<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD
FROM TO
--------- -----------
COMMISSION FILE NUMBER 1-8009
ROHN INDUSTRIES, INC.
(DELAWARE)
6718 West Plank Road
Peoria, Illinois 61604
IRS Employer Identification Number 36-3060977
TELEPHONE NUMBER (309) 697-4400
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
--- ---
<TABLE>
<CAPTION>
Shares Outstanding
as of May 10, 2000
-------------------
<S> <C>
Common Stock $.01 par value.............................................. 52,761,536
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROHN INDUSTRIES, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------
March 31, March 31,
2000 1999
---------------- ----------------
<S> <C> <C>
Net sales $45,477 $30,162
Cost of products sold 34,829 23,445
---------------- ----------------
Gross profit 10,648 6,717
Operating expenses:
Selling expenses 2,023 2,053
General and administrative expenses 4,010 2,491
---------------- ----------------
Operating income 4,615 2,173
Interest income, net 151 141
Other expense ---- 1,600
---------------- ----------------
Income before income taxes 4,766 714
Income tax provision 1,799 225
---------------- ----------------
Net income $2,967 $489
================ ================
Earnings per share - basic and diluted $0.06 $0.01
================ ================
Weighted average number of shares outstanding
Basic 52,634 52,814
================ ================
Diluted 53,253 52,814
================ ================
</TABLE>
The accompanying notes to the unaudited consolidated financial statements are an
integral part of these statements
-2-
<PAGE>
ROHN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS March 31, 2000 December 31,
(unaudited) 1999
-------------------- -----------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $25,434 $27,634
Accounts, notes and other receivables, less allowance
for doubtful accounts of $1,427 in 2000 and $1,246 in 1999 36,421 34,051
Inventories 31,819 25,885
Deferred income taxes 2,900 2,900
Prepaid expenses 1,618 1,271
------------- ----------------
TOTAL CURRENT ASSETS 98,192 91,741
------------- ----------------
Property, plant and equipment 52,635 51,905
Less: accumulated depreciation (25,542) (24,815)
------------- ----------------
TOTAL PROPERTY, PLANT AND EQUIPMENT 27,093 27,090
------------- ----------------
Other assets 1,205 1,337
Long-term assets of discontinued operations 1,988 1,680
------------- ----------------
TOTAL ASSETS $128,478 $121,848
============= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term liabilities $1,085 $1,066
Accounts payable 13,787 11,474
Accrued liabilities & other 17,275 15,463
Customer deposits 157 808
Net liabilities of discontinued operations 1,402 1,157
------------- ----------------
TOTAL CURRENT LIABILITIES 33,706 29,968
Long-term debt 8,887 9,164
Nonpension post retirement benefits 2,467 2,300
------------- ----------------
TOTAL LIABILITIES 45,060 41,432
------------- ----------------
STOCKHOLDERS' EQUITY
Common stock 534 534
Capital surplus 12,800 12,815
Retained earnings 74,710 71,743
Treasury stock (3,954) (3,896)
Unearned portion of restricted stock (672) (780)
------------- ----------------
TOTAL STOCKHOLDERS' EQUITY 83,418 80,416
------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $128,478 $121,848
============= ================
</TABLE>
-3-
<PAGE>
The accompanying notes to the unaudited consolidated financial statements are
an integral part of these statements
ROHN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
March 31,
------------------------------
2000 1999
-------------- ---------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income $2,967 $489
Adjustments for noncash items included in net income:
Depreciation 727 849
Operating requirements:
Accounts receivable decrease/(increase) (2,370) 4,918
Inventories decrease/(increase) (5,934) 3
Prepaid expenses decrease/(increase) (347) 821
Accounts payable & accrued expenses increase/(decrease) 3,493 (7,221)
Discontinued operations increase/(decrease) 245 (336)
-------------- ---------------
Net cash used in operating activities (1,219) (477)
-------------- ---------------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of plant and equipment, net of retirements (730) (661)
Decrease/(increase) in other assets (176) 437
-------------- ---------------
Net cash used in investing activities (906) (224)
-------------- ---------------
CASH FLOW FROM FINANCING ACTIVITIES
Decrease in long-term liabilities (110) (271)
Issuance/(cancellation) of common stock 35 106
-------------- ---------------
Net cash used in financing activities (75) (165)
-------------- ---------------
Net decrease in cash and cash equivalents 2,200 (866)
Cash & cash equivalents, beginning of period 27,634 19,690
-------------- ---------------
Cash & cash equivalents, end of period $25,434 $18,824
============== ===============
Cash paid during the period for interest 180 232
Cash paid during the period for income taxes 2,688 ---
</TABLE>
The accompanying notes to the unaudited consolidated financial
statements are an integral part of these statements.
-4-
<PAGE>
ROHN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS
The Company, pursuant to the rules and regulations of the Securities
and Exchange Commission, has prepared the unaudited financial statements
included herein. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.
The financial statements presented herewith reflect all adjustments
(consisting of only normal and recurring accruals) which, in the opinion of
management, are necessary for a fair presentation of the results of operations
for the three-month periods ended March 31, 2000 and 1999. The results of
operations for interim periods are not necessarily indicative of results to be
expected for an entire year.
Certain reclassifications have been made to prior year amounts to
conform to the current year presentation.
(2) REVENUE RECOGNITION
The Company's products are manufactured according to stringent customer
specifications and engineering design, and are available for immediate delivery
according to the schedule requested by the customer. Revenue is generally
recognized when the product is shipped. However, the Company recognizes revenue
for its Tower Structures segment prior to the time a product is shipped if each
of the following conditions are met:
1. The risks of ownership have passed to the customer;
2. The customer has a fixed commitment to purchase the goods;
3. The customer, not the Company, has requested that the shipment
of the product be delayed and that the transaction be on a
bill and hold basis;
4. There is a fixed schedule for delivery of the product;
5. The Company has not retained any specific performance
obligations with respect to the product such that the earnings
process is not complete;
6. The ordered product has been segregated from the Company's
inventory and is not subject to being used to fill other
orders; and
7. The product is complete and ready for shipment.
Many times, the Company's customers experience delays due to weather,
zoning approvals, and other similar circumstances, and request that the Company
hold their inventory. In these situations where the product is available for
shipment, and title has passed to the customer, the Company recognizes revenue
for its Tower Structures segment. The Enclosures segment differs from Tower
Structures in that enclosures are generally ordered by the customer in multiple
units on a project basis and are not necessarily site specific. Therefore, the
revenue recognition policy for enclosures, in addition to the requirements of
the Towers Structure segment, also requires that actual payment be received.
(3) PRINCIPLES OF CONSOLIDATION
The financial statements include the consolidated accounts of ROHN
Industries, Inc. and its subsidiaries ("ROHN" or the "Company"). All significant
inter-company transactions have been eliminated in consolidation. The Company
accounted for its 49% interest in ROHN BrasilSat, a corporate joint venture in
Brazil, under the equity method until its disposition in September 1999.
-5-
<PAGE>
(4) NET INCOME PER SHARE
Basic earnings per share were computed by dividing net income by the
weighted average number of shares outstanding during each period. Diluted
earnings per share were calculated by including the effect of all dilutive
securities. For the three months ended March 31, 2000 and 1999, the effect of
potentially dilutive stock options was 619,000 and 0, respectively. The Company
had additional outstanding stock options of 790,000 as of March 31, 2000, which
were not included in the computation of diluted earnings per share because the
options' exercise price was greater than the average market price of the common
shares.
(5) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is
determined using the first-in, first-out (FIFO) method. Inventory costs include
material, labor and factory overhead.
TOTAL INVENTORIES
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
-------------------- -------------------
<S> <C> <C>
Finished goods $14,908 $11,632
Work-in-process 10,243 7,883
Raw materials 6,668 6,370
-------------------- -------------------
Total Inventories $31,819 $25,885
==================== ===================
</TABLE>
(6) INVESTMENT IN JOINT VENTURE
In December 1997, the Company formed a corporate joint venture, ROHN
BrasilSat, S.A., with BrasilSat Harald, S.A., Brazil's largest tower
manufacturer and installer, to serve the growing telecommunications
infrastructure industry in Brazil and the rest of South America. In September
1999, after re-evaluating its investment, the Company sold its 49% interest in
ROHN BrasilSat to its joint venture partner, BrasilSat Harald, S.A.. ROHN
accounted for the corporate joint venture under the equity method until its
disposition in September 1999. The corporate joint venture had break even
results for the first quarter of 1999.
(7) NEW ACCOUNTING STANDARDS
In June 1998, Statement of Financial Accounting Standards ("SFAS") No.
133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES" was issued.
This standard establishes accounting and reporting standards for derivative
instruments and hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. Changes in the fair value of derivatives are
recorded in earnings or other comprehensive income, based on whether the
instrument is designated as part of a hedge transaction. The Company adopted
SFAS No. 133 in 1999. The adoption of this statement did not have a material
effect on the Company's results of operations or financial condition, as the
Company historically has not entered into these types of transactions in the
normal course of business.
(8) BUSINESS SEGMENT INFORMATION
The Company operates in two business segments: Tower Structures and
Enclosures. The segments are managed as strategic business units due to their
distinct manufacturing processes and potential end-user application. The Tower
Structures segment includes manufacturing plants in Peoria, Illinois and
Frankfort, Indiana. The Enclosures segment includes a manufacturing plant in
Bessemer, Alabama.
-6-
<PAGE>
Accounting policies for measuring segment assets and earnings before
interest and taxes are substantially consistent with those described in Note 1.
The Company evaluates segment performance based on earnings before interest and
taxes. Transfers between segments, which are not material in nature, are
recorded at cost.
<TABLE>
<CAPTION>
Tower
Structures Enclosures
For the three months ended March 31, Segment Segment Total
------- ------- -----
<S> <C> <C> <C>
2000
- ----
Net sales $ 32,216 $ 13,261 $ 45,477
Operating income/(loss) 2,958 1,657 4,615
Depreciation 622 105 727
Segment assets $109,410 $ 19,068 $128,478
1999
- ----
Net sales $ 21,302 $ 8,860 $ 30,162
Operating income 234 1,939 2,173
Depreciation 691 158 849
Segment assets $ 78,451(1) $ 28,509 $106,960
</TABLE>
(1) Includes equity investment in ROHN BrasilSat of $3.2 million
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
The following discussion summarizes the significant factors affecting
the consolidated operating results and financial condition of ROHN for the three
months ended March 31, 2000 and 1999. This discussion should be read in
conjunction with the consolidated financial statements and notes to the
consolidated financial statements contained in Item 1 above and the consolidated
financial statements and related notes included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1999.
RESULTS OF OPERATIONS
ROHN is a leading manufacturer and installer of infrastructure
equipment for the communications industry including cellular, PCS, radio and
television broadcast markets. The Company's products include towers,
enclosures/shelters, equipment cabinets, poles and antenna mounts. The following
table sets forth, for the fiscal periods indicated, the percentage of net sales
represented by certain items reflected in the Company's consolidated statements
of income
-7-
<PAGE>
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
2000 1999
---- ----
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 76.6 77.7
----- -----
Gross profit 23.4 22.3
S,G&A expense 13.3 15.1
----- -----
Operating income 10.1 7.2
Interest income, net 0.4 0.5
Other expense 0.0 5.3
----- -----
Income before income taxes 10.5 2.4
Income tax provision 4.0 .8
----- -----
Net income from continuing operations 6.5% 1.6%
------ ------
------ ------
</TABLE>
FOR THE THREE MONTHS ENDED MARCH 31, 2000
Net sales for the first quarter ended March 31, 2000 were $45.5 million
compared to $30.2 million in the first quarter of 1999, an increase of $15.3
million or 50.7%. The increase in sales by business segment was as follows:
<TABLE>
<CAPTION>
Dollar Percentage
For the three months ended March 31, 2000 1999 Increase Increase
- ------------------------------------- ---- ---- -------- --------
<S> <C> <C> <C> <C>
Tower structures $ 32.2 $ 21.3 10.9 51.2%
Enclosures 13.3 8.9 4.4 49.4%
----- ----- ----- ----
Total $ 45.5 $ 30.2 $ 15.3 50.7%
----- ----- ----- ----
----- ----- ----- ----
</TABLE>
The increase in sales in the Tower structures segment was primarily the
result of increased demand for towers due to the continued build-out of
infrastructure for wireless communications systems. The increase in sales in the
Enclosures segment was primarily due to increased shipments of product related
to the fiber optic network market.
Gross profit for the first quarter of 2000 was $10.6 million versus
$6.7 million in the first quarter of 1999, an increase of 58.2%. The increase in
gross margin is mainly attributable to the increase in sales. As a percentage to
sales, gross profit margin was 23.4% for the first quarter of 2000 in comparison
to 22.3% for the same period a year ago. Gross profit margin for the Company's
Tower structures segment was 24.5% for the first quarter of 2000 versus 20.9%
for the same quarter in 1999. The increase in Tower structures segment margins
is mainly attributable to more effective expense control, reduced raw material
costs and improved pricing. Tower structures segment margins for the current
quarter were negatively impacted, however, by an increase in the percentage of
Tower structures segment revenue related to installation and civil engineering
work. Historically, margins on the Company's installation business have been
significantly lower than margins on sales of its tower and enclosure products.
Gross profit margin for the Company's Enclosure segment was 20.8% for the first
quarter of 2000 versus 26.2% for the same period in 1999. The decrease in gross
margin percentage related to the Enclosure segment is the result of intense
price competition for new orders received in 1999.
Selling, general and administrative ("SG&A") expenses were $6.0 million
in the first quarter of 2000 versus $4.5 million in the first quarter of 1999.
SG&A expenses increased in the first quarter of 2000 as compared to 1999 due to
a $1.2 million charge for expenses relating to the departure of certain
management employees at the Company's Enclosures segment. Results for the first
quarter of 2000 also included a $0.6 million favorable true-up of an employee
bonus accrual related to 1999.
During the first quarter of 1999, the Company incurred approximately
$1.6 million in fees and expenses in connection the proposed failed merger with
PiROD holdings, Inc. These expenses were recognized by the Company in the first
quarter of 1999, resulting in an adverse impact on earnings of approximately
$0.02 per share.
-8-
<PAGE>
Earnings per share (basic and diluted) in the first quarter of 2000
were $0.06 versus $0.01 in the first quarter of 1999.
LIQUIDITY AND CAPITAL RESOURCES
The following table sets forth selected information concerning the
Company's financial condition:
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)
March 31, 2000 December 31, 1999
-------------------------------------------------
<S> <C> <C>
Cash $25,434 $27,634
Working capital 64,486 61,773
Total debt 9,972 10,230
Current ratio 2.91:1 3.06:1
</TABLE>
The Company's working capital was $64.5 million at March 31, 2000
compared to $61.8 million at December 31, 1999, an increase of $2.7 million.
At March 31, 2000, the Company had long-term indebtedness of
approximately $10.0 million including current maturities of long-term debt. The
Company's long-term indebtedness was related to mortgage notes payable and
capital leases.
The Company does not have any material capital commitments. The Company
expects that it will meet its ongoing working capital and capital expenditure
requirements from operating cash flows. In addition, the Company believes that
its strong balance sheet allows it substantial financial flexibility.
INVESTMENT IN JOINT VENTURE
In December 1997, the Company formed a corporate joint venture, ROHN
BrasilSat, S.A., with BrasilSat Harald, S.A., Brazil's largest tower
manufacturer and installer, to serve the growing telecommunications
infrastructure industry in Brazil and the rest of South America. In September
1999, after re-evaluating it's investment, the Company sold it's 49 percent
interest in ROHN BrasilSat to it's joint venture partner, BrasilSat Harald, S.A.
ROHN accounted for the corporate joint venture under the equity method until its
disposition in September 1999. The corporate joint venture had break even
results for the first quarter of 1999.
INFLATION
Inflation has not had a material effect on the Company's business or
results of operation.
NEW ACCOUNTING STANDARDS
In June 1998, Statement of Financial Accounting Standards ("SFAS") No.
133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES" was issued.
This standard establishes accounting and reporting standards for derivative
instruments and hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. Changes in the fair value of derivatives are
recorded in earnings or other comprehensive income, based on whether the
instrument is designated as part of a hedge transaction. The Company adopted
SFAS No. 133 during the first quarter of 1999. The adoption of this statement
did not have a material effect on the Company's results of operations or
financial condition, as the Company historically has not entered into these
types of transactions in the normal course of business.
SEASONALITY
The operations of the Company are generally not subject to seasonal
fluctuations. However, in the past, the Company has seen disruptions in its
customers ability to accept shipments due to unusual and prolonged
weather-related construction delays.
-9-
<PAGE>
The Company has periodically experienced and expects to continue to
experience significant fluctuations in its quarterly results. The Company
believes that this quarterly fluctuation is due to the capital budgeting cycle
of many of its customers who often purchase a disproportionately higher share of
the Company's products at the end of the calendar year. The Company expects that
fluctuations in quarterly results could become more significant in the future as
customers move to a more centralized purchasing environment and as the
consolidation of wireless communication service providers and build-to-suit
customers continues.
RECENT DEVELOPMENTS
On January 7, 2000, the Company announced the resignation of Maureen B.
Bellantoni as Executive Vice President and Chief Financial Officer of the
Company, effective February 4, 2000. Ms. Bellantoni assumed the position of
Chief Financial Officer at Burger King North America. Daniel J. Pallat has been
hired as interim CFO of ROHN until a permanent replacement for Maureen
Bellantoni is employed. Mr. Pallat is a partner with Tatum CFO Partners, LLP, a
national organization of senior financial executives that provides CFO services
to businesses on a permanent or transitional basis. Prior to joining Tatum, he
served in financial and operating management positions from CFO to Group Vice
President with several public companies.
On January 19, 2000, the Company announced the retirement of Richard L.
Rohn as Vice President - Equipment Enclosures which retirement became effective
March 6, 2000.
MARKET RISK SENSITIVITY
The Company has limited exposure to market rate sensitivity and adverse
impacts realized would not be material to its financial results. The principal
market risks to which the Company is currently exposed to or may be exposed to
during 2000 or beyond are changes in interest rates and foreign currency
exchange rates.
The Company currently manages its exposure to changes in interest
rates by utilizing primarily all fixed rate debt. In the future, it is
expected that if additional debt is incurred, the Company would manage its
exposure to changes in interest rates by optimizing the use of variable-rate
and fixed-rate debt and by utilizing interest rate swaps. International
operations, which accounted for 15.9% and 21.7% of net sales in the first
quarter of 2000 and 1999, respectively, are concentrated principally in
Mexico and Central America. In the future, if the Company believes that
significant financial risk exists in its international operations, the
Company would manage its exposure to changes by borrowing in foreign
currencies and by utilizing either cross-currency swaps or forward contracts.
Such swaps or forward contracts would be entered into for periods consistent
with related underlying exposures and would not constitute positions
independent of those exposures. The Company would not enter into contracts
for speculative purposes.
YEAR 2000 COMPLIANCE
The Company believes material implications and risks related to the Y2K
issue have expired, and therefore, does not anticipate experiencing any
additional effects related to this issue. The Company did not experience any
significant increase in customer demand for its products as a result of the Y2K
issue, nor did it experience any problems with its key vendors. The Company
incurred Y2K costs of approximately $100,000 in the calendar year 1999.
FORWARD-LOOKING INFORMATION
Matters discussed in this report contain forward-looking
statements which reflect management's current judgment. Many factors, some of
which are discussed elsewhere in this document, could affect the future
financial results of the Company and could cause those results to differ
materially from those expressed in the forward-looking statements contained in
this document. These factors include operating, legal and regulatory risks,
economic, political and competitive forces affecting the telecommunications and
equipment business, and the risk that the Company's analyses of these risks and
forces could be incorrect or that the strategies developed to address them could
be unsuccessful. Additional information concerning factors that could cause
actual results to materially
-10-
<PAGE>
differ from those in the forward-looking statements is contained in Exhibit
99.1 to the Company's Securities and Exchange Commission filings.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
See "Market Risk Sensitivity" under Item 2.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<S> <C> <C>
(a) Exhibits
10.1* Employment Agreement between the Company and
James R. Cote, effective April 7, 2000.
11. The computation can be determined from the report.
27. Financial data schedule.
99.1 Cautionary Statement for purposes of the "Safe
Harbor" Provisions of the Private Litigation Reform
Act of 1995 (incorporated herein by reference to
Exhibit 99.1 to ROHN's Form 10-K for the fiscal year
ended December 31, 1999).
-11-
<PAGE>
Exhibits marked with an "*" indicate the exhibit is a management
contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
On January 10, 2000 the Company filed a report on
Form 8-K, reporting under Items 5 and 7, disclosing the
resignation of the Company's chief financial officer. The Form
8-K also included as an exhibit the Company's press release
issued on January 7, 2000 pertaining to the Company's
announcement of this event.
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROHN INDUSTRIES, INC.
Dated: May 15, 2000 /s/ Lester H. Nelson, III
-------------------------
Lester H. Nelson, III
Corporate Controller and Principal Accounting Officer
-12-
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of April 7th, 2000 (this
"AGREEMENT"), is entered into by and between ROHN Industries, Inc., a Delaware
corporation (the "COMPANY"), and James R. Cote (the "EXECUTIVE").
WHEREAS, the Executive has been and is presently employed by
the Company;
WHEREAS, the Executive has developed an intimate knowledge of
the business affairs of the Company and possesses skills and experience that are
of value to the Company; and
WHEREAS, the Company desires to secure the continued services
and employment of the Executive on behalf of the Company and the Executive is
willing to render such services on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. EMPLOYMENT TERM. Subject to the terms and provisions of
this Agreement, the Company hereby agrees to employ the Executive, and the
Executive hereby agrees to be employed by the Company, for the period commencing
on the date of this Agreement and ending on the third anniversary of the date of
this Agreement, unless terminated sooner as hereinafter provided (the
"EMPLOYMENT TERM").
2. DUTIES. During the Employment Term the Executive shall
serve as Vice President-Sales & Marketing of the Company, and shall perform
such duties, services and responsibilities on behalf of the Company and its
subsidiaries as may be determined from time to time by the President and the
Board of Directors of the Company (the "Board") and shall have the authority
commensurate with such position. In performing his duties hereunder, the
Executive will report directly to the President. The Executive shall devote
his full business time, attention and skill to the performance of such duties,
services and responsibilities, and will use his best efforts to promote the
interests of the Company. The Executive may engage in any civic or charitable
activity or deliver lectures, fulfill speaking engagements or teach at
educational institutions, provided such activities do not materially interfere
with the performance of his duties hereunder.
3. COMPENSATION. In full consideration of the performance by
the Executive of the Executive's obligations during the Employment Term
(including any services by the Executive as an officer, director, employee or
member of any committee
<PAGE>
of any subsidiary or affiliate of the Company, or otherwise on behalf of
Company), the Executive shall be compensated as follows:
(a) BASE SALARY. The Executive shall receive a base
salary (the "BASE SALARY") at an annual rate of $160,000 per year, subject to
review by the Board from time to time in the Board's sole discretion, PROVIDED,
HOWEVER, that the Board shall review the Base Salary on or prior to March 31st
of each year during the Employment Term. The Base Salary shall be payable in
accordance with the normal payroll practices of the Company then in effect.
(b) SIGNING BONUS. Upon the signing of this Agreement
the Company shall pay the Executive a signing bonus of $63,000. The Signing
Bonus shall be payable in accordance with the normal payroll practices of the
Company then in effect.
(c) BONUS. During the Employment Term, the Executive
shall be eligible to participate in the Company's annual incentive bonus plan,
under which the maximum annual bonus opportunity available to the Executive
shall be equal to 100% of the Base Salary. At the sole discretion of the
Compensation Committee, all or a portion of the bonus payable, if any, to the
Executive may be paid in shares of the Company's common stock (the "COMMON
STOCK").
(d) BENEFITS. During the Employment Term, the
Executive shall be entitled to participate in any employee or executive benefit
plans, policies or programs that are provided generally to senior executives of
the Company as such plans, policies or programs may be in effect from time to
time.
(e) VACATIONS. During the Employment Term, the
Executive shall be entitled to the number of paid vacation days in each calendar
year determined by the Company in accordance with the Company's policies in
effect from time to time.
(f) TAXES. The Executive shall be solely responsible
for taxes imposed on the Executive by reason of any compensation and benefits
provided under this Agreement and all such compensation and benefits shall be
subject to applicable withholding taxes.
4. TERMINATION. The Executive's employment with the Company
hereunder and the Employment Term shall terminate upon the occurrence of any of
the following events (the date of termination, the "TERMINATION DATE"):
(a) DEATH. The death of the Executive.
(b) DISABILITY. The termination of employment by the
Company for Disability upon thirty (30) days written notice to the Executive,
provided the
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<PAGE>
Executive has not returned to work on a full-time, permanent basis prior to
the end of such thirty (30) day period.
(c) CAUSE. The termination of employment by the
Company for Cause. The Executive's termination for Cause shall be effective upon
delivery of written notice specifying the matter or matters the Company deems to
constitute Cause.
(d) WITHOUT CAUSE. The termination of employment by
the Company other than for Cause or Disability.
(e) GOOD REASON. The termination of employment by the
Executive for Good Reason; provided, however that (i) the Executive must deliver
a notice of termination within sixty (60) days after the occurrence of the
event(s) constituting Good Reason, and (ii) the Company shall have (30) days
following the receipt of the Executive's notice of termination within which to
cure the event(s) identified by the Executive as constituting Good Reason and,
if so cured, Good Reason shall be deemed not to have occurred.
(f) EXPIRATION OF AGREEMENT. The third anniversary of
the date of this Agreement.
In the event of termination of the Executive's employment, for
whatever reason (other than death), the Executive agrees to cooperate with the
Company, its subsidiaries and affiliates and to be reasonably available to the
Company, its subsidiaries and affiliates with respect to continuing and/or
future matters arising out of the Executive's employment hereunder or any other
relationship with the Company, its subsidiaries and affiliates, whether such
matters are business-related, legal or otherwise.
5. TERMINATION PAYMENTS.
(a) DEATH OR DISABILITY. If the Executive's
employment with the Company is terminated by reason of the Executive's death, or
by the Company for Disability, the Company's sole obligation hereunder, shall be
to pay the Executive or his estate, as the case may be, the Accrued Compensation
and the Pro Rata Bonus Amount.
(b) BY COMPANY FOR CAUSE; BY EXECUTIVE WITHOUT GOOD
REASON. If the Executive's employment with the Company is terminated by the
Company for Cause or by the Executive without Good Reason, or the Executive's
employment hereunder terminates pursuant to SECTION 4(f) of this Agreement, the
Company's sole obligation hereunder shall be to pay the Executive the Accrued
Compensation.
(c) BY COMPANY WITHOUT CAUSE. If the Executive's
employment with the Company is terminated by the Company for any reason other
than Cause or
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<PAGE>
Disability, the Company's sole obligation hereunder shall be to pay the
Executive the Accrued Compensation, the Pro Rata Bonus Amount and, so long as
the Executive is not in violation of the covenants contained in SECTION 6
hereof, to continue to pay the Executive the Base Salary (at the rate in
effect on the Termination Date) in accordance with the normal payroll
practices of the Company for twelve (12) months following the Termination
Date.
(d) GOOD REASON. If the Executive's employment with
the Company is terminated by the Executive for Good Reason, the Company's sole
obligation hereunder shall be to pay the Executive the Accrued Compensation, the
Pro Rata Bonus Amount and to continue to pay the Executive the Base Salary (at
the rate in effect on the Termination Date) in accordance with the normal
payroll practices of the Company, for twelve (12) months following the
Termination Date.
(e) NO MITIGATION. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement, nor shall such amounts be reduced by any earnings or benefits that
the Executive may receive from any other source.
(f) INTERNAL REVENUE CODE SECTION 280G.
Notwithstanding anything contained in this Agreement to the contrary, to the
extent that any payment or distribution of any type to or for the benefit of the
Executive by the Company, any affiliate of the Company, any person who acquires
ownership or effective control of the Company or ownership of a substantial
portion of the Company's assets (within the meaning of Section 280G of the
Internal Revenue Code (the "Code"), and the regulations thereunder), or any
affiliate of such person, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (the "Total
Payments") is or will be subject to the excise tax imposed under Section 4999 of
the Code (the "Excise Tax"), then the Total Payments shall be reduced (but not
below zero) if and to the extent that a reduction in the Total Payments would
result in the Executive retaining a larger amount, on an after-tax basis (taking
into account federal, state and local income taxes and the Excise Tax), than if
the Employee received the entire amount of such Total Payments. Unless the
Executive shall have given prior written notice specifying a different order to
the Company to effectuate the foregoing, the Company shall reduce or eliminate
the Total Payments, by first reducing or eliminating the portion of the Total
Payments which are not payable in cash (other than Total Payments attributable
to stock options or other equity awards ("EQUITY AWARDS")) and then by reducing
or eliminating cash payments, in each case in reverse order beginning with
payments or benefits which are to be paid the latest in time, and then by
reducing Equity Awards in the manner which will maximize the after-tax benefit
to the Executive. Any notice given by the Executive pursuant to the preceding
sentence shall take precedence over the provisions of any other
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<PAGE>
plan, arrangement or agreement governing the Executive's rights and
entitlements to any benefits or compensation. The determination of whether
the Total Payments shall be reduced pursuant to the foregoing and the amount
of such reduction shall be made, at the Company's expense, by an accounting
firm selected by the Company which is one of the five largest accounting
firms in the United States (other than the Company's regular independent
auditor).
(g) For purposes of this SECTION 5, the Executive's
employment shall not be treated as terminated for so long as he is an employee
of the Company or any of its subsidiaries.
6. EXECUTIVE COVENANTS.
(a) UNAUTHORIZED DISCLOSURE. The Executive agrees and
understands that in the Executive's position with the Company, the Executive has
been and will be exposed to and has and will receive information relating to the
confidential affairs of the Company, its subsidiaries and affiliates, including
but not limited to technical information, intellectual property, business and
marketing plans, strategies, customer information, other information concerning
the products, promotions, development, financing, expansion plans, business
policies and practices of the Company, its subsidiaries and affiliates, and
other forms of information considered by the Company to be confidential and in
the nature of trade secrets ("Confidential Information"). The Executive agrees
that during the Employment Term and thereafter, the Executive will not disclose
such Confidential Information, either directly or indirectly, to any third
person or entity without the prior written consent of the Company. This
confidentiality covenant has no temporal, geographical or territorial
restriction. Upon termination of the Employment Term, the Executive will
promptly supply to the Company all property, keys, notes, memoranda, writings,
lists, files, reports, customer lists, correspondence, tapes, disks, cards,
surveys, maps, logs, machines, technical data or any other tangible product or
document which has been produced by, received by or otherwise submitted to the
Executive during or prior to the Employment Term. Any material breach of the
terms of this paragraph shall be considered Cause.
(b) NON-COMPETITION. By and in consideration of the
Company's entering into this Agreement and the payments to be made and benefits
to be provided by the Company hereunder, and further in consideration of the
Executive's exposure to the proprietary information of the Company, the
Executive agrees that the Executive will not, during the Employment Term, and
thereafter during the "Non-competition Term" (as defined below), directly or
indirectly, own, manage, operate, join, control, be employed by, or participate
in the ownership, management, operation or control of, or be connected in any
manner with, including but not limited to holding any position as a shareholder,
director, officer, consultant, independent contractor, employee, partner, or
investor in, any
-5-
<PAGE>
"Restricted Enterprise" (as defined below); PROVIDED, that in no event shall
the ownership of less than 1% of the outstanding equity securities of any
issuer whose securities are registered under the Securities and Exchange Act
of 1934, as amended, standing alone, be prohibited by this SECTION 6(b). For
purposes of this SECTION 6(b), the term "RESTRICTED ENTERPRISE" shall mean
any person, corporation, partnership or other entity that competes, directly
or indirectly, with any business or activity conducted or proposed to be
conducted by the Company or any of its subsidiaries or affiliates as of the
date of the Executive's termination of employment. Following termination of
the Employment Term, upon request of the Company, the Executive shall notify
the Company of the Executive's then current employment status. For purposes
of this Agreement, the "NON-COMPETITION TERM" shall mean the period beginning
on the Termination Date and ending on the second anniversary of such date.
Any material breach of the terms of this SECTION 6(b) shall be considered
Cause. Notwithstanding the foregoing, in the event the Executive's employment
with the Company is terminated following a Change in Control by the Company
without Cause or by the Executive for Good Reason, the Executive shall not be
subject to this SECTION 6(b), and this SECTION 6(b) shall have no force or
effect.
(c) NON-SOLICITATION. During the Non-competition
Term, the Executive shall not, and shall not cause any other person to,
interfere with or harm, or attempt to interfere with or harm, the relationship
of the Company, any of its subsidiaries or affiliates with, or endeavor to
entice away from the Company, any of its subsidiaries or affiliates, or hire,
any person who at any time during the Employment Term was an employee or
customer of the Company, or any of its subsidiaries or affiliates.
Notwithstanding the foregoing, in the event the Executive's employment with the
Company is terminated following a Change in Control by the Company without Cause
or by the Executive for Good Reason, the Executive shall not be subject to this
SECTION 6(c), and this SECTION 6(c) shall have no force or effect.
(d) REMEDIES. The Executive agrees that any breach of
the terms of this SECTION 6 would result in irreparable injury and damage to the
Company, its subsidiaries and/or affiliates for which the Company, its
subsidiaries and/or affiliates would have no adequate remedy at law; the
Executive therefore also agrees that in the event of said breach or any threat
of breach, the Company, its subsidiaries and/or affiliates, as applicable, shall
be entitled to an immediate injunction and restraining order to prevent such
breach and/or threatened breach and/or continued breach by the Executive and/or
any and all persons and/or entities acting for and/or with the Executive,
without having to prove damages, in addition to any other remedies to which the
Company, its subsidiaries and/or affiliates may be entitled at law or in equity.
The terms of this SECTION 6(d) shall not prevent the Company, its subsidiaries
and/or affiliates from pursuing any other available remedies for any breach or
threatened breach hereof, including but not limited to the recovery of damages
from the Executive. The Executive and the Company further agree that the
provisions of the covenants contained in this SECTION 6 are
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<PAGE>
reasonable and necessary to protect the businesses of the Company, its
subsidiaries and affiliates because of the Executive's access to Confidential
Information and his material participation in the operation of such
businesses. The Executive hereby acknowledges that due to the global aspects
of the Company's, its subsidiaries' and affiliates' businesses and
competitors it would not be appropriate to include any geographic limitation
on this SECTION 6. Should a court or arbitrator determine, however, that any
provision of the covenants contained in this SECTION 6 are not reasonable or
valid, either in period of time, geographical area, or otherwise, the parties
hereto agree that such covenants should be interpreted and enforced to the
maximum extent which such court or arbitrator deems reasonable or valid.
The existence of any claim or cause of action by the Executive
against the Company, its subsidiaries and/or affiliates, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of the covenants contained in this SECTION 6.
7. NON-WAIVER OF RIGHTS. The failure to enforce at any time
the provisions of this Agreement or to require at any time performance by any
other party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement or
any part hereof, or the right of any party to enforce each and every provision
in accordance with its terms.
8. NOTICES. Every notice relating to this Agreement shall be
in writing and shall be given by personal delivery, by a reputable same-day or
overnight courier service (charges prepaid), by registered or certified mail,
postage prepaid, return receipt requested or by facsimile to the recipient with
a confirmation copy to follow the next day to be delivered by personal delivery
or by a reputable same-day or overnight courier service; to:
If to the Company: ROHN Industries, Inc.
6718 West Plank Road
Peoria, Illinois 61604
Attention: President
If to the Employee: James R. Cote
201 W. Greystone
Dunlap, Illinois 61525
Either of the parties hereto may change their address for
purposes of notice by given notice in writing to such other party pursuant to
this SECTION 8. The date of service of such notice shall be the date such notice
is personally delivered, three business days after the date of mailing if sent
by certified or registered mail, two business days
-7-
<PAGE>
after the date of delivery to the courier if sent by courier, or the next
business day after the date of transmittal if by facsimile.
9. BINDING EFFECT/ASSIGNMENT. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, executors, personal representatives, estates, successors (including,
without limitation, by way of merger) and assigns. Notwithstanding the
provisions of the immediately preceding sentence, the Executive shall not assign
all or any portion of this Agreement without the prior written consent of the
Company.
10. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, between them as to such
subject matter. This Agreement may not be amended, nor may any provision hereof
be modified or waived, except by an instrument in writing duly signed by the
party to be charged.
11. SEVERABILITY. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part, such
provision or application shall to that extent be severable and shall not affect
other provisions or applications of this Agreement.
12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Illinois, without
reference to the principles of conflict of laws.
13. HEADINGS. The headings contained herein are solely for the
purposes of reference, are not part of this Agreement and shall not in any way
affect the meaning or interpretation of this Agreement.
14. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
15. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
"ACCRUED COMPENSATION" shall mean any accrued and unpaid Base
Salary as of the Termination Date, all benefits accrued under any benefit plans,
programs or arrangements in which the Executive shall have been a participant as
of the date of such termination, in accordance with the applicable terms and
conditions of such plans, programs or arrangements, and an amount equal to such
reasonable and necessary business expenses incurred by the Executive in
connection with the Executive's
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<PAGE>
employment on behalf of the Company on or prior to the Termination Date but
not previously paid to the Executive.
"CAUSE" shall mean: (i) the Executive's material breach of
this Agreement, (ii) conduct by the Executive that is fraudulent or unlawful,
(iii) gross negligence of or willful misconduct by the Executive in the
performance of his duties, or (iv) repeated failure of the Executive to perform
his duties hereunder.
"CHANGE IN CONTROL" shall mean the occurrence of any one of
the following events:
(a) An acquisition (other than directly from the
Company) of any common stock, par value $.01 per share, of the Company ("Common
Stock") or other voting securities of the Company by any "Person" (as the term
person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of fifty percent (50%) or more of either (i) the then
outstanding Common Stock or (ii) the combined voting power of the Company's then
outstanding voting securities entitled to vote for the election of directors
(the "Voting Securities"); PROVIDED, HOWEVER, in determining whether a Change in
Control has occurred, Common Stock or Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control Acquisition"
shall mean an acquisition by (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (A) the Company or (B) any corporation or other
Person of which a majority of its voting power or its voting equity securities
or equity interest is owned, directly or indirectly, by the Company (for
purposes of this definition, a "Related Entity"), (ii) the Company or any
Related Entity, (iii) any Person in connection with a "Non-Control Transaction"
(as hereinafter defined), or (iv) the UNR Asbestos-Disease Claims Trust;
(b) The individuals who, as of the date of this
Agreement are members of the Board (the "Incumbent Board"), cease for any reason
to constitute at least a majority of the members of the Board; PROVIDED,
HOWEVER, that if the election, or nomination for election by the Company's
common stockholders, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board; PROVIDED, FURTHER,
HOWEVER, that no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on
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<PAGE>
behalf of a Person other than the Board (a "Proxy Contest"), including by
reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or
reorganization with or into the Company or in which securities of the Company
are issued (a "Merger"), unless the Merger is a "Non-Control Transaction." A
"Non-Control Transaction" shall mean a Merger if:
(A) the stockholders of the Company
immediately before such Merger own directly or indirectly immediately following
the Merger at least fifty percent (50%) of the outstanding common stock and the
combined voting power of the outstanding voting securities of (x) the
corporation resulting from such Merger (the "Surviving Corporation"), if fifty
percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly by another corporation (a "Parent Corporation"), or (y)
the Parent Corporation, if fifty percent (50%) or more of the combined voting
power of the Surviving Corporation's then outstanding voting securities is
Beneficially Owned, directly or indirectly, by a Parent Corporation;
(B) the individuals who were members
of the Incumbent Board immediately prior to the execution of the agreement
providing for the Merger, constitute at least a majority of the members of the
board of directors of, (x) the Surviving Corporation, if fifty percent (50%) or
more of the combined voting power of the then outstanding voting securities of
the Surviving Corporation is not Beneficially Owned, directly or indirectly by a
Parent Corporation, or (y) the Parent Corporation, if fifty percent (50%) or
more of the combined voting power of the Surviving Corporation's then
outstanding voting securities is Beneficially Owned, directly or indirectly, by
a Parent Corporation; and
(C) no Person other than (1) the
Company or another corporation that is a party to the agreement of Merger, (2)
any Related Entity, or (3) any employee benefit plan (or any trust forming a
part thereof) that, immediately prior to the Merger, was maintained by the
Company or any Related Entity, or (4) any Person who, immediately prior to the
Merger had Beneficial Ownership of fifty percent (50%) or more of the then
outstanding Common Stock or Voting Securities, has Beneficial Ownership
immediately following the Merger, directly or indirectly, of fifty percent (50%)
or more of the combined voting power of the outstanding voting securities or
common stock of (x) the Surviving Corporation, if fifty percent (50%) or more of
the combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly by a
Parent Corporation, or
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<PAGE>
(y) the Parent Corporation, if fifty percent (50%) or more of the combined
voting power of the Surviving Corporation's then outstanding voting
securities is Beneficially Owned, directly or indirectly, by a Parent
Corporation;
(ii) A complete liquidation or dissolution
of the Company; or
(iii) The sale or other disposition of all
or substantially all of the assets of the Company to any Person (other than a
transfer to a Related Entity or under conditions that would constitute a
Non-Control Transaction with the disposition of assets being regarded as a
Merger for this purpose or the distribution to the Company's stockholders of the
stock of a Related Entity or any other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Common Stock or Voting
Securities as a result of the acquisition of Common Stock or Voting Securities
by the Company which, by reducing the number of Common Stock or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of Common Stock or Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional Common Stock or Voting Securities which increases the
percentage of the then outstanding Common Stock or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.
"DISABILITY" shall mean the inability of the Executive to
perform his duties, services and responsibilities hereunder by reason of a
physical or mental infirmity, as reasonably determined by the Board, for a total
of 180 calendar days in any twelve-month period during the Employment Term.
"GOOD REASON" shall mean after a Change in Control, the
occurrence of any of the following events: (i) a material diminution in the
Executive's position, duties or responsibilities; (ii) a reduction in the
Executive's Base Salary; or (iii) a relocation of the Company's corporate
headquarters to a location that is more than 50 miles from the location of the
corporate headquarters immediately before the Change in Control.
"PRO RATA BONUS AMOUNT" shall mean an amount equal to the
annual bonus paid to the Executive for the year prior to the year in which the
Executive's employment is terminated, multiplied by a fraction, the numerator of
which is the number of days elapsed from the beginning of the bonus period
through and including the Termination Date, and the denominator of which is 365.
-11-
<PAGE>
IN WITNESS WHEREOF, each of the Company has caused this
Agreement to be executed by authority of its Board of Directors, and the
Executive has hereunto set his hand, on the day and year first above written.
ROHN INDUSTRIES, INC.
By: /s/ Brian B. Pemberton
---------------------------------
Name:
Title:
James R. Cote
/s/ James R. Cote
------------------------------------
2128
-12-
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0
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