-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FVfjSUqHbnBIKUhFaeUAP8ZVaaK6g0+uFgfqaznwUptY6FWfotQ+1BQhWBrbiUfL roPYgkMTAdaD8EEUaVWQXQ== /in/edgar/work/20000814/0000950116-00-001898/0000950116-00-001898.txt : 20000921 0000950116-00-001898.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950116-00-001898 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARLTON TECHNOLOGIES INC CENTRAL INDEX KEY: 0000096988 STANDARD INDUSTRIAL CLASSIFICATION: [7389 ] IRS NUMBER: 221825970 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07708 FILM NUMBER: 695604 BUSINESS ADDRESS: STREET 1: 2828 CHARTER RD STE 101 CITY: PHILADELPHIA STATE: PA ZIP: 19154 BUSINESS PHONE: 2156766900 MAIL ADDRESS: STREET 1: 2828 CHARTER RD CITY: PHILADELPHIA STATE: PA ZIP: 19154 FORMER COMPANY: FORMER CONFORMED NAME: TELESCIENCES INC DATE OF NAME CHANGE: 19880201 10-Q 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 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 1-7708 ------ MARLTON TECHNOLOGIES, INC. ----------------------------------------------- (Exact name of issuer as specified in its charter)
New Jersey 22-1825970 - --------------------------------------------------------------- ------------------------------------------ (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 2828 Charter Road Philadelphia PA 19154 - ---------------------------------------------- ----------------------------- ----------------- -------------- (Address of principal executive offices) City State Zip Issuer's telephone number (215) 676-6900 --------------
Former name, former address and former fiscal year, if changed since last report. Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------------ ------------ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by court Yes No ------------ ------------ APPLICABLE ONLY TO CORPORATE ISSUERS: State the number of shares outstanding of each of the issuer's classes of common equity as of the last practicable date: 7,365,896 - --------- Transitional Small Business Disclosure Form (check one): Yes No X ------------ ------------ MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands except share data)
June 30, December 31, 2000 1999 -------- ------------ ASSETS Current: Cash and cash equivalents $ 832 $ 836 Accounts receivable, net of allowance of $236 and $410, respectively 24,878 16,232 Inventory 11,445 11,655 Prepaids and other current assets 2,294 2,320 Deferred income taxes 341 341 -------- -------- Total current assets 39,790 31,384 Investment in affiliates 1,906 2,058 Property and equipment, net of accumulated depreciation of $5,999 and $5,312, respectively 5,047 5,011 Rental assets, net of accumulated depreciation of $2,069 and $1,942, respectively 1,754 1,370 Goodwill, net of accumulated amortization of $2,943 and $2,523, respectively 19,839 20,258 Other assets, net of accumulated amortization of $1,138 and $1,088, respectively 560 121 -------- -------- Total assets $ 68,896 $ 60,202 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 110 $ 2,912 Accounts payable 7,542 7,080 Accrued expenses and other 10,345 9,328 -------- -------- Total current liabilities 17,997 19,320 -------- -------- Long-term debt, net of current portion 19,665 10,448 Other long-term liabilities 420 551 Deferred income taxes 159 159 -------- -------- Total liabilities 38,241 30,478 -------- -------- Commitments and contingencies Stockholders' equity: Preferred stock, $.10 par - shares authorized 10,000,000; no shares issued or outstanding Common stock, $.10 par - shares authorized 50,000,000; 7,365,896 and 7,331,765 issued, respectively 737 733 Additional paid-in capital 30,454 30,353 Accumulated deficit (424) (1,250) -------- -------- 30,767 29,836 Less cost of 5,000 treasury shares (112) (112) -------- -------- Total stockholders' equity 30,655 29,724 -------- -------- Total liabilities and stockholders' equity $ 68,896 $ 60,202 ======== ========
See notes to consolidated financial statements. 2 MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (In thousands except per share data)
For the three months ended For the six months ended --------------------------------- ---------------------------------------- June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 ------------- ------------- ------------- ------------- Sales $ 24,790 $ 24,026 $ 49,842 $ 49,817 Cost of sales 19,237 19,276 37,853 39,506 -------- -------- -------- -------- Gross profit 5,553 4,750 11,989 10,311 -------- -------- -------- -------- Expenses: Selling 2,644 2,349 5,569 4,611 Administrative and general 2,120 1,763 4,229 3,505 -------- -------- -------- -------- 4,764 4,112 9,798 8,116 -------- -------- -------- -------- Operating profit 789 638 2,191 2,195 -------- -------- -------- -------- Other income (expense): Interest income and other income 6 53 41 83 Interest (expense) (367) (302) (646) (527) Income (loss) from investments in affiliates, net (23) (36) 4 (2) -------- -------- -------- -------- (384) (285) (601) (446) -------- -------- -------- -------- Income before provision for income taxes 405 353 1,590 1,749 Provision for income taxes 195 141 764 699 -------- -------- -------- -------- Net income $ 210 $ 212 $ 826 $ 1,050 ======== ======== ======== ======== Income per common share: Basic $.03 $.03 $.11 $.15 Diluted $.03 $.03 $.11 $.13
See notes to consolidated financial statements. 3 MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2000 (In thousands except share data)
Common Stock Additional Total --------------------- Paid-in Accumulated Treasury Stockholders' Shares Amount Capital Deficit Stock Equity --------- ------ ---------- ------------ -------- ------------ Balance at December 31, 1999 7,331,765 $733 $30,353 ($1,250) ($112) $29,724 Issuance of shares for debt restructuring 37,210 4 96 - - 100 Issuance of shares under compensation arrangements 1,921 - 5 - - 5 Net income for the six months ended June 30, 2000 - 826 - 826 --------- ---- ------- ------ ----- ------- Balance at June 30, 2000 7,370,896 $737 $30,454 ($424) ($112) $30,655 ========= ==== ======= ====== ===== =======
See notes to consolidated financial statements. 4 MARLTON TECHNOLOGIES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In thousands)
For the six months ended June 30, 2000 1999 ------- ------- Cash flows from operating activities: Net income $ 826 $ 1,050 Adjustments to reconcile net income to cash used in operating activities: Depreciation and amortization 1,329 1,259 Decrease in deferred tax asset - 121 Equity in income of affiliates (50) (48) Other items 5 26 Change in assets and liabilities: (Increase) decrease in accounts receivable, net (8,490) (1,654) (Increase) decrease in inventory 210 (2,814) (Increase) decrease in prepaid and other assets 69 (150) Increase (decrease) in accounts payable, accrued expenses and other 1,479 (3,009) ------- ------- Net cash used in operating activities (4,622) (5,219) ------- ------- Cash flows from investing activities: Guaranteed payments to sellers (131) (135) Capital expenditures (1,234) (1,660) Cash paid to acquire investment in affiliate - (258) ------- ------- Net cash used in investing activities (1,365) (2,053) ------- ------- Cash flows from financing activities: Payments for loan origination fees (432) - Net borrowings from revolving credit facility 6,415 4,037 Principal payments on long-term debt - (927) ------- ------- Net cash provided by financing activities 5,983 3,110 ------- ------- Decrease in cash and cash equivalents (4) (4,162) Cash and cash equivalents - beginning of period 836 4,621 ------- ------- Cash and cash equivalents - end of period $ 832 $ 459 ======= ======= Supplemental cash flow information: Cash paid for interest $ 300 $ 460 ======= ======= Cash paid for income taxes $ 785 $ 643 ======= ======= Non-cash financing activity: Issuance of common stock for revolving credit facility $ 100 - ======= ======= Issuance of common stock in connection with acquisition - $ 228 ======= =======
See notes to consolidated financial statements. 5 MARLTON TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION --------------------- The consolidated financial statements included herein are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the financial statements reflect all adjustments (of a normal and recurring nature) which are necessary to present fairly the financial position, results of operations and cash flows for the interim periods. These financial statements should be read in conjunction with the Annual Report to Shareholders and Form 10-K for the year ended December 31, 1999. 2. PER SHARE DATA -------------- The following table sets forth the computation of basic and diluted net income per common share (in thousands except per share data):
Three months ended Six months ended ------------------ ---------------- June 30, June 30, June 30, June 30, --------- --------- --------- -------- 2000 1999 2000 1999 ---- ---- ---- ---- Net income $ 210 $212 $ 826 $ 1,050 ===== ==== ===== ======= Weighted average common shares outstanding used to compute basic net income per common share 7,366 7,231 7,360 7,231 Additional common shares to be issued assuming the exercise of stock options, net of shares assumed reacquired -- 694 235 632 ----- ----- ----- ----- Total shares used to compute diluted net income per common share 7,366 7,925 7,595 7,863 ===== ===== ===== ===== Basic net income per share $.03 $.03 $.11 $.15 ==== ==== ==== ==== Diluted net income per share $.03 $.03 $.11 $.13 ==== ==== ==== ====
Options and warrants to purchase 930,000 and 597,000 shares of common stock were outstanding at June 30, 2000 and 1999, respectively, but were excluded in the computation of diluted income per common share because the options and warrants' exercise price was greater than the average market price of the common shares. 3. INVENTORY --------- Inventory consists of the following: June 30, 2000 December 31, 1999 ------------- ----------------- Raw materials $ 486 $ 482 Work-in-process 6,478 7,612 Finished goods 4,481 3,561 ------- ------- $11,445 $11,655 ======= ======= 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales - -----
Three months ended (in thousands) % Increase/ June 30, 2000 June 30, 1999 (Decrease) ------------- ------------- ---------- Trade show exhibits group $16,571 $13,040 27.1% Permanent and scenic displays group 8,219 10,986 (25.2) ------- ------- ---- Total sales $24,790 $24,026 3.2% ======= ======= ====
Six months ended (in thousands) % Increase/ June 30, 2000 June 30, 1999 (Decrease) ------------- ------------- ---------- Trade show exhibits group $34,469 $27,309 26.2% Permanent and scenic displays group 15,373 22,508 (31.7) ------ ------ ------ Total sales $49,842 $49,817 0.1% ======= ======= ======
Total sales grew 3.2% in the second quarter of 2000 and were essentially unchanged in the first six months of 2000 as compared with the same 1999 periods. This was the net result of higher sales of trade exhibits (up 27.1% in the second quarter and 26.2% in the first half) offset by lower sales of permanent and scenic displays (down 25.2% in the second quarter and 31.7% in the first half). Higher trade show exhibit sales were principally attributable to sales to new clients secured near the end of 1999, resulting from the Company's continuing focus on client expansion. The decrease in permanent and scenic displays sales was largely the result of lower sales for store fixtures and for Sparks scenic displays. The store fixtures decrease was primarily due to lower sales to large national retail customers experiencing slower new store growth. The decrease for scenic displays was due to large projects in the first half of 1999 which were not replaced with similar size projects in the first half of 2000, resulting from a general slowdown in the industry. Operating Profit - ---------------- Operating profit increased to $0.8 million, or 3.2% of sales, in the second quarter 2000 from $0.6 million, or 2.7% of sales, in the same 1999 period, and was essentially unchanged in the first half of 2000 as compared with the first half of 1999. This was the net result of higher gross profit margins offset by higher selling, administrative and general expenses. The gross profit margin, as a percentage of sales improved to 22.4% and 24.1% from 19.8% and 20.7% in the second quarter and first six month periods of 2000 and 1999, respectively. The second quarter gross profit margin improvement was principally attributable to higher margins generated by the scenic displays business. During the second quarter of 1999, the Company incurred poor execution in estimating and manufacturing certain significant projects, which reduced gross profit margins. Management changes were made at this operation and gross margins improved significantly in the second quarter of 2000. The improvement for the first six month period was largely the result of this improvement in the scenic displays business as well as to higher gross profit margins generated by trade show exhibits sales during the first quarter. 7 Selling expenses, as a percentage of sales increased to 10.7% and 11.2% from 9.8% and 9.2% in the second quarter and first six months of 2000 and 1999, respectively. These increases were largely the result of higher trade show exhibit sales, which are subject to higher sales commissions and variable selling expense. Administrative and general expenses increased $0.4 million in the second quarter and $0.7 million in the first half of 2000 versus 1999 due to several factors, including higher depreciation expense related to investments in computer systems and to improvements in the Company's office facilities at several locations. The Company also relocated and consolidated its DMS Store Fixtures business during the first half of 2000 and incurred higher recruiting expenses. Other Income (Expense) - ---------------------- Interest expense increased to $0.4 million and $0.6 million from $0.3 million and $0.5 million in the second quarter and first half of 2000 and 1999, respectively. This increase was due in large part to higher borrowings and interest rates on the Company's revolving credit facility to finance working capital requirements resulting from slower billing and collections of accounts receivable. Income Taxes - ------------ The provision for income taxes, as a percentage of pre-tax income, increased to 48% in the second quarter and first six months of 2000 from 40% in the comparable 1999 periods. The 1999 rate reflects a benefit from the utilization of business tax credits. The difference between statutory income tax rates and these effective tax rates is principally attributable to non-deductible goodwill amortization. Net Income - ---------- Net income of $0.2 million ($.03 per fully diluted share) for the second quarter 2000 was essentially unchanged from the same prior year period. For the first half of 2000, net income decreased to $0.8 million from $1.1 million due in large part to higher interest expense and provision for income taxes. Backlog - ------- The Company's backlog of orders increased to approximately $24 million at June 30, 2000 from $22 million at June 30, 1999. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital increased $9.7 million during the first half of 2000 to $21.8 million at June 30, 2000 from $12.1 million at December 31, 1999. This increase was principally attributable to an $8.6 million increase in accounts receivable and to a $2.8 million reduction in the current portion of long-term debt, partially offset by a $1.5 million increase in accounts payable and accrued expenses. The accounts receivable increase was due to a higher balance for the Company's DMS Store Fixtures business (up $4.2 million) largely related to major new clients and to a slower billing and collection process experienced by the Company's trade show exhibits operations. Billing and collection delays were attributable to several factors, including continuing difficulties associated with the deployment of a new computer system described below. Management believes that these difficulties will continue for the remainder of 2000. The decrease in the current portion of long-term debt was the result of the debt agreement restructuring described below. On January 21, 2000, the Company restructured its bank debt with an amended revolving credit facility, providing for borrowing capacity up to $30 million. This new facility, which matures on January 21, 2005, was used to refinance a term loan and can be used to finance capital expenditures, permitted acquisitions and other working capital requirements as needed. The new facility is collateralized by all of the Company's assets and bears interest at rates based on the LIBOR, adjusted for applicable spreads ranging from 1.25% to 2.5%. The Company is subject to an annual commitment fee of 1/4% on the average unused portion of the revolving credit facility. This new facility includes certain financial covenants requiring a minimum net worth and maintenance of certain financial ratios, and restricts the Company's ability to pay dividends. Loan origination fees totaling $532,000 comprised of $432,000 of cash payments and issuance of 37,210 shares of the Company's common stock are included under other assets and will be amortized over five years. There were borrowings of $19.6 million under this facility at June 30, 2000. 8 OUTLOOK The Company expects continued sales growth from trade show exhibits and relatively flat sales from permanent and lower sales of scenic displays for the last six months of 2000. Management believes that the trade show exhibit client base of Fortune 1000 companies will continue to tightly manage their marketing budgets, which may impact the Company's trade show exhibit profit margins. The Company has upgraded several facilities and continues to pursue operating efficiency improvements to mitigate the impact of margin pressure from its client base. The Company converted its management information system at the beginning of 1999 and incurred inefficiencies as a result of the transition, which have continued into 2000. Although management is taking decisive action to address this situation, inefficiencies are expected to continue into the second half of 2000. Further investments are planned to upgrade the Company's management information systems. Management plans ongoing investment in human resources, particularly for new sales executives and support staff to create long-term growth opportunities, and believes that these investments combined with the new debt capacity, will provide future opportunities for continued growth and business expansion. FORWARD-LOOKING STATEMENTS This report contains forward-looking statements. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, there are certain important factors that could cause the Company's actual results to differ materially from those included in such forward-looking statements. Some of the important factors which could cause actual results to differ materially from those projected include, but are not limited to: the Company's ability to continue to identify and complete strategic acquisitions to enter new markets and expand existing business; continued availability of financing to provide additional sources of funding for working capital requirements, future acquisitions, capital expenditure requirements and foreign investments; the effects of competition on products and pricing, growth and acceptance of new product lines through the company's sales and marketing programs; changes in material prices from suppliers; ability to attract and retain competent employees; ability to add and retain customers; changes in sales mix; ability to integrate and upgrade technology; uncertainties regarding accidents or litigation which may arise in the ordinary course of business; and the effects of, and changes in the economy, monetary and fiscal policies, laws and regulations, inflation and monetary fluctuations as well as fluctuations in interest rates, both on a national and international basis. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's revolving credit facility bears a floating rate of interest, based on LIBOR rates, plus an applicable spread. The Company had borrowings of $19.6 million from its $30 million revolving credit facility at June 30, 2000. Fluctuations in foreign currency exchange rates do not significantly affect the Company's financial position and results of operations. 9 PART II - OTHER INFORMATION Responses to Items one, two, three and five are omitted since these items are either inapplicable or the response thereto would be negative. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company held its Annual Meeting of Shareholders on June 22, 2000. Alan I. Goldberg and Seymour Hernes were elected as directors to serve for a three-year term. Fred Cohen, William R. Hamilton, Robert B. Ginsburg and Jeffrey Harrow continued their respective terms of office as directors. At such meeting votes were cast as follows: Election of Directors For Against - --------------------- --- ------- Alan I. Goldberg 5,374,311 101,985 Seymour Hernes 5,374,300 101,996 ITEM 6. (a) Exhibits
Page 10(w) Amendment to Employment Agreement dated May 1, 2000 with Lawrence W. Schan 11 ------ 10(x) Option Agreement dated January 10, 2000 with Stephen P. Rolf 14 ------ 10(y) Option Agreement dated August 7, 2000 with Robert B. Ginsburg 15 ------ 10(z) Option Agreement dated August 7, 2000 with Alan I. Goldberg 17 ------ 10(AA) Option Agreement dated August 7, 2000 with Outside Directors 19 ------
(b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the period covered by this report on Form 10-Q SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MARLTON TECHNOLOGIES, INC. /s/ Robert B. Ginsburg - ----------------------- Robert B. Ginsburg President and Chief Executive Officer /s/ Stephen P. Rolf - ------------------- Stephen P. Rolf Chief Financial Officer Dated August 11, 2000 10 EX-10.W 2 0002.txt EXHIBIT 10(W) EXHIBIT 10(w) AMENDMENT DMS Store Fixtures LLC (successor to DMS Store Fixtures Corp.) (the "Company") and Lawrence Schan (the "Employee") are parties to an Employment Agreement dated December 31, 1997 (the "Employment Agreement"), and Lawrence Schan, Stanley D. Ginsburg and Ira M. Ingerman are parties to a DMS Store Fixtures Shareholders Trust Agreement dated December 31, 1997 (the "Trust"), which they desire to amend effective May 1, 2000 (the "Effective Date") as follows: o Paragraph 1 of the Employment Agreement is amended and restated as follows; 1. Employment and Term. The Company hereby employs Employee and Employee hereby accepts employment with the Company, as President - Contract Division (such position, Employee's "Position") for the period commencing on the date hereof and continuing until December 31, 2002, subject to the provisions of Section 9 hereof (the "Term"), provided this Agreement may be terminated by either party with seven days prior written notice. Upon any such termination, Base Salary will end, and commissions and bonus will be computed as of such date in accordance with Schedule B. o The second sentence of Paragraph 2 of the Employment Agreement is amended and restated as follows; Employee agrees to assume such duties and responsibilities commensurate with his Position, including without limitation those set forth on Schedule A. o The first and last sentences of Paragraph 4 of the Employment Agreement are amended and restated as follows; The Company shall pay Employee, and Employee hereby agrees to accept, as compensation for all services rendered hereunder and for Employee's covenant not to compete as provided for in Section 8 hereof, a base salary at the annual rate of $250,000 from the Effective Date until a new Company Vice President of Operations has been hired (the "Transition Date"), $125,000 for the period from the Transition Date until December 31, 2000, and $100,000 thereafter (the "Base Salary"). In addition to the Base Salary, the Company shall pay Employee commissions and bonus as set forth on Schedule B. o Schedule A to the Employment Agreement is deleted and replaced with the attached Schedule A. o A new Schedule B in the form attached is added to the Employment Agreement. o Employee's bonus for 1999 under the Employment Agreement was $ 74,282 (less normal payroll deductions). Under the DMS Purchase Agreement dated July 18, 1997, the amount of $ 34,473 is payable by Employee to Marlton Technologies, Inc. for pre-acquisition inventory and accounts receivable adjustments as set forth on Schedule C. The parties agree that the current net amount of these two items will be paid to Employee within 10 days after the date of this Amendment. In the event the Company has or in the future (i) collects any accounts receivable listed on Schedule C, or (ii) gets paid for any of the inventory listed on Schedule C, the Company will pay Employee 50% of such amounts collected or paid. o Employee's Marlton Technologies, Inc. Common Stock held in the Trust shall continue to vest based on his continued employment under this Amendment. In the event of termination of his employment by Employee or by the Company with seven days prior written notice as provided in Paragraph 1 (which shall be added to the definition of an "Involuntary Termination Event") above or an "Involuntary Termination Event" as defined in the Trust, prior to December 31, 2002, such shares shall continue to vest and shall be distributed to Employee upon termination of the Trust, as long as Employee does not breach the continuing restrictions set forth in Paragraphs 6, 7 and 8(c), (d) and (e), (excluding 8(a), 8(b) and excluding from 8(c) (ii) suppliers of raw materials only, but specifically including within the term "supplier" and such restriction each factory and subcontractor who produces products for the Company) of the Employment Agreement. In the event Employee breaches the continuing restrictions set forth in Paragraphs 6, 7 and 8(c), (d) and (e), (excluding 8(a), 8(b) and excluding from 8(c) (ii) suppliers of raw materials only, but specifically including within the term "supplier" and such restriction each factory and subcontractor who produces products for the Company) of the Employment Agreement, Shares and Additional Shares of Employee will be forfeited in accordance with the procedures of Paragraphs 4.2 (b) and 4.4 of the Trust, measured as of the date of the first such breach. The restrictions set forth in Paragraph 8 11 shall apply during Employee's term of employment and the restrictions set forth in Paragraphs 8(c) (excluding from 8(c) (ii) suppliers of raw materials only), (d) and (e) shall apply for a period of two years thereafter, but in no event shall such restrictions terminate prior to December 31, 2002. After notice of termination pursuant to Paragraph 1 of this Amendment, but prior to termination of employment, the parties to this Amendment shall consult with each other in good faith to identify, with specificity, the clients and suppliers who are covered by the continuing restrictions of Paragraph 8(c), (d) and (e). Except as expressly amended by the above, the Employment Agreement and Trust shall remain in full force and effect. DMS Store Fixtures, LLC -------------------------- ___________________________________ Lawrence Schan Lars Fritz, Chief Executive Officer For the Trust: ___________________________________ Ira Ingerman ___________________________________ Stanley Ginsburg Consenting to amendment of Trust: Marlton Technologies, Inc. By ________________________________ 12 Schedule B Commission and Bonus Commissions: Employee shall receive commissions in the amount of 2% on the cumulative annual (for 2000, from the Effective Date through December 31, 2000) sales of contract jobs originated and serviced by Employee, provided such jobs cumulatively achieve a Gross Profit of at least 15%. "Gross Profit" shall mean the revenues (less applicable taxes) paid by a customer, minus all materials, labor, detailing, prototypes, engineering, authorized reimbursable travel costs (rail, air or mileage), project management and other expenses associated with a job, plus all speculative design, prototypes and engineering expenses and authorized reimbursable travel expense related to the Contract Division. Bonus: Employee shall be eligible to receive a calendar year bonus based on the cumulative annual (for 2000, from the Effective Date through December 31, 2000) Gross Profit (as defined above) of all Contract Division jobs (whether originated and serviced by Employee or other Company employees), as follows: Minimum Cumulative Gross Bonus as a Profit Percentage Percentage of Sales ----------------- ------------------- 18% .5% 19% 1.0% 20% 1.5% 21% or above 2.0% Employee shall also be entitled to receive a bonus for the period from January 1, 2000 to the Effective Date, based on the actual pre-tax profit after all bonuses of the Company, over such period, based on the original Schedule A to the Employment Agreement. Such bonus shall be payable within 90 days after completion of calendar year 2000. General: Commissions and Bonus are only earned upon completion of the relevant jobs and receipt of full payment from the respective customers. Bonus and commissions are payable within 90 days after completion of each calendar year. If reserves or credits are made by the Company with regard to a job and within six months thereafter the client makes additional payments to the Company with regard to such job, or if the Company issues a credit or adjustment to a client or performs remedial work within six months after completion of a job, Employee's commissions and bonus will be recalculated to include such additional payments, credits and/or costs relating to such job 13 EX-10.X 3 0003.txt EXHIBIT 10(X) EXHIBIT 10(x) MARLTON TECHNOLOGIES, INC. -------------------------- STOCK OPTION AGREEMENT THIS STOCK OPTION (the "Option") is granted as of the 10th day of January 2000, by MARLTON TECHNOLOGIES, INC., a New Jersey corporation (the "Company") to STEPHEN P. ROLF (the "Optionee"). W I T N E S S E T H : -------------------- 1. Grant. Pursuant to the Company's 1990 Incentive Stock Option Plan (the "Plan"), the Company hereby grants to the Optionee Stock Options (the "Options") to purchase on the terms and conditions set forth herein, an aggregate of Sixty Thousand (60,000) shares (appropriately adjusted for any subsequent stock splits, stock combinations or similar capital restructuring) of the Company's Common Stock, par value, $.10 per share (the "Option Shares"), at a purchase price per share of Two Dollars ($2.00) (the "Option Price"). 2. Term. This Option Agreement and Optionee's right to exercise Options vested in accordance with Paragraph 3 shall terminate on the earlier of (i) the date three years after such Options vest, or (ii) upon termination of Optionee's employment or Employment Agreement between Optionee and the Company, provided that in the event of termination due to Optionee's death or disability, Optionee (or Optionee's spouse or estate) may exercise this Option Agreement for a period of six months following the date of termination as to Options fully vested on or before the date of termination. 3. Vesting. The Options will vest 20,000 on each of the first three anniversaries of the date of this Agreement, provided Optionee continues to be employed by the Company on each of such dates. 4. Method of Exercise and Payment. Vested Options may be exercised from time to time, in whole or in part. When exercisable under Paragraph 3, the Option may be exercised by written notice to the Company specifying the total number of Option Shares to be exercised. The notice shall be accompanied by payment in cash or by check equal to the aggregate Option Price of all Option Shares covered by such notice. 5. Notices. Any notice to be given to the Company shall be addressed to the Company at its principal executive office, and any notice to be given to the Optionee shall be addressed to the Optionee at the address then appearing on the records of the Company or at such other address as either party hereafter may designate in writing to the other. Any such notice shall be deemed to have been duly given when deposited in the United States mail, addressed as aforesaid, registered or certified mail, and with proper postage and registration or certification fees prepaid. 6. General. This Option shall not be assignable by Optionee. Stock certificates representing the Option Shares acquired shall bear any legends required by applicable state and federal securities laws. Company stock issuances are unregistered, requiring a one year holding period. 7. Tax Provision. This Option Agreement shall be interpreted and construed in a manner consistent with, and to satisfy the requirements of, the incentive stock option provisions of the Internal Revenue Code of 1986, as it may be amended from time to time (the "Code") and of the Plan. This Option Agreement is intended to satisfy the requirements of the Plan, Section 422A(b) of the Code and qualify for special tax treatment under Section 421 et seq. of the Code. IN WITNESS WHEREOF, the parties have executed this Option Agreement as of the day and year first above written. MARLTON TECHNOLOGIES, INC. Attest: ______________________________ By:____________________________ Alan I. Goldberg, Secretary Robert B. Ginsburg, President Witness: _______________________________ _______________________________ Optionee: Stephen P. Rolf 14 EX-10.Y 4 0004.txt EXHIBIT 10(Y) EXHIBIT 10(y) MARLTON TECHNOLOGIES, INC. INCENTIVE STOCK OPTION AGREEMENT -------------------------------- THIS STOCK OPTION (the "Option") is granted this 7th day of August, 2000, by MARLTON TECHNOLOGIES, INC., a New Jersey corporation (the "Company") to ROBERT B. GINSBURG (the "Optionee"). W I T N E S S E T H ; --------------------- 1. Grant. Pursuant to the Company's 1990 Incentive Stock Option Plan (the "Plan"), the Company hereby grants to the Optionee Incentive Stock Options (the "Options") to purchase on the terms and conditions hereinafter set forth an aggregate of One Hundred, Seventy Five Thousand (175,000) shares of the Company's Common Stock, par value, $.10 per share (the "Option Shares"), at the purchase price of $1.60 per share (the "Option Price"), subject to adjustment as provided in Paragraph 5. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to such terms in the Plan. 2. Term. This Option Agreement and Optionee's right to acquire Options vested in accordance with Paragraph 3 shall terminate at 5:00 p.m. (local Philadelphia time) on July 31, 2010, notwithstanding Optionee's earlier death, Total Disability or termination of employment by the Company or by Optionee for any reason. 3. Vesting. The Options will vest (all such Options upon vesting shall constitute Accrued Installments under the Plan) as follows: (a) Options to purchase 62,500 Option Shares will vest on August 7, 2000. (b) Options to purchase 62,500 Option Shares will vest on January 1, 2001 provided Optionee continues in the employment of the Company. (c) Options to purchase 50,000 Option Shares will vest on January 1, 2002 provided Optionee continues in the employment of the Company. (d) All Options will vest immediately in their entirety in the event of a Terminating Transaction of the Company or in the event Optionee's employment with the Company is terminated by the Company or by Optionee for any reason, including without limitation due to death or Total Disability. Any such vested Options of the deceased Optionee may be exercised prior to their expiration only by the person or persons whom the Optionee's Option rights pass by will or the laws of descent and distribution. 4. Method of Exercise and Payment. This Option may be exercised with respect to vested Option Shares from time to time, in whole or in part. When exercisable under Paragraph 3, the Option may be exercised by written notice to the Company specifying the total number of Option Shares to be exercised. The notice shall be accompanied by payment in cash or by check equal to the aggregate Option Price of all Option Shares covered by such notice, or Optionee may elect to pay for some or all of the Option Shares with shares of Common Stock of the Company previously acquired and owned by Optionee at the time of exercise of this Option, in accordance with the provisions of Section 6.06(b) of the Plan. Such exercise shall be effective upon the actual receipt by the Company of such written notice and payment. 5. Adjustments. The Option Shares and the Option Price are subject to adjustment as provided in Section 6.09 of the Plan. The Option Price will also be adjusted in the event shares, or options to acquire shares, of Common Stock are issued after the date of this Option Agreement to officers or directors of the Company at a price (or, in the case of options, having an exercise price) lower than the Option Price. In such event, the Option Price will be adjusted to equal the purchase price of such shares or the exercise price of such options, as the case may be, but in no event will the Option Price be less than the Fair Market Value of shares of the Company's Common Stock on the date of this Option Agreement unless Optionee elects in writing to have this Option Agreement treated as a Non-Qualified Option under the Plan. 6. Notices. Any notice to be given to the Company shall be addressed to the Company at its principal executive office, and any notice to be given to the Optionee shall be addressed to the Optionee at the address then appearing on the personnel records of the Company or at such other address as either party hereafter may designate in 15 writing to the other. Any such notice shall be deemed to have been duly given when deposited in the United States mail, addressed as aforesaid, registered or certified mail, and with proper postage and registration or certification fees prepaid. 7. Tax Provision. This Option Agreement shall be interpreted and construed in a manner consistent with, and to satisfy the requirements of, the incentive stock option provisions of the Internal Revenue Code of 1986, as it may be amended from time to time (the "Code") and of the Plan. This Option Agreement is intended to satisfy the requirements of the Plan, Section 422A(b) of the Code and qualify for special tax treatment under Section 421 et seq of the Code. IN WITNESS WHEREOF, the Company has granted this Option on the day and year first above written. MARLTON TECHNOLOGIES, INC. By:___________________________________ Robert B. Ginsburg, Chief Executive Officer Attest: ________________________________ Alan I. Goldberg, Secretary ACCEPTED BY: _________________________________ Robert B. Ginsburg 16 EX-10.Z 5 0005.txt EXHIBIT 10.Z EXHIBIT 10(z) MARLTON TECHNOLOGIES, INC. INCENTIVE STOCK OPTION AGREEMENT THIS STOCK OPTION (the "Option") is granted this 7th day of August, 2000, by MARLTON TECHNOLOGIES, INC., a New Jersey corporation (the "Company") to ALAN I. GOLDBERG (the "Optionee"). W I T N E S S E T H ; 1. Grant. Pursuant to the Company's 1990 Incentive Stock Option Plan (the "Plan"), the Company hereby grants to the Optionee Incentive Stock Options (the "Options") to purchase on the terms and conditions hereinafter set forth an aggregate of One Hundred Sixty Two Thousand, Two Hundred (162,200) shares of the Company's Common Stock, par value, $.10 per share (the "Option Shares"), at the purchase price of $1.60 per share (the "Option Price"), subject to adjustment as provided in Paragraph 5. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to such terms in the Plan. 2. Term. This Option Agreement and Optionee's right to acquire Options vested in accordance with Paragraph 3 shall terminate at 5:00 p.m. (local Philadelphia time) on July 31, 2010, notwithstanding Optionee's earlier death, Total Disability or termination of employment by the Company or by Optionee for any reason. 3. Vesting. The Options will vest (all such Options upon vesting shall constitute Accrued Installments under the Plan) as follows: (a) Options to purchase 62,500 Option Shares will vest on August 7, 2000. (b) Options to purchase 62,500 Option Shares will vest on January 1, 2001 provided Optionee continues in the employment of the Company. (c) Options to purchase 37,200 Option Shares will vest on January 1, 2002 provided Optionee continues in the employment of the Company. (d) All Options will vest immediately in their entirety in the event of a Terminating Transaction of the Company or in the event Optionee's employment with the Company is terminated by the Company or by Optionee for any reason, including without limitation due to death or Total Disability. Any such vested Options of the deceased Optionee may be exercised prior to their expiration only by the person or persons whom the Optionee's Option rights pass by will or the laws of descent and distribution. 4. Method of Exercise and Payment. This Option may be exercised with respect to vested Option Shares from time to time, in whole or in part. When exercisable under Paragraph 3, the Option may be exercised by written notice to the Company specifying the total number of Option Shares to be exercised. The notice shall be accompanied by payment in cash or by check equal to the aggregate Option Price of all Option Shares covered by such notice, or Optionee may elect to pay for some or all of the Option Shares with shares of Common Stock of the Company previously acquired and owned by Optionee at the time of exercise of this Option, in accordance with the provisions of Section 6.06(b) of the Plan. Such exercise shall be effective upon the actual receipt by the Company of such written notice and payment. 5. Adjustments. The Option Shares and the Option Price are subject to adjustment as provided in Section 6.09 of the Plan. The Option Price will also be adjusted in the event shares, or options to acquire shares, of Common Stock are issued after the date of this Option Agreement to officers or directors of the Company at a price (or, in the case of options, having an exercise price) lower than the Option Price. In such event, the Option Price will be adjusted to equal the purchase price of such shares or the exercise price of such options, as the case may be, but in no event will the Option Price be less than the Fair Market Value of shares of the Company's Common Stock on the date of this Option Agreement unless Optionee elects in writing to have this Option Agreement treated as a Non-Qualified Option under the Plan. 17 6. Notices. Any notice to be given to the Company shall be addressed to the Company at its principal executive office, and any notice to be given to the Optionee shall be addressed to the Optionee at the address then appearing on the personnel records of the Company or at such other address as either party hereafter may designate in writing to the other. Any such notice shall be deemed to have been duly given when deposited in the United States mail, addressed as aforesaid, registered or certified mail, and with proper postage and registration or certification fees prepaid. 7. Tax Provision. This Option Agreement shall be interpreted and construed in a manner consistent with, and to satisfy the requirements of, the incentive stock option provisions of the Internal Revenue Code of 1986, as it may be amended from time to time (the "Code") and of the Plan. This Option Agreement is intended to satisfy the requirements of the Plan, Section 422A(b) of the Code and qualify for special tax treatment under Section 421 et seq of the Code. IN WITNESS WHEREOF, the Company has granted this Option on the day and year first above written. MARLTON TECHNOLOGIES, INC. By:___________________________________ Robert B. Ginsburg, Chief Executive Officer Attest: ________________________________ Alan I. Goldberg, Secretary ACCEPTED BY: --------------------------------- Alan I. Goldberg 18 EX-10.AA 6 0006.txt EXHIBIT 10(AA) EXHIBIT 10(AA) MARLTON TECHNOLOGIES, INC. STOCK OPTION AGREEMENT THIS STOCK OPTION (the "Option") is granted this 7th day of August, 2000 by MARLTON TECHNOLOGIES, INC., a New Jersey corporation (the "Company") to [Seymour Hernes, Jeffrey Harrow, Fred Cohen, William Hamilton] (the "Optionee"). W I T N E S S E T H: 1. Grant. Pursuant to the Company's 1992 Director Stock Plan, as amended (the "Plan"), the Company hereby grants to the Optionee Stock Options (the "Options") to purchase on the terms and conditions set forth in the Plan and herein, an aggregate of Twenty Thousand (20,000) shares of the Company's Common Stock, par value, $.10 per share (the "Option Shares"), at the purchase price of Two Dollars ($2.00) per share (the "Option Price"). Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to such terms in the Plan. 2. Term. This Option Agreement and Optionee's right to acquire Options vested in accordance with Paragraph 3 shall terminate at 5:00 p.m. (local Philadelphia time) on June 21, 2005. 3. Vesting. Options to purchase 10,000 Option Shares will be fully vested as of August 7, 2000. Options to purchase an additional 834 Option Shares will vest each month (with respect to the first and last months hereunder 15 or more days of service in a month shall be deemed a full month, and less than 15 days of service in a month shall be deemed no service during such month) that Optionee continues as a director of the Company subsequent to June 21, 2000, provided the aggregate of the Option Shares vested does not exceed 20,000. 4. Method of Exercise and Payment. This Option may be exercised with respect to vested Option Shares from time to time, in whole or in part. When exercisable under Paragraph 3, the Option may be exercised by written notice to the Company specifying the total number of Option Shares to be exercised. The notice shall be accompanied by payment in cash or by check equal to the aggregate Option Price of all Option Shares covered by such notice. Such exercise shall be effective upon the actual receipt by the Company of such written notice and payment. 5. Notices. Any notice to be given to the Company shall be addressed to the Company at its principal executive office, and any notice to be given to the Optionee shall be addressed to the Optionee at the address then appearing on the records of the Company or at such other address as either party hereafter may designate in writing to the other. Any such notice shall be deemed to have been duly given when deposited in the United States mail, addressed as aforesaid, registered or certified mail, and with proper postage and registration or certification fees. 6. General. This Option shall not be assignable by Optionee. This Option Agreement shall not be subject to the provisions and restrictions of Section 421, 422A(b) et. Seq. of the Internal Revenue Code of 1986, as it may be amended from time to time. Stock certificates representing the Option Shares acquired shall bear any legends required by applicable state and federal securities laws. Company stock issuances are unregistered, requiring a one-year holding period. IN WITNESS WHEREOF, the Company has granted this Option as of the day and year first above written. MARLTON TECHNOLOGIES, INC. Attest: ___________________________ By:___________________________ Alan I. Goldberg, Secretary Robert B. Ginsburg, President 19 EX-27 7 0007.txt FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-2000 JUN-30-2000 832 0 25,114 (236) 11,445 39,790 11,046 (5,999) 68,896 17,997 0 0 0 737 29,918 68,896 49,842 49,842 37,853 37,853 9,638 115 646 1,590 764 826 0 0 0 826 0.11 0.11
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