<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 27, 1998
Commission file number 0-21294
--------------------------------------------
Aseco Corporation
(Exact name of registrant as specified in its charter)
DELAWARE 04-2816806
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 DONALD LYNCH BOULEVARD, MARLBORO, MASSACHUSETTS 01752
(Address of principal executive offices)
(508)481-8896
(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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of September 27, 1998.
COMMON STOCK, $.01 PAR VALUE 3,774,313
(Title of each class) (Number of shares)
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ASECO CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets (unaudited)
at September 27, 1998 and March 29, 1998 3
Condensed Consolidated Statements of Operations
(unaudited) for the three months and six months
ended September 27, 1998 and September 28, 1997 4
Condensed Consolidated Statements of Cash Flows
(unaudited) for the six months ended
September 27, 1998 and September 28, 1997 5
Notes to Condensed Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ASECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 27, MARCH 29,
(in thousands, except share and per share data) 1998 1998
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 5,207 $ 4,431
Accounts receivable, less allowance
for doubtful accounts of $770 at
September 27, 1998 and $781 at March 29, 1998 5,376 9,140
Inventories, net 11,969 11,875
Prepaid expenses and other current assets 3,123 2,761
-------- ---------
Total current assets 25,675 28,207
Plant and equipment, at cost 8,628 8,796
Less accumulated depreciation and amortization 5,350 4,755
-------- ---------
3,278 4,041
Other assets, net 795 1,443
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$ 29,748 $ 33,691
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Borrowings on line of credit $ 4,390 $ --
Accounts payable 2,118 4,591
Accrued expenses 3,658 4,886
Current portion of capital lease obligations 12 13
-------- ---------
Total current liabilities 10,178 9,490
Deferred taxes payable 594 594
Long-term capital lease obligations 9 25
Stockholders' equity
Preferred stock, $.01 par value, 1,000,000
shares authorized, none issued and outstanding --- ---
Common stock, $.01 par value: Authorized 15,000,000
shares, issued and outstanding 3,774,313 and 3,731,718
shares at September 27, 1998 and March 29, 1998,
respectively 38 38
Additional paid in capital 18,253 18,203
Retained earnings 601 5,291
Foreign currency translation adjustment 75 50
-------- ---------
Total stockholders' equity 18,967 23,582
-------- ---------
$ 29,748 $ 33,691
======== =========
</TABLE>
See notes to condensed consolidated financial statements
3
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ASECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 27, SEPTEMBER 28, SEPTEMBER 27, SEPTEMBER 28,
1998 1997 1998 1997
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 4,395 $ 11,557 $ 11,025 $ 20,422
Cost of sales 3,641 6,253 7,701 11,073
---------- ---------- ----------- -----------
Gross profit 754 5,304 3,324 9,349
Research and development costs 1,217 1,565 2,876 2,921
Selling, general and
administrative expense 2,151 2,985 4,537 5,458
Restructuring charge 1,300 -- 1,300 --
Acquired in-process research
and development -- -- -- 4,900
---------- ---------- ----------- -----------
Income (loss) from
operations (3,914) 754 (5,389) (3,930)
Other income (expense):
Interest income 31 84 58 253
Interest expense (54) (33) (59) (39)
Other, net 20 (11) 11 (11)
---------- ---------- ----------- -----------
(3) 40 10 203
Income (loss) before income
taxes (3,917) 794 (5,379) (3,727)
Income tax (benefit) expense (347) 376 (689) 595
---------- ---------- ----------- -----------
Net income (loss) $ (3,570) $ 418 $ (4,690) $ (4,322)
========== ========== =========== ===========
Earnings (loss) per share,
basic $ (0.96) $0.11 $ (1.26) $ (1.18)
Shares used to compute
earnings (loss) per share,
basic 3,735,000 3,685,000 3,734,000 3,676,000
Earnings (loss) per share,
diluted $ (0.96) $0.11 $ (1.26) $ (1.18)
Shares used to compute
earnings (loss) per share,
diluted 3,735,000 3,979,000 3,734,000 3,676,000
</TABLE>
See notes to condensed consolidated financial statements
4
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ASECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------------------
SEPTEMBER 27, SEPTEMBER 28,
1998 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating activities:
Net (loss) $(4,690) $(4,322)
Adjustments to reconcile net (loss) to net
Cash used by operating activities:
Depreciation and amortization 1,009 621
Acquired in-process research and development -- 4,900
Loss on sale of plant and equipment 5 --
Restructuring charge 1,300 --
Inventory write-off 850 --
Changes in assets and liabilities:
Accounts receivable 3,246 (2,547)
Inventories, net (978) (3,868)
Prepaid expenses and other current assets 66 (236)
Accounts payable and accrued expenses (3,988) 2,671
Income taxes payable -- 235
------- -------
Total adjustments 1,510 1,776
------- -------
Cash used in operating activities (3,180) (2,546)
Investing activities:
Acquisitions net of cash acquired -- (6,079)
Proceeds from sale of plant and equipment 7 --
Acquisition of plant and equipment (342) (913)
Increase in software development costs and
other assets (136) (392)
------- -------
Cash used in investing activities (471) (7,384)
Financing activities:
Net proceeds from issuance of common stock 50 307
Borrowings on line of credit 4,390 1,875
Payments of long-term capital lease obligations (16) (7)
------- -------
Cash provided by financing activities 4,424 2,175
------- -------
Effect of exchange rate changes on cash 3 (3)
Net increase/decrease in cash and cash equivalents 776 (7,758)
Cash and cash equivalents at the beginning of period 4,431 14,082
------- -------
Cash and cash equivalents at the end of period $ 5,207 $ 6,324
======= =======
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
ASECO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED SEPTEMBER 27, 1998
1. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended
September 27, 1998 are not necessarily indicative of the results that may be
expected for the year ended March 28, 1999. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended March 29, 1998.
2. In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" which the Company
adopted in the third quarter of fiscal 1998. Statement 128 replaced the
previously reported primary and fully diluted earnings per share with basic and
diluted earnings per share. Unlike primary earnings per share, basic earnings
per share excludes any dilutive effects of options, warrants, and convertible
securities. Diluted earnings per share is very similar to the previously
reported fully diluted earnings per share. All earnings per share amounts for
all periods have been presented, and where necessary, restated to conform to the
Statement 128 requirements.
3. In 1997, the Financial Accounting Standards Board issued Statement No. 130,
"Reporting Comprehensive Income" which establishes standards for the reporting
and display of comprehensive income and its components in a full set of general-
purpose financial statements. Under this standard, certain revenues, expenses,
gains, and losses recognized during the period are included in comprehensive
income, regardless of whether they are considered to be results of operations of
the period. During the second quarter of Fiscal 1999 total comprehensive loss
amounted to $3,534,000 versus comprehensive income of $426,000 for the second
quarter of fiscal 1998. Comprehensive loss for the first six months of fiscal
1999 was $4,665,000 versus comprehensive loss for the first six months of fiscal
1998 of $4,302,000. The difference between comprehensive income/loss and net
income/loss as reported on the Consolidated Statements of Operations is
attributable to the foreign currency translation adjustment.
4. Inventories consisted of:
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 27, MARCH 29,
1998 1998
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<S> <C> <C>
Raw Material $ 6,354 $ 5,612
Work in Process 4,766 4,712
Finished Goods 849 1,551
------- -------
$11,969 $11,875
======= =======
</TABLE>
6
<PAGE>
5. On May 23, 1997, the Company acquired 100% of the outstanding stock of
Western Equipment Developments (Holdings) Ltd. ("WED") for approximately
$6,100,000 in cash. WED designs, manufactures and markets integrated circuit
wafer handling robot and inspection systems used to load, sort, transport and
inspect wafers during the semiconductor manufacturing process. The acquisition
was accounted for as a purchase and accordingly, the results of operations of
the acquired business have been included in the Company's consolidated financial
statements commencing May 23, 1997. The Company's initial allocation of the
purchase price at the date of acquisition resulted in an estimate of acquired
in-process research and development of $4,900,000 recorded in the first quarter
of fiscal 1998. During fiscal 1998, the Company determined that certain acquired
technology was not as developed as originally expected, and certain in-process
technology would require more time to develop than originally anticipated. At
the end of fiscal 1998, the Company completed the allocation of the purchase
price which resulted in an additional in-process research and development charge
of $1,200,000 resulting in an aggregate fiscal 1998 charge of $6,100,000. The
following table summarizes the unaudited pro-forma consolidated results of
operations as if the acquisition had been made as of January 1, 1997, including
the aggregate acquired in-process research and development charge of $6,100,000
as if expensed on that date:
<TABLE>
<CAPTION>
Six months ended
----------------
SEPTEMBER 28,
1997
----------------
<S> <C>
Net sales $21,451
Net loss (6,911)
Earnings (loss) per share $ (1.89)
</TABLE>
6. In the second quarter of fiscal 1999, the Company announced a plan to
consolidate its UK wafer handling and inspection manufacturing operations. This
plan includes the closure of the Company's UK facility and related transfer of
manufacturing operations to the United States as well as the discontinuation of
several older product models in an effort to focus the operation's product
offerings. The shutdown and transfer will be substantially completed during the
third quarter of fiscal 1999. In conjunction with this plan, the Company
recorded a $2.2 million special charge including a $850,000 charge to cost of
sales for inventory write-downs related to product discontinuations and a $1.3
million restructuring charge. The principal components of the restructuring
charge include $627,000 for write-down of fixed and other long term assets,
$241,000 for severance related charges, $188,000 for a write-down of goodwill
related to the impairment of such assets indicated using estimated future cash
flows, and $65,000 of lease termination and related costs.
7
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Three and six months ended September 27, 1998
Results of Operations
- ---------------------
Net sales for the second quarter of fiscal 1999 decreased 62% to $4.4 million
compared to $11.6 million for the second quarter of fiscal 1998. Net sales for
the first six months of fiscal 1999 decreased 46% to $11 million compared to $20
million for the first six months of fiscal 1998. The decrease in net sales
resulted from fewer unit shipments compared to the second quarter of fiscal 1998
as a result of an industry wide market downturn.
International sales represented approximately 51% of net sales for the second
quarter of fiscal 1999 versus 50% in the second quarter of fiscal 1998. On a
year to date basis, export sales represented 42% of net sales compared to 43% in
the same period last year. Year to date approximately 85% of all international
sales were to customers located in the Pacific Rim region.
In the second quarter of fiscal 1999, the Company announced a plan to
consolidate its UK wafer handling and inspection manufacturing operations. This
plan includes the closure of the Company's UK facility and related transfer of
manufacturing operations to the United States as well as the discontinuation of
several older product models in an effort to focus the operation's product
offerings. The shutdown and transfer will be substantially completed during the
third quarter of fiscal 1999 (See Note 6 to the Condensed Consolidated Financial
Statements included herein). In conjunction with this plan, the Company
recorded a $2.2 million special charge including a $850,000 charge to cost of
sales for inventory write-downs related to product discontinuations and a $1.3
million restructuring charge. The principal components of the restructuring
charge include $627,000 for write-down of fixed and other long term assets,
$241,000 for severance related charges, $188,000 for a write-down of goodwill
related to the impairment of such assets indicated using estimated future cash
flows, and $65,000 of lease termination and related costs.
Gross margin for the second quarter of fiscal 1999 was 17% compared to 46% in
the same quarter last year. Gross margin for the first six months of fiscal
1999 was 30% compared to 46% in the same period last year. The second quarter
fiscal 1999 decline in gross margin resulted from the $850,000 charge for
discontinued products described above, manufacturing excess capacity resulting
from lower production levels and, to a lesser extent, the higher mix of lower
margin product sales during the second quarter of 1999.
Research and development expenses decreased 22% to $1.2 million in the second
quarter of fiscal 1999 from $1.6 million in the second quarter of fiscal 1998.
Research and development expenses increased as a percentage of sales to 28% in
the second quarter of fiscal 1999 from 14% in the second quarter of fiscal 1998
due to the decline in net sales. Research and development expenses for the
first six months of fiscal 1999 and fiscal 1998 were approximately $2.9 million.
The decrease in spending in the comparable quarterly periods was principally a
result of decreased headcount. Development spending in the second quarter of
fiscal 1999 was focused on various enhancements and features for the VT8000, the
Company's newest test handler.
During the first quarter of fiscal 1998, the Company recorded a special charge
to earnings of $4.9 million for acquired in-process research and development
related to the initial allocation of the purchase price of the Company's
acquisition of Western Equipment Developments Holdings ("WED") (See Note 5 to
the Condensed Consolidated Financial Statements included herein).
8
<PAGE>
Selling, general and administrative expenses for the second quarter of fiscal
1999 were $2.2 million versus $3.0 million for the second quarter of fiscal
1998. Selling, general and administrative expenses for the first six months of
fiscal 1999 were $4.5 million versus $5.5 million for the first six months of
fiscal 1998. The decrease in selling, general and administrative expenses was
primarily the result of lower commissions earned due to lower sales volume along
with the savings realized from workforce reductions and a Company wide freeze on
discretionary spending.
Operating loss in the second quarter of fiscal 1999 was $3.9 million versus
operating income of $754,000 in the second quarter of fiscal 1998. Operating
loss in the first six months of fiscal 1999 was $5.4 million versus operating
loss of $3.9 million in the first six months of fiscal 1998. The year to date
operating loss of $5.4 million is the result of both the $2.2 million special
charge recorded during the second quarter (See Note 6 to the Company's Condensed
Consolidated Financial Statements included herein) and the decline in sales and
lower gross margins attributable to the shift in product mix.
The Company recorded a tax benefit of $347,000 in the second quarter of fiscal
1999 versus income tax expense of $376,000 in the second quarter of fiscal 1998.
Tax rates in both quarters were affected by the inability to offset losses
incurred by WED against income earned and taxes paid in the United States.
As a result of the foregoing, net loss for the second quarter of fiscal 1999 was
$3.6 million, or $0.96 per diluted share, as compared to net income of $418,000,
or $0.11 per diluted share, for the second quarter of fiscal 1998.
Liquidity and Capital Resources
- -------------------------------
The Company ended the second quarter of fiscal 1999 with a cash position of
approximately $5.2 million compared to $1.5 million at the end of the prior
quarter. Borrowings under the Company's bank line of credit at the end of the
second quarter of fiscal 1999 amounted to $4.4 million versus $300,000 at the
end of the first quarter of fiscal 1999. During the second quarter, the
Company's bank committed to an interim extension of the term of the Company's $5
million line of credit to November 15, 1998. As of November 11, 1998, the
Company's cash position was approximately $2.6 million and total availability
under the Company's bank line of credit was $1.9 million, all of which was
borrowed and outstanding. The Company is currently negotiating a further
extension of its bank line of credit and it is anticipated that all borrowings
under the extended line will be secured by all the assets of the Company and
will be subject to certain financial covenants including maintenance of
specified debt to net worth, current ratios, and minimum levels of net worth and
profitability.
The Company used approximately $3.2 million of cash from operations during the
first six months of fiscal 1999. Accounts receivable decreased generating cash
of approximately $3.2 million in the first six months of fiscal 1999 because of
a decrease in sales volume. For the first six months of fiscal 1999, the
Company used approximately $1.0 million for material purchases which occurred
principally in the first quarter of fiscal 1999 as the Company was not able to
reduce its build plan early enough in the first quarter to facilitate timely
cancellation of orders. Accounts payable and accrued expense decreased
approximately $4.0 million as a result of lower business volume experienced
during the quarter.
The Company used approximately $471,000 in cash for investing activities during
the first six months of fiscal 1999. The Company spent approximately $342,000 on
capital equipment purchases and $136,000 to fund internal software development
costs.
The Company generated cash from financing activities in the first six months of
fiscal 1999 of $4.4 million, primarily as a result of borrowings under the
working capital line of credit.
The Company expects to continue to experience a slowdown in the volume of
business due to adverse market conditions in the semiconductor industry. As a
result, the Company intends to monitor and further reduce if necessary, its
expenses if projected lower net sales levels continue. Although the Company
anticipates that it will incur losses in future quarters which will negatively
impact its liquidity position, the Company believes that funds generated from
operations, existing cash balances and available borrowing capacity will be
sufficient to meet the Company's cash requirements for at least the next twelve
months.
9
<PAGE>
Year 2000 Compliance
- --------------------
Historically certain computer programs have been written using two digits rather
than four to define the applicable year, which could result in a computer
recognizing a date using "00" as the year 1900 rather than the year 2000. This,
in turn, could result in major system failures or miscalculations, and is
generally referred to as the "Year 2000 Problem".
In the second quarter of fiscal 1999, the Company completed its implementation
of a new enterprise-wide management information system that the vendor has
represented is Year 2000 compliant. In addition, the Company has completed an
assessment of other software used by the Company for Year 2000 compliance and
has noted no material instances of non-compliance. On an on-going basis, the
Company reviews each of its new hardware and software purchases to ensure that
it is Year 2000 compliant. The Company has also conducted a review of its
product line and has determined that most of the products it has sold and will
continue to sell do not require remediation to be Year 2000 compliant.
The Company is in the process of gathering information about the Year 2000
compliance status of its significant suppliers and customers. The Company
expects to complete this exercise during fiscal 1999. Additionally, the
compliance status of the Company's external agents who process vital Company
data such as payroll, employee benefits, and banking information have been
queried for Year 2000 compliance. To date, the Company is not aware of any such
external agent with a Year 2000 issue that would materially impact the Company's
results of operations, liquidity, or capital resources. However, the Company
has no means of ensuring that external agents will be Year 2000 ready.
To date the Company has incurred approximately $800,000 ($175,000 expensed and
$625,000 capitalized for new systems and equipment) related to all phases of the
Year 2000 compliance initiatives.
Although the Company does not believe that it will incur any additional material
costs or experience material disruptions in its business associated with
preparing its internal systems for Year 2000 compliance, there can be no
assurances that the Company will not experience serious unanticipated negative
consequences and/or material costs caused by undetected errors or defects in the
technology used in its internal systems, which are comprised of third party
software and third party hardware that contain embedded software.
The most reasonably likely worst case scenarios would include (i) corruption of
data contained in the Company's internal information systems relating to, among
other things, manufacturing and customer orders, shipments, billing and
collections, (ii) hardware failure, (iii) the failure of infrastructure services
provided by government agencies and other third parties (i.e., electricity,
phone service, water transport, payroll, employee benefits, etc.), (iv) warranty
and litigation expense associated with third-party software incorporated into
the Company's products that is not Year 2000 compliant, and (v) a decline in
sales resulting from disruptions in the economy generally due to Year 2000
issues.
The Company has contingency plans for certain critical applications and is
working on such plans for others. These contingency plans involve among other
actions, manual workarounds and adjusting staffing strategies.
Cautionary Statement for Purposes of "Safe Harbor" Provisions of the Private
- -----------------------------------------------------------------------------
Securities Litigation Reform Act of 1995
- ----------------------------------------
The Company's future results are difficult to predict and may be affected by a
number of important risk factors including, but not limited to, the factors
listed in the Company's Annual Report on Form 10K for the fiscal year ended
March 29, 1998. The Company wishes to caution readers that those important
factors, in some cases, have affected, and in the future could affect, the
Company's actual consolidated quarterly or annual operating results and could
cause those actual consolidated quarterly or annual operating results to differ
materially from those expressed in any forward looking statements made by, or on
behalf of, the Company.
10
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ASECO CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings:
None.
Item 2. Changes in Securities:
None.
Item 3. Defaults upon Senior Securities:
None.
Item 4. Submissions of Matters to a Vote of Security Holders:
On August 11, 1998, the Annual Meeting of Stockholders was held and the
following matters were voted upon:
1. Carl S. Archer, Jr. was elected as Director to serve for a three year
term. The vote was 3,499,363 in favor, 77,884 withheld.
2. An amendment to the Company's Employee Stock Purchase Plan increasing
the maximum number of shares issuable under the plan from 100,000 to
150,000 was approved with 3,406,077 in favor, 152,590 against, and
6,832 abstaining.
3. The Board of Directors' selection of Ernst & Young LLP as the
Company's independent auditors for the year ended March 28, 1999 was
ratified with 3,546,273 in favor, 28,590 against, and 2,384
abstaining.
Item 5. Other Information:
None.
Item 6. Exhibits and reports on Form 8-K:
a. Exhibits See exhibit index
b. There were no reports on Form 8-K filed for the three months ended
September 27, 1998.
11
<PAGE>
ASECO CORPORATION
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.
SIGNATURE TITLE DATE
/s/ Sebastian J. Sicari President, Chief Executive November 11, 1998
- ----------------------- Officer, (principal
Sebastian J. Sicari executive officer)
/s/ Mary R. Barletta Vice President, Chief November 11, 1998
- --------------------- Financial Officer, Treasurer
Mary R. Barletta (principal financial and
accounting officer)
12
<PAGE>
Item 6a.
Exhibit No. Description
***10.2 1993 Non-Employee Director Stock Option Plan, as amended and
restated as of August 11, 1998, filed herewith
***10.23 Separation Agreement, dated August 11, 1998, between
Carl S. Archer, Jr. and the Company, filed herewith
***10.24 Severance Agreement, dated July 8, 1998, between
Mary R. Barletta and the Company, filed herewith
***10.25 Severance Agreement, dated July 8, 1998, between
Robert L. Murray and the Company, filed herewith
***10.26 Severance Agreement, dated July 8, 1998, between
Robert E. Sandberg and the Company, filed herewith
***10.27 Severance Agreement, dated July 8, 1998, between
Richard S. Sidell and the Company, filed herewith
***10.28 Severance Agreement, dated July 8, 1998, between
Phillip J. Villari and the Company, filed herewith
***10.29 Letter agreement, dated August 11, 1998, between
Sebastian J. Sicari and the Company, filed herewith
*** Management contract or compensation plan or arrangement required to be filed
as an exhibit pursuant to item 14c.
13
<PAGE>
ASECO CORPORATION
1993 NON-EMPLOYEE DIRECTOR STOCK PLAN
(Amended and Restated Effective as of August 11, 1998)
1. Purpose. This plan, to be known as the 1993 Non-Employee Director
-------
Stock Plan (hereinafter, this "Plan") is intended to promote the interests of
Aseco Corporation (hereinafter, the "Company") by providing an inducement to
obtain and retain the services of qualified persons who are not employees or
officers of the Company to serve as members of its Board of Directors (the
"Board").
2. Available Shares. The total number of shares of Common Stock, par
----------------
value $.01 per share, of the Company (the "Common Stock"), which may be granted
under this Plan shall not exceed 165,000 shares, subject to adjustment in
accordance with paragraph 10 of this Plan. Shares subject to this Plan are
authorized but unissued shares or shares that were once issued and subsequently
reacquired by the Company. If any options granted under this Plan are
surrendered before exercise or lapse without exercise, in whole or in part, the
shares reserved therefor shall continue to be available under this Plan.
3. Administration. This Plan shall be administered by the Board or by a
--------------
committee appointed by the Board (the "Committee"). In the event the Board fails
to appoint or refrains from appointing a Committee, the Board shall have all
power and authority to administer this Plan. In such event, the word
"Committee" wherever used herein shall be deemed to mean the Board. The
Committee shall, subject to the provisions of the Plan, have the power to
construe this Plan, to determine all questions hereunder, and to adopt and amend
such rules and regulations for the administration of this Plan as it may deem
desirable.
4. Granting of Options.
-------------------
(a) Initial Grant. On the effective date of a registration statement
-------------
on Form S-1 covering the initial public offering of the Company's Common Stock
(the "Effective Date"), each person who is then a member of the Board, and who
is not a current or former employee or officer of the Company, shall be
automatically granted, without further action by the Board, an option to
purchase 3,000 shares of the Common Stock.
(b) Initial Grant to New Directors. Subject to the availability of
------------------------------
shares under this Plan, each person who is first elected as a member of the
Board after May 15, 1996 and during the term of this Plan, and who is not on the
date of such election a current or former employee or officer of the Company,
shall be automatically granted an option to purchase 15,000 shares of the Common
Stock on the date of his or her first election as a member of the Board.
<PAGE>
(c) Automatic Grants. On April 30 of each year commencing April 30,
----------------
1996 and during the term of this Plan, each person who is then serving on the
Board, and who is not a current or former employee or officer of the Company,
shall automatically be granted an option to purchase 3,500 shares of the Common
Stock, subject to the availability of shares under this Plan.
(d) Initial Option Adjuster. On May 15, 1996, each person who is
-----------------------
serving on the Board as of such date, who is not a current or former employee or
officer of the Company and who is to serve on the Board following the 1996
Annual Meeting of Stockholders of the Company shall automatically be granted an
option to purchase an additional 10,000 shares of Common Stock.
Except for the specific options referred to above, no other options shall
be granted under this Plan.
5. Option Price. The purchase price of the stock covered by an option
------------
granted pursuant to this Plan shall be 100% of the fair market value of such
shares on the day the option is granted. The option price will be subject to
adjustment in accordance with the provisions of paragraph 10 of this Plan. For
purposes of this Plan, if, at the time an option or Stock Award (defined below)
is granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the last business day for which the
prices or quotes discussed in this sentence are available prior to the date such
option or Stock Award is granted and shall mean (i) the average (on that date)
of the high and low prices of the Common Stock on the principal national
securities exchange on which the Common Stock is traded, if the Common Stock is
then traded on a national securities exchange; or (ii) the last reported sale
price (on that date) of the Common Stock on the Nasdaq National Market System,
if the Common Stock is not then traded on a national securities exchange; or
(iii) the closing bid price (or average of bid prices) last quoted (on that
date) by an established quotation service for over-the-counter National Market
System. If, at the time an option or Stock Award is granted under the Plan, the
Company's stock is not publicly traded, "fair market value" shall be the fair
market value on the date the option or Stock Award is granted as determined by
the Board in good faith.
6. Period of Option. Unless sooner terminated in accordance with the
----------------
provisions of paragraph 8 of this Plan, an option granted hereunder shall expire
on the date which is ten (10) years after the date of grant of the option.
2
<PAGE>
7. Vesting of Shares and Non-Transferability of Options.
----------------------------------------------------
(a) Vesting. Options granted under this Plan shall not be exercisable
-------
until they become vested. Options granted pursuant to Sections 4(b), 4(c) and
4(d) of this Plan shall vest in the optionee and thus become exercisable
immediately by the optionee in two annual installments of 50% each on the first
and second anniversary of the date of grant. Options granted pursuant to
Section 4(a) of the Plan shall be 100% vested on the date of grant and thus be
fully exercisable at any time prior to their expiration.
(b) Legend on Certificates. The certificates representing such shares
----------------------
shall carry such appropriate legend, and such written instructions shall be
given to the Company's transfer agent, as may be deemed necessary or advisable
by counsel to the Company in order to comply with the requirements of the
Securities Act of 1933 or any state securities laws.
(c) Non-transferability. Any option granted pursuant to this Plan
-------------------
shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a domestic relations order and shall be
exercisable during the optionee's life time only by him or her.
8. Termination of Option Rights.
----------------------------
(a) In the event an optionee ceases to be a member of the Board for
any reason other than death or permanent disability, any then unexercised
portion of options granted to such optionee shall, to the extent not then
vested, immediately terminate and become void; any portion of an option which is
then vested but has not been exercised at the time the optionee so ceases to be
a member of the Board may be exercised, to the extent it is then vested, by the
optionee within two years of the date the optionee ceased to be a member of the
Board; and all options shall terminate after such two-year period has have
expired.
(b) In the event that an optionee ceases to be a member of the Board
by reason of his or her death or permanent disability, any option granted to
such optionee shall be immediately, and automatically accelerated and become
fully vested and all unexercised options shall be exercisable by the optionee
(or by the optionee's personal representative, heir or legatee, in the event of
death) until the scheduled expiration date of the option.
9. Exercise of Option. Subject to the terms and conditions of this Plan
------------------
and the option agreements, an option granted hereunder shall, to the extent then
exercisable, be exercisable in whole or in part by giving written notice to the
Company by mail or in person addressed to Aseco Corporation, 500
3
<PAGE>
Donald Lynch Boulevard, Marlboro, Massachusetts 01752, Attention: Chief
Financial Officer, stating the number of shares with respect to which the option
is being exercised, accompanied by payment in full for such shares. Payment may
be (a) in United States dollars in cash or by check, (b) in whole or in part in
shares of Common Stock of the Company already owned by the person or persons
exercising the option or shares subject to the option being exercised (subject
to such restrictions and guidelines as the Board may adopt from time to time),
valued at fair market value determined in accordance with the provisions of
paragraph 5 or (c) consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise. There shall be no
such exercise at any one time as to fewer than one hundred (100) shares or all
of the remaining shares then purchasable by the person or persons exercising the
option, if fewer than one hundred (100) shares. The Company's transfer agent
shall, on behalf of the Company, prepare a certificate or certificates
representing such shares acquired pursuant to exercise of the option, shall
register the optionee as the owner of such shares on the books of the Company
and shall cause the fully executed certificates(s) representing such shares to
be delivered to the optionee as soon as practicable after payment of the option
price in full. The holder of an option shall not have any rights of a
stockholder with respect to the shares covered by the option, except to the
extent that one or more certificates for such shares shall be delivered to him
or her upon the due exercise of the option.
10. Adjustments Upon Changes in Capitalization and Other Matters. Upon
------------------------------------------------------------
the occurrence of any of the following events, an optionee's rights with respect
to options granted to him or her hereunder shall be adjusted as hereinafter
provided:
(a) If, after January 18, 1993, the shares of Common Stock shall be
subdivided or combined into a greater smaller number of shares or if the Company
shall issue any shares of Common Stock as a stock dividend on its outstanding
Common Stock, the number of shares of Common Stock deliverable upon the exercise
of options shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to reflect
such subdivision, combination or stock dividend. No adjustment, however, shall
be made for the 1-for-2.4 reverse split of the Common Stock declared by the
Board on January 18, 1993.
(b) Merger; Consolidation; Liquidation; Sale of Assets. In the event
--------------------------------------------------
the Company is merged into or consolidated with another corporation under
circumstances where the Company is not the surviving corporation, or if the
Company is liquidated or
4
<PAGE>
sells or otherwise disposes of all or substantially all of its assets to another
corporation while unexercised options remain outstanding under the Plan, (i)
subject to the provisions of clauses (iii), (iv) and (v) below, after the
effective date of such merger, consolidation or sale, as the case may be, each
holder of an outstanding option shall be entitled, upon exercise of such option,
to receive in lieu of shares of Common Stock, shares of such stock or other
securities as the holders of shares of Common Stock received pursuant to the
terms of the merger, consolidation or sale; or (ii) the Board may waive any
discretionary limitations imposed with respect to the exercise of the option so
that all options from and after a date prior to the effective date of such
merger, consolidation, liquidation or sale, as the case may be, specified by the
Board, shall be exercisable in full; or (iii) all outstanding options may be
cancelled by the Board as of the effective date of any such merger,
consolidation, liquidation or sale, provided that notice of such cancellation
shall be given to each holder of an option, and each such holder thereof shall
have the right to exercise such option in full (without regard to any
discretionary limitations imposed with respect to the option) during a 30-day
period preceding the effective date of such merger, consolidation, liquidation
or sale; or (iv) all outstanding options may be cancelled by the Board as of the
date of any such merger, consolidation, liquidation or sale, provided that
notice of such cancellation shall be given to each holder of an option and each
such holder thereof shall have the right to exercise such option but only to the
extent exercisable in accordance with any discretionary limitations imposed with
respect to the option prior to the effective date of such merger, consolidation,
liquidation or sale; or (v) the Board may provide for the cancellation of all
outstanding options and for the payment to the holders thereof of some part or
all of the amount by which the value thereof exceeds the payment, if any, which
the holder would have been required to make to exercise such option.
(c) Issuance of Securities. 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
subject to options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
(d) Adjustments. Upon the happening of any of the foregoing events,
-----------
the class and aggregate number of shares set forth in paragraph 2 of this Plan
that are subject to options which previously have been or subsequently may be
granted under this Plan shall also be appropriately adjusted to reflect such
events. The Board shall determine the specific adjustments to be made under
this paragraph 10 and its determination shall be conclusive.
5
<PAGE>
11. Restrictions on Issuance of Shares. Notwithstanding the provisions of
----------------------------------
paragraphs 4, 9 and 14 of this Plan, the Company shall have no obligation to
deliver any certificate or certificates upon exercise of an option or grant of a
Stock Award until one of the following conditions shall be satisfied:
(i) The shares with respect to the Stock Award or which the option has
been exercised are at the time of the issue of such shares effectively
registered under applicable Federal and state securities laws as now in force or
hereafter amended; or
(ii) Counsel for the Company shall have given an opinion that such
shares are exempt from registration under Federal and state securities laws as
now in force or hereafter amended; and the Company has complied with all
applicable laws and regulations with respect thereto, including without
limitation all regulations required by any stock exchange upon which the
Company's outstanding Common Stock is then listed.
12. Representation of Optionee. If requested by the Company, the optionee
--------------------------
shall deliver to the Company written representations and warranties upon
exercise of the option that are necessary to show compliance with Federal and
state securities laws, including representations and warranties to the effect
that a purchase of shares under the option is made for investment and not with a
view to their distribution (as that term is used in Securities Act of 1933).
13. Option Agreement. Each option granted under the provisions of this
----------------
Plan shall be evidenced by an option agreement, which agreement shall be duly
executed and delivered on behalf for the Company and by the optionee to whom
such option is granted. The option agreement shall contain such terms,
provisions and conditions not inconsistent with this Plan as may be determined
by the officer executing it.
14. Annual Stock Awards. Subject to the availability of shares under this
-------------------
Plan, on the date of each annual meeting of the Company's stockholders,
commencing with the annual meeting of stockholders held on August 11, 1998, each
person who is then a member of the Board, and is not a current or former
employee or officer of the Company, shall be awarded a number of shares of
Common Stock determined by dividing 5,000 by the fair market value of one share
of Common Stock on such date ("Stock Awards").
15. Termination and Amendment of Plan. Options and Stock Awards may no
---------------------------------
longer be granted under this Plan after January 18, 2003, and this Plan shall
terminate when all options granted or to be granted hereunder are no longer
outstanding. The Board may at any time terminate this Plan or make such
modification or amendment thereof as it deems advisable; provided, however, that
-------- -------
the Board may not, without approval by the affirmative vote of
6
<PAGE>
the holders of a majority of the shares of Common Stock present in person or by
proxy and entitled to vote at the meeting, (a) increase the maximum number of
shares for which options and Stock Awards may be granted under this Plan (except
by adjustment pursuant to Section 10), (b) materially modify the requirements as
to eligibility to participate in this Plan, (c) materially increase benefits
accruing to participants under this Plan, or (d) amend this Plan in any manner
which would cause Rule 16b-3 to become inapplicable to this Plan; and provided
--------
further that the provisions of this Plan specified in Rule 16b-3(c)(2)(ii)(A)
- -------
(or any successor or amended provision thereof) under the Securities Exchange
Act of 1934 (including without limitation, provisions as to eligibility, amount,
price and timing of awards) may not be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder. Termination or any
modification or amendment of this Plan shall not, without consent of a
participant, affect his or her rights under an option or Stock Award previously
granted to him or her.
16. Withholding of Income Taxes. Upon the exercise of an option or grant
---------------------------
of a Stock Award hereunder, the Company, in accordance with Section 3402(a) of
the Internal Revenue Code, may require the participant to pay withholding taxes
in respect of amounts considered to be compensation includible in the
participant's gross income.
17. Compliance with Regulations. It is the Company's intent that the Plan
---------------------------
comply with all respects with Rule 16b-3 under the Securities Exchange Act of
1934 (or any successor or amended version thereof) and any applicable Securities
and Exchange Commission interpretations thereof. If any provision of this Plan
is deemed not to be in compliance with Rule 16b-3, the provision shall be null
and void.
18. Governing Law. The validity and construction of this Plan and the
-------------
instruments evidencing options shall be governed by the laws of The Commonwealth
of Massachusetts, without giving effect to the principles of conflicts of law
thereof.
Date Approved by Board of
Directors of the Company: August 11, 1998
Date Approved by Stockholders
of the Company:
-----------------------
7
<PAGE>
SEPARATION AGREEMENT
--------------------
This Separation Agreement is entered into as of this 11th day of August,
1998 by and between Aseco Corporation, a Delaware corporation (the "Company"),
-------
and Carl S. Archer, Jr. ("Archer").
------
Recitals:
--------
WHEREAS, Archer has served as the President and Chief Executive Officer of
the Company;
WHEREAS, Archer relinquished his position as President of the Company on
May 12, 1998 and as Chief Executive Officer of the Company on August 11, 1998;
WHEREAS, Archer and the Company are parties to a Severance Agreement dated
as of December 30, 1996 (the "1996 Severance Agreement"); and
------------------------
WHEREAS, in connection with the termination of Archer's employment with the
Company, the Company and Archer wish to provide for the payment of certain
compensation and the provision of certain benefits to Archer by the Company in
lieu of Archer's rights under the 1996 Severance Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Interim Employment. From the date of this Agreement until October 31,
------------------
1998 (the "Employment Period"), Archer shall remain a full-time employee of the
-----------------
Company reporting directly to the Chief Executive Officer of the Company.
2. Consulting. From November 1, 1998 until August 10, 1999 (the
----------
"Consulting Period", and together with the Employment Period, the "Service
- ------------------ -------
Period"), Archer shall render such executive-level consulting services as the
- ------
Chief Executive Officer of the Company may reasonably request; provided,
--------
however, that Archer shall not be required to render more than 5 days of service
- -------
per month and shall not be required to travel outside of Massachusetts in
connection with performing such services. Archer's obligations under this
Section 2 shall terminate upon a Change in Control (as defined below).
3. Compensation. As consideration for agreeing to provide the foregoing
------------
employment and consulting services, the Company shall pay Archer during the
Service Period a fee of $200,000, payable in bi-weekly installments (net of all
applicable withholding taxes). The Company's obligation under this Section 3
shall be absolute and unconditional, but shall terminate upon a Change in
Control.
<PAGE>
4. Severance Payments. As consideration for past services rendered by
------------------
Archer, the Company shall pay him $15,000 per month (net of all applicable
withholding taxes) during the two-year period commencing on the first
anniversary of the date of this Agreement; provided, however, that upon a Change
-------- -------
in Control the Company shall pay Archer an amount equal to $560,000 minus the
total amount theretofore paid to him pursuant to Sections 3 and 4 of this
Agreement. The Company, in its sole discretion, shall have the right to prepay
any or all amounts that it is required to pay pursuant to Sections 3 and 4 of
this Agreement. As used in this Agreement, the term "Change in Control" shall
-----------------
mean (i) the sale, lease, transfer or other disposition by the Company of all or
substantially all of its assets in a single transaction or a series of related
transactions; (ii) the merger or consolidation of the Company with another
entity in which the stockholders of the Company immediately prior to such merger
or consolidation hold less than 50% of the outstanding voting stock of the
surviving or resulting corporation immediately following such transaction; or
(iii) the sale or exchange (to or with any person or entity other than the
Company) by the stockholders of the Company of more than 50% of the outstanding
voting stock of the Company in a single transaction or series of related
transactions.
5. Benefits Continuation. During the four-year period commencing on the
---------------------
date of this Agreement, the Company shall provide to Archer the health, dental
and life insurance benefits made generally available to executive officers of
the Company; provided, however, that the Company shall have no obligation to
-------- -------
provide the foregoing benefits if the annual cost to the Company of doing so is
greater than $15,000. In the event the annual cost to the Company of providing
the foregoing benefits is greater than $15,000 Archer may either pay the Company
an amount equal to the excess (and the Company shall thereafter be obligated to
provide such benefits) or Archer may designate certain of the foregoing benefits
the annual cost of which to the Company is less than $15,000 (and the Company
shall thereupon be obligated to provide the benefits so designated.)
6. Stock Options. Exhibit A hereto lists all options held by Archer to
------------- ---------
purchase shares of the Company's common stock. Notwithstanding the terms of the
stock option agreements pursuant to which such options were granted and the
termination of Archer's employment by the Company, each such option shall be
exercisable at any time prior to the earlier of (i) August 11, 2001 and (ii) the
expiration date of the option. Each of the options listed on Exhibit A shall be
---------
fully vested and therefore exercisable in full as of the date of this Agreement.
2
<PAGE>
7. Release. Archer does hereby release, acquit, remise and forever
-------
discharge the Company, its agents, officers, directors, shareholders, employees,
affiliates, successors and assigns (collectively, "Released Parties") from all
----------------
claims (including, without limitation, any claim to employment or reemployment,
wages, or back wages, fees, expenses, benefits or compensation), damages,
demands, liabilities, equities and causes of action of every kind and character,
both known and unknown, in contract, tort or otherwise, including those past and
present, accruing to Archer against the Released Parties, or any of them, at any
time prior to the date of this Agreement. Archer hereby acknowledges and
warrants that he is over eighteen years of age, is of sound mind, has fully read
and understands all terms and conditions set forth herein, has had an
opportunity to fully consult with his own counsel in connection herewith and is
entering into this Agreement voluntarily and without any promise or benefit
other than as set forth herein.
8. Miscellaneous.
-------------
(a) This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement, including without limitation
the 1996 Severance Agreement.
(b) This Agreement may be amended or modified only by a written instrument
executed by both the Company and Archer.
(c) This Agreement shall be construed, interpreted and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
(d) This Agreement shall be binding upon and inure to the benefit of both
parties and their respective heirs, successors and assigns, including any entity
with which or into which the Company may be merged or which may succeed to its
assets or business.
(e) The captions of the sections of this Agreement are for convenience of
reference only and in no way define, limit or affect the scope or substance of
any section of this Agreement.
(f) In case any provision of this Agreement shall be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
ASECO CORPORATION
By:
---------------------------
Title:
------------------------
------------------------------
Carl S. Archer, Jr.
4
<PAGE>
Exhibit A
---------
<TABLE>
<CAPTION>
Number of Expiration
Grant Date Shares Exercise Price Date
- ------------ ----------- ---------------- ------------
<S> <C> <C> <C>
01/12/94 90,000 $ 5.375 01/12/2004
08/23/96 108,750 $10.375 08/23/2006
10/18/96 36,250 $ 9.875 10/18/2006
05/10/97 30,000 $ 9.875 05/10/2007
08/11/98 20,000 $ 3.16 08/11/2008
</TABLE>
5
<PAGE>
SEVERANCE AGREEMENT
-------------------
This Severance Agreement is entered into as of this 8th day of July, 1998
by and between Aseco Corporation, a Delaware corporation (the "Company"), and
Mary R. Barletta (the "Employee").
Recitals:
--------
WHEREAS, the Employee is an executive officer of the Company; and
WHEREAS, the Company and the Employee wish to provide for the payment of
certain severance compensation by the Company to the Employee in the event the
Employee's employment by the Company is terminated.
NOW, THEREFORE, in consideration of the Employee's continued service to the
Company and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Definitions.
-----------
"Benefit Period" shall mean the twelve (12)-month period following the
Termination Date.
"Cause" shall be deemed to exist if the Board of Directors of the Company
or its successor in good faith determines, after giving the Employee notice and
an opportunity to be heard, that the Employee has committed an act constituting
fraud, embezzlement, larceny or theft.
"Change in Control" shall mean (i) the sale, lease, transfer or other
disposition by the Company of all or substantially all of its assets in a single
transaction or a series of related transactions; (ii) the merger or
consolidation of the Company with another entity in which the stockholders of
the Company immediately prior to such merger or consolidation hold less than 50%
of the outstanding voting stock of the surviving or resulting corporation
immediately following such transaction; or (iii) the sale or exchange (to or
with any person or entity other than the Company) by the stockholders of more
than 50% of the outstanding voting stock of the Company in a single transaction
or series of related transactions.
"Good Reason" shall mean a material reduction in the duties and
responsibilities of the Employee or the assignment to the Employee of duties and
responsibilities that are inconsistent in a material and adverse respect with
his or her current position.
"Ineligibility Period" shall mean that portion of the Benefit Period when
the Employee is ineligible for coverage under the Company's group life or group
health insurance policies.
<PAGE>
"Termination Date" shall mean the effective date of the termination of the
Employee's employment with the Company.
2. Severance.
---------
In the event the Employee's employment by the Company is terminated (i)
without Cause by the Company or any successor or (ii) for Good Reason by the
Employee, in either case within twelve (12) months following a Change in
Control, the Company or its successor shall (A) pay the Employee within five
days after the Termination Date a lump sum amount equal to twelve (12) times the
Employee's monthly base salary in effect at the time of such termination (less
applicable withholding taxes and FICA) and (B) continue to provide during the
Benefit Period life and health insurance coverage to the Employee, with benefits
substantially comparable to those provided to executive officers of the Company
generally immediately prior to such termination. Notwithstanding the foregoing,
the Company shall have the right, in lieu of providing such coverage during any
Ineligibility Period, to pay the Employee an amount equal to 200% of the amount
it would have cost the Company to provide such coverage during any Ineligibility
Period, assuming the Employee were eligible for coverage under the Company's
group insurance policies and assuming further no increase in premium costs under
such policies after the commencement of any Ineligibility Period.
3. Acceleration of Vesting; Extension of Exercise Period of Stock Options.
----------------------------------------------------------------------
Upon a Change in Control, all options held by the Employee to purchase
common stock of the Company shall become fully vested and immediately
exercisable in full, notwithstanding any terms to the contrary contained in the
stock option agreements pursuant to which such options were granted. In the
event the Employee's employment by the Company is terminated (i) without Cause
by the Company or any successor or (ii) for Good Reason by the Employee, in
either case, within twelve (12) months following a Change in Control, all
options held by the Employee to purchase common stock of the Company shall be
exercisable at any time prior to the earlier of (i) the first anniversary of the
date of termination of the Employee's employment with the Company and (ii) the
expiration date of the option, notwithstanding any terms to the contrary
contained in the stock option agreements pursuant to which such options
were granted.
4. Miscellaneous.
-------------
4.1 This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter of this Agreement.
4.2 This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
2
<PAGE>
4.3 This Agreement shall be construed, interpreted and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
4.4 This Agreement shall be binding upon and inure to the benefit of
both parties and their respective successors and assigns, including any
corporation with which or into which the Company may be merged or which may
succeed to its assets or business.
4.5 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
4.6 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
ASECO CORPORATION
By:
----------------------------
Title:
-------------------------
EMPLOYEE
-------------------------------
Mary R. Barletta
3
<PAGE>
SEVERANCE AGREEMENT
-------------------
This Severance Agreement is entered into as of this 8th day of July, 1998
by and between Aseco Corporation, a Delaware corporation (the "Company"), and
Robert L. Murray (the "Employee").
Recitals:
--------
WHEREAS, the Employee is an executive officer of the Company; and
WHEREAS, the Company and the Employee wish to provide for the payment of
certain severance compensation by the Company to the Employee in the event the
Employee's employment by the Company is terminated.
NOW, THEREFORE, in consideration of the Employee's continued service to the
Company and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Definitions.
-----------
"Benefit Period" shall mean the twelve (12)-month period following the
Termination Date.
"Cause" shall be deemed to exist if the Board of Directors of the Company
or its successor in good faith determines, after giving the Employee notice and
an opportunity to be heard, that the Employee has committed an act constituting
fraud, embezzlement, larceny or theft.
"Change in Control" shall mean (i) the sale, lease, transfer or other
disposition by the Company of all or substantially all of its assets in a single
transaction or a series of related transactions; (ii) the merger or
consolidation of the Company with another entity in which the stockholders of
the Company immediately prior to such merger or consolidation hold less than 50%
of the outstanding voting stock of the surviving or resulting corporation
immediately following such transaction; or (iii) the sale or exchange (to or
with any person or entity other than the Company) by the stockholders of more
than 50% of the outstanding voting stock of the Company in a single transaction
or series of related transactions.
"Good Reason" shall mean a material reduction in the duties and
responsibilities of the Employee or the assignment to the Employee of duties and
responsibilities that are inconsistent in a material and adverse respect with
his or her current position.
"Ineligibility Period" shall mean that portion of the Benefit Period when
the Employee is ineligible for coverage under the Company's group life or group
health insurance policies.
<PAGE>
"Termination Date" shall mean the effective date of the termination of the
Employee's employment with the Company.
2. Severance.
---------
In the event the Employee's employment by the Company is terminated (i)
without Cause by the Company or any successor or (ii) for Good Reason by the
Employee, in either case within twelve (12) months following a Change in
Control, the Company or its successor shall (A) pay the Employee within five
days after the Termination Date a lump sum amount equal to twelve (12) times the
Employee's monthly base salary in effect at the time of such termination (less
applicable withholding taxes and FICA) and (B) continue to provide during the
Benefit Period life and health insurance coverage to the Employee, with benefits
substantially comparable to those provided to executive officers of the Company
generally immediately prior to such termination. Notwithstanding the foregoing,
the Company shall have the right, in lieu of providing such coverage during any
Ineligibility Period, to pay the Employee an amount equal to 200% of the amount
it would have cost the Company to provide such coverage during any Ineligibility
Period, assuming the Employee were eligible for coverage under the Company's
group insurance policies and assuming further no increase in premium costs under
such policies after the commencement of any Ineligibility Period.
3. Acceleration of Vesting; Extension of Exercise Period of Stock Options.
----------------------------------------------------------------------
Upon a Change in Control, all options held by the Employee to purchase
common stock of the Company shall become fully vested and immediately
exercisable in full, notwithstanding any terms to the contrary contained in the
stock option agreements pursuant to which such options were granted. In the
event the Employee's employment by the Company is terminated (i) without Cause
by the Company or any successor or (ii) for Good Reason by the Employee, in
either case, within twelve (12) months following a Change in Control, all
options held by the Employee to purchase common stock of the Company shall be
exercisable at any time prior to the earlier of (i) the first anniversary of the
date of termination of the Employee's employment with the Company and (ii) the
expiration date of the option, notwithstanding any terms to the contrary
contained in the stock option agreements pursuant to which such options were
granted.
4. Miscellaneous.
-------------
4.1 This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter of this Agreement.
4.2 This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
2
<PAGE>
4.3 This Agreement shall be construed, interpreted and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
4.4 This Agreement shall be binding upon and inure to the benefit of
both parties and their respective successors and assigns, including any
corporation with which or into which the Company may be merged or which may
succeed to its assets or business.
4.5 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
4.6 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
ASECO CORPORATION
By:
---------------------------
Title:
------------------------
EMPLOYEE
------------------------------
Robert L. Murray
3
<PAGE>
SEVERANCE AGREEMENT
-------------------
This Severance Agreement is entered into as of this 8th day of July, 1998
by and between Aseco Corporation, a Delaware corporation (the "Company"), and
Robert E. Sandberg (the "Employee").
Recitals:
--------
WHEREAS, the Employee is an executive officer of the Company; and
WHEREAS, the Company and the Employee wish to provide for the payment of
certain severance compensation by the Company to the Employee in the event the
Employee's employment by the Company is terminated.
NOW, THEREFORE, in consideration of the Employee's continued service to the
Company and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Definitions.
-----------
"Benefit Period" shall mean the twelve (12)-month period following the
Termination Date.
"Cause" shall be deemed to exist if the Board of Directors of the Company
or its successor in good faith determines, after giving the Employee notice and
an opportunity to be heard, that the Employee has committed an act constituting
fraud, embezzlement, larceny or theft.
"Change in Control" shall mean (i) the sale, lease, transfer or other
disposition by the Company of all or substantially all of its assets in a single
transaction or a series of related transactions; (ii) the merger or
consolidation of the Company with another entity in which the stockholders of
the Company immediately prior to such merger or consolidation hold less than 50%
of the outstanding voting stock of the surviving or resulting corporation
immediately following such transaction; or (iii) the sale or exchange (to or
with any person or entity other than the Company) by the stockholders of more
than 50% of the outstanding voting stock of the Company in a single transaction
or series of related transactions.
"Good Reason" shall mean a material reduction in the duties and
responsibilities of the Employee or the assignment to the Employee of duties and
responsibilities that are inconsistent in a material and adverse respect with
his or her current position.
"Ineligibility Period" shall mean that portion of the Benefit Period when
the Employee is ineligible for coverage under the Company's group life or group
health insurance policies.
<PAGE>
"Termination Date" shall mean the effective date of the termination of the
Employee's employment with the Company.
2. Severance.
---------
In the event the Employee's employment by the Company is terminated (i)
without Cause by the Company or any successor or (ii) for Good Reason by the
Employee, in either case within twelve (12) months following a Change in
Control, the Company or its successor shall (A) pay the Employee within five
days after the Termination Date a lump sum amount equal to twelve (12) times the
Employee's monthly base salary in effect at the time of such termination (less
applicable withholding taxes and FICA) and (B) continue to provide during the
Benefit Period life and health insurance coverage to the Employee, with benefits
substantially comparable to those provided to executive officers of the Company
generally immediately prior to such termination. Notwithstanding the foregoing,
the Company shall have the right, in lieu of providing such coverage during any
Ineligibility Period, to pay the Employee an amount equal to 200% of the amount
it would have cost the Company to provide such coverage during any Ineligibility
Period, assuming the Employee were eligible for coverage under the Company's
group insurance policies and assuming further no increase in premium costs under
such policies after the commencement of any Ineligibility Period.
3. Acceleration of Vesting; Extension of Exercise Period of Stock Options.
----------------------------------------------------------------------
Upon a Change in Control, all options held by the Employee to purchase
common stock of the Company shall become fully vested and immediately
exercisable in full, notwithstanding any terms to the contrary contained in the
stock option agreements pursuant to which such options were granted. In the
event the Employee's employment by the Company is terminated (i) without Cause
by the Company or any successor or (ii) for Good Reason by the Employee, in
either case, within twelve (12) months following a Change in Control, all
options held by the Employee to purchase common stock of the Company shall be
exercisable at any time prior to the earlier of (i) the first anniversary of the
date of termination of the Employee's employment with the Company and (ii) the
expiration date of the option, notwithstanding any terms to the contrary
contained in the stock option agreements pursuant to which such options were
granted.
4. Miscellaneous.
-------------
4.1 This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter of this Agreement.
4.2 This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
2
<PAGE>
4.3 This Agreement shall be construed, interpreted and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
4.4 This Agreement shall be binding upon and inure to the benefit of
both parties and their respective successors and assigns, including any
corporation with which or into which the Company may be merged or which may
succeed to its assets or business.
4.5 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
4.6 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
ASECO CORPORATION
By:
---------------------------
Title:
------------------------
EMPLOYEE
------------------------------
Robert E. Sandberg
3
<PAGE>
SEVERANCE AGREEMENT
-------------------
This Severance Agreement is entered into as of this 21st day of October,
1998 by and between Aseco Corporation, a Delaware corporation (the "Company"),
and Richard S. Sidell (the "Employee").
Recitals:
--------
WHEREAS, the Employee is an executive officer of the Company; and
WHEREAS, the Company and the Employee wish to provide for the payment of
certain severance compensation by the Company to the Employee in the event the
Employee's employment by the Company is terminated.
NOW, THEREFORE, in consideration of the Employee's continued service to the
Company and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Definitions.
-----------
"Benefit Period" shall mean the twelve (12)-month period following the
Termination Date.
"Cause" shall be deemed to exist if the Board of Directors of the Company
or its successor in good faith determines, after giving the Employee notice and
an opportunity to be heard, that the Employee has committed an act constituting
fraud, embezzlement, larceny or theft.
"Change in Control" shall mean (i) the sale, lease, transfer or other
disposition by the Company of all or substantially all of its assets in a single
transaction or a series of related transactions; (ii) the merger or
consolidation of the Company with another entity in which the stockholders of
the Company immediately prior to such merger or consolidation hold less than 50%
of the outstanding voting stock of the surviving or resulting corporation
immediately following such transaction; or (iii) the sale or exchange (to or
with any person or entity other than the Company) by the stockholders of more
than 50% of the outstanding voting stock of the Company in a single transaction
or series of related transactions.
"Good Reason" shall mean a material reduction in the duties and
responsibilities of the Employee or the assignment to the Employee of duties and
responsibilities that are inconsistent in a material and adverse respect with
his or her current position.
"Ineligibility Period" shall mean that portion of the Benefit Period when
the Employee is ineligible for coverage under the Company's group life or group
health insurance policies.
<PAGE>
"Termination Date" shall mean the effective date of the termination of the
Employee's employment with the Company.
2. Severance.
---------
In the event the Employee's employment by the Company is terminated (i)
without Cause by the Company or any successor or (ii) for Good Reason by the
Employee, in either case within twelve (12) months following a Change in
Control, the Company or its successor shall (A) pay the Employee within five
days after the Termination Date a lump sum amount equal to twelve (12) times the
Employee's monthly base salary in effect at the time of such termination (less
applicable withholding taxes and FICA) and (B) continue to provide during the
Benefit Period life and health insurance coverage to the Employee, with benefits
substantially comparable to those provided to executive officers of the Company
generally immediately prior to such termination. Notwithstanding the foregoing,
the Company shall have the right, in lieu of providing such coverage during any
Ineligibility Period, to pay the Employee an amount equal to 200% of the amount
it would have cost the Company to provide such coverage during any Ineligibility
Period, assuming the Employee were eligible for coverage under the Company's
group insurance policies and assuming further no increase in premium costs under
such policies after the commencement of any Ineligibility Period.
3. Acceleration of Vesting; Extension of Exercise Period of Stock Options.
----------------------------------------------------------------------
Upon a Change in Control, all options held by the Employee to purchase
common stock of the Company shall become fully vested and immediately
exercisable in full, notwithstanding any terms to the contrary contained in the
stock option agreements pursuant to which such options were granted. In the
event the Employee's employment by the Company is terminated (i) without Cause
by the Company or any successor or (ii) for Good Reason by the Employee, in
either case, within twelve (12) months following a Change in Control, all
options held by the Employee to purchase common stock of the Company shall be
exercisable at any time prior to the earlier of (i) the first anniversary of the
date of termination of the Employee's employment with the Company and (ii) the
expiration date of the option, notwithstanding any terms to the contrary
contained in the stock option agreements pursuant to which such options were
granted.
4. Miscellaneous.
-------------
4.1 This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter of this Agreement.
4.2 This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
2
<PAGE>
4.3 This Agreement shall be construed, interpreted and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
4.4 This Agreement shall be binding upon and inure to the benefit of
both parties and their respective successors and assigns, including any
corporation with which or into which the Company may be merged or which may
succeed to its assets or business.
4.5 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
4.6 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
ASECO CORPORATION
By:
---------------------------
Title:
------------------------
EMPLOYEE
------------------------------
Richard S. Sidell
3
<PAGE>
SEVERANCE AGREEMENT
-------------------
This Severance Agreement is entered into as of this 8th day of July, 1998
by and between Aseco Corporation, a Delaware corporation (the "Company"), and
Philip Villari (the "Employee").
Recitals:
--------
WHEREAS, the Employee is an executive officer of the Company; and
WHEREAS, the Company and the Employee wish to provide for the payment of
certain severance compensation by the Company to the Employee in the event the
Employee's employment by the Company is terminated.
NOW, THEREFORE, in consideration of the Employee's continued service to the
Company and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Definitions.
-----------
"Benefit Period" shall mean the twelve (12)-month period following the
Termination Date.
"Cause" shall be deemed to exist if the Board of Directors of the Company
or its successor in good faith determines, after giving the Employee notice and
an opportunity to be heard, that the Employee has committed an act constituting
fraud, embezzlement, larceny or theft.
"Change in Control" shall mean (i) the sale, lease, transfer or other
disposition by the Company of all or substantially all of its assets in a single
transaction or a series of related transactions; (ii) the merger or
consolidation of the Company with another entity in which the stockholders of
the Company immediately prior to such merger or consolidation hold less than 50%
of the outstanding voting stock of the surviving or resulting corporation
immediately following such transaction; or (iii) the sale or exchange (to or
with any person or entity other than the Company) by the stockholders of more
than 50% of the outstanding voting stock of the Company in a single transaction
or series of related transactions.
"Good Reason" shall mean a material reduction in the duties and
responsibilities of the Employee or the assignment to the Employee of duties and
responsibilities that are inconsistent in a material and adverse respect with
his or her current position.
"Ineligibility Period" shall mean that portion of the Benefit Period when
the Employee is ineligible for coverage under the Company's group life or group
health insurance policies.
<PAGE>
"Termination Date" shall mean the effective date of the termination of the
Employee's employment with the Company.
2. Severance.
---------
In the event the Employee's employment by the Company is terminated (i)
without Cause by the Company or any successor or (ii) for Good Reason by the
Employee, in either case within twelve (12) months following a Change in
Control, the Company or its successor shall (A) pay the Employee within five
days after the Termination Date a lump sum amount equal to twelve (12) times the
Employee's monthly base salary in effect at the time of such termination (less
applicable withholding taxes and FICA) and (B) continue to provide during the
Benefit Period life and health insurance coverage to the Employee, with benefits
substantially comparable to those provided to executive officers of the Company
generally immediately prior to such termination. Notwithstanding the foregoing,
the Company shall have the right, in lieu of providing such coverage during any
Ineligibility Period, to pay the Employee an amount equal to 200% of the amount
it would have cost the Company to provide such coverage during any Ineligibility
Period, assuming the Employee were eligible for coverage under the Company's
group insurance policies and assuming further no increase in premium costs under
such policies after the commencement of any Ineligibility Period.
3. Acceleration of Vesting; Extension of Exercise Period of Stock Options.
----------------------------------------------------------------------
Upon a Change in Control, all options held by the Employee to purchase
common stock of the Company shall become fully vested and immediately
exercisable in full, notwithstanding any terms to the contrary contained in the
stock option agreements pursuant to which such options were granted. In the
event the Employee's employment by the Company is terminated (i) without Cause
by the Company or any successor or (ii) for Good Reason by the Employee, in
either case, within twelve (12) months following a Change in Control, all
options held by the Employee to purchase common stock of the Company shall be
exercisable at any time prior to the earlier of (i) the first anniversary of the
date of termination of the Employee's employment with the Company and (ii) the
expiration date of the option, notwithstanding any terms to the contrary
contained in the stock option agreements pursuant to which such options were
granted.
4. Miscellaneous.
-------------
4.1 This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter of this Agreement.
4.2 This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Employee.
2
<PAGE>
4.3 This Agreement shall be construed, interpreted and enforced in
accordance with the laws of The Commonwealth of Massachusetts.
4.4 This Agreement shall be binding upon and inure to the benefit of
both parties and their respective successors and assigns, including any
corporation with which or into which the Company may be merged or which may
succeed to its assets or business.
4.5 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
4.6 In case any provision of this Agreement shall be invalid, illegal
or otherwise unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year set forth above.
ASECO CORPORATION
By:
---------------------------
Title:
------------------------
EMPLOYEE
------------------------------
Philip Villari
3
<PAGE>
ASECO CORPORATION
500 Donald Lynch Boulevard
Marlboro, MA 01752
August 11, 1998
Mr. Sebastian J. Sicari
35 Townsend Farms Road
Boxford, MA 01921
Re: Stock Options
-------------
Dear Sebastian:
On behalf of the Compensation Committee of the Board of Directors of Aseco
Corporation (the "Company") please accept this letter as confirmation that,
notwithstanding the terms of the stock option agreements pursuant to which your
options to purchase common stock of the Company were granted (Schedule A
----------
attached lists your stock options), in the event your employment with the
Company is terminated for any reason except for cause (as defined in your
Severance Agreement with the Company dated as of December 30, 1996), each of
your options shall be exercisable at any time prior to the earlier of (i) the
third anniversary of the date your employment with the Company terminates or
(ii) the expiration date of the option.
Sincerely yours,
--------------------------------------
Dr. Sheldon Buckler
Chairman of the Compensation Committee
<PAGE>
SCHEDULE A
----------
<TABLE>
<CAPTION>
Grant Date Number of Shares Exercise Price Expiration Date
- ------------ ------------------ ---------------- -----------------
<S> <C> <C> <C>
01/12/94 75,000 $ 5.375 01/12/2004
05/15/95 10,000 $13.00 05/15/2005
08/23/96 67,500 $10.375 08/23/96
10/18/96 22,500 $ 9.875 10/18/2006
05/10/97 25,000 $ 9.875 05/10/2007
08/11/98 60,000 $ 3.16 08/11/2008
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ASECO
CORPORATION CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED
SEPTEMBER 27, 1998.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-28-1999
<PERIOD-START> JUN-29-1998
<PERIOD-END> SEP-27-1998
<CASH> 5,207
<SECURITIES> 0
<RECEIVABLES> 6,146
<ALLOWANCES> 770
<INVENTORY> 11,969
<CURRENT-ASSETS> 3,123
<PP&E> 8,628
<DEPRECIATION> 5,350
<TOTAL-ASSETS> 29,748
<CURRENT-LIABILITIES> 10,178
<BONDS> 0
0
0
<COMMON> 38
<OTHER-SE> 18,929
<TOTAL-LIABILITY-AND-EQUITY> 29,748
<SALES> 4,395
<TOTAL-REVENUES> 4,395
<CGS> 3,641
<TOTAL-COSTS> 3,641
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 54
<INCOME-PRETAX> (3,917)
<INCOME-TAX> (347)
<INCOME-CONTINUING> (3,570)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,570)
<EPS-PRIMARY> (.96)
<EPS-DILUTED> (.96)
</TABLE>
