<PAGE>
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 March 31, 1997 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 0-17139
GENUS, INC.
______________________________________________________________________________
(Exact name of registrant as specified in its charter)
California 94-279080
______________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1139 Karlstad Drive, Sunnyvale, California 94089
______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(408) 747-7120
______________________________________________________________________________
(Registrant's telephone number, including area code)
Not Applicable
______________________________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such 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 shares outstanding at May 12, 1997: 16,754,425
<PAGE>
GENUS, INC.
Index
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
<S> <C>
Consolidated Statements of Operations -
Three months ended March 31, 1997
and March 31, 1996 3
Consolidated Balance Sheets -
March 31, 1997 and December 31, 1996 4
Consolidated Statements of Cash Flows -
Three months ended March 31, 1997
and March 31, 1996 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8-11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Index to Exhibits 14
</TABLE>
2
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
GENUS, INC.
Consolidated Statements of Operations (Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended
March 31,
1997 1996
_______ _______
<S> <C> <C>
Net sales $ 19,681 $ 26,360
Costs and expenses:
Cost of goods sold 12,313 16,922
Research and development 3,191 3,970
Selling, general & administrative 3,867 4,520
______ ______
Income from operations 310 948
Other income (expense), net (15) 17
______ ______
Income before provision for income taxes 295 965
Provision for income taxes 114 372
______ ______
Net income $ 181 $ 593
====== ======
Net income per share $ 0.01 $ 0.04
====== ======
Shares used in per share calculation 16,856 16,540
====== ======
The accompanying notes are an integral part of these financial statements.
3
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</TABLE>
<TABLE>
<CAPTION>
GENUS, INC.
Consolidated Balance Sheets (Unaudited)
(Amounts in thousands, except share data)
March 31, December 31,
1997 1996
_______ ______
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,644 $ 11,827
Accounts receivable (net of allowance for doubtful
accounts of $250 in 1997 and 1996) 21,601 15,555
Inventories, net 25,346 26,464
Other current assets 1,168 638
Current deferred taxes 4,427 4,427
______ ______
Total current assets 60,186 58,911
Property and equipment, net 15,120 15,345
Other assets, net 4,046 4,459
Noncurrent deferred taxes 10,417 10,417
_______ _______
$ 89,769 $ 89,132
======= =======
LIABILITIES
Current liabilities:
Short term bank borrowings $ 3,000 $ 2,500
Accounts payable 5,634 5,304
Accrued expenses 10,241 10,808
Current portion of long-term debt 931 1,009
______ ______
Total current liabilities 19,806 19,621
Long-term debt, less current portion 1,594 1,260
______ ______
SHAREHOLDERS' EQUITY
Preferred stock, no par value:
Authorized, 2,000,000 shares;
Issued and outstanding, none
Common stock, no par value:
Authorized, 20,000,000 shares;
Issued and outstanding, 16,738,092 shares at
March 31, 1997 and 16,723,927 shares at
December 31, 1996 97,965 97,915
Accumulated deficit (29,347) (29,527)
Cumulative translation adjustment (249) (137)
______ ______
Total shareholders' equity 68,369 68,251
______ ______
$ 89,769 $ 89,132
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
GENUS, INC.
Consolidated Statements of Cash Flows (Unaudited)
(Amounts in thousands)
Three Months Ended
March 31,
1997 1996
______ ______
<S> <C> <C>
Cash flows from operating activities:
Net income $ 181 $ 593
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 1,264 1,765
Changes in assets and liabilities:
Accounts receivable (6,046) 3,616
Inventories 1,118 (80)
Other current assets (530) (179)
Accounts payable 330 (764)
Accrued expenses (567) (518)
Other, net 118 138
______ _____
Net cash provided by (used in) operating activities (4,132) 4,571
______ _____
Cash flows from investing activities:
Acquisition of property and equipment (821) (1,752)
Capitalization of software development costs - (185)
______ _____
Net cash used in investing activities (821) (1,937)
______ _____
Cash flows from financing activities:
Proceeds from issuance of common stock 48 221
Payment of short-term bank borrowings (2,500) -
Proceeds from short-term bank borrowings 3,000 -
Payments of long-term debt 256 (226)
______ _____
Net cash provided by (used in) financing activities 804 (5)
______ _____
Effect of exchange rate changes on cash (34) -
Increase (decrease) in cash and cash equivalents (4,183) 2,629
Cash and cash equivalents, beginning of period 11,827 12,630
______ ______
Cash and cash equivalents, end of period $ 7,644 $ 15,259
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
GENUS, INC.
Notes to Consolidated Financial Statements (Unaudited)
March 31, 1997
(Amounts in thousands)
Basis of Presentation
The accompanying consolidated financial statements have been prepared in
accordance with SEC requirements for interim financial statements. These
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996.
The information furnished reflects all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of management, necessary for
the fair statement of the consolidated financial position, results of
operations and cash flows for the interim periods. The results of operations
for the periods presented are not necessarily indicative of results to be
expected for the full year.
Net Income Per Share
Net income per share is computed by dividing net income by the weighted average
number of common and common equivalent shares of common stock outstanding during
each period.
Reclassification
Certain amounts in prior years' financial statements have been reclassified to
conform to the current year's presentation. These reclassifications did not
change previously reported results.
Statement of Cash Flows Information
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
------ ------
<S> <C> <C>
Noncash investing activities:
Purchase of property and equipment under
long-term debt obligations $ 753 $ 326
</TABLE>
Line of Credit
The Company has a revolving line of credit agreement with a bank that provides
for maximum borrowings of $10.0 million and expires in July 1997. Borrowings
under the line of credit, which are secured by substantially all of the assets
of the Company, bear interest at the bank's prime rate. The line of credit
agreement requires the Company to comply with certain financial covenants and
restricts the payment of dividends. At March 31, 1997, the Company had $3.0
million in borrowings outstanding under the line of credit.
6
<PAGE>
GENUS, INC.
Notes to Consolidated Financial Statements (continued)
(Amounts in thousands)
<TABLE>
<CAPTION>
Inventories
Inventories comprise the following:
March 31, December 31,
1997 1996
_______ _______
<S> <C> <C>
Raw materials and spare parts $ 16,354 $ 14,776
Work in process 3,233 6,847
Finished goods 5,759 4,841
_______ _______
$ 25,346 $ 26,464
======= =======
</TABLE>
<TABLE>
<CAPTION>
Property and Equipment
Property and equipment are stated at cost and comprise the following:
March 31, December 31,
1997 1996
______ ______
<S> <C> <C>
Demonstration equipment $ 14,108 $ 14,047
Equipment 16,848 16,145
Furniture and fixtures 2,633 2,631
Leasehold improvements 6,901 6,900
_______ _______
40,490 39,723
Less accumulated depreciation and amortization (25,715) (24,669)
_______ _______
14,775 15,054
Construction in process 345 291
_______ _______
$ 15,120 $ 15,345
======= =======
</TABLE>
<TABLE>
<CAPTION>
Accrued Expenses
Accrued expenses comprise the following:
March 31, December 31,
1997 1996
_______ _______
<S> <C> <C>
System installation and warranty $ 4,372 $ 4,884
Accrued commissions and incentives 1,500 1,344
Accrued payroll and related items 1,286 1,003
Other 3,083 3,577
_______ _______
$ 10,241 $ 10,808
======= =======
</TABLE>
7
<PAGE>
GENUS, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Net sales for the quarter ended March 31, 1997 were $19.7 million compared with
net sales of $26.4 million in the same period of 1996, a decrease of 25%. The
decline was attributable to lower unit sales of systems as well as lower revenue
from spares and service. During the second half of 1996, the semiconductor
manufacturing equipment industry experienced a significant slowdown in sales as
a result of excess capacity within the semiconductor industry, and equipment
sales levels have not recovered to previous levels.
Gross margin for the quarter ended March 31, 1997 was 37% compared to 36% for
the same period in 1996. Despite a lower level of sales resulting in less
absorption of fixed manufacturing costs, and competitive pricing pressures, the
Company was able to improve its gross margins by one percentage point due to
some operating efficiencies. In the first quarter of 1996, the company
experienced higher service costs associated with the opening of Genus Korea,
Ltd. The Company's gross margins have historically been affected by variations
in average selling price (ASP), changes in the mix of product sales, unit
shippments, the level of foreign sales, and competitive pricing pressures.
For the first quarter of 1997, research and development (R&D) expenses were
$3.2 million, or 16% of sales compared to $4.0 million, or 15% of sales, for
the first quarter of 1996. The decrease in absolute dollars is primarily
attributable to the restructuring of the Company's operations and two
reductions in force that occurred during the second half of 1996. The Company
continually evaluates its R&D investment in view of evolving competition and
market conditions and expects that R&D spending may increase during the
subsequent quarters of 1997.
Selling, general and administrative expenses (S,G&A) were $3.9 million for the
first quarter of 1997, or 20% of sales, down from the $4.5 million, or 17% of
sales, for the first quarter of 1996. Similar to R&D, the decrease in absolute
dollars is attributable to restructuring and the reduction in force. In
addition, sales commissions were higher in the first quarter of 1996,
commensurate with the higher sales level.
For first quarter of 1997, other expense was $15,000 compared with other income
of $17,000 for the first quarter of 1996. The other expense is comprised
primarily of interest expense associated with capital leases, and is lower than
the first quarter of 1996 due to less interest income as a result of lower cash
balances. The effective tax rate for the quarter was 38.5%, unchanged from the
same quarter a year ago.
The Company experienced losses during the third and fourth quarter of 1996 as a
result of an overall industry downturn. As a result of the restructuring of
operations and a 15% increase in sales over the fourth quarter of 1996, the
Company was able to return to a break-even level of profitability in the first
quarter of 1997. Nonetheless, due to the Company's order rates in the last
twelve months, the Company's continued reliance on one customer for a
significant portion of its orders, the continued competitive market environment
for the Company's products and the historically cyclical nature of the
semiconductor equipment market, the Company remains cautious about the
short-term prospects for its business. The Company continues to make strategic
investments in new product development and manufacturing improvements with a
view to improving future performance by enhancing product offerings; however,
such investment may adversely affect short-term operating performance. The
Company is also continuing its efforts to implement productivity improvements
for future operating performance.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter ended March 31, 1997, the Company's cash and cash
equivalents declined by $4.2 million to $7.6 million while accounts receivable
grew by $6.0 million to $21.6 million. Some of the increase in accounts
receivable is attributable to extended payment terms granted to customers
during the industry downturn.
The Company's primary source of funds at March 31, 1997 consisted of $7.6
million in cash and cash equivalents and funds available under a $10.0 million
revolving line of credit. The line of credit is secured by substantially all of
the assets of the Company and expires in July 1997. At March 31, 1997, the
Company had $3.0 million of borrowings outstanding under the line of credit.
Capital expenditures during the first quarter of 1997 were $0.8 million and
related primarily to leasehold improvements for the Ion Technology Products
group located in Newburyport, Massachusetts.
The Company believes that cash generated from operations, if any, and existing
credit facilities will be sufficient to satisfy its cash needs for the
foreseeable future. There can be no assurance that any required additional
funding, if needed, will be available on terms attractive to the Company, which
could have a material adverse effect on the Company's business, financial
condition and results of operations. Any additional equity financing may be
dilutive to shareholders, and debt financing, if available, may involve
restrictive covenants.
RISK FACTORS
The following risk factors should be considered carefully in addition to the
other information presented in this report. This report contains forward
looking statements that involve risks and uncertainties. The Company's actual
results may differ significantly from the results discussed in the forward
looking statements. Factors that might cause such differences include, but are
not limited to, the following risk factors.
Historical Performance. Although the Company had net income of $19.3 million
and $4.2 million in the years ended December 31, 1995 and 1994, respectively,
the Company experienced losses of $9.2 million, $6.9 million, and $17.1 million
for the years ended December 31, 1996, 1993 and 1992, respectively. Although
the Company reported net income of $181,000 for the first quarter of 1997, as a
result of the Company's inconsistent sales and operating results in recent
years, there can be no assurance that the Company will be able to sustain
consistent future revenue growth on a quarterly or annual basis, or that the
Company will be able to maintain consistent profitability on a quarterly or
annual basis.
Competition. The semiconductor manufacturing capital equipment industry is
highly competitive. The Company faces substantial competition throughout the
world. The Company believes that to remain competitive, it will require
significant financial resources in order to offer a broader range of products,
to maintain customer service and support centers worldwide and invest in
product and process research and development. Many of the Company's existing
and potential competitors have substantially greater financial resources, more
extensive engineering, manufacturing, marketing and customer service and
support capabilities, as well as greater name recognition than the Company. The
Company expects its competitors to continue to improve the design and
performance of their current products and processes and to introduce new
products and processes with improved price and performance characteristics. If
the Company's competitors enter into strategic relationships with leading
semiconductor manufacturers covering MeV or CVD products similar to those sold
by the Company, it would materially adversely affect the Company's ability to
sell its products to these manufacturers. There can be no assurance that the
Company will continue to compete successfully in the tungsten silicide from
Applied Materials, Inc. and Tokyo Electron, Ltd. In the MeV marketplace, the
Company's MeV ion implantation systems compete with MeV systems marketed by
Eaton Corporation.
9
<PAGE>
There can be no assurance that these or other competitiors will not succeed in
developing new technologies, offering products at lower prices than those of
the Company or obtaining market acceptance for products more rapidly than the
Company.
Dependence on New Products and Processes. The Company believes that its future
performance will depend in part upon its ability to continue to enhance its
existing products and their process capabilities and to develop and manufacture
new products with improved process capabilities. As a result, the Company
expects to continue to invest in research and development. The Company also
must manage product transitions successfully, as introductions of new products
could adversely affect sales of existing products. There can be no assurance
that the market will accept the Company's new products or that the Company will
be able to develop and introduce new products or enhancements to its existing
products and processes in a timely manner to satisfy customer needs or achieve
market acceptance. The failure to do so could have a material adverse effect on
the Company's business, financial condition and results of operations.
Furthermore, if the Company is not successful in the development of advanced
processes or equipment for manufacturers with whom it has formed strategic
alliances, its ability to sell its products to those manufacturers would be
adversely affected.
Cyclical Nature of the Semiconductor Industry. The Company's business depends
upon the capital expenditures of semiconductor manufacturers, which in turn
depend on the current and anticipated market demand for integrated circuits and
products utilizing integrated circuits. The semiconductor industry is cyclical
and is currently experiencing a downturn, which has had an adverse effect on
the semiconductor industry's demand for semiconductor manufacturing capital
equipment. Prior and current semiconductor industry downturns have adversely
affected the Company's revenue, operating margins and results of operations.
There can be no assurance that the Company's revenue and operating results will
not continue to be materially and adversely affected if a downturn in the
semiconductor industy continues, or occurs in the future. In addition, the
need for continued investment in research and development, substantial capital
equipment requirements and extensive ongoing worldwide customer service and
support capability may limit the Company's ability to reduce expenses or to
maintain them at current levels. Accordingly, there is no assurance that the
Company will be profitable in the future.
Reliance on International Sales. International sales accounted for
approximately 86%, 88% and 89% respectively, of total net sales in years ended
1996, 1995, and 1994 respectively, and were 74% for the first three months of
1997. In addition, net sales to Korean customers accounted for approximately
59%, 63%, 60%, and 48% of total net sales respectively, during the same
periods. The Company anticipates that international sales, including sales to
Korea, will continue to account for a significant portion of net sales. As a
result, a significant portion of the Company's sales will be subject to certain
risks, including unexpected changes in regulatory requirements, tariffs and
other barriers, political and economic instability, difficulties in accounts
receivable collection, difficulties in managing distributors or representatives,
diffculties in staffing and managing foreign subsidiary operations and
potentially adverse tax consequences. Although the Company's foreign sales
are primarily denominated in U.S. dollars and the Company does not engage in
hedging transactions, the Company's foreign sales are subject to the risks
associated with unexpected chages in exchange rates, which could have the
effect of making the Company's products more or less expensive. There can be no
assurance that any of these factors will not have a material adverse effect
on the Company's business, financial condition and results of operations.
Reliance on a Small Number of Customers. Historically, the Company has relied
on a limited number of customers for a substantial portion of its net sales.
For the first quarter of 1997, one customer accounted for 47% of its net sales.
In 1996, two customers accounted for 53% and 18%, respectively, of the
Company's net sales. Net sales to one customer accounted for 63% of total net
sales in 1995. In 1994, net sales to three customers accounted for 33%, 19%
and 14%, respectively, of total net sales. Because the semiconductor
manufacturing industry is concentrated in a limited number of generally larger
companies, the Company expects that a significant portion of its future
products sales will be concentrated within a limited number of customers. None
of these customers has entered into a long-term agreement requiring it to
purchase the Company's products. Sales to certain of these customers may
decrease in the future when those customers complete their current
10
<PAGE>
semiconductor equipment purchasing requirements for new or expanded fabrication
facilities. Futhermore, one customer accounts for all of the sales of the
Genus 7000 System, which accounted for 30% of the Company's revenues in the
first quarter of 1997. The loss of customer or another significant customer or
any reduction in orders from this customer or another significant customer,
including reductions due to this customer's or another significant customer's
departure from recent buying patterns, market, economic or competitive
conditions in the semiconductor industry or in the industries that manufacture
products utilizing integrated circuts, would have a material adverse effect on
the Company's business, financial condition and results of operations.
Product Concentration; Rapid Technological Change. Semiconductor manufacturing
equipment and processes are subject to rapid technological change. The Company
derives its revenue primarily from the sale of its MeV ion implantation and
tungsten silicide CVD systems. The Company estimates that the life cycle for
these systems is generally three to five years. The Company believes that its
future prospects will depend in part upon its ability to continue to enhance
its existing products and their process capabilities and to develop and
manufacture new products with imporved process capabilities. As a result, the
Company expects to continue to make significant investments in research and
development. The Company also must manage product transitions successfully, as
introductions of new products could adversely affect sales of existing products.
There can be no assurance that future technologies, processes or product
development will not render the Company's product offerings obsolete or that
the Company will be able to develop and introduce new products or enhancements
to its existing and future processes in a timely manner to satisfy customer
needs or achieve market acceptance. The failure to do so could adversely
affect the Company's business, financial condition and results of operations.
Futhermore, if the Company is not successful in the development of advanced
processes or equipment for manufacturers with whom it currently does business,
its ability to sell its products to those manfacturers would be adversely
affected.
Fluctuations in Quarterly Operating Results. The Company's revenue and
operating results may fluctuate significantly from quarter to quarter. The
Company derives its revenue primarily from the sale of a relatively small
number of high-priced systems, many of which may be ordered and shipped during
the same quarter. The Company's results of operations for a particular quarter
could be adversely affected if anticipated orders, for even a small number of
systems, were not received in time to enable shipment during the quarter,
anticipated shipments were delayed or canceled by one or more customers or
shipments were delayed due to manufacturing difficulties. The Company's
revenue and operating results may also fluctuate due to the mix of products
sold and the channel of distribution.
Volatility of Stock Price. The Company's Common Stock has experienced
substantial price volatility, particularly as a result of quarter-to-quarter
variations in the actual or anticipated financial results of, or announcements
by, the Company, its competitors or its customers. Also, the stock market has
experienced extreme price and volume fluctuations which have affected the
market price of many technology companies, in particular, and which have often
been unrelated to the operating performance of these companies. These broad
market fluctuations, as well as general economic and political conditions in
the United States and the countries in which the Company does business, may
adversely affect the market price of the Company's Common Stock. In addition,
the occurrence of any of the events described in this Risk Factors section
could have a material adverse effect on such market price. See "Common
Stock Information" in the Company's 1996 Annual Report on Page 9.
11
<PAGE>
GENUS, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The Exhibits listed on the accompanying Index to Exhibits are filed as part
hereof, or incorporated by reference into, this Report.
Exhibit 11.1 - Computation of Net Income Per Share
(b) Report on Form 8-K
No report on Form 8-K was filed during the quarter ended March 31, 1997.
12
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GENUS, INC.
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.
Date: May 14, 1997 GENUS, INC.
James T. Healy
_______________________
James T. Healy
President and
Chief Executive Officer
Mary F. Bobel
_______________________
Mary F. Bobel
Chief Financial Officer
13
<PAGE>
GENUS, INC.
Index to Exhibits
Exhibit Description Page
3.1 Restated Articles of Incorporation of Registrant (2)
3.2 By-Laws of Registrant, as amended (4)
4.1 Common Shares Rights Agreement, dated as of April 27, 1990, between
Registrant and Bank of America, N.T. and S.A., as Rights Agent (6)
10.1 Lease dated December 6, 1985, for Registrant's facilities at 4 Mulliken
Way, Newburyport, Massachusetts, and amendment and extension of lease
dated March 17, 1987 (1)
10.2 Lease dated June 15, 1988, for Registrant's facilities at 100 Merrick
Road, West Building, Rockville Center, New York (1)
10.3 Assignment of Lease dated April 1986 for Registrant's facilities at
Unit 11A, Melbourn Science Park, Melbourn, Hertz, England (1)
10.4 Registrant's 1981 Incentive Stock Option Plan, as amended (3)
10.5 Registrant's 1989 Employee Stock Purchase Plan, as amended (7)
10.6 Registrant's 1991 Incentive Stock Option Plan, as amended
10.7 International Distributor Agreement dated November 23, 1987, between
General Ionex Corporation and Innotech Corporation (1)
10.8 Distributor/Representative Agreement dated August 1, 1984, between
Registrant and Aju Exim (formerly Spirox Holding Co./You One Co. Ltd.) (1)
10.9 Exclusive Sales and Service Representative Agreement dated October 1,
1989, between Registrant and AVBA Engineering Ltd. (5)
10.10 Exclusive Sales and Service Representative Agreement dated April 1, 1990,
between Registrant and Indosale PVT Ltd. (5)
10.11 License Agreement dated November 23, 1987, between Registrant and Eaton
Corporation (1)
10.12 Exclusive Sales and Service Representative Agreement dated May 1, 1989,
between Registrant and Spirox Taiwan, Ltd. (4)
10.13 Lease dated April 7, 1992, between Registrant and The John A. and Susan R.
Sobrato 1979 Revocable Trust for property at 1139 Karlstad Drive,
Sunnyvale, California (8)
10.14 Term Loan Agreement dated April 17, 1992, between the Registrant and
Silicon Valley Bank (8)
10.15 Asset Purchase Agreement dated May 28, 1992, between Registrant and
Advantage Production Technology, Inc. (9)
10.16 License and Distribution Agreement dated September 8, 1992, between
Registrant and Sumitomo Mutual Industries, Ltd. (10)
10.17 Mortgage dated February 1, 1993, with Bay Bank Middlesex for Registrant's
facilities at One Merrimack Landing, Unit 26, Newburyport, Massachusetts
(11)
10.18 Revolving Loan Agreement dated May 15, 1994, between Registrant and
Silicon Valley Bank (12)
10.19 Lease Agreement dated October 1995 for Registrant's facilities at Lot 62,
Four Stanley Tucker Drive, Newburyport, Massachusetts (13)
11.1 Computation of Net Income Per Share
27.1 Financial Data Schedule
14
<PAGE>
(1) Incorporated by reference to the exhibit filed with the Registrant's
Registration Statement on Form S-1 (No. 33-23861) filed August 18, 1988,
and amended on September 21, 1988, October 5, 1988, November 3, 1988,
November 10, 1988, and December 15, 1988, which Registration Statement
became effective November 10, 1988.
(2) Incorporated by reference to the exhibit filed with the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1988.
(3) Incorporated by reference to the exhibit filed with the Registrant's
Registration Statement on Form S-8 filed January 17, 1991.
(4) Incorporated by reference to the exhibit filed with the Registrant's
Registration Statement on Form S-1 (No. 33-28755) filed on May 17, 1989,
and amended May 24, 1989, which Registration Statement became effective
May 24, 1989.
(5) Incorporated by reference to the exhibit filed with the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1989.
(6) Incorporated by reference to the exhibit filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1990.
(7) Incorporated by reference to the exhibit filed with the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1990.
(8) Incorporated by reference to the exhibit filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1992.
(9) Incorporated by reference to the exhibit filed with the Registrant's
Report on Form 8-K dated June 12, 1992.
(10)Incorporated by reference to the exhibit filed with the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1992.
(11)Incorporated by reference to the exhibit filed with the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1993.
(12)Incorporated by reference to the exhibit filed with the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1994.
(13)Incorporated by reference to the exhibit filed with the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1995.
15
<PAGE>
Exhibit 10.6
GENUS, INC.
1991 INCENTIVE STOCK OPTION PLAN
Amended and Restated March, 1997
1. Purposes of the Plan. The purposes of this Incentive Stock Option Plan are
to attract and retain the best available personnel, to provide additional
incentive to the Employees, Consultants and Outside Directors of Genus, Inc.
(the "Company") and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or Nonstatutory
Stock Options, at the discretion of the Board and as reflected in the terms of
the written option agreement.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Committee, if one has been appointed, or the Board
of Directors of the Company, if no Committee is appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Committee appointed by the Board of Directors in
accordance with Section 4(a) of the Plan, if one is appointed.
(d) "Common Stock" shall mean the Common Stock of the Company.
(e) "Company" shall mean Genus, Inc. a California corporation.
(f) "Consultant" shall mean any person who is engaged by the Company or any
Parent or Subsidiary to render consulting services and is compensated for such
consulting services; provided that the term Consultant shall not include
directors who are not compensated for their services or are paid only a
director's fee by the Company.
(g) "Continuous Status as an Employee, Consultant or Outside Director" shall
mean the absence of any interruption or termination of service as an Employee,
Consultant or Outside Director, as applicable. Continuous Status as an
Employee, Consultant or Outside Director shall not be considered interrupted in
the case of sick leave, military leave, or any other leave of absence approved
by the Board; provided that such leave is for a period of not more than 90 days
or reemployment upon the expiration of such leave is guaranteed by contract or
statute.
16
<PAGE>
(h) "Disinterested Person" shall have the meaning set forth in Rule 16b-3(d)(3)
as promulgated by the Securities and Exchange Commission under Section 16(b) of
the Securities Exchange Act of 1934, as amended, as such rule is amended from
time to time and as interpreted by the Securities and Exchange Commission.
(i) "Employee" shall mean any person, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Incentive Stock Option" shall mean an option intended to qualify as an
incentive stock option within the meaning of Section 422A of the Code.
(k) "Nonstatutory Stock Option" shall mean an Option not intended to qualify
as an Incentive Stock Option.
(l) "Option" shall mean a stock option granted pursuant to the Plan.
(m) "Optioned Stock" shall mean the Common Stock subject to an Option.
(n) "Optionee" shall mean an Employee, Consultant or Outside Director who
receives an Option.
(o) "Outside Director" shall mean a member of the Board of Directors of the
Company who is not (i) an Employee, (ii) a Consultant or (iii) a representative
or affiliate of any person or entity holding in the aggregate 10% or more of
the Company's outstanding Common Stock.
(p) "Parent" shall mean a "parent corporation," whether now or hereafter
existing, as defined in Section 425(e) of the Code.
(q) "Plan" shall mean this 1991 Incentive Stock Option Plan.
(r) "Share" shall mean a share of the Common Stock, as adjusted in accordance
with Section 10 of the Plan.
(s) "Subsidiary" shall mean a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 425(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the
Plan, the maximum aggregate number of shares under the Plan is 1,053,006 shares
of Common Stock. The Shares may be authorized, but unissued, or reacquired
Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, then the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant or sale under the Plan.
4. Administration of the Plan.
(a) Procedure. The Plan shall be administered by the Board of Directors of the
Company, or by a committee appointed by the Board which shall have not less
than three Board members (the "Committee"). Subject to Section 5(b),
(relating to Option grants to Outside Directors) any grants of Options to
directors (other than Outside Directors) of the Company shall be made (i) by
the Board when a majority of the directors acting in the matter, are
Disinterested Persons, or (ii) by the Committee when the Committee is composed
of three or more persons having full authority to act in the matter and each
17
<PAGE>
member of the Committee is a Disinterested Person. Grants of Options to
officers who are not directors shall be made (i) by the Board, or (ii) the
Committee when the Committee is composed of three or more persons having full
authority to act in the matter and each member of the Committee is a
Disinterested Person. Subject to the foregoing, from time to time the Board of
Directors may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies however caused, or remove all members of
the Committee and thereafter directly administer the Plan.
(b) Powers of the Board. Subject to Section 5(b), (relating to Option grants
to Outside Directors), subject to the provisions of the Plan, the Board shall
have the authority, in its discretion: (i) to grant Incentive Stock Options or
Nonstatutory Stock Options; (ii) to determine, upon review of relevant
information and in accordance with Section 7 of the Plan, the fair market value
of the Common Stock; (iii) to determine the exercise price per share of Options
to be granted, which exercise price shall be determined in accrodance with
Section 7 of the Plan; (iv) to determine the Employees or Consultants to whom,
and the time or times at which, Options shall be granted and the number of
shares to be represented by each Option; (v) to interpret the Plan; (vi) to
prescribe, amend and rescind rules and regulations relating to the Plan; (vii)
to determine the terms and provisions of each Option granted (which need not
be identical) and, with the consent of the holder thereof, modify or amend
any provisions (including provisions relating to exercise price) of any Option;
(viii) to accelerate or defer (with consent of the Optionee) ther exercise date
of any Option; (ix) to authorize any person to execute on behalf of the Company
any instrument required to effectuate the grant of an Option previously granted
by the Board; (x) to reduce the exercise price of any Option to the then fair
market value if the fair market value of the Common Stock covered by such Option
shall have declined since the date of the Option was granted; and (xi) to make
all other determinations deemed necessary or advisable for the administration
of the Plan.
(c) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and
any other holders of any Options granted under the Plan.
5. Eligibility.
(a) Options may be granted to Employees, Consultants and Outside Directors
provided that (i) Incentive Stock Options may only be granted to Employees and
(ii) Options may only be granted to Outside Directors in accordance with the
provisions of Section 5(b) hereof. Subject to Section 5(b) with respect to
Outside Directors, an Employee, Consultant or Outside Director who has been
granted an option may, if such Employee, Consultant or Outside Director is
otherwise eligible, be granted additional Option(s).
(b) All grants of Options to Outside Directors under this Plan shall be
automatic and non-discretionary and shall be made strictly in accordance with
the following provisions:
(i) No person shall have any discretion to select which Outside Directors shall
be granted Options or to determine the number of shares to be covered by Options
granted to Outside Directors; provided, however, that nothing in this Plan shall
be construed to prevent an Outside Director from declining to receive an Option
under this Plan.
(ii) As of February 7, 1991, each Outside Director shall be automatically
granted an Option to purchase 5,000 shares of Common Stock, or 5,000 shares of
Common Stock decreased or increased as provided in Section 10 hereof, on the
date on which such person first becomes an Outside Director, whether through
election by the shareholders of the Company or appointment by the Board to fill
a vacancy (the "First Option").
18
<PAGE>
(iii) One year from the date of grant of the First Option, each Outside Director
shall be automatically granted an Option to purchase 5,000 shares of Common
Stock decreased or increased as provided in Section 10 hereof (a "Second
Option"), provided that at the date of grant of the Second Option such person
is an Outside Director.
(iv) The terms of an Option granted hereunder shall be as follows:
(A) the term of the Option shall be five (5) years;
(B) except as provided in Section 8(b) hereof, the Option shall be exercisable
only while the Outside Director remains a director;
(C) the exercise price per share of Common Stock shall be 100% of the Fair
Market Value on the date of grant of the Option;
(D) the Option shall become exercisable cumulatively with respect to one twelfth
of the shares of Common Stock (or one twelfth of the shares of Common Stock
increased or decreased as provided in Section 10 hereof) on the last day of
each month following the date of grant, and provided, however, that in no event
shall any Option be exercisable prior to obtaining shareholder approval of the
Plan.
(c) Each Option shall be designated in the written option agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate fair market
value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options.
(d) For purposes of Section 5(c), Options shall be taken into account in the
order in which they were granted, and the fair market value of the Shares shall
be determined as of the time the Option with respect to such Shares is granted.
(e) The Plan shall not confer upon any Optionee any right with respect to
continuation of employment by or the rendition of services to the Company, nor
shall it interfere in any way with his or her right or the Company's right to
terminate his or her employment or services at any time, with or without cause.
(f) No Employee shall be granted, in any fiscal year of the Company, Options to
purchase more than 400,000 Shares; provided that, in addition, a new Employee
upon joining the Company may be granted Options to purchase 400,000 Shares.
(g) The foregoing limitation shall be adjusted proportionately in connection
with any change in the Company's capitalization as described in Section 10.
(h) If an Option is canceled in the same fiscal year of the Company it was
granted (other than in connection with a transaction described in Section 10),
the canceled Option will be counted against the limit set forth in Section 5(f).
For this purpose, if the exercise price of an Option is reduced, the reduction
will be treated as a cancellation of the Option and the grant of a new Option.
6. Term of Plan. The Plan shall become effective upon the earlier to occur of
its adoption by the Board of Directors or its approval by vote of the holders
of a majority of the outstanding shares of the Company entitled to vote on the
adoption of the Plan. It shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 14 of the Plan.
19
<PAGE>
7. Exercise Price and Consideration.
(a) The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of such Incentive
Stock Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be no less than 110% of the fair market value
per Share on the date of grant.
(B) granted to any Employee, the per Share exercise price shall be no less than
100% of the fair market value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the grant of such Option, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the fair market value per Share
on the date of the grant.
(B) granted to any person other than an Outside Director, the per Share
exercise price shall be no less than 85% of the fair market value per Share on
the date of grant.
For purposes of this Section 7(a), in the event that an Option is amended to
reduce the exercise price, the date of grant of such Option shall thereafter be
considered to be the date of such amendment.
(b) The fair market value shall be determined by the Board in its discretion;
provided, however, that where there is a public market for the Common Stock,
the fair market value per Share shall be the closing bid price (or the closing
price per share if the Common Stock is listed on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") National Market System) of
the Common Stock for the date of grant, as reported in the Wall Street Journal
(or, if not so reported, as otherwise reported in the Wall Street Journal (or,
if not so reported, as otherwise reported by the NASDAQ System) or, in the event
the Common Stock is listed on a stock exchange, the fair market value per
Share shall be the closing price on such exchange on the date of grant of the
Option as reported in the Wall Street Journal.
(c) The consideration to be paid for the Shares to be issued upon exercise of
an Option, including the method of payment, shall be determined by the Board
(and, in the case of an Incentive Stock Option, shall be determined at the
time of grant), and may consist entirely of (i) cash, (ii) check, (iii)
promissory note, (iv) other Shares of Common Stock which (x) either have been
owned by the Optionee for more than six (6) months on the date of surrender or
were not acquired directly or indirectly, from the Company, and (y) have a fair
market value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised, (v) authorization from
the Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a fair market value on the date of
exercised; (vi) delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale or loan proceeds required to pay the exercise price; (vii) any
combination of such methods of payment; or (viii) such other consideration and
method of payment for the issuance of Shares to the extent permitted under
applicable laws.
20
<PAGE>
8. Options.
(a) Term of Option. The term of each Option shall be ten (10) years from the
date of grant thereof or such shorter term as may be provided in the Option
agreement. However, in the case of an Option granted to an Optionee who, at
the time the Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Option shall be five (5) years from the date of
grant thereof or such shorter time as may be provided in the Option agreement.
(b) Exercise of Option.
(i) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such exercise
has been given to the Company in accordance with the terms of the Option by the
person entitled to exercise the Option and full payment for the Shares with
respect to which the Option is exercised has been received by the Company. Full
payment may, as authorized by the Board, consist of any consideration and method
of payment allowable under Section 7 of the Plan. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option. In the event that the
exercise of an Option is treated in part as the exercise of an Incentive Stock
Option and in part as the exercise of a Nonstatutory Stock Option pursuant to
Section 5(b), the Company shall issue a separate stock certificate evidencing
the Shares treated as acquired upon exercise of an Incentive Stock Option and a
separate stock certificated evidencing the Shares treated as acquired upon
exercise of a Nonstatutory Stock Option and shall identify each such certificate
accrordingly in its stock transfer records. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificated is issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the number of
Shares which thereafter may be available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(ii) Termination of Status as an Employee, Consultant or Outside Director. In
the event of termination of an Optionee's Continuous Status as an Employee,
Consultant or Outside Director (as the case may be), such Optionee may, but
only within three (3) months (or, in the case of a Nonstatutory Stock Option,
such other period of time not exceeding six (6) months as determined by the
Board) after the date of such termination (but in no event later than the date
of expiration of the term of such Option as set forth in the Option agreement,
exercised the Option to the exten that such Employee, Consultant or Outside
Director was entitled to exercise it at the date of such termination. To the
extent that such Employee, Consultant or Outside Director was not entitled to
exercise the Option at the date of such termination, or if such Employee,
Consultant or Outside Director does not exercise such Option (which such
Employee, consultant or Outside Director was entitled to exercise) within the
time specified herein, the Option shall terminate.
21
<PAGE>
(iii) Disability of Optionee. Notwithstanding the provisions of Section 8(b)
(ii) above, in the event of termination of an Optionee's Continuous Status as
an Employee, Consultant or Outside Director as a result of such Employee's,
Consultant's or Outside Director's total and permanent disability (as defined
in Section 22(e)(3) of the Code), such Employee, Consultant or Outside Director
may, but only within twelve (12) months (or such shorter period of time as is
determined by the Board, with such determination in the case of an Incentive
Stock Option being made at the time of grant of the Option) from the date of
such termination (but in no event later than the date of expiration of the
term of such Option as set forth in the Option agreement), exercise the Option
to the extent such Employee, Consultant or Outside Director was entitled to
exercise it at the date of such termination. To the extent that such Employee,
Consultant or Outside Director was not entitled to exercise the Option at the
date of termination, or if such Employee, Consultant or Outside Director does
not exercise such Option (which such Employee, Consultant or Outside Director
was entitled to exercise) within the time specified herein, the Option shall
terminate.
(iv) Death of Optionee. In the event of the death of an Optionee, the Option
may be exercised, at any time within twelve (12) months (but in no event later
than the date of expiration of the term of such Option as set forth in the
Option agreement), by the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance, but only to the extent
of the right to exercise had accrued at the date of death.
9. Non-Transferability of Options. Options may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee only by the Optionee.
10. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock of the Company or the
payment of a stock dividend with respect to the Common Stock or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable.
Unless otherwise specified inindividual option agreements, in the event of a
proposed sales of all or substantially all of the asset of the Company, or the
merger of the Company with or into another corporation, the Option shall be
assumed or an equivalent option shall be substituted by such successor
corportation or a parent or subsidiary of such successor corporation, unless
the successor corporation refuses to assume the Option or substitute an
equivalent option, in which case the Optionee shall have the right to exercise
the Option as to all of the Optioned Stock, including Shares as to which the
Option would not otherwise be exerciseable. The Option shall be deemed to be
assumed if, following the sale of assets or merger, the Option confers the
right to purchase, for each share of Optioned Stock subject to the Option
22
<PAGE>
immediately prior to the sales of assets or merger, the consideration (whether
stock, cash or other securities or property) received in the sale of assets or
merger by holders of Common Stock for each share of Common Stock held on the
effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority
of the outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not solely common
stock of the successor corporation or its Parent, the Board of Directors may,
with the consent of the successor corporation and the Optionee, provide for the
consideration to be recieved upon exercise of the Option to be solely Common
Stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Common Stock in the sale
of assets or merger. If the Board makes an Option fully exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Board shall notify the Optionee that the Option shall be fully exercisable for
a period of fifteen (15) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
11. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Board makes the determination granting such
Option. Notice of the determination shall be given to each Employee,
Consultant or Outside Director to whom an Option is so granted within a
reasonable time after the date of such grant.
12. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or terminate the Plan from
time to time in such respects as the Board may deem advisable; provided that,
to the extent necessary to comply with Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or with
Section 422A of the Code (or any other successor or applicable law or
regulation), the Company shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as is required by the applicable
law, rule or regulation.
(b) Effect of Amendment or Termination. Any such amendment or termination of
the Plan shall not affect Options already granted and such Options shall remain
in full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Optionee and the Board, which
agreement must be in writing and signed by the Optionee and the Company.
13. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933,
as amended, the Exchange Act, the rules and regulations promulgated thereunder,
and the requirements of any stock exchange upon which the Shares may then be
listed, and shall be further subject to the the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
14. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
23
<PAGE>
15. Option Agreements. Options shall be evidenced by written Option agreements
in such form as the Board shall approve.
16. Information to Optionees. To the extent required by applicable law, the
Company shall provide to each Optionee, during the period for which such
Optionee has one or more Options outstanding, copies of all annual reports and
other information which are provided to all shareholders of the Company.
24
<PAGE>
Exhibit 11.1
<TABLE>
<CAPTION>
GENUS, INC.
Computation of Net Income Per Share (a)
(Amounts in thousands, except per share amounts)
Quarter Ended
March 31,
1997 1996
______ ______
<S> <C> <C>
Average common shares outstanding 16,738 16,207
Computation of incremental outstanding shares
Net effect of dilutive stock options
based on treasury stock method 118 333
16,856 16,540
====== ======
Net income $ 181 $ 593
====== ======
Net income per share (a) $ 0.01 $ 0.04
====== ======
</TABLE>
Computation Notes:
(a) Presentation of fully diluted earnings per share for the three months ended
March 31, 1997 and 1996 is omitted because such amounts are materially the
same as those presented above.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000837913
<NAME> GENUS, INC.
<MULTIPLIER> 1000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 7644
<SECURITIES> 0
<RECEIVABLES> 21851
<ALLOWANCES> 250
<INVENTORY> 25346
<CURRENT-ASSETS> 60186
<PP&E> 40835
<DEPRECIATION> 25715
<TOTAL-ASSETS> 89769
<CURRENT-LIABILITIES> 19806
<BONDS> 0
0
0
<COMMON> 97965
<OTHER-SE> 29596
<TOTAL-LIABILITY-AND-EQUITY> 89769
<SALES> 19681
<TOTAL-REVENUES> 19681
<CGS> 12313
<TOTAL-COSTS> 19371
<OTHER-EXPENSES> 15
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 295
<INCOME-TAX> 114
<INCOME-CONTINUING> 181
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 181
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
