Written by Kathy Williams
Herald Democrat


GlobiTech won approval of a new $201,120 performance agreement with Sherman Economic Development Corp. in exchange for investing $6.7 million in new capital improvements.

SEDCO President John Boswell said Wednesday that the agreement created Monday involves all new construction and could bring a few new employees, but the incentives are for capital investment only.

“This is one of the most significant new capital investments we’ve had in a long time,” Boswell said. “It is for new Epi-reactors.”

GlobiTech buys silicon wafers and puts an epitaxial coating on the chips’ surfaces. Epitaxy is growing a crystal layer of one mineral on the crystal base of another mineral in such a manner that its crystalline orientation is the same as that of the substrate (or the base crystal).

Several months ago, SEDCO removed a cloud over its relationship with GlobiTech by canceling its “clawback” requirements. Under the clawback provisions of its first performance agreement, GlobiTech was repaying $600,000 of the $1.5 million SEDCO had paid GlobiTech of a $2.5 million incentive package awarded in 1999. GlobiTech had failed in its obligation to keep current in its tax payments to local governments.

To get back in SEDCO’s good graces, GlobiTech had repaid back taxes, with penalties and interest and had paid SEDCO $173,000 in penalties, interest and principal owed on the $600,000 clawback.

At the time SEDCO forgave the remainder of the clawback debt, Boswell said, “The board did due diligence and looked at their (GlobiTech’s) financials. They are up to about 130 (employees) and the original agreement was for, I think, 68 jobs. So with that, plus the fact that they are current on all their taxes, penalties and interest included, the board thought that it was in keeping with the spirit of the agreement and with our philosophy of economic development to release them from that clawback.”

Boswell said the new performance agreement has nothing to do with the old one, but is based totally on the value GlobiTech will add to the tax base with the capital investment. He said GlobiTech has not sought any tax abatements for the new project.

All performance agreements in which SEDCO participates now give payments only after requirements are met. That means all requirements must be met, and that includes the company must keep current on its taxes. This $201,120 incentive will be paid in two $100,560 payments.

Former Sherman City Attorney Charles Rowland authored the contract SEDCO uses for its performance agreements. The contract sets out all the requirements each company must meet, including paying its taxes, hiring the number of employees (if jobs are part of the agreement) and the amount of capital investment made, plus several other requirements.

The document Rowland designed is so good, Boswell said, it has become the model the State Comptrollers Office recommends to 4A sales-tax-financed corporations. SEDCO is such a corporation.

“We’re pleased with GlobiTech right now and I think that we’re optimistic they will continue to improve and hope we get the opportunity to do another agreement down the road,” Boswell said.

He added the improvements will add to the tax base, but since it doesn’t add many employees or use a new site, it will require nothing extra in tax-payer funded activities like road building or hiring new police officers.