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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
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 1-5005
SELAS CORPORATION OF AMERICA
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1069060
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Dresher, Pennsylvania 19025
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (215) 646-6600
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Shares, $1 par American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 periods
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. (X)
The aggregate market value, as of March 1, 1996, of the voting stock held
by non-affiliates of the registrant was approximately $34,775,000.
(Aggregate market value is estimated solely for the purposes of this
report and shall not be construed as an admission for the purposes of
determining affiliate status.)
At March 1, 1996, there were 3,460,050 of the Company's common shares
outstanding (exclusive of 242,376 treasury shares).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's 1995 annual report to shareholders are
incorporated by reference into Part II of this report. Portions of the
Company's proxy statement for the 1996 annual meeting of shareholders are
incorporated by reference into Part III of this report. Except for the
parts of such documents that have been specifically incorporated herein
by reference, such documents shall not be deemed "filed" for the purposes
of this report.
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PART I
ITEM 1. Business
Selas Corporation of America (together with its subsidiaries, unless the
context otherwise requires, referred to herein as the ("Company")), was
incorporated in Pennsylvania in 1930. The Company is a diversified firm
with international operations and sales that engages in the design,
development, engineering and manufacturing of a range of products. The
Company, headquartered in Dresher, Pennsylvania with subsidiaries in
Minnesota, Ohio, France, Germany and Italy, operates directly or through
subsidiaries in three business segments.
Under the SelasTM name, the Company designs and manufactures specialized
industrial heat processing systems and equipment for steel, glass and
other manufacturers worldwide. The Company's subsidiary, Resistance
Technology, Inc., designs and manufactures microminiature components and
molded plastic parts primarily for the hearing instrument manufacturing
industry worldwide. The Company's subsidiary, Deuer Manufacturing, Inc.,
manufactures spare tire holders and lifts and related products, primarily
based on cable winch designs, for use principally as original equipment
by the pick-up truck and minivan segment of the automotive industry.
Financial data relating to industry segments, geographical summary of
assets and operations, export sales and major customers are set forth in
Note 4 of the Company's consolidated financial statements.
HEAT PROCESSING
The Company specializes in the controlled application of heat to achieve
precise process and temperature control. The Company's principal heat
processing equipment and systems are large custom-engineered furnaces and
smaller standard-engineered systems, burners and combustion control
equipment.
CUSTOM-ENGINEERED FURNACES
Products and Industries Served. The Company designs specialized furnaces
for use primarily in the steel and glass industries worldwide. The
furnaces are engineered to subject a customer's products to carefully
controlled heating and cooling processes in order to improve the physical
characteristics of those products. Each furnace is custom-engineered by
the Company to meet the customer's specific requirements. The Company
believes that the SelasTM name, its reputation for quality and its
leadership in the design and engineering of direct gas-fired heat
processing furnaces are important factors in its business. The Company
also offers gas-fired radiant tube and electric heating technology for
heat processing furnaces.
The Company's custom-engineered systems for the steel industry include
continuous annealing furnaces and continuous galvanizing furnaces.
Continuous annealing furnaces are used to heat-treat semi-finished steel
sheet and strip to soften it to improve the ductility of the steel,
thereby making it suitable for use in the
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ITEM 1. Business - (Continued)
manufacture of automobiles, appliances and other items. Continuous
galvanizing furnaces consist of continuous annealing furnaces plus the
components used to apply a zinc coating to steel strip to improve its
resistance to corrosion.
The Company's furnaces for the glass industry are used for the tempering
and bending of glass. The glass tempering process toughens glass plate
through a controlled process of heating and cooling. Glass manufacturers
use the Company's glass bending furnaces to heat and bend plate glass for
automotive and architectural uses.
From time to time, the Company also designs various other specialized
furnaces for use by manufacturers in a variety of industries to suit
particular process requirements. For example, over the years the Company
has engineered large barrel line furnaces used for the continuous heat
treatment of steel pipe, tube or bar.
Marketing and Competition. The Company markets its custom-engineered
furnaces on a global basis. Marketing personnel are located at the
Company's offices in Dresher, Paris, Ratingen and Milan and at the
offices of its 50%-owned affiliate, Nippon Selas Co., Ltd., in Tokyo.
Over the years, the Company has installed custom-engineered systems
throughout the world, in Europe, North America, South America, Asia,
Australia and Africa. In a particular period, a single contract may
account for a large percentage of sales, but the Company is not dependent
on any custom-engineered systems customer on an ongoing basis.
Company engineering and marketing personnel maintain contact with
potential major steel and glass customers to determine their needs for
new furnaces, typically for expansion or new technology. The Company's
furnaces have long useful lives, and replacement business is not a major
factor in sales of custom-engineered systems.
The Company also markets its products and services through agents and
licensees located in various parts of the world. Typically, the
Company's license agreements provide that the licensee will act as the
Company's sales agent in a particular territory, is granted a license to
utilize the Company's heat processing technology in that territory, and
is granted the right to utilize technical services provided by the
Company. In exchange, the Company receives certain fees when the
licensee sells the Company's products or services in the territory.
Over the years, Japanese steel producers have aligned themselves in semi-
exclusive relationships with furnace manufacturers. For a number of
years, the Company has licensed direct fired furnace technology to NKK
Corporation, the second largest steel producer in Japan.
Furnaces for continuous galvanizing and annealing lines generally utilize
either direct fired or radiant tube technology. The Company is the
market leader for furnaces based on direct fired technology,
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ITEM 1. Business - (Continued)
and also sells furnaces of the radiant tube design utilized primarily by
its competitors. Some of the Company's competitors are larger and have
greater financial resources. Operations.
The Company's custom-engineered furnace business is
conducted principally by its wholly-owned subsidiaries, Selas S.A.
(Paris), Selas Waermetechnik GmbH (Ratingen) and Selas Italiana, S.r.L.
(Milan). These subsidiaries currently employ approximately 88 persons,
of whom 16 are administrative personnel and 72 are sales, engineering and
operations personnel. A small number of engineering and marketing
management personnel located at the Company's Dresher, Pennsylvania
headquarters facility are also involved from time to time in the custom-
engineered furnace business.
On large-scale projects, such as a continuous steel strip annealing or
galvanizing line, the customer frequently contracts for the entire line
on a turnkey basis with an engineering and construction firm specializing
in line terminal equipment, and the Company acts as a subcontractor for
the design, engineering, supply of material and installation of the
furnace portion of the line, or, alternatively, as a subcontractor only
for design and engineering. When the Company provides only design and
engineering services, the prime contractor handles the fabrication and
erection of the furnace. With the exception of certain proprietary
parts, the Company does not manufacture the components used in such
systems.
The Company's custom-engineered furnace business is historically cyclical
in nature.
STANDARD-ENGINEERED SYSTEMS, BURNERS AND COMBUSTION CONTROL EQUIPMENT
Standard-Engineered Systems. At its Dresher, Pennsylvania facility, the
Company engineers and fabricates a variety of smaller furnaces and heat
processing equipment. Although these systems are based on standard
designs, the Company often adapts or re-engineers them to meet particular
customer needs. These smaller systems are
generally used by manufacturers in sophisticated applications for the
heat treatment of finished and semi-finished parts.
The Company's standard-engineered systems include atmosphere-
controlled furnaces for heat treating finished metal parts. Its
continuous heat treating systems include not only the hardening and
tempering furnaces central to the system, but also the ancillary loading,
quenching and washing equipment.
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ITEM 1. Business - (Continued)
The Company also manufacturers large non-atmosphere-controlled batch-type
furnaces in a variety of designs. The Company's carbottom furnaces
enable its customers to remove the furnace hearth, running on tracks
similar to a railroad car, from the stationary furnace for loading and
unloading. With its hood furnaces, the furnace itself can be lifted from
the stationary hearth for loading and unloading. Carbottom and hood
furnaces are used to heat treat large, usually semi-finished, metal parts
of a variety of shapes and sizes. Clamshell furnaces designed by the
Company open and close around steel rolls to produce a gradation of metal
characteristics due to the differential heating of the steel roll. The
Company's standard batch furnaces are supplied to customers with a need
for the precise, accurately controlled application of heat to their
products.
The Company's standard systems also include automatic brazing and
soldering systems used in the assembly of radiators, air conditioner
coils and electrical appliances. The precise application of heat in
these systems improves a customer's product quality and uniformity while
reducing production costs. The Company also produces the fuel mixing and
monitoring systems, burners and product handling equipment necessary for
these systems.
The Company also produces custom designed barrel furnaces used primarily
to heat treat long metal parts, and also produces specialized glass lehrs
for heating glass products.
Burners and Combustion Control Equipment. The Company designs,
manufactures and sells an array of original equipment and replacement
gas-fired industrial burners for many applications. The Company is a
producer of burners used in fluid processing furnaces serving the
petrochemical industry. One type of fluid processing burner is capable
of minimizing the emission of oxides of nitrogen as combustion products.
As many jurisdictions reduce the permissable level of emissions of these
compounds, the Company believes that the demand for "low NOx" burners
will increase. The Company also produces burners suitable for creating a
high temperature furnace environment desirable in steel and glass heat
treating furnaces. The Company's burners accommodate a wide variety of
fuel types, environmental constraints and customer production
requirements.
The Company furnishes many industries with gas combustion control
equipment sold both as component parts and as systems that have been
custom-engineered to meet a particular customer's needs. This equipment
is provided with the Company's original custom-engineered and standard
heat treating equipment, as replacement or additional components for
existing furnaces being refurbished or upgraded, and as original
components for heat treating equipment manufactured by
others. The components of the combustion control systems include mixing
valves capable of mixing gas and air and controlling the air/gas ratio,
pressure and total flow of the mixed gases. The Company also produces
its Qual-O-RimeterTM automated monitoring and control device used in
conjunction with its mixing valves to maintain precise, uniform heat
release and flame shape, despite fluctuations in fuel mix and quality,
air temperature and humidity.
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ITEM 1. Business - (Continued)
Additional combustion control products include Flo-ScopeTM flow meters,
which measure the rate of flow of gases, and automatic fire checks and
automatic blowouts, which arrest flame and pressure resulting from
backfire from the burners into the pipe line.
Marketing and Competition. The Company markets its standard-engineered
systems products on a global basis through its sales and marketing
personnel located in Dresher, and also sells these products through
licensees and agents located in various parts of the world. Although the
Company competes for orders for such products with many other
manufacturers, some of which are larger and have greater financial
resources, the Company believes that its reputation and its high standard
for quality allow it to compete effectively with other manufacturers.
Operations. At its Dresher facility, the Company employs approximately
70 persons, of whom 16 are executive and administrative personnel, 15 are
sales and engineering personnel and 39 are personnel engaged in
manufacturing. The hourly personnel are represented by a union, and the
current union contract expires May 1, 1998. The Company considers its
relations with its employees to be satisfactory.
The principal components used in the Company's heat processing equipment
and other products are steel, special castings (including high-alloy
materials), electrical and electronic controls and materials handling
equipment. These items are available from a wide range of independent
suppliers.
Research and Development. The Company conducts research and development
activities at its Dresher facility to support its heat processing
services and products. The Company's research efforts are designed to
develop new products and technology as well as to improve existing
products and technology. For example, the Company's research and
development activities have led to the redesign and upgrade of its air-
mixing valve process. The Company also conducts research on behalf of
particular customers in connection with customers' unusual process needs.
Research and development expenditures for heat processing aggregated
$188,000, $194,000 and $251,000 in 1995, 1994 and 1993, respectively.
It is the Company's policy to apply for domestic and foreign patents on
those inventions and improvements which it considers significant and
which are likely to be incorporated in its products. It owns a number of
United States and foreign patents and has a number of additional
applications pending. It is licensed under patents owned by others and
has granted licenses to others on a fee basis. The Company believes
that, although these patents collectively are valuable, no one patent or
group of patents is of material importance to its business as a whole.
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ITEM 1. Business - (Continued)
MICROMINIATURE COMPONENTS AND MOLDED PLASTICS
Resistance Technology, Inc. ("RTI"), a wholly-owned subsidiary whose
outstanding capital stock the Company acquired on October 20, 1993,
manufactures microminiature components and molded plastic parts primarily
for the hearing instrument manufacturing industry worldwide.
Products and Industries Served. RTI is a leading manufacturer and
supplier of microminiature electromechanical components to hearing
instrument manufacturers. These components consist of volume controls,
trimmer potentiometers and switches. RTI also manufactures hybrid
amplifiers and integrated circuit components ("hybrid amplifiers"), along
with faceplates for in-the-ear and in-the-canal hearing instruments.
Components are offered in a variety of sizes, colors and capacities in
order to accommodate a hearing manufacturer's individualized
specifications. Sales to hearing instrument manufacturers represented
approximately 91% of RTI's 1995 annual net sales.
Hearing instruments, which fit behind or in a person's ear to amplify and
process sound for a hearing impaired person, generally are composed of
four basic parts and several supplemental components for control or
fitting purposes. The four basic parts are microphones, amplifier
circuits, miniature receivers/speakers and batteries. RTI's hybrid
amplifiers are a type of amplifier circuit. Supplemental components
include volume controls, trimmer potentiometers, which shape sound
frequencies to respond to the particular nature of a person's hearing
loss, and switches used to turn the instrument on and off and to go from
telephone to normal speech modes. Faceplates and an ear shell molded to
fit the user's ear often serve as a housing for hearing instruments.
The potential range of applications for RTI's molded plastic parts is
broad. RTI has produced intravenous flow restrictors for a medical
instruments manufacturer and cellular telephone battery sockets for a
telecommunications equipment manufacturer. Sales to industries other
than the hearing instrument industry represented approximately 9% of
RTI's 1995 annual net sales.
RTI manufactures its components on a short lead-time basis in order to
supply "just-in-time" delivery to its customers. Due to the short lead-
time, the Company does not include orders from RTI's customers in its
published backlog figures.
Marketing and Competition. RTI sells its hearing instrument components
directly to domestic hearing instrument manufacturers through an internal
sales force. Sales of molded plastic parts to industries other than
hearing instrument manufacturers are made through independent sales
representatives. In recent years, three companies have accounted for a
substantial portion of the U.S.
-8-
ITEM 1. Business - (Continued)
hearing instrument sales. In 1995, these three customers accounted for
approximately 38% of RTI's net sales.
Internationally, sales representatives employed by Resistance Technology,
GmbH ("RT, GmbH"), a German company 80% of whose capital stock is owned
by RTI, solicit sales from European hearing instrument manufacturers and
facilitate sales with Japanese and Australian hearing instrument markets.
RTI believes that it is the largest supplier worldwide of microminiature
electromechanical components to hearing instrument manufacturers and that
its full product line and automated manufacturing process allow it to
compete effectively with other manufacturers with respect to these
products.
In the market of hybrid amplifiers and molded plastic faceplates, RTI's
primary competition is from the hearing instrument manufacturers
themselves. The hearing instrument manufacturers produce a substantial
portion of their internal needs for these components.
Operations. RTI currently employs 280 people, of whom 28 are executive
and administrative personnel and 252 are sales, engineering and
operations personnel at RTI's two facilities near Minneapolis, Minnesota.
A small number of sales personnel employed by RT, GmbH are located in
Munich, Germany.
As a consumer products manufacturer, RTI is subject to claims for
personal injuries allegedly caused by its products. While the Company
maintains what it believes to be adequate insurance coverage, it retains
a self-insured deductible under its liability insurance policies.
Research and Development. RTI conducts research and development
activities primarily to improve its existing products and technology.
RTI's research and development expenditures were $1,106,000, $896,000 and
$125,000 in 1995, 1994 and 1993, respectively. The expense for 1993
represents the part of the year it was owned by the Company.
RTI owns a number of United States patents which cover a number of
product designs and processes. The Company believes that, although these
patents collectively add some value to the Company, no one patent or
group of patents is of material importance to its business as a whole.
TIRE HOLDERS, LIFTS AND RELATED PRODUCTS
Deuer Manufacturing, Inc. ("Deuer"), a wholly-owned subsidiary,
manufactures tire holders, lifts, and other related products based
principally on cable winch designs.
Products and Industries Served. Deuer is a leading supplier of spare
tire holders used on light trucks and mini-vans manufactured by the major
domestic automotive manufacturers. Deuer's spare tire holder holds the
spare tire to the underbody of the vehicle by means of a steel cable
running to the underside of the vehicle's frame. One end of the steel
cable is attached to a hub placed through the
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ITEM 1. Business - (Continued)
center of the spare tire's rim, and the other end is attached to a hand-
operated winch mounted at an accessible location on the vehicle. The
spare tire holding system permits the spare tire to be stored in a remote
location and to be easily removed without the need to crawl under the
vehicle. During 1995, sales of spare tire holders accounted for
approximately 87% of Deuer's net sales.
Deuer also produces a variety of hand-operated hoist-pullers, using
primarily a cable winch design, sold under the Mini-MuleTM brand name.
These products, which retail from $30 to $60, are portable hand winches
designed for a variety of uses, such as pulling objects, rigging loads
and installing fencing. Deuer furnishes these hoist-pullers in a variety
of sizes and capacities. It also manufactures accessories for use with
the products, including slings, clamps, blocks and gantries.
Deuer manufactures products on a short lead time basis in order to
furnish "just-in-time" delivery to its automotive customers. Because of
the substantial variances between manufacturers' estimated and actual
requirements, the Company does not include blanket order commitments from
automotive manufacturers in its published backlog figures.
Marketing and Competition. Deuer sells its spare tire holders directly
to domestic automotive manufacturers. Deuer's spare tire holders are
sold to Chrysler Corporation, General Motors, Ford Motor Company and
Mobile Home Manufactures. The design and quality of Deuer's spare tire
holders have been recognized by its major customers. The Company sells
its hoist-pullers through a network of distributors as well as directly
to some large retail outlets.
Deuer is one of several suppliers of spare tire holders to domestic mini-
van and light truck manufacturers. Some of Deuer's competitors are
larger and have greater financial resources. The Company believes that
price and Deuer's reputation for quality and reliability of delivery are
important factors in competition for business from the domestic
automotive manufacturers. A number of other domestic and foreign
manufacturers sell hoist-pullers to the retail market, and Deuer's share
of this market is relatively small.
Operations. At its Dayton facility, Deuer employs 17 executive and
administrative personnel and approximately 136 manufacturing employees.
Some of the manufacturing employees are represented by a union, and the
current union contract expires in October 1998. Deuer considers its
relations with its employees to be satisfactory.
Deuer's principal raw material is coil rolled steel which is widely
available. Deuer also conducts research and development activities which
consist of the development of new products and technology and the
modification of existing products. Deuer's research and development
expenditures aggregated $171,000, $218,000 and $219,000 in 1995, 1994 and
1993, respectively.
As a consumer products manufacturer, Deuer is subject to claims for
personal injuries allegedly caused by its products. While the
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ITEM 1. Business - (Continued)
Company maintains what it believes to be adequate insurance coverage, it
retains a self-insured deductible under its liability insurance policies.
ITEM 2. Properties
The Company owns the manufacturing facility in Dresher, Pennsylvania in
which its standard-engineered systems, burners and combustion control
equipment are produced. The Company's headquarters are located on the
same 17 acre site. The 136,000 square foot Dresher facility has more
space than is currently needed for the Company's operations and
headquarters, and the Company is seeking to lease all or a portion of the
excess office and manufacturing space to a suitable tenant. This
property is subject to a mortgage. See note 8 of the Company's
consolidated financial statements.
RTI leases a 47,000 sq. ft. manufacturing facility in Arden Hills,
Minnesota from a partnership consisting of three officers of RTI, one of
whom, Mark S. Gorder, serves on the Company's Board of Directors. At
this facility, RTI manufactures all of its products other than plastic
component parts. The lease expires in October, 1996, but RTI has two
consecutive 5-year renewal options. In addition, RTI owns, subject to a
mortgage from a third party lender, a 20,000 sq. ft. building in Vadnais
Heights, Minnesota at which RTI produces plastic component parts. (See
notes 8 and 17 of the Company's consolidated financial statements.)
Deuer owns its 82,000 square foot manufacturing facility located on 6.5
acres in Dayton, Ohio, where it produces its spare tire holders and
hoist-pullers. The facility is furnished with a variety of steel
fabrication equipment, including punch presses, drill presses, screw
machines, grinders, borers, lathes and welders.
Deuer owns and leases an additional 11,000 square feet of excess space to
several tenants, principally for storage and office use. This and the
above designated Deuer property are subject to a mortgage. See note 8 of
the Company's consolidated financial statements.
Selas S.A. owns the land and building which houses its engineering, sales
and administrative operations in Gennevilliers, France (outside of
Paris). The land under the building is owned by Selas S.A. and the
property outside of the building is jointly owned by the building owners
in the office complex. The building has 22,000 square feet. This
property is subject to a mortgage. See note 8 of the Company's
consolidated financial statements.Selas Italiana S.r.L., the Companys
Italian subsidiary, and Selas
Waermetechnik GmbH, the Company's German subsidiary, lease facilities in
Milan, Italy and Ratingen, Germany, respectively. The Milan facilities,
are comprised of engineering, sales and administrative offices, and the
Ratingen facilities are used for sales, administrative and engineering
activities and assembly of small furnaces and furnace components and each
are on a year-to-year basis. Resistance Technology, GmbH, leases office
space in Munich, Germany, on a year-to-year basis, for its sales
personnel. Management expects to be able to extend these leases.
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ITEM 3. Legal Proceedings
The Company is a defendant along with a number of other parties in
approximately 112 lawsuits as of December 31, 1995 (210 as of December
31, 1994) alleging that plaintiffs have or may have contracted asbestos-
related diseases as a result of exposure to asbestos products or
equipment containing asbestos sold by one or more named defendants. Due
to the noninformative nature of the complaints, the Company does not know
whether any of the complaints state valid claims against the Company.
The Company is also one of approximately 500 defendants in a class action
on behalf of approximately 2700 present or former employees of a Texas
steel mill alleging that products supplied by the defendants created a
poisonous atmosphere that caused unspecified physical harm. These cases
are being defended by one or more of the Company's insurance carriers
presently known to be "at risk." Through October 1993, the legal costs
of defense of the asbestos and steel mill cases were shared among the
insurance carriers (92%) and the Company (8%). The lead insurance
carrier settled a number of the cases in 1993 and requested that the
Company pay a portion of the settlement amount. The Company declined to
do so because no such payment is required by the express terms of the
policies. The lead carrier then purported in October 1993 to abrogate
the arrangement under which the defense costs had been shared, and the
Company responded by tendering all of the cases to the lead carrier and
demanding that the lead carrier honor its obligations under its policies
to pay 100% of the costs of defense and 100% of all settlements and
judgments up to the policy limits. The lead carrier has settled
approximately 98 and 450 claims in 1995 and 1994, respectively with no
request for the Company to participate in any settlement.
In 1995, a dispute arose under a contract between a customer and a
subsidiary of the Company that was submitted to arbitration. The
customer alleged that the subsidiary had breached the contract and that
the customer was entitled to recision of the contract. The Company
recorded revenue of approximately $1,400,000 under the contract in 1994
and had, as of December 31, 1995, a current billed receivable of $140,000
for the balance of the aggregate amount due under the contract. The
subsidiary of the Company has contested the customer's claims in the
arbitration proceeding.
ITEM 4. Submission of Matters to a Vote of Security Holders
None
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ITEM 4A. Executive Officers of the Company
The names, ages and offices (as of February 28, 1996) of the Company's
officers were as follows:
Name Age Office
Stephen F. Ryan 60 President and Chief
Executive Officer
Christian Bailliart 47 Vice President and Chairman-
Director Generale of Selas S.A.
Frank J. Boyle 66 Vice President, Sales and
Engineering
James C. Deuer 68 Vice President and President
of Deuer Manufacturing, Inc.
Mark S. Gorder 49 Vice President and President of
Resistance Technology, Inc.
Robert W. Ross 47 Vice President, Chief Financial
Officer, Treasurer and Secretary
Mr. Ryan joined the Company in May 1988, as President and Chief Executive
Officer. Mr. Bailliart joined Selas S.A. in 1974 and in January 1, 1993
was promoted to Vice President of the Company and Chairman-Director
Generale of Selas S.A. In 1989 he was promoted to Chairman-Director
Generale of Selas S.A. from Vice President,
Treasurer. Mr. Boyle joined the Company in 1961 and has held various
management positions in research and development, applications
engineering and sales. He was appointed Vice President-Sales and
Engineering in July 1988. Mr. Deuer joined the Company as President of
Deuer Manufacturing when it was acquired in May, 1986 and was promoted to
Vice President of the Company and President of Deuer Manufacturing in
December, 1990. From 1965 to 1986 he was President of Deuer
Manufacturing. Mr. Gorder joined the Company October 20, 1993 when
Resistance Technology, Inc. (RTI) was acquired. Prior to the
acquisition, Mr. Gorder was President and one of the founders of RTI,
which began operations in 1977. Mr. Gorder was promoted to Vice
President of the Company and elected to the Board of Directors in 1996.
Mr. Ross joined the Company in October 1990 as Vice President -
Treasurer, was elected to Chief Financial Officer January 1, 1994 and
Secretary February 21, 1995. From 1981 to 1990 he was with ALPO Pet
Foods, a division of Grand Metropolitan PLC, as a Controller from 1981
and as Vice President, Controller from 1988.
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PART II
ITEM 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The Company's common shares are listed on the American Stock Exchange.
The high and low sale prices during each quarterly period during the
past two years were as follows:
1995 1994
Market Market
Price Range Price Range
QUARTER HIGH LOW HIGH LOW
First 10 8-5/8 15-5/8 13
Second 9-3/4 7-7/8 13-3/4 10-1/2
Third 8-3/4 7-3/8 12-3/8 10-3/4
Fourth 9-7/8 7-3/16 11-1/2 9-1/2
At March 1, 1996, the Company had 589 shareholders of record.
The payment of any future dividends is subject to the discretion of the
Board of Directors and is dependent on a number of factors, including the
Company's capital requirements, financial condition, financial covenants
and cash availability.
1995 1994 1993
Dividends per share:
First Quarter $.055 $.05 $.05
Second Quarter .055 .05 .05
Third Quarter .06 .05 .05
Fourth Quarter .06 .055 .05
ITEM 6. Selected Financial Data
Certain selected financial data is incorporated by reference to "Selas
Corporation of America Five-Year Summary of Operations", page 4, and
"Other Financial Highlights" (excluding graphs), page 5, of the Company's
1995 annual report to shareholders.
ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Management's Discussion and Analysis is incorporated by reference to
pages 6 through 8 of the Company's 1995 annual report to shareholders.
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ITEM 8. Financial Statements and Supplementary Data
The Company's consolidated balance sheets as of December 31, 1995 and
1994, and the related consolidated statements of operations, cash flows
and shareholders' equity for each of the three years in the period ended
December 31, 1995, and the report of independent auditors thereon and the
quarterly results of operations (unaudited) for the two year period ended
December 31, 1995 are incorporated by reference to pages 9 to 30 of the
Company's 1995 annual report to shareholders.
ITEM 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
None
-15-
PART III
The information called for by Items 10, 11, 12 and 13 (except the
information concerning executive officers included in Item 4A) is
incorporated by reference to the Company's definitive proxy statement
relating to its 1996 Annual Meeting which the Company filed on March 15,
1996. However, the portions of such proxy statement constituting the
report of the Compensation Committee of the Board of Directors and the
graph showing performance of the Company's common shares and certain
share indices shall not be deemed to be incorporated herein or filed for
purposes of the Securities Exchange Act of 1934.
-16-
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) The following documents are filed as a part of this
report:
1. Financial Statements - The Company's consolidated financial
statements, as described below, are incorporated by reference to
pages 9 through 30 of the Company's 1995 annual report to
shareholders.
Consolidated Balance Sheet at December 31, 1995 and 1994.
Consolidated Statements of Operations for the years ended December
31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows for the years ended December
31, 1995, 1994 and 1993.
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
Financial statements for 50% or less owned companies which are
accounted for by the equity method have been omitted because they do
not, considered individually or in the aggregate, constitute
significant subsidiaries.
2. Financial Statement Schedules
Page
Report of Independent Auditors on the Consoli-
dated Financial Statements and Consolidated
Financial Statement Schedules 19
Schedule I - Condensed Financial Information
of Registrant (Parent only) 20,21,22,23
Schedule II - Valuation and Qualifying
Accounts 24, 25
All other schedules are omitted because they are
not applicable, or because the required information
is included in the consolidated financial statements or notes
thereto.
3. Exhibits
2. Stock Purchase and Sale Agreement dated September 27, 1993 by and
among the Company, RTI and the shareholders of RTI. Exhibit 2 to
the Company's report on Form 8-K filed on November 3, 1993 is hereby
incorporated by reference.
-17-
ITEM 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K - (Continued)
3A. The Company's Articles of Incorporation as amended May 18,
1984 and April 25, 1991. Exhibit 3A to the Company's report on Form
10-K for the year ended December 31, 1984 and Exhibit 3A1 to the
Company's report on Form 10-K for the year ended December 31, 1991
are hereby incorporated herein by reference.
3B. The Company's By-Laws as amended through January 8, 1996.
4A. Credit Agreement dated October 20, 1993 by and among First Fidelity
Bank, N.A., Pennsylvania, the Company, RTI and Deuer. Exhibit 4A to
the Company's report on Form 10-K for the year ended December 31,
1993 is hereby incorporated by reference.
4B. Term Note, dated October 20, 1993, of the Company in favor of First
Fidelity Bank, N.A., Pennsylvania. Exhibit 4(b) to the Company's
report on Form 8-K filed on November 3, 1993 is hereby incorporated
by reference.
4C. Amended Credit Agreement dated July 21, 1995 which amends the Credit
Agreement dated October 20, 1993 by and among First Fidelity Bank,
N.A., Pennsylvania, the Company, RTI and Deuer.
4D. Amended and Restated Revolving Credit Note, dated July 21, 1995, of
the Company in favor of First Fidelity Bank, N.A. Pennsylvania.
4E. Amended and Restated Revolving Credit Note, dated July 21, 1995, of
RTI in favor of First Fidelity Bank, N.A., Pennsylvania.
4F. Amended and Restated Revolving Credit Note, dated July 21, 1995, of
Deuer in favor of First Fidelity Bank, N.A., Pennsylvania.
10A. Form of termination agreement between the Company and Messrs. Ryan,
Boyle, Deuer and Ross. Exhibit 10A to the Company's report on Form
10-K for the year ended December 31, 1994 is hereby incorporated by
reference.
10B. 1985 Stock Option Plan, as amended. Exhibit
10C to the Company's Registration Statement on Form S-2 filed on
June 15, 1990 (No. 33-35443) is hereby incorporated herein by
reference.
10C. Form of Stock Option Agreements granted under the 1985 Stock Option
Plan. Exhibit 10D to the Company's Registration Statement on Form
S-2 filed on June 15, 1990 (No. 33-35443) is hereby incorporated
herein by reference.
10D. Form of Amendments to Stock Option Agreements granted under the 1985
Stock Option Plan. Exhibit 10E to the Company's Registration
Statement on Form S-2 filed on June 15, 1990 (No. 33-35443) is
hereby incorporated herein by reference.
-18-
ITEM 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K - (Continued)
10E. 1994 Stock Option Plan. Exhibit 10E to the Company's report on Form
10-K for the year ended December 31, 1993 is hereby incorporated by
reference.
10F. Form of Stock Option Agreements granted under the 1994 Stock Option
Plan.
10G. Agreement between Selas S.A., a wholly-owned subsidiary, and
Europarc Gennevilliers dated May 16, 1991 relating to the purchase
of land and building to house its operations in France, accompanied
by an English translation. Exhibit 10E to the Company's report on
Form 10-K for the year ended December 31, 1991 is hereby
incorporated by reference.
10H. Amended and Restated Executive Incentive Plan. Exhibit 10G to the
Company's report on Form 10-K for the year ended December 31, 1994
is hereby incorporated by reference.
10I. Supplemental Retirement Plan (amended and restated effective January
1, 1995).
10J. Management Employment Agreement dated October 20, 1993 between
Resistance Technology, Inc. and Mark S. Gorder.
13. "Selas Corporation of America Five-Year Summary of Operations"
contained on page 4 of the Company's 1995 annual report to
shareholders; "Other Financial Highlights" (excluding graphs)
contained on page 5 of the company's 1995 annual report to
shareholders; "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained on pages 6-8 of the
Company's 1995 annual report to shareholders; and the Company's
consolidated financial statements, including the "Notes to
Consolidated Financial Statements" and the "Report of Independent
Auditors" contained on pages 9-30 of the Company's 1995 annual
report to shareholders.
21. List of significant subsidiaries of the Company.
23. Consent of Independent Auditors.
24. Powers of Attorney.
99. Portions of the Company's definitive proxy statement for its 1996
Annual Meeting of shareholders responsive to Items 10, 11, 12 and 13
in Part III hereof, which was filed prior to March 15, 1996, are
hereby incorporated herein by reference. However, the portions of
such proxy statement constituting the report of the Compensation
Committee of the Board of Directors and the graph showing
performance of the Company's common shares and certain share indices
shall not be deemed to be incorporated herein or filed for purposes
of the Securities Exchange Act of 1934.
(b) Reports on Form 8-K - There were no reports on
Form 8K filed for the three months ended December 31, 1995.
-19-
REPORT OF INDEPENDENT AUDITORS ON FINANCIAL STATEMENT SCHEDULES
The Board of Directors and Shareholders
Selas Corporation of America:
We have audited the consolidated financial statements of Selas
Corporation of America and subsidiaries as listed in the accompanying
index. In connection with our audits of the consolidated financial
statements, we also have audited the financial statement schedules as
listed in the accompanying index. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Selas
Corporation of America and subsidiaries as of December 31, 1995 and 1994,
and the results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 1995, in conformity
with generally accepted accounting principles. Also in our opinion, the
related financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
Philadelphia, Pennsylvania
February 12, 1996
-20-
SCHEDULE I
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
Condensed Financial Information of Registrant
Balance Sheets
December 31, 1995 and 1994
ASSETS 1995 1994
Current assets:
Cash $ 1,378,267 $ 4,318,953
Accounts receivable (including
$6,428,864 and $3,768,318 due from
subsidiaries in 1995 and 1994,
respectively, eliminated in con-
solidation), less allowance for doubt-
ful accounts of $10,000 in both years 10,191,115 5,266,608
Inventories, at cost 3,170,396 3,213,006
Prepaid expenses and other current
assets 850,367 955,180
Total current assets 15,590,145 13,753,747
Investment in wholly-owned subsidiaries 39,853,600 38,685,502
Property and equipment, at cost 5,594,309 5,403,914
Less: accumulated depreciation (4,315,616) (4,152,988)
1,278,693 1,250,926
Other assets and investment in
unconsolidated affiliate 1,527,661 1,894,514
Total Assets $58,250,099 $55,584,689
=========== ===========
-21-
SCHEDULE I
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
Condensed Financial Information of Registrant
Balance Sheets
December 31, 1995 and 1994
LIABILITIES AND SHAREHOLDERS' EQUITY 1995 1994
Current liabilities:
Notes payable and current maturities
of long term debt $ 1,900,000 $ 2,150,000
Accounts payable (including $8,582,000
and $4,976,689 due to subsidiaries
in 1995 and 1994, respectively,
eliminated in consolidation) 9,224,558 5,891,721
Accrued expenses 2,667,584 2,631,136
Total current liabilities 13,792,142 10,672,857
Long-term debt 5,851,117 7,750,000
Other postretirement benefit obligations 3,513,715 3,451,327
Deferred income taxes 116,767 120,792
Pension plan obligation 320,184 491,800
Contingencies and commitments
Shareholders' equity
Common stock 3,702,426 3,697,426
Retained earnings and other equity 31,335,685 29,782,424
Less: 242,376 common shares held in
treasury, at cost (381,937) (381,937)
Total shareholders' equity
34,656,174 33,097,913
Total Liabilities and
Shareholders' Equity $58,250,099 $55,584,689
=========== ===========
See accompanying notes to the consolidated financial statements.
-22-
SCHEDULE I
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
Sales - net $13,729,233 $ 8,889,438 $10,168,291
Add back: license fees and
corporate charges paid by
subsidiaries, eliminated in
consolidation 720,192 992,930 1,042,831
14,449,425 9,882,368 11,211,122
Costs and expenses:
Cost of goods sold 8,289,761 5,638,307 7,765,096
Selling, general and adminis-
trative expenses 3,467,857 3,644,655 2,777,091
Rent and depreciation 337,845 305,321 307,705
12,095,463 9,588,283 10,849,892
Income before income taxes and
equity in net income of
subsidiaries 2,353,962 294,085 361,230
Provision for income taxes 927,328 20,614 12,356
Income before equity in net
income of subsidiaries 1,426,634 273,471 348,874
Equity in net income of
subsidiaries 873,390 2,830,568 998,597
Net income $ 2,300,024 $ 3,104,039 $ 1,347,471
=========== =========== ==========
See accompanying notes to the consolidated financial statements.
-23-
SCHEDULE I
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
CONDENSED FINANCIAL STATEMENTS OF THE REGISTRANT
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
OPERATING ACTIVITIES
Net income $ 2,300,024 $ 3,104,039 $1,347,471
Adjustments to reconcile net
income to net cash provided
(used) by operating
activities:
Depreciation and
amortization 201,806 186,666 187,224
Other adjustments (814,239) (2,954,973) (1,143,984)
Net changes in operating
assets and liabilities (1,495,030) 2,282,576 527,616
Net cash provided by operating
activities 192,561 2,618,308 918,327
INVESTING ACTIVITIES
Dividend from unconsolidated
affiliate -- 34,538 93,669
Acquisition of subsidiary
company -- (16,601)(19,004,852)
Return of investment in
subsidiary company -- -- 1,500,000
Purchase of property, plant and
equipment (217,158) (99,331) (62,821)
Proceeds of sale from property,
plant and equipment 325 75 4,000
Net cash (used) by investing
activities (216,833) (81,319)(17,470,004)
FINANCING ACTIVITIES
Proceeds from borrowings used
to acquire subsidiary -- 1,600,000 9,950,000
Proceeds from exercise of
stock options 28,281 124,437 141,406
Repayments of short term
borrowings -- (1,600,000) (200,000)
Payment of dividends (795,812) (708,085) (645,060)
Repayment of long term debt (2,148,883) (1,650,000) --
Net cash provided (used) by
financing activities (2,916,414) (2,233,648) 9,246,346
Increase (decrease) in cash
and cash equivalents (2,940,686) 303,341 (7,305,331)
Cash and cash equivalents,
beginning of year 4,318,953 4,015,612 11,320,943
Cash and cash equivalents, end
of year $ 1,378,267 $ 4,318,953 $ 4,015,612
=========== =========== ===========
See accompanying notes to the consolidated financial statements.
-24-
SCHEDULE II
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1995, 1994 and 1993
Column A Column B Column C
Additions
Balance at Charged to
Beginning Costs and
Classification of Period Expenses Other
Year ended December 31, 1995:
Reserve deducted in the balance
sheet from the asset to which
it applies:
Allowance for doubtful
accounts $ 513,045 $ 284,475 $ 36,136 (a)
========== ========== ==========
Deferred tax asset
valuation allowance $2,203,780 $ 412,646 $ 68,879 (a)
========== ========== ==========
Reserve not shown elsewhere:
Reserve for estimated future
costs of service and
guarantees $1,156,296 $ 119,903 $ 58,134 (a)
========== ========== ==========
Year ended December 31, 1994:
Reserves deducted in the balance
sheet from the asset to which
they apply:
Allowance for doubtful
accounts $ 468,308 $ 25,879 $ 38,639 (a)
========== ========== ==========
Deferred tax asset
valuation allowance $2,102,682 $ (2,933) $ 104,031 (a)
========== ========== ==========
Reserve not shown elsewhere:
Reserve for estimated future
costs of service and
guarantees $ 774,652 $ 529,680 $ 44,821 (a)
========== ========== ==========
Year ended December 31, 1993:
Reserve deducted in the balance
sheet from the asset to which
they apply:
Allowance for doubtful
accounts $ 446,405 $ 13,183 $ 47,763 (a,d)
========== ========== =========
Deferred tax asset
valuation allowance $1,881,028 $ 305,263 $ (83,609) (a)
========== ========== ==========
Reserve not shown elsewhere:
Reserve for estimated future
costs of service and
guarantees $1,020,910 $ 198,990 $ (29,526) (a)
========== ========== ==========
(Continued)
-25-
SCHEDULE II
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 1995, 1994 and 1993
Column A Column D Column E
Balance at
End of
Classification Deductions Period
Year ended December 31, 1995:
Reserve deducted in the balance sheet
from the asset to which it applies:
Allowance for doubtful accounts $ 41,407 (b) $ 792,249
========== ==========
Deferred tax asset valuation allowance $ -- $2,685,305
========== ==========
Reserve not shown elsewhere:
Reserve for estimated future costs
of service and guarantees $ 489,546 (c) $ 844,787
========== ==========
Year ended December 31, 1994:
Reserves deducted in the balance sheet
from the asset to which they apply:
Allowance for doubtful accounts $ 19,781 (b) $ 513,045
========== ==========
Deferred tax asset valuation allowance -- $2,203,780
========== ==========
Reserve not shown elsewhere:
Reserve for estimated future costs of
service and guarantees $ 192,857 (c) $1,156,296
========== ==========
Year ended December 31, 1993:
Reserve deducted in the balance sheet
from the asset to which they apply:
Allowance for doubtful accounts $ 39,043 (b) $ 468,308
========== ==========
Deferred tax asset valuation allowance -- $2,102,682
========== ==========
Reserve not shown elsewhere:
Reserve for estimated future costs
of service and guarantees $ 415,722 (c) $ 774,652
========== ==========
(a) Represents difference between translation rates of foreign
currency at beginning and end of year and average rate during year.
(b) Uncollectible accounts charged off.
(c) "After job" costs charged to reserve.
(d) Represents increase resulting from acquisition of RTI.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SELAS CORPORATION OF AMERICA
(Registrant)
By: /s/ Robert W. Ross
Robert W. Ross
Vice President and
Chief Financial Officer
Dated: March 19, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons (including a
majority of members of the Board of Directors) on behalf of the
registrant and in the capacities and on the dates indicated.
*By: /s/ Stephen F. Ryan
Stephen F. Ryan Stephen F. Ryan
Attorney-In-Fact President, Chief Executive
March 19, 1996 Officer and Director
March 19, 1996
* /s/ Robert W. Ross
John H. Austin, Jr. Robert W. Ross
Director Vice President, Principal
March 19, 1996 Financial and Accounting Officer
March 19, 1996
*
Frederick L. Bissinger
Director
March 19, 1996
*
Roy C. Carriker
Director
March 19, 1996
*
Francis J. Dunleavy
Director
March 19, 1996
*
Mark S. Gorder
Director
March 19, 1996
*
Ralph R. Whitney, Jr.
Director
March 19, 1996
EXHIBIT INDEX
EXHIBITS:
3B. The Company's By-Laws as amended through January 8, 1996.
4C. Amended Credit Agreement dated July 21, 1996 which amends the
Credit Agreement dated October 20, 1993 by and among First Fidelity
Bank, N.A., Pennsylvania, the Company, RTI and Deuer.
4D. Amended and Restated Revolving Credit Note, dated July 21, 1995, of
the Company in favor of First Fidelity Bank, N.A., Pennsylvania.
4E. Amended and Restated Revolving Credit Note, dated July 21, 1995, of
RTI in favor of First Fidelity Bank, N.A., Pennsylvania.
4F. Amended and Restated Revolving Credit Note, dated July 21, 1995, of
Deuer in favor of First Fidelity Bank, N.A., Pennsylvania.
10F. Form of Stock Option Agreements granted under the 1994 Stock Option
Plan.
10I. Supplemental Retirement Plan (amended and restated effective
January 1, 1995).
10J. Management Employment Agreement dated October 20, 1993 between
Resistance Technology, Inc. and Mark S. Gorder.
21. List of significant subsidiaries of the Company.
23. Consent of Independent Auditors.
24. Powers of Attorney.
EXHIBIT 3B
Amended through 1/8/96
BY-LAWS
of
SELAS CORPORATION OF AMERICA
(A Pennsylvania Corporation)
MEETINGS OF SHAREHOLDERS
Section 1.01. Place of Meeting. Meetings
of shareholders of the Corporation shall be held at such place, within
the Commonwealth of Pennsylvania or elsewhere, as may be fixed by the
Board of Directors. If the Board shall not fix a place for such meetings,
they shall be held at the Offices of the Corporation in
Dresher, Pennsylvania.
Section 1.02. Annual Meeting. The Annual
Meeting of Shareholders for the election of Directors and the transaction
of any further business that may be brought before the meeting, shall,
unless the Board of Directors shall fix some other hour or day therefore,
be held at 2 o'clock p.m. on the last Tuesday in April of each year, if
not a legal holiday under the laws of the Commonwealth of Pennsylvania,
and, if a legal holiday, then on the next succeeding secular day not a
legal holiday under the laws of said Commonwealth. If for any reason
such meeting should not be held at the time fixed therefor, such election
may be held at a subsequent meeting called for that purpose.
Section 1.03. Notice of Meetings. Notice
of every Annual Meeting of Shareholders shall be given by the Secretary.
Notice of all meetings of shareholders
shall be given to each shareholder of record entitled to vote at the
meeting, at least ten days prior to the day named for the meeting, unless
a greater period of notice is by law required in a particular case.
Section 1.04. Organization. At every
meeting of the shareholders, the President, or in his absence, a Vice
President shall act as Chairman; and the Secretary, or in his absence, a
person appointed by the Chairman, shall act as Secretary.
Section 1.05. Voting. Except as otherwise
specified herein or in the Articles or provided by law, all matters shall
be decided by the vote of the holders of a majority of the outstanding
shares entitled to vote, present in person or represented by proxy, at a
meeting at which a quorum shall be present, though such a majority be
less than a majority of all the shares entitled to vote thereon.
In each election for Directors, the
candidates receiving the highest number of votes, up to the number of
Directors to be elected in such election, shall be elected.
II. DIRECTORS
Section 2.01. Number,
Classification, Term of Office and Removal of Directors.
(a) The number of
Directors of the Corporation shall be seven.
(b) The Directors shall
be classified with respect to the time for which they shall severally
hold office. The Board of Directors shall be divided into three classes
of Directors, as nearly equal in number of Directors as possible, to be
known as Classes "A", "B", and "C". Class A Directors shall each be
elected and hold office initially for one (1) year, or until the next
annual election; Class B Directors shall be elected and hold office
initially for two (2) years or until the second annual election; and
Class C Directors shall each be elected and hold office initially for
three (3) years, or until the third annual election. Each Director shall
hold office for the term for which he is elected and until his successor
shall have been elected and qualified. At each annual election, the
successors to the class of Directors whose term shall expire in that year
shall be elected to hold office for the term of three (3) years, so that
the term of office of one class of Directors shall expire each year. If
the number of Directors is changed, any newly-created directorships or
any decrease in directorships shall be so apportioned among the classes
so as to make all classes as nearly equal in number as possible. Any
Director or the entire Board of Directors may be removed with or without
cause only upon the affirmative vote of two-thirds (2/3) of all of the
shares outstanding and entitled to vote; provided that the Board of
Directors shall retain the right conferred by Section 405B of the
Pennsylvania Business Corporation Law, as amended from time to time, to
declare vacant the office of a Director for the reasons specified
therein.
Section 2.02. Resignations. Any Director
may resign at any time by giving written notice to the Board of Directors
or to the Secretary. Such resignation shall take effect at the date of
the receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 2.03. Annual Meeting. Immediately
after each annual election of Directors, the Board of Directors shall
meet for the purpose of organization, election of Officers, and the
transaction of other business, at the place where such election of
Directors was held. Notice of such meeting need not be given. In the
absence of a quorum at said meeting, the same may be held at any other
time or place which shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors.
Section 2.04. Regular Meetings. Regular
meetings of the Board of Directors shall be held at such time and place
as shall be designated from time to time by standing resolution of the
Board. If the date fixed for any such regular meeting be a legal holiday
under the laws of the State where such
meeting is to be held, then the same shall be held on the next
succeeding secular day not a legal holiday under the laws of said State,
or at such other time as may be determined by resolution of the Board.
At such meetings, the Directors may transact such business as may be
brought before the meeting.
Section 2.05. Special Meetings. Special
meetings of the Board of Directors may be called by the President, by a
Corporate Vice President, by the Secretary, or by two or more of the
Directors, and shall be held at such time and place as shall be
designated in the call for the meeting.
Section 2.06. Notice of Meetings. Written
notice of each special meeting shall be given, by or at the direction of
the person or persons authorized to call such meeting, to each Director
at least two days prior to the day named for the meeting.
Notice of regular meetings need not be
given.
Section 2.07. Organization. At every
meeting of the Board of Directors, a Chairman chosen by a majority of the
Directors present, shall preside, and the Secretary, or in his absence,
any person appointed by the presiding officer, shall act as Secretary.
Section 2.08. Compensation of Directors.
Each Director shall receive such compensation as from time to time may be
fixed by the Board. Directors may also be reimbursed by the Corporation
for all reasonable expenses incurred in traveling to and from the place
of each meeting of the Board or any committee thereof.
Section 2.09. Indemnification and Liability of Directors and
Officers.
A. Personal Liability of Directors. A
director of the Corporation shall not be personally liable for monetary
damages for any action taken, or any failure to take any action, as a
director to the extent that under the terms of the Director's Liability
Act, 42 Pa. Cons. Stat. Para. 8361 et seq., as modified by any
Pennsylvania statute thereafter enacted, a director's liability for
monetary damages may not be limited.
B. Indemnification. The Corporation shall
indemnify any person who was or is a party (other than a party plaintiff
suing in his own behalf or in the right of the Corporation) or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, including actions by or in the right of the
Corporation, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director or officer of
the Corporation, or is or was serving while a director or officer of the
Corporation at the request of the Corporation as a director, officer,
employee, agent fiduciary or other representative of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorney's fees), judgements,
fines, excise taxes and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit
or proceeding unless the act or failure to act giving rise to the claim
for indemnification is determined by a court to have constituted willful
misconduct or recklessness.
C. Advancement of Expenses. Expenses
actually and reasonably incurred by an officer or director of the
Corporation in defending a civil or criminal action, suit or proceeding
described in paragraph B shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding (regardless of
the financial condition of such director or officer) upon receipt of an
undertaking by or on behalf of such person to repay such amount if it
shall ultimately be determined that the person is not entitled to be
indemnified by the Corporation.
D. Other Rights. The indemnification and
advancement of expenses provided by or pursuant to this Section shall not
be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under the
Corporation's Articles of Incorporation, any insurance or other
agreement, vote of shareholders or directors or otherwise, both as to
actions in their official capacity and as to actions in another capacity
while holding an office, and shall continue as to a person who has ceased
to be a director or officer and shall inure to the benefit of the heirs,
executors and administrators of such person.
E. Insurance. The Corporation shall have
the power to purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against any
liability asserted against and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under the
provisions of these By-laws.
F. Security Fund; Indemnity Agreements.
By action by the Board of Directors (notwithstanding their interest in
the transaction) the Corporation may create and fund a trust fund or fund
of any nature, and may enter into agreements with its directors,
officers, employees and agents for the purpose of securing or insuring in
any manner its obligation to indemnify or advance expenses provided for
in this Section.
G. Modification. The duties of the
Corporation to indemnify and to advance expenses to a director or officer
provided in this Section shall be in the nature of a contract between the
Corporation and each such director or officer, and no amendment or repeal
of any provision of this Section, and no amendment or termination of any
trust or other fund created pursuant to Paragraph F, shall alter, to the
detriment of such director or officer, the right of such person to the
advance of expenses or indemnification related to a claim based on an act
or failure to act which took place prior to such amendment, repeal or
termination.
Section 2.10. Participation in Meetings.
One or more directors may participate in a meeting of the Board or a
committee of the Board by means of conference telephone or similar
communications equipment by which all persons participating at the
meeting can hear each other.
III. COMMITTEES
Section 3.01. Executive Committee. The
Board of Directors shall have authority to appoint an Executive
Committee comprised of members of the Board of Directors. If such
Executive Committee be appointed, it shall have such duties and
responsibilities as shall be conferred upon it from time to time by the
Board of Directors, including the right to act as to matters arising
between meetings of the Board, except as to matters which, by law,
require action by the Board. If so appointed, the Executive Committee
shall report on its actions to the Board from time to time as appropriate
or as may be requested by the Board.
Section 3.02. Other Committees. The Board
of Directors may at any time and from time to time, appoint such standing
committees and/or such special committees, consisting of Directors or
others, to perform such duties and make such investigations and reports
as the Board shall by resolution determine. Such committees shall
determine their own organization and times and places of meeting, unless
otherwise directed by such resolution.
IV. OFFICERS
Section 4.01. Number. The Officers of the
Corporation shall be a President, a Secretary, a Treasurer and
may include one or more Corporate Vice Presidents, and a Controller, and
such other Officers and Assistant Officers as the Board of Directors may
from time to time designate.
Section 4.02. Qualifications. Any two or
more offices may be held by the same person, except that the offices of
President and Secretary or Assistant Secretary shall not be held by the
same person. The Officers shall be natural persons of full age.
Section 4.03. Election and Term of Office.
The Officers of the Corporation shall be chosen by the Board of Directors
at its Annual Meeting, but the Board may choose Officers or fill any
vacancies among the Officers at any other meeting. Subject to earlier
termination of office, each Officer shall hold office for one year and
until his successor shall have been duly chosen and qualified.
Section 4.04. Resignations. Any Officer
may resign at any time by giving written notice to the Board of
Directors, or to the President, or to the Secretary of the Corporation.
Any such resignation shall take effect at the date of the receipt of such
notice or at any later time specified therein; and unless otherwise
specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 4.05. Duties.
(a) The President. The President shall be
the Chief Executive Officer of the Corporation and shall have
general supervision over the business affairs of the Corporation, shall
sign, or countersign, all share certificates, contracts or other
instruments of the Corporation as authorized by the Board of Directors,
except in cases where the signing and execution thereof shall be
expressly designated by the Board to some other officer or agent of the
Corporation; shall make reports to the Board of Directors and
shareholders and shall perform such other duties as are incident to his
office or are properly required of him by the Board of Directors.
(b) The Vice Presidents. In the absence
or disability of the President, any Corporate Vice President designated
by the Board of Directors may perform all the duties of the President,
and, when so acting, shall have all the powers and be subject to all the
restrictions upon the President; provided, however, that no Corporate
Vice President shall act as a member of, or as Chairman of, any special
committee of which the President is a member, except when designated by
the Board of Directors. The Corporate Vice Presidents shall perform such
other duties as from time to time may be assigned to them by the Board of
Directors or the President.
(c) The Secretary. The Secretary shall
record all the votes of the shareholders and of the Directors and the
minutes of the meetings of the shareholders and of the Board of Directors
in a book or books to be kept for that purpose; he shall see that notices
of meetings of the Board and shareholders are given and that all records
and reports are properly kept and filed by the Corporation as required by
law; he shall be the custodian of the Seal of the Corporation, and shall
see that it is affixed to all documents to be executed on behalf of the
Corporation under its Seal; and, in general, he shall perform all duties
incident to the office of the Secretary, and such other duties as may
from time to time be assigned to him by the Board of Directors or the
President.
(d) Assistant Secretaries. In the absence
or disability of the Secretary, or when so directed by the Secretary, any
Assistant Secretary may perform all the duties of the Secretary, and,
when so acting, shall have all the powers of and be subject to all the
restrictions placed upon the Secretary. The Assistant Secretaries shall
perform such other duties from time to time as may be assigned to them
respectively by the Board of Directors, the President or the Secretary.
(e) The Treasurer. The Treasurer shall
have charge of all receipts and disbursement of the Corporation, and
shall have or provide for the custody of its funds and securities; he
shall have full authority to receive and give receipts for all money due
and payable to the Corporation, and to endorse checks, drafts, warrants
in its name and on its behalf and to give full discharge for the same;
he shall deposit all funds of the Corporation, except such as may be
required for current use, in such banks or other places of deposit as the
Board of Directors may from time to time designate; and, in general, he
shall perform all duties incident to the office of Treasurer and such
other duties as may from time to time be assigned to him by the Board of
Directors or the President.
(f) Assistant Treasurers. In the absence
or disability of the Treasurer, or when so directed by the Treasurer, any
Assistant Treasurer may perform all the duties of the Treasurer, and,
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. The Assistant Treasurers shall perform
such other duties as from time to time may be assigned to them
respectively by the Board of Directors, the President or the Treasurer.
Section 4.06. Compensation of Officers and
Others. The compensation of all Officers shall be fixed from time to
time by the Board of Directors, or by any committee or Officer authorized
by the Board so to do. No Officer shall be precluded from receiving such
compensation by reason of the fact that he is also a Director of the
Corporation.
Additional compensation, fixed as above,
may be paid to any Officers or employees for any year or years, based
upon the success of the operations of the Corporation during such year.
V. BORROWING, DEPOSITS, PROXIES, ETC.
Section 5.01. Borrowing, etc. No Officer,
agent or employee of the Corporation shall have any power or authority
to borrow money on its behalf, to pledge its credit or to mortgage or
pledge its real or personal property, except within the scope and to the
extent of the authority delegated by resolution of the Board of
Directors. Authority may be given by the Board for any of the above
purposes and may be general or limited to specific instances.
Section 5.02. Deposits. All funds of the
Corporation shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as the
Board of Directors may approve or designate, and all such funds shall be
withdrawn only upon checks signed by such one or more Officers or
employees as the Board shall from time to time determine.
Section 5.03. Proxies. Unless otherwise
ordered by the Board of Directors, any Officer of the Corporation may
appoint an attorney or attorneys (who may be or include such Officer
himself), in the name and on behalf of the Corporation, to cast the votes
which the Corporation may be entitled to cast as a shareholder or
otherwise in any other corporation any of whose shares or other
securities are held by or for the Corporation, at meetings of the holders
of the shares or other securities of such other corporation, or, in
connection with the ownership of such shares or other securities, to
consent in
writing to any action by such other corporation, and may instruct the
person or persons so appointed as to the manner of casting such votes or
giving such consent, and may execute or cause to be executed in the name
of and on behalf of the Corporation and under its Seal such written
proxies or other instruments as he may deem necessary or proper in the
premises.
Section 5.04. Non-Applicability of Certain Provisions of Law.
The provisions of Subchapters E, G and H of Chapter 25 of the
Pennsylvania Business Corporation Law of 1988, as amended, and any
corresponding provisions of succeeding law shall not be applicable to the
Corporation.
VI. SHARE CERTIFICATES; TRANSFER
Section 6.01. Share Certificates. To the extent permitted by
law, share certificates shall be signed by the
President, or a Corporate Vice President and by the Secretary or the
Treasurer, or by an Assistant Secretary or Assistant Treasurer of the
Corporation, but, to the extent permitted by law, such signatures may be
facsimiles, engraved or printed.
Section 6.02. Transfer of Shares. Transfer of share
certificates and the shares represented thereby shall be made only on the
books of the Corporation by the owner thereof or by his attorney
thereunto authorized, by a power of attorney duly executed and filed with
the Secretary or a Transfer Agent of the Corporation, and on surrender of
the share certificates.
Section 6.03. Transfer Agent and Registrar; Regulation. The
Corporation may, if and whenever the Board of Directors so determines,
maintain, in the Commonwealth of Pennsylvania, or any other State of the
United States, one or more transfer offices or agencies, each in charge
of a Transfer Agent designated by the Board, where the shares of the
Corporation shall be transferable, and also one or more registry offices,
each in charge of a Registrar designated by the Board, where such shares
shall be registered; and no certificates for shares of the Corporation in
respect of which a Transfer Agent and Registrar shall have been
designated shall be valid unless countersigned by such Transfer Agent and
registered by such Registrar. The Board may also make such additional
rules and regulations as it may deem expedient concerning the issue,
transfer, regulation and registration of share certificates.
Section 6.04. Lost, Destroyed and Mutilated Certificates. The
Board of Directors, by standing resolution or by resolutions with respect
to particular cases, may authorize the issue of new share certificates in
lieu of sharecertificates lost, destroyed, or mutilated, upon such terms
and conditions as the Board may direct.
VII. FINANCIAL REPORTS
Section 7.01. The Directors of the Corporation shall not be
required to cause to be sent to the shareholders an
annual financial report under Section 318 of the Business Corporation Law
of the Commonwealth of Pennsylvania; nor need any financial report which
the Directors in their discretion may cause to be sent to the
shareholders be required to be verified by a Certified Public Accountant.
Any accountant or firm of accountants employed by the Corporation for any
purpose may be or include a Director or full-time employee of the
Corporation, and shall not be required to be elected by the shareholders
of the Corporation.
VIII. AMENDMENTS
Section 8.01. Any or all of the provisions of these By-Laws
whether contractual in nature or merely regulatory of
the internal affairs of the Corporation, may be amended, altered, or
repealed by the Board of Directors or by the shareholders entitled to
vote thereon, at any regular or special meeting duly convened after
notice to the Directors or shareholders, as the case may be, giving a
summary of the proposed amendment, alteration, or repeal; provided, that
any such proposal relating to Section 2.01(b) of these By-Laws must
receive the affirmative vote of at least two thirds (2/3) of all shares
outstanding and entitled to vote and any proposal to change the two-
thirds (2/3) approval required by this Section must also receive the
affirmative vote of at least two-thirds (2/3) of all shares outstanding
and entitled to vote.
No provision of these By-Laws shall vest any property right in
any shareholder.
EXHIBIT 4C
AMENDMENT TO CREDIT AGREEMENT
This AMENDMENT TO CREDIT AGREEMENT (together with all amendments and
modifications hereto, the "Agreement"), dated as of July ___, 1995, is by
and among FIRST FIDELITY BANK, N.A., successor in interest by
consolidation to FIRST FIDELITY BANK, N.A., PENNSYLVANIA, a national
banking association with offices located at Broad and Walnut Streets,
Philadelphia, PA 19109-1199 (the "Bank"), SELAS CORPORATION OF AMERICA, a
Pennsylvania business corporation with offices located at 2034 Limekiln
Pike, Dresher, PA 19025 ("Selas"), DEUER MANUFACTURING, INC., an Ohio
business corporation with offices located at 2985 Springboro West,
Dayton, OH 45439 ("Deuer"), and RESISTANCE TECHNOLOGY, INC., a Minnesota
business corporation with offices located at 1260 Red Fox Road, Arden
Hills, MN 55112 ("RTI", and together with Selas and Deuer, the
"Borrowers").
BACKGROUND
A. The Bank and the Borrowers entered into that certain Credit
Agreement, dated as of October 20, 1993 (together with all amendments and
modifications thereto, the "Loan Agreement"), pursuant to which the Bank
agreed to make available: (1) to Selas, among other things, a revolving
credit facility in a maximum principal amount of $2,000,000; (2) to
Deuer, a revolving credit facility in a maximum principal amount of
$500,000; and (3) to RTI, a revolving credit facility in a maximum
principal amount of $1,000,000 (the "Loans").
B. In connection with the Loan Agreement and in order to evidence
the Loans: (1) Selas executed and delivered to the Bank that certain
Revolving Credit Note, dated as of October 20, 1993 (together with all
amendments and modifications thereto, the "Selas Note"), by Selas in
favor of the Bank in the principal amount of $2,000,000; (2) Deuer
executed and delivered to the Bank that certain Revolving Credit Note,
dated as of October 20, 1993 (together with all amendments and
modifications thereto, the "Deuer Note"), by Deuer in favor of the Bank
in the principal amount of $500,000; and (3) RTI executed and delivered
to the Bank that certain Revolving Credit Note, dated as of October 20,
1993 (together with all amendments and modifications thereto, the "RTI
Note", and together with the Selas Note and the Deuer Note, the "Notes"),
by RTI in favor of the Bank in the principal amount of $1,000,000.
C. The Loan Agreement, the Notes, and all of the documents,
instruments and agreements executed and delivered in connection
therewith, together with all amendments and modifications thereto, shall
be referred to hereinafter as the "Loan Documents".
D. The Bank and the Borrowers, pursuant to the terms hereof, wish
to amend certain of the terms of the Loan Documents.
NOW THEREFORE, incorporating the foregoing Background herein by
reference and for other good and valuable consideration, the receipt and
legal sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties agree as follows:
1. DEFINED TERMS. Terms used herein which are capitalized but not
defined herein shall have the meanings ascribed to such terms in the Loan
Agreement.
2. AMENDMENTS.
(a) Section 1.1 of the Loan Agreement is hereby amended by
deleting the definition of the term "Bank" which appears therein and
substituting therefore the following:
"Bank" means First Fidelity Bank, N.A., a national banking
association, and its successors and assigns.
(b) Section 1.1 of the Loan Agreement is hereby amended by
deleting the definition of the term "Business Day" which appears therein
and substituting therefore the following:
"Business Day" means a day of the year on which banks are not
required or authorized to close in Philadelphia, PA and, if the
applicable Business Day relates to any Eurodollar Loan, on which
dealings are carried on in the London interbank market.
(c) Section 1.1 of the Loan Agreement is hereby amended by
deleting the definition of the term "Deuer Revolving Credit Termination
Date" which appears therein and substituting therefore the following:
"Deuer Revolving Credit Termination Date" means the earlier of
(i) June 1, 1997 (as such date may be extended from time to time in
accordance with Section 2.1(c)(ii) hereof) or (ii) the date on which
the Deuer Revolving Credit Commitment is terminated pursuant to
Section 2.7 or 9.2 hereof.
(d) Section 1.1 of the Loan Agreement is hereby amended by
deleting the definition of the term "RTI Revolving Credit Termination
Date" which appears therein and substituting therefore the following:
"RTI Revolving Credit Termination Date" means the earlier of
(i) June 1, 1997 (as such date may be extended from time to time in
accordance with Section 2.1(d)(ii)hereof) or (ii) the date on which
the RTI Revolving Credit Commitment is terminated pursuant to
Section 2.7 or 9.2 hereof.
(e) Section 1.1 of the Loan Agreement is hereby amended by
deleting the definition of the term "Selas Revolving Credit Termination
Date" which appears therein and substituting therefore the following:
"Selas Revolving Credit Termination Date" means the earlier of
(i) June 1, 1997 (as such date may be extended from time to time in
accordance with Section 2.1(b)(ii) hereof) or (ii) the date on which
the Selas Revolving Credit Commitment is terminated pursuant to
Section 2.7 or 9.2 hereof.
(f) Section 1.1 of the Loan Agreement is hereby amended by
adding the following defined terms which shall appear in alphabetical
order:
"Applicable Margin" means, with respect to each Eurodollar
Loan, one and one-half percent (1.5%).
"Base Rate Loan" means an Advance which bears interest as
provided in Section 2.5(b)(i)(A).
"Conversion", "Convert", and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.5(b)(ii).
"Eurocurrency Reserve Requirements" means, for any day, the
aggregate (without duplication) of the applicable rates (expressed
as a decimal) of reserve requirements for the Bank (including,
without limitation, basic, supplemental, marginal and emergency
reserves), in effect on such day under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor) with
respect to eurocurrency funding currently referred to as
"Eurocurrency liabilities" in Regulation D.
"Eurodollar Base Rate" means, with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, the rate per
annum for deposits in United States dollars for a period equal to
the relevant Interest Period which appears on the Telerate Page 3750
as of 11:00 a.m., London time, on the day that is two (2) Business
Days prior to the commencement of such Interest Period. If such
rate does not appear on the Telerate Page 3750, the rate to be
utilized shall be the offered rate which appears, or if two or more
such rates appear, the average (rounded up to the next higher 1/16
of 1%) of the offered rates which appear on the Reuters Screen LIBO
Page as of 11:00 a.m., London time, on the day that is two (2)
Business Days prior to the commencement of such Interest Period.
"Eurodollar Loan" means an Advance which bears interest as
provided in Section 2.5(b)(i)(B).
"Eurodollar Rate" means, with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate determined
in accordance with the following formula:
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Interest Period" means, with respect to any Eurodollar Loan:
.0.0.0.1 initially, the period commencing on, as the case may
be, the date of borrowing or Conversion with respect to such
Eurodollar Loan and ending one, two, three, or six months
thereafter as selected by the Borrower in its notice of
borrowing as provided in Section 2.6 or its notice of
conversion as provided in Section 2.5(b)(ii); and
.0.0.0.2 thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three, or six months
thereafter as selected by the Borrower by irrevocable notice to
the Bank not less than three (3) Business Days prior to the
last day of the then current Interest Period with respect to
such Eurodollar Loan;
provided that the foregoing provisions relating to Interest
Periods are subject to the following:
.0.0.0.2.1 if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day which is not a Business Day,
that Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately
preceding Business Day;
.0.0.0.2.2 any Interest Period pertaining to a Eurodollar Loan
that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall
end on the last Business Day of a calendar month; and
the Borrower may not select any Interest Period which ends
after the Selas Revolving Credit Termination Date, the Deuer
Revolving Credit Termination Date, or the RTI Revolving Credit
Termination Date, as applicable.
"Reuters Screen LIBO Page" means the display designated as page
"LIBO" on the Reuter Monitor Money Rates Service (or such other page
as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks).
"Telerate Page 3750" means the display designed as "Page 3750"
on the Dow Jones Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying London
interbank offered rates of major banks).
"Type" means, when used in reference to an Advance, either a
Base Rate Loan or a Eurodollar Rate Loan.
(g) Section 2.3(d) of the Loan Agreement is hereby deleted in
its entirety and replaced by the following:
(d) RTI Revolving Credit Facility. Funds advanced under
the RTI Revolving Credit Facility shall be used for working capital
and general corporate purposes of RTI.
(h) Section 2.5(b) of the Loan Agreement is hereby deleted in
its entirety and replaced by the following:
(b) Revolving Credit Facilities.
(i)(A) Prior to an Event of Default, interest on
each Base Rate Loan, if any, shall accrue at the Base Rate and shall
be payable by the applicable Borrower monthly on the first day of
each month, commencing the first day of the first month after such
Advance and continuing until such Revolving Credit Commitment is
terminated and the applicable Borrower's indebtedness thereunder is
paid in full. (B) Prior to an Event of Default, interest on each
Eurodollar Loan, if any, shall accrue at the Eurodollar Rate plus
the Applicable Margin and shall be payable on the last day of the
applicable Interest Period; provided that if such Interest Period
has a duration of more than three months, interest shall be paid on
the day which is three months after the first day of such Interest
Period, and upon the termination of such Revolving Credit Commitment
and the payment in full of the applicable Borrower's obligations
thereunder. Interest will be calculated on the basis of a three
hundred sixty (360) day year and the actual number of days elapsed.
(ii) A Borrower may on any Business Day, upon notice
given to the Bank not later than 12:00 noon on (A) the third
Business Day prior to the date of the proposed Conversion into a
Eurodollar Loan and (B) the first Business Day prior to the date of
the proposed Conversion into a Base Rate Loan, and, in each case,
subject to the provisions of Section 5.3, Convert all or any portion
of an Advance from one Type to the other Type; provided, however,
that any Conversion of Eurodollar Loans into Base Rate Loans shall
be made only on the last day of an Interest Period for such
Eurodollar Loan and any Conversion of a Base Rate Loan into a
Eurodollar Loan shall be in an amount not less than the minimum
amount specified in Section 2.6(a)(i). Each such notice of
Conversion shall, within the restrictions specified above, specify
(A) the date of such Conversion, (B) the particular Advances to be
Converted, and (C) if such Conversion is into a Eurodollar Loan, the
duration of the initial Interest Period for such Eurodollar Loan.
Each notice of Conversion shall be irrevocable and binding upon the
applicable Borrower.
(iii) If a Borrower shall fail to select the duratin
of any Interest period for any Eurodollar Loan in accordance with
the provisions contained in the definition of "Interest Period" in
Section 1.1 and Section 2.5(b)(ii), the Bank will forthwith so
notify the applicable Borrower, whereupon each such Eurodollar Loan
will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Loan.
(i) The initial paragraph of Section 2.6(a) of the Loan
Agreement, which precedes Section 2.6(a)(i), (ii), and (iii), is
hereby deleted in its entirety and replaced by the following:
(a) A Borrower shall give the Bank written notice (which
notice may be transmitted by telecopier, provided that the Bank
receives an original executed Advance Request Form within 24 hours
thereafter) not later than eleven o'clock (11:00) a.m. on the date
of each requested Advance under its respective Revolving Credit
Facility in the case of Base Rate Loans, and on the date which is
three (3) Business Days prior to the date of each requested Advance
under its respective Revolving Credit Facility in the case of
Eurodollar Loans, in either case specifying the date, amount,
Interest Period (if applicable), and purpose thereof. Such notice
shall be in the form of the Advance Request Form attached hereto as
Exhibit A, shall be certified by the chief executive or chief financial
or accounting officer (or the equivalent thereof) of the applicable
Borrower and shall contain the following information and representations,
which shall be deemed affirmed and true and correct as of the date of the
requested Advance:
(j) Section 2.8(b) of the Loan Agreement is hereby
deleted in its entirety and replaced by the following:
(b) Revolving Credit Commitment. Upon one (1) Business
Day's prior written notice by a Borrower to the Bank, such Borrower
may repay in whole or in part the aggregate amount outstanding under
its Revolving Credit Facility at any time provided that: (i) such
repayments prior to the applicable Revolving Credit Termination Date
shall not reduce the applicable Revolving Credit Commitment and may
be reborrowed and partial repayments after the Termination Date will
be applied first to accrued interest and fees and then to
outstanding Advances, (ii) any repayment shall be in an amount equal
to or in excess of $50,000 and multiples of $50,000 in excess
thereof, and (iii) if any prepayment of a Eurodollar Loan shall be
made on a date which is not the last day of the Interest Period
applicable to such Eurodollar Loan, the applicable Borrower shall
also pay to the Bank any amount due to the Bank pursuant to Section
2.13 hereof.
(k) Section 2.8(b) of the Loan Agreement is hereby
amended by adding the following to the end of such Section:
Notwithstanding the foregoing, the Borrowers shall not be permitted
to prepay any Eurodollar Loan prior to the last day of the Interest
Period applicable thereto.
(l) Section 2 of the Loan Agreement is hereby amended by
adding the following new Section 2.13:
2.13 CHANGE IN CIRCUMSTANCES; COMPENSATION.
(a) Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period,
with respect to any Eurodollar Loan:
(i) the Bank determines that deposits in United
States dollars (in the applicable amounts) are not being offered in
the relevant market for such Interest Period, or
(ii) the Bank determines that the Eurodollar Rate
will not adequately and fairly reflect the cost to the Bank of
funding such Eurodollar Loan for such Interest Period, then the Bank
shall forthwith give notice thereof to the Borrowers, whereupon
until the Bank notifies the Borrowers that the circumstances giving
rise to such suspension no longer exist, the obligation of the Bank
to make Eurodollar Loans shall be suspended. Unless a Borrower
notifies the Bank at least two (2) Business Days before the date of
any Advance of such Eurodollar Loans for which an Advance Request
has previously been given that it elects not to borrow on such date,
such Advance shall instead be made as a Base Rate Loan.
(b) Illegality. If, after the date hereof, the adoption
of any applicable law, rule or regulation, or any change therein, of
any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof (any such agency
being referred as an "Authority" and any such event being referred
to as a "Change of Law"), or compliance by the Bank with any request
or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for the Bank to make,
maintain, or fund Eurodollar Loans, the Bank shall forthwith give
notice thereof to the Borrowers, whereupon until the Bank notifies
the Borrowers that the circumstances giving rise to such suspension
no longer exist, the obligation of the Bank to make Eurodollar Loans
shall be suspended. If the Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding
Eurodollar Loans to maturity and shall so specify in such notice,
the Borrowers shall immediately prepay in full the then outstanding
principal amount of each Eurodollar Loan, together with accrued
interest thereon. Concurrently with prepaying each such Eurodollar
Loan, the Borrowers shall borrow a Base Rate Loan in an equal
principal amount from the Bank, and the Bank shall make such Base
Rate Loan.
(c) Increased Cost and Reduced Return.
(i) If after the date hereof, a Change of Law or
compliance by the Bank with any request or directive (whether or not
having the force of law) of any Authority:
(A) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System, but excluding any such requirement
included in any applicable Eurocurrency Reserve Requirement) against
assets of, deposits with, or for the account of, or credit extended
by the Bank;
(B) shall impose on the Bank or the London
interbank market any other condition affecting the Eurodollar Loans,
the Notes, or the Bank's obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to
the Bank of making or maintaining any Loan or to reduce the amount
of any sum received or receivable by the Bank under this Agreement
or under the Notes with respect thereto, by an amount deemed by the
Bank to be material, then, within fifteen (15) days after demand by
the Bank, the Borrowers shall pay to the Bank such additional amount
or amounts as will compensate the Bank for such increased cost or
reduction.
(ii) If the Bank shall have determined that after the
date hereof the adoption of any applicable law, rule, or regulation
regarding capital adequacy, or any change therein or any change in
the interpretation or administration thereof, or compliance by the
Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of any Authority, has or
would have the affect of reducing the rate of return on the Bank's
capital as a consequence of its obligations hereunder to a level
below that which the Bank could have achieved but for such adoption,
change or compliance (taking into consideration the Bank's policies
with respect to capital adequacy) by an amount deemed by the Bank to
be material, then from time to time, within fifteen (15) days after
demand by the Bank, the Borrowers shall pay to the Bank such
additional amount or amounts as will compensate the Bank for such
reduction.
(iii) The Bank will promptly notify the Borrowers of
any event of which it has knowledge, occurring after the date hereof
which will entitle the Bank to compensation pursuant to this Section
and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation,
and will not, in the judgment of the Bank, be otherwise
disadvantageous to the Bank. A certificate of the Bank claiming
compensation under this Section setting forth the additional amount
or amounts to be paid to it hereunder and containing in reasonable
detail the calculations relevant thereto shall be conclusive in the
absence of manifest error. In determining such amount, the Bank may
use any reasonable averaging and attribution methods.
(iv) The provisions of this Section shall be
applicable with respect to the any participant, assignee, or other
transferee, and any calculations required by such provisions shall
be based upon the circumstances of such participant, assignee, or
other transferee.
(d) Base Rate Loans Substituted for Affected Eurodollar
Loans. If: (i) the obligations of the Bank to make or maintain any
Eurodollar Loan has been suspended pursuant to Section 2.13(b), or
(ii) the Bank has demanded compensation under Section 2.13(c), and
the Borrowers shall, by at least five (5) Business Days' prior
notice to the Bank, have elected that the provisions of this Section
shall apply to the Bank, then, unless and until the Bank notifies
the Borrowers that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(A) all Loans which would otherwise be made by
the Bank as Eurodollar Loans shall be made instead as Base Rate
Loans, and
(B) after each of its Eurodollar Loans has been
repaid, all payments of principal which would otherwise be applied
to repay such Eurodollar Loans shall be applied to repay its Base
Rate Loans instead.
(e) Compensation. Upon the request of the Bank,
delivered to the Borrowers, the Borrowers shall pay to the Bank such
amount or amounts as shall compensate the Bank for any loss, cost or
expense incurred by the Bank as a result of: (i) any payment or
prepayment of a Eurodollar Loan on a date other than the last
day of an Interest Period for such Loan (whether as a result of
prepayment, acceleration or otherwise); or
(ii) any failure by a Borrower to borrow or Convert a
Eurodollar Loan on the date specified in the applicable notice
delivered pursuant to this Agreement; or
(iii) a Borrower fails to make any prepayment after
such Borrower has given notice thereof in accordance with the
provisions of this Agreement
such compensation to include, without limitation, an amount equal to
the excess, if any, of (x) the amount of interest which would have
accrued on the amount so paid or prepaid or not prepaid or borrowed
for the period from the date of such payment, prepayment or failure
to prepay or borrow to the last day of the then current Interest
Period for such Eurodollar Loan (or, in the case of a failure to
prepay or borrow, the Interest Period for such Eurodollar Loan which
would have commenced on the date of such failure to prepay or
borrow) at the applicable rate of interest for such Eurodollar Loan
provided for herein over (y) the amount of interest (as reasonably
determined by the Bank) the Bank would have paid on deposits in
United States dollars of comparable amounts having terms comparable
to such period placed with it by leading banks in the London
interbank market.
(m) Section 6.15 of the Loan Agreement is hereby deleted in
its entirety and replaced by the following:
6.15 Minimum Net Working Capital. Maintain, as of the last day
of each fiscal quarter, Net Working Capital of not less than the
following amounts for the following entities:
(a) As to Selas, $1,800,000;
(b) As to Deuer, $2,000,000; and
(c) As to RTI, $3,500,000.
(n) Section 6.20 of the Loan Agreement is hereby deleted in
its entirety and replaced by the following:
6.20 Net Worth. Maintain, as of the last day of each fiscal
quarter, an aggregate Net Worth in amounts not less than those set
forth for the following entities:
(a) As to Selas, $18,000,000;
(b) As to Deuer, $6,500,000; and
(c) As to RTI, $23,000,000.
3. CONDITIONS PRECEDENT. The effectiveness of this Agreement and
the Bank's obligations hereunder are conditioned upon the satisfaction of
the following conditions precedent:
(a) The Borrowers shall have delivered to the Bank this
Agreement duly executed by each of the Borrowers.
(b) Selas shall have delivered to the Bank that certain
Amended and Restated Revolving Credit Note, dated as of the date hereof,
duly executed by Selas;
(c) Deuer shall have delivered to the Bank that certain
Amended and Restated Revolving Credit Note, dated as of the date hereof,
duly executed by Deuer;
(d) RTI shall have delivered to the Bank that certain Amended
and Restated Revolving Credit Note, dated as of the date hereof, duly
executed by RTI;
(e) Selas shall have delivered that certain Reaffirmation of
Guaranty and Suretyship Agreement, dated as of the date hereof, duly
executed by Selas;
(f) Selas shall have delivered that certain Reaffirmation of
Security Agreement, dated as of the date hereof, duly executed by Selas;
(g) Deuer shall have delivered that certain Reaffirmation of
Security Agreement, dated as of the date hereof, duly executed by Deuer;
(h) RTI shall have delivered that certain Reaffirmation of
Security Agreement, dated as of the date hereof, duly executed by RTI;
(i) Selas shall have delivered that certain Reaffirmation of
Pledge Agreement, dated as of the date hereof, duly executed by Selas;
(j) RTI shall have delivered that certain Reaffirmation of
Patent and Trademark Security Agreement, dated as of the date hereof,
duly executed by RTI;
(k) Selas shall have delivered that certain Amendment to First
Mortgage and Security Agreement, dated as of the date hereof, duly
executed by Selas;
(l) Deuer shall have delivered that certain Amendment to Open-
End First Mortgage and Security Agreement, dated as of the date hereof,
duly executed by Deuer;
(m) All proceedings required to be taken by the Borrowers in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Bank and its counsel, and the
Bank shall have received all such counterpart originals or certified or
other copies of such documents as the Bank may reasonably request;
(n) The Borrowers shall have executed and delivered to the
Bank such other documents, instruments and agreements as the Bank may
reasonably request.
4. REPRESENTATIONS AND WARRANTIES. In order to induce the Bank to
enter into this Agreement, the Borrowers hereby represent and warrant to
the Bank as follows:
(a) The representations and warranties contained in the Loan
Documents are true and correct on and as of the date of this Agreement
and after giving effect hereto, no Event of Default will be in existence
or will occur as a result of giving effect hereto.
(b) The execution, delivery and performance of this Agreement
will not violate any provision of any law or regulation or of any writ or
decree of any court or governmental instrumentality, or any of the
Borrowers' certificate or articles of incorporation, by-laws, or other
similar organizational documents.
(c) Each of the Borrowers has the power to execute, deliver
and perform this Agreement and each of the documents, instruments and
agreements to be executed and/or delivered in connection herewith and has
taken all necessary action to authorize the execution, delivery and
performance of this Agreement and each of the documents, instruments and
agreements executed and/or delivered in connection herewith and the
performance of the Loan Agreement as amended hereby.
(d) The execution, delivery and performance of this Agreement
and each of the documents, instruments and agreements to be executed
and/or delivered in connection herewith does not require the consent of
any other party or the consent, license, approval or authorization of, or
registration or declaration with, any governmental body, authority,
bureau or agency and the Loan Documents, this Agreement and each of the
documents, instruments and agreements executed and/or delivered in
connection herewith constitute legal, valid and binding obligations of
each of the Borrowers, enforceable in accordance with their respective
terms, subject to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
except as enforcement may be subject to general equitable principles.
5. REAFFIRMATION. Except as amended hereby, all of the terms,
covenants and conditions of the Loan Agreement and each of the other Loan
Documents (INCLUDING, BUT NOT LIMITED TO, PROVISIONS RELATING TO ANY
AUTHORITY GRANTED TO THE BANK TO CONFESS JUDGMENT AGAINST THE BORROWERS,
OR ANY OF THEM, AND ANY WAIVER OF THE RIGHT TO TRIAL BY JURY) are
ratified, reaffirmed and confirmed and shall continue in full force and
effect as therein written and are not intended to be re-enacted as of the
above date, but rather to be effective as of the original date of such
documents. Each of the Borrowers hereby reaffirms and ratifies all of
the terms, covenants, and conditions contained in each of their
respective guarantees and confirms that such guarantees are binding and
enforceable against the parties thereto as if such guarantees had been
executed as of the date hereof.
6. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the Borrowers and the Bank and their respective heirs,
executors, administrators, successors and assigns; provided, however,
that the Borrowers may not assign any of their rights, nor delegate any
of their obligations, under this Agreement without the prior written
consent of the Bank and any purported assignment or delegation absent
such consent shall be void. The Bank may at any time assign or otherwise
transfer (by participation or otherwise) any or all of its rights, or
delegate any or all of its obligations, hereunder.
7. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed to be an original,
but all such counterparts shall together constitute one and the same
agreement. This Agreement shall be deemed to have been executed and
delivered when the Bank has received counterparts hereof executed by all
parties listed on the signature page(s) hereto.
8. AMENDMENT AND WAIVER. No amendment of this Agreement, and no
waiver of any one or more of the provisions hereof shall be effective
unless set forth in a writing and signed by the parties hereto.
9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the Commonwealth of
Pennsylvania without reference to conflict of law principles.
10. SEVERABILITY. Any provision of this Agreement that is held to
be inoperative, unenforceable, voidable or invalid in any jurisdictin
shall, as to that jurisdiction, be ineffective, unenforceable, void or
invalid without affecting the remaining provisions in that or any other
jurisdiction, and to this end the provisions of this Agreement are
declared to be severable.
11. JUDICIAL PROCEEDINGS. Each party to this Agreement agrees that
any suit, action or proceeding, whether claim or counterclaim, brought or
instituted by any party hereto or any successor or assign of any party,
on or with respect to this Agreement, the documents, instruments and
agreements executed in connection herewith, the Loan Documents or the
dealings of the parties with respect hereto and thereto, shall be tried
only by a court and not by a jury. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
SUCH SUIT, ACTION OR PROCEEDING. Further, each party waives any right it
may have to claim or recover, in
any such suit, action or proceeding, any special, exemplary, punitive or
consequential damages or damages other than, or in addition to, actual
damages. THE BORROWERS ACKNOWLEDGE AND AGREE THAT THIS SECTION IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT THE BANK WOULD
NOT ENTER INTO THIS AGREEMENT IF THE WAIVERS SET FORTH IN THIS SECTION
WERE NOT A PART OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above
written.
ATTEST: SELAS CORPORATION OF AMERICA
By:_________________ By:_____________________
Name: Name:
Title: Title:
ATTEST: DEUER MANUFACTURING, INC.
By:_________________ By:_____________________
Name: Name:
Title: Title:
ATTEST: RESISTANCE TECHNOLOGY, INC.
By:_________________ By:_____________________
Name: Name:
Title: Title:
FIRST FIDELITY BANK, N.A.
By:__________________________
Name:
Title:
EXHIBIT 4D
AMENDED AND RESTATED REVOLVING CREDIT NOTE
$2,000,000.00 July ____, 1995
Philadelphia, Pennsylvania
FOR VALUE RECEIVED, the undersigned SELAS CORPORATION OF AMERICA, a
Pennsylvania business corporation with offices at 2034 Limekiln Pike,
Dresher, PA 19025 (the "Borrower"), promises to pay to the order of
FIRST FIDELITY BANK, N.A., a national banking association (the "Bank"),
with an office at Broad and Walnut Streets, Philadelphia, Pennsylvania
19109, on the Selas Revolving Credit Termination Date, the principal sum
of Two Million and No/100 Dollars ($2,000,000.00) or such lesser
principal amount as is actually outstanding under the Revolving Credit
Facility (as defined in the Credit Agreement defined below) on such date,
and with interest on the unpaid principal balance hereof payable as set
forth below. All such principal and interest shall be payable in lawful
money of the United States of America in immediately available funds on a
Business Day at the offices of the Bank set forth above.
Until maturity (whether by acceleration or otherwise), the
outstanding principal balance hereunder shall bear interest at the rates
and shall be payable at the times and in the manner set forth in the
Credit Agreement. Subsequent to maturity, including after judgment,
interest on the outstanding principal balance hereunder shall accrue at
an annual rate which shall be two percent (2%) above the rate of interest
otherwise payable hereunder.
This Amended and Restated Revolving Credit Note (herein, the "Note")
arises out of a certain Credit Agreement, dated as of October 20, 1993
(together with all amendments and modifications thereto, the "Credit
Agreement"), by and among Borrower, the Bank, DEUER MANUFACTURING, INC.,
an Ohio business corporation with offices located at 2985 Springboro
West, Dayton, OH 45439 ("Deuer"), and RESISTANCE TECHNOLOGY, INC., a
Minnesota business corporation with offices located at 1260 Red Fox Road,
Arden Hills, MN 55112 ("RTI"). Capitalized terms used by not otherwise
defined in this Note shall have the respective meanings given to such
terms in the Credit Agreement. Reference is made to the Credit Agreement
for a statement of the respective rights and obligations of the parties
and the terms and conditions therein provided under which the principal
hereof and accrued interest thereon, if any, may become immediately due
and payable. The collateral specified in the applicable Collateral
Security Documents shall secure the obligations of Borrower under this
Note.
Notwithstanding the face amount of this Note, Borrower's liability
hereunder shall be limited at all times to the actual aggregate
outstanding indebtedness to Bank (principal, interest and fees) under the
Revolving Credit Facility, as established by Bank's books and records,
which books and records shall be conclusive absent manifest error.
The occurrence of an Event of Default under the Credit Agreement
constitutes an Event of Default under this Note and entitles Bank, in
accordance with the Credit Agreement, to declare this Note immediately
due and payable in full.
Borrower hereby waives presentment, demand for payment, notice of
dishonor or acceleration, protest and notice of protest, and any and all
other notices or demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note, excepting any notice
requirements set forth in the Credit Agreement.
In the event any interest rate applicable hereto is in excess of the
highest rate allowable under applicable law, then the rate of such
interest will be reduced to the highest rate not in excess of such
maximum allowable interest and any excess previously paid by Borrower
shall be deemed to have been applied against principal.
BORROWER HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR ATTORNEYS OR
THE PROTHONOTARY OR CLERK OF ANY COURT OF THE COMMONWEALTH OF
PENNSYLVANIA, OR ELSEWHERE, TO APPEAR FOR BORROWER AT ANY TIME FOLLOWING
THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE CREDIT AGREEMENT IN ANY
SUCH COURT IN AN APPROPRIATE ACTION THERE OR ELSEWHERE BROUGHT OR TO BE
BROUGHT AGAINST BORROWER BY THE BANK ON THIS NOTE, WITH OR WITHOUT
DECLARATIONS FILED, AS OF ANY TERM OR TIME OF COURT THEREOF OR ELSEWHERE
TO BE HELD AND THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR
ALL SUMS DUE BY BORROWER TO BANK UNDER THIS NOTE AND THE CREDIT
AGREEMENT, TOGETHER WITH THE COST OF SUIT AND REASONABLE ATTORNEYS' FEES,
AND FOR SO DOING THIS NOTE OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL
BE A SUFFICIENT WARRANT.
BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION HEREON
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR THE CREDIT
AGREEMENT OR THE MAKING OF THE LOANS OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF BORROWER OR
BANK OR ANY OF THEM. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK'S
ENTERING INTO THE CREDIT AGREEMENT.
BORROWER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF COUNSEL IN
THE REVIEW AND EXECUTION OF THIS NOTE AND FURTHER ACKNOWLEDGES THAT THE
MEANING AND EFFECT OF THE CONFESSION OF JUDGMENT AND WAIVER OF JURY TRIAL
HAVE BEEN FULLY EXPLAINED TO SUCH BORROWER BY SUCH COUNSEL.
Borrower's liability under this Note shall include all fees and
expenses provided in the Credit Agreement.
This Note shall be binding upon Borrower and its successors and
assigns and shall inure to the benefit of the Bank and its successors and
assigns and shall be governed as to validity, interpretation and effect
by the laws of the Commonwealth of Pennsylvania.
This Note amends and restates in its entirety the terms of that
certain Revolving Credit Note, dated as of October 20, 1993 (together
with all amendments and modifications thereto, the "Existing Note"), by
the Borrower in favor of the Bank. This Note is not intended to
extinguish the Borrower's obligations under the Existing Note or
constitute a novation thereof.
IN WITNESS WHEREOF, the undersigned, by its duly authorized officer,
has executed this Amended and Restated Revolving Credit Note the day and
year first above written.
ATTEST: SELAS CORPORATION OF AMERICA
By:_____________________________ By:____________________________
Name: Name:
Title: Title:
EXHIBIT 4E
AMENDED AND RESTATED REVOLVING CREDIT NOTE
$1,000,000.00 July ____, 1995
Philadelphia, Pennsylvania
FOR VALUE RECEIVED, the undersigned RESISTANCE TECHNOLOGY, INC.,
a Minnesota business corporation with offices located at 1260 Red Fox
Road, Arden Hills, MN 55112 (the "Borrower"), promises to pay to the
order of FIRST FIDELITY BANK, N.A., a national banking association (the
"Bank"), with an office at Broad and Walnut Streets, Philadelphia,
Pennsylvania 19109, on the RTI Revolving Credit Termination Date, the
principal sum of One Million and No/100 Dollars ($1,000,000.00) or such
lesser principal amount as is actually outstanding under the Revolving
Credit Facility (as defined in the Credit Agreement defined below) on
such date, and with interest on the unpaid principal balance hereof
payable as set forth below. All such principal and interest shall be
payable in lawful money of the United States of America in immediately
available funds on a Business Day at the offices of the Bank set forth
above.
Until maturity (whether by acceleration or otherwise), the
outstanding principal balance hereunder shall bear interest at the rates
and shall be payable at the times and in the manner set forth in the
Credit Agreement. Subsequent to maturity, including after judgment,
interest on the outstanding principal balance hereunder shall accrue at
an annual rate which shall be two percent (2%) above the rate of interest
otherwise payable hereunder.
This Amended and Restated Revolving Credit Note (herein, the
"Note") arises out of a certain Credit Agreement, dated as of October 20,
1993 (together with all amendments and modifications thereto, the "Credit
Agreement"), by and among Borrower, the Bank, SELAS CORPORATION OF
AMERICA, a Pennsylvania business corporation with offices located at 2034
Limekiln Pike, Dresher, PA 19025 ("Selas") and DEUER MANUFACTURING,
INC., an Ohio business corporation with offices located at 2985
Springboro West, Dayton, OH 45439 ("Deuer"). Capitalized terms used by
not otherwise defined in this Note shall have the respective meanings
given to such terms in the Credit Agreement. Reference is made to the
Credit Agreement for a statement of the respective rights and obligations
of the parties and the terms and conditions therein provided under which
the principal hereof and accrued interest thereon, if any, may become
immediately due and payable. The collateral specified in the applicable
Collateral Security Documents shall secure the obligations of Borrower
under this Note.
Notwithstanding the face amount of this Note, Borrower's
liability hereunder shall be limited at all times to the actual aggregate
outstanding indebtedness to Bank (principal, interest and fees) under the
Revolving Credit Facility, as established byBank's books and records,
which books and records shall be conclusive absent manifest error.
The occurrence of an Event of Default under the Credit Agreement
constitutes an Event of Default under this Note and entitles Bank, in
accordance with the Credit Agreement, to declare this Note immediately
due and payable in full.
Borrower hereby waives presentment, demand for payment, notice of
dishonor or acceleration, protest and notice of protest, and any and all
other notices or demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note, excepting any notice
requirements set forth in the Credit Agreement.
In the event any interest rate applicable hereto is in excess of
the highest rate allowable under applicable law, then the rate of such
interest will be reduced to the highest rate not in excess of such
maximum allowable interest and any excess previously paid by Borrower
shall be deemed to have been applied against principal.
BORROWER HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR ATTORNEYS
OR THE PROTHONOTARY OR CLERK OF ANY COURT OF THE COMMONWEALTH OF
PENNSYLVANIA, OR ELSEWHERE, TO APPEAR FOR BORROWER AT ANY TIME FOLLOWING
THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE CREDIT AGREEMENT IN ANY
SUCH COURT IN AN APPROPRIATE ACTION THERE OR ELSEWHERE BROUGHT OR TO BE
BROUGHT AGAINST BORROWER BY THE BANK ON THIS NOTE, WITH OR WITHOUT
DECLARATIONS FILED, AS OF ANY TERM OR TIME OF COURT THEREOF OR ELSEWHERE
TO BE HELD AND THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR
ALL SUMS DUE BY BORROWER TO BANK UNDER THIS NOTE AND THE CREDIT
AGREEMENT, TOGETHER WITH THE COST OF SUIT AND REASONABLE ATTORNEYS' FEES,
AND FOR SO DOING THIS NOTE OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL
BE A SUFFICIENT WARRANT.
BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR THE
CREDIT AGREEMENT OR THE MAKING OF THE LOANS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
BORROWER OR BANK OR ANY OF THEM. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR BANK'S ENTERING INTO THE CREDIT AGREEMENT.
BORROWER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF COUNSEL
IN THE REVIEW AND EXECUTION OF THIS NOTE AND FURTHER ACKNOWLEDGES THAT
THE MEANING AND EFFECT OF THE CONFESSION OF JUDGMENT AND WAIVER OF JURY
TRIAL HAVE BEEN FULLY EXPLAINED TO SUCH BORROWER BY SUCH COUNSEL.
Borrower's liability under this Note shall include all fees and
expenses provided in the Credit Agreement.
This Note shall be binding upon Borrower and its successors and
assigns and shall inure to the benefit of the Bank and its successors and
assigns and shall be governed as to validity, interpretation and effect
by the laws of the Commonwealth of Pennsylvania.
This Note amends and restates in its entirety the terms of that
certain Revolving Credit Note, dated as of October 20, 1993 (together
with all amendments and modifications thereto, the "Existing Note"), by
the Borrower in favor of the Bank. This Note is not intended to
extinguish the Borrower's obligations under the Existing Note or
constitute a novation thereof.
IN WITNESS WHEREOF, the undersigned, by its duly authorized
officer, has executed this Amended and Restated Revolving Credit Note the
day and year first above written.
ATTEST RESISTANCE TECHNOLOGY, INC.
By:_____________________________
Name:
Title:
By:____________________________
Name:
Title:
EXHIBIT 4F
AMENDED AND RESTATED REVOLVING CREDIT NOTE
$500,000.00 July ____, 1995
Philadelphia, Pennsylvania
FOR VALUE RECEIVED, the undersigned DEUER MANUFACTURING, INC., an
Ohio business corporation with offices located at 2985 Springboro West,
Dayton, OH 45439 (the "Borrower"), promises to pay to the order of FIRST
FIDELITY BANK, N.A., a national banking association (the "Bank"), with an
office at Broad and Walnut Streets, Philadelphia, Pennsylvania 19109, on
the Deuer Revolving Credit Termination Date, the principal sum of Five
Hundred Thousand and No/100 Dollars ($500,000.00) or such lesser
principal amount as is actually outstanding under the Revolving Credit
Facility (as defined in the Credit Agreement defined below) on such date,
and with interest on the unpaid principal balance hereof payable as set
forth below. All such principal and interest shall be payable in lawful
money of the United States of America in immediately available funds on a
Business Day at the offices of the Bank set forth above.
Until maturity (whether by acceleration or otherwise), the
outstanding principal balance hereunder shall bear interest at the rates
and shall be payable at the times and in the manner set forth in the
Credit Agreement. Subsequent to maturity, including after judgment,
interest on the outstanding principal balance hereunder shall accrue at
an annual rate which shall be two percent (2%) above the rate of interest
otherwise payable hereunder.
This Amended and Restated Revolving Credit Note (herein, the
"Note") arises out of a certain Credit Agreement, dated as of October 20,
1993 (together with all amendments and modifications thereto, the "Credit
Agreement"), by and among Borrower, the Bank, SELAS CORPORATION OF
AMERICA, a Pennsylvania business corporation with offices located at 2034
Limekiln Pike, Dresher, PA 19025 ("Selas"), and RESISTANCE TECHNOLOGY,
INC., a Minnesota business corporation with offices located at 1260 Red
Fox Road, Arden Hills, MN 55112 ("RTI"). Capitalized terms used by not
otherwise defined in this Note shall have the respective meanings given
to such terms in the Credit Agreement. Reference is made to the Credit
Agreement for a statement of the respective rights and obligations of the
parties and the terms and conditions therein provided under which the
principal hereof and accrued interest thereon, if any, may become
immediately due and payable. The collateral specified in the applicable
Collateral Security Documents shall secure the obligations of Borrower
under this Note.
Notwithstanding the face amount of this Note, Borrower's
liability hereunder shall be limited at all times to the actual aggregate
outstanding indebtedness to Bank (principal, interest and fees) under the
Revolving Credit Facility, as established by Bank's books and records,
which books and records shall be conclusive absent manifest error.
The occurrence of an Event of Default under the Credit Agreement
constitutes an Event of Default under this Note and entitles Bank, in
accordance with the Credit Agreement, to declare this Note immediately
due and payable in full.
Borrower hereby waives presentment, demand for payment, notice of
dishonor or acceleration, protest and notice of protest, and any and all
other notices or demands in connection with the delivery, acceptance,
performance, default or enforcement of this Note, excepting any notice
requirements set forth in the Credit Agreement.
In the event any interest rate applicable hereto is in excess of
the highest rate allowable under applicable law, then the rate of such
interest will be reduced to the highest rate not in excess of such
maximum allowable interest and any excess previously paid by Borrower
shall be deemed to have been applied against principal.
BORROWER HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR ATTORNEYS
OR THE PROTHONOTARY OR CLERK OF ANY COURT OF THE COMMONWEALTH OF
PENNSYLVANIA, OR ELSEWHERE, TO APPEAR FOR BORROWER AT ANY TIME FOLLOWING
THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE CREDIT AGREEMENT IN ANY
SUCH COURT IN AN APPROPRIATE ACTION THERE OR ELSEWHERE BROUGHT OR TO BE
BROUGHT AGAINST BORROWER BY THE BANK ON THIS NOTE, WITH OR WITHOUT
DECLARATIONS FILED, AS OF ANY TERM OR TIME OF COURT THEREOF OR ELSEWHERE
TO BE HELD AND THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST BORROWER FOR
ALL SUMS DUE BY BORROWER TO BANK UNDER THIS NOTE AND THE CREDIT
AGREEMENT, TOGETHER WITH THE COST OF SUIT AND REASONABLE ATTORNEYS' FEES,
AND FOR SO DOING THIS NOTE OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL
BE A SUFFICIENT WARRANT.
BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR THE
CREDIT AGREEMENT OR THE MAKING OF THE LOANS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
BORROWER OR BANK OR ANY OF THEM. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR BANK'S ENTERING INTO THE CREDIT AGREEMENT.
BORROWER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF COUNSEL
IN THE REVIEW AND EXECUTION OF THIS NOTE AND FURTHER ACKNOWLEDGES THAT
THE MEANING AND EFFECT OF THE CONFESSION OF JUDGMENT AND WAIVER OF JURY
TRIAL HAVE BEEN FULLY EXPLAINED TO SUCH BORROWER BY SUCH COUNSEL.
Borrower's liability under this Note shall include all fees and
expenses provided in the Credit Agreement.
This Note shall be binding upon Borrower and its successors and
assigns and shall inure to the benefit of the Bank and its successors and
assigns and shall be governed as to validity, interpretation and effect
by the laws of the Commonwealth of Pennsylvania.
This Note amends and restates in its entirety the terms of that
certain Revolving Credit Note, dated as of October 20, 1993 (together
with all amendments and modifications thereto, the "Existing Note"), by
the Borrower in favor of the Bank. This Note is not intended to
extinguish the Borrower's obligations under the Existing Note or
constitute a novation thereof.
IN WITNESS WHEREOF, the undersigned, by its duly authorized
officer, has executed this Amended and Restated Revolving Credit Note the
day and year first above written.
ATTEST: DEUER MANUFACTURING, INC.
By:_____________________________ By:____________________________
Name: Name:
Title: Title:
EXHIBIT 10F
(FORM OF STOCK OPTION AGREEMENT UNDER
SELAS 1994 STOCK OPTION PLAN)
(Addressee)
Dear :
I am pleased to inform you that on the Compensation
Committee of the Company's Board of Directors granted you options to
purchase Common Shares of the Company under the Company's 1994
Stock Option Plan (the "Plan"), at an exercise price of $
per share.
Under the Plan, the Company may grant either incentive stock options or
non-qualified stock options. The options granted to you are intended to
be (incentive stock options) (non-qualified stock options).
These options will become exercisable as follows:
Date First Exercisable Number of Shares
The exercise price for your options shall be payable in cash or its
equivalent.
Once options become exercisable, they will remain exercisable until they
are exercised or until they terminate. Unless earlier terminated
pursuant to the terms of the Plan, all options granted hereby shall
terminate on . While the specific terms of the Plan will
govern, generally upon termination of your employment for any reason the
options will terminate to the extent of options that you could not have
exercised on the date of such termination. Options that could have been
exercised on the date of termination of employment for reasons other than
death or disability may be exercised only prior to the earlier of three
months following the date of termination of employment or the expiration
date of such options. Options that could have been exercised on the date
of termination of employment due to death or disability may be exercised
only prior to the earlier of one year following the date of your death or
such termination of employment or the expiration date of such options.
Further terms governing the options granted to you are set forth in the
Plan, a copy of which is attached hereto and incorporated by reference
herein.
If you wish to accept the grant of the options as provided above and in
the Plan, please so indicate by signing and returning the enclosed copy
of this letter, whereupon you and the Company shall be legally bound
hereby under Pennsylvania law.
Very truly yours,
SELAS CORPORATION OF AMERICA
By:
Robert W. Ross,
Secretary
Accepted and Agreed:
EXHIBIT 10I
SELAS CORPORATION OF AMERICA
SUPPLEMENTAL RETIREMENT PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1995)
DECEMBER 1995
TABLE OF CONTENTS
PAGE
ARTICLE I - NAME OF PLAN, FUNDING AND EFFECTIVE DATE 1
1.1 Name of Plan 1
1.2 Funding 1
1.3 Effective Date of Plan 1
ARTICLE II - DEFINITIONS 1
2.1 Incorporation of Definitions 1
2.2 Plan 1
2.3 Retirement Plan 1
ARTICLE III - AMOUNT OF BENEFITS 2
3.1 Pension Restoration Benefits 2
3.2 Benefits upon Reemployment 2
ARTICLE IV - VESTING 2
ARTICLE V - FORM OF BENEFIT AND DISTRIBUTION OF BENEFITS 2
5.1 No Election Made 2
5.2 Distribution Elections 3
5.3 Beneficiary Designation 3
ARTICLE VI - ADMINISTRATION 3
6.1 Plan Administrator 3
6.2 Responsibilities and Powers of the Plan
Administrator 3
6.3 Claims for Benefits 4
6.4 Indemnification 4
ARTICLE VII - MISCELLANEOUS 4
7.1 Benefits Payable by Company 4
7.2 Amendment or Termination 4
7.3 Status of Employment 4
7.4 Inalienability of Benefits 5
7.5 Governing Law 5
SELAS CORPORATION OF AMERICA
SUPPLEMENTAL RETIREMENT PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1995)
WHEREAS, SELAS CORPORATION OF AMERICA (the "Company") in
1994 adopted the SELAS CORPORATION OF AMERICA SUPPLEMENTAL RETIREMENT
PLAN (the "Plan") to supplement the benefits provided to a select group
of highly compensated or management employees under the SELAS CORPORATION
OF AMERICA SALARIED RETIREMENT PLAN; and
WHEREAS, the Company reserved the right to amend the Plan
under Section 7.2 of the Plan; and
WHEREAS, the Company desires to amend and restate the Plan,
effective January 1, 1995, in order to make certain changes to the Plan;
NOW, THEREFORE, effective January 1, 1995, the Company
hereby amends and restates the SELAS CORPORATION OF AMERICA SUPPLEMENTAL
RETIREMENT PLAN, as follows:
ARTICLE I
NAME OF PLAN, FUNDING AND EFFECTIVE DATE
.0.0.1 NAME OF PLAN. The plan as set forth herein shall
be known as the "SELAS CORPORATION OF AMERICA SUPPLEMENTAL
RETIREMENT PLAN" (the "Plan").
.0.0.2 FUNDING. The Plan is designed to cover a select
group of highly compensated or management employees, and
shall be unfunded for tax purposes and for purposes of the
exemptions from Title I of the Employee Retirement Income
Security Act of 1974, as amended. All obligations of the
Plan shall be paid from the general assets of the Company.
.0.0.3 EFFECTIVE DATE OF PLAN. The effective date of the
Plan is January 1, 1994.
ARTICLE II
DEFINITIONS
.0.0.4 INCORPORATION OF DEFINITIONS. All definitions
used in the SELAS CORPORATION OF AMERICA SALARIED RETIREMENT
PLAN (the "Retirement Plan") are hereby made a part of this
Plan by reference. Any amendment of the definitions of the
Retirement Plan shall be effective with respect to this Plan
as of the effective date of the amendment to the Retirement
Plan.
.0.0.5 "PLAN" shall mean the SELAS CORPORATION OF AMERICA
SUPPLEMENTAL RETIREMENT PLAN as set forth herein, and as
amended from time to time.
.0.0.6 "RETIREMENT PLAN" shall mean the SELAS CORPORATION
OF AMERICA SALARIED RETIREMENT PLAN.
ARTICLE III
AMOUNT OF BENEFITS
.0.0.7 PENSION RESTORATION BENEFITS.
.0.0.7.1 ELIGIBILITY. Each employee who is employed
by the Company on or after January 1, 1994, and whose
Accrued Benefit under the Retirement Plan is reduced
as result of the compensation limitation imposed by
section 401(a)(17) of the Internal Revenue Code of
1986, as amended (the "Code") on the Retirement Plan,
in Plan Years after 1988, shall be entitled to Pension
Restoration Benefits ("PBR Benefits") under this Plan.
.0.0.7.2 AMOUNT. For each benefit payment made under
the Retirement Plan, an employee entitled to PBR
Benefits shall receive a PBR Benefit in an amount equal
to the difference between (1) the amount such payment
under the Retirement Plan would have been if, in Plan
Years after 1988, the Compensation used in computing
such employee's Accrued Benefit under the Retirement
Plan had not been reduced as a result of section
401(a)(17) of the Code, and (2) the benefit payment the
employee is entitled to under the terms of the
Retirement Plan.
.0.0.8 BENEFITS UPON REEMPLOYMENT. If a former employee
is rehired by the Company after he begins to receive his PBR
Benefits,
.0.0.8.1 his PBR Benefits shall cease during such
period of reemployment; and
.0.0.8.2 the PBR Benefits payable after the employee's
subsequent retirement or separation shall be the
benefits computed in accordance with Section 3.1(b) at
the date of the termination of his last period of
reemployment.
ARTICLE IV
VESTING
An employee shall become vested in his PBR Benefits under
the Plan on the date his Accrued Benefit under the Retirement Plan
becomes vested.
ARTICLE V
FORM OF BENEFIT AND DISTRIBUTION OF BENEFITS
.0.1 NO ELECTION MADE. If no effective election has been
made under Section 5.2 before the later of the date the
employee attains age 65 or separates from service with the
Company, payment of benefits under the Plan shall be made to
the employee in a lump sum distribution within 60 days
following such date. If the employee dies before payment of
benefits commences and the employee's Beneficiary has not
made an effective election under Section 5.2 within 13
months of the employee's date of death, payment of benefits
under the Plan shall be made to the employee's Beneficiary
in a lump sum distribution within 60 days following the
expiration of such 13-month period.
.0.2 DISTRIBUTION ELECTIONS.
(a) ELECTION BY EMPLOYEE. An employee shall be
entitled to elect to have payment of benefits under this Plan
commence in a form of payment that is available, and at a time
which is permissible, under the Retirement Plan. However, no
payment shall be made pursuant to such an election unless the
election is made at least 30 days before the beginning of the
taxable year in which payments to the employee are to commence
under the election.
(b) ELECTION BY BENEFICIARY. If an employee dies
before payment commences, his Beneficiary shall be entitled to
elect to commence payment of benefits under this Plan in a form
of payment that is available, and at a time which is permissible,
under the Retirement Plan. However, no payment shall be made
pursuant to such an election unless the election is made at least
30 days before the beginning of the taxable year in which
payments to the Beneficiary are to commence under the election.
(c) SUBSEQUENT ELECTIONS. An employee or a
Beneficiary may make an election under this Section 5.2 which
shall supersede the previous election he made under this Section
5.2, provided that such a subsequent election is made at least 30
days before the beginning of the taxable year in which payments
were to commence under the individual's previous election and the
subsequent election otherwise meets the applicable requirements
of this Section 5.2.
(d) PROCEDURES FOR ELECTIONS. In addition to meeting
the applicable requirements of this Section 5.2, an election
under this Section 5.2 will only be effective if made in
accordance with the procedures established by the Company.
.0.3 BENEFICIARY DESIGNATION. An employee's designation of
a Beneficiary under the Retirement Plan will also apply
under this Plan.
ARTICLE VI
ADMINISTRATION
.0.3.1 PLAN ADMINISTRATOR. The Company shall be the Plan
Administrator and shall have responsibility to supervise the
management and administration of this Plan.
.0.3.2 RESPONSIBILITIES AND POWERS OF THE PLAN
ADMINISTRATOR.
.0.3.2.1 The Plan Administrator shall have the
responsibility:
.0.3.2.1.1 To administer the Plan in
accordance with the terms hereof, and to exercise
all powers specifically conferred upon the Plan
Administrator hereby or necessary to carry out the
provisions hereof.
.0.3.2.1.2 To construe this Plan solely in its
discretion, which construction shall be conclusive
on all parties correct any defects, supply any
omissions, and reconcile any inconsistencies to
the extent necessary to effectuate the Plan.
.0.3.2.1.3 To keep all records relating to the
Plan and such other records as are necessary for
proper operation of the Plan.
.0.3.2.2 In carrying out its functions hereunder:
.0.3.2.2.1 The Plan Administrator may adopt
rules and regulations necessary for the
administration of the Plan and which are
consistent with the provisions hereof.
.0.3.2.2.2 The Plan Administrator may
authorize one or more of its employees, or other
representatives, to act on its behalf.
.0.3.2.2.3 The Plan Administrator shall have
the right to hire, at the expense of the Company,
such professional assistants and consultants as
it, in its sole discretion, deems necessary or
advisable, including, but not limited to,
accountants, actuaries, consultants, counsel, and
such clerical assistance as is necessary for
proper discharge of its duties.
.0.3.3 CLAIMS FOR BENEFITS. The Company will advise each
employee of any PBR Benefits to which he is entitled under
the Plan. If any employee believes that the Company has
failed to advise him of any PBR Benefits to which he is
entitled, or disputes the amount of his PBR Benefits he may
file a written claim with the Human Resources Department.
The claim and review procedure described in Section 10.5 of
the Retirement Plan shall also apply to claims filed for
benefits under this Plan.
.0.3.4 INDEMNIFICATION. To the extent permitted by law,
the Company shall indemnify employees properly appointed to
perform Plan Administrator duties from all claims for
liability, loss or damage (including payment of expenses in
connection with defense against such claim) arising from any
act or failure to act which constitutes a breach of such
individual's responsibilities under any aspects of the law,
unless such misconduct results from gross negligence or
willful misconduct.
ARTICLE VII
MISCELLANEOUS
.0.3.5 BENEFITS PAYABLE BY COMPANY. Any benefits payable
under this Plan shall constitute an unfunded obligation of
the Company and this Plan constitutes a mere promise that
the Company will make such PBR Benefit payments in the
future. Payments shall be made, as due, from the general
funds of the Company. The Company, at its option, may
maintain one or more bookkeeping reserve accounts to reflect
its obligations under the Plan and may make such investments
as it may deem desirable to assist it in meeting such
obligations. Any such investments shall be assets of the
Company subject to the claims of its general creditors. No
person eligible for benefits under this Plan shall have any
right, title or interest in any such investments except as a
general unsecured creditor of the Company.
.0.3.6 AMENDMENT OR TERMINATION. The Company reserves
the right, at any time and from time to time, pursuant to a
written resolution of its Board of Directors, adopted at a
duly held meeting of such Board or by unanimous written
consent of such Board, to amend, modify, restate or
terminate the Plan, provided, however, that no such action
by the Company shall reduce an employee's PBR Benefits after
the date of commencement of payment of such PBR Benefits.
.0.3.7 STATUS OF EMPLOYMENT. Nothing herein contained
shall be construed as conferring any rights upon any
employee or other person for a continuation of employment
nor shall it be construed as limiting in any way the right
of the Company to discharge any employee or other person or
to treat him without regard to the effect which such
treatment might have upon him as a participant in the Plan.
.0.3.8 INALIENABILITY OF BENEFITS. The right of any
person to any benefit or payment under the Plan shall not be
subject to voluntary or involuntary transfer, alienation or
assignment, and, to the fullest extent permitted by law,
shall not be subject to attachment, execution, garnishment,
sequestration or other legal or equitable process. In the
event a person who is receiving or is entitled to receive
PBR Benefits attempts to assign, transfer or dispose of such
right, or if an attempt is made to subject said right to
such process, such assignment, transfer or disposition shall
be null and void.
.0.3.9 GOVERNING LAW. Except to the extent preempted by
federal law, the provisions of the Plan will be construed
according to the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, SELAS CORPORATION OF AMERICA has caused
this amended and restated Plan, effective as of January 1, 1995, to be
executed this 8th day of December, 1995.
SELAS CORPORATION OF AMERICA
ATTEST: /s/ Robert W. Ross, By: /s/ Stephen F. Ryan
Robert W. Ross, Secretary Stephen F. Ryan
President and Chief
Executive Officer
CORPORATE SEAL
EXHIBIT 10J
MANAGEMENT EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective the 20th day of October, 1993,
by and between RESISTANCE TECHNOLOGY, INC., a Minnesota corporation
(hereinafter "RTI"), and MARK S. GORDER, an individual resident of St.
Paul, Minnesota (hereinafter, "GORDER").
BACKGROUND
Gorder currently serves (and for the past several years Gorder
has served) as the President and Chief Executive Officer of RTI and as a
member of its Board of Directors. Gorder is a key employee of RTI and
has been substantially involved with RTI's organization, operations and
management and possesses trade secrets and other confidential information
relating to RTI and its customers.
RTI and the holders of all issued and outstanding shares of RTI
have entered into a Stock Purchase and Sale Agreement with Selas
Corporation of America, a Pennsylvania corporation ("Selas"), whereby
Selas is acquiring on the date hereof all of the issued and outstanding
shares of RTI.
RTI and Selas recognize that Selas' substantial monetary
investment in RTI, as well as the future business success of RTI, could
be materially jeopardized and prejudiced if Gorder were not available to
continue to serve RTI. Accordingly, RTI and Selas desire to assure the
continued services and employment of Gorder for the period provided in
this Agreement and to obtain the noncompetition and confidentiality
protections provided for herein with respect to RTI's customers,
relationships and trade secrets and other confidential information.
Gorder is willing to continue to serve RTI and to grant to RTI
noncompetition and confidentiality protections as provided in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
.0.3.10 EMPLOYMENT AGREEMENT; TERM. RTI hereby hires and
employs Gorder, and Gorder hereby accepts such engagement by
RTI, for a term of five (5) years, commencing October 20, 1993,
and ending October 20, 1998 (unless sooner terminated as
hereinafter provided) and upon the terms and conditions
contained in this Agreement.
.0.3.11 COMPENSATION AND BENEFITS.
.0.3.11.1 BASE SALARY. In consideration of all of
Gorder's services to RTI, RTI shall pay Gorder, a base
salary at a minimum rate of $160,706 per annum. Salary
increases will be at the discretion of the Board of
Directors of RTI, subject to the approval of the
Compensation Committee of the Board of Directors of Selas
(the "Compensation Committee"). Gorder's salary will be
payable as earned in reasonable periodic installments in
accordance with the regular practices of RTI in effect
from time to time.
.0.3.11.2 BONUSES. During the term of Gorder's employment
hereunder, Gorder shall participate in such annual bonus
or incentive compensation programs as may be adopted from
time to time by the Board of Directors of RTI with the
approval of the Compensation Committee, and Gorder shall
be entitled to receive such annual bonus or incentive
compensation as is provided for pursuant to the terms of
such programs; provided, however, that with respect to the
year ending December 31, 1993, Gorder shall receive a
bonus in accordance with RTI's Annual Incentive Bonus Plan
for 1993 as in effect on July 27, 1993.
.0.3.11.3 FRINGE BENEFITS. Throughout the term of his
employment, Gorder shall be entitled to participate in and
receive the benefits of any health or medical insurance
plan, life insurance plan, disability insurance plan, or
other employee benefit plan made available to other
officers of RTI [, provided that in any event Gorder shall
be entitled to [six] weeks of vacation per year, with any
unused vacation as of any year end to lapse]. In
addition, Gorder shall be entitled to continue to have the
use of an automobile similar to the automobile leased by
RTI for his use as of July 27, 1993.
.0.3.11.4 EXPENSES. RTI shall reimburse Gorder for all
reasonable and ordinary direct expenses incurred by Gorder
in conjunction with performing his duties hereunder,
subject to expense guidelines established from time to
time by the Board of Directors of RTI.
.0.3.12 DUTIES. Gorder shall perform such senior executive
responsibilities as shall from time to timebe assigned to him
by the Board of Directors of RTI. He shall initially serve as
President and Chief Executive Officer of RTI. Gorder shall
devote his full time, knowledge, skill and efforts to the
performance of his duties hereunder. Gorder shall not engage
in any other business activity unless approved by the Board of
Directors of RTI. Notwithstanding the foregoing, Gorder may
passively invest his assets (other than in business entities
which are in competition with RTI or Selas or any affiliate
thereof) in such form or manner as will not require any
material services on the part of Gorder in the operation of the
affairs of such businesses in which such investments are made.
.0.3.13 TERMINATION OF EMPLOYMENT. The term of Gorder's
employment hereunder shall be terminated upon the occurrence of
any of the events described below. In case of such
termination, the date upon which Gorder ceases to be employed
under this Agreement, after giving effect to any prior notice
requirement set forth below, is hereinafter referred to as the
"Termination Date."
.0.3.13.1 DEATH OR DISABILITY. This Agreement shall
terminate upon the death or "Disability" (as defined
below) of Gorder. If termination occurs for either such
reason, Gorder (or his heirs, beneficiaries or estate)
shall receive when due (i) all amounts payable under the
provisions of Paragraph 2(a) hereof which have accrued
through the Termination Date, and (ii) all bonus payments
and benefits as are due in accordance with the terms of
the benefit and bonus plans of RTI in effect on the date
of his death or "Disability" referred to in Paragraph 2(b)
and 2(c) hereof, and RTI shall have no further obligations
hereunder to Gorder or to his heirs, beneficiaries or
estate. As used herein, the terms "Disability" and
"Disabled" shall mean Gorder's inability, as a result of
physical or mental incapacity, to perform substantially
his duties with RTI for a period of six (6) consecutive
months. If there is any dispute as to whether Gorder is
or was Disabled, such dispute shall be resolved by a
licensed physician mutually agreeable to Gorder and RTI,
or, if Gorder and RTI are unable to agree upon a physician
within ten (10) days after notice from either to the other
suggesting a physician, then a physician shall be
designated by the then president of medical society for
the county in which Gorder maintains his principal
residence, upon request of either party. The cost of any
such medical examination shall be borne by RTI.
.0.3.13.2 CAUSE. RTI may, without liability, forthwith
terminate Gorder's employment hereunder for "Cause" (as
defined below) at any time, and thereafter the obligations
of RTI hereunder shall cease and terminate except for (i)
all amounts payable under the provisions of Paragraph 2(a)
hereof which are accrued through the Termination Date and
(ii) all bonus payments and benefits as are due in
accordance with the terms of the benefit and bonus plans
of RTI in effect on the Termination Date referred to in
Paragraphs 2(b) and 2(c) hereof. For purposes of this
Agreement, the term "Cause" shall mean (i) Gorder's
continued failure to perform substantially his duties with
RTI (other than any such failure resulting from his
incapacity due to physical or mental illness), twenty (20)
days after a demand for substantial performance is
delivered to him by RTI which specifically identifies the
manner in which RTI believes he has not substantially
performed his duties, (ii) any willful act of misconduct
by Gorder which is materially injurious to RTI or Selas,
momentarily or otherwise, or (iii) a criminal conviction
of Gorder for any act involving dishonesty, breach of
trust or the commission of a felony. For purposes of this
Subparagraph (b), no act, or failure to act, on Gorder's
part will be considered "willful" unless done (or omitted
to be done) by Gorder in bad faith and without reasonable
belief that his act or omission was in the best interests
of RTI.
.0.3.13.3 TERMINATION WITHOUT CAUSE. RTI may terminate
this Agreement at any time without Cause. If this
Agreement is terminated by RTI for any reason other than
for Cause or due to death or Disability of Gorder, then
Gorder shall receive from RTI a lump sum payment equal to
the present value (applying an 8% discount factor) of the
amounts Gorder would have received pursuant to Paragraph
2(a) hereof assuming Gorder's then current annual base
salary had continued to be paid, in equal monthly
installments, during the remaining unexpired term of this
Agreement. Upon such payment by RTI, RTI shall have no
further obligations or liabilities hereunder.
.0.3.14 NONCOMPETITION; CONFIDENTIAL INFORMATION.
.0.3.14.1 For a period (the "Relevant Period") commencing
on the date hereof and ending three years following the
date Gorder ceases, for any reason, to be employed by RTI,
except for the performance of his duties hereunder or as
expressly consented to in writing by RTI and Selas,
neither Gorder nor any Affiliate (as hereinafter defined)
shall, directly or indirectly: (i) engage, anywhere in the
Territory (as defined in subparagraph (c) below), in the
manufacture, assembly, design, distribution or marketing
of any product or equipment substantially similar to or in
competition with any product or equipment which at any
time during the period from the date hereof until the date
Gorder ceases, for any reason, to be employed by RTI is
manufactured, sold or distributed by RTI or any subsidiary
of RTI (which jointly and severally are hereinafter
referred to as the "Group") or any product or equipment
which the Group develops during such period for future
manufacture, sale or distribution; (ii) be or become a
stockholder, partner, owner, officer, director or employee
or agent of, or a consultant to or give financial or other
assistance to, any person or entity considering engaging
in any such activities or so engaged; (iii) seek in
competition with the business of the Group to procure
orders from or do business with any customer of the Group;
(iv) solicit or contact with a view to the engagement or
employment by any person or entity of any person who is an
employee of the Group; or (v) seek to contract with or
engage (in such a way as to adversely affect or interfere
with the business of the Group as carried on at any time
after the date hereof and on or prior to the date Gorder
ceases, for any reason, to be employed by RTI) any person
or entity who has been contracted with or engaged to
manufacture, assemble, supply or deliver products, goods,
materials or services to the Group; provided, however,
that nothing herein shall prohibit Gorder and Affiliates
from owning, as passive investors, such investments as are
expressly permitted under Paragraph 3 hereof. The
duration of Gorder's covenants set forth in this
subparagraph shall be extended by a period of time equal
to the number of days, if any, during which Gorder or any
Affiliate is in violation of the provisions hereof.
.0.3.14.2 From and after the date hereof, except in
connection with the performance of his duties hereunder,
neither Gorder nor any Affiliate shall, directly or
indirectly: (i) use or procure the use of any name
including the words Resistance Technology, Inc. or RTI or
any derivative or colorable imitation thereof; or (ii) use
in furtherance of any of their business affairs or
disclose to any third party any trade secret, customer
list, supplier list, financial data, pricing or marketing
policy or plan or any other proprietary or confidential
information relating to the Group or any of its products,
services, customers or suppliers, so long as the same is
not publicly known (other than by the act of Gorder or any
Affiliate).
.0.3.14.3 For the purposes of this Agreement, "Territory"
means the world, and "Affiliate" means: (i) any
corporation of which Gorder owns or otherwise possesses
the power to direct the vote, directly or indirectly, of
an amount of voting securities sufficient to elect a
majority of the board of directors of such corporation,
and (ii) any other person or entity controlled by Gorder.
For the purposes of this definition of "Affiliate,"
"control" means the power to direct the management and
policies of a person or entity, directly or indirectly,
whether through the ownership of voting securities, by
contract or otherwise; provided that, any person or entity
of which Gorder owns beneficially or of record, either
directly or through one or more intermediaries, more than
20% of the ownership interests, shall be conclusively
presumed to be an "Affiliate."
.0.3.14.4 Gorder acknowledges that damages alone shall not
be an adequate remedy for any breach by Gorder or
Affiliates of Gorder's covenants contained in this
Paragraph 5 and accordingly expressly agrees that, in
addition to any other remedies which RTI may have, RTI
shall be entitled to injunctive relief in any court of
competent jurisdiction for any breach or threatened breach
of any such covenants by Gorder and/or Affiliates.
Nothing contained herein shall prevent or delay RTI from
seeking, in any court of competent jurisdiction, specific
performance or other equitable remedies in the event of
any breach or intended breach by Gorder or Affiliates of
any of their obligations hereunder.
.0.3.14.5 Gorder acknowledges and agrees that (i) the
market for nearly all of the products manufactured by RTI
is worldwide, there being presently only one other company
which manufactures many of RTI's products, and (ii) the
covenants contained in this Agreement are fair and
reasonable in light of the consideration paid hereunder
and in order to protect Selas' investment in RTI, and the
invalidity or unenforceability of any particular
provision, or part of any provision, of this Paragraph 5
shall not affect the other provisions or parts hereof. If
any provision of this Paragraph 5 is determined to be
invalid or unenforceable by a court of competent
jurisdiction by reason of the duration or geographical
scope of the covenants contained therein, such duration or
geographical scope, or both, shall be considered to be
reduced to a duration or geographical scope to the extent
necessary to cure such invalidity.
.0.3.15 BENEFIT AND ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of RTI, its successors
and assigns, Gorder and his heirs and legal representatives.
This Agreement is not assignable by Gorder without the prior
written consent of RTI. This Agreement is assignable by RTI
only (i) with the prior written consent of Gorder, or (ii) to
any person, firm or corporation which becomes a successor in
interest (by purchase of its assets or stock, or by merger or
otherwise) to RTI's business.
.0.3.16 NOTICES. All notices required or permitted to be
given under this Agreement shall be given in writing, and shall
be sent by mail to the residence of Gorder then on file with
RTI, and to the principal office of RTI.
.0.3.17 CHOICE OF LAW. The provisions of this Agreement
shall be interpreted and construed in accordance with the laws
of the State of Minnesota.
.0.3.18 HEADINGS AND CAPTIONS. The headings and captions of
the paragraphs, sections and clauses of this Agreement are
inserted for convenience of reference only and shall not
constitute a part of this Agreement.
.0.3.19 ENTIRE AGREEMENT. This Agreement and the Patent and
Secrecy Agreement dated January 26, 1984 between RTI and
Gorder, taken together, contain the entire understanding
between RTI and Gorder concerning the subject matter hereof;
and the provisions applicable thereto cannot be amended,
altered, enlarged, supplemented, abridged, modified, extended
or waived except in a writing duly signed by the party to be
charged.
.0.3.20 SEVERABILITY. The invalidity or unenforceability of
any provisions of this Agreement or the application thereof to
any person or circumstances shall not affect or impair the
validity or enforceability of any other provision herein. Any
provision in this Agreement that might otherwise be invalid or
unenforceable because of contravention of any applicable law,
statute or governmental regulation shall be deemed to be
amended to the extent necessary to remove the cause of such
invalidation or unenforceability and such provision, as so
amended, shall remain in full force and effect.
.0.3.21 COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same
instrument.
IN WITNESS WHEREOF, RTI and Gorder have executed this
Agreement effective the date and year first above written.
RESISTANCE TECHNOLOGY, INC.
By:/s/ Thomas Giguere /s/ Mark S. Gorder
Its Vice President for MARK S. GORDER
Administration
EXHIBIT 21
SIGNIFICANT SUBSIDIARIES OF
SELAS CORPORATION OF AMERICA
SUBSIDIARY PLACE OF INCORPORATION
Deuer Manufacturing, Inc. Ohio
Resistance Technology GmbH Germany
Vertrieb von Elecktronikteilen
Resistance Technology, Inc. Minnesota
Selas S.A. France
Selas Italiana, S.A Italy
Selas Waermetechnik, GmbH Germany
EXHIBIT 23
SELAS CORPORATION OF AMERICA
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Selas Corporation of America:
We consent to the incorporation by reference in the Registration
Statement File No. 33-33712, on Form S-3, and the Registration Statement
File No. 33-35802, on Form S-8, of Selas Corporation of America and
subsidiaries of our report dated February 12, 1996 relating to the
consolidated balance sheets of Selas Corporation of America and
subsidiaries as of December 31, 1995 and 1994 and the related
consolidated statements of operations, shareholders' equity, and cash
flows and related financial statement schedules for each of the years in
the three-year period ended December 31, 1995, which report appears in
the December 31, 1995 annual report on Form 10-K of Selas Corporation of
America.
Philadelphia, Pennsylvania
March 25, 1996
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
consent and appoint Stephen F. Ryan and Robert W. Ross, or either of
them, his attorney to do any and all acts, including the execution of
documents, which said attorneys, or either of them, may deem necessary or
advisable to enable Selas Corporation of America (the "Company") to
comply with the Securities Exchange Act of 1934, as amended, and the
rules, regulations and requirements of the Securities and Exchange
Commission, in connection with the filing under said Act of an annual
report of the Company on Form 10-K for the year ended December 31, 1995,
including the power and authority to sign in the name and on behalf of
the undersigned, in any and all capacities in which the signature of the
undersigned would be appropriate, such annual report and any and all
amendments thereto and generally to do and perform all things necessary
to be done in the premises as fully and effectually in all respects as
the undersigned could do if personally present.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
and seal this 19th day of March, 1996.
/s/ John H. Austin, Jr.
John H. Austin, Jr.
/s/ Frederick L. Bissinger
Frederick L. Bissinger
/s/ Roy C. Carriker
Roy C. Carriker
/s/ Francis J. Dunleavy
Francis J. Dunleavy
/s/ Mark S. Gorder
Mark S. Gorder
/s/ Ralph R. Whitney, Jr.
Ralph R. Whitney, Jr.