Worcester Business Journal

4 Worcester Business Journal • July 18, 2016 www.wbjournal.com Marlborough, North Middlesex banks merge to create $1B firm Two area mutual banks have announced they have agreed to a merg- er that would create a bank with nearly $1 billion in assets and $95 million in equity across 14 branches. In a joint release put out by the banks, officials said the merger would allow for increased lending capacity and a larger network of branches and ATMs while continuing the hometown focus that the banks had been built on. There will be no staffing reductions as a result of the merger, according to the release. The merger will also result in a merg- er of both banks' charitable founda- tions, which have a long history of giv- ing back to their communities. The merger is expected to be com- pleted in the fourth quarter of 2016, subject to the receipt of regulatory approval and the approval of both par- ties' corporators. Fitchburg company terminates $4M acquisition Security Devices International Inc., the Fitchburg maker of rubber bullets and other less-lethal projectiles used by military and police forces, has termi- nated a $4.14-million acquisition after looking into the other firm's financials. The acquisition of the undisclosed U.S. manufacturer was announced in March, but during SDI's due diligence process there were a number of items in the target firm's financial statements that "raised concerns in support of the negotiated price of the transaction," SDI announced in a release. SDI has since terminated discussions with that com- pany, although it is open to revisiting the opportunity in the future. The Fitchburg firm said it is continu- ing to look for acquisitions and strategic partnerships in the less-lethal sector. Leominster manufacturer penalized $1.4M for OT violations Leominster manufacturer United Solutions and a staffing agency have been ordered to pay $1.4 million in back wages and damages to 566 employ- ees, as well as $100,000 in penalties to the U.S. Labor Department, after an investigation found the firms jointly employed and systematically underpaid workers for a three-year period. A federal investigation by the U.S. Department of Labor's Wage and Hour Division found ASI Staffing Group Corp., which is also based in Leominster and supplied contract labor to United Solutions, avoided paying employees at its Leominster and Sardis, Miss. plants proper overtime by creating additional company names and logging overtime under these names, paying employees a straight rate for their overtime hours. Although United Solutions contract- ed out its labor through ASI, the inves- tigation found that the company was aware that ASI employees were not being paid proper overtime and as a result was found responsible as a joint employer through the Fair Labor Standards Act. United Solutions does business as United Plastics, which is how the labor department cited them. Most of the entitled employees, who worked as machine operators, mainte- nance workers, molding technicians, color mixers and quality control work- ers, worked more than 48 hours a week. Edward W. Zephir, Jr., president of United Comb and Novelty Corporation, which operates as United Solutions, said in a statement United was not aware ASI employees working at United did not receive proper compensation. "In connection with its investigation, the Department of Labor has alleged that ASI and United are joint employ- ers. United disagrees with the Department's position. However, to ensure prompt reimbursement to the affected ASI employees and in the spirit of compromise, United has entered into a Consent Judgement and Order, whereby United will ensure that the employees in question are reimbursed for any unpaid overtime. The order reflects no evidence of wrongdoing by United," the statement read. "ASI has agreed to reimburse United for all pay- ments made to rectify ASI's failure to abide by its contract with United and comply with all labor and employment laws and regulations." After CEO ouster, SeaChange names new CFO SeaChange International has named Peter Faubert as the company's new chief financial officer just three months after the board ousted the company's former CEO Jay Samit. The Acton multi-screen company made the announcement Thursday that Peter Faubert will replace Anthony Dias as the company's CFO and senior vice president and treasurer. As part of his severance, Dias will receive $157,749.96, six months worth of his yearly salary, in addition to being eligible for a portion of his annual bonus and his perfor- mance stock award of $189,300. According to that filing, Faubert will receive a base salary of $300,000 per year and receive a one-time equity award of 100,000 stock options and be eligible for an annual cash bonus with a target value of $180,000. Faubert's appointment follows the replacement of former CEO Jay Samit in April. Although the company did not give a reason for the change, the announcement came as SeaChange posted a fiscal 2016 operating loss of $48.2 million. benefit of last year's sales holiday to be roughly $168 million. This takes into account not only additional sales, but added shifts by retailers and ancillary spending by shoppers such as din- ing while out. "We recognize it is a loss in sales tax reve- nue… but there is such a boon to those busi- nesses that it really does outweigh it," Loosemore said. The benefit can espe- cially be felt in Worcester County and locations near tax-free New Hampshire, he said, as well as in the face of online competition. "For that weekend it creates a level playing field for the smaller retailers that are trying to strive and hang on at times," Loosemore said. n A s the state government continues to deal with stunted revenues, it appears the sales tax holiday that has come to be a staple in Massachusetts retailer's August plans might be one of the casualties. The Sales Tax Holiday eliminates the state's 6.25-percent tax on purchases up to $2,500 during the designated day or weekend. While not a guarantee, it has been voted through in 11 of the past 12 years, with 2009 being the exception. However, this year may become an exception as well, as the House already passed at a chance to include a sales tax holiday in its $915-million economic development bill. The Senate could move a tax holiday forward in its version of the bill, but with the current climate at the state, it seems just as likely that it could be passed over this year. The concern Money, or the lack of it coming into the state's coffers, is the main concern. The state is looking at a $750-million shortfall from previous revenue esti- mates for fiscal 2017 and the tax-free weekend would only add to that. Department of Revenue estimates place the loss of tax revenue for last year's tax holiday at $25.51 million. But money is also the concern on the side of the business community, said Stuart Loosemore, Worcester Regional Chamber of Commerce director of gov- ernment affairs and public policy. Estimates from the Retailers Association of Massachusetts placed the economic REGIONAL BRIEFS Verbatim "One way or another I think this sends a bad message to small business and a bad message to farmers, both of whom I care a lot about." Gov. Charlie Baker, about the potential closure of the Nashoba Valley Winery's alcohol operations >> "I'm proud that, in the midst of a tough fiscal climate, we came to agreement on a fiscally- responsible budget that minimizes cuts and protects our most vulnerable residents." Massachusetts House Speaker Robert DeLeo, about passing a budget that takes into account slashed revenues >> "We are helping to lift hundreds of thou- sands of working families out of pover- ty. The Earned Income Tax Credit is one of the most powerful tools we have to grow the economy." State Senate President Stanley Rosenberg, about expanding the credit by charging hotel and motel taxes on transient accommoda- tions, such as apartments rented out through online services like Airbnb >> In Review CENTRALMASS Tax-free weekend on the ropes BY SAM BONACCI Worcester Business Journal Digital Editor White City Shopping Center in Shrewsbury is home to a number of retailers who could take advantage of the Sales Tax Holiday. >> Continued on next page

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