Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________.
Commission file number 1-4371
Tech-Sym Corporation
(Exact name of Registrant as specified in its charter)
Nevada 74 1509818
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10500 Westoffice Drive, Suite 200, Houston, Texas 77042
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: 713/785-7790
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, 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 Outstanding at July 31, 1997
---------------------------- ----------------------------
Common Stock, $.10 par value 6,031,481
<PAGE>
Form 10-Q
Tech-Sym Corporation
INDEX
-----
Page No.
--------
Part I. Financial Information:
Consolidated Balance Sheet June 30, 1997
and December 31, 1996 1
Consolidated Statement of Income and Accumulated
Earnings for the Quarter Ended June 30,
1997 and 1996 2
Consolidated Statement of Income and Accumulated
Earnings for the Six Months Ended June 30,
1997 and 1996 3
Consolidated Statement of Cash Flows for the
Six Months Ended June 30, 1997 and 1996 4
Notes to Consolidated Financial Statements 5-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
Part II. Other Information:
Item 4. Submission of Matters to Vote of
Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE>
Page 1 Form 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Tech-Sym Corporation
Consolidated Balance Sheet
(stated in thousands,
except share amounts)
June 30, 1997 December 31, 1996
------------ ------------
Assets ........................................ (unaudited)
Current assets:
Cash and cash equivalents ................. $ 12,339 $ 20,450
Short-term investments .................... 5,810 6,380
Receivables - net ......................... 56,254 62,217
Unbilled revenue .......................... 51,776 48,814
Inventories ............................... 91,812 82,808
Other ..................................... 11,069 6,098
------------ ------------
Total current assets ................ 229,060 226,767
Property, plant and equipment - net ......... 45,708 48,917
Long-term receivables - net ................. 9,276 16,695
Other assets ................................ 23,817 30,900
Net assets of discontinued operation ........ 12,385
------------ ------------
Total assets ........................ $ 320,246 $ 323,279
============ ============
Liabilities
Current liabilities:
Notes payable ............................. $ 38,798 $ 29,406
Current maturities of long-term debt ...... 2,631 4,251
Accounts payable .......................... 17,428 21,115
Billings in excess of cost and estimated
earnings on uncompleted contracts ....... 8,293 9,728
Taxes on income ........................... 5,682 5,201
Other accrued liabilities ................. 16,774 21,331
------------ ------------
Total current liablilites ........... 89,606 91,032
Long-term debt .............................. 14,626 13,974
Other liabilities and deferred credits ...... 39,010 43,022
------------ ------------
Total liabilities ................... 143,242 148,028
Minority interest ............................. 15,690 17,179
Shareholders' Investment
Preferred stock - authorized 2,000,000
shares, without par value; none issued
Common stock - authorized 20,000,000
shares, $.10 par value; issued
7,964,181 and 7,941,231 shares ............. 796 794
Additional capital .......................... 40,083 39,753
Accumulated earnings ........................ 150,385 145,195
Cumulative translation adjustments .......... (2,303) (911)
Common stock held in treasury at cost
(1,936,400 and 1,905,400 shares) ........... (27,647) (26,759)
------------ ------------
Total shareholders' investment ...... 161,314 158,072
------------ ------------
Total liabilities and
shareholders' investment ........... $ 320,246 $ 323,279
============ ============
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
Page 2 Form 10-Q
Tech-Sym Corporation
Consolidated Statement of Income and
Accumulated Earnings
(stated in thousands,
except per share amounts)
For The Quarter
Ended June 30,
-----------------------------
1997 1996
(unaudited)
Sales ........................................ $ 73,725 $ 65,780
------------ ------------
Costs and expenses:
Cost of sales .............................. 49,632 42,832
Selling, general and administrative
expenses ................................. 16,155 14,723
Company-sponsored product development ...... 3,394 3,561
Interest expense ........................... 1,081 706
Gain on issuance of stock by subsidiary .... (21,166)
Interest and other (income) - net .......... (1,824) (1,103)
------------ ------------
68,438 39,553
------------ ------------
Income from continuting operations
before income taxes, minority
interest and extraordinary item ..... 5,287 26,227
Provision for income taxes
from continuing operations ................. 1,491 8,998
Minority interest expense
from continuing operations ................. 307 246
------------ ------------
Income from continuing operations
before extraordinary item ........... 3,489 16,983
Discontinued operation:
Loss from discontinued operation net of
applicable income taxes of $425 and
$538 and minority interest expense of
$206 and $205, respectively .............. 740 932
------------ ------------
Income before extraordinary item ...... 2,749 16,051
Extraordinary item:
Extraordinary loss on early
extinguishment of debt net of
applicable income taxes of $557 .......... 1,035
------------ ------------
Net income ............................ 2,749 15,016
Accumulated earnings:
Beginning of period ........................ 147,636 125,134
------------ ------------
End of period .............................. $ 150,385 $ 140,150
============ ============
Earnings (loss) per common share:
Continuing operations before
extraordinary item ....................... $ 0.58 $ 2.58
Discontinued operation ..................... (0.12) (0.14)
Extraordinary item ......................... (0.16)
------------ ------------
Net income ............................ $ 0.46 $ 2.28
============ ============
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
Page 3 Form 10-Q
Tech-Sym Corporation
Consolidated Statement of Income and
Accumulated Earnings
(stated in thousands,
except per share amounts)
For The Six Months
Ended June 30,
-----------------------------
1997 1996
(unaudited)
Sales ........................................ $ 147,423 $ 131,588
------------ ------------
Costs and expenses:
Cost of sales .............................. 99,853 85,995
Selling, general and administrative
expenses ................................. 31,594 28,704
Company-sponsored product development ...... 6,549 7,382
Interest expense ........................... 1,761 2,075
Gain on issuance of stock by subsidiary .... (21,166)
Interest and other (income) - net .......... (2,133) (1,934)
------------ ------------
137,624 101,056
------------ ------------
Income from continuting operations
before income taxes, minority
interest and extraordinary item ..... 9,799 30,532
Provision for income taxes
from continuing operations ................. 2,877 10,393
Minority interest expense
from continuing operations ................. 496 246
------------ ------------
Income from continuing operations
before extraordinary item ........... 6,426 19,893
Discontinued operation:
Loss from discontinued operation net of
applicable income taxes of $713 and
$833 and minority interest expense of
$352 and $205, respectively .............. 1,236 1,563
------------ ------------
Income before extraordinary item ...... 5,190 18,330
Extraordinary item:
Extraordinary loss on early
extinguishment of debt net of
applicable income taxes of $557 .......... 1,035
------------ ------------
Net income ............................ 5,190 17,295
Accumulated earnings:
Beginning of period ........................ 145,195 122,855
------------ ------------
End of period .............................. $ 150,385 $ 140,150
============ ============
Earnings (loss) per common share:
Continuing operations before
extraordinary item ....................... $ 1.06 $ 3.03
Discontinued operation ..................... (0.20) (0.24)
Extraordinary item ......................... (0.16)
------------ ------------
Net income ............................ $ 0.86 $ 2.63
============ ============
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
Page 4 Form 10-Q
Tech-Sym Corporation
Consolidated Statement of Cash Flows
(stated in thousands)
For the Six Months
Ended June 30,
-----------------------
1997 1996
--------- ----------
(unaudited)
Cash flows from operating activities:
Net income ......................................... $ 5,190 $ 17,295
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ................... 6,836 6,019
Gain on issuance of stock by subsidiary ......... (21,166)
Gain on foreign currency denominated debt ....... (641)
Minority interest ............................... 144 41
Change in assets and liabilities:
Receivables ..................................... (883) 23,528
Unbilled revenue ................................ (2,962) (6,038)
Inventories ..................................... (9,205) (15,175)
Accounts payable and taxes on income ............ (1,961) 14,777
Billing in excess and other accrued liabilites .. (9,785) (2,118)
Long-term receivables - net and other assets .... (5,095) 885
Other liabilities and deferred credits .......... 2,512 (10,269)
--------- ---------
Net cash provided by (used for) operating activities (15,850) 7,779
--------- ---------
Cash flows from investing activities:
Capital expenditures ............................... (5,965) (8,411)
Payment for purchase of business,
net of cash acquired .............................. 7,656
Sale of equipment under operating lease ............ 731
Sale of investment securities ...................... 570
Other investing activities ......................... 270 (342)
--------- ---------
Net cash used for investing activities ............. (4,394) (1,097)
--------- ---------
Cash flows from financing activities:
Net borrowings (payments) under bank line
of credit agreements .............................. 9,392 (12,038)
Proceeds from long-term debt ....................... 2,432 3,406
Payments on long-term debt ......................... (2,759) (20,431)
Proceeds from sale of notes receivable ............. 7,268
Proceeds from exercise of stock options ............ 332 544
Acquisition of Tech-Sym and
GeoScience treasury shares ........................ (3,140) (30)
Proceeds from issuance of subsidiary common stock .. 39,525
Other .............................................. (1,392) (509)
--------- ---------
Net cash provided by financing activities .......... 12,133 10,467
--------- ---------
Net increase (decrease) in
Cash and cash equivalents .......................... (8,111) 17,149
Cash and cash equivalents at beginning of period ... 20,450 20,715
--------- ---------
Cash and cash equivalents at end of period ......... $ 12,339 $ 37,864
========= =========
Cash flow from operating activities include:
Interest paid ...................................... $ 1,921 $ 2,864
Income taxes paid .................................. 4,664 2,553
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
Page 5 Form 10-Q
Tech-Sym Corporation
Notes to Consolidated Financial Statements
1. The accompanying unaudited consolidated financial statements of
Tech-Sym Corporation and its subsidiaries (the "Company") have been
prepared in accordance with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements and should be read in conjunction with
the financial statements and notes thereto appearing in the
Company's Annual Report for the year ended December 31, 1996.
In the opinion of the Company's management ("Management"), all
adjustments necessary for a fair presentation of the results of
operations for all periods reported have been included. Such
adjustments consist only of normal recurring items.
The consolidated statements of income for the three and six months
ended June 30, 1997, are not necessarily indicative of the results
to be expected for the full year ending December 31, 1997.
The consolidated financial statements have been restated to reflect
the geoscientific software subsidiary of the Company's majority
owned subsidiary, GeoScience Corporation ("GeoScience"), as a
discontinued operation in accordance with Accounting Principles
Board Opinion No. 30 (see Note 2).
2. Effective June 30, 1997 (the "measurement date"), GeoScience adopted
a plan to sell its geoscientific software subsidiary, CogniSeis
Development, Inc. ("CogniSeis"). Accordingly, CogniSeis is reported
as a discontinued operation for the periods presented. Management
anticipates CogniSeis will incur operating losses approximating
$500,000 from the measurement date through the disposal date. Such
losses have been deferred due to the fact that Management expects a
gain on the sale of CogniSeis.
On July 15, 1997, GeoScience signed a letter of intent to sell
CogniSeis for cash and guaranteed future royalties with a combined
estimated value between $19.5 and $23 million. The proposed sale is
subject to the terms of a negotiated definitive agreement which
could vary from the letter of intent, and no assurances can be made
that this transaction will be completed. Management's current
estimate indicates that the total sale proceeds from the disposal of
CogniSeis will result in a gain on the transaction. However, the
ultimate financial impact of the negotiated definitive agreement
could differ from Management's current estimate.
<PAGE>
Page 6 Form 10-Q
Tech-Sym Corporation
Notes to Consolidated Financial Statements - Continued
The operating results (unaudited) of the discontinued operation are
summarized as follows (in thousands):
Quarter Ended June 30,
--------------------------
1997 1996
---------- ----------
Revenue ............................ $ 5,575 $ 5,404
========== ==========
Loss before provision for
income taxes ...................... 1,371 1,675
Provision for income taxes ......... 425 538
Minority interest .................. 206 205
---------- ----------
Net loss ........................... $ 740 $ 932
========== ==========
Six Months Ended June 30,
--------------------------
1997 1996
---------- ----------
Revenue ............................ $ 11,398 $ 11,281
========== ==========
Loss before provision for
income taxes ...................... 2,301 2,601
Provision for income taxes ......... 713 833
Minority interest .................. 352 205
---------- ----------
Net loss ........................... $ 1,236 $ 1,563
========== ==========
The net assets (unaudited) of the discontinued operation are
summarized as follows (in thousands):
June 30, 1997
-------------
Current assets ................................ $ 7,465
Property, plant and equipment, net ............ 3,149
Other assets .................................. 5,747
Current liabilities ........................... (3,976)
-------------
Net assets ............................... $ 12,385
=============
3. Inventories, stated at the lower of cost (first-in, first-
out) or market, are summarized as follows (in thousands):
June 30, 1997 December 31, 1996
------------- -------------
(unaudited)
Raw Materials ............... $ 34,726 $ 28,613
Work in Process ............. 33,259 30,680
Finished Goods .............. 23,827 23,515
------------- -------------
Total inventories ...... $ 91,812 $ 82,808
============= =============
<PAGE>
Page 7 Form 10-Q
Tech-Sym Corporation
Notes to Consolidated Financial Statements - Continued
4. Earnings per common share are based on the weighted average number
of shares outstanding during each period (6,032,000 and 6,579,000
for the quarter ended June 30, 1997 and 1996 respectively, and
6,037,000 and 6,571,000 for the six month period ended June 30, 1997
and 1996, respectively).
5. In 1997, Statement of Financial Accounting Standards No. 128 (FAS
128), Earnings per Share was issued. FAS 128 is effective for
earnings per share calculations for periods ending after December
15, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate
all prior periods. Adoption of FAS 128 is not expected to have a
material effect on the Company's financial position or operational
results.
Quarter Ended June 30,
----------------------
1997 1996
-------- --------
Pro-forma earnings per share
Earnings per common share .......... $ 0.46 $ 2.28
-------- --------
Earnings per common share
assuming dilution ................. $ 0.44 $ 2.20
-------- --------
Six Months Ended June 30,
-------------------------
1997 1996
-------- --------
Pro-forma earnings per share
Earnings per common share .......... $ 0.86 $ 2.63
-------- --------
Earnings per common share
assuming dilution ................. $ 0.83 $ 2.53
-------- --------
<PAGE>
Page 8 Form 10-Q
Tech-Sym Corporation
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
In June 1997, the Company's majority owned subsidiary, GeoScience
Corporation ("GeoScience") adopted a plan to sell its geoscientific
software subsidiary, CogniSeis Development, Inc. ("CogniSeis").
CogniSeis is accounted for as a discontinued operation. Accordingly, the
consolidated financial statements have been presented to report
separately the operating results of the continuing operations. All prior
year amounts have been restated.
RESULTS OF OPERATIONS - QUARTER ENDED JUNE 30, 1997 COMPARED TO THE
QUARTER ENDED JUNE 30, 1996
Revenue increased $7,945,000 or 12% to $73,725,000 for the quarter ended
June 30, 1997. The increase in revenue resulted primarily from increased
shipments in the communications and geoscientific business which
increased from the same quarter in the prior year $8,596,000 and
$3,326,000, respectively. Within the communications business, shipments
of broadcast equipment, microwave products and weather radar systems
demonstrated revenue growth over the second quarter of 1996. In the
geoscientific business, the increase primarily resulted from increased
shipments of land and ocean bottom cables. The increases in the
communications and geoscientific business more than offset the
$3,199,000 decrease in revenue in the defense systems business which was
a result of delayed bookings of government and foreign orders.
The consolidated gross profit margin decreased from 35% to 33% of
revenue for the quarter ended June 30, 1997, compared to the same
quarter in the prior year. The majority of the decrease in gross profit
margin was attributed to the communications business. Within the
broadcast area of the communications business, the gross profit margin
was negatively impacted by cost over-runs on several long-term projects
and initial start-up costs on a number of new products. The gross profit
of the microwave products' portion of the communications business
suffered due to production labor costs increasing at a greater rate than
the increase in product shipments. Increased material costs on several
contracts within the defense systems business due to supplier problems
also contributed to a lower than customary gross profit margin. The
gross profit margin of the geoscientific business improved over the
second quarter of 1996 primarily as a result of reduced costs derived
from improved manufacturing efficiencies and decreased electronic
component prices related to the 24-bit electronic module.
<PAGE>
Page 9 Form 10-Q
Tech-Sym Corporation
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Continued
Consolidated selling, general and administrative expenses increased 10%
to $16,155,000 during the second quarter of 1997. These expenses as a
percentage of revenue decreased slightly in comparison to the same
quarter a year ago. The majority of the $1,432,000 increase occurred
within the geoscientific business. The increase primarily resulted from
additional costs for support personnel and royalties associated with the
overall growth in the business and additional commissions associated
with increased international sales. Furthermore, expenses related to
managing the consolidated business and necessitated by being a publicly
traded company were added. The Company-sponsored product development
expenses were $3,394,000 for the quarter ended June 30, 1997 compared to
$3,561,000 for the quarter ended June 30, 1996. The decrease was
primarily in the communications business as a result of the completion
of several projects relating to broadcast and antenna equipment that
were under development in the second quarter of 1996. The overall
decreases exceeded the increases incurred within the geoscientific
business due to design changes on the 24-bit electronic module.
Interest expense increased to $1,081,000 during the second quarter of
1997 from $706,000 during the second quarter of 1996 as a result of the
increase in interest bearing debt incurred primarily to support the
growth of the business and, to a lesser extent, to fund the Company's
stock buy-back program. Other income increased to $1,824,000 from
$1,103,000 primarily due to foreign currency transaction gains within
the communications business.
Income from continuing operations before the extraordinary item for the
second quarter of 1997 was $3,489,000 compared to $16,983,000 for the
corresponding quarter a year ago. The results of the second quarter of
1996 included a net gain of $13,700,000 related to the spin-off of 24.7%
of GeoScience.
Loss from the discontinued operation for the quarter ended June 30,
1997, decreased $192,000 or $.02 per share from the same quarter in the
prior year as a result of an increase in interest income recognized on
contract installment sales.
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO JUNE
30, 1996
Revenue increased 12% to $147,423,000 for the six months ended June 30,
1997, from $131,588,000 for the same period in the prior year. The
increase in revenue resulted from increased shipments
<PAGE>
Page 10 Form 10-Q
Tech-Sym Corporation
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Continued
in the communications and geoscientific business of $13,037,000 and
$7,783,000, respectively. Revenue relating to the defense systems
business decreased $4,032,000 from the same period in the prior year due
to continued delays in the receipt of new government and foreign orders.
Within the communications business, shipments in all major product areas
(broadcast equipment, microwave products and weather radar systems)
increased 20% or more over the six months ended June 30, 1996. Increased
shipments of land, ocean bottom and marine seismic cables and revenue
relating to the technical data services provided to oil exploration and
production customers resulted in a 20% growth in the revenue of the
geoscientific business over the same period in the prior year.
The consolidated gross profit margin decreased from 34% to 32% of
revenue for the six months ended June 30, 1997. The overall decrease is
primarily related to the communications business. The reasons for the
decrease within the communications business are essentially the same as
those discussed for the quarter, along with a change in the product mix
within the broadcast area. The gross profit margin for the geoscientific
business was consistent as a percent of revenue for the six months ended
June 30, 1997 and 1996, while the gross profit margin as a percent of
revenue for the defense systems business improved from 22% to 24% over
the same period in the prior year.
Consolidated selling, general and administrative expenses increased to
$31,594,000 for the period ended June 30, 1997, from $28,704,000. These
expenses as a percentage of revenue decreased slightly in comparison to
the same quarter in the prior year. The increase occurred in the
geoscientific business. The increase in the geoscientific business
resulted from (1) the growth in support personnel associated with the
growth in the business, (2) additional royalty costs associated with the
overall increase in revenue, (3) additional commissions associated with
the increased international sales and (4) the added costs of managing
the consolidated geoscientific business as a publicly traded company.
Company-sponsored product development expenses were $6,549,000 for the
period ended June 30, 1997 compared to $7,382,000 for the period ended
June 30, 1996. The decrease occurred primarily within the broadcast area
of the communications business. The reasons for the decrease are as
discussed in the results for the quarter ended June 30, 1997.
Interest expense was $1,761,000 for the six month period ended June 30,
1997, as compared to $2,075,000 for the six month period ended June 30,
1996. The decrease was derived from the first
<PAGE>
Page 11 Form 10-Q
Tech-Sym Corporation
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Continued
three months of the year due to a reduction in interest bearing debt
that occurred in the second quarter of 1996 as a result of proceeds
generated from the sale of stock of GeoScience. Other income increased
to $2,133,000 from $1,934,000 primarily due to foreign currency
transaction gains within the communications business that more than
offset the decrease in interest income on interest bearing receivables
within the geoscientific business.
The effective tax rate for the six months ended June 30, 1997 was 31%
compared to 34% for the same period in the prior year. The Company's
effective tax rate is lower than the statutory United States rate due to
tax benefits generated from foreign sales.
Income from continuing operations before the extraordinary item for the
six month period of 1997 was $6,426,000 compared to $19,893,000 for the
corresponding period a year ago. The six months ended June 30, 1996
included a net gain of $13,700,000 as discussed in the results for the
quarter ended June 30, 1997.
Loss from the discontinued operation for the six months ended June 30,
1997 decreased $327,000 from the same period in the prior year as a
result of an increase in interest income recognized on contract
installment sales and the change in minority ownership interest between
the two periods.
Backlog at June 30, 1997 was $122,000,000 compared to $147,000,000 at
June 30, 1996. The decrease occurred primarily in the defense systems
business and the broadcast area within the communications business. The
decrease in backlog may unfavorably affect the Company's operating
results for the third and fourth quarter if orders are not received in
time to ship during the respective periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company is currently satisfying its working capital and capital
expenditure requirements through internally generated cash from
operations and bank borrowings. At June 30, 1997, the Company's working
capital balance was $139,454,000 compared to $135,735,000 at December
31, 1996. The increase in working capital is a result of a decrease in
liabilities which resulted from segregating the net assets of the
discontinued operation as a non-current asset at June 30, 1997 and an
increase in inventory levels. Cash used for operations was $15,850,000
for the six months ended June 30, 1997, compared to cash provided by
operations of $7,779,000 for the same period in the prior year.
<PAGE>
Page 12 Form 10-Q
Tech-Sym Corporation
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - Continued
As of June 30, 1997, the Company had uncommitted bank lines of credit
aggregating approximately $84,295,000. Borrowings under these lines were
$38,798,000, including the discontinued operation. The Company had a
working capital ratio of 2.56 to 1.0 and debt to total capitalization of
26%. The Company believes that its current financial position and
available lines of credit will provide ample sources of funds to meet
foreseeable requirements.
Purchases of property, plant and equipment totaled $5,965,000 for the
six months ended June 30, 1997, compared to $8,411,000 for the
corresponding prior year period. The Company estimates that capital
expenditures for property, plant and equipment during the remainder of
1997 will be approximately $9,830,000. Most of the anticipated capital
expenditures are not subject to firm commitments and the Company may
modify its plans depending on future results of operations or other
factors.
Forward-looking statements in this document are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Investors are cautioned that all forward-looking statements
involve risks and uncertainties, including, without limitation, risks
associated with the uncertainty of market acceptance of the Company's
products, limited number of customers, as well as risks of downturns in
economic conditions generally, risks associated with competition and
competitive pricing pressures, and other risks detailed in the Company's
filings with the Securities and Exchange Commission.
<PAGE>
Page 13 Form 10-Q
Tech-Sym Corporation
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
The shareholders of Registrant took the following action at the Annual
Meeting held April 29, 1997:
1. Elected all eight (8) management nominees for directors
pursuant to proxies solicited without opposition under
regulation 14A, as stated below:
Votes in Votes
Nominee Favor Withheld
------- --------- --------
W.L. Creech 4,576,398 430,199
M.C. Forrest 4,582,203 424,394
A.A. Gallotta, Jr. 4,582,203 424,394
W.W. Gamel 4,582,203 424,394
C.C. Kraft, Jr. 4,582,203 424,394
R.E. Moore 4,576,403 430,194
C.J. Scribner 4,582,203 424,394
C.K. Watt 4,582,203 424,394
2. Ratified the appointment of Price Waterhouse LLP as
independent accountants of the Registrant for the year ending
December 31, 1997 (4,984,800 shares voted for, 13,601 shares
voted against and 8,196 shares abstained).
3. Approved the Third Amendment to the 1990 Stock Option Plan
(3,388,109 shares voted for, 1,565,545 shares voted against
and 52,943 shares abstained).
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
10(a) -- 1990 Stock Option Plan, as amended and restated.
10(b) -- Form of Employee Stock Option Agreement.
10(c) -- Incentive Bonus Compensation Plan, effective
January 1, 1997.
(b) REPORTS ON FORM 8-K.
None.
<PAGE>
Page 14 Form 10-Q
Tech-Sym Corporation
No financial statements were filed as a part of this report.
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.
TECH-SYM CORPORATION
Registrant
Date: August 13, 1997 /s/ Wendell W. Gamel
Wendell W. Gamel, Chairman of
the Board and President
Date: August 13, 1997 /s/ Ray F. Thompson
Ray F. Thompson, Vice-
President, Treasurer,
and Chief Financial Officer
<PAGE>
Form 10-Q
Tech-Sym Corporation
EXHIBIT INDEX
Number Exhibit
10(a) 1990 Stock Option Plan, as amended and restated.
10(b) Form of Employee Stock Option Agreement.
10(c) Incentive Bonus Compensation Plan, effective
January 1, 1997.
EXHIBIT 10(a)
TECH-SYM CORPORATION
1990 STOCK OPTION PLAN
(THIRD AMENDMENT)
This Third Amendment shall be effective upon its approval by the
stockholders of Tech-Sym Corporation (the "Company") at the 1997 annual
meeting of the stockholders. However, if the stockholders of the Company do not
approve this Third Amendment at the 1997 annual meeting of stockholders of the
Company, this amendment shall be null and void for all purposes. Further, no
grants shall be made pursuant to this amendment prior to the date this amendment
is approved by the stockholders. The terms of the Plan, as amended and restated
by this Third Amendment, are as set forth below.
1. PURPOSE
The purpose of the Tech-Sym corporation 1990 Stock Option Plan (the
"Plan") is to advance the interests of Tech-Sym Corporation (the "Company")
and its Subsidiaries (as defined below) by providing incentive awards and stock
ownership opportunities to those key employees including officers and directors
who are employees) who contribute significantly to the performance of the
Company and its Subsidiaries ("Key Employees") and stock ownership
opportunities to the members of the Board of Directors of the company (the
"Board") who are not employees of the Company or a Subsidiary ("Nonemployee
Directors"). In addition, the Plan is intended to enhance the ability of the
Company and its Subsidiaries to attract and retain individuals of superior
managerial ability and to motivate such individuals to exert their best efforts
towards future progress and profitability of the Company and its Subsidiaries.
For purposes of the Plan, a Subsidiary shall be any corporation in which
the Company has a direct or indirect ownership interest of 50% or more the total
combined voting power of all classes of stock in such corporation.
2. ADMINISTRATION AND INTERPRETATION
a. ADMINISTRATION. The Plan shall be administered by a committee (the
"Committee") consisting of not less than three members of the Board appointed
by and serving at the pleasure of the Board; provided that each member shall be
a "nonemployee director" within the meaning of Rule 16b-3 which has been
adopted by the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as such Rule or its equivalent is in effect from time to time. The
Board may from time to time appoint members of the Committee in substitution for
or in addition to members previously appointed and may fill vacancies, however
caused, in the Committee. The Committee may prescribe, amend and rescind rules
and regulations for the administration of the Plan and shall have the full power
and authority to construe and interpret the Plan. A majority of the members of
the Committee shall constitute a quorum and the acts of a majority of the
members present at a meeting or the acts of a majority of the members evidenced
in writing shall be the acts of the Committee. The Committee may correct any
defect or any omission or reconcile any inconsistency in the Plan or in any
award or grant made hereunder in the manner and to the extent it shall deem
desirable.
The Committee shall have the full and exclusive right to grant all Options
and SARs (both as defined below), other than the automatic grant of Options and
SARs to Nonemployee Directors as provided in
<PAGE>
Section 5 below. In granting Options or SARs, the Committee shall take into
consideration the contribution the employee has made or may make to the success
of the Company or its Subsidiaries and such other considerations as the
Committee shall determine. The Committee shall also have the authority to
consult with and receive recommendations from officers and other employees of
the Company and its Subsidiaries with regard to these matters. In no event shall
any employee, his legal representatives, heirs, legatees, distributees, or
successors have any right to participate in the Plan, except to such extent, if
any, as the Committee shall determine.
The Committee may from time to time in granting Options or SARs under the
Plan prescribe such other terms and conditions concerning such Options or SARs
as it deems appropriate, provided that such terms and conditions are not more
favorable to the Key Employee than those expressly set forth in the Plan.
The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company and its Subsidiaries as shall be
designated from time to time by the Committee.
b. INTERPRETATION. The interpretation and construction by the Committee
of any provisions of the Plan or of any award or grant under the Plan and any
determination by the Committee under any provision of the Plan or any such award
or grant shall be final and conclusive for all purposes.
c. LIMITATION ON LIABILITY. Neither the Committee nor any member thereof
shall be liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith, and the members of
the Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense (including counsel
fees) arising therefrom to the full extent permitted by law and under any
directors and officers liability insurance coverage that may be in effect from
time to time.
3. SHARES SUBJECT TO AWARDS UNDER THE PLAN
a. LIMITATION ON NUMBER OF SHARES. The shares subject to grants of
Options and SARs shall be shares of the Company's authorized but unissued common
stock, par value $.10 per share, and shares, if any, of such common stock that
are issued but not outstanding and held as treasury stock by the Company
("Common Stock"). Subject to adjustment as hereinafter provided, the aggregate
number of shares of Common Stock as to which Options and/or SARs may be granted
under the Plan shall not exceed 1,158,000 shares.
Shares of Common Stock ceasing to be subject to an Option or SAR because of
the exercise of such Option or SAR shall no longer be subject to any further
grant under the Plan. If any outstanding Option or SAR, in whole or in part,
expires or terminates unexercised or is cancelled for any reason prior to
January 1, 2000, the shares of Common Stock allocable to the unexercised,
terminated, cancelled or forfeited portion of such Option or SAR may again be
made the subject of grants under the Plan.
b. ADJUSTMENTS OF AGGREGATE NUMBER OF SHARES. The aggregate number of
shares of Common Stock stated in Section 3(a) shall be subject to appropriate
adjustment, from time to time, in accordance with the provisions of Section 6
hereof. In the event of a change in the Common Stock of the Company that is
limited to a change in the designation thereof to "Capital Stock" or other
similar designation, or to a change in the par value thereof, or from par value
to no par value, without increase or decrease in the number of issued shares,
the shares resulting from any such change shall be deemed to be Common Stock
within the meaning of the Plan.
2
<PAGE>
4. ELIGIBILITY
The individuals eligible to receive Options and/or SARs under the Plan
shall be those Key Employees as the Committee from time to time shall determine.
In addition, each Nonemployee Director shall automatically receive Options and
SARs under the Plan as provided in Section 5 below.
5. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
a. GRANTS OF OPTIONS.
(1) IN GENERAL. Options granted under the Plan may be either
"Incentive Stock Options" or "Non-qualified Stock Options" (both as
defined below and collectively referred to as "Options"), or both.
Options granted under the Plan shall be such type and for such number of
shares of Common Stock, subject to such terms and conditions as the
Committee shall designate.
The Committee may grant Incentive Stock Options and/or Non-qualified
Stock Options to Key Employees at any time and from time to time before
January 1, 2000.
(2) INCENTIVE STOCK OPTIONS. The term "Incentive Stock Option"
shall mean an Option, or portion thereof, that is intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
(3) NON-QUALIFIED STOCK OPTIONS. The term "Non-qualified Stock
Option" shall mean any Option, or portion thereof, that is not an
Incentive Stock Option. Except as specifically provided herein, the
provisions of this Plan shall apply in the same manner to Incentive Stock
Options and to Non-qualified Stock Options.
b. GRANTS OF STOCK APPRECIATION RIGHTS.
(1) IN GENERAL. The term stock appreciation right or "SAR" shall
mean the right to receive from the Company an amount equal to the Market
Value Per Share (as defined in Section 5c.(4) below) on the exercise date,
over the Market Value Per Share on the date of grant, multiplied by the
total number of shares of Common Stock for which the SAR is exercised. The
amount payable by the Company upon the exercise of a SAR may be paid in
cash or in shares of Common Stock or in any combination thereof as the
Committee in its sole discretion shall determine, but no fractional shares
shall be issuable pursuant to any SAR.
SARs may be granted by the Committee to any Key Employee at any time
and from time to time before January 1, 2000. A SAR may, but need not,
relate to a specific Option granted under this Plan. If a SAR relates to a
specific Option, it may be granted either concurrently with the Option or
at any time prior to the exercise, termination, cancellation or expiration
of such Option.
(2) LIMITATIONS ON SARS. The Committee may fix such waiting periods,
exercise dates or other limitations as it shall deem appropriate with
respect to SARs granted under the Plan; provided, however, that each SAR
granted hereunder shall be exercisable only upon consent of the Committee;
and provided further, that a SAR that relates to a specific Option shall be
exercisable only when and to the extent that the Option to which it relates
is exercisable.
c. TERMS OF OPTIONS AND SARS. Options and SARs granted pursuant to this
Plan shall be evidenced by stock option agreements and/or SAR agreements
respectively (collectively referred to herein as "agreements") that shall
comply with and be subject to the following terms and conditions and may contain
such other provisions, consistent with this Plan, as the Committee shall deem
advisable. SARs that relate to a specific Option, however, may be evidenced by
stock option agreements or agreements amending
3
<PAGE>
and/or forming a part of the stock option agreements to which such SARs relate.
Reference herein to agreements shall include, to the extent applicable, any
amendments to such agreements.
(1) PAYMENT OF OPTION EXERCISE PRICE. Upon exercise of an Option,
the full option exercise price for the shares with respect to which the
Option is being exercised shall be payable to the Company (i) in cash or by
check payable and acceptable to the Company or (ii) subject to the approval
of the Committee, (a) by tendering to the Company shares of Common Stock
owned by the optionee having an aggregate Market Value Per Share as of the
date of exercise and tender that is not greater than the full option
exercise price for the shares with respect to which the Option is being
exercised and by paying any remaining amount of the option exercise price
as provided in (i) above (provided that the Committee may, upon confirming
that the optionee owns the number of shares being tendered, authorize the
issuance of a new certificate for the number of shares being acquired
pursuant to the exercise of the Option less the number of shares being
tendered upon the exercise and return to the optionee (or not require
surrender of) the certificate for the shares being tendered upon the
exercise) or (b) by the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a broker
to promptly deliver to the Company cash or a check payable and acceptable
to the company to pay the option exercise price; provided that in the event
the optionee chooses to pay the option exercise price as provided in
(ii)(b) above, the optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements
as the Committee shall prescribe as a condition of such payment procedure.
Payment instruments will be received subject to collection.
(2) NUMBER OF SHARES. Each agreement shall state the total number of
shares of Common Stock that are subject to the Option and/or SAR.
(3) EXERCISE PRICE. The exercise price for each Option and SAR shall
be fixed by the Committee at the date of grant, but in no event may such
exercise price per share be less than the Market Value Per Share (as
defined below) on the date of the grant of the Option or SAR.
(4) MARKET VALUE PER SHARE. The Market Value Per Share as of any
particular date shall be determined by any fair and reasonable means
determined by the Committee, which may include, if the Common Stock is
listed for trading on the New York Stock Exchange, the closing price
published in THE WALL STREET JOURNAL reports of New York Stock Exchange --
Composite Transactions for the day of the grant, or if no trade of the
Common Stock shall have been reported for such date, the closing price
which is published in THE WALL STREET JOURNAL reports of the New York Stock
Exchange -- Composite Transactions for the next day prior thereto on which
a trade of the Common Stock was so reported.
(5) TERM. The term of each Option and/or SAR shall be determined by
the Committee at the date of grant; provided, however, that each Option
and/or SAR shall, notwithstanding anything in the Plan or an agreement to
the contrary, expire ten years from the date the Option or SAR is granted
or, if earlier, the date specified in the agreement at the date of grant of
such Option or SAR.
(6) DATE OF EXERCISE. In the discretion of the Committee, each
agreement may contain a provision not inconsistent with Section 8 hereof
stating that the Option and/or SAR granted therein may not be exercised in
whole or in part for a period or periods of time specified in such
agreement, subject to Section 8, and except as so specified therein, any
Option or SAR may be exercised in whole at any time or in part from time to
time during its term. The Committee may, however, at any time, in its sole
discretion amend any outstanding Option or SAR to accelerate the time that
such Option or
4
<PAGE>
SAR shall be exercisable or to provide that the time for exercising such
Option or SAR shall be accelerated upon the occurrence of a specified
event.
(7) TERMINATION OF EMPLOYMENT. In the event that an individual's
employment with the Company and its Subsidiaries shall terminate, for
reasons other than (i) retirement with the consent of the Company or the
individual's employing Subsidiary, as the case may be, ("retirement"),
(ii) permanent disability or (iii) death, the individual's Options and/or
SARs shall be exercisable by him, subject to subsections (5) and (6) above,
only within three months after such termination, but only to the extent the
Option and/or SAR was exercisable immediately prior to such termination of
employment.
If, however, any termination of employment is due to retirement or
permanent disability, the individual shall have the right after such
termination of employment, subject to the provisions of subsections (5) and
(6) above, to exercise any outstanding Option and/or SAR in full at any
time during the remaining term provided therefor in the related agreements.
Whether any termination of employment is due to retirement or permanent
disability shall be determined by the Committee.
If an individual shall die while entitled to exercise an Option and/or
SAR, the individual's estate, personal representative or beneficiary, as
the case may be, shall have the right, subject to the provisions of
subsections (5) and (6) above, to exercise such Option and/or SAR at any
time within 12 months from the date of the optionee's death, to the extent
that the optionee was entitled to exercise the same on the day immediately
prior to the optionee's death.
d. EFFECTS OF EXERCISE OF OPTIONS AND SARS. The right of an individual to
exercise an Option or SAR shall terminate to the extent that such Option or SAR
is exercised and, to the extent that a SAR relates to a specific Option, the
exercise of the SAR shall terminate a corresponding portion of the related
Option and, conversely, to the extent that such optionee exercises the related
Option, a corresponding portion of such SAR shall terminate.
e. OPTIONS AND SARS GRANTED BY OTHER CORPORATIONS. Options and SARs may
be granted under the Plan from time to time in substitution for stock options
and stock appreciation rights held by employees of corporations who become Key
Employees as a result of a merger or consolidation of the employer corporation
with the Company or a Subsidiary, or the acquisition by the Company or a
Subsidiary of assets of the employer corporation, or the acquisition by the
Company or a Subsidiary of stock of the employer corporation, with the result
that such employer corporation becomes a Subsidiary.
f. OPTIONS AND SARS GRANTED TO NONEMPLOYEE DIRECTORS. Options and SARs
granted to Nonemployee Directors shall be subject to all provisions and terms of
this Plan otherwise applicable thereto, except that notwithstanding such other
provisions and terms of this Plan to the contrary, all Options and SARs granted
to Nonemployee Directors shall be subject to the following provisions:
(1) TYPE AND TERMS OF AWARDS. Each Option granted to a Nonemployee
Director shall be a Non-qualified Stock Option and shall be automatically
accompanied by an SAR for the entire number of shares subject to the
Option. The agreement with respect to each such grant shall provide that
the accompanying SAR, if and to the extent exercised, shall be
automatically paid one-half in cash and one-half in shares of Common Stock
except that no fractional shares of Common Stock shall be issued. All
Options and SARs granted to Directors shall have an exercise price equal to
the Market Value Per Share on the date of grant, shall become exercisable
on and after the first anniversary of the date of grant (except as provided
in Section 8) and shall have a term of ten years unless earlier terminated
as provided in (3) below.
5
<PAGE>
(2) GRANTING OF AWARDS. Each person who is elected or appointed to
the Board as a Nonemployee Director for the first time shall automatically
receive, on the date of his or her election or appointment, an Option for
10,000 shares of Common Stock. On the date of the regular annual meeting of
the stockholders of the Company in each year that this Plan is in effect
(commencing with the 1997 annual meeting of stockholders), each Nonemployee
Director who is in office on that day and who was not elected for the first
time at such annual meeting shall automatically receive an Option for 2,000
shares of Common Stock.
(3) TERMINATION OF SERVICE. In the event that a Nonemployee Director
ceases to be a member of the Board, Options and SARs then held by such
individual shall be exercisable, subject to subsections c.(5) and (6)
above, only within 12 months after such termination of service and only to
the same extent that such Options and SARs were exercisable on the date of
such termination; provided, however, that if the termination is due to the
death, permanent disability or retirement of the individual pursuant to a
Company policy, all Options and SARs held by such Nonemployee Director
shall be exercisable after the date of such termination of service in full
at any time during the remaining term provided therefor in the related
agreements, subject to subsections c.(5) and (6) above.
g. INDIVIDUAL LIMITS. Notwithstanding anything in the Plan to the
contrary, no person may receive Options and SARs with respect to more than
250,000 shares of Common Stock during any calendar year, but disregarding any
SAR granted in tandem with an Option.
6. RECAPITALIZATION
The aggregate number of shares stated in Section 3a, the number of shares
of Common Stock to which each outstanding Option and SAR relates, and the
exercise price in respect of each such Option and SAR shall be adjusted in an
equitable manner determined by the Committee, in its sole discretion and without
liability to any person, in the event of (i) a subdivision or consolidation of
shares of Common Stock or other capital adjustments, (ii) the payment of a stock
dividend or a recapitalization or (iii) a "corporate transaction", as such
term is deemed in Treasury Regulation ^1.425-1(a)(1)(ii), or any other
transaction which, in the opinion of the Committee, is similar to a "corporate
transaction", as deemed by the said Treasury Regulations as in effect on
January 1, 1990, including without limitation any spin-off or other distribution
to the security holders of the Company of securities or property of the Company
or a Subsidiary. The Committee may exercise its discretion to make any such
adjustments on an optionee-by-optionee basis and with respect to all or only
some of the Options or SARs held by an optionee.
7. MERGER OR CONSOLIDATION
Except as otherwise provided in Section 8 below, after a merger of one or
more corporations into the Company in which the Company shall survive, or after
a consolidation of the Company and one or more corporations, in which the
resulting corporation remains, as an independent, publicly-owned corporation, an
optionee shall, at the same cost, be entitled upon the exercise of an Option or
SAR to receive (subject to any required action by stockholders and the
discretion of the Committee as to the payment of cash with respect to a SAR)
such stock, cash and/or securities of the surviving or resulting corporation as
the board of directors of such corporation, in its sole discretion and without
liability to any person, shall determine to be equivalent, as nearly as
practicable, to the nearest whole number and class of shares of Common Stock or
other securities that were then subject to such Option or SAR and such shares of
stock or other securities shall, after such merger or consolidation, be deemed
to be shares of Common Stock for all purposes of the Plan and any agreement.
6
<PAGE>
8. CHANGE IN CONTROL
In the event of a Change in Control (as defined below), then,
notwithstanding any other term of this Plan or any agreement to the contrary,
any and all outstanding Options and SARs not fully vested shall automatically
vest in full and, except as provided below with respect to a person subject to
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), be immediately exercisable. The date on which such accelerated vesting
and immediate exercisability shall occur (the "Acceleration Date") shall be
the date of the occurrence of the Change in Control.
A "Change in Control" shall be deemed to have occurred if:
(a) any "person," as such term is used in Section 13(d) and 14(d) of
the Exchange Act (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any
company owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company) together with its "Affiliates" and "Associates", as such term
is defined in Rule 12b-2 of the Exchange Act, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then outstanding
securities;
(b) during any period of two consecutive years (not including any
period prior to the effective date of this Plan), individuals who at the
beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (a), (c) or
(d) of this definitions) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at least a
majority thereof;
(c) the stockholders of the Company approve a merger or consolidation
of the Company with any other company other than (i) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as herein above defined)
acquires more than 25% of the combined voting power of the Company's then
outstanding securities; or
(d) the stockholders of the Company adopt a plan of complete
liquidation of the Company or approve an agreement for the sale, exchange
or disposition by the Company of all or a significant portion of the
Company's assets. For purposes of this clause (d), the term "the sale,
exchange or disposition by the Company of all or a significant portion of
the Company's assets" shall mean a sale or other disposition transaction
or series of related transactions involving assets of the Company or any
Subsidiary (including the stock of any Subsidiary) in which the value of
the assets or stock being sold or otherwise disposed of (as measured by the
purchase price being paid therefor or by such other method as the Board
determines is appropriate in a case where there is no readily ascertainable
purchase price) constitutes more than 25% of the fair market value of the
Company (as hereinafter defined). For purposes of the preceding sentence,
the "fair market value of the Company" shall be the aggregate market
value of the outstanding shares of common stock of the Company (on a fully
diluted
7
<PAGE>
basis) plus the aggregate market value of the Company's other outstanding
equity securities. The aggregate market value of the shares of common stock
of the Company shall be determined by multiplying the number of shares of
the Company's common stock (on a fully diluted basis) outstanding on the
date of the execution and delivery of a definitive agreement with respect
to the transaction or series of related transactions (the "Transaction
Date") by the average closing price of the shares of common stock of the
Company for the ten trading days immediately preceding the Transaction
Date. The aggregate market value of any other equity securities of the
Company shall be determined in a manner similar to that prescribed in the
immediately preceding sentence for determining the aggregate market value
of the shares of common stock of the Company or by such other method as the
Board shall determine is appropriate.
Notwithstanding the foregoing however, a Change in Control shall not be
deemed to have occurred if, prior to the time a Change in Control would
otherwise be deemed to have occurred pursuant to the above provisions, the Board
determines otherwise.
If during the 60-day period following any such Acceleration Date or, with
respect to an Option or SAR granted to an officer or director subject to Section
16(b) of the Exchange Act, the 60-day period following the earlier of the date
that Section 16(b) of the Exchange Act ceases to apply to such person or six
months following the date of grant of such Option or SAR (but not to exceed the
remaining term of such Option or SAR), a participant (or beneficiary thereof)
elects to exercise an Option or SAR, the holder shall receive in cash whichever
of the following amounts is applicable:
(i) with respect to an acquisition of Common Stock described in clause
(a) of the definition of Change in Control, an amount equal to the
Acquisition Spread (as defined below);
(ii) with respect to a change in composition of the Board described in
clause (b) of the definition of Change in Control, an amount equal to the
Spread (as defined below); or
(iii) with respect to stockholder approval of an agreement or adoption
of a plan described in clause (c) or (d) of the definition of Change in
Control, an amount equal to the Merger Spread (as defined below).
Notwithstanding the foregoing provisions of this Section 8, in the case of an
exercise in respect of an Incentive Stock Option, the holder may not receive an
amount in excess of the maximum amount that will enable such option to continue
to qualify as an Incentive Stock Option.
As used in this Section 8, the following terms shall have the meaning
indicated:
(1) The term "Acquisition Price Per Share" shall mean the greater
of (i) the highest price paid by a person (or an Affiliate or Associate
thereof) for any share of Common Stock acquired prior to, but in connection
with, a Change in Control described in clause (a) of the definition of a
Change in Control or (ii) the highest Market Value Per Share for any day
during the 60-day period ending on the date the Option or SAR is exercised.
(2) The term "Acquisition Spread" shall mean an amount equal to the
product obtained by multiplying (i) the excess of (A) the Acquisition Price
Per Share over (B) the price per share of Common Stock at which the Option
or SAR is exercisable, by (ii) the number of shares of Common Stock with
respect to which such Option or SAR is being exercised.
(3) The term "Merger Price Per Share" shall mean the greater of (i)
the fixed or formula price for the acquisition of shares of Common Stock
specified in such agreement or adoption, if such fixed or formula price is
determinable on the date on which such Option or SAR is exercised, and (ii)
the
8
<PAGE>
highest Market Value Per Share for any day during the 60-day period ending
on the date on which such Option or SAR is exercised.
(4) The term "Merger Spread" shall mean an amount equal to the
product obtained by multiplying (i) the excess of (A) the Merger Price Per
Share over (B) the price per share of Common Stock at which the Option or
SAR is exercisable, by (ii) the number of shares of Common Stock with
respect to which such Option or SAR is being exercised.
(5) The term "Spread" shall mean an amount equal to the product
obtained by multiplying (i) the excess of (A) the highest Market Value Per
Share for any day during the 60-day period ending on the date the Option or
SAR is exercised over (B) the price per share of Common Stock at which the
Option or SAR is exercisable, by (ii) the number of shares of Common Stock
with respect to which the Option or SAR is being exercised.
The Company intends that this Section 8 shall comply with the requirements
of Rule 16b-3 and any future rules promulgated in substitution therefor ("the
Rule") under the Exchange Act during the term of the Plan. Should any provision
of this Section 8 not be necessary to comply with the requirements of the Rule
or should any additional provisions be necessary for this Section 8 to comply
with the requirements of the Rule, the Board may amend the Plan to add to or
modify the provisions of the Plan accordingly.
9. EMPLOYEE'S AGREEMENT
If, at the time of the exercise of any Option or SAR, in the opinion of
counsel for the Company, it is necessary or desirable, in order to comply with
any then applicable laws or regulations relating to the sale of securities, for
the individual exercising the Option or SAR to agree to hold any shares issued
to the individual for investment and without intention to resell or distribute
the same and for the individual to agree to dispose of such shares only in
compliance with such laws and regulations, the individual will, upon the request
of the Company, execute and deliver to the Company a further agreement to such
effect.
10. WITHHOLDING FOR TAXES
Any cash payment under the Plan shall be reduced by any amounts required to
be withheld or paid with respect thereto under all present or future federal,
state and local tax and other laws and regulations that may be in effect as of
the date of each such payment ("Tax Amounts"). Any issuance of Common Stock
pursuant to the exercise of an Option or other distribution of Common Stock
under the Plan shall not be made until appropriate arrangements have been made
for the payment of any amounts that may be required to be withheld or paid with
respect thereto. Such arrangements may, at the discretion of the Committee,
include allowing the optionee to tender to the Company shares of Common Stock
owned by optionee, or to request the Company to withhold a portion of the shares
of Common Stock being acquired pursuant to the exercise or otherwise distributed
to optionee, which have a Market Value Per Share as of the date of such
exercise, tender or withholding that is not greater than the sum of all Tax
Amounts, together with payment of any remaining portion of all Tax Amounts in
cash or by check payable and acceptable to the Company.
11. TERMINATION OF AUTHORITY TO GRANT AWARDS
No Options or SARs may be granted pursuant to this Plan after December 31,
1999.
12. AMENDMENT AND TERMINATION
The Board may from time to time and at any time alter, amend, suspend,
discontinue or terminate this Plan and any grants hereunder; provided, however,
that no such action of the Board may, without the
9
<PAGE>
approval of the stockholders of the Company, alter the provisions of the Plan so
as to (i) increase the maximum number of shares of Common Stock that may be
subject to grants and distributed in the payment of exercises under the Plan
(except as provided in Section 3b); (ii) change the class of employees eligible
to receive grants under the Plan; (iii) extend beyond ten years the maximum
terms of Options or SARs granted under the Plan or extend the term of the Plan;
or (iv) change the operation of Section 5f., concerning automatic grants to
Nonemployee Directors, unless, in each case, such approval is not required to
meet the requirements of the Rule.
13. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS
Anything in the Plan or any agreement entered into pursuant to the Plan to
the contrary notwithstanding, if, at any time specified herein or therein for
the making of any determination, the issuance or other distribution of shares of
Common Stock, or the payment of consideration to an employee as a result of the
exercise of any SAR, as the case may be, any law, regulation or requirement of
any governmental authority having jurisdiction in the premises shall require
either the Company or the employee (or the employee's beneficiary), as the case
may be, to take any action in connection with any such determination, the shares
then to be issued or distributed, or such payment, the issue or distribution of
such shares or the making of such determination or payment, as the case may be,
shall be deferred until such action shall have been taken.
14. CHANGE IN CONTROL LIMITATION
Notwithstanding any other provision in the Plan, to the extent that the
acceleration of exercisability of an Option or SAR under this Plan following a
Change in Control, when aggregated with other payments or benefits to the
participant, whether or not payable pursuant to this Plan, would, as determined
by tax counsel selected by the Company, result in "excess parachute payments"
(as defined in Section 280G of the Code) such parachute payments or benefits
provided to a participant under this Plan shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code, but only if, by reason of such reduction, the
participant's net after tax benefit shall exceed the net after tax benefit if
such reduction were not made. "Net after tax benefit" shall mean the sum of
(i) all payments and benefits which a participant receives or is then entitled
to receive that would constitute a "parachute payment" within the meaning of
Section 280G of the Code, less (ii) the amount of federal income taxes payable
with respect to the payments and benefits described in (i) above calculated at
the maximum marginal income tax rate for the year in which such payments and
benefits shall be paid to the participant (based upon the rate for such year as
set forth in the Code at the time of the first payment of the foregoing), less
(iii) the amount of excise taxes imposed with respect to the payments and
benefits described in (i) above by Section 4999 of the Code.
15. MISCELLANEOUS
a. NO EMPLOYMENT CONTRACT. Nothing contained in the Plan shall be
construed as conferring upon any employee the right to continue in the employ of
the Company or any Subsidiary.
b. EMPLOYMENT WITH SUBSIDIARIES. Employment by the Company for the
purpose of this Plan shall be deemed to include employment by, and to continue
during any period in which an employee is in the employment of, any Subsidiary.
c. NO RIGHTS AS A STOCKHOLDER. A participant shall have no rights as a
stockholder with respect to shares covered by such participant's Option or SAR
until the date of the issuance of shares to the participant
10
<PAGE>
pursuant thereto. No adjustment will be made for dividends or other
distributions or rights for which the record date is prior to the date of such
issuance.
d. NO RIGHT TO CORPORATE ASSETS. Nothing contained in the Plan shall be
construed as giving any participant, such participant's beneficiaries or any
other person any equity or other interest of any kind in any assets of the
Company or any Subsidiary or creating a trust of any kind or a fiduciary
relationship of any kind between the Company or a Subsidiary and any such
person.
e. NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company or any Subsidiary from taking any
corporate action that is deemed by the Company or such Subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any grant made under the Plan. No participant,
beneficiary or other person shall have any claim against the Company or any
Subsidiary as a result of any such action.
f. NON-ASSIGNABILITY. A participant shall not have the power or right to
sell, exchange, pledge, transfer, assign or otherwise encumber or dispose of
such participant's interest in any grant under the Plan nor shall such interest
be subject to seizure for the payment of a participant's debts, judgments,
alimony, or separate maintenance or be transferable by operation of law in the
event of a participant's bankruptcy or insolvency and to the extent any such
interest arising under the Plan is awarded to a spouse pursuant to any divorce
proceeding, such interest shall be deemed to be terminated and forfeited
notwithstanding an vesting provisions or other terms herein or in the agreement
evidencing such aware.
g. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to the Plan will be used for general corporate purposes.
h. SALE OF SUBSIDIARY OR ASSETS. In the event a Key Employee ceases to be
employed by the Company or a Subsidiary as a result of a sale or other
disposition by the Company of a Subsidiary or all or part of the business
operations of the Company or a Subsidiary, the Committee, in its sole
discretion, may accelerate the exercisability of any grant under the Plan, in
whole or in part, as it deems appropriate.
i. GOVERNING LAW; CONSTRUCTION. All rights and obligations under the Plan
shall be governed by, and the Plan shall be construed in accordance with, the
laws of the State of Texas without regard to the principles of conflicts of
laws. Titles and headings to Sections herein are for purposes of reference only,
and shall in no way limit, define or otherwise affect the meaning or
interpretation of any provisions of the Plan.
Effective Date of Plan: February 15, 1990.
Effective Date of Third Amendment: April 29, 1997.
11
EXHIBIT 10(b)
TECH-SYM CORPORATION
INCENTIVE STOCK OPTION
AND STOCK APPRECIATION RIGHT AGREEMENT
AGREEMENT made effective the ___ day of _______, 199_, (the "Grant
Date") between TECH-SYM CORPORATION, a Nevada corporation (the "Company"), and
Optionee ("Optionee").
To carry out the purposes of the Tech-Sym Corporation 1990 Stock
Option Plan, as amended, to which this Agreement is expressly subject and a copy
of which is attached hereto as EXHIBIT "A", by affording Optionee the
opportunity to purchase shares of Common Stock, par value $.10 per share, of the
Company ("Stock"), and in consideration of the mutual agreements and other
matters set forth herein and in the Plan, the Company and Optionee hereby agree
as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee the
right and option (the "Option") to purchase all or any part of an aggregate of
- -Shares~- shares of Stock, on the terms and conditions set forth herein and in
the Plan. It is intended that the Option qualify as an "incentive stock option"
within the meaning of Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code").
2. GRANT OF SAR. The Company also hereby grants the Optionee a stock
appreciation right ("SAR") entitling the Optionee to surrender (upon the terms
and conditions hereinafter set forth, including the consent of the Committee
with respect to any such exercise) to the Company unexercised the Option granted
pursuant to this Agreement, or any portion thereof, and to receive from the
Company in exchange therefor cash, Stock or a combination thereof (as determined
in the discretion of the Committee) having an aggregate value equal to the
excess of the Market Value Per Share on the date of exercise over the Market
Value Per Share on the Grant Date (such amount herein referred to as the
"Spread"), multiplied by the total number of shares of Stock for which the SAR
is exercised.
3. EXERCISE PRICE. The exercise price of the Option shall be $_____
per share.
4. EXERCISE OF OPTION.
(a) Subject to the further provisions of this Agreement, the Option
granted pursuant to this Agreement shall not become exercisable until after one
year following the date hereof and thereafter may be exercised upon the
following terms:
(i) after such one year, this Option shall be exercisable for
any number of shares up to and including, but not in excess of, 20% of the
aggregate number of shares subject to this Option;
(ii) after one and one-half years, this Option shall be
exercisable for any number of shares up to and including but not in excess
of, 40% of the aggregate number of shares subject to this Option;
(iii) after two years, this Option shall be exercisable for
any number of shares up to and including, but not in excess of, 60% of the
aggregate number of shares subject to this Option;
1
<PAGE>
(iv) after two and one-half years, this Option shall be
exercisable for any number of shares up to and including, but not in
excess of, 80% of the aggregate number of shares subject to this Option;
and
(v) after three years, this Option shall be fully exercisable.
(b) Subject to the earlier expiration of the Option as herein
provided and subject to the terms and conditions contained herein, the Option
may be exercised by written notice (which complies in all respects with the
provisions of this Agreement) to the Company at its principal executive office
addressed to the attention of the Secretary of the Company, identifying the
Option and specifying the number of shares that the Optionee decides to
purchase, such exercise to be effective at the time of receipt of such written
notice at the Company's principal executive office during normal business hours.
The notice shall not be considered to be properly given unless accompanied by
all documentation deemed appropriate by the Committee to reflect exercise of the
Option and compliance with all applicable laws, rules and regulations.
(c) The vesting and exercisability of the Option shall be subject to
acceleration on the terms and conditions stated in Section 8 of the Plan, which
relate to a "Change in Control" of the Company (as defined in the Plan).
(d) Notwithstanding anything herein to the contrary, in no event
shall the Option, or any part thereof, be exercisable after the tenth
anniversary of the Grant Date.
5. EXERCISE OF SAR.
(a) The SAR granted pursuant to this Agreement may be exercised,
subject to the following limitations set forth herein, as the Optionee may from
time to time elect in whole or in part; provided, however, that subject to the
terms and conditions stated in Section 8 of the Plan, the SAR may only be
exercised (i) at such time or times and to such extent as the underlying Option
may be exercised, (ii) only upon consent of the Committee and (iii) only when
there is a positive Spread; and provided further that the Committee shall be
entitled to elect to settle the Company's obligation, or any portion thereof,
arising out of the permitted exercise of the SAR, by the payment of cash, Stock
or a combination thereof having an aggregate value equal to the Spread on the
date of exercise, but no fractional shares shall be issuable. The SAR granted
pursuant to this Agreement shall expire at such time as the Option expires.
(b) The SAR granted herein may be exercised by the Optionee by
giving a written request to the Secretary of the Company identifying the SAR and
specifying the part of the related Option being surrendered. The request shall
not be considered to be given unless accompanied by all documentation deemed
appropriate by the Committee to reflect exercise of the SAR and compliance with
all applicable laws, rules and regulations. The Committee shall within fifteen
days of the delivery of such request give notice to the Optionee of approval or
disapproval of the request. If the request is approved, payment shall be made
not more than twenty days from delivery of the request. If the request is
disapproved, the request shall be considered null and void. The request may be
withdrawn at any time by the Optionee prior to its being acted upon by the
Committee by giving written notice of such withdrawal to the Secretary of the
Company.
6. PAYMENT OF OPTION EXERCISE PRICE. Upon exercise of an Option, the
full option exercise price for the shares with respect to which the Option is
being exercised shall be payable to the Company (i) in cash or by check payable
and acceptable to the Company or (ii) subject to the approval of the Committee,
(a) by tendering to the Company shares of Stock owned by the Optionee having an
aggregate Market Value Per Share as of the date of exercise
2
<PAGE>
and tender that is not greater than the full Option exercise price for the
shares with respect to which the Option is being exercised and by paying any
remaining amount of the Option exercise price as provided in (i) above (provided
that the Committee may, upon confirming that the Optionee owns the number of
shares being tendered, authorize the issuance of a new certificate for the
number of shares being acquired pursuant to the exercise of the Option less the
number of shares being tendered upon the exercise and return to the Optionee (or
not require surrender of) the certificate for the shares being tendered upon the
exercise) or (b) by the Optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company to
pay the option exercise price; provided that in the event the Optionee chooses
to pay the Option exercise as provided in (ii)(b) above, the Optionee and the
broker shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Committee shall prescribe as a condition
of such payment procedure. Payment instructions will be received subject to
collection.
7. NON-TRANSFERABILITY. The Option and SAR may not be transferred by
Optionee separately or otherwise than by will or the laws of descent and
distribution.
8. TERMINATION OF EMPLOYMENT.
(a) If the Optionee's employment with the Company and its
Subsidiaries is terminated for reasons other than (i) retirement with the
consent of the Company or the individual's employing Subsidiary, as the case may
be, ("retirement"), (ii) permanent disability or (iii) death, the Option and/or
SAR shall be exercisable by him, subject to Section 4(d) above, only within
three months after such termination and only to the extent the Option was
exercisable on the date of termination of employment.
(b) If, however, any termination of employment is due to retirement
or permanent disability, the Option and/or SAR shall be exercisable by the
Optionee in full at any time, subject to Section 4(d) above, after such
termination of employment.
(c) If the Optionee shall die while entitled to exercise the Option
and/or SAR, the Optionee's estate, personal representative or beneficiary, as
the case may be, shall have the right subject to the provisions of Section 4(d)
above, to exercise the Option or SAR at any time within 12 months after the date
of the Optionee's death, to the extent that the Optionee was entitled to
exercise the same on the day immediately prior to the Optionee's death.
(d) Except as provided above in this Section 8, to the extent the
Option and SAR is not exercisable on such termination of employment, the Option
and SAR, or applicable portion thereof, shall be terminated and forfeited in
full.
9. WITHHOLDING OF TAX. Any cash payment under this Agreement shall
be reduced by any amounts required to be withheld or paid with respect thereto
under all present or future federal, state and local tax and other laws and
regulations that may be in effect as of the date of each such payment ("Tax
Amounts"). Any issuance of Stock pursuant to the exercise of the Option or SAR
under this Agreement shall not be made until appropriate arrangements have been
made for the payment of any amounts that may be required to be withheld or paid
with respect thereto. Such arrangements may, at the discretion of the Committee,
include allowing the Optionee to tender to the Company shares of Stock owned by
Optionee, or to request the Company to withhold a portion of the shares of Stock
being acquired pursuant to the exercise or otherwise distributed to Optionee,
which have a Market Value Per Share as of the date of such exercise, tender or
withholding that is not greater than the sum of all Tax Amounts, together with
payment of any remaining portion of all Tax Amounts in cash or by check payable
and acceptable to the Company. Payment instruments will be received subject to
collection.
3
<PAGE>
10. SECURITIES MATTERS. The Option and SAR granted herein shall be
subject to the requirement that, if at any time the Board shall determine, in
its discretion, that the listing, registration or qualification of the shares
subject to such Option upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the issue or
purchase of shares hereunder, such Option and SAR may not be exercised in whole
or in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not reasonably
acceptable to the Board.
11. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, the
Optionee shall be considered to be in the employment of the Company as long as
the Optionee remains an employee of either the Company, a parent or subsidiary
corporation (as defined in Section 425 of the Code) of the Company, or a
corporation or a parent or subsidiary of such corporation assuming or
substituting a new agreement for this Agreement. Any question as to whether and
when there has been a termination of such employment, for purposes of this
Agreement, and the cause of such termination, for purposes of this Agreement,
shall be determined by the Committee, and its determination shall be final.
Nothing herein shall give the Optionee any right to continued employment or
affect in any manner the right of the Company or any Subsidiary or parent
corporation to terminate the employment of the Optionee.
12. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under the Optionee. This Agreement and all actions taken shall be
governed by and constructed in accordance with the laws of the State of Texas.
In the event of conflict between this Agreement and the Plan, the terms of the
Plan shall control. All undefined capitalized terms used herein shall have the
meaning assigned to them in the Plan. The Committee shall have authority to
construe the terms of this Agreement, and the Committee's determinations shall
be final and binding on the Optionee and the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Optionee has executed this Agreement as of the day and year
first above written.
By:____________________
Chairman and President
OPTIONEE
----------------------
Optionee
EXHIBIT 10(c)
TECH-SYM CORPORATION
WRITTEN DESCRIPTION OF INCENTIVE BONUS COMPENSATION PLAN
ADOPTED BY THE BOARD OF DIRECTORS OF TECH-SYM CORPORATION
EFFECTIVE JANUARY 1, 1997
The Board of Directors, pursuant to the recommendations of its
Compensation Committee, is authorized to make incentive bonus awards after the
end of each fiscal year to selected employees including the officers and
employees of Tech-Sym Management Corporation and the presidents of the Company's
wholly owned subsidiaries. The aggregate bonus pool from which such awards can
be made in any year cannot exceed 2% of the Company's consolidated earnings
before Federal and state income taxes plus an amount equal to 25% of the
aggregate subsidiary bonus pools.
After the close of each fiscal year, key employees of each of the
subsidiaries, except for the subsidiary presidents, shall share in a bonus pool,
calculated separately for each subsidiary, amounting to not less than 6% and not
more than 15% of such subsidiary's earnings before state and Federal income
taxes. Bonus amounts earned in excess of 6% pre-tax earnings depend upon the
degree by which each subsidiary exceeds certain performance criteria. The 6%
minimum will be increased (up to the maximum of 15%) one additional percentage
point for each fifteen points earned by the subsidiary in accordance with the
following:
(a) 1 point for each 2% increase in sales in excess of 15% over the
prior year.
(b) 1 point for each .1% increase in net profit as a percent of sales
over the average of the previous three years.
(c) 2 points for each 1%, in excess of 8%, for return on investment.
(Investment to be defined as Stockholders' Equity plus or minus
intercompany accounts).
(d) 5 points if 90% of forecasted pretax profits is achieved.
The amount of the bonus pool of the Company and of each subsidiary is
subject to reduction by the amount of (i) any bonuses such as Christmas bonuses
paid to employees for such year; (ii) the contributions which each such company
would be required to make to its retirement and/or thrift plan(s), if any, on
the total bonus pool amount for the accounts of its bonus recipients; and (iii)
any marketing incentives paid to employees for such year other than sales
commissions comprising all or part of an individuals regular compensation.
The apportionment of the total amount of the bonus and the recipients
thereof are determined by the management of each subsidiary subject to the
approval of either (i) the President or any Vice President of the Company
regarding employees with annual salaries of $60,000 or more, or (ii) the Board
of Directors of the Company, pursuant to recommendations of the Compensation
Committee, when the annual salary of any recipient exceeds $100,000 and in the
case of any recipient who is a division or subsidiary general manager or chief
executive officer, regardless of such person's compensation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM TECH SYM'S 2ND QUARTER 1997 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 12,339
<SECURITIES> 5,810
<RECEIVABLES> 56,254
<ALLOWANCES> 0
<INVENTORY> 91,812
<CURRENT-ASSETS> 229,060
<PP&E> 45,708
<DEPRECIATION> 0
<TOTAL-ASSETS> 320,246
<CURRENT-LIABILITIES> 89,606
<BONDS> 0
0
0
<COMMON> 796
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 320,246
<SALES> 147,423
<TOTAL-REVENUES> 0
<CGS> 99,853
<TOTAL-COSTS> 137,624
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,761
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,426
<DISCONTINUED> (1,236)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,190
<EPS-PRIMARY> 0.86
<EPS-DILUTED> 0
</TABLE>
