-----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, S3YxmM1uAE95ER24Ek3LDspfoncA9GtEfKyWT+Qj0jfrrcZ0bzK/jBQQAJpoNwqe lKNzhIuLe527KRT1BGualA== 0000891839-95-000034.txt : 19951119 0000891839-95-000034.hdr.sgml : 19951119 ACCESSION NUMBER: 0000891839-95-000034 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSMATION INC CENTRAL INDEX KEY: 0000099302 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 160874418 STATE OF INCORPORATION: OH FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03905 FILM NUMBER: 95589375 BUSINESS ADDRESS: STREET 1: 10 VANTAGE PT CITY: ROCHESTER STATE: NY ZIP: 14606 BUSINESS PHONE: 7162549000 MAIL ADDRESS: STREET 1: 10 VANTAGE PT CITY: ROCHESTER STATE: NY ZIP: 14624 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES -- EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 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 0-3905 TRANSMATION, INC. (Exact name of registrant as specified in its charter) OHIO 16-0874418 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 10 Vantage Point Drive, Rochester, NY 14624 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 716-352-7777 Former name, former address and former fiscal year, if changed since last report Indicate by check mark (x) whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x No ---- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Number of Shares Outstanding Date - ----- ---------------------------- ---- Common 2,418,440 October 18, 1995 TOTAL PAGES - 30 PART I FINANCIAL INFORMATION Item 1. Financial Statements TRANSMATION CONSOLIDATED BALANCE SHEET ASSETS Sept. 30, March 31, 1995 1995 -------- ------ Current Assets: Cash $ 294,548 $ 607,763 Accounts Receivable, less allowance for doubtful accounts of $528,200 at 9/30/95 and $473,000 at 3/31/95 4,958,207 5,524,244 Inventories 6,508,471 6,747,036 Prepaid Expenses and Deferred Charges 1,263,689 1,270,833 Deferred Tax Assets 130,741 132,026 ----------- ---------- Current Assets 13,155,656 14,281,902 ----------- ----------- Properties, at cost, less accumulated depreciation and amortization 1,577,801 1,500,498 Deferred Charges 145,106 146,161 Deferred Income Taxes 153,109 154,926 Other Assets 218,497 209,920 ----------- ----------- $15,250,169 $16,293,407 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 2,079,378 $ 3,655,934 Accrued Payrolls, Commissions and Other Liabilities 941,014 1,187,992 Income Taxes Payable 264,949 2,610 ----------- ----------- Current Liabilities 3,285,341 4,846,536 ----------- ----------- Long-Term Debt 4,039,800 4,064,426 Deferred Compensation 737,417 780,880 ----------- ----------- 8,062,558 9,691,842 ----------- ----------- Stockholders' Equity Common Stock, par value $.50 per share - Authorized - 8,000,000 shares issued outstanding - 2,418,440 shares at 9/30/95 and 2,380,640 at 3/31/95 1,209,220 1,190,320 Capital in Excess of Par Value 993,546 849,829 Accumulated Translation Adjustment (77,493) (109,513) Retained Earnings 5,062,338 4,670,929 ----------- ----------- 7,187,611 6,601,565 ----------- ----------- $15,250,169 $16,293,407 =========== =========== SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TRANSMATION, INC. CONSOLIDATED STATEMENT OF INCOME (LOSS) UNAUDITED Three Months Ended Six Months Ended ------------------------------- ---------------------------------- Sept. 30, Sept. 30, Sept. 30, Sept. 30, 1995 1994 1995 1994 --------------------------------- ---------------------------------- Net Sales $ 9,100,252 $ 8,478,390 $ 18,666,749 $ 16,955,729 ------------ ------------ ------------ ------------ Costs and Expenses: Cost of Product Sold 5,726,831 5,314,932 11,760,795 10,747,671 Selling & Admin. Expenses 2,682,226 2,740,339 5,483,910 5,737,290 Research & Develop. Costs 261,187 285,961 529,112 650,351 Interest Expense 106,899 106,811 218,998 187,187 ----------- ------------ ------------ ------------ 8,777,143 8,448,043 17,992,815 17,322,499 ----------- ------------ ------------ ------------ Income(Loss) Before Taxes 323,109 30,347 673,934 (366,770) Provision for Income Taxes State and Federal 134,525 13,000 282,525 13,000 ----------- ------------ ----------- ------------ Net Income(Loss) 188,584 17,347 391,409 (379,770) Retained Earnings at Beginning of Period 4,873,754 3,892,027 4,670,929 4,289,144 ----------- ------------ ------------ ------------ Retained Earnings at End of Period $ 5,062,338 $ 3,909,374 $ 5,062,338 $ 3,909,374 ============ ============ Net Income(Loss) Per Share $ .07 $ .01 $ .15 ($ .16) =============================== ================================= SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
TRANSMATION, INC. CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED Three Months Ended Six Months Ended ------------------------------------ ------------------------------- July 1, 1995 July 1, 1994 April 1, 1995 April 1, 1994 to to to to Sept. 30, 1995 Sept. 30, 1994 Sept. 30, 1995 Sept. 30, 1994 ----------------------------------- ------------------------------ Cash Flows from Operating Activities: Net Income(Loss) $ 188,584 $ 17,437 $ 391,409 ($ 379,770) Items Not Requiring (Providing) Cash Included in Income Depreciation and Amortization 108,024 109,017 207,748 203,383 Increase in Cash Surrender Value of Insurance Policies (8,577) (8,716) (8,577) (8,716) Provision for Losses on Accounts Receivable 26,700 35,600 55,200 9,900 Decrease(Increase) in Accounts Receivable (186,472) 182,292 510,837 967,841 Decrease(Increase) in Inventories 240,355 39,442 238,565 (281,319) Decrease(Increase) in Prepaid Expenses and Deferred Charges 130,825 293,913 8,199 872,885 (Decrease)Increase in Accounts Payable (660,501) (417,374) (1,576,556) (580,585) (Decrease)Increase in Accrued Payrolls, Commissions and Other Liabilities (73,410) (155,682) (246,978) (449,103) Increase(Decrease) in Income Taxes Payable 162,560 1,893 262,339 (1,470) (Decrease)Increase in Deferred and Prepaid Income Taxes 2,787 3,367 3,102 1,586 Deferred Compensation (22,327) (43,463) ----------------------------------- ------------------------------ Net Cash Provided (Used) by Operating Activities (91,452) 101,189 (198,175) 354,632 ----------------------------------- ------------------------------ Cash Flows (Used in) Investing Activities: Purchases of Properties (191,969) (113,336) (285,051) (268,630) ----------------------------------- ------------------------------ Net Cash (Used in) Investing Activities (191,969) (113,336) (285,051) (268,630) ----------------------------------- ------------------------------ Cash Flows from Financing Activities: Exercise of Stock Options and Warrants 74,250 2,250 162,617 2,250 Increase(Decrease) in Long-Term Debt 119,100 31,926 (24,626) 31,926 ----------------------------------- ------------------------------ Net Cash Provided by Financing Activities 193,350 34,176 137,991 34,176 ----------------------------------- ------------------------------ Effect of Exchange Rate Changes on Cash 26,383 23,568 32,020 16,148 ----------------------------------- ------------------------------ Net Increase(Decrease) in Cash (63,688) 45,597 (313,215) 136,326 Cash at Beginning of Period 358,236 275,535 607,763 184,806 ----------------------------------- ------------------------------ Cash at End of Period $ 294,548 $ 321,132 $ 294,548 $ 321,132 =================================== ============================= Cash Paid for Interest and Income Taxes are as follows: Interest Paid $ 104,634 $ 130,284 $ 210,591 $ 206,149 Taxes Paid $ 35,922 NONE $ 167,865 NONE SEE NOTES TO FINANCIAL STATEMENTS
TRANSMATION, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY Number of Shares of $.50 Par Value Common Stock Capital Common Stock Issued and in Excess Retained Outstanding Outstanding of Par Value Earnings ----------------------- ------------------------ ------------------- ------------------- Balance, March 31, 1993 2,374,040 $1,187,020 $834,679 $4,875,378 Issuance of Stock 200 100 350 Net Loss (586,234) ----------------------- ------------------------ ------------------- ------------------- Balance, March 31, 1994 2,374,240 1,187,120 835,029 4,289,144 Issuance of Stock 6,400 3,200 14,800 Net Income 381,785 ----------------------- ------------------------ ------------------- ------------------- Balance, March 31, 1995 2,380,640 1,190,320 849,829 4,670,929 Issuance of Stock 37,800 18,900 143,717 Net Income 391,409 ----------------------- ------------------------ ------------------- ------------------- Balance, September 30, 1995 2,418,440 $1,209,220 $993,546 $5,062,338 ======================= ======================== =================== =================== SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Revolving Credit Agreement Borrowings under a secured revolving credit agreement with a bank which extends through July 31, 1998 total $4,039,800 at September 30, 1995. Maximum funds available under this credit agreement total $7,000,000. The interest rate the bank's prime lending rate. The revolving credit agreement contains, among other provisions, restrictions on the annual amount of capital expenditures, restrictions on the annual amount of expenditures made for the purpose of printing and distributing catalogs and requirements for minimum amounts of tangible net worth. Additionally, the company has pledged its personal property and fixtures, including inventory and equipment, and its accounts receivable as collateral security for the loan. Further, the company has agreed to pay to the lender an amount equal to 1/4% of the unused portion of the total credit available. The fee is payable quarterly. Total commitment fees paid on any unused lines of credit under revolving credit agreements were immaterial in 1995 and 1994. The company is in compliance with provisions of its loan agreement at September 30, 1995. Note 2 - Inventories The major classifications of inventory are as follows: Sept. 30, 1995 March 31, 1995 -------------- -------------- Raw Materials and Purchased Parts $1,844,324 $1,510,425 Work in Process 878,277 767,522 Finished Products 3,785,870 4,469,089 ---------- ---------- $6,508,471 $6,747,036 ========== ==========
Note 3 - Stockholders' Equity In August 1993, an incentive Stock Option plan was adopted; this plan was amended in August 1995. Options are available to be granted to employees under the 1993 Plan at prices not less than fair market value at the date of grant and are exercisable in annual installments beginning at the date of grant and expiring up to ten years later. A plan adopted in August 1981 has now expired; however, certain options remain exercisable under that plan. The following table summarizes the transactions under the plans during 1995, 1994, and 1993: Option Price Shares Per Share Aggregate ------ ------------ --------- Options Outstanding - 3/31/93 88,500 $2.25 $199,125 ------ ----- -------- Options Granted During the Year 10,000 4.00 40,000 Options Cancelled During the Year (1,000) 2.25 (2,250) Options Exercised During the Year (200) 2.25 (450) Balance, 3/31/94 97,300 2.25-4.00 236,425 Options Granted During the Year 164,600 4.25 699,550 Options Exercised During the Year (5,200) 2.25 (11,700) Options Cancelled During the Year (12,100) 2.25 (27,225) -------- ----- -------- Balance, 3/31/95 244,600 2.25-4.25 897,050 Options Exercised During the Year (13,400) 2.25 (30,150) Options Cancelled During the Year (2,000) 2.25-6.25 (8,500) Options Granted During the Year 187,400 4.25-6.25 951,250 ------- --------- ------- Balance, 9/30/95 416,600 $2.25-6.25 $1,809,650 ======= ========== ==========
59,600 shares are eligible to be exercised under the 1981 and 1993 plans. The market value of these shares at the date they first became eligible for exercise ranged from $2.00 to $6.50 per share and aggregated $224,750. On August 21, 1984, shareholders approved the Directors' Warrant Plan. On August 16, 1995, this plan was amended by shareholders. The Plan provides that warrants may be granted thereunder to non-employee directors of Transmation to purchase in the aggregate not more than 100,000 shares of the company's Common Stock. The purchase price for shares issued under the Directors' Warrant Plan shall be equal to the fair market value of the stock on the date of the grant of the warrant. A summary of activity under the 1984 Directors' Warrant Plan is as follows: Warrant Shares Price Aggregate ------ ------- --------- Balance - 3/31/94 32,500 $3.00-3.875 $110,625 ------ ----------- -------- Balance - 3/31/95 32,500 3.00-3.875 110,625 ------ ---------- -------- Exercised During the Year (14,500) 3.00-3.875 (54,875) Granted During the Year 14,000 6.500 91,000 Cancelled During the Year (2,000) 3.875 (7,750) ------- ----- ------- Balance - 9/30/95 $30,000 $3.00-6.50 $139,000 ======= ========== ========
On March 11, 1993, the Board of Directors granted the President of the Company's Instrument Division a non-qualified stock option contract for the purchase of 25,000 shares of the company's common stock at $3.00 per share, the fair market value at the date of the grant. These shares are exercisable in equal annual installments beginning at the date of the grant and expiring five years later. On August 15, 1995, the Board of Directors granted the President of the Company's Transcat division a non-qualified stock option contract for the purchase of 30,000 shares of the Company's common stock at $6.25 per share, the fair market value at the date of the grant. These shares are exercisable in equal installments beginning at the date of the grant and expiring five years later. Note 4 - Net Income (Loss) Per Share The net income per share amounts in 1995 and 1994 were computed by dividing the net income by the average number of shares actually outstanding plus common equivalent shares resulting from the assumed conversion of the dilutive stock options and warrants. The net loss per share amount in 1994 was computed by dividing the net loss by the number of shares actually outstanding. Common and common equivalent shares averaged 2,524,377 in 1995 and 2,375,240 in 1994. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Sales increases result primarily from increased product, service and repair sales within the Company's Transcat division. Shipments from the Company's domestic Instrument division and through its Far East subsidiaries are not presently achieving planned levels and efforts are underway to correct this situation. Financial Condition The Company's primary sources of liquidity and capital are funds provided through its borrowing agreement with a bank, its profitability and through management of its balance sheet. At September 30, 1995, trade accounts receivable had been reduced more than $566,000 compared to the balance which existed at March 31, 1995, and inventories at September 30, 1995 had been reduced by more than $238,000 compared to amounts which existed at March 31, 1995. These reductions, combined with a reduction of cash balances enabled the Company to reduce its balance of Trade Accounts Payable by more than $1,567,000 as of September 30, 1995 when compared to the balance which existed at March 31, 1995. The Company signed an amendment to its existing revolving credit facility during the quarter which increases the total amount available under the credit to $7,000,000, reduces the rate charged on amounts outstanding to the bank's prime lending rate, and extends the expiration date of the agreement through July 31, 1998. Results of Operations Comparison of July 1, 1995 - September 30, 1995 to July 1, 1994 - September 30, 1994 Sales increased approximately 7% in 1995 compared to 1994. This increase is the result of gains achieved in the Company's Transcat division and in its domestic Instrument division. Cost of products sold increased by approximately 8% in 1995 compared to 1994. A somewhat less favorable sales mix compared to fiscal 1994 caused cost of products sold to increase slightly more than sales in the period. Sales and administrative expenses totaled 29.5% of sales in 1995 compared to 32.3% of sales in 1994. This improvement resulted primarily from lower catalog mailing costs in 1995 compared to 1994. Research and development spending was 9% lower in 1995 than in 1994. Research spending has been reduced during the past year bringing Company spending in line with industry norms. Comparison of April 1, 1995 - September 30, 1995 to April 1, 1994 - September 30, 1994 Sales increased 10% in the six month period ended September 30, 1995 compared to the same period one year ago. This increase is primarily the result of gains achieved in the Company's Transcat division. Cost of products sold increased by approximately 9% in fiscal 1995 compared to the same period in 1994. This increase is approximately equal to the increase in sales that was achieved. Sales and administrative expenses totaled 29.4% of sales in the six month period ended September 30, 1995 compared to 33.8% of sales in the same 1994 period. Lower catalog costs in 1995 are the primary reason for the reduction in sales and administrative expenses. Research and development costs totaled 2.8% of sales in 1995 versus 3.8% of sales in 1994. Research spending has been reduced to a level in line with industry norms in 1995. PART II OTHER INFORMATION Item 2. Changes in Securities On September 8, 1995, Transmation amended its revolving credit agreement with a bank. That amendment is filed as Exhibit 4(c) to this filing. Item 4. Submission of Matters to a Vote of Security Holders On August 15, 1995, Mr. Gerald R. Katz, Mr. Robert G. Klimasewski and Mr. Philip P. Schulp were elected to serve 3-year terms as Directors of Transmation, Inc. Price Waterhouse was elected to serve as auditors for fiscal 1996; the Transmation, Inc. 1993 Stock Option Plan was amended and restated; the Transmation, Inc. Employees' Stock Purchase Plan was ratified; the Transmation, Inc. Amended and Restated Directors' Warrant Plan was ratified; and the Transmation, Inc. Directors' Stock Plan was ratified. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TRANSMATION, INC. Date November 13, 1995 /s/ Robert G. Klimasewski ------------------------ Robert G. Klimasewski, President Date November 13, 1995 /s/ John A. Misiaszek ------------------------ John A. Misiaszek Vice President, Finance INDEX TO EXHIBITS (2) Plan of acquisition, reorganization, arrangement, liquidation or succession Not applicable. (3) (a) Articles of Incorporation Articles of Incorporation, as amended, are incorporated herein by reference to Exhibit 4(a) to the Registrant's Registration Statement on Form S-8 (Registration No. 33-61665) as filed on August 8, 1995. (b) By-laws Code of Regulations, as amended, are incorporated herein by reference to Exhibit 3 to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1988. (4) Instruments defining the rights of security holders, including indentures (a) The documents listed under Item (3) of this Index are incorporated herein by reference. (b) Revolving Credit Agreement between the Registrant and Manufacturers and Traders Trust Company is incorporated herein by reference to Exhibit 1 to the Registrant's Form 10-Q for the quarter ended September 30, 1994. *(c) Agreement and Amendment No. 1 to an Existing Revolving Credit Facility Agreement between the Registrant and Manufacturers and Traders Trust Company dated September 8, 1995, together with a brief identification of the contents of all omitted exhibits thereto, is included herein as Exhibit 4(c) at pages 14 through 22 of this Report. Upon written request, the Registrant will provide to security holders copies of any of the referenced omitted exhibits. (10) Material Contracts (a) The documents listed under Item (4) of this Index are incorporated herein by reference. (b) Compensation agreements between the Registrant and William J. Berk are incorporated herein by reference to Exhibit 10 to the Registrant's Form 10-K for the fiscal year ended March 31, 1984, and Exhibit 10(b) to the Registrant's Form 10-K for the fiscal year ended March 31, 1991. (c) Non-Statutory Stock Option Agreement dated March 11, 1993 between the Registrant and Thomas R. Crumlish is incorporated herein by reference to Exhibit 10 to the Registrant's Form 10-K for the fiscal year ended March 31, 1993. (d) Transmation, Inc. Directors' Stock Plan is incorporated herein by reference to Exhibit 10(i) to the Registrant's Form 10-K for the fiscal year ended March 31, 1995. (e) Employment Agreement dated as of April 1, 1995 between the Registrant and Robert G. Klimasewski is incorporated herein by reference to Exhibit 10(ii) to the Registrant's Form 10-K for the fiscal year ended March 31, 1995. (f) Transmation, Inc. Amended and Restated Directors' Warrant Plan is incorporated herein by reference to Exhibit 99(b) to the Registrant's Registration Statement on Form S-8 (Registration No. 33-61665) as filed on August 8, 1995. (g) Transmation, Inc. Amended and Restated 1993 Stock Option Plan is incorporated herein by reference to Exhibit 99(c) to the Registrant's Registration Statement on Form S-8 (Registration No. 33-61665) as filed on August 8, 1995. (h) Transmation, Inc. Employees' Stock Purchase Plan is incorporated herein by reference to Exhibit 99(e) to the Registrant's Registration Statement on Form S-8 (Registration No. 33-61665) as filed on August 8, 1995. *(i) Amendment No. 1 to Transmation, Inc. Directors' Stock Plan is included herein as Exhibit 10(i) at page 23 of this Report. *(j) Non-Statutory Stock Option Agreement dated August 15, 1995 between Transmation, Inc. and Eric W. McInroy is included herein as Exhibit 10(j) at pages 24 through 28 of this Report. (11) Statement re computation of per share earnings Not applicable. (15) Letter re unaudited interim financial information Not applicable. (18) Letter re change in accounting principles Not applicable. (19) Report furnished to security holders Not applicable. (22) Published report regarding matters submitted to vote of security holders Not applicable. (23) Consents of experts and counsel Not applicable. (24) Power of attorney Not applicable. *(27) Financial Data Schedule The Financial Data Schedule is included herein as Exhibit 27 at pages 29 through 30 of this Report. (99) Additional Exhibits Not applicable. * Exhibit filed with this Report EXHIBIT 4(c) AGREEMENT AND AMENDMENT NO. 1 TO AN EXISTING REVOLVING CREDIT FACILITY AGREEMENT THIS AGREEMENT AND AMENDMENT NO. 1 TO AN EXISTING REVOLVING CREDIT FACILITY AGREEMENT is made September 8, 1995, by and between MANUFACTURERS AND TRADERS TRUST COMPANY ("Bank"), a domestic corporation with an office and principal place of business located at One M&T Plaza, Buffalo, New York 14240, and TRANSMATION, INC. ("Borrower"), an Ohio corporation authorized to do business in New York State, with an office and principal place of business located at 977 Mt. Read Blvd., Rochester, New York 14606. R E C I T A L S --------------- A. On or about September 13, 1994, Bank and Borrower entered into a Revolving Credit Facility Agreement. B. In connection with its execution of the Revolving Credit Facility Agreement, Borrower and other Entities also executed and delivered to Bank various Documents. C. Bank and Borrower desire to make certain changes to the Revolving Credit Facility Agreement, which changes are set forth below. NOW, THEREFORE, in consideration of the promises set forth below, and/or in consideration of any prior extension of credit by Bank to Borrower and/or in consideration of Bank entering into the Agreement, Bank and Borrower hereby agree as follows: 1. This Agreement and Amendment No. 1 to an Existing Revolving Credit Facility Agreement is referred to below as the "Amendment". Except as otherwise specified in this Amendment, capitalized terms used in this Amendment and in the Documents executed in connection with this Amendment, have the definition given to them in the September 13, 1994 Revolving Credit Facility Agreement between Bank and Borrower, as amended by this Amendment and as hereafter amended from time to time ("Agreement"). 2. Effective as the date this Amendment is executed by Bank and Borrower ("Amendment Date"), Sections 1.17, 1.19 and 1.22, are deleted and replaced with the following. "1.17 The term "Maximum Credit" shall mean $7,000,000.00. At any time that Bank in its sole discretion notifies Borrower in writing that it is re-instituting a formula-based Revolver, then from the date of Bank's notice to Borrower, the term "Maximum Credit" shall mean the lesser of $7,000,000.00 or the then current Borrowing Base. 1.19 The term "Note" shall mean the $7,000,000.00 Grid Note executed by Borrower on the Amendment Date pursuant to Section 2 of the Agreement, as extended, supplemented, modified, amended or replaced from time to time. The term "Prior Note" shall mean the $6,250,000.00 Grid Note executed by Borrower on the Closing Date, which is being replaced on the Amendment Date by the Note. 1.22 The term "Revolver Expiration Date" shall mean August 1, 1998." 3. Effective as of the Amendment Date, the following are added as Sections 1.27 and 1.28 of the Agreement. "1.27 The term "Amendment" shall mean an Agreement and Amendment No. 1 to an Existing Revolving Credit Facility Agreement entered into by Bank and Borrower on the Amendment Date. 1.28 The term "Amendment Date" shall mean the date the Amendment is executed by Bank and Borrower." 4. Effective as of the Amendment Date, Section 2.1 of the Agreement is deleted and replaced with the following: "2.1 $7,000,000.00 Revolver 2.1.1 Effective as of the Amendment Date, Bank hereby establishes for Borrower a Revolver, the unpaid principal balance of which shall not at any time exceed the Maximum Credit. This Revolver replaces and supersedes the $6,250,000.00 Revolver previously provided to Borrower by Bank under Section 2 of this Agreement. Within such limit, Borrower may borrow, repay and reborrow, for working capital purposes only, on and after the Amendment Date through the Revolver Expiration Date, provided that the following conditions are met at the time of each borrowing request: 2.1.1.1 Borrower is not in default under this Agreement, and no condition exists, which, with notice, lapse of time or both, would constitute a default under this Agreement. 2.1.1.2 All representations and warranties contained in Section 4 of this Agreement and elsewhere in the Agreement and/or in any Document are true and correct as of the date of the requested borrowing. 2.1.2 Unless sooner accelerated, all loans made under this Revolver shall be repayable on the Revolver Expiration Date, pursuant to the terms of Borrower's Note, which shall be in the form of Exhibit A to the Amendment, with blanks appropriately completed. 2.1.3 Each borrowing under this Revolver shall be processed by debiting this Revolver and crediting Borrower's checking account with Bank for the amount of the borrowing or otherwise making the loan proceeds available to Borrower. The loan shall be deemed made immediately upon the crediting of the loan proceeds to Borrower's checking account with Bank or by Bank otherwise making the loan proceeds available to Borrower. Each loan, together with the unpaid principal balance of all previous loans made under this Revolver, shall be deemed automatically refinanced and consolidated into one loan, which shall be payable to Bank as indicated in the Note. 2.1.4 So long as Bank receives notice of a proposed borrowing by 1:00 p.m. on a Business Day, and the conditions precedent set forth in Sections 2.1.1.1 through 2.1.1.3 are satisfied, Bank will make advances duly authorized and permitted under this Revolver available to Borrower by crediting Borrower's checking account maintained at Bank's main office on that date. If Bank receives notice of a proposed borrowing after 1:00 p.m. on a Business Day, it will endeavor to make the advance available on that date, but if Bank is unable to do so, Bank will make the advance to Borrower by crediting Borrower's checking account maintained at Bank's office no later than 10:00 a.m. of the next Business Day. 2.1.5 The unpaid principal balance of the Note shall at all times prior to acceleration, accrue interest, computed on the basis of a 360 day year for the actual number of days elapsed, at the floating rate of Bank's Prime Rate per annum. If any payment due under the Note is not made within five days of the date when due, Borrower shall pay a late charge equal to the greater of 5% of the delinquent amount or $50.00, or Bank's then current late charge. In the event Bank accelerates payment of the Note, interest shall accrue on the unpaid principal balance of the Note at the floating rate of Bank's Prime Rate plus 5.0% per annum, computed on the basis of a 360 day year for the actual number of days elapsed, until the Note is paid in full. In the event there is a change in Bank's Prime Rate, the change in the accruing interest rate on the Note shall be effective on the day when the change in Bank's Prime Rate is made by Bank, without notice to Borrower. Payments of accrued interest on the Note shall be due on the first Business Day of each month, commencing October 2, 1995, and when Bank has accelerated payment of the Note, and on the Revolver Expiration Date, and when the Note is paid in full. 2.1.6. In the event that the unpaid principal balance of the of the Note at any time exceeds the Maximum Credit for any reason, including but not limited to a change in the Borrowing Base and/or a decrease in the value of Eligible Accounts Receivable and/or Eligible Inventory, then Borrower shall, without notice, demand or protest, pay to Bank within ten days of the date the unpaid principal balance of the Note exceeds the Maximum Credit, a sum sufficient to reduce the principal balance of the Note to an amount equal to or less than the Maximum Credit. Any unpaid principal balance of the Note which is in excess of the Maximum Credit shall, until such excess is paid in full, or until Bank accelerates payment of the Note, accrue interest at the floating rate of Bank's Prime Rate plus 3% per annum, calculated on the basis of a 360 day year for the actual number of days elapsed. 2.1.7 Bank is authorized to act on the telephone requests for borrowing and/or prepayment, of any person identifying himself as an Authorized Person and Borrower will be bound by such instructions. Borrower hereby indemnifies and holds Bank harmless from any liability (including Bank's reasonable attorneys' fees), which may arise as a result of Bank's good faith reliance on telephone requests for borrowing and/or prepayment from any person identifying himself as an Authorized Person. 2.1.8 Borrower shall pay to Bank a commitment fee equal to 1/4 of 1% per annum (calculated on the basis of a 360 day year), on the daily average of the difference between $7,000,000.00 (subject to permanent reduction, as specified in Section 2.1.9 below), and the aggregate principal amount outstanding under the Revolver. This commitment fee shall be payable in arrears and calculated by Bank as of the first Business Day of each October (commencing October 2, 1995), January, April and July, and on the Revolver Expiration Date and when payment of the Note is accelerated. The commitment fees shall be due and payable by Borrower within ten days of the date that Bank bills Borrower for the commitment fee. 2.1.9 On five Business Days written notice to Bank, Borrower may elect to reduce the number "$7,000,000.00" in the definition of Maximum Credit to a lesser amount selected by Borrower. Upon such election, the reduction shall be permanent and irrevocable, and if the then unpaid principal balance of the Note exceeds the revised Maximum Credit, Borrower shall immediately pay to Bank a sum sufficient to reduce the unpaid principal balance of the Note to the new Maximum Credit." 5. Borrower represents and warrants to Bank that as of the Amendment Date, all representations and warranties contained in Exhibit "4" to the Agreement are true and accurate. Borrower further represents and warrants to Bank that as of the Amendment Date, neither Borrower nor any Subsidiary has violated any of the covenants contained in Exhibit "4" to the Agreement, or in any elsewhere in the Agreement, or in any Document. Borrower acknowledges to Bank that Borrower and each of its Subsidiaries has a continuing obligation to comply with all of the covenants contained in Exhibit "4" of the Agreement, and all covenants contained elsewhere in the Agreement and all covenants contained in Documents. Borrower acknowledges to Bank on behalf of itself and on behalf of each of its Subsidiaries that all representations and warranties contained in Exhibit "4" to the Agreement and elsewhere in the Agreement and in Documents are deemed to be made on a continuing basis from the Closing Date through the Termination Date, and Borrower agrees to give Bank prompt written notice at any time that any representation or warranty contained in Exhibit "4" or elsewhere in the Agreement or in any Document becomes untrue. 6. Effective on the Amendment Date, Section 5 of the Agreement is deleted and replaced with the following: "SECTION 5 Financial Covenants Borrower covenants and agrees that from the Amendment Date through the Termination Date, Borrower will at all times comply with the financial covenants contained in Exhibit "B" to the Amendment. End of Section 5" 7. Borrower represents and warrants to Bank that, as of the Amendment Date, Borrower is not in default under Section 6 of the Agreement, and no condition exists which with notice, lapse of time or both, would constitute a default under Section 6 of the Agreement. 8. Borrower represents and warrants to Bank that as of August 31, 1995, there was due Bank on the $6,250,000.00 Grid Note executed by Borrower on the Closing Date ("Prior Note"), the sum of $4,317,00.00 in principal, plus accrued interest ("Prior Note"). Borrower further acknowledges to Bank that the Prior Note constitutes Borrower's valid and binding obligation, enforceable by Bank according to its terms, and that as of the Amendment Date, there were no offsets against or defenses to Borrower's liability to Bank under the prior note. 9. Except as set forth above, all terms and conditions of the Agreement, as amended by the Amendment, and the Documents remain the same. 10. Borrower acknowledges and represents and warrants to Bank that the Agreement, as modified by this Amendment, and all Documents executed by Borrower at any time, including but not limited to the Note, Security Agreement, Mortgage and Negative Pledge Agreement, are and constitute valid and binding obligations of Borrower, enforceable against Borrower by Bank according to their respective terms, and that as of the Amendment Date, there were no offsets against or defenses to Borrower's liability to Bank thereunder. 11. Borrower represents and warrants to Bank and acknowledges to Bank that the following Exhibits attached to the Agreement remain accurate in all respects: Exhibit "1.2", Exhibit "1.11", Exhibit "1.20", Exhibit "3.1", Exhibit "3.5.1", Exhibit "3.6.1", and Exhibit "3.8". 12. Bank's obligation to enter into this Amendment is contingent upon the execution of this Amendment by Borrower, and the performance by Borrower of all terms and conditions specified in this Amendment, and upon the following additional terms and conditions. a. Borrower shall deliver to Bank a Certificate executed by its Secretary, containing the duly adopted resolutions of its directors, consenting to the adoption of resolutions authorizing among other things, the execution by Borrower of this Amendment, and all Documents to be executed by Borrower in connection therewith. The Certificate shall be in the form of Exhibit "C", with blanks appropriate completed. b. On the Amendment Date, Borrower shall direct its attorneys (Harter, Secrest & Emery or such other attorneys as are acceptable to Bank), to provide, and such attorneys shall provide to Bank and its attorneys an opinion letter which shall contain such opinions as shall be satisfactory to Bank and its attorneys. c. After the Amendment Date, Borrower shall pay to Bank in full all accrued interest due under the Prior Note when billed by Bank, and all borrowings under the Prior Note shall be replaced with borrowings under the Note. d. There shall be no materially adverse change in the business, assets or condition (financial or otherwise), of Borrower and/or of any Guarantor, as disclosed to Bank in any matter. e. Within thirty days of the Amendment Date, all Guarantors shall execute and deliver to Bank an Agreement and Acknowledgement pursuant to which they acknowledge to Bank that all Documents executed by them in connection with the Agreement, including but not limited to their respective Guaranties, remain in full force and effect ("Acknowledgement"). The form of the Acknowledgements shall be satisfactory to Bank and its attorneys. f. Borrower and Guarantors shall execute and deliver to Bank such additional writings and agreements which Bank deems necessary in order to protect and perfect Bank's interests created under the Agreement, as amended by this Amendment and under the Documents. g. All legal details in connection with this Amendment and the Documents executed in connection therewith, shall have met with the approval of Bank and Woods, Oviatt, Gilman, Sturman & Clarke, counsel for Bank. Bank, at is sole option, may extend past the Amendment Date, the time in which Borrower and/or any Guarantor and/or any other Entity is required to provide any of the Documents required to be delivered under this Amendment. The extension may be written or oral, expressed or implied, such as where Bank executes this Amendment on the Amendment Date without one or more of the Documents required under this Amendment having been provided. Such extension shall not operate as a waiver of the requirement that such Documents be provided, and Borrowers and/or Guarantors and/or any other Entities failure to provide such Documents to Bank after the Amendment Date, shall at Bank's option, constitute a default under Section 6.1.4 of the Agreement. The requirement that Borrower and/or any Guarantor and/or any other Entity deliver to Bank any Documents called for under this Amendment may only be waived in a writing signed by Bank. 13. On the Amendment Date, Borrower shall pay all of Bank's attorneys' fees and disbursements incurred and to be incurred in connection with the preparation, negotiation and execution of this Amendment, the Documents executed in connection with this Amendment, and all related matters. 14. This Amendment is governed by New York law, and may not be amended or terminated orally. Any litigation involving this Amendment and/or the Agreement and/or any of the Documents shall at Bank's sole option, be triable only in a court located in Monroe County, New York. BORROWER WAIVES THE RIGHT TO A JURY TRIAL IN ANY LITIGATION OF ANY NATURE OR KIND IN WHICH BORROWER AND BANK ARE PARTIES. No other Entity is a third party beneficiary of this jury trial waiver. Borrower also waives the right to require Bank to post an undertaking in any action commenced by Bank against Borrower, or in any action in which Bank and Borrower are both parties, including but not limited to an action under Article 71 of the CPLR. IN WITNESS WHEREOF, Bank and Borrower have executed this Amendment on the date first written above. MANUFACTURERS AND TRADERS TRUST COMPANY By: /s/ J. Theodore Smith --------------------------- J. Theodore Smith Assistant Vice President TRANSMATION, INC. By: /s/ Robert G. Klimasewski --------------------------- Robert G. Klimasewski President STATE OF NEW YORK ) COUNTY OF MONROE )ss: On this 8th day of September, 1995, before me personally came J. Theodore Smith, to me known, who, being by me duly sworn, did depose and say that he is an Assistant Vice President of MANUFACTURERS AND TRADERS TRUST COMPANY, the corporation described in and which executed the above instrument; and that he signed his name thereto by order of the board of directors of said corporation. /s/ Gary F. Amendola --------------------------- Notary Public STATE OF NEW YORK ) COUNTY OF MONROE )ss: On this 8th day of September, 1995, before me personally came Robert G. Klimasewski, to me known, who, being by me duly sworn, did depose and say that he is an Assistant Vice President of TRANSMATION, INC., the corporation described in and which executed the above instrument; and that he signed his name thereto by order of the board of directors of said corporation. /s/ Gary F. Amendola --------------------------- Notary Public EXHIBIT A: Grid Note with Rider [omitted] EXHIBIT B Section 5 - Schedule of Financial Covenants 1. On the Amendment Date, Borrower shall have and maintain at all times through March 30, 1996, a Tangible Net Worth of $6,602,000.00 or higher. 2. On March 31, 1996, Borrower shall have and maintain at all times through March 30, 1997, a Tangible Net Worth of $7,200,000.00 or higher. 3. On March 31, 1997, Borrower shall have and maintain at all times through March 30, 1998, a Tangible Net Worth of $8,000,000.00 or higher. 4. On March 31, 1998, Borrower shall have and maintain at all times through March 30, 1999, a Tangible Net Worth of $9,000,000.00 or higher. 5. On March 31, 1999, Borrower shall have and maintain at all times through the Termination Date, a Tangible Net Worth of $10,000,000.00 or higher 6. Borrower shall not make, directly or indirectly, in any fiscal year, Capital Expenditures (which term shall include obligations under capital leases as determined by GAAP), in excess of the amounts indicated for the fiscal years indicated below. a. Fiscal year ending 3/31/96 $750,000.00 b. Fiscal year ending 3/31/97 $600,000.00 c. Fiscal year ending 3/31/98 $650,000.00 d. Fiscal year ending 3/31/99 $700,000.00 7. During each fiscal year indicated below, Borrower's cash Catalog Expenditures shall not exceed the amounts indicated. a. Fiscal year ending 3/31/96 $1,750,000.00 b. Fiscal year ending 3/31/97 $2,000,000.00 c. Fiscal year ending 3/31/98 $2,250,000.00 d. Fiscal year ending 3/31/99 $2,500,000.00 EXHIBIT 10(i) AMENDMENT NO. 1 to the TRANSMATION, INC. DIRECTORS' STOCK PLAN Effective August 15, 1995 WHEREAS, Transmation, Inc., an Ohio corporation (the "Company"), has established the Transmation, Inc. Directors' Stock Plan, effective January 17, 1995 (the "Plan"); and WHEREAS, deeming it appropriate and advisable so to do, the Board of Directors of the Company has authorized, approved and adopted the amendment to the Plan set forth herein; NOW, THEREFORE, the Plan is hereby amended, effective August 15, 1995, as follows: 1. Section 3(b) of the Plan is hereby amended to provide in its entirety as follows: "(b) Awards for Board Meetings Attended. Each Participating Director shall receive an Award of 200 Shares for each regular or special meeting of the Board, up to a maximum of six Board meetings per fiscal year of the Company, attended by such Participating Director; provided, however, that if, on the date of any such Award, 200 Shares has an aggregate market value in excess of $1,500, then such Award shall instead be in the amount of the largest number of whole Shares that has an aggregate market value not exceeding $1,500. Such Awards shall be made on the date of each such Board meeting, with share certificates representing such Awards to be issued as soon as practicable after the last day of each fiscal quarter of the Company, commenc- ing with the quarter ending March 31, 1995." 2. Except as amended hereby, the Plan shall remain in full force and effect in accordance with its terms. This Amendment No. 1 to the Transmation, Inc. Directors' Stock Plan was authorized, ap- proved and adopted by the Board of Directors of the Company on August 15, 1995. /s/ John A. Misiaszek ------------------------------ John A. Misiaszek, Secretary EXHIBIT 10(j) NON-STATUTORY STOCK OPTION AGREEMENT THIS NON-STATUTORY STOCK OPTION AGREEMENT is made as of August 15, 1995 by and between TRANSMATION, INC., an Ohio corporation (the "Company"), and ERIC W. McINROY (the "Optionee"). The parties agree as follows: 1. Grant of Option. The Company hereby grants to the Optionee an option (the "Option") to purchase an aggregate of 30,000 Shares under the terms and conditions hereof. As used in this Agreement, the term "Shares" shall mean shares of the Company's common stock, par value $.50 per share (the "Common Stock"), or other securities resulting from an adjustment under Section 9. 2. Term. The Option shall become exercisable and terminate in accordance with the schedule set forth in Section 5(a); provided, however, that the Option shall lapse and terminate on the earliest of the following dates: (a) the date that is one year after the date of the Optionee's death, provided that the Optionee's death occurs (i) while he is an employee of the Company or of any subsidiary of the Company (a "Subsidiary") or (ii) within three months after termination of such employment; (b) the date that is one year after the date that the Optionee's employment by the Company or a Subsidiary is terminated because of his permanent and total disability; (c) the date that is three months after the date on which the Optionee's employment by the Company or a Subsidiary terminates for any other reason; or (d) August 14, 2000. Upon such termination of the Option, the Optionee's rights under this Agreement, including the right to exercise the Option, shall thereupon terminate. In the event of any exercise of the Option after the Optionee's death or other termination of employment, as permitted by this Section 2, the Option shall be exercisable only to the extent that it was exercisable under the terms hereof on the date of death or such other termination, and subject to all of the conditions on exercise imposed hereby. 3. Non-Transferability, Etc. (a) The Option is not transferable other than by will or the laws of descent and distribution. Except as provided by Section 3(b), the Option shall be exercisable only during the Optionee's lifetime, and only by him. (b) In the event that the Optionee shall die (i) while he is an employee of the Company or a Subsidiary, or within three months after termination of such employment, and (ii) prior to the complete exercise of the Option, then the Option may be exercised, within the applicable term provided by Section 2, by the Optionee's estate or by such person(s) to whom the Optionee's rights hereunder shall have passed under his will or the laws of descent and distribu- tion. In such event, as used herein the term "Optionee" shall mean the Optionee's estate or such person(s). 4. Price. The price of each Share purchased upon exercise of the Option shall be $6.25 (that being the last transaction price of the Common Stock on August 15, 1995 quoted by The Nasdaq Stock Market). 5. Schedule and Method of Exercise. (a) Subject to the provisions of Section 2, the Option shall be exercisable as follows: (i) as to 6,000 Shares beginning on August 15, 1995 and terminating on August 14, 2000; (ii) as to an additional 6,000 Shares beginning on August 15, 1996 and terminating on August 14, 2000; (iii) as to an additional 6,000 Shares beginning on August 15, 1997 and terminating on August 14, 2000; (iv) as to an additional 6,000 Shares beginning on August 15, 1998 and terminating on August 14, 2000; and (v) as to an additional 6,000 Shares beginning on August 15, 1999 and terminating on August 14, 2000. (b) The Option, to the extent exercisable under Section 5(a), may be exercised in whole or in part, provided that the Option may not be exercised for less than one Share in any single exercise transaction. (c) The Option shall be exercised by written notice given by the Optionee to the Company specifying the number of Shares that the Optionee elects to purchase and the purchase price being paid, accompanied by full payment of such purchase price. Upon each exercise, the Option price shall be payable by one or any combination of the following methods, as determined by the Optionee and specified in his notice of exercise: (i) in cash, or (ii) by delivery of Shares already owned by the Optionee. Any Shares that are so delivered to pay the Option price shall be valued at their fair market value on the date of such Option exercise. Upon determining that compliance with this Agreement has occurred, including compliance with such reasonable requirements as the Company may impose pursuant to Section 10, the Company shall issue certificate(s) for the Shares purchased. 6. No ISO Treatment. The Option is not an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. 7. No Rights of Shareholder. No person, estate or other entity shall have the rights of a shareholder of the Company with respect to any of the Shares subject to the Option until a certificate for such Shares has been delivered to the Optionee. 8. Rights of the Company. This Agreement does not affect the Company's right to take any corporate action whatsoever, including without limitation its right to recapitalize, reorganize or make other changes in its capital structure or business, merge or consolidate, issue bonds, notes, Shares or other securities, including preferred stock, or options therefor, dissolve or liquidate, or sell or transfer any part of its assets or business. 9. Adjustment Provisions. In the event that (a) in connection with a merger or consolidation of the Company or a sale by the Company of all or a part of its assets, the outstanding Shares are exchanged for a different number or class of shares of stock or other securities of the Company, or for shares of the stock or other securities of any other entity; or (b) new, different or additional Shares or other securities of the Company or of another entity are received by the holders of Shares, whether by way of recapitalization or otherwise; or (c) any dividend in the form of stock is made to the holders of Shares, or any stock split or reverse split pertaining to Shares is effected; then appropriate adjustment shall be made to (i) the number and kind of Shares or other securities that may be issued upon exercise of the Option; and (ii) the Option price per Share to be paid upon exercise of the Option. Under no circumstance shall the Optionee be entitled to an adjustment hereunder to reflect dilution resulting from the issuance or acquisition of Shares or other securities by the Company, except as expressly provided in the preceding sentence, regardless of whether such Shares or other securities are issued for less than the exercise price of the Option. 10. Taxes; Securities Laws Matters. (a) The exercise of the Option shall be conditioned upon the Optionee making arrangements satisfactory to the Company for the payment to the Company of the amount of all taxes required by any governmental authority to be withheld and paid over by the Company to the governmental authority on account of the exercise. The payment of such withholding taxes to the Company may be made by either or a combination of the following methods: (i) in cash, or (ii) by the Company withholding such taxes from any other compensation owed to the Optionee by the Company or a Subsidiary. (b) As a precondition to the Company's execution of this Agreement and the issuance of the Option hereunder, the Optionee represents to the Company that the Option is being, and (unless a Registration Statement with respect thereto shall then be effective under the Securities Act of 1933, as amended (the "Act")) any Shares acquired by him upon exercise of the Option shall be, acquired by him solely for investment and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of selling, transferring or disposing of the same. (c) The Optionee acknowledges and agrees that the Option may not be offered for sale, sold, pledged, hypothecated or otherwise transferred or disposed of in any manner inconsistent with this Agreement. The Optionee agrees and consents that any Shares acquired upon exercise of the Option may not be offered for sale, sold or otherwise transferred or disposed of unless (i) a registration statement with respect thereto shall then be effective under the Act, and the Optionee shall have provided proof satisfactory to counsel for the Company that he has complied with all applicable state securities laws, or (ii) the Company shall have received an opinion of counsel in form and substance satisfactory to counsel for the Company that the proposed offer for sale, sale or transfer of the Shares is exempt from the registration requirements of the Act and may otherwise be effected in compliance with any other applicable law, including all applicable state securities laws. The Optionee agrees that unless a Registration Statement with respect thereto shall then be effective under the Act, a legend to this effect may be placed on each certificate, and that a stop transfer order may be placed against his account, relating to such Shares. In addition, each such certificate shall bear such additional legends and statements as the Company deems advisable to assure compliance with all Federal and state laws and regulations, including securities laws and regulations. (d) The Optionee confirms that the Company is relying upon his representations contained in this Section 10 in connection with the issuance to him of the Option and the Shares underlying the Option. In consideration of the issuance to the Optionee of the Option and the Shares upon any exercise of the Option, the Optionee hereby indemnifies and holds harmless the Company, and the officers, directors, employees and agents thereof, from and against any and all liability, losses, damages, expenses and attorneys' fees which they may hereafter incur, suffer or be required to pay by reason of the falsity of, or his failure to comply with, any representation or agreement contained in this Section 10. 11. Tenure. The Optionee's right, if any, to continue to serve the Company or a Subsidiary as an officer, employee or otherwise will not be enlarged or otherwise affected by this Agreement. This Agreement does not restrict the right of the Company or any Subsidiary to terminate the Optionee's employment at any time. 12. Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such State. 13. Notices. All notices and other communications required or permitted under this Agreement shall be written, and shall be either delivered personally or sent by registered or certified first-class mail, postage prepaid and return receipt requested, or by telex or telecopier, addressed as follows: if to the Company, to the Company's principal office, Attention: Corporate Secretary; and if to Optionee or his successor, to the address last furnished by such person to the Company. Each such notice and other communication delivered personally shall be deemed to have been given when delivered. Each such notice and other communication delivered by mail shall be deemed to have been given when it is deposited in the United States mail in the manner specified herein, and each such notice and other communication delivered by telex or telecopier shall be deemed to have been given when it is so transmitted and the appropriate answerback is received. A party may change its address for the purpose hereof by giving notice in accordance with the provisions of this Section 13. 14. In General. This Agreement is the final, complete and exclusive expression of the understanding between the parties and supersedes any prior or contemporaneous agreement or representation, oral or written, between them. Modification of this Agreement or waiver of a provision hereof must be written and signed by the party to be bound. In the event that any provision of this Agreement shall be held to be illegal or unenforceable, such provision shall be severed from this Agreement and the entire Agreement shall not fail on account thereof, but shall otherwise remain in full force and effect. As used herein, the term "Section" shall mean the appropriate section of this Agreement. IN WITNESS WHEREOF, the Optionee and the Company have executed this Agreement as of the date first above written. TRANSMATION, INC. By:/s/ Robert G. Klimasewski --------------------------------- Robert G. Klimasewski, President /s/ Eric W. McInroy -------------------------------- ERIC W. McINROY EX-27 2 ART. 5 FOR 10-Q
5 This schedule contains summary financial information extracted from the financial statements included within the Company's September 30, 1995, Form 10-Q and is qualified in its entirety by reference to such financial statements. 0000099302 TRANSMATION, INC. 6-MOS MAR-31-1996 SEP-30-1995 294,548 0 5,486,407 528,200 6,508,471 13,155,656 5,222,201 3,644,400 15,250,169 3,285,341 4,039,800 1,209,220 0 0 5,978,391 15,250,169 16,676,054 18,666,749 10,842,656 11,760,795 5,957,822 55,200 218,998 673,934 282,525 391,409 0 0 0 391,409 .15 .15
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