<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1995
/ / 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 1-5731
---------------------
REXEL, INC.
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
NEW YORK 13-1474527
(State of (I.R.S. employer
Incorporation) identification no.)
</TABLE>
150 ALHAMBRA CIRCLE, CORAL GABLES, FL 33134
(Address of principal executive offices)
305-446-8000
(Telephone Number)
------------------------
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON WHICH
TITLE OF EACH CLASS REGISTERED
- ----------------------- -------------------------------------
<S> <C>
Common stock, par value New York Stock Exchange, Inc.
$1 per share The Pacific Stock Exchange,
Incorporated
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
As of March 1, 1996: 25,649,790 shares of Common Stock were outstanding; and
the aggregate market value of shares held by non-affiliates was $164,233,296
(For these purposes, a reported closing market price of $12 per share on March
1, 1996 has been used and "affiliates" have been arbitrarily determined to be
Rexel, S.A., International Technical Distributors, Inc. (see Item 1 of this
Report) and all directors and officers, although the Company does not
acknowledge that any such entity or person is actually an "affiliate" within the
meaning of the federal securities laws.)
Documents Incorporated By Reference: definitive proxy statement for 1996
Annual Meeting of Stockholders (Part III).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I
ITEM 1. BUSINESS
Rexel, Inc. (the "Company") is a New York corporation that was incorporated
in 1866. Rexel, S. A., a French company listed on the Paris Stock Exchange, owns
approximately 46% of the stock of the Company. During 1995, the Company changed
its name from Willcox & Gibbs, Inc. to Rexel, Inc. Management believes that the
Company is the fifth largest distributor of electrical parts and supplies in the
United States and that Rexel, S. A., operating through its affiliated companies
including the Company, is the largest electrical supplies distributor in the
world, based on 1995 sales.
During the last several years, the Company has undertaken a major
restructuring. On April 22, 1992, the Company, Rexel, S.A., International
Technical Distributors, Inc. ("ITD"), a subsidiary of Rexel, S. A. and Southern
Electric Supply Company, Inc. ("SES"), a subsidiary of ITD engaged in the
distribution of electrical materials, entered into a Purchase Agreement (the
"Purchase Agreement"). Pursuant to the Purchase Agreement, the Company issued to
Rexel, S. A. and ITD 6,284,301 shares of Company Common Stock in exchange for
all of the stock of SES and approximately $10 million in cash. In addition,
pursuant to the Purchase Agreement, the Company declared a dividend consisting
of one share of common stock of the Company's subsidiary Worldtex, Inc.
("Worldtex") for each share of Company Common Stock outstanding on November 23,
1992 (the "Distribution"). In August 1992, the Company transferred to Worldtex
all of the stock of the Company's subsidiaries engaged in the manufacture of
covered elastic yarn.
Also during 1992, the Company disposed of its data communications equipment
distribution business, conducted by Data Net, Inc. and Dataspan Systems, Inc.,
and its Montrose Supply and Equipment Division, which distributed equipment to
the knitting trade. In July 1994, the Company sold its apparel parts and
supplies distribution businesses. As a result of these transactions and the
Distribution, the Company became engaged solely in the distribution of
electrical goods and supplies.
In April 1993, the Company acquired Sacks Electrical Supply Co. ("Sacks"), a
distributor of electrical supplies and components with three locations in Ohio,
for $13,635,000. On December 17, 1993, the Company acquired Summers Group Inc.,
("Summers"), a distributor of electrical parts and supplies with locations
principally in Texas, Oklahoma, Louisiana, Arkansas, Arizona, Colorado and
California. The consideration for the Summers acquisition was $60,000,000 in
cash and a $25,000,000 three year note issued to the seller, plus contingent
consideration to be determined based on Summers' profits before interest and
taxes for 1993 and 1994, subject to a maximum purchase price of $120,000,000. In
December 1994, the Company agreed to prepay such note and cancel the contingent
consideration in exchange for cash payments that brought the total cash purchase
price for Summers to $90,950,000 (including $0.7 million of acquisition costs).
In March, 1994, the Company sold 3,491,280 newly-issued shares of Company
Common Stock to Rexel, S. A. for $31,421,520 in cash. In connection with that
sale, the size of the Company's Board of Directors was reduced from twelve to
nine and two additional nominees of Rexel, S. A. became directors of the
Company. As a result, five of the Company's nine current directors are nominees
of Rexel, S. A.
During the last half of 1994, the Company also realigned the management of
its electrical distribution operations. The operations of the Company's
principal subsidiaries, Summers, Sacks, SES and the Consolidated Electric Supply
group ("CES"), were reorganized along geographic lines into two regions: the
Eastern Region and the Western Region. In addition, substantially all of the
Company's operating subsidiaries were merged into either SES, which operates the
Eastern Region, or Summers, which operates the Western Region.
In 1995, the Company has focused on integrating its operations, reducing
costs and developing new sourcing and marketing programs.
2
<PAGE>
ELECTRICAL DISTRIBUTION OPERATIONS
The Company is engaged in the wholesale distribution of electrical parts and
supplies, operating 169 electrical distribution locations in 18 states and the
Bahamas. The Company manages its business through two principal regional
organizations: the Eastern Region and the Western Region.
The Eastern Region operates 93 distribution centers in 11 states, of which
44 are in Florida, 14 in Ohio, 9 in Mississippi, 7 in Alabama, 4 in Louisiana, 4
in Georgia, 3 in Delaware, 2 in Maryland, 2 in Tennessee, 2 in Oklahoma, 1 in
Virginia and 1 in Freeport, Grand Bahamas.
The Western Region operates 76 locations in 9 states, consisting of 37 in
Texas, 12 in California, 8 in Louisiana, 8 in Arkansas, 5 in Oklahoma, 2 in
Missouri, 2 in Arizona, and 1 in each of Colorado and New Mexico.
Each of the Company's electrical distribution locations serves an area with
approximately a 50 mile radius and serves the needs of electrical contractors
engaged in construction work on commercial and residential structures. The
Company also provides materials to industrial customers for maintenance and
repairs and for the manufacture of equipment. In addition, the Company has two
divisions focused on specialty markets: the DataCom division, which distributes
products used to interconnect voice, data and video systems, and the Cummins
division, which distributes supplies to the utility industry. These two
divisions generated approximately 9% of the Company's sales in 1995.
In 1995, the Company served over 61,000 customers, with no single customer
accounting for more than 2.3% of total annual sales. The Company's ten largest
customers in 1995 represented less than 7.3% of sales. Management believes that
approximately 50% of the Company's sales are from the construction-based
electrical contractor market. The remainder are sold to industrial,
governmental, municipal and utility company customers.
Management believes that the Company is the fifth largest distributor of
electrical parts and supplies in the United States, although there are other
companies which account for significantly greater national volume. The Company
competes with national chains (some of which are affiliated with manufacturing
companies) and other independent distributors operating single or multiple
outlets. Because the electrical supply business is fragmented and highly
competitive, service and price are essential components of success. A typical
Company electrical distribution location consists of a 20,000 sq. ft. warehouse
and office facility, ten inside and outside sales representatives, one technical
specialist, six warehouse and delivery personnel, and four management and
support personnel. An average branch has approximately 400 customers, maintains
an inventory of about 8,500 items, and makes deliveries within a 50-mile radius.
Small branches are often grouped to constitute a profit center.
The Company's extensive product line includes electrical supplies, such as
cable, cords, boxes, covers, wiring devices, conduit, raceway duct, safety
switches, motor controls, breakers, panels, lamps, fuses and related supplies
and accessories, residential, commercial and industrial electrical fixtures and
other special use fixtures, as well as materials and special cables for
computers and advanced communications systems. The products sold by the Company
are purchased from over 1,400 manufacturers and other suppliers, the two largest
of which accounted in the aggregate for approximately 16% of the Company's total
purchases during 1995, with none of the remainder accounting for more than 5%.
DISCONTINUED OPERATIONS
APPAREL PARTS AND SUPPLIES DISTRIBUTION
In July 1994, the Company sold its apparel parts and supplies distribution
businesses, which are described below, for consideration valued at approximately
$44 million.
The Company's former Sunbrand Division marketed to the apparel industry a
wide range of sewing equipment parts, supplies and other equipment, including
pressing and finishing equipment, fabric spreading machines and reconditioned
equipment. Its product line included needles, tools,
3
<PAGE>
electric and electronic devices and warehouse equipment. Sunbrand's executive
offices were located in
Atlanta. Sunbrand had seven office/distribution centers located near major
apparel manufacturing areas in Atlanta, El Paso, Fall River (Massachusetts),
Miami, Mexico City, Nashville, and Santo Domingo (Dominican Republic).
The Company's former Unity Sewing Supply Division ("Unity"), an importer and
distributor of non-trademarked ("generic") parts for industrial sewing machines,
was headquartered in New York with branch offices in Los Angeles and Miami. It
sold to dealers, not to manufacturers or end users. The majority of Unity's
parts were manufactured in Japan, Germany and the United States.
The Company's former subsidiary, Willcox & Gibbs, Ltd., a wholly-owned
United Kingdom subsidiary, marketed sewing equipment in certain Common Market
countries and sold generic sewing equipment parts in the United Kingdom.
The Company's former subsidiary, Leadtec Systems, Inc. ("Leadtec"),
distributed to the apparel industry a computer-based real-time production
control system, marketed under the name "Satellite Plus", which utilized
hardware manufactured by others and proprietary software designed by Leadtec.
COVERED ELASTIC YARN
Prior to 1993, the Company owned Worldtex and its subsidiaries, which
engaged in the manufacture of covered elastic yarn. These operations were
disposed of by the Company pursuant to the Distribution on November 12, 1992.
While owned by the Company, Worldtex's principal product was nylon covered
spandex used in the manufacture of women's pantyhose, which accounted for 58% of
Worldtex's 1992 sales. Worldtex also sold covered spandex and covered latex
rubber for use in the manufacture of men's, women's and children's socks.
EMPLOYEES
As of December 31, 1995, the Company had a total of approximately 2,700
employees. Approximately 38 employees are covered by collective bargaining
agreements. The Company has experienced no significant labor problems during
recent years and considers that its employee relations are good.
ITEM 2. PROPERTIES
The Company's executive offices are located in leased office space at 150
Alhambra Circle, Coral Gables, Florida. Of the Company's distribution centers,
38 are owned by subsidiaries of the Company and 131 are leased. These leases are
classified as operating leases and expire in various years through 2002. The
Company's distribution centers generally range from 4,000 to 105,000 square feet
and include office and warehouse facilities. The average distribution center is
approximately 20,000 square feet.
Eleven of the Company's distribution centers are leased from Robert Merson,
a Senior Vice President of the Company and President of the Company's Eastern
Region, and/or members of his or his wife's family, for terms extending through
2002. The Company believes that these leases are on terms at least as favorable
as could have been obtained from an unaffiliated third party.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings as of the date of this
Report to which the Company or any of its subsidiaries is a party or to which
any of their property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the last quarter of the Company's fiscal year, no matters were
submitted to a vote of the Company's security holders.
4
<PAGE>
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
NAME AGE TITLE AND PERIOD OF SERVICE
- ------------------- --- ------------------------------------------------------------------------------------------
<S> <C> <C>
Alain Viry 47 President and Chief Executive Officer (March 1994 to present).
Robert M. Merson 57 Senior Vice President (May 1994 to present); Vice President (November 1992 to May 1994)
Jon O. Fullerton 53 Vice President, General Counsel and Secretary (July 1994 to present)
Steven M. Hitt 45 Vice President and Chief Financial Officer (July 1994 to present)
Allan M. Gonopolsky 51 Vice President and Corporate Controller (May 1991 to November 1992 and July 1994 to
present); Vice President, Chief Financial Officer and Corporate Controller (November 1992
to July 1994); Corporate Controller (1978 to April 1991).
</TABLE>
The officers of the Company are elected annually by the Board of Directors.
Mr. Viry also serves as a director of the Company.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is listed on the New York Stock Exchange and the
Pacific Stock Exchange. The following table sets forth the high and low per
share sales prices for the Common Stock on the New York Stock Exchange as
reported by the Dow Jones Historical Stock Quote Reporter Service for each
quarter since December 31, 1993.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
1994:
1st Quarter......................................................................... 8.63 6.50
2nd Quarter......................................................................... 7.38 5.63
3rd Quarter......................................................................... 7.38 6.25
4th Quarter......................................................................... 7.50 5.88
1995:
1st Quarter......................................................................... 7.38 5.75
2nd Quarter......................................................................... 9.75 6.75
3rd Quarter......................................................................... 10.88 9.38
4th Quarter......................................................................... 14.88 9.88
1996:
1st Quarter (through March 8, 1996)................................................. 14.25 11.50
</TABLE>
At March 8, 1996, there were approximately 1,286 holders of record of Common
Stock.
No cash dividends have been paid on the Company's Common Stock since the
last quarter of 1991. Future payment of cash dividends by the Company will be
dependent on such factors as business conditions, earnings and the financial
condition of the Company.
The terms of the Company's 9.78% Senior Notes, dated as of April 2, 1991, as
amended, restrict dividends and certain other payments with respect to the
Company's capital stock if the sum thereof for the period since August 8, 1995,
exceeds the sum of (i) $26,000,000 plus (ii) 15% of net cash proceeds from the
sale of stock for such period, plus (iii) 50% of consolidated net income (as
defined)
5
<PAGE>
for such period. In addition, the Note Agreement and the Company's Amended and
Restated Revolving Credit and Reimbursement Agreement, dated as of August 8,
1995, require that the Company meet certain financial tests that could have the
effect of restricting the Company's ability to pay dividends.
ITEM 6. SELECTED FINANCIAL DATA
REXEL, INC. AND SUBSIDIARIES
The following tables set forth certain consolidated financial data of the
Company and its subsidiaries for the five fiscal years ended December 31, 1995,
which has been derived from the Company's audited financial statements, and
should be read in conjunction with the Consolidated Financial Statements and
Notes thereto of the Company appearing elsewhere in this Report on Form 10-K.
The selected financial data of the Company for the years set forth below are
not directly comparable due to acquisitions and dispositions during such
periods, including the distribution of Worldtex on November 12, 1992, the sale
of the Apparel Division on July 13, 1994, and the acquisitions of SES on
November 12, 1992, Sacks on April 12, 1993 and Summers on December 17, 1993.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
------------- ------------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Net sales................................... $ 1,120,688 $ 1,065,543 $ 521,519 $ 359,080 $ 370,103
------------- ------------- ----------- ----------- -----------
------------- ------------- ----------- ----------- -----------
Income (loss) from continuing operations
before income taxes........................ $ 37,679 $ 16,528 $ 11,928 $ (17,588) $ (6,095)
Income tax provision (benefit).............. 16,579 7,270 5,038 (5,186) (1,656)
------------- ------------- ----------- ----------- -----------
Income (loss) from continuing operations.... 21,100 9,258 6,890 (12,402) (4,439)
Income from discontinued operations......... -- -- 1,517 7,527 6,123
Loss on disposal of discontinued
operations................................. -- (327) -- -- --
------------- ------------- ----------- ----------- -----------
Income (loss) before extraordinary charge
and cumulative effect of accounting
change..................................... 21,100 8,931 8,407 (4,875) 1,684
Extraordinary charge (a).................... (1,325) -- -- -- (1,436)
Cumulative effect of accounting change
(b)........................................ -- -- 660 -- --
------------- ------------- ----------- ----------- -----------
Net income (loss)........................... $ 19,775 $ 8,931 $ 9,067 $ (4,875) $ 248
------------- ------------- ----------- ----------- -----------
------------- ------------- ----------- ----------- -----------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Earnings per common share
Primary:
Income (loss) from continuing operations.... $ .85 $ .39 $ .33 $ (.85) $ (.32)
Income (loss) from discontinued
operations................................. -- (.01) .07 .52 .44
----------- ----------- ----------- ----------- -----------
Income (loss) before extraordinary charge
and cumulative effect of accounting
change..................................... .85 .38 .40 (.33) .12
Extraordinary charge (a).................... (.05) -- -- -- (.10)
Cumulative effect of accounting change
(b)........................................ -- -- .03 -- --
----------- ----------- ----------- ----------- -----------
Net income (loss)........................... $ .80 $ .38 $ .43 $ (.33) $ .02
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Fully diluted (c):
Income from continuing operations........... $ .79
Extraordinary charge (a).................... (.05)
-----------
Net income.................................. $ .74
-----------
-----------
Total assets.................................... $ 375,493 $ 414,487 $ 428,519 $ 285,309 $ 365,429
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Long-term obligations........................... $ 40,582 $ 99,201 $ 129,503 $ 114,251 $ 113,447
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Cash dividends per common share................. $ -0- $ -0- $ -0- $ -0- $ .10
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
- ------------------------
(a) Loss on early extinguishment of debt.
(b) Cumulative effect of accounting change for income taxes in connection with
SFAS No. 109, "Accounting for Income Taxes."
(c) Fully diluted amounts are anti-dilutive in all years prior to 1995.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SIGNIFICANT TRANSACTIONS
On November 12, 1992, pursuant to the Purchase Agreement, dated April 22,
1992, among the Company, Rexel, S.A., International Technical Distributors, Inc.
("ITD"), a subsidiary of Rexel, S. A., and Southern Electric Supply Company,
Inc. ("SES"), a subsidiary of ITD engaged in the distribution of electrical
materials, the Company issued to Rexel, S. A. and ITD 6,284,301 shares of
Company Common Stock in exchange for all of the stock of SES and approximately
$10 million in cash. In addition, pursuant to such Purchase Agreement, the
Company declared a dividend consisting of one share of Common Stock of Worldtex,
Inc. ("Worldtex"), its subsidiary engaged in the manufacture of covered yarn,
for each share of Company Common Stock outstanding on November 23, 1992.
In April 1993, the Company acquired Sacks Electrical Supply Co. ("Sacks"), a
distributor of electrical supplies and components with three locations in Ohio,
for $13.6 million. On December 17, 1993, the Company acquired Summers Group,
Inc. ("Summers"), an electrical parts distributor with locations principally in
Texas, Oklahoma, Louisiana, Arkansas, Arizona, Colorado and California, for $60
million in cash and a $25 million three year note issued to the seller, plus
contingent consideration to be determined based on Summers' profits before
interest and taxes for 1993 and 1994, subject to a maximum purchase price of
$120 million. In December 1994, the Company agreed to prepay such note and
cancel the contingent consideration in exchange for cash payments that brought
the total cash purchase price for Summers to $90.95 million (including $0.7
million of acquisition costs).
7
<PAGE>
On March 1, 1994, the Company sold 3,491,280 newly-issued shares of Company
Common Stock to Rexel, S. A. for a total purchase price of $31.4 million.
On July 13, 1994, the Company sold its apparel parts and supplies
distribution businesses (the "Apparel Division") for consideration of
approximately $44 million, including cash, debt of the purchaser and warrants of
the purchaser. On July 26, 1995, the Company sold such debt, warrants and
certain other assets to the purchaser for $4.1 million in cash. The Apparel
Division is shown as a discontinued operation in the Company's Consolidated
Financial Statements.
During the second half of 1994, the operations of the Company's principal
subsidiaries, Summers, Sacks, SES and the Consolidated Electric Supply group
("CES"), were reorganized along geographical lines into two regions: the Eastern
Region and the Western Region. As part of this process, the Company closed six
redundant or underperforming locations and opened ten new locations. In
addition, the Company implemented cost reduction programs, including the
consolidation and redesign of employee benefit and casualty insurance programs,
established new management incentive programs focused on profit growth and asset
management and commenced upgrade of its Eastern Region's computer management
information system.
As a result of the aforementioned transactions and discontinuances, the
Company became engaged in only one business segment: the distribution of
electrical parts and supplies, principally in the southern United States.
RESULTS OF CONTINUING OPERATIONS
The following tables set forth the operating results from continuing
operations before income taxes and the percentages which certain income and
expense items bear to net sales:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ------------
<S> <C> <C> <C>
Net sales.................................................................. $ 1,120.7 $ 1,065.5 $ 521.5(a)
---------- ---------- ------------
---------- ---------- ------------
Gross profit............................................................... $ 230.1 $ 212.5 $ 107.5
Selling & administrative expense........................................... 183.8 187.4 90.4
---------- ---------- ------------
Operating profit........................................................... 46.3 25.1 17.1
Interest expense........................................................... 7.7 9.6 5.9
Other (expense) income..................................................... (.9) 1.0 .7
---------- ---------- ------------
Income from continuing operations before income taxes...................... $ 37.7 $ 16.5 $ 11.9
---------- ---------- ------------
---------- ---------- ------------
</TABLE>
- ------------------------
(a) Assuming the Sacks and Summers acquisitions had been consummated as of
January 1, 1993, the Company's unaudited pro forma sales would have been
$958.5 million in 1993.
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Net sales.............................................................................. 100.0% 100.0% 100.0%
--------- --------- ---------
--------- --------- ---------
Gross profit........................................................................... 20.5% 19.9% 20.6%
Selling & administrative expense....................................................... 16.4 17.6 17.3
--------- --------- ---------
Operating profit....................................................................... 4.1 2.3 3.3
Interest expense....................................................................... .7 .9 1.1
Other income........................................................................... -- .1 --
--------- --------- ---------
Income from continuing operations before income taxes.................................. 3.4% 1.5% 2.2%
--------- --------- ---------
--------- --------- ---------
</TABLE>
8
<PAGE>
OPERATING RESULTS 1995 VS. 1994
- - SALES
Sales in 1995 increased $55.1 million to $1,120.7 million, or 5.2% over
1994. Same branch sales increased 7.1% for the year. Sales by geographic region
in 1995 were as follows:
<TABLE>
<CAPTION>
AMOUNT PERCENTAGE
(IN INCREASE/
MILLIONS) (DECREASE)
----------- -----------
<S> <C> <C>
Eastern Region:
Southeast................................................................. $ 405.8 5.4%
Midwest................................................................... 167.4 9.0%
Western Region:
Southwest................................................................. 450.7 7.7%
Pacific Coast............................................................. 96.8 (10.7)%
----------- -----------
Total....................................................................... $ 1,120.7 5.2%
----------- -----------
----------- -----------
</TABLE>
The 1995 increase in sales was attributable to favorable construction
markets, particularly in the first half of the year, improvements in industrial
markets, and growth of sales in the utility and data communications markets. The
decrease in sales in the Pacific Coast region was the result of branch closures
and tighter credit policies implemented to improve the quality of trade
receivables. During 1995, 7 new branches were opened while 12 branches were
closed. The effect on sales in 1995 of openings and closings of branches during
the year was a reduction of sales of $18.4 million, or 1.7% of 1994 sales. The
branches closed during 1995 were marginally profitable or loss branches.
- - GROSS PROFIT
Gross profit in 1995 increased $17.6 million, or 8.3%, to $230.1 million. As
a percentage of sales, gross profit improved to 20.5% from 19.9% in 1994. The
improvement in gross profit percentage of 0.6 percentage points can be analyzed
as follows:
<TABLE>
<CAPTION>
PERCENTAGE
INCREASE/
(DECREASE)
-------------
<S> <C>
Change in the mix of sales from inventory vs. direct sales................................ (0.2)%
Trading margin improvement................................................................ 0.5%
Effect of LIFO............................................................................ 0.3%
-----
Total Increase............................................................................ 0.6%
-----
-----
</TABLE>
Compared to 1994, the percentage of total sales from inventory decreased by
two percentage points. Inventory sales have historically had a gross margin
percentage roughly twice the gross margin percentage attributable to direct
sales. The impact of the change in the percentage of inventory sales to total
sales on the total gross profit percentage was a reduction of 0.2% compared to
1994. The percentages of inventory sales and direct sales to total sales can
vary year to year and is influenced by the level of activity in industrial and
construction project business in the markets we serve.
During 1995, several gross margin improvement initiatives were implemented
which improved the total gross profit percentage by 0.5%. These initiatives were
mainly centered around improved pricing capabilities through enhanced access to
inventory information attributable to the new MIS system in two of our Eastern
Region operating divisions and improved controls over price change authority
within our branches. These improvements were tempered by a lower gross profit
percentage on the Company's utility division's sales. Many utility companies
have been consolidating purchasing by their operating units and reducing the
number of their electrical product suppliers. This consolidation process, while
increasing sales for surviving distributors such as the Company's utility
division, has resulted in pressures on pricing.
9
<PAGE>
In 1994, margins were unfavorably impacted by the LIFO increment resulting
primarily from the 36% increase in the price of copper, an important component
of certain products distributed by the Company. As of December 31, 1995, copper
prices had decreased 4.8% compared to a year ago. Combined with a $7.4 million
decrease in inventory (before LIFO reserves), the lower inflation in copper and
other product prices had a favorable 0.3% impact on 1995 margins compared to
1994.
- - SELLING AND ADMINISTRATIVE EXPENSE
Selling and administrative expense decreased $3.7 million or 2.0% in 1995.
Included in selling and administrative expense for 1994 were nonrecurring
charges totalling $4.9 million related to the resignation of an officer of the
Company, the relocation of the corporate office to Coral Gables, Florida and
replacement of certain computer systems in the Company's Eastern Region.
Excluding these nonrecurring charges, selling and administrative expense
increased $1.2 million or 0.7% in 1995, primarily as a result of certain
expenses that increase with increased sales. As a percentage of sales, selling
and administrative expense improved to 16.4% in 1995 compared to 17.6% in 1994
(17.1% excluding 1994 nonrecurring charges), reflecting the results of cost
reduction initiatives implemented in the second half of 1995 and which are
continuing in 1996.
Depreciation and amortization costs decreased $0.8 million in 1995 compared
to 1994. Included in depreciation expense for 1994 was $2.1 million in
accelerated depreciation due to the replacement of certain computer systems in
the Company's Eastern Region. Excluding this nonrecurring charge, depreciation
and amortization costs increased $1.3 million in 1995 primarily as a result of
depreciation on the new computer systems installed in the Eastern Region.
The provisions for doubtful accounts decreased $2.8 million in 1995 compared
to 1994 as a result of initiatives in 1995 to improve the quality of trade
accounts receivable.
- - INTEREST EXPENSE
Interest expense decreased $1.9 million or 19.7% in 1995 compared to 1994.
The Company reduced its debt by $66.6 million during 1995 with existing cash
balances, operating cash flow and the conversion of $14.5 million of 7%
Convertible Subordinated Debentures Due 2014 into Common Stock of the Company
(see Note 7 of the Notes to the Consolidated Financial Statements). In 1994,
interest expense of $2.0 million was allocated to the discontinued apparel
operating results based upon net assets of the apparel operation.
- - OTHER (EXPENSE) INCOME -- NET
Other (expense) income -- net decreased from income in 1994 of $1.0 million
to expense in 1995 of $1.0 million. Earnings from interest bearing investments
decreased in 1995 by $0.3 million as a result of using cash funds to reduce
debt. The Company paid to Rexel, S. A. $0.9 million in 1995 pursuant to the
Services Agreement entered into in November 1995 (see Note 15 of the Notes to
the Consolidated Financial Statements). Additionally, $0.4 million in costs were
incurred for the early termination of The Sacks Group Pension Plan in
association with the consolidation of the Company's various benefit plans into
one plan in 1995.
- - INCOME FROM CONTINUING OPERATIONS
Income from continuing operations increased to $21.1 million in 1995 from
$9.3 million in 1994 or 127.9%. Excluding the $4.9 million ($2.7 million after
tax) in nonrecurring costs in 1994, income from continuing operations increased
76.0% in 1995 compared to 1994.
OPERATING RESULTS 1994 VS. 1993
- - SALES
Sales increased $544.0 million in 1994 to $1.066 billion. Sales for 1994
included a total of $560.8 million from Summers and Sacks, which were acquired
in December 1993 and April 1993, respectively. Had these acquisitions occurred
on January 1, 1993, pro forma 1993 sales would be $958.5 million. The pro forma
sales increase in 1994 of 11.2% was attributable to favorable new home
construction markets and growth of sales in the utility and data communications
markets.
10
<PAGE>
- - GROSS PROFIT
Gross margins declined in 1994 to 19.9% from 20.6% in 1993. This decline was
primarily attributable to the 36% increase during 1994 in the price of copper,
an important component of certain goods distributed by the Company. Over half of
this increase occurred in the last four months of the year. While inflation
tends to improve the Company's margins, since so much of the increase in copper
prices occurred late in the year, the improved margins could not offset the
increase in LIFO reserves primarily caused by the inflation in copper wire
prices.
- - SELLING AND ADMINISTRATIVE EXPENSE
Selling and administrative expense increased to $187.4 million in 1994 from
$90.4 million in 1993, reflecting the additional operations added through the
above-mentioned acquisitions. As a percentage of sales, such expenses were 17.6%
in 1994 compared to 17.3% in 1993. Included in selling and administrative costs
for 1994 were nonrecurring charges totaling $4.9 million consisting of charges
primarily associated with the resignation of an officer of the Company ($2.1
million), the relocation of the corporate office to Coral Gables, Florida ($0.7
million) and replacement of certain computer systems in the Company's Eastern
Region ($2.1 million). These nonrecurring costs amounted to 0.5% of sales in
1994. Depreciation and amortization increased to $9.7 million in 1994 from $5.2
million in 1993, reflecting increased amortization of goodwill on the 1993
acquisitions of Sacks and Summers and the $2.1 million for replacement of
computer systems.
- - INTEREST EXPENSE
Interest expense increased to $9.6 million in 1994 from $5.9 million in
1993. While the Company reduced its borrowings $77.1 million by the end of 1994,
interest expense increased due to additional debt arising in 1993 in connection
with the acquisitions of Sacks and Summers and the increase in interest rates on
short-term debt. Additionally, discontinued operations absorbed $2.0 million in
interest expense in 1994 compared to $3.9 million in 1993.
- - OTHER INCOME -- NET
Other income -- net increased to $1.0 million in 1994 from $0.7 million in
1993, primarily reflecting higher earnings from short-term investments during
the second half of 1994.
- - INCOME FROM CONTINUING OPERATIONS
Income from continuing operations increased to $9.3 million in 1994 from
$6.9 million in 1993, reflecting the additional operations added through the
acquisitions of Sacks and Summers in 1993.
DISCONTINUED OPERATIONS
As discussed above, the results of the Apparel Division are included in the
financial statements as discontinued operations. Summarized results are as
follows (000's):
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Sales............................................................................ $ 40,819 $ 76,850
--------- ---------
--------- ---------
Net Income....................................................................... $ 345 $ 1,517
--------- ---------
--------- ---------
</TABLE>
The Apparel Division was sold July 13, 1994 and accordingly, sales and net
income of the Apparel Division reflect activity through that date.
INCOME TAXES
The Company had effective income tax rates of 44%, 44% and 43% in 1995,
1994, and 1993. The 1995 rate reflects the impact of state and local taxes and
non-deductible goodwill amortization. The 1994 rate reflects the above as well
as an increase in the deferred tax asset valuation allowance (related to
estimates of federal capital loss and state and local net operating loss
utilization), reduced by the current deductibility of certain prior year
transaction costs.
Effective January 1, 1993, the Company changed its method of accounting from
the deferred method to the liability method required by SFAS No. 109,
"Accounting for Income Taxes" (see
11
<PAGE>
Note 11 of the Notes to the Consolidated Financial Statements). As permitted
under Statement 109, prior years' financial statements have not been restated.
The cumulative effect of adopting Statement 109 as of January 1, 1993 was to
increase net income by $660,000 or $.03 per share for 1993.
As of December 31, 1995 and 1994, the Company had recognized deferred tax
assets of $7.6 million and $8.9 million, respectively, arising primarily from
basis differences between the recorded value for financial reporting purposes
and tax basis of accounts receivable, inventory and various liabilities and
reserves, including restructuring and transaction costs. Such deferred tax
assets have been reduced by a valuation allowance of $1.1 million and $1.3
million in 1995 and 1994, respectively. In addition, the Company has recognized
deferred tax liabilities totaling $5.0 million and $9.4 million in 1995 and
1994, respectively, arising principally from a higher recorded value over tax
basis of property, plant and equipment and certain acquisitions.
FINANCIAL CONDITION
- - ASSETS
Total assets at year end 1995 decreased $39.0 million or 9.4% compared to
year end 1994. Cash decreased $13.8 million as a result of repayment of debt.
Trade accounts and notes receivables decreased $4.4 million or 3.1% as a result
of efforts to improve the quality of trade receivables, as indicated by an
improvement in the number of days sales represented by trade accounts receivable
to 46 days at December 31, 1995 from 48 days at December 31, 1994 and by
improvement of the ratio of the allowance for doubtful accounts to trade
accounts and notes receivables to 1.9% at December 31, 1995 from 2.8% at
December 31, 1994. Inventory decreased $9.0 million or 8.1% as a result of
improved inventory management. Inventory days increased to 78 days at December
31, 1995 primarily as a result of favorable physical inventory results recorded
in the fourth quarter. Investments and noncurrent receivables decreased $4.3
million primarily as a result of the sale, in July 1995, of the note and
warrants originally received by the Company as part of the consideration for the
sale of the Apparel Division in July 1994.
- - LIABILITIES
Total liabilities at year end 1995 decreased $73.9 million or 26.1% compared
to year end 1994. Debt decreased $66.6 million or 55.7% during 1995 as a result
of repayments from existing cash balances, operating cash flow and conversion of
$14.5 million of 7% Convertible Subordinated Debentures Due 2014 into Common
Stock of the Company upon redemption of the convertible debentures in August
1995. Additionally, trade accounts payable decreased $9.0 million or 7.8%
primarily as a result of the decrease in inventory and a change in payment terms
of a significant vendor.
In August 1995, the Company redeemed all of its outstanding 7% Convertible
Subordinated Debentures due 2014, which had an original principal amount of $50
million. Of such principal amount, $35.5 million was redeemed for cash at a
redemption price of 102.8% of principal, plus accrued and unpaid interest to the
redemption date, or a total redemption payment of $36.5 million. The balance of
the debentures was converted in accordance with terms thereof into Common Stock
of the Company at a conversion price of $9.57 per share, or a total of 1.5
million shares. The extraordinary charge to earnings in connection with this
redemption was approximately $2.2 million ($1.3 million after tax or $.05 per
share). These charges result primarily from the premium paid to redeem the
debentures and the acceleration of unamortized financing costs associated with
the issuance of the debentures in 1989.
- - FINANCIAL LEVERAGE
On August 8, 1995, the Company amended and restated its Revolving Credit and
Reimbursement Agreement (the "Credit Agreement"), with NationsBank of Florida,
N.A., and Credit Lyonnais New York Branch to add Societe Generale as a
participant in the facility and to provide for borrowings through August 1, 2000
of up to $100 million. Interest on borrowings under such facility will be at
NationsBank's prime rate, or at a rate based on rates in the certificate of
deposit market or LIBOR
12
<PAGE>
plus a margin, which margin varies depending on the Company's financial
performance. The Credit Agreement includes various covenants, including
restrictions on liens, debt and lease obligations and requirements that certain
financial ratios be maintained.
To offset the variable rate characteristic of its revolving line of credit,
the Company entered into interest rate swap agreements with major banks
resulting in fixed interest rates of 6.31% applicable to $15 million from June
24, 1996 through June 25, 2001 and 6.435% on an additional $15 million from June
24, 1996 through June 23, 2003. As of December 31, 1995, about 15.2% of the
Company's debt was exposed to variable interest rates, up from none at December
31, 1994.
The Company's debt to equity ratio (defined as the ratio of debt including
capital lease obligations to total stockholders' equity) was 0.3 to 1 at
December 31, 1995 compared to 0.9 to 1 at December 31, 1994.
- - STOCKHOLDERS' EQUITY
Stockholders' Equity at year end 1995 increased $34.9 million or 26.5% from
year end 1994. The increase is due primarily to a 64.2% increase in retained
earnings resulting from net income of $19.8 million and a $14.5 million increase
in common stock and capital surplus associated with the conversion into common
stock of $14.5 million of 7% Convertible Subordinated Debentures redeemed by the
Company in August 1995.
Based on income from continuing operations, the Company's return on average
stockholders' equity was 14.4% for 1995 compared to 7.7% for 1994.
CASH FLOWS
- - NET CASH PROVIDED BY OPERATING ACTIVITIES
Net cash provided by operating activities in 1995 increased $8.6 million or
26.1% over 1994 and in 1994 increased $27.3 million or 472% over 1993. The
improvement in 1995 over 1994 was primarily the result of improved
profitability, improvement in the quality of trade accounts receivable and
reduction in inventory through better management, which was offset to some
degree by a reduction in trade accounts payable associated with the reduction in
inventory and a change in payment terms of a significant vendor.
The improvement in 1994 over 1993 was primarily the result of improvement in
trade working capital and a full year's operating income from the 1993
acquisitions of Sacks and Summers.
- - NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
Investing activities over the past three years reflect cash used to upgrade
fixed assets and make acquisitions and cash provided through the sale of certain
operating segments. In November 1995, the Company acquired the assets of Davies
Electric, Little Rock, Arkansas for $2.4 million, requiring a cash outlay of
$1.7 million at closing. In 1994, capital expenditures were up as a result of
upgrading computer systems in the Eastern Region. Additionally, $37.2 million in
cash was generated from the sale of the Apparel Division. In 1993, the Company
acquired Sacks and Summers at a cash outlay of $68.3 million (see "Significant
Transactions" above for further details).
- - NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
In 1995, the Company used cash to redeem $35.5 million in 7% Convertible
Subordinated Debentures and pay off the 4.375% Senior Note due June 30, 1995
which was associated with the acquisition of Summers. As of December 31, 1995,
the Company had $8.1 million outstanding on its revolving line of credit. In
1994, the Company received a capital infusion from the sale of common stock to
Rexel, S. A. totalling $31.0 million. These funds, along with cash generated
from operating activities and investing activities, were used to repay $61.5
million in revolving credit and $15.6 million in other financial debt. In 1993,
the Company borrowed $61.5 million under its revolving line of credit to fund
the acquisition of Summers.
13
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital requirements are generally met by internally
generated funds and short-term borrowings under the Credit Agreement. Management
believes sufficient cash resources will be available to support its long-term
growth strategies through internally generated funds, credit arrangements and
the ability of the Company to obtain additional financing. However, no assurance
can be given that financing will continue to be available on attractive terms.
On September 19, 1995, the Company announced its intention to repurchase up
to two million shares of its common stock on the open market. As of December 31,
1995, no shares have been purchased.
The Company regularly reviews possible acquisitions of businesses, and may
from time to time, in the future, acquire other businesses. Otherwise, the
Company expects to make $5.9 million of capital expenditures in 1996.
The Company continually reviews the impact of inflation. Pricing policies
are reviewed regularly and, to the extent permitted by competition, the Company
passes increased costs on by increasing the sales price. The Company will
continue to monitor the impact of inflation and will consider these matters in
setting its pricing policies.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements, supplementary financial information and
schedules are filed as part of this Report:
<TABLE>
<S> <C>
Report of Independent Accountants
Financial Statements:
Consolidated Balance Sheets,
December 31, 1995 and 1994
Consolidated Statements of Income,
Years Ended December 31, 1995, 1994 and 1993
Consolidated Statement of Changes in Stockholders' Equity,
Years Ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows,
Years Ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Supplementary Financial Information
Financial Statement Schedule:
Schedule II -- Valuation and Qualifying Accounts,
Years Ended December 31, 1995, 1994 and 1993
</TABLE>
All schedules not mentioned above are omitted for the reason that they are
not required or are not applicable, or the information is included in the
Consolidated Financial Statements or the Notes thereto.
The foregoing financial statements are incorporated by reference in certain
registration statements on Form S-8 of the Company and the prospectuses relating
thereto in reliance upon the report of Coopers & Lybrand L. L. P. pertaining to
such financial statements given upon the authority of such firm as experts in
accounting and auditing.
14
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF REXEL, INC.:
We have audited the consolidated financial statements and the financial
statement schedule of Rexel, Inc. and subsidiaries listed in Item 8 of this Form
10-K. These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Rexel, Inc. and
subsidiaries as of December 31, 1995 and 1994 and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995 in conformity with generally accepted accounting
principles. In addition, in our opinion, the financial statement schedule
referred to above, when considered in relation to the basic financial statements
taken as a whole, presents fairly, in all material respects, the information
required to be included therein.
As discussed in Note 11 of the consolidated financial statements, in 1993
the Company changed its method of accounting for income taxes.
/s/ COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Miami, Florida
February 23, 1996
15
<PAGE>
REXEL, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents............................................................. $ 10,013 $ 23,843
Accounts and notes receivable, less allowance for doubtful accounts of $2,680 in 1995
and $4,149 in 1994................................................................... 138,604 142,997
Inventories........................................................................... 102,239 111,276
Income taxes receivable............................................................... -- 3,385
Prepaid expenses and other current assets............................................. 8,344 8,930
Deferred income taxes................................................................. 3,849 1,888
----------- -----------
Total current assets................................................................ 263,049 292,319
Investments and noncurrent receivables.................................................. 1,069 5,330
Fixed assets, at cost:
Land.................................................................................. 8,196 8,148
Buildings and leasehold improvements.................................................. 26,531 26,077
Machinery, equipment and other tangible property...................................... 37,861 37,048
----------- -----------
72,588 71,273
Less, accumulated depreciation and amortization....................................... 23,135 19,419
----------- -----------
Fixed assets -- net................................................................... 49,453 51,854
----------- -----------
Other assets............................................................................ 2,135 3,759
Deferred income taxes................................................................... 834 1,253
Goodwill, net of accumulated amortization of $6,996 in 1995 and $5,355 in 1994.......... 58,953 59,972
----------- -----------
$ 375,493 $ 414,487
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt....................................................................... $ 8,050 $ --
Current portion of long-term debt..................................................... 7,757 24,894
Accounts and notes payable -- trade, and other liabilities............................ 147,031 155,282
Income taxes payable.................................................................. 3,725 --
Deferred income taxes................................................................. -- 630
----------- -----------
Total current liabilities........................................................... 166,563 180,806
Long-term debt.......................................................................... 37,219 94,761
Other long-term liabilities............................................................. 3,363 4,440
Deferred income taxes................................................................... 2,029 3,028
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock (authorized 2,000,000 shares, none issued)............................ -- --
Common stock (26,258,133 and 24,705,233 shares issued in 1995 and 1994)............... 26,258 24,705
Capital surplus....................................................................... 94,206 81,354
Retained earnings..................................................................... 50,580 30,805
Unrealized losses on marketable equity securities..................................... -- (875)
Treasury stock, at cost (609,143 and 591,095 shares in 1995 and 1994)................. (4,725) (4,537)
----------- -----------
Total stockholders' equity.......................................................... 166,319 131,452
----------- -----------
$ 375,493 $ 414,487
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
16
<PAGE>
REXEL, INC.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994 1993
------------- ------------- -----------
<S> <C> <C> <C>
Net sales.............................................................. $ 1,120,688 $ 1,065,543 $ 521,519
Cost of goods sold..................................................... 890,605 853,041 414,027
------------- ------------- -----------
Gross profit....................................................... 230,083 212,502 107,492
Selling and administrative expense..................................... 183,747 187,423 90,365
------------- ------------- -----------
Operating profit................................................... 46,336 25,079 17,127
Interest expense....................................................... 7,688 9,577 5,890
Other (expense) income -- net (969) 1,026 691
------------- ------------- -----------
Income from continuing operations before income taxes.............. 37,679 16,528 11,928
Income tax provision................................................... 16,579 7,270 5,038
------------- ------------- -----------
Income from continuing operations.................................. 21,100 9,258 6,890
Income from discontinued operations, net of income tax of $1,303....... -- -- 1,517
Loss on disposal of discontinued operations, net of income tax benefit
of $256............................................................... -- (327) --
------------- ------------- -----------
Income before extraordinary charge and cumulative effect of
accounting change................................................. 21,100 8,931 8,407
Extraordinary charge, net of income tax................................ (1,325) -- --
Cumulative effect of accounting change for income taxes................ -- -- 660
------------- ------------- -----------
Net income......................................................... $ 19,775 $ 8,931 $ 9,067
------------- ------------- -----------
------------- ------------- -----------
Income (loss) per common share:
Primary
Income from continuing operations................................ $ .85 $ .39 $ .33
Income (loss) from discontinued operations, net of income
taxes........................................................... -- (.01) .07
Extraordinary charge............................................. (.05) -- --
Cumulative effect of accounting change for income taxes.......... -- -- .03
------------- ------------- -----------
Net income....................................................... $ .80 $ .38 $ .43
------------- ------------- -----------
------------- ------------- -----------
Fully Diluted (a)
Income from continuing operations................................ $ .79
Income (loss) from discontinued operations, net of income
taxes........................................................... --
Extraordinary charge............................................. (.05)
Cumulative effect of accounting change for income taxes.......... --
-------------
Net Income....................................................... $ .74
-------------
-------------
Average number of common and common equivalent shares..................
Primary.............................................................. 24,949 23,765 20,970
------------- ------------- -----------
------------- ------------- -----------
Fully Diluted........................................................ 28,214
-------------
-------------
</TABLE>
- ------------------------
(a) Fully diluted income (loss) per share data is not presented in 1994 and 1993
as the impact is anti-dilutive.
See accompanying notes to consolidated financial statements.
17
<PAGE>
REXEL, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
UNREALIZED
COMMON CUMULATIVE LOSSES ON
STOCK FOREIGN MARKETABLE TREASURY
TO BE CAPITAL RETAINED TRANSLATION EQUITY STOCK, AT
COMMON STOCK ISSUED SURPLUS EARNINGS ADJUSTMENT SECURITIES COST TOTAL
------------ ------ ------- -------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1993............ $20,586 $ 628 $53,818 $ 12,807 $(1,186) $-- $ (2,426) $ 84,227
Net income............................ 9,067 9,067
Issuance of 628,430 shares............ 628 (628)
Foreign translation adjustment........ (147) (147)
Marketable equity security
adjustment........................... (625) (625)
------------ ------ ------- -------- ---------- ---------- --------- --------
Balance at December 31, 1993.......... 21,214 -- 53,818 21,874 (1,333) (625) (2,426) 92,522
Net income............................ 8,931 8,931
Issuance of 3,491,280 shares.......... 3,491 27,536 31,027
Foreign translation adjustment........ 378 378
Sale of apparel parts and supplies
distribution business................ 955 (2,111) (1,156)
Marketable equity security
adjustment........................... (250) (250)
------------ ------ ------- -------- ---------- ---------- --------- --------
Balance at December 31, 1994.......... 24,705 -- 81,354 30,805 -- (875) (4,537) 131,452
Net Income............................ 19,775 19,775
Issuance of 1,517,000 shares upon
conversion of 7% Convertible
Subordinated Debentures, net of
expenses............................. 1,517 12,649 14,166
Issuance of 35,900 shares pursuant to
Stock Incentive Plan and 18,048
treasury shares acquired as
payment.............................. 36 203 (188) 51
Marketable equity security
adjustment........................... 875 875
------------ ------ ------- -------- ---------- ---------- --------- --------
Balance at December 31, 1995.......... $26,258 $-- $94,206 $ 50,580 $ -- $-- $ (4,725) $166,319
------------ ------ ------- -------- ---------- ---------- --------- --------
------------ ------ ------- -------- ---------- ---------- --------- --------
See accompanying notes to consolidated financial statements.
</TABLE>
18
<PAGE>
REXEL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income........................................................................................ $ 19,775 $ 8,931 $ 9,067
-------- -------- --------
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization................................................................... 8,949 9,718 5,161
Provision for losses on accounts receivable..................................................... 827 3,600 2,154
Deferred income taxes........................................................................... (4,773) 3,070 5,639
Loss on redemption of 7% Convertible Subordinated Debentures.................................... 2,162 -- --
Gain on sale of investments..................................................................... (991) -- --
Provision for loss on investment and noncurrent receivable...................................... 1,975 -- --
Loss on sale of apparel division................................................................ -- 1,200 --
Cumulative effect of accounting change for income taxes......................................... -- -- (660)
Changes in assets and liabilities, net of effect of acquisitions and sale of net assets:
Accounts and notes receivable................................................................. 4,651 (17,209) 6,107
Inventories................................................................................... 10,008 5,209 1,054
Prepaid expenses and other current assets..................................................... 590 114 (124)
Accounts and notes payable -- trade, and other liabilities.................................... (9,997) 20,434 (19,292)
Income taxes payable.......................................................................... 8,712 (1,931) (1,372)
Net payments for transaction costs.............................................................. (685) (1,208) (777)
Net payments for restructuring activities....................................................... -- (124) (1,302)
Other, net...................................................................................... 560 1,313 135
-------- -------- --------
Total adjustments............................................................................. 21,988 24,186 (3,277)
-------- -------- --------
Net cash provided by operating activities..................................................... 41,763 33,117 5,790
-------- -------- --------
Cash flows from investing activities:
Capital expenditures.............................................................................. (5,052) (12,094) (5,381)
Cost of acquisitions, net of cash acquired........................................................ (1,720) -- (68,329)
Proceeds from sale of net assets.................................................................. 4,050 37,199 --
Contingent payments to former shareholders of acquired businesses................................. -- (5,250) --
Sale of short-term investments.................................................................... -- -- 12,874
Other investing activities........................................................................ 761 (2,211) (1,963)
-------- -------- --------
Net cash (used in) provided by investing activities............................................... (1,961) 17,644 (62,799)
-------- -------- --------
Cash flows from financing activities:
Net borrowings (payments) under line of credit arrangements....................................... 8,050 (61,500) 61,500
Redemption of 7% Convertible Subordinated Debentures.............................................. (36,780) -- --
Proceeds from exercise of stock options........................................................... 51 -- --
Proceeds from issuance of common stock to Rexel, S.A., net of issuance costs...................... -- 31,027 --
Other debt payments and financing activities, net................................................. (24,953) (15,576) (927)
-------- -------- --------
Net cash (used in) provided by financing activities............................................... (53,632) (46,049) 60,573
-------- -------- --------
Net (decrease) increase in cash and cash equivalents.............................................. (13,830) 4,712 3,564
Cash and cash equivalents at beginning of year...................................................... 23,843 19,131 15,567
-------- -------- --------
Cash and cash equivalents at end of year............................................................ $ 10,013 $ 23,843 $ 19,131
-------- -------- --------
-------- -------- --------
</TABLE>
19
<PAGE>
REXEL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest........................................................................................ $ 9,427 $ 11,660 $ 9,779
Income taxes.................................................................................... $ 11,352 $ 5,660 $ 1,183
Supplemental information of businesses acquired:
Fair value of assets acquired..................................................................... $ 3,350 $ -- $179,113
Liabilities assumed............................................................................... (972) -- (79,490)
Liability issued to seller........................................................................ (658) -- (25,000)
-------- -------- --------
Cash paid......................................................................................... $ 1,720 $ -- $ 74,623
-------- -------- --------
-------- -------- --------
</TABLE>
See accompanying notes to consolidated financial statements.
20
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and all of its subsidiaries. All significant intercompany transactions and
balances have been eliminated. The Company's continuing operations consist
solely of the distribution of electrical parts and supplies, principally in the
southern United States.
(B) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
(C) CASH AND CASH EQUIVALENTS
Highly liquid investments with a maturity of three months or less when
purchased are generally considered to be cash equivalents. The Company maintains
its cash in bank deposit accounts which at times exceed federally insured
limits. The Company has not experienced any losses in such accounts.
(D) INVENTORIES
Inventories are stated at the lower of LIFO cost or market for continuing
operations. Had the FIFO method been used to value inventories, total
inventories would have increased $14,514 and $12,867 at December 31, 1995 and
1994, respectively.
(E) INVESTMENTS AND NONCURRENT RECEIVABLES
Investments and noncurrent receivables are stated at the lower of cost or
net realizable value.
Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". At December 31, 1994, the Company classified its investments
in debt securities as "Trading", and these investments were included as part of
Cash and Cash Equivalents based on their liquidity. At December 31, 1995, the
Company had no such investments. Also, at December 31, 1994, the Company
classified its investments in equity securities as "Available-for-Sale", and the
fair value of these securities at such date was approximately $625. At December
31, 1995, the cost of these securities was fully reserved for in the
accompanying financial statements.
(F) DEPRECIATION AND AMORTIZATION
Depreciation, computed by means of straight-line and accelerated methods, is
based on the estimated useful lives of the related assets. Leasehold
improvements are amortized over their respective lease terms or their estimated
useful lives, if shorter.
Goodwill, representing the cost in excess of net assets of acquired
businesses, is being amortized over 40 years. At each balance sheet date, the
Company reviews the carrying value of goodwill in relation to current and
expected operating results of the businesses which benefit therefrom in order to
assess whether there has been a permanent impairment of goodwill.
(G) FORWARD EXCHANGE CONTRACTS
Solely in connection with the apparel parts and supplies distribution
business, which was sold on July 13, 1994, the Company entered into forward
exchange contracts in limited circumstances as a hedge against purchases with
extended terms denominated in foreign currency. These contracts were used by the
Company to minimize exposure and reduce risk from exchange rate fluctuations in
the
21
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
regular course of its foreign apparel business. Gains and losses on forward
contracts were deferred and included in the measurement of the related foreign
currency transaction. Cash provided and used for forward contracts is included
in the cash flows resulting from changes in accounts and notes payable -- trade.
(H) EARNINGS PER SHARE
Primary earnings per share are based on the weighted average number of
common and common equivalent shares outstanding during the year. Fully diluted
earnings per share assume the conversion of the convertible debentures and the
resultant reduction in interest costs, net of tax.
(I) FUTURE IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In March 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of."
This statement applies to financial statements for fiscal years beginning after
December 15, 1995, and requires that long-lived assets and certain identifiable
intangible assets to be held or used by the Company, be reviewed for impairment
whenever events or changes in circumstances indicate the carrying amount of such
assets may not be recoverable. Impairments determined under this statement are
recognized as losses in the current period. It is management's opinion that the
adoption of this statement will not have a significant effect on the Company's
financial statements.
In October 1995, the FASB also issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation". This statement
establishes financial accounting and reporting standards for stock-based
employee compensation plans. It encourages, but does not require companies to
recognize compensation expense for grants of stock, stock options and other
equity instruments to employees based on new fair value accounting rules.
Companies that choose not to adopt the new fair value accounting rules will be
required to disclose proforma net income and earnings per share under the new
method. The Company anticipates adopting the disclosure provisions of this
statement, although the impact of such disclosure has not been determined.
2. NAME CHANGE
On May 15, 1995, the Company's Certificate of Incorporation was amended and
restated to provide, among other things, for the change of the name of the
Company to Rexel, Inc.
3. SIGNIFICANT TRANSACTIONS
On November 12, 1992, pursuant to a Purchase Agreement dated April 22, 1992
among the Company, Rexel, S.A., International Technical Distributors, Inc.
("ITD"), a subsidiary of Rexel, S. A., and Southern Electric Supply Company
("SES"), a subsidiary of ITD engaged in the distribution of electrical
components and supplies, the Company issued to Rexel, S. A. and ITD 6,284,301
shares of the Company's Common Stock in exchange for all of the stock of SES and
$9,885 in cash.
On March 1, 1994, the Company sold to Rexel, S.A. 3,491,280 newly issued
shares of Company Common Stock for a total cash purchase price of $31,422, which
was used to repay short-term debt. As a result, Rexel, S.A. increased its
beneficial ownership of the outstanding Common Stock of the Company from 30% to
40%. As of March 1, 1996, Rexel, S.A. had further increased its beneficial
ownership to approximately 46%.
22
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
4. ACQUISITIONS
On April 12, 1993, the Company acquired the common stock of Sacks Electrical
Supply Co. ("Sacks"), a distributor of electrical supplies and components with
three locations in Ohio, for $13.9 million (including $0.3 million of
acquisition costs).
On December 17, 1993, the Company acquired the common stock of Summers
Group, Inc. ("Summers") for $60 million in cash and a $25 million three-year
note issued to the seller, plus contingent consideration to be determined based
on defined profits of Summers, subject to a maximum purchase price of $120
million. On December 22, 1994, the Company reached an agreement pursuant to
which the Company paid $5.25 million in cash and agreed to pay the balance of
the $25 million note ($16.7 million) prior to June 30, 1995, and the contingent
consideration was cancelled. The additional payments, plus $0.7 million of
acquisition costs, bring the total purchase price to $90.95 million. Summers is
a distributor of electrical parts and supplies with locations principally in
Texas, Oklahoma, Louisiana, Arkansas, Arizona, Colorado and California.
Each of these 1993 acquisitions has been recorded as a purchase, and the
excess of the total purchase price over the fair value of the net assets
acquired ($6.8 million for Sacks and $25.6 million for Summers) is being
amortized over 40 years. Sacks' and Summers' results of operations are included
in the Company's financial statements from the respective dates of acquisition.
The following table summarizes the effect on consolidated sales and income
from continuing operations of the Company for 1993, on an unaudited pro forma
basis, assuming the Sacks and Summers acquisitions had been consummated as of
January 1, 1992, the year preceding the year of acquisition:
<TABLE>
<CAPTION>
1993
-----------
<S> <C>
Sales...................................................................................... $ 958,518
-----------
-----------
Income from continuing operations.......................................................... $ 12,622
-----------
-----------
Income per share from continuing operations................................................ $ .60
-----------
-----------
</TABLE>
The pro forma results are not necessarily indicative of what actually would
have occurred if the acquisitions had been in effect at the beginning of the
period or are they necessarily indicative of future consolidated results.
5. DISCONTINUED OPERATIONS
In the fourth quarter of 1993, the Company decided to sell its apparel parts
and supplies distribution business ("Apparel") and engaged an investment banking
firm, of which a director of the Company is president, to seek a purchaser. The
sale was consummated on July 13, 1994 for consideration valued at approximately
$44.0 million, consisting of cash of $38.6 million ($37.2 million net of costs),
a $3.0 million subordinated note from the buyer valued at $2.3 million (the
"Note"), warrants to purchase approximately 15% of the buyer valued at $0.7
million (the "Warrant) and 324,814 shares of Company common stock valued at $2.1
million. The net proceeds from the sale approximated book value of the net
assets sold, but resulted in a loss on disposal of $0.7 million, net of taxes,
due primarily to the recognition of previously established deferred foreign
translation adjustments. In connection with the sale, the investment banking
firm was paid $0.5 million. On July 26, 1995, the Company sold the note, warrant
and certain other assets with a total aggregate book value of approximately $3.1
23
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
5. DISCONTINUED OPERATIONS (CONTINUED)
million to the buyer for cash of approximately $4.1 million. This business is
included in the Consolidated Statements of Income as discontinued operations for
all periods presented. Summarized results of the discontinued operations
(excluding the loss on disposal) are as follows:
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Sales............................................................................ $ 40,819 $ 76,850
--------- ---------
--------- ---------
Net income....................................................................... $ 345 $ 1,517
--------- ---------
--------- ---------
</TABLE>
Interest expense of $1,983 and $3,927 for the years ended December 31, 1994
and 1993, respectively, have been allocated to Apparel operating results based
upon net assets of the Apparel operation.
6. SHORT-TERM DEBT
On August 8, 1995, the Company amended and restated its Revolving Credit and
Reimbursement Agreement (the "Credit Agreement"), with NationsBank of Florida,
N.A., and Credit Lyonnais New York Branch to add Societe Generale as a
participant in the facility and to provide for borrowings through August 1, 2000
of up to $100 million. Interest on borrowings under such facility will be at
NationsBank's prime rate, or at a rate based on rates in the certificate of
deposit market or LIBOR plus a margin, which margin varies depending on the
Company's financial performance. The Credit Agreement includes various
covenants, including restrictions on liens, debt and lease obligations and
requirements that certain financial ratios be maintained.
To offset the variable rate characteristic of its revolving line of credit,
the Company entered into interest rate swap agreements with major banks
resulting in fixed interest rates of 6.31% applicable to $15 million from June
24, 1996 through June 25, 2001 and 6.435% on an additional $15 million from June
24, 1996 through June 23, 2003.
7. LONG-TERM DEBT
Long-term debt, less current installments, consists of:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1994
--------- -----------
<S> <C> <C>
9.78% Senior Notes due March 15, 2001.......................................... $ 42,860 $ 50,000
7% Convertible Subordinated Debentures, due August 1, 2014..................... -- 50,000
4.375% Senior Note due June 30, 1995........................................... -- 16,667
Other notes payable............................................................ 2,116 2,988
--------- -----------
44,976 119,655
Less, current installments................................................... 7,757 24,894
--------- -----------
$ 37,219 $ 94,761
--------- -----------
--------- -----------
</TABLE>
The 9.78% Senior Notes are payable ratably over a seven-year period
commencing March 15, 1995 with interest payable semi-annually at a rate of 9.78%
per annum. Under the terms of the Senior Notes (as amended), the Company may pay
dividends and make other restricted payments (as defined) to the extent of
$26,000 plus 50% of consolidated net income (as defined) since August 8, 1995
plus certain other amounts and is subject to certain restrictions on the
incurrence of additional debt and other transactions and to other covenants
calling for minimum levels of working capital and certain financial ratios.
24
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
7. LONG-TERM DEBT (CONTINUED)
On August 11, 1995, the Company redeemed all of its outstanding 7%
Convertible Subordinated Debentures due 2014, which had an original principal
amount of $50 million. Of such principal amount, $35.5 million was redeemed for
cash at a redemption price of 102.8% of principal, plus accrued and unpaid
interest to the redemption date, or a total redemption payment of $36.5 million.
The balance of the Debentures was converted in accordance with the terms thereof
into Common Stock of the Company at a conversion price of $9.57 per share, or a
total of 1,517,000 shares. Results for 1995 include an extraordinary charge of
approximately $2.2 million ($1.3 million after tax or $.05 per share) in
connection with the redemption. These charges result primarily from the premium
paid to redeem the Debentures and the acceleration of unamortized financing
costs associated with the issuance of the Debentures in 1989.
The 4.375% Senior Note was issued to the seller in connection with the
Summers acquisition and was paid with interest in June 1995 (see Note 4).
Long-term debt maturities during the next five years are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, AMOUNT
- ---------------------------------------------------------------------------------------------- ---------
<S> <C>
1996.......................................................................................... $ 7,757
1997.......................................................................................... 7,770
1998.......................................................................................... 7,694
1999.......................................................................................... 7,433
2000.......................................................................................... 7,182
</TABLE>
Based on borrowing rates currently available to the Company for long-term
debt with similar terms and average maturities, and the quoted market price of
the Company's Convertible Debentures (at December 31, 1994 only), the fair value
of the Company's indebtedness was approximately $50,197 and $113,000 as of
December 31, 1995 and 1994.
8. STOCKHOLDERS' EQUITY
On May 15, 1995, the Company's Certificate of Incorporation was amended and
restated to, among other things, increase the number of authorized shares of
Common Stock of the Company from 35,000,000 to 45,000,000, to eliminate the
authorization for 600,000 shares of Preferred Stock and to change the name of
"Preference Stock" to "Preferred Stock" (2,000,000 shares of which continue to
be authorized).
At December 31, 1995 1,779,853 shares of common stock are reserved for
issuance pursuant to the Company's Stock Incentive Plan.
On September 19, 1995, the Board of Directors authorized the purchase of up
to 2,000,000 shares of the Company's outstanding common stock from time to time,
in open market transactions or otherwise. Such purchases, if commenced, may be
suspended or discontinued at any time. As of December 31, 1995, no purchases
have been made under this program.
9. STOCK OPTION PLANS
Under the Company's 1988 and 1985 Stock Option Plans, options to purchase up
to 2,266,667 shares and 829,630 shares of common stock, respectively, were
available to be granted to key employees of the Company. The 1985 plan
terminated on January 15, 1995. The 1988 Plan also provides that each director
of the Company, other than one who is an officer or employee, be granted a
non-qualified stock option to purchase 10,000 shares of Company Common Stock and
provides for annual grants to
25
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
9. STOCK OPTION PLANS (CONTINUED)
directors if defined levels of income are achieved by the Company. For each
plan, the option period is either ten or eleven years from the date of grant,
and options may be exercised at various times depending on the provisions of the
grant.
Information regarding the Company's stock option plans is summarized below:
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF OPTION PRICE SHARES
SHARES PER SHARE EXERCISABLE
---------- -------------- -----------
<S> <C> <C> <C>
Outstanding at January 1, 1993................................. 30,938 $3.80-$8.88 30,938
Granted...................................................... 597,000 6.56-6.69
Terminated and cancelled..................................... (10,820) 7.00-8.88
----------
Outstanding at December 31, 1993............................... 617,118 3.80-7.00 20,118
Granted...................................................... 160,000 6.50-8.06
Terminated and cancelled..................................... (207,118) 3.80-7.00
----------
Outstanding at December 31, 1994............................... 570,000 6.50-8.06 237,200
Granted...................................................... 399,000 6.00-7.25
Terminated and cancelled..................................... (70,000) 6.69
Exercised.................................................... (35,900) 6.63-6.69
----------
Outstanding at December 31, 1995............................... 863,100 $6.00-$8.06 352,040
----------
----------
</TABLE>
All options were granted at market value on the date of grant.
As of December 31, 1995, options for the purchase of 916,753 shares were
available for future grant under the 1988 plan.
10. EMPLOYEE BENEFIT PLANS
The Rexel, Inc. Section 401(k) Savings Plan, whereby participants may
contribute a percentage of compensation, but not in excess of the maximum
allowed under the Internal Revenue Code, became effective January 1, 1995. The
Company matches 50% of employee contributions to the plan that do not exceed 6%
of an employee's base compensation ("Matching Contributions"). In addition, the
Company may make additional contributions at the discretion of the Board of
Directors. Employees who complete one year of service are eligible to
participate and are always vested 100% in the Matching Contributions. Vesting in
discretionary contributions is based on years of service with 100% vesting after
seven years.
This plan replaced all other plans of the Company with the exception of a
nonqualified defined benefit supplemental retirement plan.
The nonqualified defined benefit supplemental retirement plan covers certain
key employees and is not funded. Benefits under this plan are based on years of
service and defined levels of compensation. No new enrollments are permitted
into the plan and salary levels under the plan have been frozen.
The Company had a qualified noncontributory defined benefit pension plan
covering certain eligible domestic employees of a subsidiary. This plan was
terminated on February 22, 1995 and all obligations were settled. The Company
also had a qualified noncontributory defined benefit pension plan covering
certain eligible domestic employees in the discontinued apparel operation. As
part of the
26
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
10. EMPLOYEE BENEFIT PLANS (CONTINUED)
agreement to sell the apparel operation, the purchaser assumed all obligations
under this plan. The Company's funding policy was to contribute annually the
maximum amount that could be deducted for Federal income tax purposes.
The Company also had a defined benefit plan maintained for eligible
employees of certain United Kingdom subsidiaries included in the discontinued
apparel operation. The plan was funded annually for the maximum amount permitted
by statute. The benefits were based on years of service and defined levels of
compensation.
The following table sets forth the plans' funded status at December 31, 1995
and 1994:
<TABLE>
<CAPTION>
1994
1995 ----------------------
--------- QUALIFIED
NON- NON- SUBSIDIARY
QUALIFIED QUALIFIED PLAN
--------- --------- -----------
<S> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation.......................................... $ (1,450) $ (1,608) $ (938)
--------- --------- -----------
--------- --------- -----------
Accumulated benefit obligation..................................... $ (1,514) $ (1,669) $ (944)
--------- --------- -----------
--------- --------- -----------
Projected benefit obligation......................................... $ (1,514) $ (1,669) $ (1,388)
Plan assets at fair value............................................ -- -- 1,870
--------- --------- -----------
Projected benefit obligation (in excess of) less than plan
assets............................................................ (1,514) (1,669) 482
Unrecognized net loss (gain)......................................... (32) (133) 20
Unrecognized net transition obligation............................... 26 71 --
--------- --------- -----------
Accrued pension asset (liability).................................. $ (1,520) $ (1,731) $ 502
--------- --------- -----------
--------- --------- -----------
</TABLE>
27
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
10. EMPLOYEE BENEFIT PLANS (CONTINUED)
Net periodic pension cost for 1995, 1994 (excluding the United Kingdom Plan
assumed in the Apparel sale) and 1993 includes the following components:
<TABLE>
<CAPTION>
INTEREST
COST ON NET
PROJECED ACTUAL NET PERIODIC
SERVICE BENEFIT RETURN ON AMORTIZATION PENSION
COST OBLIGATIONS ASSETS AND DEFERRAL COST
------- ----------- --------- ------------ --------
<S> <C> <C> <C> <C> <C>
1995
Domestic:
Non-Qualified..................................................... $ 31 133 -- 26 $190
Qualified......................................................... $-- 12 (26) (5) $(19)
--------
$171
--------
--------
1994
Domestic:
Non-Qualified..................................................... $ 44 131 -- 10 $185
Qualified......................................................... $158 222 (173) 6 $213
Qualified Subsidiary Plan......................................... $ 59 123 (130) (17) $ 35
--------
$433
--------
--------
1993
United Kingdom...................................................... $ 76 178 (157) (15) $ 82
Domestic:
Non-Qualified..................................................... $ 49 131 -- (8) $172
Qualified......................................................... $322 403 (221) (101) $403
Qualified Subsidiary Plan......................................... $ 22 92 (127) -- $(13)
--------
$644
--------
--------
</TABLE>
The actuarial assumptions used for each of the plans for 1995, 1994 and 1993
are as follows:
<TABLE>
<CAPTION>
QUALIFIED NON
QUALIFIED SUBSIDIARY QUALIFIED
PLAN PLAN PLAN
--------- ---------- ---------
<S> <C> <C> <C>
1995
Weighted average discounts used in determining the actuarial present value of the
projected benefit obligation............................................................. N/A N/A 7.00%
Rates of increase in future compensation levels........................................... N/A 5.00% N/A
Expected long-term rates of return on assets.............................................. N/A 8.50% N/A
1994
Weighted average discounts used in determining the actuarial present value of the
projected benefit obligation............................................................. 7.25% 8.25% 8.50%
Rates of increase in future compensation levels........................................... 4.50% 5.00% N/A
Expected long-term rates of return on assets.............................................. 7.25% 8.50% N/A
1993
Weighted average discounts used in determining the actuarial present value of the
projected benefit obligation............................................................. 7.25% 7.25% 7.50%
Rates of increase in future compensation levels........................................... 4.50% 4.00% N/A
Expected long-term rates of return on assets.............................................. 8.00% 8.50% N/A
</TABLE>
28
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
10. EMPLOYEE BENEFIT PLANS (CONTINUED)
For the United Kingdom plan, the assumed discount rate, the rate of increase
in future compensation levels and the expected long-term rate of return on
assets was 9.0% at, and for, the year ended December 31, 1993.
Prior to January 1, 1995, certain subsidiaries had noncontributory
profit-sharing plans and defined contribution pension plans providing for
minimum contributions based upon defined levels of subsidiary income or employee
compensation.
Pension and profit-sharing expense for the years ended December 31, 1995,
1994 and 1993 amounted to approximately $3,553, $2,880 and $1,338, respectively.
A subsidiary of the Company, acquired in 1993, provides certain health care
benefits for eligible retired employees. The status of the plan at December 31,
1995 and 1994 is as follows:
<TABLE>
<CAPTION>
1995 1994
------ -----
<S> <C> <C>
Accumulated postretirement benefit obligation ("APBO").............................................. $1,323 $ 905
Unrecognized prior service cost..................................................................... (279) --
Unrecognized net loss............................................................................... (264) (144)
------ -----
Accrued postretirement benefit cost................................................................. $ 780 $ 761
------ -----
------ -----
</TABLE>
The postretirement benefit cost in 1995 and 1994 included the following
components:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Interest cost on APBO............................................................................... $ 98 $ 68
Net amortization and deferral....................................................................... 22 22
---- ----
$120 $ 90
---- ----
---- ----
</TABLE>
The plan is unfunded. The discount rate used in determining APBO was 6.50%
and 8.25% at December 31, 1995 and 1994, respectively. The assumed health care
trend rate assumed for 1996 was 10.6%. Increasing assumed health care trends one
percentage point will increase the APBO by $122 as of December 31, 1995.
The Company's Employee Stock Ownership Plan, which became effective in 1981,
provided eligible employees with an opportunity to purchase the Company's Common
Stock through payroll deductions, which were matched by the Company, subject to
certain limitations. Contributions to the plan were invested by an independent
trustee in Common Stock of the Company. Stock attributable to Company
contributions vested at the rate of 10% for each twelve months of contributions
by the employee, with 100% vesting after five years of service. The Company's
contributions to the plan, net of forfeitures, charged to income for 1994 and
1993 were $592 and $695, respectively. Effective January 1, 1995, this plan was
merged into the Rexel, Inc. Section 401(k) Savings Plan.
11. INCOME TAXES
Effective January 1, 1993, the Company adopted SFAS No. 109, "Accounting for
Income Taxes." Under Statement 109, the liability method is used in accounting
for income taxes. Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. Prior to
the adoption of Statement 109, income tax
29
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
11. INCOME TAXES (CONTINUED)
expense was determined using the deferred method. Deferred tax expense was based
on items of income and expense that were reported in different years in the
financial statements and tax returns and were measured at the tax rate in effect
in the year the difference originated.
As permitted by Statement 109, the Company has elected not to restate the
financial statements of any prior years. The effect of the change on pretax
income from continuing operations for the year ended December 31, 1993 was not
material; however, the cumulative effect of the change as of January 1, 1993
increased net income by $660 or $.03 per share.
The Company and its U.S. subsidiaries file Federal income tax returns on a
consolidated basis. The provision (benefit) for income taxes has been classified
as follows in the consolidated statements of income:
<TABLE>
<CAPTION>
1995 1994 1993
------- ------ ------
<S> <C> <C> <C>
Tax provision from continuing operations............................................................ $16,579 $7,270 $5,038
Tax provision (benefit) for discontinued operations................................................. -- (256) 1,303
Tax (benefit) for extraordinary charge.............................................................. (837) -- --
------- ------ ------
$15,742 $7,014 $6,341
------- ------ ------
------- ------ ------
</TABLE>
The provision (benefit) for income taxes is comprised of the following:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Federal:
Current............................................................... $ 17,019 $ 2,473 $ 259
Deferred.............................................................. (4,465) 3,141 4,251
State and local:
Current............................................................... 3,496 1,396 297
Deferred.............................................................. (308) (111) 1,361
Foreign:
Current............................................................... -- 75 146
Deferred.............................................................. -- 40 27
--------- --------- ---------
$ 15,742 $ 7,014 $ 6,341
--------- --------- ---------
--------- --------- ---------
</TABLE>
30
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
11. INCOME TAXES (CONTINUED)
Deferred income taxes result from temporary differences in the recognition
of revenue and expenses for financial statement and income tax reporting
purposes. The tax effects of each as of December 31, 1995 and 1994 are as
follows:
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Deferred tax assets:
Accounts receivable............................................................. $ 1,562 $ 1,764
Inventory....................................................................... 1,896 2,505
Other liabilities and reserves.................................................. 2,745 2,162
Accrued restructuring and transaction costs..................................... 1,233 1,947
Federal capital loss and AMT credit carryforward................................ -- 253
State net operating loss carryforwards.......................................... 1,278 1,553
Valuation allowance............................................................. (1,097) (1,278)
--------- ---------
Total deferred tax assets....................................................... 7,617 8,906
--------- ---------
Deferred tax liabilities:
Property, plant and equipment................................................... 2,295 3,592
Book/tax difference on asset valuation upon acquisition......................... 2,668 5,831
--------- ---------
Total deferred tax liabilities.................................................. 4,963 9,423
--------- ---------
Net deferred tax assets (liabilities)........................................... $ 2,654 $ (517)
--------- ---------
--------- ---------
</TABLE>
The change in the valuation allowance between 1995 and 1994 of $181 resulted
from updating estimates of federal capital loss and state and local net
operating loss utilization.
Income (loss) before income taxes is comprised of the following:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Continuing operations:
Domestic........................................................... $ 37,607 $ 16,505 $ 11,861
Foreign............................................................ 72 23 67
--------- --------- ---------
37,679 16,528 11,928
Discontinued operations.............................................. -- (583) 2,820
Extraordinary charge................................................. (2,162) -- --
--------- --------- ---------
$ 35,517 $ 15,945 $ 14,748
--------- --------- ---------
--------- --------- ---------
</TABLE>
31
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
11. INCOME TAXES (CONTINUED)
A reconciliation for 1995, 1994 and 1993 between the amount computed using
the Federal income tax rate and the effective rate of tax on income(loss),
including discontinued operations, but excluding extraordinary charge, is as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
Statutory Federal income tax rate................................................................... 35.0% 35.0% 35.0%
State and local income taxes, net of Federal income tax effect...................................... 5.2 4.5 5.9
Amortization of goodwill............................................................................ 0.8 2.0 2.1
Transaction costs................................................................................... -- (1.2) (1.4)
Decrease in taxes resulting from foreign income subject to foreign income tax but not expected to be
subject to U.S. tax in foreseeable future.......................................................... (0.1) (0.1) (0.8)
Impact on deferred taxes of 1993 federal corporate tax rate change to 35%........................... -- -- (1.7)
Utilization of federal capital loss carryforward not previously recognized.......................... -- -- (2.2)
Increase in deferred tax asset valuation allowance.................................................. -- 1.2 2.6
Alternative minimum tax............................................................................. -- -- 0.6
Other, net.......................................................................................... 3.1 2.6 2.9
----- ----- -----
Effective tax rate................................................................................ 44.0% 44.0% 43.0%
----- ----- -----
----- ----- -----
</TABLE>
12. COMMITMENTS AND CONTINGENCIES
At December 31, 1995, annual minimum rental commitments under noncancelable
operating leases, primarily for real property, are summarized as follows:
<TABLE>
<CAPTION>
<S> <C>
1996...................................................................... $ 8,637
1997...................................................................... 7,031
1998...................................................................... 5,444
1999...................................................................... 4,016
2000...................................................................... 2,820
2001 and thereafter....................................................... 4,057
---------
$ 32,005
---------
---------
</TABLE>
The minimum annual commitments include amounts payable to an officer of the
Company and/or members of his and his wife's family and amounts payable to an
officer of a subsidiary as follows: 1996 -- $883; 1997 -- $833; 1998 -- $762;
1999 --- $752; 2000 -- $758; thereafter -- $712.
Total rent expense charged to operations for the years ended December 31,
1995, 1994 and 1993 amounted to approximately $9,893, $9,498 and $6,589,
respectively.
In the normal course of business, the Company is sometimes named as a
defendant in litigation. In the opinion of management, based upon the advice of
counsel, any uninsured liability which may result from the resolution of any
present litigation or asserted claim will not have a material effect on the
Company's financial position or results of operations.
32
<PAGE>
REXEL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
13. ACCOUNTS AND NOTES PAYABLE -- TRADE, AND OTHER LIABILITIES
Accounts and notes payable -- trade and other liabilities consist of the
following:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1994
----------- -----------
<S> <C> <C>
Accounts and other payables -- trade.......................................... $ 107,341 $ 116,530
Salaries, wages and other compensation........................................ 16,794 13,854
Pensions, profit sharing and employee benefits................................ 4,781 5,091
Taxes, other than income taxes................................................ 2,371 3,068
Interest...................................................................... 1,267 3,006
Other......................................................................... 14,477 13,733
----------- -----------
$ 147,031 $ 155,282
----------- -----------
----------- -----------
</TABLE>
14. RESULTS OF OPERATIONS
In connection with the resignation of an executive of the Company on March
18, 1994, the Company entered into an agreement with such executive that
provided, among other things, certain
payments and acceleration of certain other payments in connection with the
executive's related employment agreement. Results for 1994 include charges of
$1.7 million in connection with this agreement.
15. RELATED PARTY TRANSACTIONS
The Company and Rexel, S. A. have entered into a Services Agreement, dated
as of November 1, 1995. The Services Agreement was negotiated and approved by a
special committe of the Board of Directors consisting of persons who are neither
officers nor directors of Rexel, S.A. or its affiliates nor have a material
financial relationship with Rexel, S. A. and its affiliates. Under this
Agreement, in consideration for the benefits to the Company arising from its
association with the worldwide business of Rexel, S. A., including without
limitation, in matters relating to customers, suppliers, employers, business
methods and know-how and financial expertise, the Company has agreed to pay to
Rexel, S. A. $600 per year (commencing with 1995). In addition, Rexel, S. A. has
agreed to provide consulting services to the Company relating to specific
projects at the request of the Company at a rate 10% higher than the costs to
Rexel, S. A. of providing such services (including, in the case of employees of
Rexel, S. A., costs based on the wages, social insurance payments and allocated
overhead and general corporate expenses attributable to such employees). Any
payment for consulting services must be approved by the Audit Committee of the
Board of Directors (excluding any member thereof who is an officer or director
of Rexel, S. A. or any of its affiliates or a person that has a material
financial relationship with Rexel, S. A. or any of its affiliates). During 1995,
the Company requested from Rexel, S. A. services valued at $340 relating to the
development of training programs, logistics consulting, enhancement of cash
management and treasury systems and a global agreement on implementation of an
inventory management system. In addition, pursuant to the agreement, Rexel, S.
A. consented to the use by the Company of the name "Rexel". The Services
Agreement is effective through December 31, 1996, subject to automatic renewal
for successive one year terms unless terminated on 30 days notice given by
either party prior to the commencement of a renewal term.
33
<PAGE>
REXEL, INC.
SUPPLEMENTARY FINANCIAL INFORMATION
YEARS ENDED DECEMBER 31, 1995 AND 1994
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRIMARY EARNINGS PER
SHARE
-------------------------
UNAUDITED INCOME INCOME INCOME INCOME
QUARTERLY FROM (LOSS) FROM INCOME BEFORE FROM (LOSS) FROM
FINANCIAL GROSS CONTINUING DISCONTINUED EXTRAORDINARY NET CONTINUING DISCONTINUED
DATA (1) NET SALES PROFIT OPERATIONS OPERATIONS CHARGE INCOME OPERATIONS OPERATIONS
- ------------ ---------- -------- ---------- ------------ ------------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995:
First..... $ 278,828 $ 55,316 $ 4,230 $-- $ 4,230 $ 4,230 $.18 $--
Second.... 288,686 56,778 4,942 -- 4,942 4,942 .20 --
Third..... 282,263 57,297 5,707 -- 5,707 4,165 .23 --
Fourth.... 270,911 60,692 6,221 -- 6,221 6,438 .24 --
---------- -------- ---------- ------ ------------- ------- --- -----
$1,120,688 $230,083 $21,100 $-- $21,100 $19,775 $.85 $--
---------- -------- ---------- ------ ------------- ------- --- -----
---------- -------- ---------- ------ ------------- ------- --- -----
1994:
First..... $ 244,607 $ 50,324 $ 1,733 $ 232 $ 1,965 $ 1,965 $.08 $ .01
Second.... 264,466 52,702 2,842 375 3,217 3,217 .12 .01
Third..... 275,822 53,134 2,780 (934) 1,846 1,846 .11 (.03)
Fourth.... 280,648 56,342 1,903 -- 1,903 1,903 .08 --
---------- -------- ---------- ------ ------------- ------- --- -----
$1,065,543 $212,502 $ 9,258 $(327) $ 8,931 $ 8,931 $.39 $(.01)
---------- -------- ---------- ------ ------------- ------- --- -----
---------- -------- ---------- ------ ------------- ------- --- -----
<CAPTION>
FULLY DILUTED EARNINGS PER SHARE
--------------------------------------------------
UNAUDITED INCOME INCOME
QUARTERLY INCOME BEFORE FROM (LOSS) FROM INCOME BEFORE
FINANCIAL EXTRAORDINARY NET CONTINUING DISCONTINUED EXTRAORDINARY NET
DATA (1) CHARGE INCOME OPERATIONS OPERATIONS CHARGE INCOME
- ------------ ------------- ------ ---------- ------------ ------------- ------
<S> <C> <C> <C> <C> <C> <C>
1995:
First..... $.18 $.18 $.16 -$- $.16 $.16
Second.... .20 .20 .18 -- .18 .18
Third..... .23 .17 .22 -- .22 .16
Fourth.... .24 .25 .24 -- .24 .25
--- ------ --- --- --- ------
$.85 $.80 $.80 -$- $.80 $.75
--- ------ --- --- --- ------
--- ------ --- --- --- ------
1994:
First..... $.09 $.09
Second.... .13 .13
Third..... .08 .08
Fourth.... .08 .08
--- ------
$.38 $.38
--- ------
--- ------
</TABLE>
- ------------------------------
(1) Fully diluted amounts are anti-dilutive in 1994.
34
<PAGE>
SCHEDULE II
REXEL, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COLUMN C
--------------------------
COLUMN B ADDITIONS COLUMN E
----------- -------------------------- COLUMN D -----------
COLUMN A BALANCE AT CHARGES TO ------------- BALANCE AT
- ------------------------------------------------- BEGINNING COSTS AND DEDUCTIONS CLOSE OF
DESCRIPTION OF PERIOD EXPENSES OTHER FROM RESERVED PERIOD
- ------------------------------------------------- ----------- ----------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995:
Allowance for doubtful accounts................ $ 4,149 $ 827 $ -- $ 2,296(A) $ 2,680
----------- ----------- ----- ------------- -----------
----------- ----------- ----- ------------- -----------
Year ended December 31, 1994:
Allowance for doubtful accounts................ $ 4,023 $ 3,600 $ -- $ 3,474(A) $ 4,149
----------- ----------- ----- ------------- -----------
----------- ----------- ----- ------------- -----------
Year ended December 31, 1993:
Allowance for doubtful accounts................ $ 10,035 $ 2,154 $ 451(B) $ 8,617(A) $ 4,023
----------- ----------- ----- ------------- -----------
----------- ----------- ----- ------------- -----------
</TABLE>
- ------------------------
(A) Accounts charged off, recoveries, and other adjustments, net.
(B) Additions resulting primarily from acquired companies.
35
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Reference is made to the information responsive to the Items comprising this
Part III that is contained in the Company's definitive proxy statement for its
1996 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A under
the Securities Exchange Act of 1934, which is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
FINANCIAL STATEMENTS AND SCHEDULES
The financial statements and financial statement schedules included in this
Report are listed in the introductory portion of Item 8.
EXHIBITS
The following exhibits are filed as part of this Report (for convenience of
reference, exhibits are listed according to numbers assigned in the exhibit
tables of Item 601 of Regulation S-K under the Securities Exchange Act of 1934
and management contracts and compensatory plans are indicated by an asterisk):
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- ---------------------------------------------------------------------------------------------------------
<C> <S>
3.1 Amended and restated certificate of incorporation -- filed herewith.
3.2 By-laws of the Company -- filed as exhibit 3.2 to the Company's annual report on Form 10-K for 1993 and
incorporated herein by reference.
4.1 Note Agreement, dated as of April 2, 1991, between the Company and The Prudential Insurance Company of
America -- filed as Exhibit 4.1 to the Company's report on Form 10-Q for the quarter ended March 31, 1991
and incorporated herein by reference.
4.2 Amendment No. 2, dated as of November 11, 1992, to the Note Agreement, dated as of April 2, 1991 -- filed
as Exhibit 4.2 to the Company's annual report on Form 10-K for 1992 and incorporated herein by reference.
4.3 Amendment No. 3, dated as of March 30, 1993, to the Note Agreement, dated as of April 2, 1991 -- filed as
Exhibit 4.3 to the Company's annual report on Form 10-K for 1993 and incorporated herein by reference.
4.4 Amendment No. 4, dated as of December 17, 1993, to the Note Agreement, dated as of April 2, 1991 -- filed
as Exhibit 4.4 to the Company's annual report on Form 10-K for 1993 and incorporated herein as reference.
4.5 Amendment No. 5, dated as of December 31, 1994, to the Note Agreement, dated as of April 2, 1991 -- filed
as Exhibit 4.5 to the Company's annual report on Form 10-K for 1994 and incorporated herein by reference.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- ---------------------------------------------------------------------------------------------------------
<C> <S>
4.6 Amendment No. 7, dated as of August 8, 1995, to the Note Agreement, dated as of April 2, 1991 -- filed as
Exibit 10.2 to the Company's report on Form 10-Q for the quarter ended September 30, 1995 and
incorporated herein by reference.
4.7 Indenture dated as of August 1, 1989 between the Company and Manufacturers Hanover Trust Company, as
Trustee relating to the 7% Debentures -- filed as Exhibit 4 to the Company's report on Form 10-Q for the
quarter ended June 30, 1989 and incorporated herein by reference.
10.1 Amended and Restated Revolving Credit and Reimbursement Agreement dated as of August 8, 1995, among the
Company and NationsBank of Florida, National Association, as agent, and the lenders named therin -- filed
as exhibit 10.1 to the Company's report on Form 10-Q for the quarter ended September 30, 1995 and
incorporated herein by reference.
10.2 1988 Stock Incentive Plan, as amended and restated effective March 16, 1995 -- filed herewith.*
10.3 1985 Stock Option Plan as amended -- filed as Exhibit A to the Company's Proxy Statement for its annual
meeting of stockholders held on May 10, 1985 and amended as described in the Proxy Statement for the
annual meeting held on May 9, 1986 and incorporated herein by reference.*
10.4 Form of indemnification agreement, dated as of November 18, 1986, between the Company and its directors
and officers -- filed as Exhibit 10.30 to the Company's annual report on Form 10-K for 1986 and
incorporated herein by reference.
10.5 Distribution Agreement, dated as of November 12, 1992, between the Company and Worldtex, Inc. -- filed as
Exhibit 10.25 to the Company's annual report on Form 10-K for 1992 and incorporated herein by reference.
10.6 Tax Sharing Agreement, dated as of November 12, 1992, between the Company and Worldtex, Inc. -- filed as
Exhibit 10.26 to the Company's annual report on Form 10-K for 1992 and incorporated herein by reference.
10.7 Services Agreement, dated as of November 1, 1995, between the Company and Rexel, S. A. -- filed herewith
10.8 Severance Agreement, dated as of March 18, 1994, between the Company, Steinthal Sample Co., Inc. and John
K. Ziegler -- filed as Exhibit 10.19 to the Company's annual report on Form 10-K for 1993 and
incorporated herein by reference.*
10.9 Employment Contract, dated as of March 18, 1994, between the Company and Alain C. Viry -- filed as
Exhibit 10.20 to the Company's annual report on Form 10-K for 1994 and incorporated herein by reference.*
10.10 Employment Contract, dated as of June 26, 1994, between the Company and Steven M. Hitt -- filed as
Exhibit 10.21 to the Company's annual report on Form 10-K for 1994 and incorporated herein by reference.*
10.11 Employment Contract, dated as of April 12, 1993, between Sacks Electrical Supply Co., Inc. and Jules
Altshuler -- filed as Exhibit 10.22 to the Company's annual report on Form 10-K for 1994 and incorporated
herein by reference.*
10.12 Employment Contract, dated as of May 27, 1994, between the Company and Jon O. Fullerton -- filed as
Exhibit 10.23 to the Company's annual report on Form 10-K for 1994 and incorporated herein by reference.*
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- ---------------------------------------------------------------------------------------------------------
<C> <S>
10.13 Employment Contract, dated as of June 27, 1994, between the Company and Allan M. Gonopolsky -- filed as
Exhibit 10.24 to the Company's annual report on Form 10-K for 1994 and incorporated herein by reference.*
10.14 Employment Contract dated as of July 12, 1988 between the Company and Allan M. Gonopolsky -- filed as
Exhibit 10.2 to the Company's annual report on Form 10-K for 1988 and incorporated herein by reference.*
10.15 Letter Agreement, dated April 22, 1992, between the Company and Allan M. Gonopolsky relating to his
Employment Contract -- filed as Exhibit G to the Company's Proxy Statement, dated September 2, 1992, and
incorporated herein by reference.*
10.16 Employment Contract dated April 22, 1992, between the Company and Robert M. Merson -- filed as Exhibit D
to the Company's Proxy Statement, dated September 2, 1992, and incorporated herein by reference.*
11.1 Statement re computation of per share earnings -- filed herewith.
21.1 Subsidiaries of the Company -- filed herewith.
23.1 Consent of Coopers & Lybrand L.L.P. -- filed herewith.
24.1 Powers of Attorney executed by certain directors and officers of the Company -- filed as Exhibit 24.1 to
the Company's annual report on Form 10-K for 1993 and incorporated herein by reference.
27.1 Financial Data Schedule -- filed with EDGAR filing only.
</TABLE>
8-K REPORTS
During the last quarter of the Company's 1995 fiscal year, the Company did
not file a Current Report on Form 8-K.
38
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 29, 1996 REXEL, INC.
By: /s/ ALLAN M. GONOPOLSKY
----------------------------------
Allan M. Gonopolsky
VICE PRESIDENT
AND CORPORATE CONTROLLER
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 29, 1996 by the following persons on
behalf of the registrant and in the capacities indicated.
<TABLE>
<C> <S> <C>
ALAIN VIRY*
- ------------------------------------------- President and Chief Executive Officer
Alain Viry and Director
Vice President and Chief Financial
Officer
/s/ STEVEN M. HITT
- -------------------------------------------
Steven M. Hitt
Vice President and Corporate Controller
and Attorney for persons indicated by
asterisk
/s/ ALLAN M. GONOPOLSKY
- -------------------------------------------
Allan M. Gonopolsky
FREDERIC DE CASTRO*
- ------------------------------------------- Director
Frederic de Castro
JOHN B. FRASER*
- ------------------------------------------- Director
John B. Fraser
R. GARY GENTLES*
- ------------------------------------------- Director
R. Gary Gentles
AUSTIN LIST*
- ------------------------------------------- Director
Austin List
ERIC LOMAS*
- ------------------------------------------- Director
Eric Lomas
GERALD E. MORRIS*
- ------------------------------------------- Director
Gerald E. Morris
NICOLAS SOKOLOW*
- ------------------------------------------- Director
Nicolas Sokolow
SERGE WEINBERG*
- ------------------------------------------- Director
Serge Weinberg
</TABLE>
39
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
- --------- -------------------------------------------------------------------------------------------------- -----
<C> <S> <C>
3.1 Amended and restated certificate of incorporation -- filed herewith.
3.2 By-laws of the Company -- filed as exhibit 3.2 to the Company's annual report on Form 10-K for
1993 and incorporated herein by reference.
4.1 Note Agreement, dated as of April 2, 1991, between the Company and The Prudential Insurance
Company of America -- filed as Exhibit 4.1 to the Company's report on Form 10-Q for the quarter
ended March 31, 1991 and incorporated herein by reference.
4.2 Amendment No. 2, dated as of November 11, 1992, to the Note Agreement, dated as of April 2, 1991
-- filed as Exhibit 4.2 to the Company's annual report on Form 10-K for 1992 and incorporated
herein by reference.
4.3 Amendment No. 3, dated as of March 30, 1993, to the Note Agreement, dated as of April 2, 1991 --
filed as Exhibit 4.3 to the Company's annual report on Form 10-K for 1993 and incorporated herein
by reference.
4.4 Amendment No. 4, dated as of December 17, 1993, to the Note Agreement, dated as of April 2, 1991
-- filed as Exhibit 4.4 to the Company's annual report on Form 10-K for 1993 and incorporated
herein as reference.
4.5 Amendment No. 5, dated as of December 31, 1994, to the Note Agreement, dated as of April 2, 1991
-- filed as Exhibit 4.5 to the Company's annual report on Form 10-K for 1994 and incorporated
herein by reference.
4.6 Amendment No. 7, dated as of August 8, 1995, to the Note Agreement, dated as of April 2, 1991 --
filed as Exibit 10.2 to the Company's report on Form 10-Q for the quarter ended September 30, 1995
and incorporated herein by reference.
4.7 Indenture dated as of August 1, 1989 between the Company and Manufacturers Hanover Trust Company,
as Trustee relating to the 7% Debentures -- filed as Exhibit 4 to the Company's report on Form
10-Q for the quarter ended June 30, 1989 and incorporated herein by reference.
10.1 Amended and Restated Revolving Credit and Reimbursement Agreement dated as of August 8, 1995,
among the Company and NationsBank of Florida, National Association, as agent, and the lenders
named therin -- filed as exhibit 10.1 to the Company's report on Form 10-Q for the quarter ended
September 30, 1995 and incorporated herein by reference.
10.2 1988 Stock Incentive Plan, as amended and restated effective March 16, 1995 -- filed herewith.*
10.3 1985 Stock Option Plan as amended -- filed as Exhibit A to the Company's Proxy Statement for its
annual meeting of stockholders held on May 10, 1985 and amended as described in the Proxy
Statement for the annual meeting held on May 9, 1986 and incorporated herein by reference.*
10.4 Form of indemnification agreement, dated as of November 18, 1986, between the Company and its
directors and officers -- filed as Exhibit 10.30 to the Company's annual report on Form 10-K for
1986 and incorporated herein by reference.
10.5 Distribution Agreement, dated as of November 12, 1992, between the Company and Worldtex, Inc. --
filed as Exhibit 10.25 to the Company's annual report on Form 10-K for 1992 and incorporated
herein by reference.
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
- --------- -------------------------------------------------------------------------------------------------- -----
10.6 Tax Sharing Agreement, dated as of November 12, 1992, between the Company and Worldtex, Inc. --
filed as Exhibit 10.26 to the Company's annual report on Form 10-K for 1992 and incorporated
herein by reference.
<C> <S> <C>
10.7 Services Agreement, dated as of November 1, 1995, between the Company and Rexel, S. A. -- filed
herewith
10.8 Severance Agreement, dated as of March 18, 1994, between the Company, Steinthal Sample Co., Inc.
and John K. Ziegler -- filed as Exhibit 10.19 to the Company's annual report on Form 10-K for 1993
and incorporated herein by reference.*
10.9 Employment Contract, dated as of March 18, 1994, between the Company and Alain C. Viry -- filed as
Exhibit 10.20 to the Company's annual report on Form 10-K for 1994 and incorporated herein by
reference.*
10.10 Employment Contract, dated as of June 26, 1994, between the Company and Steven M. Hitt -- filed as
Exhibit 10.21 to the Company's annual report on Form 10-K for 1994 and incorporated herein by
reference.*
10.11 Employment Contract, dated as of April 12, 1993, between Sacks Electrical Supply Co., Inc. and
Jules Altshuler -- filed as Exhibit 10.22 to the Company's annual report on Form 10-K for 1994 and
incorporated herein by reference.*
10.12 Employment Contract, dated as of May 27, 1994, between the Company and Jon O. Fullerton -- filed
as Exhibit 10.23 to the Company's annual report on Form 10-K for 1994 and incorporated herein by
reference.*
10.13 Employment Contract, dated as of June 27, 1994, between the Company and Allan M. Gonopolsky --
filed as Exhibit 10.24 to the Company's annual report on Form 10-K for 1994 and incorporated
herein by reference.*
10.14 Employment Contract dated as of July 12, 1988 between the Company and Allan M. Gonopolsky -- filed
as Exhibit 10.2 to the Company's annual report on Form 10-K for 1988 and incorporated herein by
reference.*
10.15 Letter Agreement, dated April 22, 1992, between the Company and Allan M. Gonopolsky relating to
his Employment Contract -- filed as Exhibit G to the Company's Proxy Statement, dated September 2,
1992, and incorporated herein by reference.*
10.16 Employment Contract dated April 22, 1992, between the Company and Robert M. Merson -- filed as
Exhibit D to the Company's Proxy Statement, dated September 2, 1992, and incorporated herein by
reference.*
11.1 Statement re computation of per share earnings -- filed herewith.
21.1 Subsidiaries of the Company -- filed herewith.
23.1 Consent of Coopers & Lybrand L.L.P. -- filed herewith.
24.1 Powers of Attorney executed by certain directors and officers of the Company -- filed as Exhibit
24.1 to the Company's annual report on Form 10-K for 1993 and incorporated herein by reference.
27.1 Financial Data Schedule -- filed with EDGAR filing only.
</TABLE>
41
<PAGE>
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
WILLCOX & GIBBS, INC.
UNDER SECTION 807 OF THE BUSINESS CORPORATION LAW
We the undersigned, being officers of Willcox & Gibbs, Inc., do hereby
certify:
1. The current name of the Corporation is Willcox & Gibbs, Inc. The
original name was Willcox & Gibbs Sewing Machine Company.
2. The Certificate of Incorporation of the Corporation was filed by the
Department of State on the second day of March, 1866.
3. The Certificate of Incorporation is hereby amended as follows:
a. to change the name of the Corporation to Rexel, Inc.;
b. to change the purpose for which the Corporation was formed;
c. to increase the number of authorized shares of Common Stock of the
Corporation from 35,000,000 to 45,000,000;
d. to delete the references to authorized shares of 600,000 par value
$12 Preferred Stock of the Corporation, none of which are outstanding, and
to change references of 2,000,000 par value $1 "Preference" stock to
"Preferred" stock;
e. to delete Article Fourth, which specifies that the Corporation shall
have perpetual existence, and to redesignate Section D, Article Third as
Article Fourth;
f. to change the reference in Article Sixth from "principal place of
business" to "office"; and
g. to delete the provisions setting forth the terms of the Series A
Junior Preference Stock and the Series B Junior Preference Stock, none of
which is outstanding. The text of the Certificate of Incorporation, as so
amended, is hereby restated to read in full as follows:
FIRST:
The corporate name of the Corporation is Rexel, Inc.
SECOND:
The purpose for which the Corporation is formed is to engage in any lawful
act or activity for which corporations may be organized under the Business
Corporation Law, provided that it is not formed to engage in any act or activity
requiring the consent or approval of any state official, department, board,
agency or other body, without such consent or approval first being obtained.
THIRD:
The aggregate number of shares which the Corporation shall have authority to
issue is forty-seven million (47,000,000), to consist of two million (2,000,000)
shares of Preferred Stock having a par value of one dollar ($1) each and
forty-five million (45,000,000) shares of Common Stock having a par value of one
dollar ($1) each.
42
<PAGE>
A. PREFERRED STOCK
(1) The Preferred Stock may be issued from time to time in one or more
series. Authority is hereby expressly granted to the Board of Directors to
establish and designate one or more series of Preferred Stock and to fix the
variations in the relative rights, preferences and limitations of each such
series, including, but not limited to, the following:
(a) The number of shares to constitute such series and the designation
of the shares of such series.
(b) The dividends, if any, payable on such series, the conditions and
dates upon which such dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable on any other class
or series of stock and whether such dividends shall be cumulative and, if
so, from what dates.
(c) Whether the shares of such series shall be subject to redemption by
the Corporation or at the option of the holder or both and, if so, the
times, prices and other terms and conditions of such redemption.
(d) Whether the shares of such series shall be subject to the operation
of a purchase, retirement or sinking fund and, if so, the terms and
conditions thereof.
(e) Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or series or any other securities
and, if so, the times, prices, rates, adjustments and other terms and
conditions of such conversion or exchange.
(f) Whether the shares of such series shall have voting rights in
addition to any voting rights provided by law and this Certificate of
Incorporation and, if so, the terms of such voting rights, which may be
general or limited.
(g) The conditions, limitations or restrictions, if any, on payment of
dividends or the making of distributions on, or the purchase, redemption or
other acquisition of, any other stock, on the creation of indebtedness or on
the issue or reissue of any additional stock.
(h) The rights of the holders of the shares of such series upon the
voluntary or involuntary liquidation, dissolution or winding up of, or upon
any distribution of the assets of, the Corporation.
(2) Shares of any series of Preferred Stock which have been purchased,
redeemed (whether through the operation of a purchase, retirement or sinking
fund or otherwise) or otherwise reacquired by the Corporation or which, if
convertible or exchangeable, have been converted into or exchanged for shares of
stock of any other class or series or any other securities, which are cancelled
by the Board of Directors, shall have the status of authorized and unissued
shares of Preferred Stock and may be reissued as a part of the series of which
they were originally a part or may be reissued as part of a new series of
Preferred Stock to be created by the Board of Directors or as part of any other
series of Preferred Stock, all subject to the conditions or restrictions on
issuance required by the resolution or resolutions adopted by the Board of
Directors providing for the issue of any series of Preferred Stock, by this
Certificate of Incorporation or by law.
B. COMMON STOCK
(1) Each share of Common Stock shall have one vote and, except as provided
by law or by the resolution or resolutions providing for the issue of any series
of Preferred Stock adopted by the Board of Directors as hereinabove provided,
the exclusive voting power for all purposes shall be vested in the holders of
Common Stock. The holders of Common Stock shall not have cumulative voting
power.
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(2) In the event of any liquidation, dissolution or winding up of the
Corporation, the holders of the Common Stock shall be entitled, after payment or
provision for payment of the debts and other liabilities of the Corporation, and
the amounts to which the holders of the Preferred Stock shall be entitled, to
share ratably in the remaining net assets of the Corporation.
FOURTH:
Unless otherwise provided by the Board of Directors, no holder of shares of
the Corporation of any class, now or hereafter authorized, shall have any
preemptive right (as such holder) to subscribe for or purchase any securities
now or hereafter authorized by the Corporation, including without limitation any
shares of stock of the Corporation of any class, any obligations or securities
of the Corporation convertible into or exchangeable for such shares or any
options, warrants or rights to acquire any of the foregoing.
FIFTH:
The following provisions are inserted for the management of the business and
for the conduct of the affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corporation and of its directors
and stockholders:
(1) The number of directors of the Corporation (exclusive of directors (the
"Preferred Stock Directors") who may be elected by the holders of any one or
more series of Preferred Stock which may at any time be outstanding, voting
separately as a class or classes) shall not be less than nine nor more than
twelve, the exact number to be fixed from time to time solely by resolution of
the Board of Directors, acting by not less than a majority of the entire Board
and to be fixed initially at nine.
(2) The Board of Directors (exclusive of Preferred Stock Directors) shall be
divided into three classes; with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1983, three directors of the
first class shall be elected to hold office for a term expiring at the 1984
annual meeting, three directors of the second class shall be elected to hold
office for a term expiring at the 1985 annual meeting and three directors of the
third class shall be elected to hold office for a term expiring at the 1986
annual meeting. At each annual meeting commencing with the annual meeting of
1984, each class of directors whose term shall expire at the meeting shall be
elected to hold office for a three year term and until the election and
qualification of their respective successors in office. In case of any increase
in the number of directors (other than Preferred Stock Directors), the number of
directors in each class shall be as nearly equal as possible.
(3) Subject to the rights of the holders of any one or more series of
Preferred Stock then outstanding, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office for cause or other reason shall be filled solely by the
Board of Directors, acting by not less than a majority of the directors then in
office. Any director so chosen shall hold office until the next election of the
class for which such director shall be elected and qualified (subject to any
requirement of law specifically calling for an earlier vote of stockholders). No
decrease in the number of directors shall shorten the term of any incumbent
director.
(4) Except as otherwise provided in Article THIRD of this certificate of
incorporation with respect to the holders of any one or more series of Preferred
Stock or as otherwise provided by law, special meetings of stockholders for any
purpose or purposes shall be called solely by resolution of the Board of
Directors, acting by not less than a majority of the entire Board, and the power
of stockholders to call a special meeting is specifically denied. The place and
notice of any special meeting shall be as set forth in the By-Laws. No business
shall be transacted and no corporate action shall be taken other than that
stated in the notice of meeting at a special meeting of stockholders.
(5) Subject to the rights of the holders of any one or more series of
Preferred Stock then outstanding, any director or the entire Board of Directors
of the Corporation may be removed, but
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such removal shall be only for cause. At any annual meeting of the stockholders
of the Corporation or at any special meeting of stockholders of the Corporation
the notice of which shall state that the removal of a director or directors is
among the purposes of the meeting, the holders of stock of the Corporation
entitled to vote thereon, by vote of a majority of the outstanding shares
thereof, may remove such director or directors for cause.
(6) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting except by unanimous written consent of all stockholders entitled to vote
thereon, and the power of less than all such stockholders to consent in writing,
without such a meeting, to the taking of any action is specifically denied.
(7) Notwithstanding any other provisions of this Certificate of
Incorporation or the By-Laws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, this Certificate of
Incorporation or the By-Laws), the affirmative vote of the holders of not less
than 75 percent of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (which shall mean 75% of
the votes entitled to be cast by such shares) shall be required (i) to amend or
repeal any provision of this Article FIFTH (including, without limitation, this
section (7)) or (ii) to adopt any provision in this Certificate of Incorporation
or the By-Laws of the Corporation which is inconsistent with any provision of
this article FIFTH or (iii) in general, to adopt, amend or repeal any provision
of the By-Laws of the Corporation relating to meetings of stockholders or
directors (including, without limitation, voting or quorum requirements) or
qualification, election or removal of directors or officers.
SIXTH:
The office of the Corporation shall be in the City of New York, in the
County of New York, and State of New York.
SEVENTH:
The Secretary of the State of New York is hereby designated as the agent of
the Corporation upon whom process in any action or proceeding against it may be
served. The address to which the Secretary of State shall mail a copy of process
in any action or proceeding against the Corporation which may be served upon him
is c/o CT Corporation System, 1633 Broadway, New York, New York 10019.
EIGHTH:
The affirmative vote of the holders of not less than 75 percent of the
outstanding shares of "Voting Stock" (as hereinafter defined) of the Corporation
shall be required for the approval or authorization of any "Business
Combination" (as hereinafter defined) of the Corporation with any Related Person
(as hereinafter defined); provided, however, that the 75 percent voting
requirement shall not be applicable if:
(1) A majority of the "Continuing Directors" (as hereinafter defined) of the
Corporation (a) have expressly approved in advance the acquisition of
outstanding shares of Voting Stock of the Corporation that caused the Related
Person to become a Related Person or (b) have approved the Business Combination
prior to the Related Person involved in the Business Combination having become a
Related Person; or
(2) The Business Combination is a merger or consolidation and the cash or
fair market value of the property, securities or other consideration to be
received per share by holders of Common Stock of the Corporation in the Business
Combination is not less than the highest per share price (with appropriate
adjustments for recapitalizations and for stock splits, stock dividends and like
distributions), as determined in good faith by a majority of the Continuing
Directors, paid by the Related Person in acquiring any of its holdings of the
Corporation's Common Stock.
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For purposes of this Article EIGHTH:
(i) The term "Business Combination" shall mean (a) any merger or
consolidation of the Corporation or a subsidiary with or into a Related
Person, (b) any sale, lease, exchange, transfer or other disposition,
including without limitation a mortgage or any other security device, of all
or any "Substantial Part" (as hereinafter defined) of the assets either of
the Corporation (including without limitation any voting securities of a
subsidiary) or of a subsidiary, or both, to a Related Person, (c) any merger
or consolidation of a Related Person with or into the Corporation or a
subsidiary, (d) any sale, lease, exchange, transfer or other disposition of
all or any Substantial Part of the assets of a Related Person to the
Corporation or a subsidiary, (e) the issuance of any securities of the
Corporation or a subsidiary to a Related Person, (f) any recapitalization
that would have the effect of increasing the voting power of a Related
Person, (g) any agreement, contract or other arrangement providing for any
of the transactions described in this definition of Business Combination and
(h) any series of related transactions which, if taken together, would come
within this definition of Business Combination.
(ii) The term "Related Person" shall mean and include any individual,
corporation, partnership or other person or entity which, together with its
"Affiliates" and "Associates" (as defined on April 1, 1983 in Rule 12b-2
under the Securities Exchange Act of 1934), "Beneficially Owns" (as defined
on April 1, 1983 in Rule 13d-3 under the Securities Exchange Act of 1934) in
the aggregate ten percent or more of the outstanding Voting Stock of the
Corporation, any Affiliate or Associate of any such individual, corporation,
partnership or other person or entity and any assignee of any of the
foregoing.
(iii) The term "Substantial Part" shall mean more than 20 percent of the
fair market value of the total assets of the corporation in question, as
determined in good faith by a majority of the Continuing Directors, as of
the end of its most recent fiscal year ending prior to the time the
determination is being made.
(iv) Without limitation, any shares of Common Stock of the Corporation
that any Related Person has the right to acquire pursuant to any agreement,
or upon exercise of conversion rights, warrants or options, or otherwise,
shall be deemed beneficially owned by the Related Person.
(v) For the purposes of paragraph (2) of this Article EIGHTH, the term
"other consideration to be received" shall include, without limitation,
Common Stock of the Corporation retained by its existing public stockholders
in the event of a Business Combination in which the Corporation is the
surviving corporation.
(vi) The term "Voting Stock" shall mean all outstanding shares of capital
stock of the Corporation or another corporation entitled to vote generally
in the election of directors and each reference to a proportion of shares of
Voting Stock shall refer to such proportion of the votes entitled to be cast
by such shares.
(vii) The term "Continuing Director" shall mean a Director who is not an
Affiliate or Associate of the Related Person and who (a) was a member of the
Board of Directors of the Corporation immediately prior to the time that the
Related Person involved in a Business Combination became a Related Person or
(b) is a successor of such a Director who is recommended to succeed such a
Director by a majority of the Continuing Directors then on the Board.
The affirmative vote of the holders of not less than 75 percent of the
outstanding shares of Voting Stock of the Corporation shall be required to amend
or repeal any provision of this Article EIGHTH (including, without limitation,
this paragraph).
NINTH:
No director shall be personally liable to the Corporation or any shareholder
for damages for any breach of duty in such capacity, except if a judgment or
other final adjudication adverse to the director
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establishes that (i) the director's acts or omissions were in bad faith or
involved intentional misconduct or a knowing violation of law, (ii) the director
personally gained in fact a financial profit or other advantage to which he was
not legally entitled or (iii) the director's acts violated Section 719 of the
Business Corporation Law of New York. If the Business Corporation Law of New
York is amended after approval by the stockholders of this provision to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of directors of the Corporation shall
be eliminated or limited to the fullest extent permitted by the Business
Corporation Law of New York, as so amended. Neither the amendment nor repeal of
this Article NINTH, nor the adoption of any provision of this Certificate of
Incorporation or the By-Laws of the Corporation or of any statute inconsistent
with this Article NINTH, shall eliminate or reduce the effect of this Article
NINTH in respect of any acts or omissions occurring prior to such amendment,
repeal or adoption of an inconsistent provision.
4. The amendments and restatement referred to herein were duly authorized
by the vote of the Board of Directors of the Corporation, followed by the
affirmative vote of the holders of a majority of all outstanding shares entitled
to vote thereon at the Corporation's Annual Meeting of Shareholders duly called
and held on May 12, 1995.
IN WITNESS WHEREOF, we have signed this Certificate on the 12th day of May,
1995, and we affirm that the statements contained herein are true under
penalties of perjury.
/s/ Alain Viry
------------------------------------
President -- Alain Viry
/s/ Jon O. Fullerton
------------------------------------
Secretary -- Jon O. Fullerton
[SEAL]
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EXHIBIT 10.2
WILLCOX & GIBBS
1988 STOCK INCENTIVE PLAN
(As Amended and Restated effective March 16, 1995)
SECTION 1. PURPOSE.
The purposes of the Willcox & Gibbs 1988 Stock Incentive Plan (the "Plan")
are (i) to enable Willcox & Gibbs, Inc. (the "Company") and Related Companies
(as defined below) to attract and retain employees who contribute to the
Company's success by their ability, ingenuity and industry, and to enable such
employees to participate in the long-term success and growth of the Company by
giving them an equity interest in the Company, and (ii) to enable the Company to
pay part of the compensation of its Outside Directors (as defined in Section
5.2) in options to purchase the Company's Common Stock, thereby increasing such
directors' proprietary interest in the Company. For purposes of the Plan, a
"Related Company" means any corporation, partnership, joint venture or other
entity in which the Company owns, directly or indirectly, at least a 20%
beneficial ownership interest.
SECTION 2. TYPES OF AWARDS.
2.1 Awards under the Plan may be in the form of (i) Stock Options; (ii)
Stock Appreciation Rights; (iii) Restricted Stock; (iv) Deferred Stock; (v)
Loans; and/or (vi) Tax Offset Payments.
2.2 An eligible officer or employee may be granted one or more types of
awards, which may be independent or granted in tandem. If two awards are granted
in tandem the award holder may exercise (or otherwise receive the benefit of)
one award only to the extent he or she relinquishes the tandem award.
SECTION 3. ADMINISTRATION.
3.1 The Plan shall be administered by the Executive Compensation Committee
of the Company's Board of Directors (the "Board") or such other committee of
directors as the Board shall designate (the "Committee"), which shall consist of
not less than three disinterested persons (as such term is defined in Rule 16b-3
under the Securities Exchange Act of 1934 or any successor rule) who shall serve
at the pleasure of the Board. The Chairman of the Board of the Company shall not
be appointed to the Committee unless the Company has determined, with the advice
of counsel, that he is disinterested.
3.2 The Committee shall have the following authority with respect to awards
under the Plan to officers (including the Chairman of the Board) and employees:
to grant awards to eligible officers or employees under the Plan; to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall deem advisable; to interpret the terms and provisions of
the Plan and any award granted under the Plan; and to otherwise supervise the
administration of the Plan. In particular, and without limiting its authority
and powers, with respect to awards to officers and employees, the Committee
shall have the authority:
(a) to determine whether and to what extent any award or combination of
awards will be granted hereunder, including whether any awards will be
granted in tandem with each other;
(b) to select the officers or employees to whom awards will be granted;
(c) to determine the number of shares of the common stock of the Company
(the "Stock") to be covered by each award granted hereunder;
(d) to determine the terms and conditions of any award granted hereunder,
including, but not limited to, any vesting or other restrictions based on
performance and such other factors as the Committee may determine, and to
determine whether the terms and conditions of the award are satisfied;
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SECTION 3. ADMINISTRATION. (CONTINUED)
(e) to determine the treatment of awards upon an award holder's retirement,
disability, death, termination for cause or other termination of
employment or service;
(f) to determine pursuant to a formula or otherwise the fair market value of
the Stock on a given date; provided, however, that if the Committee fails
to make such a determination, fair market value shall mean the closing
sale price of the Stock on a given date;
(g) to determine that amounts equal to the amount of any dividends declared
with respect to the number of shares covered by an award (i) will be paid
to the award holder currently or (ii) will be deferred and deemed to be
reinvested or (iii) will otherwise be credited to the award holder, or
that the award holder has no rights with respect to such dividends;
(h) to determine whether, to what extent, and under what circumstances Stock
and other amounts payable with respect to an award will be deferred
either automatically or at the election of an award holder, including
providing for and determining the amount (if any) of deemed earnings on
any deferred amount during any deferral period;
(i) to provide that the shares of Stock received as a result of an award
shall be subject to a right of first refusal, pursuant to which the
holder shall be required to offer to the Company any shares that he or
she wishes to sell, subject to such terms and conditions as the Committee
may specify;
(j) to amend the terms of any award, prospectively or retroactively;
provided, however, that no amendment shall impair the rights of the award
holder without his or her consent; and
(k) to substitute new Stock Options for previously granted Stock Options, or
for options granted under other plans, in each case including previously
granted options having higher option prices.
3.3 With respect to awards to Outside Directors (other than awards to the
Chairman of the Board granted pursuant to Section 3.2), the Committee shall have
authority to interpret the Plan; to adopt, amend, and rescind administrative
regulations to further the purposes of the Plan; and to take any other action
necessary to the proper operation of the Plan. However, the Committee shall have
no discretion to vary the amount or terms of awards as set forth in Section 14,
except as provided in Section 4.3.
3.4 All determinations made by the Committee pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
Plan participants.
3.5 The Committee may from time to time delegate to one or more officers of
the Company any or all of its authorities granted hereunder except with respect
to awards granted to persons subject to Section 16 of the Securities Exchange
Act of 1934. The Committee shall specify the maximum number of shares that the
officer or officers to whom such authority is delegated may award.
SECTION 4. STOCK SUBJECT TO PLAN.
4.1 The total number of shares of Stock reserved and available for
distribution under the Plan shall be 2,266,667 (subject to adjustment as
provided below). Such shares may consist of authorized but unissued shares or
treasury shares. The exercise of a Stock Appreciation Right for cash or the
payment of any other award in cash shall not count against this share limit.
Options with respect to more than 300,000 shares shall not be granted to any
officer or employee in any calendar year.
4.2 To the extent a Stock Option terminates without having been exercised,
or an award terminates without the award holder having received payment of the
award, or shares awarded are forfeited, the shares subject to such award shall
again be available for distribution in connection with future awards under the
Plan regardless of whether the forfeiting participant received any benefits of
ownership such as dividends from the forfeited award. At no time will the number
of shares issued
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SECTION 4. STOCK SUBJECT TO PLAN. (CONTINUED)
under the Plan plus the number of shares estimated by the Committee to be
ultimately issued with respect to outstanding awards under the Plan exceed the
number of shares authorized under Section 4.1. If the Committee's estimate of
the number of shares to be issued with respect to an award is greater than the
number of shares actually issued with respect thereto, such excess number of
shares shall again be available in connection with future awards under the Plan.
4.3 In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, Stock dividend, Stock split,
spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Stock, a substitution or adjustment, as may be
determined to be appropriate by the Committee in its sole discretion, may be
made in the aggregate number of shares reserved for issuance under the Plan, the
limitations on individual awards, the number of shares subject to outstanding
awards and the amounts to be paid by award holders or the Company, as the case
may be, with respect to outstanding awards; provided, however, that no such
adjustment shall increase the aggregate value of any outstanding award. In the
event any change described in this Section 4.3 occurs and an adjustment is made
in the outstanding Stock Options, a similar adjustment shall be made in the
number and terms of Stock Options granted and to be granted to Outside Directors
under Section 14.
SECTION 5. ELIGIBILITY.
5.1 Officers (including the Chairman of the Board) and other employees of
the Company or a Related Company are eligible to be granted awards under the
Plan. Except as provided in Section 5.2, Outside Directors other than any
Outside Director serving as Chairman of the Board are not eligible to be granted
awards under the Plan. The officer and employee participants under the Plan
shall be selected from time to time by the Committee, in its sole discretion,
from among those eligible.
5.2 Awards under Section 14 of the Plan shall be made solely to Outside
Directors, which term shall mean (i) for purposes of Initial Options granted
under Section 14.1, any director of the Company other than one who is an officer
or employee of the Company or a Related Company, and (ii) for purposes of Annual
Options granted under Section 14.2, any director of the Company other than one
who is an officer or employee of the Company, a Related Company, or Rexel, S.A.
("Rexel").
SECTION 6. STOCK OPTIONS.
6.1 The Stock Options awarded to officers and employees under the Plan may
be of two types: (i) Incentive Stock Options within the meaning of Section 422A
of the Internal Revenue Code or any successor provision thereto; and (ii)
Non-Qualified Stock Options. To the extent that any Stock Option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
6.2 Subject to the following provisions, Stock Options awarded to officers
and employees under the Plan shall be in such form and shall have such terms and
conditions as the Committee may determine:
(a) OPTION PRICE. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee; provided, however,
that to the extent required to satisfy the exemption requirements of Rule
16b-3 under the Securities Exchange Act of 1934 (or any successor rule),
the option price of Stock Options granted to persons subject to Section
16 of the Securities Exchange Act of 1934, shall not be less than 50% of
the fair market value of the Stock on the date of the award of the Stock
Option.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee.
(c) EXERCISABILITY. Stock Options shall be exercisable at such time or times
and subject to such terms and conditions as shall be determined by the
Committee. If the Committee provides that any Stock Option is exercisable
only in installments, the Committee may waive such installment exercise
provisions at any time in whole or in part.
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SECTION 6. STOCK OPTIONS. (CONTINUED)
(d) METHOD OF EXERCISE. Stock Options may be exercised in whole or in part
at any time during the option period by giving written notice of exercise
to the Company specifying the number of shares to be purchased,
accompanied by payment of the purchase price. Payment of the purchase
price shall be made in such manner as the Committee may provide in the
award, which may include cash (including cash equivalents), delivery of
shares of Stock already owned by the optionee or subject to awards
hereunder, any other manner permitted by law determined by the Committee,
or any combination of the foregoing. The Committee may provide that all
or part of the shares received upon the exercise of a Stock Option which
are paid for using Restricted Stock or Deferred Stock shall be restricted
or deferred in accordance with the original terms of the award in
question.
(e) NO STOCKHOLDER RIGHTS. An optionee shall have neither rights to
dividends or other rights of a stockholder with respect to shares subject
to a Stock Option until the optionee has given written notice of exercise
and has paid for such shares.
(f) SURRENDER RIGHTS. The Committee may provide that options may be
surrendered for cash upon any terms and conditions set by the Committee.
(g) NON-TRANSFERABILITY. No Stock Option shall be transferable by the
optionee other than by will or by the laws of descent and distribution.
During the optionee's lifetime, all Stock Options shall be exercisable
only by the optionee.
(h) TERMINATION OF EMPLOYMENT. If an optionee's employment with the Company
or a Related Company terminates by reason of death, disability,
retirement, voluntary or involuntary termination or otherwise, the Stock
Option shall be exercisable to the extent determined by the Committee.
The Committee, may provide that, notwithstanding the option term fixed
pursuant to Section 6.2(b), a Stock Option which is outstanding on the
date of an optionee's death shall remain outstanding for an additional
period after the date of such death.
6.3 Notwithstanding the provisions of Section 6.2, no Incentive Stock
Option shall (i) have an option price which is less than 100% of the fair market
value of the Stock on the date of the award of the Stock Option, (ii) be
exercisable more than ten years after the date such Incentive Stock Option is
awarded or (iii) be awarded more than ten years after the effective date of this
restatement of the Plan.
SECTION 7. STOCK APPRECIATION RIGHTS.
7.1 A Stock Appreciation Right awarded to an officer or employee shall
entitle the holder thereof to receive payment of an amount, in cash, shares of
Stock or a combination thereof, as determined by the Committee, equal in value
to the excess of the fair market value of the shares as to which the award is
granted on the date of exercise over an amount specified by the Committee. Any
such award shall be in such form and shall have such terms and conditions as the
Committee may determine.
7.2 The Committee may provide that a Stock Appreciation Right awarded to an
officer or employee may be exercised only within the 60-day period following
occurrence of a Change of Control (as defined in Section 16.2). Unless the
Committee provides otherwise, in the event of a Change of Control the amount to
be paid upon an officer or employee's exercise of a Stock Appreciation Right
shall be based on the Change of Control Price (as defined in Section 16.3).
SECTION 8. RESTRICTED STOCK.
Subject to the following provisions, all awards of Restricted Stock to
officers and employees shall be in such form and shall have such terms and
conditions as the Committee may determine:
(a) The Restricted Stock award shall specify the number of shares of
Restricted Stock to be awarded, the price, if any, to be paid by the
recipient of the Restricted Stock and the date or dates on which, or the
conditions upon the satisfaction of which, the Restricted Stock will
vest. The vesting of Restricted Stock may be unconditional or may be
conditioned upon the
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SECTION 8. RESTRICTED STOCK. (CONTINUED)
completion of a specified period of service with the Company or a Related
Company, upon the attainment of specified performance goals or upon such
other criteria as the Committee may determine.
(b) Stock certificates representing the Restricted Stock awarded to an
officer or employee shall be registered in the recipient's name, but the
Committee may direct that such certificates be held by the Company on
behalf of the recipient. Except as may be permitted by the Committee, no
share of Restricted Stock may be sold, transferred, assigned, pledged or
otherwise encumbered by the recipient until such share has vested in
accordance with the terms of the Restricted Stock award. At the time
Restricted Stock vests, a certificate for such vested shares shall be
delivered to the officer or employee (or his or her designated
beneficiary in the event of death), free of all restrictions.
(c) The Committee may provide that the officer or employee shall have the
right to vote or receive dividends on Restricted Stock. The Committee may
provide that Stock received as a dividend on, or in connection with a
stock split of, Restricted Stock shall be subject to the same
restrictions as the Restricted Stock.
(d) Except as may be provided by the Committee, in the event of an officer's
or employee's termination of employment before all of his or her
Restricted Stock has vested, or in the event any conditions to the
vesting of Restricted Stock have not been satisfied prior to any deadline
for the satisfaction of such conditions set forth in the award, the
shares of Restricted Stock which have not vested shall be forfeited, and
the Committee may provide that (i) any purchase price paid by the officer
or employee shall be returned to the employee or (ii) a cash payment
equal to the Restricted Stock's fair market value on the date of
forfeiture, if lower, shall be paid to the officer or employee.
(e) The Committee may waive, in whole or in part, any or all of the
conditions to receipt of, or restrictions with respect to, any or all of
the officer's or employee's Restricted Stock.
SECTION 9. DEFERRED STOCK AWARDS.
Subject to the following provisions, all awards of Deferred Stock to
officers and employees shall be in such form and shall have such terms and
conditions as the Committee may determine:
(a) The Deferred Stock award shall specify the number of shares of Deferred
Stock to be awarded to any recipient and the duration of the period (the
"Deferral Period") during which, and the conditions under which, receipt
of the Stock will be deferred, and the period, if any, during which the
award is subject to forfeiture. The Committee may condition the award of
Deferred Stock, or receipt of Stock or cash at the end of the Deferral
Period, upon the attainment of specified performance goals or such
criteria as the Committee may determine.
(b) Except as may be permitted by the Committee, Deferred Stock awards may
not be sold, assigned, transferred, pledged or otherwise encumbered
during the Deferral Period.
(c) At the expiration of the Deferral Period, the recipient (or his or her
designated beneficiary in the event of death) shall receive (i)
certificates for the number of shares of Stock equal to the number of
shares covered by the Deferred Stock award, (ii) cash equal to the fair
market value of such Stock or (iii) a combination of shares and cash, as
the Committee may determine.
(d) Except as may be provided by the Committee, in the event of an officer's
or employee's termination of employment before the end of the Deferral
Period, his or her Deferred Stock award shall be forfeited.
(e) The Committee may waive, in whole or in part, any or all of the
conditions to receipt of, or restrictions with respect to, Stock or cash
under a Deferred Stock award.
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SECTION 10. LOANS.
The Committee may provide that the Company shall make, or arrange for, a
loan or loans to an officer or employee with respect to the exercise of any
Stock Option awarded under the Plan, with respect to the payment of the purchase
price, if any, of any Restricted Stock awarded hereunder or with respect to any
taxes arising from an award hereunder, PROVIDED, HOWEVER, that the Company shall
not loan to an officer or employee more than the excess of the purchase or
exercise price of an award (together with the amount of any taxes arising from
such award) over the par value of any shares of Stock awarded. The Committee
shall have full authority to decide whether a loan will be made hereunder and to
determine the amount, term and provisions of any such loan, including the
interest rate to be charged, whether the loan will be with or without recourse
against the borrower, any security for the loan, the terms on which the loan is
to be repaid and the conditions, if any, under which the loan may be forgiven.
SECTION 11. TAX OFFSET PAYMENTS.
The Committee may provide for a Tax Offset Payment by the Company to an
officer or employee in an amount specified by the Committee, which shall not
exceed the amount necessary to pay the federal, state, local and other taxes
payable with respect to any award and receipt of the Tax Offset Payment assuming
the officer or employee is taxed at the maximum tax rate applicable to such
income. The Tax Offset Payment may be paid in cash, Stock or a combination
thereof, as determined by the Committee.
SECTION 12. ELECTION TO DEFER AWARDS.
The Committee may permit an officer or employee to elect to defer receipt of
an award for a specified period or until a specified event, upon such terms as
are determined by the Committee.
SECTION 13. TAX WITHHOLDING.
13.1 Each Outside Director, officer or employee shall, no later than the
date as of which the value of an award first becomes includible in such person's
gross income for applicable tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of, any federal,
state, local or other taxes of any kind required by law to be withheld with
respect to the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company (and, where
applicable, any Related Company), shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment of any kind otherwise due to
the Outside Director, officer or employee.
13.2 To the extent permitted by the Committee, and subject to such terms
and conditions as the Committee may provide, an officer or employee may elect to
have the withholding tax obligation, or any additional tax obligation with
respect to any awards hereunder, satisfied by (i) having the Company withhold
shares of Stock otherwise deliverable to such person with respect to the award
or (ii) delivering to the Company shares of unrestricted Stock.
SECTION 14. STOCK OPTIONS FOR OUTSIDE DIRECTORS.
14.1 Each person who is an Outside Director at the close of the 1993 Annual
Meeting of Stockholders shall be granted as of such date a Stock Option to
purchase 10,000 shares of common stock of the Company (an "Initial Option").
Each person who becomes an Outside Director after such date shall be granted, as
an Initial Option as of the date of his or her election as an Outside Director,
a Stock Option to purchase 10,000 shares of common stock of the Company.
14.2 At the close of each annual meeting of stockholders commencing with
the 1995 annual meeting, (or in the case of a person who subsequently becomes an
Outside Director, commencing with the annual meeting following the grant of such
person's Initial Option), if the Company's earnings per share (as certified by
the Company's independent auditors) for the immediately preceding fiscal year
exceed 110% of the Company's earnings per share (as certified by the Company's
independent
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SECTION 14. STOCK OPTIONS FOR OUTSIDE DIRECTORS. (CONTINUED)
auditors) for the fiscal year prior thereto, each Outside Director other than
the Chairman of the Board for the preceding year shall be granted an option to
purchase 2,500 shares of Common Stock and any Outside Director who served as
Chairman of the Board for the preceding year shall be granted an option to
purchase 5,000 shares of Common Stock. In the event the Chairman of the Board
served in such position for less than the entire preceding year, he shall
receive a pro rata portion of the option to purchase 5,000 shares of Common
Stock for the portion of the preceding year in which he served as Chairman of
the Board, and a pro rata portion of the option to purchase 2,500 shares of
Common Stock for the portion of the preceding year in which he served as a
non-Chairman Outside Director. Each option granted pursuant to this Section 14.2
shall be referred to as an "Annual Option".
14.3 Stock Options granted under this Section 14 shall be Non-Qualified
Stock Options and shall have the following terms and conditions:
(a) OPTION PRICE. The option price per share of Stock purchasable under the
Stock Option shall be equal to the average of the high and low sale price
of the Stock on the date the Stock Option is granted.
(b) OPTION TERM. The term of the Stock Option shall be ten years, subject
to earlier termination in the event of termination of service as a
director, as set forth in paragraph (e) below, and subject to earlier or
later termination in the event of the director's death, as set forth in
paragraph (f) below.
(c) EXERCISABILITY. Each Initial Option shall become exercisable with
respect to 20% of the underlying shares on the first anniversary of the
date immediately following the date of grant, and an additional 20% on
each subsequent anniversary thereof, provided that the optionee is a
director of the Company on such date. Each Annual Option shall become
fully exercisable, in whole or in part, on the last business day before
the annual meeting which follows the grant of such option, provided the
optionee is a director of the Company on such date. Notwithstanding the
preceding two sentences, in the event of a Change of Control (as defined
in Section 16), each Stock Option granted under this Section 14 shall
become fully exercisable and vested.
(d) METHOD OF EXERCISE. The Stock Options may be exercised in whole or in
part at any time during the option period by giving written notice of
exercise to the Company specifying the number of shares to be purchased,
accompanied by payment of the purchase price. Payment of the purchase
price shall be made in cash (including cash equivalents) or by delivery
of shares of Stock already owned by the optionee for at least six months,
or any combination of the foregoing. Shares delivered upon payment of the
exercise price shall be valued at the average of the high and low sale
prices on the date of exercise.
(e) TERMINATION OF SERVICE AS DIRECTOR. If an optionee's status as a
director of the Company is terminated for cause (as defined below), such
director's Stock Options shall terminate on the date of such termination
of service. If an optionee's status as a director is terminated for any
reason other than death or termination for cause, such director's Stock
Options may be exercised only within three months of such termination of
service, and only to the extent such Stock Options were exercisable on
the date of such termination of service. For purposes of this paragraph,
termination for cause shall mean termination on account of any act of
fraud or intentional misrepresentation, embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any Related
Company.
(f) DEATH OF OPTIONEE. If an optionee's status as a director of the Company
is terminated by reason of the optionee's death, such director's Stock
Options may be exercised by his or her legal representatives only within
12 months following the director's death and only to the extent such
Stock Options were exercisable on the date of such death.
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SECTION 14. STOCK OPTIONS FOR OUTSIDE DIRECTORS. (CONTINUED)
(g) NON-TRANSFERABILITY. No Stock Option shall be transferable by the
optionee other than by will or by the laws of descent and distribution.
During the optionee's lifetime, all Stock Options shall be exercisable
only by the optionee.
(h) NO STOCKHOLDER RIGHTS. An optionee shall have neither rights to
dividends nor other rights of a stockholder with respect to shares
subject to a Stock Option until the optionee has given written notice of
exercise and has paid for such shares.
(i) LIMITED STOCK APPRECIATION RIGHTS. Each Stock Option under this Section
14 shall be granted in tandem with a Limited Stock Appreciation Right
which may be exercised only within the 60-day period following a Change
of Control (as defined in Section 16.2) and upon exercise shall entitle
the holder to receive payment, for each share as to which the Limited
Stock Appreciation Right is exercised, of an amount equal in value to the
excess of the Change of Control Price (as defined in Section 16.3) over
the exercise price of the related Stock Option. Such Limited Stock
Appreciation Right shall be payable in cash, except that if a cash
payment would be subject to disgorgement under Section 16(b) of the
Securities Exchange Act of 1934, such Limited Stock Appreciation Right
shall be payable in shares of Stock.
SECTION 15. AMENDMENTS AND TERMINATION.
The Board may discontinue the Plan at any time and may amend it from time to
time. No amendment or discontinuation of the Plan shall adversely affect any
award previously granted without the award holder's written consent. The
provisions of Section 14 shall not be amended more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder. Amendments may be made
without stockholder approval except as required to satisfy Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor rule) or other regulatory
requirements.
SECTION 16. CHANGE OF CONTROL.
16.1 In the event of a Change of Control, unless otherwise determined by the
Committee at the time of grant or by amendment (with the holder's consent) of
such grant:
(a) all outstanding Stock Options and all outstanding Stock Appreciation
Rights awarded under the Plan shall become fully exercisable and vested;
(b) the restrictions and deferral limitations applicable to any outstanding
Restricted Stock and Deferred Stock awards under the Plan shall lapse and
such shares and awards shall be deemed fully vested; and
(c) to the extent the cash payment of any award is based on the fair market
value of Stock, such fair market value shall be the Change of Control
Price.
16.2 A "Change of Control" shall be deemed to occur on:
(a) the date that any person or group deemed a person under Sections 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934, (other than the
Company and its subsidiaries as determined immediately prior to that
date, an employee benefit plan of the Company or its subsidiaries, or
Rexel and its affiliates) in a transaction or series of transactions has
become the beneficial owner, directly or indirectly (with beneficial
ownership determined as provided in Rule 13d-3, or any successor rule,
under such Act) of 25% or more of the outstanding securities of the
Company ("Voting Securities") having the right under ordinary
circumstances to vote at an election of the Board;
(b) the date on which one-third or more of the members of the Board shall
consist of persons other than Current Directors (for these purposes, a
"Current Director" shall mean any
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SECTION 16. CHANGE OF CONTROL. (CONTINUED)
member of the Board as of the effective date of the Plan, any Rexel
Nominee (as defined in the Investment Agreement, dated as of November 12,
1992, among the Company, Rexel and International Technical Distributors,
Inc., as amended from time to time) and any successor of a Current
Director whose nomination or election has been approved by a majority of
the Current Directors then on the Board); or
(c) the date of approval by the stockholders of the Company of an agreement
providing for (A) the merger or consolidation of the Company with another
corporation where the stockholders of the Company, immediately prior to
the merger or consolidation, would not beneficially own, immediately
after the merger or consolidation, shares entitling such stockholders to
50% or more of all votes (without consideration of the rights of any
class of stock to elect directors by a separate class vote) to which all
stockholders of the corporation issuing cash or securities in the merger
or consolidation would be entitled in the election of directors or where
the members of the Board, immediately prior to the merger or
consolidation, would not, immediately after the merger or consolidation,
constitute a majority of the Board of Directors of the corporation
issuing cash or securities in the merger or consolidation or (B) the sale
or other disposition of all or substantially all the assets of the
Company.
16.3 "Change of Control Price" means the highest price per share paid in any
transaction reported on the New York Stock Exchange Composite Tape, or paid or
offered in any transaction related to a Change of Control at any time during the
90-day period ending with the Change of Control. Notwithstanding the foregoing
sentence, in the case of Stock Appreciation Rights granted in tandem with
Incentive Stock Options, the Change of Control Price shall be the highest price
paid on the date on which the Stock Appreciation Right is exercised.
SECTION 17. GENERAL PROVISIONS.
17.1 Each award under the Plan shall be subject to the requirement that, if
at any time the Committee shall determine that (i) the listing, registration or
qualification of the Stock subject or related thereto upon any securities
exchange or under any state or federal law, or (ii) the consent or approval of
any government regulatory body or (iii) an agreement by the recipient of an
award with respect to the disposition of Stock is necessary or desirable (in
connection with any requirement or interpretation of any federal or state
securities law, rule or regulation) as a condition of, or in connection with,
the granting of such award or the issuance, purchase or delivery of Stock
thereunder, such award shall not be granted or exercised, in whole or in part,
unless such listing, registration, qualification, consent, approval or agreement
shall have been effected or obtained free of any conditions not acceptable to
the Committee.
17.2 Nothing set forth in this Plan shall prevent the Board from adopting
other or additional compensation arrangements. Neither the adoption of the Plan
nor any award hereunder shall confer upon any employee of the Company, or of a
Related Company, any right to continued employment, and no award shall confer
upon any Outside Director any right to continued service as a director.
17.3 Determinations by the Committee under the Plan relating to the form,
amount, and terms and conditions of awards need not be uniform, and may be made
selectively among persons who receive or are eligible to receive awards under
the Plan, whether or not such persons are similarly situated.
17.4 No member of the Board or the Committee, nor any officer or employee of
the Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination or interpretation taken or made with
respect to the Plan, and all members of the Board or the Committee and all
officers or employees of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.
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SECTION 18. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on November 15, 1988, subject to approval by the
Company's stockholders. The amendment increasing the number of shares to
2,266,667 shall be effective May 13, 1994, and this amendment and restatement of
the Plan shall be effective on March 16, 1995, in each case subject to approval
by the Company's stockholders.
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EXHIBIT 10.7
SERVICES AGREEMENT
Services Agreement, dated as of November 1, 1995, between Rexel, Inc., a New
York corporation (the "Company"), and Rexel, S.A., a French societe anonyme
("Parent").
Parent, the beneficial owner of in excess of 40% of the outstanding common
stock of the Company, is one of the world's largest distributors of electrical
parts and supplies (the "BUSINESS"). The Company is engaged in the Business in
the United States. The Company wishes to obtain from Parent and Parent wishes to
provide to the Company the benefit of Parent's knowledge, expertise and goodwill
relating to Business, on the terms and subject to the conditions of this
Agreement.
Accordingly, the parties hereto agree as follows:
1. INTANGIBLE BENEFITS.
1.1 USE OF NAME. Parent hereby consents (i) to the use by the Company of
"Rexel, Inc." as the name of the Company and in connection with its Business and
(ii) to the registration by the Company with the Patent and Trademark Office of
the U.S. Department of Commerce of the word Rexel and the related logo as a
trademark.
1.2 INTANGIBLE BENEFITS. The Company acknowledges and agrees that the
Company's association with the worldwide Business of Parent provide substantial
benefits to the Company including, without limitation, in matters relating to
customers, suppliers, employees, business methods and know-how and financial
expertise. Parent shall make its personnel available for consultation by the
officers of the Company on matters relating to the Business; PROVIDED that
Parent shall not be obligated to furnish consulting services to the extent that
the Service Charge (as defined in Section 2.2) for such services would exceed
$3,000 with respect to the particular matter or $5,000 in any calendar month.
The benefits and rights furnished by Parent to the Company pursuant to this
Section 1.2 are hereinafter called the "INTANGIBLE BENEFITS".
1.3 PAYMENT FOR INTANGIBLE BENEFITS. The Company shall pay to Parent
$600,000 per year during the term of this Agreement in consideration for the
Intangible Benefits.
2. CONSULTING PROJECTS.
2.1 INITIATION OF CONSULTING PROJECT. Parent shall, upon the written
request of an officer of the Company, provide consulting services beyond those
included in the Intangible Benefits. Such consulting services shall be with
respect to any matter relating to the Business, including, without limitation,
the following:
(a) selling techniques, distribution, identification and development of
markets and strategies;
(b) product lines and product segments;
(c) logistics, the opening and furnishing of display rooms, and
distribution channels;
(d) sales promotion, advertising, brochures, marketing;
(e) selection and identification of suppliers;
(f) organization, administrative and accounting issues and personnel
management;
(g) financial matters, including cooperation with banks, cash management
and investment financing;
(h) preparation of budgets and internal controls;
(i) risk management and insurance matters;
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(j) electronic data processing, including selection, installation or
adoption of systems and software;
(k) asset management; and
(l) acquisitions and divestitures.
Each project as to which Parent provides consulting services pursuant to this
Section 2.1 is hereinafter called a "CONSULTING PROJECT".
2.2 CHARGES FOR CONSULTING PROJECTS. Promptly after completion of each
Consulting Project, Parent shall provide to the Company an invoice listing each
employee of Parent who worked on the Consulting Project, such employee's title
or job description with Parent, the time spent (expressed in hours) by each such
employee on the Consulting Project, a description in reasonable detail of the
work performed by such employee, such employee's Billing Rate in effect during
the period that services were provided, the product of the Billing Rate
multiplied by the time spent by each such employee (such product, the "SERVICE
CHARGE"). Such invoice shall also list Parent's out-of-pocket costs (excluding
all overhead and general corporate expenses) incurred directly relating to the
Consulting Project, which shall be multiplied by 110% to determine the amount
invoiced to the Company for out-of-pocket costs. The "BILLING RATE" shall mean,
for any employee of Parent, 110% of (i) the wages paid by Parent with respect to
such employee on an annual basis divided by 1920, multiplied by (ii) 1.4
(representing payments by Parent for social insurance payments and similar
charges), multiplied by (iii) 1.81 (representing an allocation of Parent's
overhead and general corporate expenses).
2.3 DETERMINATION OF APPROVED CHARGES. The Company shall submit to the
Audit Committee of its Board of Directors at a meeting held in May, June or July
and at a meeting held in October, November or December (and more frequently if
the Company so elects) all invoices furnished to the Company by Parent at least
30 days prior to each such meeting and not previously reviewed by the Audit
Committee, together with a memorandum prepared by an officer of the Company with
respect to each Consulting Project to which such invoices relate setting forth
the following: a brief description of the Consulting Project; the reasons for
the Consulting Project; the benefits obtained by the Company from such
Consulting Project; the reasons that Parent was selected for such Consulting
Project as opposed to other possible vendors; and such officer's opinion as to
whether the amounts invoiced for the Consulting Project are reasonable in light
of the benefits obtained by the Company therefrom. The Audit Committee
(excluding any member thereof that is an officer or director of Parent or any of
its Affiliates or a person that has a material financial relationship with
Parent or any of its Affiliates) shall review the invoices and related memoranda
and determine, in its judgment, by majority vote, the amount of the charges
included in each such invoice that is reasonable for the Company to pay in light
of the benefits obtained by the Company from the applicable Consulting Project
(such amount, with respect to each Consulting Project, the "APPROVED CHARGES").
The Company shall give Parent written notice of the Approved Charges with
respect to each Consulting Project within 30 days after they are so determined
by the Audit Committee. In the event that the Approved Charges with respect to
any Consulting Project are less than the amount invoiced by Parent, Parent may,
by written notice to the Company, discontinue its obligation to engage in
Consulting Projects pursuant to this Agreement.
3. PAYMENTS
3.1 INTANGIBLE BENEFITS. The Company shall pay to Parent one quarter of
the amount required pursuant to Section 1.3 for the Intangible Benefits on the
last Business Day of each calendar quarter, provided that the payment in respect
of 1995 shall be paid for the entire year on the last Business Day of 1995.
3.2 CONSULTING PROJECTS. The Company shall pay to Parent the aggregate
amount of all Approved Charges determined by the Audit Committee at any meeting
within 30 days after they have been so determined.
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3.3 PAYMENT MECHANICS. All payments hereunder shall be made, net of any
required withholding taxes, by wire transfer to such account of Parent in the
United States as Parent shall designate in written notice to the Company given
at least five Business Days prior to the date any such payment is due.
4. TERM
This Agreement shall commence effective as of January 1, 1995 and shall
terminate on December 31, 1996, provided that this Agreement shall be
automatically renewed thereafter for successive one year terms unless either
party shall have given the other party written notice at least 30 days preceding
the commencement of any such renewal term of its election to terminate this
Agreement effective at the end of the then current term. Any such termination
shall not affect the Company's obligations hereunder to pay Parent amounts due
for Intangible Benefits and Consulting Projects provided prior to such
termination.
5. MISCELLANEOUS
5.1 NONEXCLUSIVITY. Nothing herein shall restrict the Company's right to
obtain consulting services similar to those that may be provided by Parent
hereunder from any other person.
5.2 ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement sets forth the
entire agreement and understanding between the parties with respect to the
transactions contemplated hereby and supersedes all agreements and
understandings with respect to the transactions contemplated hereby entered into
prior to the execution hereof. This Agreement may be modified only by a written
instrument duly executed by or on behalf of each party. No breach of any
agreement herein shall be deemed waived unless expressly waived in writing by
and on behalf of the party who might assert such breach.
5.3 NOTICES. Any notice, advice or communication required or permitted to
be given hereunder shall be in writing and shall be given by mail, courier
service such as DHL or Federal Express, telecopy or personal delivery to the
party to whom it is to be given at such party's address set forth on the
signature page to this Agreement or to such other address as the party shall
have furnished in writing to the other party in accordance with the provisions
of this Section 5.3. Any notice, advice or communication shall be deemed to have
been given when received or delivery is refused by the addressee.
5.4 BINDING EFFECT; THIRD PARTIES; HEADINGS; COUNTERPARTS. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors, which term shall include any successor by merger or
consolidation, and permitted assigns and their respective successors, except
that no party to this Agreement shall be entitled to assign this Agreement or
any interest herein or right hereunder and any such purported assignment shall
be void. Nothing in this Agreement is intended by the parties or shall act to
confer any right or remedy on any third party. The Article and Section headings
of this Agreement are for convenience of reference only and do not form a part
hereof and do not in any way modify, interpret or construe the intentions of the
parties. This Agreement may be executed in counterparts, and all such
counterparts shall constitute one and the same instrument.
5.5 CONSENT TO JURISDICTION. Each party hereto, hereby consents to, and
confers nonexclusive jurisdiction upon, the courts of the State of Florida and
the Federal courts of the United States of America located in the City of Miami,
Florida, and appropriate appellate courts therefrom, over any action, suit or
proceeding arising out of or relating to this Agreement. Each party hereto
hereby waives, and agrees not to assert, as a defense in any such action, suit
or proceeding that it is not subject to such jurisdiction or that such action,
suit or proceeding may not be brought or is not maintainable in said courts or
that this Agreement may not be enforced in or by said courts or that its
property is exempt or immune from execution, that the suit, action or proceeding
is brought in an inconvenient forum, or that the venue of the suit, action or
proceeding is improper. Service of process
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in any such action, suit or proceeding may be served on any party anywhere in
the world, whether within or without the State of Florida, provided that notice
thereof is provided pursuant to provisions for notice under this Agreement.
5.6 CERTAIN DEFINITIONS. The following terms shall have the respective
meanings indicated below for purposes of the Agreement:
"AFFILIATE" of a specified person shall mean a person directly or
indirectly controlling, controlled by, or under common control with, such
other person. For the purposes of this definition, "control" when used with
respect to any person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such person, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meaning
correlative to the foregoing.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which banks in Miami, Florida, U.S.A. are required to or may be
closed.
"PERSON" shall mean and include an individual, corporation, company,
partnership, joint venture, association, group, trust, and other
unincorporated organization or entity and a governmental entity or any
department or agency thereto.
5.7 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida applicable to
contracts executed and to be performed in such State.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
REXEL, S.A.
By: __________________________________
Name:
Title:
Address: 26, rue de Londres
75009, Paris, France
Fax: 331-42850659
Attention: President
REXEL, INC.
By: __________________________________
Name:
Title:
Address:150 Alhambra Circle
Suite 900
Coral Gables, Florida 33134
U.S.A.
Fax: 305-446-8128
Attention: President
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EXHIBIT 11.1
REXEL INC.
COMPUTATION OF NET INCOME PER
COMMON AND COMMON EQUIVALENT SHARE
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Income from continuing operations.............................................. $ 21,100 $ 9,258 $ 6,890
Income (loss) from discontinued operations..................................... -- (327) 1,517
--------- --------- ---------
Income before extraordinary charge and cumulative effect of accounting
change........................................................................ 21,100 8,931 8,407
Extraordinary charge........................................................... (1,325) -- --
Cumulative effect of accounting change for income taxes........................ -- -- 660
--------- --------- ---------
Income applicable to primary common and common equivalent shares............... 19,775 8,931 9,067
Interest reduction, net of taxes, upon conversion of Convertible Subordinated
Debentures.................................................................... 1,182 1,960 1,995
--------- --------- ---------
Income applicable to fully diluted common shares............................... $ 20,957 $ 10,891 $ 11,062
--------- --------- ---------
--------- --------- ---------
Primary shares:
Weighted average number of common shares and common share equivalents
outstanding during the year
Common (net of treasury stock)................................................ 24,687 23,734 20,947
Options...................................................................... 262 31 23
--------- --------- ---------
24,949 23,765 20,970
--------- --------- ---------
--------- --------- ---------
Fully diluted shares:
Weighted average number of common shares and common share equivalents
outstanding during the year:
Common (net of treasury stock)............................................... 24,687 23,734 20,947
Options...................................................................... 262 31 23
Conversion of Subordinated Debentures........................................ 3,265 5,225 5,225
--------- --------- ---------
28,214 28,990 26,195
--------- --------- ---------
--------- --------- ---------
</TABLE>
62
<PAGE>
EXHIBIT 21.1
SUBSIDIARIES
The following are the subsidiaries of Rexel, Inc.
<TABLE>
<S> <C>
Calcon Electric Supply, Inc.............................. California
C.E.S. Industries, Inc................................... Delaware
Clark Consolidated Industries, Inc....................... Ohio
Consolidated Electric Supply, Inc........................ Delaware
Consolidated Electric Supply (Bahamas) Ltd............... Bahamas
Duellman Electric Supply Company......................... Ohio
Elgee Electric Supply Co. ............................... Ohio
Engineered Apparel Concepts, Inc. ....................... Delaware
Rawlinson Electric Company............................... Texas
Rogers Lighting Company.................................. Texas
Robin Service Corporation................................ New York
Seaco Electrical Supplies, Inc. ......................... Florida
Southern Electric Supply Company, Inc. .................. Delaware
Spindletop Electrical Distributing Company............... Texas
Summers Electric Company................................. Texas
Summers Group, Inc. ..................................... Delaware
The Sacks Electrical Supply Co. ......................... Ohio
Rexel DN, Inc. .......................................... Delaware
Rexel DS, Inc. .......................................... Delaware
</TABLE>
63
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
------------------------
We consent to the incorporation by reference in the registration statement
of Rexel, Inc. and subsidiaries on Form S-8 which relates to the 1988 Stock
Incentive Plan (No. 33-32648), of our report, which includes an explanatory
paragraph regarding the Company's change in method of accounting for income
taxes, dated February 23, 1996, on our audits of the consolidated financial
statements and financial statement schedule of Rexel, Inc. and subsidiaries as
of December 31, 1995 and 1994, and the years ended December 31, 1995, 1994 and
1993 which report is included in this Annual Report on Form 10-K. We also
consent to the reference to our firm as "Experts."
/s/ COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
Miami, Florida
March 26, 1996
64
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REXEL, INC.
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 10,013
<SECURITIES> 0
<RECEIVABLES> 141,284
<ALLOWANCES> 2,680
<INVENTORY> 102,239
<CURRENT-ASSETS> 263,049
<PP&E> 72,588
<DEPRECIATION> 23,135
<TOTAL-ASSETS> 375,493
<CURRENT-LIABILITIES> 166,563
<BONDS> 37,219
0
0
<COMMON> 26,258
<OTHER-SE> 140,061
<TOTAL-LIABILITY-AND-EQUITY> 375,493
<SALES> 1,120,688
<TOTAL-REVENUES> 1,120,688
<CGS> 890,605
<TOTAL-COSTS> 890,605
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 827
<INTEREST-EXPENSE> 7,688
<INCOME-PRETAX> 37,679
<INCOME-TAX> 16,579
<INCOME-CONTINUING> 21,100
<DISCONTINUED> 0
<EXTRAORDINARY> (1,325)
<CHANGES> 0
<NET-INCOME> 19,775
<EPS-PRIMARY> .80
<EPS-DILUTED> .74
</TABLE>
