost to
Lender of funding LIBOR Rate Advances, then, and in any such event:
(1) Lender shall forthwith give notice (by telephone confirmed
in writing) to Borrower of such advice;
(2) Borrower's right to request and Lender's obligation to make
LIBOR Rate Advances shall be immediately suspended and Borrower's right
to continue a LIBOR Rate Advance as such beyond the then applicable
Interest Period shall also be suspended; and
4
<PAGE>
(3) Lender shall make an advance as part of the requested
Borrowing of LIBOR Rate Advances as a Prime Rate Advance, which Prime
Rate Advance shall, for all purposes, be considered part of such
borrowing.
(vi) Loan Requests. Borrowings of LIBOR Rate Advances and Prime Rate
-------------
Advances shall be made and funded as follows:
(A) Whenever Borrower desires to borrow pursuant to this
Agreement (other than a borrowing resulting from a conversion or
continuation pursuant to Section 2.2(d)(vi)(B) hereof), Borrower shall
give Lender prior written notice (or telephonic notice promptly
confirmed in writing) of such borrowing request in such form as the
Bank may from time to time specify (a "Notice of Borrowing"). Such
Notice of Borrowing shall be given prior to 11:00 a.m., Boston,
Massachusetts time at the office of Lender designated by Lender from
time to time (a) on the Business Day of the requested date of such
borrowing in the case of Prime Rate Advances, and (b) at least three
(3) Business Days prior to the requested date of such borrowing in the
case of LIBOR Rate Advances. Notices received after 11:00 a.m. shall
be deemed received on the next Business Day. Each Notice of Borrowing
with respect to LIBOR Rate Advances shall be irrevocable and shall
specify (a) the principal amount of the borrowing (which, in the case
of each LIBOR Rate Advance, shall be in the amount of not less than
$1,000,000 and $500,000 increments in excess thereof), (b) the date of
borrowing (which shall be a Business Day), and (c) the duration of the
Interest Period to be applicable thereto.
(B) Whenever Borrower desires to convert all or a portion of an
outstanding Prime Rate Advance or LIBOR Rate Advance into one or more
Advances of another type, or to continue outstanding a LIBOR Rate
Advance for a new Interest Period, Borrower shall give Lender written
notice (or telephone notice promptly confirmed in writing) at least
three (3) Business Days before the conversion into a Prime Rate Advance
and at least three (3) Business Days before the conversion into or
continuation of a LIBOR Rate Advance. Such notice (a "Notice of
Conversion/Continuation") shall be given prior to 11:00 a.m., Boston,
Massachusetts time, on the date specified. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify the
aggregate principal amount of the Advance to be converted or continued,
the date of such conversion or continuation, whether the Advance is
being converted into or continued as a LIBOR Rate Advance (and, if so,
the duration of the Interest Period to be applicable thereto) or a
Prime Rate Advance. If, upon the expiration of any Interest Period in
respect of any LIBOR Rate Advance, Borrower shall have failed, or
pursuant to the following sentence be unable, to deliver the Notice of
Conversion/Continuation, Borrower shall be deemed to have elected to
convert or continue such LIBOR Rate Advance to a Prime Rate Advance.
So long as any Default or Event of Default shall have occurred and be
continuing, no Advance may be converted into or continued as (upon
expiration of the current Interest Period) a LIBOR Rate Advance. No
conversion of any LIBOR
5
<PAGE>
Rate Advance shall be permitted except on the last day of the Interest
Period in respect thereto.
(C) In no event shall the number of Advances outstanding under
the Revolving Credit Loans, exceed five (5), but for purposes of
determining the number of Advances outstanding, all Prime Rate Advances
outstanding at any time shall be considered as one Advance.
(vii) Optional Prepayments of LIBOR Rate Advances. LIBOR Rate
-------------------------------------------
Advances may be prepaid, at Borrower's option, at any time in whole or from
time to time in part, in amounts aggregating $500,000 or any greater
integral multiple thereof, by paying the principal amount to be prepaid,
interest accrued and unpaid thereon to the date of prepayment and all
charges payable under Section 2(d)(iv) hereof if such prepayment is made on
a date other than the last day of an applicable Interest Period. Borrower
shall give written notice (or telephonic notice confirmed in writing) to
Lender of any intended prepayment not less than three (3) Business Days
prior to any prepayment of LIBOR Rate Advances. Such notice, once given,
shall be irrevocable. All prepayments shall include payment of accrued
interest on the principal amount so prepaid, plus any charges owing
hereunder, and shall be applied to the payment of interest before
application to principal.
(viii) Illegality. Notwithstanding anything to the contrary contained
----------
elsewhere in this Agreement, if (x) any change in any law or regulation or
in the interpretation thereof by any governmental authority charged with
the administration thereof shall make it unlawful for Lender to make or
maintain a LIBOR Rate Advance or to give effect to its obligations as
contemplated hereby with respect to a LIBOR Rate Advance or (y) at any time
Lender determines that the making or continuance of any LIBOR Rate Advance
has become impracticable as a result of a contingency occurring after the
date hereof which adversely effects the London Interbank Market or the
position of Lender in such market, then, by written notice to Borrower,
Lender may (A) declare that LIBOR Rate Advances will not thereafter be made
by Lender, whereupon any request by Borrower for a LIBOR Rate Advance shall
be deemed a request for a Prime Rate Advance unless Lender's declaration
shall be subsequently withdrawn; and (B) require that all outstanding LIBOR
Rate Advances be converted to Prime Rate Advances at the end of the then
Applicable Interest Period or at such earlier time as may be required by
Applicable Law.
(ix) Direct Debit. Borrower authorizes Bank to charge its deposit
------------
account(s) for all payments hereunder, whether for principal, interest or
other amounts payable in connection with the obligations. Principal and
interest shall be payable in lawful money of the United States of America
without set-off, deduction or counterclaim.
(x) Additional Definitions. For purposes of this Section 2.2(d) the
----------------------
terms set forth below shall have the following definitions:
Adjusted LIBOR Rate - with respect to each Interest Period for a LIBOR
-------------------
Rate Advance, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%)
6
<PAGE>
equal to the quotient of (a) the LIBOR Rate in effect for such Interest
Period divided by (b) a percentage (expressed as a decimal) equal to 100%
minus Statutory Reserves.
Advance - a Revolving Credit Loan, or portion thereof, as provided
-------
under the Agreement.
Applicable Law - all laws, rules and regulations applicable to the
--------------
Person, conduct, transaction, covenant or Loan Documents in question,
including, but not limited to, all applicable common law and equitable
principles; all provisions of all applicable state and federal
constitutions, statues, rules, regulations and orders of governmental
bodies; and all orders, judgments and decrees of all courts and
arbitrators.
Prime Rate Advance - an Advance made or outstanding as a Revolving
------------------
Credit Loan or a portion thereof bearing interest based on the Prime Rate
as provided in Section 2.2(d)(i) hereof.
Business Day - any day excluding Saturday, Sunday and any day which is
------------
a legal holiday under the laws of the Commonwealth of Massachusetts or in
London, England or is a day in which banking institutions located in such
state or country are closed.
Interest Period - as defined in Section 2.2(d)(ii).
---------------
LIBOR Rate - the rate, as determined by Lender, at which Dollar
----------
deposits approximately equal in principal amount to the LIBOR Rate Advance
for which the LIBOR Rate is being determined and for a maturity comparable
to the Interest Period for which such LIBOR Rate will apply are offered by
major banks in immediately available funds in the London interbank market
at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period.
LIBOR Rate Advance - an Advance made or outstanding as a Revolving
------------------
Credit Loan or a portion thereof bearing interest based on the applicable
Adjusted LIBOR Rate as provided in Section 2.2(d)(i) hereof.
Notice of Borrowing - as defined in Section 2.2(d)(vi)(A) hereof.
-------------------
Notice of Conversion/Continuation - as defined in Section 2.2(d)(vi)(B)
---------------------------------
hereof.
Statutory Reserves - on any date, the percentage (expressed as a
------------------
decimal) established by the Board of Governors which is the then stated
maximum rate for all reserves (including, but not limited to, any
emergency, supplemental or other marginal reserve requirements) applicable
to any member bank of the Federal Reserve System in respect to Eurocurrency
Liabilities (or any successor category of liabilities under Regulation D).
Such reserve percentage shall include, without limitation, those imposed
pursuant to Regulation D. The Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in such
percentage.
7
<PAGE>
(xi) Interest on Term Loan and Equipment Loans. The Term Loan and the
-----------------------------------------
Equipment Loans shall bear interest and be payable as provided in the Notes
evidencing such Loans.
2. Event of Default Amendment. Section 10(o) of the Loan Agreement is
--------------------------
amended by deleting the words "Harry Chase, President of Borrower" therefrom.
3. Representations and Warranties.
------------------------------
To induce Bank to enter into this Third Amendment, each Borrower
jointly and severally warrants, represents and covenants to Bank that:
(a) Organization and Qualification. Each Borrower is a corporation
------------------------------
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Borrower is duly qualified or is
authorized to do business and is in good standing as a foreign corporation in
all states and jurisdictions in which the failure of such Borrower to be so
qualified would have a material adverse effect on the financial condition,
business or properties of such Borrower.
(b) Corporate Power and Authority. Each Borrower is duly authorized
-----------------------------
and empowered to enter into, execute, deliver and perform this Third Amendment,
and each of the Loan Documents to which it is a party. The execution, delivery
and performance of this Third Amendment and each of the other Loan Documents
have been duly authorized by all necessary corporate action and do not and will
not (i) require any consent or approval of the shareholders of any Borrower;
(ii) contravene any Borrower's charter or by-laws; (iii) violate, or cause any
Borrower to be in default under, any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award in effect
having applicability to such Borrower; (iv) result in a breach of or constitute
a default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which any Borrower is a party or by which such
Borrower's properties may be bound or affected; or (v) result in, or require,
the creation or imposition of any Lien (other than Permitted Liens) upon or with
respect to any of the properties now owned or hereafter acquired by any
Borrower.
(c) Legally Enforceable Agreement. This Third Amendment and each of
-----------------------------
the other Loan Documents delivered under this Third Amendment will be, a legal,
valid and binding obligation of each Borrower, enforceable against each Borrower
in accordance with its respective terms subject to bankruptcy, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
(d) No Material Adverse Change. Since February 25, 1996, the date of
--------------------------
the last financial statements provided by the Borrower to the Bank, there has
been no material adverse change in the condition, financial or otherwise, of
Borrower as shown on the consolidated balance sheet thereof as of such date and
no change in the aggregate value of property and assets owned
8
<PAGE>
by Borrower, except changes in the ordinary course of business, none of which
individually or in the aggregate has been materially adverse.
(e) Continuous Nature of Representations and Warranties. Each
---------------------------------------------------
representation and warranty contained in the Loan Agreement and the other Loan
Documents remains accurate, complete and not misleading in any material respect
on the date of this Third Amendment, except for representations and warranties
that explicitly relate to an earlier date and changes in the nature of
Borrower's business or operations that would render the information in any
exhibit attached thereto either inaccurate, incomplete or misleading, so long as
Bank has consented to such changes or such changes are expressly permitted by
the Loan Agreement.
4. Conditions Precedent.
--------------------
Notwithstanding any other provision of this Third Amendment or any of
the other Loan Documents, and without affecting in any manner the rights of Bank
under the other sections of this Third Amendment, this Third Amendment shall not
be effective as to Bank unless and until each of the following conditions has
been and continues to be satisfied:
(a) Documentation. Bank shall have received, in form and substance
-------------
satisfactory to Bank and its counsel, a duly executed copy of this Third
Amendment, the Amended and Restated Revolving Credit Note in the form attached
hereto, together with such additional documents, instruments and certificates
as Bank and its counsel shall require in connection therewith, all in form and
substance satisfactory to Bank and its counsel.
(b) No Default. No Event of Default shall exist.
----------
(c) No Litigation. Except as previously disclosed to and consented to
-------------
by Bank, no action, proceeding, investigation, regulation or legislation shall
have been instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to obtain damages
in respect of, or which is related to or arises out of the Loan Agreement or
this Third Amendment or the consummation of the transactions contemplated
thereby or hereby.
5. Acknowledgement of Obligations.
------------------------------
Each Borrower hereby (1) reaffirms and ratifies all of the promises,
agreements, covenants and obligations to Bank under or in respect of the Loan
Agreement and other Loan Documents as amended hereby and (2) acknowledges that
it is unconditionally liable for the punctual and full payment of all
Obligations, including, without limitation, all charges, fees, expenses and
costs (including reasonable attorneys' fees and expenses) under the Loan
Documents, as amended hereby, and that it has no defenses, counterclaims or
setoffs with respect to full, complete and timely payment and performance of all
Obligations.
6. Confirmation of Liens.
---------------------
9
<PAGE>
Each Borrower acknowledges, confirms and agrees that the Loan
Documents, as amended hereby, are effective to grant to Bank duly perfected,
valid and enforceable first priority security interests and liens in the
Collateral described therein, except for Permitted Liens, and that the locations
for such Collateral specified in the Loan Documents have not changed except as
provided herein. Borrower further acknowledges and agrees that all Obligations
of Borrower are and shall be secured by the Collateral.
7. Miscellaneous.
-------------
Except as set forth herein, the undersigned confirms and agrees that
the Loan Documents remain in full force and effect without amendment or
modification of any kind. The execution and delivery of this Third Amendment by
Bank shall not be construed as a waiver by Bank of any Default or Event of
Default under the Loan Documents. This Third Amendment, together with the Loan
Agreement and other Loan Documents, constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
dealings, correspondence, conversations or communications between the parties
with respect to the subject matter hereof. This Third Amendment and the
transactions hereunder shall be deemed to be consummated in the Commonwealth of
Massachusetts and shall be governed by and interpreted in accordance with the
laws of that state. This Third Amendment and the agreements, instruments and
documents entered into pursuant hereto or in connection herewith shall be "Loan
Documents" under and as defined in the Loan Agreement.
Executed under seal on the date set forth above.
ATTEST: WAKEFIELD ENGINEERING, INC.
/s/ James J. Polakiewicz By: /s/ Harry G. Chase
- ------------------------ --------------------------
Name: Harry G. Chase
-------------------
Title: President
-------------------
ATTEST: SPECIALTY EXTRUSION CORP.
/s/ James J. Polakiewicz By: /s/ Harry G. Chase
- ------------------------ --------------------------
Name: Harry G. Chase
--------------------
Title: Director
--------------------
10
<PAGE>
Accepted in Boston, Massachusetts
on March 29, 1996
FLEET NATIONAL BANK OF
MASSACHUSETTS
f/k/a Shawmut Bank, N.A.
By: /s/ S. P. Kanarian
---------------------
Name: S. P. Kanarian
---------------
Title: V.P.
---------------
11
<PAGE>
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$9,000,000.00 Boston, Massachusetts
March 29, 1996
FOR VALUE RECEIVED, the undersigned ("Maker"), hereby promises, jointly and
severally, to pay to the order of Fleet National Bank of Massachusetts (f/k/a
Shawmut Bank, N.A.) with a place of business at One Federal Street, Boston,
Massachusetts 02211 ("Bank"), the sum of NINE MILLION DOLLARS ($9,000,000.00),
or so much as may have been advanced to Maker as Revolving Loans, as provided in
that certain Loan and Security Agreement (the "Agreement") dated as of June 22,
1994 between Maker and Bank, as amended, together with interest on the unpaid
principal amount from time to time outstanding prior to maturity at a per annum
equal to one of the following as selected by Borrower as provided in the
Agreement:
(A) For each Prime Rate Advance, the Prime Rate plus one half of
one percent (1/2%), and
(B) For each LIBOR Rate Advance, the relevant Adjusted LIBOR Rate
for the applicable Interest Period selected by Borrower in conformity
with the Agreement plus 275 basis points.
Interest shall be payable in arrears on the first day of each month commencing
on the first such date to occur after date hereof. Subject to the terms and
conditions of the Agreement, Revolving Loans made thereunder may be repaid and
reborrowed, and the entire balance of principal, accrued interest, and other
fees and charges shall be due and payable on April 30, 1997.
After maturity (whether by acceleration or otherwise), interest shall be payable
on the unpaid principal balance from time to time outstanding at a rate per
annum equal to the interest rate otherwise applicable hereunder plus three
percent (3%), until fully paid. Any payment hereunder not paid within ten (10)
days after the date such payment is due shall be subject to a late charge equal
to five percent (5%) of the amount overdue.
Interest and fees shall be calculated on the basis of a 360-day year times the
actual number of days elapsed. At Bank's discretion, all payments will be
applied first to unpaid accrued interest, then to principal, and then any
balance to any charges, costs, expenses or late fees outstanding. All
capitalized terms not otherwise defined herein shall have the meanings given
such terms in the Agreement. In no event shall interest payable hereunder
exceed the highest rate permitted by applicable law. To the extent any interest
received by Bank exceeds the maximum amount legally permitted, such payment
shall be credited to principal, and any excess remaining after full payment of
principal shall be refunded to Maker. This Note evidences borrowings under the
Agreement and is secured by and entitled to the benefits of the provisions of
the Agreement and any other instruments or documents executed in connection
therewith. The principal of this Note is subject to prepayment in the manner
and to the extent provided in the Agreement. If an Event of Default occurs, the
entire balance of principal, accrued interest, and any and all other fees and
charges
12
<PAGE>
payable hereunder may become immediately due and payable in the manner and with
the effect provided in the Agreement.
As security for the payment and performance of Maker's obligations or the
obligations of any guarantor or endorser hereof to the Bank or any holder hereof
("Holder") now existing or hereafter arising, Holder is hereby granted a lien
and security interest in and to any and all deposits or other sums at any time
credited by or due from Holder to Maker or any guarantor or endorser, whether in
regular or special depository accounts or otherwise, and all moneys, securities
and other property and the proceeds thereof, now or hereafter held or received
by Holder, whether for safekeeping, custody, pledge, collection or otherwise.
Upon the failure of Maker, or any guarantor or endorser hereof, to pay any
amount hereunder when due, in addition to and not in limitation of any and all
rights and remedies of the Holder hereunder or otherwise, all of such rights and
remedies being cumulative, Holder may set off any such deposits, other sums,
moneys, securities and other property and the proceeds thereof against any or
all of the obligations of Maker, guarantors or endorsers to Holder, without
prior notice or demand, and regardless of whether or not such obligations are
secured by any other collateral, and regardless of the adequacy of any such
other collateral.
Maker agrees to pay all costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses incurred, or which may be incurred, by
Holder in connection with the negotiation, documentation, administration (as
provided in the Loan Agreement), enforcement and collection of this note and any
other agreements, instruments and documents executed in connection herewith.
Maker and all guarantors and endorsers hereby waive presentment, demand, notice,
protest, and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this note, and assent to extensions
of the time of payment or forbearance or other indulgence without notice. No
delay or omission of Holder in exercising any right or remedy hereunder shall
constitute a waiver of any such right or remedy. Acceptance by Holder of any
payment after demand shall not be deemed a waiver of such demand. A waiver on
one occasion shall not operate as a bar to or waiver of any such right or remedy
on any future occasion.
All payments required to be made hereunder shall be made to the Bank at its
office at One Federal Street, Boston, Massachusetts 02211 or such other address
as the Bank or any Holder may designate.
13
<PAGE>
This instrument amends and restates a Revolving Credit Note dated June 22, 1994
of the Maker and shall be governed by Massachusetts law.
Executed as an instrument under seal as of the date first above written.
WITNESS: WAKEFIELD ENGINEERING, INC.
/s/ James J. Polakiewicz By: /s/ Harry G. Chase
- ------------------------ ----------------------
Name: Harry G. Chase
--------------
Title: President
--------------
WITNESS: SPECIALTY EXTRUSION CORP.
/s/ James J. Polakiewicz By: /s/ Harry G. Chase
- ------------------------ ----------------------
Name: Harry G. Chase
--------------
Title: Director
--------------
14
<PAGE>
EXHIBIT 10.25
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), effective as of April 13, 1996,
between UNI-STAR INDUSTRIES, INC., a Delaware corporation (the "Company"), and
ERNEST C. HARTLAND, JR. (the "Employee").
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein, the parties hereto agree as follows:
1. Employment, Duties and Acceptance.
------------------------------------
1.1. The Company hereby employs the Employee, for the Term (as
hereinafter defined), to render exclusive full-time services to the business of
the Company as the President and Chief Executive Officer of the Company, subject
to the direction of the Board of Directors of the Company and the Chairman of
its Board of Directors, and, in connection therewith, to perform such executive,
marketing, product development, administrative and managerial duties as he shall
reasonably be directed by the Board of Directors of the Company or the Chairman
of the Board of Directors to perform.
1.2. Acceptance of Employment by the Employee. The Employee hereby
accepts such employment and agrees to render the executive and managerial
services described above on the terms and conditions set forth.
1.3. Place of Employment. The services to be performed hereunder by the
Employee shall be performed primarily at the offices of the Company, which are
currently located in South Pasadena, California, subject to reasonable travel
requirements on behalf of the Company, including (without limitation) to
Company's facilities in the United Kingdom, France, Pennsylvania and Ohio.
1.4. Vacation. The Employee shall be entitled to vacation at the rate of
three weeks for each twelve months of his employment during the Term, without
compensation for any accrued and unused vacation days as of the end of the Term.
2. Term of Employment. The term of the Employee's employment under this
-------------------
Agreement (the "Term") shall commence on April 13, 1996 and shall end on October
31, 1997, unless sooner terminated pursuant to Article 4 of this Agreement.
Upon termination of the Term, the Employee will leave with the Company all
memoranda, notes, records, drawings, manuals, disks, or other documents and
media pertaining to the Company's business, including all copies thereof.
1
<PAGE>
3. Compensation.
-------------
3.1. Salary and Benefits. As full regular compensation for all services
to be rendered pursuant to this Agreement, the Company agrees to pay the
Employee, during the Term, a salary at the fixed rate of $125,000 per annum (the
"Annual Salary"). Said Annual Salary will be payable in such payroll
installments as the Company ordinarily pays its salaried employees, less such
deductions and withholdings as shall be required by applicable law and
regulations.
3.2. Signing Bonus and Moving Reimbursement. As an inducement to the
Employee to enter into this Agreement, the Company shall, within ten days from
the date the Term commences, pay the Employee $20,000. Employee's moving
reimbursement entitlement and moving benefits are set forth on Exhibit A hereto.
3.3. Options. As a further inducement to the Employee to enter into this
Agreement, Alpha Technologies Group, Inc. ("ATGI"), the Company's parent, is
herewith granting to the Employee an option to purchase 20,000 shares of ATGI's
common stock under its 1994 Stock Option Plan at an exercise price reflecting
the market price of the stock on the date of grant.
3.4. Bonus Compensation. The Company shall pay the Employee incentive
compensation for his services during the Term for the twelve months ended
October 31, 1997, in an amount to be agreed upon in writing by the Company and
the Employee. All such payments shall be less such deductions and withholdings
as may be required by applicable law and regulations.
3.5. Expenses. The Company shall reimburse the Employee for all
reasonable expenses actually incurred or paid by him during the Term in the
performance of his services under this Agreement, upon presentation of expense
statements or vouchers of such other supporting information as it may require;
provided, however, that the maximum amount available for such expenses during
any period may be fixed in advance by the Chairman of the Board of Directors.
3.6. Benefits. The Employee shall be eligible to all rights and benefits
under any pension, group insurance or other so-called "fringe" benefits which
the Company may, in its sole discretion, provide for him and its senior
employees generally.
3.7. Limitations Imposed by Law. The provisions of this Agreement
relating to compensation to be paid to the Employee shall be subject to and
limited by any applicable provision of law, regulation or order which may from
time to time restrict or limit the compensation to be paid hereunder.
2
<PAGE>
4. Termination.
------------
4.1. Termination upon Death. If the Employee shall die during the Term,
this Agreement shall terminate, except that the Employee's legal representatives
shall be entitled to receive the Annual Salary provided for in Section 3.1 of
this Agreement to the 60th day after the date of the Employee's death.
4.2. Termination upon Disability. If during the Term the Employee shall
become physically or mentally disabled, whether totally or partially, so that he
is unable substantially to perform his services hereunder for (i) a period of
three consecutive months, or (ii) for shorter periods aggregating three months
during any twelve-month period, the Company may at any time after the last day
of the third consecutive month of disability or the day on which the shorter
periods of disability shall have equaled an aggregate of three months, by
written notice to the Employee (but before the Employee has recovered from such
disability), terminate the term of the Employee's employment hereunder.
Notwithstanding such disability the Company shall continue to pay the Employee
the Annual Salary herein provided for in Section 3.1 up to and including the
date of such termination. Nothing in this Section 4.2 shall be deemed to extend
the Term.
4.3. Termination for Cause. Nothing contained herein shall preclude the
Company from terminating this Agreement for cause without notice, in which case
the Company shall have no further obligation to the Employee. Upon such
termination no incentive compensation shall be payable for the fiscal year in
which the termination took place. As used herein the term "for cause" shall be
deemed to include, with respect to the Employee breach of any of his
representations in this Agreement, chronic alcoholism, drug addiction, criminal
dishonesty, conviction of the Employee of any felony, or of any lesser crime or
offense involving the property or affairs of the Company or ATGI pr amu of its
subsidiaries or operations, misappropriation of any money or other assets or
properties of the Company or ATGI, or any of its subsidiaries or operations,
willful violation of specific and lawful directions from the Board of Directors
or the Chairman of the Board of the Company (which directions must not be
inconsistent with the provisions of this Agreement), failure or refusal to
perform the services required of the Employee under this Agreement, willful
misconduct by the Employee in connection with the performance of his duties
hereunder, or any other misconduct on the part of the Employee seriously
detrimental to the best interest of the Company or that of its subsidiaries or
operations.
5. Employee's Representation.
--------------------------
5.1. Representations. The Employee represents and warrants to the
Company that: (a) he has delivered to the Company a written release addressed to
the Company of Berg Electronics, Inc., releasing the Employee from all
obligations to it, including (without limitation) regarding competition,
confidentiality and disclosures, (b) he is subject to no contractual, fiduciary
or other obligation which may affect or limit the performance of his duties
under this Agreement, (c) he has delivered to the Company his completed and
signed Officer's Questionnaire, (d) his answers therein are true and complete,
(e) his employment with the Company will not require him to use or disclose
proprietary or
3
<PAGE>
confidential information of any other person or entity, and (f) he owns, and has
no interest or claim in, any patent, patent application, copyright, trade
secret, trademark or other intangible interest or property except as set forth
in Exhibit B hereto.
6. Confidentiality; Non-Solicitation Agreements; Proprietary Information.
----------------------------------------------------------------------
(a) The Employee realizes that his employment with the Company will involve
access to information, whether or not in tangible form, which is the property of
the Company and which is not known in the trade or generally by the public, and
to information which is identified as confidential by the Company, or which the
Employee has reason to believe is being maintained in confidence, whether
embodied in memoranda, manuals, letters or other documents, computer disks,
tapes or other information storage devices or any other media or vehicle
("Proprietary Information"). Proprietary Information includes all results,
intermediate and final, of the Company's business plans and product and
marketing activities in which the Employee may participate or of which the
Employee may obtain knowledge during his employment with the Company, together
with business, manufacturing, development and research methods, including
(without limitation) product design and specifications, manufacturing procedures
and tolerances, research and development tools, test procedures, prices and
pricing formulae, cost information, customers' special materials and product
specifications and requirements, suppliers, sales records, salesmen's reports,
customers lists, customer contact reports, and customer records. The Employee
agrees to treat Proprietary Information as confidential both during the Term and
thereafter and to recognize and protect the property rights of the Company. The
Employee recognizes and further agrees (i) that the identification of the
existing employees, consultants, customers, suppliers, buying agents and
contractors of the Company, and of employees, consultants, customers, suppliers,
buying agents and contractors of the Company developed during the Term, are and
shall be the sole and exclusive property of the Company and constitute
Proprietary Information, and that the Employee neither has nor shall have any
right, title or interest therein; (ii) that such Information is and must
continue to be confidential; (iii) that such Information is not readily
accessible to competitors of the Company; and (iv) that the Company's present
and future business relationship with its employees, consultants, customers,
suppliers and contractors is and will continue to be of a type which normally
continues unless interfered with by others. The Proprietary Information is not
as a matter of corporate policy ever disclosed to the public except as
authorized in writing by an executive officer other than the disclosing party.
The Employee agrees that during the term of his employment and thereafter, he
will not use such information for himself or others, or divulge or convey such
information to others, and at all times will hold such information in strictest
confidence; provided, however, that the Employee shall not be liable for
disclosure of that information if (A) the information is in, or becomes part of,
the public domain, other than by the Employee's disclosure of the information or
(B) the information is disclosed by the Employee with the prior written approval
of another executive officer the Chairman of the Board of Directors of the
Company. All equipment, recordings, notebooks, documents, files, samples,
correspondence, lists, other written and graphic records and the like prepared
or obtained by the Company or its employees shall be and remain the property of
the Company and shall be returned promptly upon its request.
4
<PAGE>
(b) The Employee agrees that, during the Term, and for a period of two
years after its termination, but for a minimum period of three years from the
date of this Agreement, he shall not solicit for employment, directly or
indirectly, or advise or recommend to any other person that such person employ
or solicit for employment, any person employed by the Company or by ATGI or any
subsidiary or affiliate of ATGI on the date of the Employee's employment
terminated.
(c) It is understood and agreed that the Company would suffer
irreparable harm for which there is no adequate remedy available at law in the
event of a breach of this Section 6 by the Employee, and, in addition to
remedies available at law, the Company shall be entitled to enforce the
provisions of this Section 6 through actions in equity, including injunctive and
similar remedies.
(d) The provisions of this Section 6 shall be non-exclusive and shall
not limit any rights the Company may have at law, and no action taken by the
Company pursuant to this Section 6 shall constitute a waiver of any rights the
Company may have at law.
(e) If for any reason any court of competent jurisdiction shall have
deemed the provisions of this Section 6 unreasonable in duration or in
geographic scope or otherwise unenforceable, the prohibitions herein contained
shall be restricted to such time and geographic area or shall otherwise be
reformed in such manner as the court determines to be reasonable.
(f) The Employee recognizes that, because of the nature of the subject
matter of Section 6, it would be impractical and extremely difficult to
determine the Company's actual damages in the event of his breach of Section 6.
Accordingly, if the Employee commits a breach, or threatens to commit a breach,
of any of the provisions of Section, the Company shall be entitled to have the
provisions of said Section specifically enforced by temporary, preliminary and
permanent injunctive relief without the posting of bond or other security by and
court of competent jurisdiction, notwithstanding the provisions of Section 9
hereof.
7. Ownership of Employee Developments. (a) All copyrights, patents, trade
-----------------------------------
secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by the Employee during the Term (collectively, the "Work Product") shall
belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Employee for hire for the Company within the
meaning of Title 17 of the United States Code. To the extent the Work Product
may not be considered work made by the Employee for hire for the Company, the
Employee agrees to assign, and automatically assigns to the Company at the time
of creation of the Work Product, without any requirement of further
consideration, any right, title or interest the Employee may have in such Work
Product. Upon request of the Company, the Employee shall take such further
actions, including execution and delivery of instruments of conveyance, as may
be appropriate to give full and proper effect to such assignment.
(b) The Employee assigns to the Company, will hold for the Company's
benefitexclusive benefit, and will confirm assignment thereof in writing without
additional payment, all Employee's right, title and interest in and to
discoveries, inventions and improvements conceived or made by the
5
<PAGE>
Employee, whether solely or jointly with others, during his employment with the
Company (including periods prior to the effective date of this Agreement) and
which fall within the scope of the Company's, ATGI's or any of its subsidiaries
or affiliates actual or anticipated business or research and development whether
made within or outside of usual work hours, and whether on or off Company
premises. The Employee will make prompt and full disclosure thereof to the
Company and maintain records of creative or inventive activities and deliver
such records to the Company at terminations of employment or as requested by the
Company. The Employee will assist the Company both during and after his
employment with the Company in every proper manner and at the Company's expense
and without cost to the Employee to obtain for the Company in any and all
countries and to maintain and enforce patents, on all discoveries, inventions,
improvements, or refinements assigned by the Employee to the Company as provided
above, or which the executive is bound to assign to the Company, and for that
purpose, the Employee will sign all documents which the Company deems necessary
or desirable.
8. Avoidance of Conflicts of Interest. During the Term, the Employee shall
-----------------------------------
not engage in any business activity that conflicts with the interests of the
Company or his duties under the Agreement. He shall not have any direct or
indirect financial interest in, or receive any direct or indirect benefit from,
any competitor, except for minor investments, as part of a diversified
portfolio, in the securities of a competitor whose stock is traded on a national
securities exchange.
9. Disputes; Arbitration. In the event that a dispute should arise between
----------------------
the Company and the Employee, under or in connection with Section 6 hereof and
such dispute shall not have been resolved within 30 days after it arose, then
such dispute, subject tot he provisions of Section 6(f) hereof, shall be
submitted to arbitration. Such arbitration shall be conducted in Los Angeles,
California, under the rules of the American Arbitration Association then
obtaining. The arbitrator(s) shall award the predominantly prevailing party in
the arbitration its reasonable attorneys' fees and other costs and expenses in
connection with the arbitration. Such award shall be final and binding, and
judgment upon such award may be entered in any court having jurisdiction
thereof.
10. Notices. All notices, requests, consents and other communications,
--------
required or permitted to be given hereunder, shall be in writing and shall be
deemed to have been duly given if delivered personally, or mailed first-class,
postage prepaid by registered or certified mail (notices shall be deemed to have
been given when so delivered personally or, if mailed, two days after the date
of mailing) as follows, or to such other address as either party shall designate
by notice so given to the other in accordance herewith:
If to the Company, to:
Uni-Star Industries, Inc.
Attention: Chairman of the Board
306 Pasadena Avenue
South Pasadena, CA 91030
6
<PAGE>
If to the Employee, to:
Ernest C. Hartland, Jr.
345 North 27th Street
Camp Hill, Pennsylvania 17011
11. General.
--------
11.1. This Agreement shall be governed by and construed and enforced in
accordance with the local laws of the State of California applicable to
agreements made and to be performed entirely in California.
11.2. The article and section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
11.3. This Agreement sets forth the entire agreement and understanding
of the parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made
by either party that is not embodied in this Agreement, and neither party shall
be bound by or liable for any alleged representation, promise or inducement not
so set forth.
11.4. This Agreement, and the Employee's rights and obligations
hereunder, may not be assigned by the Employee. The Company may assign its
rights, together with its obligations, hereunder in connection with any sale,
transfer or other disposition of all or substantially all of its business or
assets; in any event the obligations of the Company hereunder shall be binding
on its successors or assigns, whether by merger, consolidation or acquisition of
all or substantially all of its business or assets.
11.5. This Agreement may be amended, modified, superseded, cancelled,
renewed or extended and the terms or covenants hereof may be waived, only by a
written instrument executed by the party to be charged therewith. The failure
of either party at any time or times to require performance of any provision
hereof shall in no manner affect the right at a later time to enforce the same.
No waiver by either party of the breach of any term or covenant contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Agreement. The invalidity or unenforceability of any term or provision
of this Agreement shall in no way impair or affect the balance thereof, which
shall remain in full force and effect.
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on April 13,
1996, effective as of April 13, 1996.
UNI-STAR INDUSTRIES, INC.
By: /s/ Lawrence Butler
-------------------
Lawrence Butler
Chairman of the Board
/s/ Ernest C. Hartland, Jr.
---------------------------
ERNEST C. HARTLAND, JR.
8
<PAGE>
EXHIBIT A
Moving Expense Policy
9
<PAGE>
Exhibit 11.1
ALPHA TECHNOLOGIES GROUP, INC., AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE
FOR THE QUARTERS AND SIX MONTHS ENDED APRIL 30, 1995 AND APRIL 28, 1996
(Unaudited)
(In Thousands, Except per Share Date)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
---------------------- ----------------------
April 30, April 28, April 30, April 28,
1995 1996 1995 1996
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
Shares:
Weighted average common shares
outstanding 5,904 6,192 6,003 6,135
Net common shares issuable on
exercise of stock options 511 421 501 535
------ ------ ------ ------
Weighted average common and common
equivalent shares outstanding 6,415 6,613 6,504 6,670
====== ====== ====== ======
Income before minority interest $ 853 $ 172 $ 948 $ 246
Minority interest (102) (24) (96) 35
------ ------ ------ ------
Net income $ 751 $ 148 $ 852 $ 281
====== ====== ====== ======
Net income per common and common
equivalent share:
Income before minority interest $ 0.13 $ 0.02 $ 0.14 $ 0.03
Minority interest (0.02) -- (0.01) 0.01
------ ------ ------ ------
Net income $ 0.11 $ 0.02 $ 0.13 $ 0.04
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEET-APRIL 28, 1996, CONSOLIDATED STATEMENT OF INCOME FOR THE SIX
MONTHS ENDED APRIL 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-27-1996
<PERIOD-START> OCT-30-1995
<PERIOD-END> APR-28-1996
<CASH> 4,739
<SECURITIES> 0
<RECEIVABLES> 12,034
<ALLOWANCES> 245
<INVENTORY> 9,219
<CURRENT-ASSETS> 27,340
<PP&E> 13,217
<DEPRECIATION> 2,171
<TOTAL-ASSETS> 43,774
<CURRENT-LIABILITIES> 11,653
<BONDS> 10,349
0
0
<COMMON> 214
<OTHER-SE> 19,135
<TOTAL-LIABILITY-AND-EQUITY> 43,774
<SALES> 34,789
<TOTAL-REVENUES> 34,789
<CGS> 27,043
<TOTAL-COSTS> 27,043
<OTHER-EXPENSES> 7,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 372
<INCOME-PRETAX> 374
<INCOME-TAX> 128
<INCOME-CONTINUING> 281
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 281
<EPS-PRIMARY> .04
<EPS-DILUTED> 0
</TABLE>
