<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
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, 1999
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 NO. 1-8009
ROHN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-3060977
- -------------------------------------- ----------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
6718 WEST PLANK ROAD, PEORIA, ILLINOIS 61604
(Address of principal executive (Zip Code)
office)
</TABLE>
Registrant's telephone number including area code: (309) 697-4400
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 par value
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, 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. __
On March 16, 2000, 52,740,405 shares of common stock were outstanding. The
aggregate market value of stock held by nonaffiliates of the registrant is
$96,568,792, based upon the closing price of $4.188 per share on that date. For
purposes of this computation, shares held by directors of the registrant have
been excluded. Such exclusion of shares held by directors is not intended, nor
shall it be deemed, to be an admission that such persons are affiliates of the
registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held on May 11, 2000 are incorporated by reference
in Part III of this Form 10-K to the extent stated herein. Except with respect
to information specifically incorporated by reference in this Form 10-K, the
Proxy Statement shall not be deemed filed as a part hereof.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I
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 DIFFER FROM THOSE IN THE FORWARD-LOOKING STATEMENTS IS
CONTAINED IN EXHIBIT 99.1 TO THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION
FILINGS.
ITEM 1. BUSINESS.
GENERAL
ROHN Industries, Inc., formerly known as UNR Industries, Inc., ("ROHN" or
the "Company"), is a leading manufacturer and installer of infrastructure
products for the communications industry, including cellular, Personal
Communications Systems ("PCS"), Enhanced Specialized Mobile Radio ("ESMR"),
paging, radio and television broadcast, wireless cable, private microwave and
other telecommunications businesses. The Company's principal product lines are
tower structures and equipment enclosures. Although the Company has been
expanding its international business, it is primarily a domestic manufacturer,
and descriptions of market conditions relate to the domestic market. From 1995
to 1997, the Company's growth was primarily due to the growth of domestic
wireless communications systems, and the introduction and growth of its
equipment enclosures product line. While U.S. wireless capital expenditures
continued at an accelerated pace from late 1997 through the first half of 1999,
these expenditures were increasingly made in technological system improvements
rather than for additional cell site development. In addition, the development
of a new build-to-suit tower industry, along with local zoning requirements,
encouraged increased emphasis on co-location of existing and new cell sites,
further decreasing the total number of cell sites developed. These were
significant factors in the decreased revenues experienced by the Company during
1999. The Company believes it should benefit from the continued build-out of
wireless communication systems as capacity requirements increase with the growth
in both wireless voice and data communications, along with the growth of
infrastructure to support the Internet through wireless and fiber optic
transmission. It is anticipated that additional growth will be realized from the
build-to-suit industry, which erects and leases towers and shelters to wireless
carriers. Participants in this relatively new industry have acquired well over
20,000 towers from existing carriers, and anticipate constructing a significant
portion of the new towers expected to be built in the near future. These new
towers are expected to be significantly larger than towers that have been built
in previous years, but their capacity to hold more than one carrier, and in many
cases seven or eight carriers, will result in less tower density in areas of
high communication traffic.
The Company's key products consist of self-supporting and guyed
(cable-supported) towers, equipment enclosures, steel and concrete poles,
concrete and fiberglass equipment enclosures, equipment cabinets, antenna mounts
and installation services. The Company also manufactures steel agricultural
products.
The Company was organized as a Delaware corporation in 1979. In 1982, the
Company filed a voluntarily petition for reorganization under Chapter 11 of the
Federal Bankruptcy Code. Pursuant to a Plan of Reorganization accepted by the
Company's creditors and stockholders and confirmed by the Bankruptcy Court in
1989, the Company issued 42,404,847 shares of common stock to the UNR
Asbestos-Disease Claims Trust and unsecured creditors in full discharge of all
claims. The trust currently owns 29,348,051 shares of common stock representing
approximately 55% of the Company's currently outstanding shares of common stock.
In March 1997, the Company moved its principal executive offices from Chicago,
Illinois to Peoria, Illinois, and in December 1997, the Company changed its name
to ROHN Industries, Inc. The Company currently maintains its executive offices
and main tower manufacturing facility at 6718 West Plank Road, Peoria, Illinois
61604.
2
<PAGE>
TELECOMMUNICATIONS EQUIPMENT MARKET
The use of wireless telephones in the United States has shown rapid growth
in recent years, from about five million subscribers in 1990 to over 75 million
at the end of 1999. The number of cell sites has risen from about 6,000 in 1990
to over 85,000 today and is expected to grow by as many as 34,000 in the next
year. While co-located and rooftop cells sites will make up many of these new
cell sites, the remainder are expected to require a tower or pole and equipment
enclosure. Co-located and rooftop sites will require mounts and equipment
enclosures.
Competition among wireless carriers is becoming increasingly intense,
lowering the average cost per minute for a wireless call to the point where a
wireless phone may become an economic alternative to a wireline phone. This cost
reduction may serve to further enhance the growth of wireless subscribers. In
addition, other new technologies such as broadband wireless provide
opportunities to serve the rapid growth of internet services by providing "last
mile" links from fiber-optic hubs to office buildings. New technologies are
continually being introduced to use available wireless spectrum as an
alternative to traditional copper wire. These new technologies often require the
use of towers, poles, mounts and equipment enclosures such as those manufactured
by the Company.
Radio and Television broadcast is another market served by the Company.
Recent changes in FCC regulation and the introduction of high definition
television (HDTV) should provide additional opportunities for the Company, as
new antenna support structures may be required to support these new broadcasting
technologies. In November 1999, the Company announced the execution of a
contract with Central Missouri State University to construct a 2,000-foot HDTV
tower. This contract represents the Company's first entry into the ultra high
tower market as a result of the Company's commitment to the expanding tall tower
industry. The Company has enhanced its engineering, manufacturing and
installation capabilities to enable it to expand its sales in this market
segment.
ROHN is also an active participant in the fiber optic network industry,
supplying shelters and site installation services to several of the major fiber
optic carriers in the United States. In 1999, the Company announced a major
contract to supply Peter Kiewit, Inc. with over 700 shelters during 1999 and
2000. As Internet usage results in increased demand for data-carrying capacity
over fiber optic lines, ROHN shelters will continue to provide secure housing
for valuable transmission equipment located in remote sites around the country.
The Company also plans to continue to develop overseas markets through its
United States customers and through the establishment of strategic partnerships,
such as the relationship with Radiotronica announced in September 1999. See
"--International."
PRODUCTS
TOWER STRUCTURES. The Company manufactures many configurations of towers,
ranging from a 2,000-foot high tower to small antenna mounts. The Company's
principal tower product is the tubular self-supporting tower ranging in heights
up to 900 feet. The Company's towers are used across the world for television
broadcast, AM/FM radio broadcast, microwave, cellular telephone, PCS, radar,
surveillance camera mounts, solar power stations and weather stations. Included
within the Tower Structures segment are steel and concrete poles, generally used
where space is too limited to erect a tower, as is often the case in urban
areas, and antenna mounts that are hot-dipped galvanized to prevent corrosion.
Antenna mounts range from non-penetrating roof mounts that spread the balanced
weight of an antenna over a large area to mounts that concentrate weight for
compact installation. The Company also provides tower mounts, wall mounts for
corners or flat walls, square pole mounts, and standard roof mounts for flat or
sloped roofs. Approximately 71%, 63% and 68% of the Company's revenues were
attributable to sales in the Tower Structures segment for years 1999, 1998 and
1997, respectively.
ENCLOSURES. Secure housing of highly valuable electronic components and
power systems is a major concern for communications companies. The Company's
concrete enclosures are made of lightweight concrete with steel reinforcements
for added strength. The Company's fiberglass enclosures are made of laminated
fiberglass and are lightweight, portable, strong and secure. The Company also
markets a non-combustible enclosure for rooftop applications, manufactured with
a steel frame to meet strict fire codes. Equipment cabinets, made of lightweight
concrete or molded fiberglass for water and rust resistance, are designed as
maintenance-free structures for compact equipment installations. The
3
<PAGE>
Enclosures segment accounted for approximately 29%, 37% and 32% of the Company's
revenues for years 1999, 1998 and 1997, respectively. Concrete structures
represent the largest part of the Company's Enclosures segment, generating more
than 79% of Enclosures segment revenues for years 1999, 1998 and 1997.
See Note 19 to the Consolidated Financial Statements of the Company in Item
8 for additional financial information regarding the Company's business
segments.
PATENTS AND TRADEMARKS
The Company has a number of patents and trademarks, none of which are
considered material to its operations.
SEASONALITY OF BUSINESS
The operations of the Company are generally not subject to seasonal
fluctuations. However, in the past, the Company has seen disruptions in its
customer's ability to accept shipments due to unusual and prolonged
weather-related construction delays.
The Company has periodically experienced and expects to continue to
experience significant fluctuations in its quarterly results. It is believed
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. It is expected 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 continue.
The Company's working capital requirements do not vary significantly from
period to period.
INTERNATIONAL
Foreign sales accounted for approximately $22.1 million, $12.1 million and
$10.2 million of the Company's revenues for years 1999, 1998 and 1997,
respectively. The Company has sold towers and other equipment in more than 55
countries and currently operates a sales and construction office in Mexico City.
In December 1997, the Company entered into an agreement with BrasilSat Harald
S.A. ("BrasilSat") of Curitiba, Brazil to form a corporate joint venture to
serve the telecommunications infrastructure industry in Brazil and South
America. The corporate joint venture began production of enclosures in late
1998. The corporate joint venture's operations were adversely affected by the
Brazilian economy in 1998 and early 1999. In September 1999, the Company sold
its interest in the joint venture to its joint venture partner BrasilSat. The
Company plans to develop other foreign markets through its United States
customers, who are investing in telecommunications on a global basis, and
through the continued establishment of partnerships and facilities in key
developing countries.
In September 1999, the Company announced a joint marketing agreement with
Radiotronica, S.A., a Spanish multi-national firm which is one of the world's
largest turnkey telecommunications providers. Radiotronica currently operates in
Spain, Portugal, Morocco, and Latin America, where it has subsidiaries in
Argentina, Brazil, Chile, Columbia and Peru. As part of the agreement, the
Company and Radiotronica will cooperate in the development and construction of
the wireless telecommunications infrastructure in Latin America. The agreement
provides for a unified marketing and sales structure.
Substantially all of the Company's foreign sales are negotiated, invoiced
and paid in United States dollars. Accordingly, although changes in exchange
rates do not affect the Company's revenue, they can influence the willingness of
customers to purchase the Company's products. Adverse effects from economic
instability similar to those experienced by BrasilSat in 1998 and early 1999 may
have an adverse effect on the Company's foreign sales.
See Note 18 to the Consolidated Financial Statements of the Company in Item
8 for additional financial information.
CUSTOMERS AND BACKLOG
The Company markets its products worldwide, through a variety of marketing
channels with different customer focuses. Domestically, the Company has 10
direct salespeople.
4
<PAGE>
For international sales efforts, the Company employs two salespeople who
concentrate on Mexico and Latin America. In addition, the Company utilizes two
key distributors and a variety of agents to cover the remainder of the world.
The Company's backlog was approximately $93.0 million, $29.0 million and
$52.4 million at December 31, 1999, 1998 and 1997, respectively. The 1999
backlog includes a $40 million contract with the State of Pennsylvania for a
statewide radio communications project. It is anticipated that this turnkey
project will be substantially completed by the end of 2000. In 1999, one
customer accounted for approximately 11% of the Company's net sales. In 1998,
one customer accounted for approximately 13% of the Company's net sales. No
customer accounted for more than 10% of the Company's sales in 1997.
COMPETITION
The telecommunications infrastructure industry is highly competitive. The
Company faces substantial competition in both the Tower Structures and
Enclosures segments of its business from established competitors, some of which
have greater financial, engineering, manufacturing, and marketing resources than
the Company. The Company's competitors can be expected to continue to improve
the design of their products, to introduce new products with competitive prices
and performance characteristics and to improve customer service. Competitive
pressures caused an erosion in operating margins in 1998 and early 1999, and
competitive pressures could necessitate further price reductions, adversely
affecting operating results in the future. The Company believes that it has
certain competitive advantages over its competitors, such as its broad
engineering flexibility and capability, its historic customer relationships, its
international relationships, its ability to retain a skilled workforce, and its
purchasing volume for raw materials. The Company can not be certain that it will
be able to maintain the competitive advantages it currently enjoys.
RAW MATERIALS
The primary raw materials used by the Company to produce its products are
steel, zinc and concrete. These materials are currently readily available in the
marketplace. The Company is not dependent upon any single supplier for any
materials essential to its business or not otherwise commercially available. The
Company has been able to obtain an adequate supply of raw materials and does not
anticipate a shortage of raw materials. The Company's ability to continue to
acquire steel, zinc and concrete on favorable terms, however, may be adversely
affected by factors beyond its control. Because steel, zinc and concrete
constitute a significant portion of the Company's cost of goods sold, any
increase in price of such materials could have a material adverse impact on the
Company's gross profit margin.
EMPLOYEES
As of December 31, 1999, the Company employed 654 people. Collective
bargaining agreements cover 322 employees at its facilities in Peoria and
Frankfort. The Company's union employees are members of the United Automobile,
Aerospace and Agricultural Implement Workers of America (UAW) in Peoria and the
Retail, Wholesale and Department Store Union (RWDSU) in Frankfort. The Company
considers its relations with its employees to be good.
The Company's success depends to a significant degree upon the continued
contributions of key management, engineering, sales, marketing, customer
support, finance and manufacturing personnel. The loss of certain personnel
could have a material adverse effect on the Company and its operations. The
Company cannot be certain that these personnel will continue to be available to
the Company. In addition, the Company believes that its success depends on its
ability to attract additional qualified employees and that the failure to do so
could have a material adverse effect on the Company and its operations.
ENVIRONMENTAL MATTERS
The Company employs some materials in its manufacturing processes, including
oils and solvents that are regulated by environmental laws. The Company has made
expenditures to comply with environmental laws and regulations, including
investigation and remediation of ground and water contamination, and expects to
continue to make such expenditures to comply with existing and future
requirements. While such expenditures have not had, and are not expected to
have, a material adverse effect on
5
<PAGE>
the Company's financial condition or results of operations, there can be no
assurance that more stringent regulations or enforcement in the future will not
have such effects.
In some cases, the Company has notified state or federal authorities of a
possible need to remedy sites it previously operated. The Company has also been
notified by various state and federal governmental authorities that they believe
it may be a "potentially responsible party" or otherwise have responsibility
with respect to clean-up obligations at certain hazardous and other waste
disposal sites which were not owned or operated by the Company. In several such
cases, the Company has entered into settlements with the relevant authorities or
other parties for immaterial amounts. In other cases, the Company is
participating in negotiations for settlement with the relevant authorities or
other parties or has notified the authorities that it denies liability for
clean-up obligations. The costs or liabilities the Company may incur with
respect to these sites are difficult to predict until the level of contamination
is determined. The Company, after consultation with legal counsel and
environmental experts, believes that the ultimate outcome with respect to all of
these sites will not have a material adverse effect on the Company's financial
condition or on its results of operations.
ITEM 2. PROPERTIES.
The Company has 847,000 square feet of manufacturing facilities located in
Peoria, Illinois, Bessemer, Alabama and Frankfort, Indiana. The Company's
headquarters are located in Peoria, Illinois. The Frankfort, Indiana facility is
subject to a mortgage in the amount of $5.2 million. The Bessemer, Alabama
facility is subject to a mortgage in the amount of $2.1 million and a capital
lease in the amount of $2.0 million. Listed below are the manufacturing
facilities operated by the Company:
<TABLE>
<CAPTION>
OWNED/ SQUARE
LOCATION LEASED FOOTAGE PRINCIPAL APPLICATION SERVED
- -------- -------------- -------- ----------------------------------------
<S> <C> <C> <C>
Peoria, IL..................... Owned 417,000 Tower manufacturing, galvanizing
Bessemer, AL................... Owned/Leased 250,000 Enclosure manufacturing
Frankfort, IN.................. Owned 180,000 Tower, mounts, and agricultural product
manufacturing
</TABLE>
ITEM 3. LEGAL PROCEEDINGS.
The Company is involved in various pending legal proceedings and claims
arising in the ordinary course of business, as well as claims arising from the
Company's disposition of certain Divisions in 1996. Although the outcome of such
proceedings and claims cannot be determined with certainty, the Company
believes, after consultation with legal counsel, that such proceedings and
claims, individually or in the aggregate, are not material to any of its
business, financial condition, or results of operations. See
"Business--Environmental Matters."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the Company's security holders during
the fourth quarter of fiscal year 1999.
6
<PAGE>
ADDITIONAL ITEM: EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
OFFICER
NAME OF EXECUTIVE OFFICER SINCE AGE PRESENT POSITION AND FIVE YEAR BUSINESS EXPERIENCE
- ------------------------- -------- -------- ------------------------------------------------------
<S> <C> <C> <C>
Brian B. Pemberton 1997 55 President and Chief Executive Officer of ROHN
Industries, Inc. (commencing April 14, 1997);
President, Skycell Services, a division of American
Mobile Satellite Corporation, a common carrier
providing satellite-based mobile voice and data
services to North America ("AMSC")(August 1996 to
December 1996); President and Chief Executive Officer,
AMSC (April 1995 to August 1996).
James R. Cote 1993 50 Vice President--Sales and Marketing of ROHN
Industries, Inc. (June 1999 to present); Vice
President--International and Corporate Development
(April 1998 to June 1999); Vice-President--Sales and
Marketing (September 1997 to April 1998);
Vice-President Sales and Marketing, ROHN Division of
UNR Industries, Inc. (1994-1997).
Daniel J. Pallat 2000 62 Chief Financial Officer of ROHN Industries, Inc.
(commencing January 19, 2000); Partner, Tatum CFO
Partners, LLP (a partnership of career chief financial
officers) (January 2000 to present); Chief Financial
Officer, American Citrus Products Corporation
(December 1986 to August 1999).
Richard L. Rohn (1) 1962 55 Vice-President--Equipment Enclosures of ROHN
Industries, Inc. (September 1997 to March 2000);
President Enclosure Operations, ROHN Division of UNR
Industries, Inc. (1962--1997).
</TABLE>
- ------------------------
(1) On January 19, 2000, the Company announced the retirement of Richard L.
Rohn, effective March 6, 2000.
7
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's common stock is quoted on the Nasdaq National Market. Its
trading symbol is ROHN. The following table sets forth, for the periods
indicated, the high and low bid quotations on the Nasdaq National Market as
reported by Dow Jones:
<TABLE>
<CAPTION>
DIVIDENDS
HIGH LOW PER SHARE
----------- ----------- ---------
<S> <C> <C> <C>
1998
First Quarter.................................... 6 1/4 4 11/16 --
Second Quarter................................... 6 1/4 3 3/4 --
Third Quarter.................................... 4 3/4 1 3/4 --
Fourth Quarter................................... 3 1/2 1 13/16 --
1999
First Quarter.................................... 3 5/8 1 7/8 --
Second Quarter................................... 2 7/32 1 1/16 --
Third Quarter.................................... 2 1/4 1 7/32 --
Fourth Quarter................................... 4 5/16 1 29/32 --
2000
First Quarter (through March 16)................. 6 7/32 2 11/16 --
</TABLE>
As of March 16, 2000, the Company had 2,608 registered holders of record of
its common stock.
ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1999 1998 1997 1996 1995
- ------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
FIVE YEAR SUMMARY OF OPERATIONS
Net sales.............................. $141,896 $174,153 $158,132 $154,434 $142,216
Cost of products sold.................. 109,055 131,121 111,124 106,847 98,996
-------- -------- -------- -------- --------
Gross profit........................... 32,841 43,032 47,008 47,587 43,220
-------- -------- -------- -------- --------
Operating income....................... 13,578 24,236 26,459 32,498 29,862
-------- -------- -------- -------- --------
Interest income(expense), net.......... 117 (753) (477) 884 1,839
Other income(expense).................. (1,600) -- 4,088 -- --
-------- -------- -------- -------- --------
Income from continuing operations
before income taxes.................. 12,095 23,483 30,070 33,382 31,701
Income tax provision................... 4,500 8,900 11,151 13,100 12,700
Equity loss of corporate joint
venture.............................. 355 540 -- -- --
-------- -------- -------- -------- --------
Income from continuing operations...... 7,240 14,043 18,919 20,282 19,001
Discontinued operations--
Income from operations, net of tax... -- -- -- 3,859 10,275
Gain on dispositions, net of tax..... -- -- -- 21,900 --
-------- -------- -------- -------- --------
Net Income............................. $ 7,240 $ 14,043 $ 18,919 $ 46,041 $ 29,276
-------- -------- -------- -------- --------
Net income per share--basic
Continuing operations.................. $ 0.14 $ 0.27 $ 0.36 $ 0.39 $ 0.37
Discontinued operations--
Income from operations............... -- -- -- 0.08 0.20
Gain on dispositions................. -- -- -- 0.42 --
-------- -------- -------- -------- --------
Net income per share--basic............ $ 0.14 $ 0.27 $ 0.36 $ 0.89 $ 0.57
-------- -------- -------- -------- --------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA) 1999 1998 1997 1996 1995
- ------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Income per share--diluted
Continuing operations.................. $ 0.14 $ 0.27 $ 0.36 $ 0.39 $ 0.37
Discontinued operations--
Income from operations............... -- -- -- 0.08 0.20
Gain on dispositions................. -- -- -- 0.42 --
-------- -------- -------- -------- --------
Net income per share--diluted.......... $ 0.14 $ 0.27 $ 0.36 $ 0.89 $ 0.57
-------- -------- -------- -------- --------
Dividends declared per common share.... $ -- $ -- $ 0.10 $ 2.60 $ 2.55
Weighted average common shares
outstanding--Basic................... 52,575 52,774 52,475 52,383 51,813
Weighted average common shares and
equivalent shares
outstanding--Diluted................. 52,921 52,779 52,558 52,566 52,056
FIVE-YEAR SUMMARY OF FINANCIAL DATA
Total assets........................... $121,848 $114,192 $111,072 $ 93,372 $161,226
Stockholders' equity................... 80,416 72,579 58,042 42,511 127,764
Dividends declared..................... -- -- 5,245 136,368 132,274
Return on assets....................... 5.9% 12.3% 17.0% 49.3% 18.2%
Return on stockholders' equity......... 9.0% 19.3% 32.6% 108.3% 22.9%
Capital expenditures................... 3,881 2,283 8,307 11,658 2,303
Depreciation........................... 3,421 3,148 2,634 1,672 1,433
Long-term liabilities.................. 11,464 12,327 11,271 12,191 4,671
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion summarizes the significant factors affecting the
consolidated operating results and financial condition of the Company for the
three years ended December 31, 1999. This discussion should be read in
conjunction with the consolidated financial statements and notes to the
consolidated financial statements.
RESULTS OF OPERATIONS
The Company is a leading manufacturer and installer of infrastructure
products for the communications industry, including cellular, Personal
Communications Systems ("PCS"), Enhanced Specialized Mobile Radio ("ESMR"),
paging, radio and television broadcast, wireless cable, private microwave and
other telecommunications businesses. The Company's principal product lines are
tower structures and enclosures.
9
<PAGE>
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.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1999 1998 1997
- -------------------------------- -------- -------- --------
<S> <C> <C> <C>
Net sales................................................... 100.0% 100.0% 100.0%
Cost of sales............................................... 76.9 75.3 70.3
----- ----- -----
Gross profit................................................ 23.1 24.7 29.7
Selling, general and administrative expense................. 13.5 10.8 10.8
Restructuring expense....................................... -- -- 2.2
----- ----- -----
Total operating expenses.................................... 13.5 10.8 13.0
----- ----- -----
Operating income............................................ 9.6 13.9 16.7
Interest income/(expense), net.............................. 0.1 (.4) (.3)
Other income/(expense)...................................... (1.1) -- 2.6
----- ----- -----
Income before income taxes.................................. 8.6 13.5 19.0
Income tax provision........................................ 3.2 5.1 7.0
Equity loss of joint venture................................ .3 .3 --
----- ----- -----
Income from continuing operations........................... 5.1% 8.1% 12.0%
===== ===== =====
</TABLE>
1999 COMPARED TO 1998
Net sales for 1999 were $141.9 million compared to $174.2 million in 1998, a
decrease of 18.5%. The decreases in sales by business segment were as follows:
<TABLE>
<CAPTION>
DOLLAR PERCENTAGE
FOR THE YEARS ENDED DECEMBER 31, 1999 1998 DECREASE DECREASE
- -------------------------------- -------- -------- -------- ----------
<S> <C> <C> <C> <C>
Tower Structures...................................... $100.2 $110.1 $ 9.9 9.0%
Enclosures............................................ 41.7 64.1 22.4 34.9%
------ ------ ----- ----
Total................................................. $141.9 $174.2 $32.3 18.5%
====== ====== ===== ====
</TABLE>
The decrease in sales in the Tower Structures segment was primarily the
result of a continued softness in the demand for the installation and erection
of towers within the Company's construction business. The decrease in sales in
the Enclosures segment was primarily due to a significant reduction in sales
volume to a provider of a high-speed broadband fiber optic network whose
buildout was completed in 1999. 1998 sales for the Enclosures segment were
significantly higher due to the significant volume of business with this same
provider of a high-speed broadband fiber optic network.
International sales increased to $22.1 million in 1999 from $12.1 million in
1998, an increase of $10.0 million or 82.6%. This increase in international
sales is the result of the Company's efforts to increase international market
penetration, particularly in Mexico and the rest of Latin America.
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. Results of operations for the years ended
December 31, 1999 and 1998 include Tower Structures revenues of $2.4 million and
$4.2 million, respectively, related to product not yet shipped, but where the
previously-discussed earnings criteria had been met.
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 Tower Structures segment,
also requires that actual payment be received. Results of operations for the
years ended December 31, 1999 and 1998 include Enclosures revenues of
$4.9 million and $6.5 million, respectively, related to product not yet shipped,
but where the earnings criteria had been met.
Gross profit for 1999 was $32.8 million versus $43.0 million in 1998, a
decrease of 23.7%. Gross profit margin was 23.1% in 1999 versus 24.7% for 1998.
The decrease in gross profit margin was
10
<PAGE>
primarily attributable to non-recurring charges taken during the first half of
1999 totaling $1.8 million, of which $1.5 million related to a writedown of
inventory and $.3 million related to severance payments due to a reduction in
workforce. Without the impact of the non-recurring charges taken during the
first half of 1999, gross margin would have been $34.6 million or 24.4% of
sales. Gross profit margins for the Company's Tower Structures segment increased
from approximately 18% at the end of 1998 to 26% at the end of 1999. This
increase in gross margin was primarily the result of cost cutting measures
implemented in 1999, including the reduction of raw material costs. Gross profit
margins for the Company's Enclosure segment decreased from approximately 26% at
the end of 1998 to 18% at the end of 1999. This decrease in gross margin was
primarily the result of intense price competition for new orders received in
1999.
In November 1999, the Company entered into a contract with the State of
Pennsylvania to supply and install communications towers/poles and/or enclosures
for a state-wide radio communications project. This contract could generate
approximately $40 million in revenues, and it is anticipated that this project
will be substantially completed by the end of 2000. Historically, margins on the
Company's installation business have been significantly lower than margins on
sales of its tower and enclosure products. Due to the large portion of the
contract which comprises installation and civil engineering work, it is
anticipated that the margins to be recognized on the State of Pennsylvania
contract will be significantly lower than the margins the Company has recently
achieved in its Tower Structures or Enclosures segment.
Selling, general and administrative ("SG&A") expenses were $19.3 million in
1999 versus $18.8 million in 1998, an increase of $0.5 million, or 2.7%. As a
percentage of sales, SG&A expenses were 13.6% in 1999 and 10.8% in 1998. The
increase in SG&A expenses was primarily attributable to a charge for severance
payments of $.7 million taken in the second quarter of 1999 relating to a
reduction in workforce. Without this non-recurring charge, SG&A expense for 1999
would have been $18.6 million.
The Company incurred other expenses of approximately $1.6 million related to
fees and expenses in connection with the proposed merger with PiRod
Holdings, Inc., which was terminated on March 30, 1999. These expenses were
recognized by the Company in the first quarter of 1999, resulting in an adverse
impact on earnings of approximately $.02 per share.
The Company's effective tax rate for 1999 was 37.2% versus 37.9% in 1998.
The equity loss of the corporate joint venture of $.36 million relates to
the Company's share of the operating losses for ROHN BrasilSat, as well as the
loss related to the sale of its joint venture interest. The Company accounted
for this corporate joint venture under the equity method until its disposition
in September 1999. Of the $.36 million loss recorded by the Company in 1999,
$.12 million represented the Company's share of the operating losses of the
entity and $.24 million of the loss was related to the sale of the Company's
interest in the joint venture. The operations of ROHN BrasilSat started in 1998.
The Company sold its 49% interest in the joint venture to its joint venture
partner in September 1999.
Earnings per share (basic and diluted) were $0.14 in 1999 versus $0.27 in
1998. The decrease in earnings per share was primarily attributable to the
softness in demand for the Company's products in 1999, the non-recurring charges
of $2.5 million taken during the second quarter of 1999, and the charge of
$1.6 million taken during the first quarter of 1999 for the failed merger
transaction. The charges taken in the first half of 1999 related to the failed
merger, inventory writedown and severance payments reduced earnings per share
for 1999 by $.05 per share basic and diluted.
1998 COMPARED TO 1997
Net sales for 1998 were $174.2 million compared to $158.1 million in 1997,
an increase of 10.2%. The increases in sales by business segment were as
follows.
<TABLE>
<CAPTION>
DOLLAR PERCENTAGE
FOR THE YEARS ENDED DECEMBER 31, 1998 1997 INCREASE INCREASE
- -------------------------------- -------- -------- -------- ----------
<S> <C> <C> <C> <C>
Tower Structures....................................... $110.1 $107.1 $ 3.0 2.8%
Enclosures............................................. 64.1 51.0 13.1 25.7%
------ ------ ----- ----
Total.................................................. $174.2 $158.1 $16.1 10.2%
====== ====== ===== ====
</TABLE>
11
<PAGE>
The increase in sales in the Tower Structures segment was primarily due to a
$1.0 million increase in sales in international markets as well as recapturing
market penetration domestically. The Company believes that the overall market
for tower products in 1998 was unchanged from 1997. One of the Company's
principal business objectives in 1998 was to reverse losses in market share
experienced in previous years. The Company's Enclosures segment benefited from a
wider range of applications for these products both within the communications
industry and outside the industry.
In 1998, many of the Company's customers experienced delays and requested
that the Company hold their inventory. In circumstances where the product is
ready for shipment, the customer requests delayed shipment and risk of ownership
has passed to the customer, the Company recognizes revenue for its Tower
Structures segment. Results of operations for the year ended December 31, 1998,
included approximately $4.2 million of Tower Structures revenues related to
product that had not been shipped, but where the earnings criteria were met. No
such revenues were recorded in 1997, in accordance with generally accepted
accounting principles, because the revenue recognition criteria were not met.
The Enclosures segment differs from the Tower Structures segment in that the
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 for the Tower Structures
segment, also requires that actual payment be received. Results of operations
for the year ended December 31, 1998, included approximately $6.5 million of
Enclosures revenues related to product that had not been shipped, but where the
earnings criteria was met. No such revenues were recorded in 1997, in accordance
with generally accepted accounting principles, because the revenue recognition
criteria were not met.
Gross profit for 1998 was $43.0 million versus $47.0 million in 1997, a
decrease of 8.5%. Gross profit margin was 24.7% in 1998 versus 29.7% for 1997.
The 5% decrease was attributable to a significant decrease in gross profit
margins for the Company's tower products. This gross profit margin deterioration
was experienced primarily in the last two quarters of 1998. Significant
industry-wide pricing pressure was experienced as certain competitors lowered
prices and demand remained flat during the year. In addition, the Company
experienced increases in production costs related to annual purchasing
commitments for its primary raw materials such as steel and increased operating
costs of its new galvanizing facility which was brought on-line during the
latter half of 1997.
SG&A expenses were $18.8 million in 1998 versus $17.1 million in 1997, an
increase of $1.7 million, or 9.9%. As a percentage of sales, SG&A expenses were
10.8% in both 1998 and 1997. The increase in SG&A expenses was primarily
attributable to an increase in sales and marketing costs. The Company invested
in additional sales, project management and customer service personnel and
enhanced sales tools such as catalogs and trade shows to gain sales momentum in
the domestic market place. Also, the Company increased its spending to improve
its worldwide market presence.
During the third quarter of 1997, the Company's Board of Directors approved
a special charge of $3.4 million ($2.1 million after tax or $0.04 per share) to
cover the costs of a restructuring program. The restructuring charge was related
to cost cutting measures including early retirement costs, other workforce
reductions, and expenses associated with the development and implementation of
this program. The provision for the reduction in workforce included severance
and other benefits for approximately 25 employees, the majority of whom were
based in Peoria, Illinois and Frankfort, Indiana. During 1997, cash expenditures
of $1.9 million were charged against the reserve. Approximately $1.1 million of
expenses were charged against the reserve in 1998, with the remaining balance
expended in 1999.
The Company's 1998 effective tax rate was 37.9% versus 37.1% in 1997. This
increase in the effective tax rate was primarily due to the non-recurring nature
of certain adjustments made in 1997. These adjustments were recorded by the
Company when it finalized its 1996 return in late 1997.
The equity loss of the corporate joint venture of $.5 million in 1998
related to the Company's share of the start-up losses for ROHN BrasilSat. The
operations of ROHN BrasilSat began in 1998.
Earnings per share (basic and diluted) were $0.27 in 1998 versus $0.36 in
1997. The decrease in earnings per share was primarily attributable to the
significant decrease in gross profit margin experienced by the Tower Structures
segment in 1998. The 1997 earnings per share included $0.05 per share
12
<PAGE>
gain on the sale of an investment in a non-related business and a $0.04 per
share loss related to the restructuring charge.
The Company reduced in size due to the sale of Leavitt Tube, Unarco
Commercial Products, UNR Home Products and Real Time Solutions, Inc. in 1996,
and the closing in 1997 of the Company's former corporate office in Chicago, IL.
In 1998, the Company implemented a thorough review of its recorded reserves and
discovered that reserves for postretirement benefits other than pensions had not
been properly provided for in accordance with Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions." As of January 1, 1998, the Company had an unfunded accumulated
postretirement benefit obligation of $3.5 million and an unamortized net
transition obligation of $1.8 million, resulting in an accrual requirement of
$1.7 million at the beginning of the year. The Company recorded a charge in 1998
to establish a postretirement benefit liability of approximately $2.2 million as
of December 31, 1998. Also, in connection with the Company's thorough review of
its recorded reserves, it was determined that there were excess reserves of
approximately $2.4 million related to insurance, accounts receivable and other
miscellaneous reserves that were not material to the prior year consolidated
financial statements. These excess reserves were reversed in 1998. Due to the
immateriality of the postretirement benefit charges to the consolidated
financial statements of the Company from 1993 through 1997, no restatement was
made.
LIQUIDITY AND CAPITAL RESOURCES
The following table sets forth selected information concerning the Company's
financial condition:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
(DOLLARS IN THOUSANDS) 1999 1998
- ---------------------- ------------ ------------
<S> <C> <C>
Cash.............................................. $27,634 $19,690
Working capital................................... 61,773 50,830
Total debt........................................ 10,230 11,270
Current ratio..................................... 3.06:1 2.73:1
</TABLE>
The Company's working capital was $61.8 million at December 31, 1999
compared to $50.8 million at December 31, 1998, an increase of $11.0 million.
This increase in working capital primarily reflects an increase in cash and
accounts receivable related to increased sales at year end.
At December 31, 1999, the Company had aggregate indebtedness of
$10.2 million. The Company's outstanding 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.
INFLATION
Inflation has not had a material effect on the Company's business or results
of operations.
SEASONALITY AND QUARTERLY RESULTS OF OPERATIONS
The operations of the Company are generally not subject to seasonal
fluctuations. However, in the past, the Company has seen disruptions in its
customer's ability to accept shipments due to unusual and prolonged
weather-related construction delays.
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. It is expected 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 ACCOUNTING PRONOUNCEMENTS
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
13
<PAGE>
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 does not enter
into these types of transactions in the normal course of business.
YEAR 2000 COMPLIANCE
Historically, certain computer programs were written using two digits rather
than four to define the applicable year. Accordingly, a company's software may
have recognized a date using "00" as the year 1900 rather than the year 2000,
which could result in computer system failures or miscalculations, commonly
referred to as the Year 2000 ("Y2K") issue. The Y2K issue could have arisen at
any point in the Company's supply, manufacturing, processing, distribution and
financial chains. Incomplete or untimely resolution of the Y2K issue by the
Company, key suppliers, customers and other parties could have had a material
adverse effect on the Company's results of operations, financial condition and
cash flows.
The aggregate cost of the Company's Y2K efforts was approximately
$4.7 million. Approximately $4.5 million of these costs were related to the
acquisition of new computer systems which have been capitalized, with the
remainder being funded through operating cash flows. The Company incurred Y2K
costs of approximately $0.1 million in 1999. The Company believes material
implications and risks related to Year 2000 have expired and, therefore, does
not anticipate experiencing any additional effects related to this issue. The
Company did not experience a significant increase in customer demand for
products as a result of Year 2000, nor did it experience any problems with its
key vendors.
SUBSEQUENT EVENTS
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, effective March 6, 2000. The Company
will record a charge in 2000 related to Mr. Rohn's retirement, the amount of
which has not yet been determined.
14
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company has limited exposure to market rate sensitivity and any 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 sales, which accounted for 15.6% of
net sales in 1999, are concentrated principally in Latin America. In the future,
the Company expects that if it experiences significant growth in its
international sales activity, the Company would manage its exposure to changes
in exchange rates 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 does
not expect to enter into contracts for speculative purposes.
15
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
ROHN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1999 1998 1997
------------ ------------ ------------
(IN THOUSANDS EXCEPT FOR PER SHARE DATA)
<S> <C> <C> <C>
Net sales................................................... $141,896 $174,153 $158,132
Cost of products sold....................................... 109,055 131,121 111,124
-------- -------- --------
Gross profit................................................ 32,841 43,032 47,008
Operating expenses:
Selling expense........................................... 7,551 8,600 6,607
General and administrative................................ 11,712 10,196 10,522
Restructuring............................................. -- -- 3,420
-------- -------- --------
Operating income............................................ 13,578 24,236 26,459
-------- -------- --------
Interest income............................................. 948 292 822
Interest expense............................................ (831) (1,045) (1,299)
Other income/(expense)...................................... (1,600) -- 4,088
-------- -------- --------
Income from continuing operations before income taxes....... 12,095 23,483 30,070
Income tax provision........................................ 4,500 8,900 11,151
Equity loss of corporate joint venture...................... 355 540 --
-------- -------- --------
Net income.................................................. $ 7,240 $ 14,043 $ 18,919
======== ======== ========
Earnings per share--basic and diluted....................... $ 0.14 $ 0.27 $ 0.36
======== ======== ========
Weighted average shares outstanding--basic.................. 52,575 52,774 52,475
Weighted average shares and equivalent shares outstanding--
diluted................................................... 52,921 52,779 52,558
</TABLE>
The accompanying notes are an integral part of these statements
16
<PAGE>
ROHN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................. $ 27,634 $ 19,690
Accounts, notes and other receivables, less allowance for
doubtful accounts of $1,246 in 1999 and $1,200 in
1998.................................................... 34,051 28,588
Inventories............................................... 25,885 27,444
Deferred income taxes..................................... 2,900 2,600
Prepaid expenses.......................................... 1,271 1,794
-------- --------
Total Current Assets........................................ 91,741 80,116
Fixed assets, net........................................... 27,090 26,630
Other Assets................................................ 1,337 5,277
Long-term assets of discontinued operations................. 1,680 2,169
-------- --------
Total Assets................................................ $121,848 $114,192
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term liabilities.................. $ 1,066 $ 1,017
Accounts payable.......................................... 11,474 11,331
Accrued liabilities & other............................... 15,463 14,846
Customer deposits......................................... 808 940
Net liabilities of discontinued operations................ 1,157 1,152
-------- --------
Total Current Liabilities................................... 29,968 29,286
Long-Term debt.............................................. 9,164 10,253
Nonpension post retirement benefits......................... 2,300 2,074
-------- --------
Total Liabilities........................................... 41,432 41,613
-------- --------
Stockholders' Equity:
Common stock, $0.01 par value, authorized -- 60,000 shares
issued -- 52,752 in 1999 and 52,816 in 1998............... 534 535
Capital surplus........................................... 12,815 13,024
Retained earnings......................................... 71,743 64,503
Less -- 635 in 1999 and 1998 treasury shares, at cost..... (3,896) (3,896)
-- Unearned portion of restricted stock.............. (780) (1,587)
-------- --------
Total Stockholders' Equity.................................. 80,416 72,579
-------- --------
Total Liabilities and Stockholders' Equity.................. $121,848 $114,192
======== ========
</TABLE>
The accompanying notes are an integral part of these statements
17
<PAGE>
ROHN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON STOCK
------------------- TREASURY STOCK N/R
SHARES CAPITAL RETAINED ------------------- RESTRICTED FROM
ISSUED AMOUNT SURPLUS EARNINGS SHARES AMOUNT STOCK OFFICERS
-------- -------- -------- -------- -------- -------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996.............. 52,838 $528 $ 9,837 $36,786 (326) $(1,595) $ (745) $(2,300)
Net income............................ -- -- -- 18,919 -- -- -- --
Issuance of restricted stock.......... 150 2 1,123 -- -- -- (1,125) --
Restricted stock canceled............. (10) -- (61) -- -- -- 61 --
Amortization of restricted shares..... -- -- -- -- -- -- 1,153 --
Repayment of officers' loans.......... -- -- -- -- (309) (2,301) -- 2,300
Cash dividends -- $0.10 per share..... -- -- -- (5,245) -- -- -- --
Director's stock plan................. 28 -- 140 -- -- -- -- --
Stock options exercised............... 200 2 165 -- -- -- -- --
Stock options tax benefit............. -- -- 398 -- -- -- -- --
------ ---- ------- ------- ---- ------- ------- -------
Balance, December 31, 1997.............. 53,206 $532 $11,602 $50,460 (635) $(3,896) $ (656) $ --
Net income............................ -- -- -- 14,043 -- -- -- --
Issuance of restricted stock.......... 280 3 1,597 -- -- -- (1,600) --
Restricted stock canceled............. (30) -- (175) -- -- -- 143 --
Amortization of restricted shares..... -- -- -- -- -- -- 526 --
------ ---- ------- ------- ---- ------- ------- -------
Balance, December 31, 1998.............. 53,456 $535 $13,024 $64,503 (635) $(3,896) $(1,587) $ --
Net income............................ -- -- -- 7,240 -- -- -- --
Restricted stock canceled............. (69) (1) (371) -- -- -- 320 --
Director's stock plan................. -- -- 162 -- -- -- -- --
Amortization of restricted shares..... -- -- -- -- -- -- 487 --
------ ---- ------- ------- ---- ------- ------- -------
Balance, December 31, 1999.............. 53,387 $534 $12,815 $71,743 (635) $(3,896) $ (780) $ --
====== ==== ======= ======= ==== ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements
18
<PAGE>
ROHN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------
1999 1998 1997
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income.................................................. $ 7,240 $14,043 $18,919
Adjustments to reconcile net income to net cash provided by
(used in) operating activities --
Depreciation.............................................. 3,421 3,148 2,634
Deferred income tax....................................... (300) 1,850 (450)
Equity loss of corporate joint venture.................... 355 540 --
Operating requirements --
Accounts receivable decrease (increase)................. (5,463) 5,160 (5,700)
Inventory decrease (increase)........................... 1,559 6,300 (3,027)
Prepaid expenses (increase) decrease.................... 523 (1,125) 424
Accounts payable and accrued expense (decrease)
increase............................................... 854 (8,364) 11,081
Discountinued operations.................................. 494 (1,859) (8,523)
Investment in non-related business gain................... -- -- (4,088)
------- ------- -------
Net Cash provided by operating activities............... $ 8,683 $19,693 $11,270
------- ------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of plant and equipment, net of dispositions and
retirements............................................. $(3,881) $(2,283) $(8,307)
Decrease in other assets.................................. 2,670 410 104
Proceeds from the sale of corporate joint venture......... 915 -- --
Investment in equity of joint venture..................... -- (3,669) --
Proceeds from the sale of an investment in non-related
business................................................ -- -- 4,088
------- ------- -------
Net Cash (used in) financing activities................. $ (296) $(5,542) $(4,115)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of long-term debt................................. $(1,040) $ (949) $ (803)
Proceeds from short-term borrowings....................... -- -- 5,150
Payment of short-term borrowings.......................... -- -- (7,150)
Dividends paid............................................ -- -- (5,245)
Repayment of officers' loans.............................. -- -- 2,300
Common stock issued....................................... 597 494 1,858
Treasury stock purchases.................................. -- -- (2,301)
------- ------- -------
Net cash (used in) financing activities................. $ (443) $ (455) $(6,191)
------- ------- -------
Net increase in cash and cash equivalents............... $ 7,944 $13,696 $ 964
Cash and cash equivalents at beginning of period............ $19,690 5,994 5,030
------- ------- -------
Cash and cash equivalents at end of period.................. $27,634 $19,690 $ 5,994
======= ======= =======
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest................................................ $ 831 $ 1,045 $ 1,299
Income taxes............................................ $ 2,610 $ 5,814 $ 5,143
</TABLE>
The accompanying notes are an integral part of these statements
19
<PAGE>
1. NATURE OF OPERATIONS
ROHN Industries, Inc. and subsidiaries ("ROHN" or the "Company")
manufactures and installs towers, poles, mounts and related accessories used
principally to support telecommunications antennae for wireless communications,
such as cellular telephone, personal communications systems ("PCS"), private
microwave, commercial and amateur broadcasting and home television. The Company
also produces equipment enclosures and cabinets of concrete and fiberglass to
house electronic telecommunications equipment. The Company has manufacturing
facilities in Peoria, Illinois (towers and poles), Bessemer, Alabama (equipment
enclosures), and Frankfort, Indiana (towers, tower component, mounts and
agricultural products). The Company's products are sold direct to customers and
through the use of distributors throughout the United States and in
international markets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Company are described
below:
PRINCIPLES OF CONSOLIDATION
The financial statements include the consolidated accounts of the Company
and its subsidiaries. All significant intercompany 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.
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 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. Results of operations for the years ended
December 31, 1999 and 1998 include Tower Structures revenues of $2.4 million and
$4.2 million, respectively, related to product not yet shipped, but where the
previously-discussed earnings criteria had been met. No such revenues were
recorded in 1997, in accordance with generally accepted accounting principles,
as the revenue recognition criteria had not been met.
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 Tower Structures segment,
also requires that actual payment be received. Results of operations for the
years ended December 31, 1999 and 1998 include Enclosures revenues of
$4.9 million and $6.5 million, respectively, related to product not yet shipped,
but where the earnings criteria had been met. No such revenues were
20
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
recorded in 1997, in accordance with generally accepted accounting principles,
as the revenue recognition criteria had not been met.
CASH EQUIVALENTS
The Company considers all highly liquid short-term investments purchased
with a maturity of three months or less and all treasury bills to be cash
equivalents. Cash equivalents are carried at cost which approximates market
value.
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. Obsolete or unsalable inventories are reflected at
their estimated net realizable values.
Total inventories in 1999 and 1998 included the following classifications
(in thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Finished goods........................................... $11,632 $14,514
Work-in-progress......................................... 7,883 4,650
Raw materials............................................ 6,370 8,280
------- -------
Total Inventories........................................ $25,885 $27,444
======= =======
</TABLE>
PLANT AND EQUIPMENT
Land, buildings and equipment are carried at cost. Expenditures for
maintenance and repairs are charged directly against income and major
renewals/betterments are capitalized. When properties are retired or otherwise
disposed of, the original cost and accumulated depreciation are removed from the
respective accounts and the profit or loss resulting from the disposal is
reflected in income.
The Company provides for depreciation of plant and equipment over the
estimated useful lives of the assets (buildings--20 to 40 years; machinery and
equipment--3 to 15 years). Depreciation is generally provided on the
straight-line method for financial reporting purposes and on accelerated methods
for tax purposes.
INCOME TAXES
Under Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" (SFAS 109), the Company recognizes deferred tax liabilities and
assets for the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns.
Total income tax expense for the years ended December 31, 1999, 1998, and
1997, was allocated as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Income from continuing operations................ $4,500 $8,900 $11,151
Stockholders' equity, for compensation expense
for tax purposes in excess of amounts
recognized for financial reporting purposes.... -- 71 (398)
------ ------ -------
$4,500 $8,971 $10,753
====== ====== =======
</TABLE>
Income tax expense attributable to income from continuing operations
consists of current provisions of $4.8 million, $7.1 million, and $11.7 million
and deferred provisions of $(0.3) million, $1.8 million, and $(0.5) million for
the years ended December 31, 1999, 1998, and 1997, respectively.
21
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income tax expense attributable to income from continuing operations was
$4.5 million, $8.9 million, and $11.2 million, for the years ended December 31,
1999, 1998, and 1997, respectively, and differed from the U.S. Federal statutory
income tax rate as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
---------------------- ---------------------- ----------------------
AMOUNT % AMOUNT % AMOUNT %
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Computed statutory provision.............. $4,233 35 $8,200 35 $10,500 35
State taxes, net of federal effect........ 484 4 900 4 1,200 4
Other, net................................ (217) (2) (200) (1) (549) (2)
------ --- ------ --- ------- ---
Total provision........................... $4,500 37 $8,900 38 $11,151 37
====== === ====== === ======= ===
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1999 and 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Postretirement benefits other than pensions................ $1,080 $ 880
Depreciation............................................... (757) (836)
Accrued insurance reserves................................. 345 630
Other, net................................................. 2,232 1,926
------ ------
Net deferred tax assets.................................... $2,900 $2,600
====== ======
</TABLE>
NET INCOME PER SHARE
Basic earnings per share were computed by dividing net income by the
weighted average number of shares outstanding during the year. Diluted earnings
per share were calculated by including the effect of all dilutive securities.
For the years ended December 31, 1999, 1998 and 1997, the effect of potentially
dilutive stock options was approximately 346,000, 5,000 and 83,000,
respectively. The Company had additional outstanding stock options of 745,000 as
of December 31, 1999, 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.
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 the
disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform with the
current year presentation.
NEW ACCOUNTING STANDARDS
In 1998, the Company adopted SFAS No. 130, "REPORTING COMPREHENSIVE INCOME,"
SFAS No. 131, "DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION," and SFAS No. 132, "EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER
POSTRETIREMENT BENEFITS." These statements expanded or modified disclosures and
had no material impact on the Company's results of operations, financial
condition or cash flows.
SFAS No. 130 established standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed in the same prominence as other financial
statements. The Company has no differences between reported net income and
comprehensive income.
22
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SFAS No. 131 established standards for the way that public enterprises
report information about operating segments in annual financial statements and
require reporting of selected information about operating segments in interim
financial statements issued to the public. It also established standards for
disclosures regarding products and services, geographic areas, and major
customers. SFAS No. 131 defines operating segments as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. The company maintains two
segments: Tower Structures and Enclosures.
SFAS No. 132 changed certain disclosure requirements for pensions and other
postretirement benefits.
In June 1998, 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 does not enter
into these types of transactions in the normal course of business.
3. PREPAID EXPENSES
Prepaid expenses at December 31, 1999 and 1998 consist of the following (in
thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Catalogues, trade shows and sales promotion................ $ -- $ 243
Insurance.................................................. 598 167
Tax deposits............................................... 448 294
Merger and share repurchase related........................ -- 1,017
Other...................................................... 225 73
------ ------
$1,271 $1,794
====== ======
</TABLE>
4. FIXED ASSETS
Fixed assets at December 31, 1999 and 1998 consist of the following (in
thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Land................................................... $ 1,255 $ 1,168
Buildings.............................................. 21,150 20,749
Machinery and equipment................................ 29,500 26,107
-------- --------
51,905 48,024
Less accumulated depreciation.......................... (24,815) (21,394)
-------- --------
$ 27,090 $ 26,630
======== ========
</TABLE>
23
<PAGE>
5. OTHER ASSETS
Other assets at December 31, 1999 and 1998 consist of the following (in
thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Equity investment in Brazil................................ $ -- $3,129
Computer system conversion costs........................... 770 1,468
Funds held by trustee--Frankfort, IN Construction Fund..... 270 260
Note receivable............................................ 103 126
Other...................................................... 194 294
------ ------
$1,337 $5,277
====== ======
</TABLE>
6. ACCRUED LIABILITIES AND OTHER
Accrued and other liabilities at December 31, 1999 and 1998 consist of the
following (in thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Payroll related.......................................... $ 1,938 $ 3,250
Insurance related........................................ 1,240 2,183
Income taxes............................................. 9,008 6,782
Other.................................................... 3,277 2,631
------- -------
$15,463 $14,846
======= =======
</TABLE>
7. PENSION, PROFIT SHARING AND POSTRETIREMENT BENEFITS
GENERAL
The Company has defined benefit and/or defined contribution retirement plans
covering substantially all of its employees. Included in these plans are certain
union sponsored plans to which the Company makes annual contributions equal to
the amounts accrued. The total pension expense for union sponsored plans for
1999, 1998, and 1997, was $785,000, $856,000, and $740,000, respectively. The
Company has one trustee-administered profit sharing plan covering all eligible
employees in its Enclosures segment, located in Bessemer, Alabama. Discretionary
contributions of $227,000, $165,000, and $240,000, were charged to expense in
1999, 1998, and 1997, respectively. Total pension expense for Company-sponsored
plans for 1999, 1998, and 1997 was $148,000, $20,000, and $300,000,
respectively.
PENSION PLAN
The Company's non-union employees of its Tower Structures segment in Peoria,
Illinois and Frankfort, Indiana, are covered by a noncontributory defined
benefit pension plan. Plan benefits are generally based on years of service and
employee compensation during the last years of employment. Benefits are paid
from funds previously provided to trustees for those plans. Actuarial
assumptions and provisions are reviewed regularly by the Company and its
independent actuary to ensure that plan assets will be adequate to provide
pension benefits. Plan assets consist primarily of investments in equities,
fixed income securities and money market funds.
Pension expense includes the following components (in thousands):
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Service cost--benefits earned during the period........ $320 $228 $322
Interest on projected benefit obligations.............. 650 457 522
Expected return on plan assets......................... (835) (678) (560)
Net amortization and deferral.......................... 13 13 16
---- ---- ----
Net pension expense.................................... $148 $ 20 $300
==== ==== ====
</TABLE>
24
<PAGE>
7. PENSION, PROFIT SHARING AND POSTRETIREMENT BENEFITS (CONTINUED)
The status of the plans at the respective year-ends was as follows (in
thousands):
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Fair market value of plan assets............................ $ 9,818 $ 9,114 $ 8,473
======= ======= =======
The funded status of the plan was as follows:
Accumulated benefit obligation.............................. 7,754 8,086 6,899
Effect of projected future salary increases................. 737 1,200 1,079
------- ------- -------
Projected benefit obligation................................ $ 8,491 $ 9,286 $ 7,978
======= ======= =======
Excess (Deficit) of plan assets over projected
benefit obligations......................................... $ 1,327 $ (172) $ 495
Unrecognized net transitional asset......................... 19 25 31
Unrecognized market (gain) loss............................. (1,364) 295 (323)
Unrecognized prior service costs............................ 43 50 57
------- ------- -------
Prepaid pension asset....................................... $ 25 $ 198 $ 260
======= ======= =======
</TABLE>
The expected long-term rate of return on plan assets was 9.0% for 1999 and
1998 and 8.0% for 1997. The weighted average discount rate and rate of increase
in future compensation levels used in determining the actuarial present value of
accumulated benefit obligations were 7.75% and 3%, respectively, in 1999, 7% and
3%, respectively, in 1998 and 8% and 4%, respectively in 1997.
RETIREMENT PLAN
The Company has a 401(k) Tax Deferred Savings Plan for the benefit of
non-union employees. After one year of continuous service, the Company matches
25% of employee contributions up to 12% of an employee's compensation and
subject to the limits allowed by the Internal Revenue Service. The matching
contribution made by the Company was $188,000 in 1999, $176,000 in 1998 and
$173,000 in 1997.
RETIREE BENEFITS
The Company provides certain postretirement healthcare benefits to both the
union and non-union employees located in Peoria, Illinois. Employees who retire
from the Company after reaching the age of 65 are eligible to participate in the
postretirement healthcare plan.
Postretirement benefit expense includes the following (in thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Benefits earned during the year.......................... $ 179 $ 149
Interest cost............................................ 306 244
Amortization of gains and losses......................... 11 --
Amortization of transition obligation.................... 121 121
------- -------
Postretirement benefit expense........................... $ 617 $ 514
======= =======
</TABLE>
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Actuarial present value of benefit obligation:
Retirees................................................. $ 1,903 $ 1,604
Fully eligible active plan participants.................. 86 67
Other active plan participants........................... 2,463 2,142
------- -------
Accumulated benefit obligation........................... $ 4,452 $ 3,813
Unamortized net transition obligation.................... (1,575) (1,697)
Unrecognized net gain.................................... (386) --
------- -------
Accrued postretirement benefit liability................. $ 2,491 $ 2,116
======= =======
</TABLE>
25
<PAGE>
7. PENSION, PROFIT SHARING AND POSTRETIREMENT BENEFITS (CONTINUED)
The discount rate used to determine the accumulated postretirement
healthcare benefit obligation was 7.5% and 7.0% in 1999 and 1998, respectively.
The assumed healthcare cost trend rate used to measure the accumulated
postretirement benefit obligation was 9.0% in 1999, declining to 5.5% over a
period of 8 years and continuing at 5.5% thereafter. A one percentage point
increase in the assumed healthcare cost trend would have increased the
accumulated postretirement benefit obligation by $525,390 and $590,000 for 1999
and 1998, respectively, and the postretirement benefit expense by $63,170 and
$68,000 for 1999 and 1998, respectively. A one percentage point decrease in the
assumed healthcare cost trend would have reduced the accumulated postretirement
benefit obligation by $506,770 and $527,000 for 1999 and 1998, respectively, and
the postretirement benefit expense by $61,295 and $62,000 for 1999 and 1998,
respectively.
The current portion of non-pension post retirement healthcare benefits
included in accrued liabilities was approximately $200,000 and $126,000 at
December 31, 1999 and 1998, respectively.
The Company has reduced in size due to the sale of Leavitt Tube, Unarco
Commercial Products, UNR Home Products and Real Time Solutions, Inc. in 1996,
and the closing in 1997 of the Company's former corporate office located in
Chicago, Illinois. In 1998, the Company implemented a thorough review of its
recorded reserves and discovered that reserves for postretirement benefits other
than pensions had not been properly provided for in accordance with Statement of
Financial Accounting Standards No. 106, "EMPLOYERS' ACCOUNTING FOR
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS." As of January 1, 1998, the Company
had an unfunded accumulated postretirement benefit obligation of $3.5 million
and an unamortized net transition obligation of $1.8 million, resulting in an
accrual requirement of $1.7 million at the beginning of the year. The Company
recorded a charge in 1998 to establish a postretirement benefit liability of
approximately $2.2 million as of December 31, 1998. Also, in connection with the
Company's thorough review of its recorded reserves, it was determined that there
were excess reserves of approximately $2.4 million related to insurance,
accounts receivable and other miscellaneous reserves that were not material to
the prior year consolidated financial statements. These excess reserves were
reversed in 1998. Due to the immateriality of the postretirement benefit charges
to the consolidated financial statements of the Company from 1993 through 1997,
no restatement was made.
8. LITIGATION
The Company is involved in various pending legal proceedings and claims
arising in the normal course of its business. Although the outcome of such
proceedings and claims cannot be determined with certainty, the Company
believes, after consultation with counsel, that such proceedings and claims,
individually or in the aggregate, are not material to either its business,
financial condition, or results of operations.
9. LEASES
The Company leases certain of its facilities and equipment under operating
leases or capital leases, as defined by SFAS No. 13. The Company's property
under capital leases, which is included in plant and equipment, consists of
$2.4 million at December 31, 1999 and $2.7 million at December 31, 1998.
Future minimum payments for operating leases at December 31, 1999 are
$339,000 in 2000, $312,000 in 2001, $240,000 in 2002, $119,000 in 2003, $82,000
in 2004 and $71,000 thereafter. Rental expense under operating leases was
approximately $476,000 in 1999, $493,000 in 1998, and $469,000 in 1997.
26
<PAGE>
10. LONG-TERM BORROWINGS
Total borrowings of the Company at December 31, 1999 and 1998, consisted of
the following (in thousands):
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Mortgage notes payable at 7.5% to 9.5%................... $ 7,323 $ 7,651
Capital leases........................................... 2,907 3,619
------- -------
Total.............................................. $10,230 $11,270
======= =======
Classified in the balance sheet as follows:
Current portion of long-term liabilities................. $ 1,066 $ 1,017
Notes and capital leases................................. 9,164 10,253
------- -------
Total.............................................. $10,230 $11,270
======= =======
</TABLE>
Aggregate annual payments required on secured debt, including capitalized
leases, are $1,067,000 in 2000, $797,000 in 2001, $537,000 in 2002, $635,000 in
2003 and $7,195,000 thereafter.
11. STOCK OPTION PLANS
The Company had three stock option plans at December 31, 1999, the Key
Executives' Stock Option Plan ("Executive Plan"), the 1994 Stock Option Plan
("1994 Plan") and the 1999 Stock Option Plan ("1999 Plan").
The Executive Plan was approved by the shareholders of the Company on
July 12, 1990. This plan provides for granting of non-qualified and incentive
stock options, and reserves for the issuance of up to 2,500,000 authorized but
unissued shares of common stock. Options granted under this plan are exercisable
at a price equal to the fair market value at the date of grant and expire in ten
years from the date of grant. At December 31, 1999, 27,000 common shares were
available for grant under this plan. At December 31, 1999, 1,126,000 options
were outstanding under this plan.
The 1994 Plan was approved by the shareholders of the Company on
November 1, 1994. This plan provides for granting of non-qualified options and
reserves for the issuance of up to 500,000 shares. Outstanding options granted
under this plan are exercisable at a price equal to the fair market value at the
date of grant, reduced by the amount of any "Extraordinary Dividend" made after
the date of grant, and expire in five years from the date of grant. Each option
is exercisable upon the attainment of certain stock price thresholds, adjusted
for extraordinary dividends, or 54 months, whichever comes earlier. At
December 31, 1999, 55,000 common shares were available for grant under this
plan. At December 31, 1999, no options were outstanding under this plan.
The 1999 Plan was approved by shareholders of the Company on May 18, 1999.
This plan provides for the granting of non-qualified and incentive stock
options, and reserves for the issuance of 2,500,000 authorized but unissued
shares of common stock. Options granted under this plan are exercisable at a
price established by the Compensation Committee of the Board of Directors and
expire ten years from the date of grant. At December 31, 1999, 1,400,000 common
shares were available for granting under this plan. At December 31, 1999,
1,100,000 options were outstanding under this plan.
27
<PAGE>
Information relating to these plans is summarized below (in thousands except
for per share data):
<TABLE>
<CAPTION>
AVERAGE
SHARES OPTION
SUBJECT TO PRICE PER
OPTIONS SHARE
---------- ---------
<S> <C> <C>
Outstanding December 31, 1996, adjusted for extraordinary
dividends.............................................. 200 $0.838
Granted................................................ 210 6.199
Exercised.............................................. (200) 0.838
----- ------
Outstanding December 31, 1997, adjusted for extraordinary
dividends.............................................. 210 $6.199
Granted................................................ 950 5.872
Canceled............................................... (140) 5.609
----- ------
Outstanding December 31, 1998, adjusted for extraordinary
dividends.............................................. 1,020 $5.976
Granted................................................ 1,481 1.674
Canceled............................................... (275) 5.567
----- ------
Outstanding December 31, 1999, adjusted for extraordinary
dividends.............................................. 2,226 $3.164
===== ======
</TABLE>
12. STOCK-BASED COMPENSATION PLANS
The Company has three stock option plans, the Executive Plan, the 1994 Plan,
and the 1999 Plan. The Company accounts for all stock option plans under APB
Opinion No. 25, under which no compensation cost has been recognized. Had
compensation cost for stock options awarded under the plans been determined
consistent with SFAS No. 123, the Company's net income and earnings per share
would have been reduced to the following pro forma amounts:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) DECEMBER 31, 1999
- ------------------------------------- -------------------
<S> <C>
Net income:
As reported............................................. $ 7,240
Pro forma............................................... 6,589
Basic EPS:
As reported............................................. $ 0.14
Pro forma............................................... $ 0.13
Diluted EPS:
As reported............................................. $ 0.14
Pro forma............................................... $ 0.12
</TABLE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) DECEMBER 31, 1998
- ------------------------------------- -------------------
<S> <C>
Net income:
As reported............................................. $14,043
Pro forma............................................... 13,576
Basic EPS:
As reported............................................. $ 0.27
Pro forma............................................... $ 0.26
Diluted EPS:
As reported............................................. $ 0.27
Pro forma............................................... $ 0.26
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) DECEMBER 31, 1997
- ------------------------------------- -------------------
<S> <C>
Net income:
As reported............................................. $18,919
Pro forma............................................... 18,854
Basic EPS:
As reported............................................. $ 0.36
Pro forma............................................... $ 0.36
Diluted EPS:
As reported............................................. $ 0.36
Pro forma............................................... $ 0.36
</TABLE>
As of December 31, 1999, the Company has 1,482,000 shares available for
grant under the Plans. At December 31, 1999, the Company has options outstanding
and not yet exercised of 2,226,000 shares under the Executive Plan, the 1994
Plan, and the 1999 Plan. Under the option plans, the options vest 33.33% per
year beginning with the first year and expire in either five or ten years.
A summary of the status of the Company's option plans for the years
December 31, 1997 through December 31, 1999 and changes during the years then
ended is presented in the table and narrative below:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
DECEMBER 31, 1999
---------------------------
WEIGHTED AVERAGE SHARES
EXERCISE PRICE (000)
---------------- --------
<S> <C> <C>
Outstanding at beginning of period................... $5.976 1,020
Granted.............................................. 1.674 1,481
Exercised............................................ -- --
Forfeited............................................ -- --
Expired.............................................. -- --
Canceled............................................. 5.567 (275)
------ -----
Outstanding at end of period......................... $3.164 2,226
Exercisable at end of year........................... $6.199 281
Weighted average fair value of options granted....... $ 1.10
</TABLE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
DECEMBER 31, 1998
---------------------------
WEIGHTED AVERAGE SHARES
EXERCISE PRICE (000)
---------------- --------
<S> <C> <C>
Outstanding at beginning of period................... $6.199 210
Granted.............................................. 5.872 950
Exercised............................................ -- --
Forfeited............................................ -- --
Expired.............................................. -- --
Canceled............................................. 5.609 (140)
------ -----
Outstanding at end of period......................... $5.976 1,020
Exercisable at end of year........................... $5.525 70
Weighted average fair value of options granted....... $2.664
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
DECEMBER 31, 1997
---------------------------
WEIGHTED AVERAGE SHARES
EXERCISE PRICE (000)
---------------- --------
<S> <C> <C>
Outstanding at beginning of period................... $ .838 200
Granted.............................................. 6.199 210
Exercised............................................ .838 (200)
Forfeited............................................ -- --
Expired.............................................. -- --
Canceled............................................. -- --
------ -----
Outstanding at end of period......................... $6.199 210
Exercisable at end of year........................... -- --
Weighted average fair value of options granted....... $2.322
</TABLE>
The 2,226,000 options outstanding at December 31, 1999 had an exercise price
between $1.281 and $7.75 with a weighted-average exercise price of $3.164 and a
weighted average remaining contractual life of 7.93 years. The fair value of
each option grant is estimated on the date of grant using the Black-Scholes
option pricing model with the following weighted-average assumptions used for
the option grants in 1999: risk-free interest rate of 6.01 percent, expected
dividend yield of 0.00 percent, expected life of 10.0 years, and expected
volatility of 44.81 percent. The following weighted-average assumptions were
used for the options granted in 1998: risk-free interest rate of 5.63 percent,
expected dividend yield of 1.79 percent, expected life of 10.0 years, and
expected volatility of 36.81 percent. The following weighted-average assumptions
were used for the options granted in 1997: risk-free interest rate of
6.45 percent, expected dividend yield of 1.72 percent, expected life of
5.0 years, and expected volatility of 37.18 percent.
13. RESTRICTED STOCK PLAN
The Restricted Stock Plan was approved by the shareholders of the Company on
July 30, 1992. The Plan provides for the granting of restricted stock to certain
key employees and reserves for issuance of 1,000,000 shares of common stock.
The Company had 220,840, 388,990 and 242,048 shares of restricted stock
outstanding at December 31, 1999, 1998 and 1997, respectively. Of the current
shares outstanding, 50,000 were awarded to Brian B. Pemberton in connection with
his employment agreement and 170,840 shares were issued to Brian B. Pemberton
and other key employees of the Company. These shares have the same dividend and
voting rights as other common stock. Restricted stock is considered to be
currently issued and outstanding. The cost of the restricted stock, determined
as the fair market value of the shares at the date of grant, is expensed ratably
over a three to five-year vesting period. Such expense amounted to $487,000 in
1999; $526,000 in 1998, and $1,153,000 in 1997.
14. DIRECTOR'S STOCK OWNERSHIP PLAN
The Company has a stock ownership plan for non-employee directors, the
Amended and Restated ROHN Industries, Inc., 1994 Nonemployee Director Stock
Ownership Plan (the "Director Plan"), which was approved by the stockholders of
the Company in 1994. A total of 200,000 shares of the Company's common stock was
initially reserved for issuance under the Director Plan. The Director Plan
initially allowed each non-employee director to elect to receive all or a part
of such director's annual retainer fee, which would otherwise be paid in cash,
in shares of restricted stock held in custody by the Company. The Director Plan
was amended by the Board of Directors on May 18, 1999, to require that directors
receive their entire annual retainer fee in the form of "Stock Units", which
represent the right to receive shares of common stock upon the earliest of the
fifth anniversary of the date on which the Stock Units are granted, the
termination of the participant's service as a director, or a change of control.
15. STOCKHOLDERS' EQUITY
On September 24, 1990, the Company announced that its Board of Directors had
authorized the acquisition, through both negotiated transactions involving large
blocks and open-market purchases, of up to 1.5 million shares of its common
stock to be held as treasury shares and be available to meet
30
<PAGE>
requirements of its Key Executives' Stock Option Plan. As of December 31, 1999
and 1998, 1,133,565 shares have been purchased, respectively.
On December 29, 1997, the Company paid a dividend of $0.10 per share to
stockholders of record as of the close of business on December 15, 1997.
16. RESTRUCTURING
During the third quarter of 1997, the Company recorded a restructuring
charge of $3.4 million related to cost-cutting measures including early
retirement costs, work force reductions, and expenses associated with the
development and implementation of this program. The provision for the reduction
in workforce included severance and other benefits for approximately 25
employees, the majority of whom were based in Peoria, Illinois and Frankfort,
Indiana.
During 1997, cash expenditures of $1.9 million were charged against the
reserve. Approximately $1.1 million of expenses were charged against the reserve
in 1998. The Company spent the remaining $0.4 million of the restructuring
reserve in 1999.
17. RELATED PARTY TRANSACTIONS
The Company held three notes receivable for a total of $2,300,000 from
executive officers of the Company which were paid in full by the executive
officers during 1997 by transferring 309,000 shares of common stock to the
Company. These notes were related to the 1994 Executive Stock Purchase Plan
approved by shareholders of the Company on November 1, 1994. Under the Plan,
executive officers purchased 1,650,000 shares of common stock from the Company,
at the then fair market value. Shares were paid for in cash in the amount of the
par value of the stock and the balance in promissory notes due in three years.
The notes were interest free (although interest was imputed for tax purposes),
except in the event a participant resigned from the Company, was terminated for
cause or, if the stock was sold within three years, the notes would become due
and interest at the applicable federal rate was applied retroactively from the
date of the notes.
18. INVESTMENT IN CORPORATE JOINT VENTURE
In December 1997, the Company formed a corporate joint venture 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% 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 Company recorded a loss of approximately
$355,000 in 1999 arising out of the corporate joint venture, of which $120,000
represented the Company's share of the operating losses of the joint venture and
$235,000 of the loss was related to the sale of the Company's interest in the
joint venture. The Company's investment in ROHN BrasilSat amounted to $0 and
$3,129,000 at December 31, 1999, and 1998, respectively. There was no investment
in ROHN BrasilSat in 1997. The Company recorded a loss of $540,000 for the year
ended December 31, 1998, which represented the Company's share of the start-up
losses.
19. 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, as well as a world-wide sales, marketing and distribution
effort. The Enclosures segment includes a manufacturing plant in Bessemer,
Alabama and has a sales, marketing and distribution effort separate from the
Tower Structures segment's sales and marketing resources.
Accounting policies for measuring segment assets and earnings before
interest and taxes are substantially consistent with those described in Note 2.
The Company evaluates segment performance
31
<PAGE>
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
1999 (IN THOUSANDS) SEGMENT SEGMENT ELIMINATION TOTAL
- ------------------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales......................................... $101,797 $41,680 $(1,581) $141,896
Earnings before interest and taxes................ 5,110 6,868 -- 11,978
Depreciation...................................... 2,765 656 -- 3,421
Capital expenditures(1)........................... 3,180 701 -- 3,881
Segment assets.................................... $ 92,529 $29,319 -- $121,848
</TABLE>
<TABLE>
<CAPTION>
TOWER
STRUCTURES ENCLOSURES
1998 (IN THOUSANDS) SEGMENT SEGMENT ELIMINATION TOTAL
- ------------------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales......................................... $111,545 $64,143 $(1,535) $174,153
Earnings before interest and taxes................ 9,201 15,035 -- 24,236
Depreciation...................................... 2,508 640 -- 3,148
Capital expenditures(1)........................... 1,964 319 -- 2,283
Segment assets.................................... 84,873(2) $29,319 -- $114,192
</TABLE>
<TABLE>
<CAPTION>
TOWER
STRUCTURES ENCLOSURES
1997 (IN THOUSANDS) SEGMENT SEGMENT ELIMINATION TOTAL
- ------------------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales......................................... $110,136 $51,025 $(3,029) $158,132
Earnings before interest and taxes................ 16,790 9,669 -- 26,459
Depreciation...................................... 2,062 572 -- 2,634
Capital expenditures(1)........................... 7,627 680 -- 8,307
Segment assets.................................... $ 70,158 $40,914 $-- $111,072
</TABLE>
- ------------------------
(1) Net of asset dispositions and retirements.
(2) Includes equity investment in Brazil of $3,129.
In 1999, the Tower Structures segment had one customer that accounted for
approximately 16% of total segment revenues and 11% of consolidated net sales.
The Enclosures segment had two customers that accounted for 24% of total segment
revenue, or 7% of consolidated net sales. In 1998, the Tower Structures segment
had one customer that accounted for approximately 13% of total segment revenues.
The Enclosures segment had four customers that accounted for 65% of total
segment revenue with one customer at 35% of total segment revenues, or 13% of
consolidated net sales. In 1997, no one customer accounted for more than 10% of
the Company's sales.
Revenues and long-lived assets are related to U.S. operations, except for
Mexico, which had revenues of approximately $3.9 million, $0.9 million and
$0.5 million for the years ended December 31, 1999, 1998 and 1997, respectively,
and long-lived assets of $60,000, $50,000 and $10,000 as of December 31, 1999,
1998 and 1997, respectively.
20. EXPORT SALES
Export sales for the years ended December 31, 1999, 1998, and 1997 were
$22.1 million, $12.1 million, and $10.2 million, respectively.
21. COMMITMENTS AND CONTINGENCIES
From time to time, the Company becomes party to various claims and legal
actions arising during the ordinary course of business. Management believes that
the Company's cost and any potential judgments resulting from such claims and
actions would be covered by the Company's product liability insurance, except
for deductible limits and self-insured retention. The Company intends to defend
such claims and actions in cooperation with its insurers. It is management's
opinion that, in any event, their outcome would not have a material adverse
effect on the Company's financial position or results of operations.
32
<PAGE>
The Company employs some materials in its manufacturing processes, including
oils and solvents that are regulated by environmental laws. The Company has made
expenditures to comply with environmental laws and regulations, including
investigation and remediation of ground and water contamination, and expects to
continue to make such expenditures to comply with existing and future
requirements. While such expenditures have not had, and are not expected to
have, a material adverse effect on the Company's financial condition or results
of operations, there can be no assurance that more stringent regulations or
enforcement in the future will not have such effects.
In some cases, the Company has notified state or federal authorities of a
possible need to remedy sites it previously operated. The Company has also been
notified by various state and federal governmental authorities that they believe
it may be a "potentially responsible party" or otherwise have responsibility
with respect to clean-up obligations at certain hazardous and other waste
disposal sites which were not owned or operated by the Company. In several such
cases, the Company has entered into settlements with the relevant authorities or
other parties for immaterial amounts. In other cases, the Company is
participating in negotiations for settlement with the relevant authorities or
other parties or has notified the authorities that it denies liability for
clean-up obligations. The costs or liabilities the Company may incur with
respect to these sites are difficult to predict until the level of contamination
is determined. The Company, after consultation with legal counsel and
environmental experts, believes that the ultimate outcome with respect to all of
these sites will not have a material adverse effect on the Company's financial
condition or on its results of operations.
22. QUARTERLY RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
UNAUDITED (IN THOUSANDS, EXCEPT PER SHARE DATA) FIRST SECOND THIRD FOURTH YEAR
- ----------------------------------------------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
1999
Net Sales.................................... $30,162 $29,068 $36,855 $45,811 $141,896
Gross profit................................. 6,717 5,362 9,641 11,121 32,841
Operating income............................. 3,773 207 5,318 4,280 13,578
Income before income taxes................... 714 83 5,330 5,968 12,095
Net income................................... $ 489 $ 1 $ 3,032 $ 3,718 $ 7,240
Net income per share--basic.................. $ 0.01 $ 0.00 $ 0.06 $ 0.07 $ 0.14
Net income per share--diluted................ $ 0.01 $ 0.00 $ 0.06 $ 0.07 $ 0.14
Market price of common stock:
High....................................... $ 3.625 $ 2.219 $ 2.250 $ 4.313
Low........................................ $ 1.875 $ 1.063 $ 1.219 $ 1.906
</TABLE>
<TABLE>
<CAPTION>
UNAUDITED (IN THOUSANDS, EXCEPT PER SHARE DATA) FIRST SECOND THIRD FOURTH YEAR
- ----------------------------------------------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
1998
Net Sales.................................... $41,065 $39,931 $47,541 $45,616 $174,153
Gross profit................................. 11,329 11,489 10,068 10,146 43,032
Operating income............................. 6,470 6,466 6,106 5,194 24,236
Income before income taxes................... 6,334 6,306 6,019 4,824 23,483
Net income................................... $ 3,959 $ 3,831 $ 3,561 $ 2,692 $ 14,043
Net income per share--basic.................. $ 0.08 $ 0.07 $ 0.07 $ 0.05 $ 0.27
Net income per share--diluted................ $ 0.08 $ 0.07 $ 0.07 $ 0.05 $ 0.27
Market price of common stock:
High....................................... $ 6.250 $ 6.250 $ 4.750 $ 3.500
Low........................................ $ 4.688 $ 3.750 $ 1.750 $ 1.813
</TABLE>
33
<PAGE>
23. SUBSEQUENT EVENTS
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, effective March 6, 2000. The Company
will record a charge in 2000 related to Mr. Rohn's retirement, the amount of
which has not yet been determined.
34
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF
ROHN INDUSTRIES, INC.:
We have audited the accompanying consolidated balance sheets of ROHN
Industries, Inc. (a Delaware corporation) and Subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of ROHN
Industries, Inc. and Subsidiaries as of December 31, 1999 and 1998, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1999 in conformity with generally accepted accounting
principles.
Arthur Andersen LLP
Chicago, Illinois
February 16, 2000
35
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 10. DIRECTOR AND EXECUTIVE OFFICERS OF THE REGISTRANT.
See Part I, page 7 for Item 10 information regarding Executive Officers of
the Registrant. The information with respect to the remaining portion of Item 10
is set forth in the Company's definitive proxy statement for its annual meeting
of shareholders to be held on May 11, 2000 (the "Proxy Statement"), under the
captions "Section 16(a) Beneficial Ownership Reporting Compliance" and "Election
of Directors", and such information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information with respect to Item 11 is set forth in the Company's Proxy
Statement, under the caption "Executive Compensation" (other than that set forth
under the sub-captions "Stock Performance Graph" and "Compensation Committee
Report on Executive Compensation"), and such information is incorporated herein
by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information with respect to Item 12 is set forth in the Company's Proxy
Statement, under the caption "Stock Ownership", and such information is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information with respect to Item 13 is set forth in the Company's Proxy
Statement, under the caption "Employment Contracts and Other Agreements", and
such information is incorporated herein by reference. See also, Note 17 to the
consolidated financial statements.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K.
(a) 1. Financial Statements:
The information required by this item is included in Item 8 of this report.
2. The following financial schedule for the years 1999, 1998 and 1997 is
submitted herewith:
Schedule II--Allowance for Doubtful Accounts.
3. Exhibits:
The following list sets forth the exhibits to this Form 10-K as required by
Item 601 of Regulation S-K. Certain exhibits are filed herewith, while the
balance are incorporated by this reference to documents previously filed
with the Securities and Exchange Commission.
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
2.1 Plan of Reorganization (incorporated herein by reference to
Exhibit A to ROHN's Form 10-Q for the quarter ended March
31, 1989).
3.1 Amended and restated Certificate of Incorporation of ROHN
dated December 31, 1997 (incorporated herein by reference to
Exhibit A to ROHN's Current Report on Form 8-K filed on
December 19, 1997).
3.2 Amended and Restated By-laws of ROHN (adopted March 10,
2000).
4.1 Loan Agreement dated March 9, 1998 by and among LaSalle
National Bank and ROHN (incorporated herein by reference to
Exhibit 4 to ROHN's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997).
10.1* UNR Industries, Inc. 1992 Restricted Stock Plan
(incorporated herein by reference to Exhibit 10 to ROHN's
Form 10-K for the fiscal year ended December 31, 1992).
10.2* UNR Industries, Inc. 1994 Stock Option Plan (incorporated
herein by reference to Exhibit A to ROHN's Proxy Statement,
dated October 11, 1994).
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
10.3* UNR Industries, Inc. 1994 Executive Stock Purchase Plan
(incorporated herein by reference to Exhibit B to ROHN's
Proxy Statement, dated October 11, 1994).
10.4* Change of Control Agreement between the Company and James R.
Cote, dated November 30, 1996 (incorporated herein by
reference to Exhibit 10.1(a) to ROHN's Form 10-K for the
fiscal year ended December 31, 1998).
10.5* Letter Agreement, dated July 24, 1998 between ROHN
Industries, Inc. and Richard L. Rohn (incorporated by
reference to Exhibit 10.3(b) to ROHN's Form 10-K for the
fiscal year ended December 31, 1998).
10.6 Termination Agreement dated March 30, 1999 between ROHN
Industries, Inc. and PiRod Holdings, Inc. (incorporated
herein by reference to Exhibit 10.5 to ROHN's Form 10-K for
the fiscal year ended December 31, 1998).
10.7* Employment Agreement between the Company and Brian B.
Pemberton, effective November 11, 1999.
10.8* Amended and Restated ROHN Industries, Inc. 1994 Non-employee
Director Stock Ownership Plan, as amended March 27, 2000.
10.9* ROHN Industries, Inc. 1999 Stock Option Plan, as amended
November 11, 1999.
10.10* UNR Industries, Inc. Supplemental Executive Retirement Plan
effective as of January 1, 1993 (incorporated herein by
reference to Exhibit 10 to ROHN's Form 10-K for the fiscal
year ended December 31, 1993).
10.11* Form of Indemnification Agreement, between ROHN Industries,
Inc. and each of its directors and officers.
10.12* UNR Industries, Inc. Key Executives' Stock Option Plan, as
amended May 6, 1993.
10.13 Statewide Radio System Site Development between The
Governor's Office of Administration, Commonwealth of
Pennsylvania and the Company, dated November 23, 1999.
11.1 Computation can be determined from this report.
21.1 List of Subsidiaries.
23.1 Consent of Arthur Andersen LLP.
27.1 Financial Data Schedule.
99.1 Cautionary Statement for purposes of the "Safe Harbor"
Provisions of the Private Litigation Reform Act of 1995.
</TABLE>
Exhibits marked with an "*" indicate the exhibit is a management contract or
compensatory plan or arrangement.
(b) A Form 8-K was filed on November 3, 1999 reporting that the Company had
hired Maureen B. Bellantoni to serve as Executive Vice President and
Chief Financial Officer.
(c) Exhibits--See section (a) above.
(d) None.
37
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE
To the Stockholders and Board of Directors of ROHN Industries, Inc.:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of ROHN Industries, Inc. and subsidiaries
included in this Form 10-K, and have issued our report thereon dated
February 16, 2000. Our audit was made for the purpose of forming an opinion on
the basic consolidated financial statements taken as a whole. The supplemental
Allowance for Doubtful Accounts Schedule Included in Part IV, Item 14(d) is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Chicago, Illinois
February 16, 2000
38
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
ROHN INDUSTRIES, INC.
/s/ BRIAN B. PEMBERTON
---------------------------------------------
Brian B. Pemberton
CHIEF EXECUTIVE OFFICER, PRESIDENT, SECRETARY
& DIRECTOR
March 30, 2000
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ BRIAN B. PEMBERTON
------------------------------------------------------- March 30, 2000
Brian B. Pemberton
CHIEF EXECUTIVE OFFICER, PRESIDENT, SECRETARY & DIRECTOR
/s/ DANIEL J. PALLAT
------------------------------------------------------- March 30, 2000
Daniel J. Pallat
CHIEF FINANCIAL OFFICER
/s/ LESTER H. NELSON, III
------------------------------------------------------- March 30, 2000
Lester H. Nelson, III
CORPORATE CONTROLLER AND PRINCIPAL ACCOUNTING OFFICER
/s/ MICHAEL E. LEVINE
------------------------------------------------------- March 30, 2000
Michael E. Levine
DIRECTOR, CHAIRMAN OF THE BOARD
/s/ STEPHEN E. GORMAN
------------------------------------------------------- March 30, 2000
Stephen E. Gorman
DIRECTOR
/s/ JOHN H. LAERI, JR.
------------------------------------------------------- March 30, 2000
John H. Laeri, Jr.
DIRECTOR
/s/ GENE LOCKS
------------------------------------------------------- March 30, 2000
Gene Locks
DIRECTOR
</TABLE>
39
<PAGE>
<TABLE>
<S> <C> <C>
/s/ JORDAN RODERICK
------------------------------------------------------- March 30, 2000
Jordan Roderick
DIRECTOR
/s/ ALAN SCHWARTZ
------------------------------------------------------- March 30, 2000
Alan Schwartz
DIRECTOR
</TABLE>
40
<PAGE>
SCHEDULE II
ALLOWANCE FOR DOUBTFUL ACCOUNTS (IN THOUSANDS)
Changes in the allowance for doubtful accounts for the three years ended
December 31 are as follows:
<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Balance--beginning of year.................................. $1,136 $1,451 $1,200
Add (deduct)
- --Provision charged to income............................... 1,233 30 245
- --Bad debts written-off..................................... (918) (169) (543)
- --Reserve reversal and other................................ -- (112) 344
------ ------ ------
Balance--end of year........................................ $1,451 $1,200 $1,246
====== ====== ======
</TABLE>
41
<PAGE>
Exhibit 3.2
ELEVENTH AMENDED AND RESTATED
BY-LAWS
OF
ROHN INDUSTRIES, INC.
Effective as of March 10, 2000
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be
established and maintained in the City of Wilmington, in the County of New
Castle, in the State of Delaware.
SECTION 2. OTHER OFFICES. The corporation may have other
offices, either within or without the State of Delaware, at such place or places
as the board of directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of the stockholders
for the election of directors shall be held in Chicago, Illinois, at such place
as may be fixed from time to time by the board of directors, or at such place
either within or without the State of Delaware as shall be designated from time
to time by the board of directors and stated in the notice of the meeting.
Meetings of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. ANNUAL MEETINGS. Annual meetings of stockholders
shall be held on the first Thursday after the third day in the month of May if
not a legal holiday, and if a legal holiday, then on the next business day
following, at 11:00 a.m., or at such other date and time as shall be designated
from time to time by the board of directors and stated in the notice of the
meeting, at which meeting the stockholders shall elect by plurality vote a board
of directors, and transact such other business as may properly be brought before
the meeting.
SECTION 3. ADVANCE NOTICE PROVISIONS FOR BUSINESS TO BE
TRANSACTED AT A MEETING. For business properly to be brought before any meeting
of stockholders by a stockholder, the stockholder must have given timely notice
thereof in proper written form to the secretary of the corporation. To be
timely, a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not less than 30 days nor
more
<PAGE>
than 60 days prior to the date of the meeting; provided, however, that in
the event that less than 40 days notice or prior public disclosure of the date
of the meeting is given or made to stockholders, for such notice by the
stockholder to be timely, it must be so received prior to the date of the
meeting and not later than the close of business on the tenth day following the
day on which such notice of the date of the meeting was mailed or such public
disclosure was made. To be in proper written form, a stockholder's notice to the
secretary shall set forth in writing as to each matter the stockholder proposes
to bring before the meeting: (i) a brief description of the business desired to
be brought before the meeting and the reasons for conducting such business at
the meeting; (ii) the name and address, as they appear on the corporation's
books, of the stockholder proposing such business; (iii) the class and number of
shares of capital stock of the corporation which are owned by the stockholder as
of the record date for the meeting; and (iv) any material interest of the
stockholder in such business. The chairman of the meeting shall have the sole
authority to determine whether business was properly brought before the meeting
in accordance with the provisions of this Section 3 and, if the chairman of the
meeting should determine that any such business was not so properly brought, he
or she shall so declare to the meeting, and any such business not properly
brought before the meeting shall not be transacted.
SECTION 4. NOTICE OF MEETINGS. Written notice of the annual or
any special meeting of stockholders stating the place, date and hour of the
meeting shall be given to each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of the meeting. Business
transacted at any special meeting of stockholders shall be limited to the
purposes stated in the notice. Notice of any meeting shall not be required to be
given to any person who attends such meeting, except when such person attends
the meeting in person or by proxy for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened, or who, either before or after the meeting,
shall submit a signed written waiver of notice, in person or by proxy. Neither
the business to be transacted at, nor the purpose of, an annual or special
meeting of stockholders need be specified in any written waiver of notice.
SECTION 5. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The officers
or agents who have charge of the stock ledger or transfer book of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, showing the address of each stockholder
and the number of shares of capital stock of the corporation registered in the
name of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 6. SPECIAL MEETINGS. Special meetings of the
stockholders for any purpose or purposes, unless otherwise prescribed by
statute, by these By-Laws or by the certificate of incorporation, may be called
by the chairman of the board or by the president and shall be called by the
chairman of the board, president or secretary at the request in writing of a
2
<PAGE>
majority of the board of directors, or at the request in writing of stockholders
owning a majority of the shares of capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
SECTION 7. ORGANIZATION. At each meeting of stockholders, the
Chairman of the Board, if one shall have been elected, or, in such person's
absence or if one shall not have been elected, the President, shall act as
chairman of the meeting. The Secretary or, in such person's absence or inability
to act, the person whom the chairman of the meeting shall appoint secretary of
the meeting, shall act as secretary of the meeting and keep the minutes thereof.
SECTION 8. QUORUM; ADJOURNMENTS. The holders of a majority of
the shares of capital stock of the corporation issued and outstanding and
entitled to vote thereat, present in person, or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute, by these By-Laws or by the
certificate of incorporation. Abstentions shall be counted as present in person
or represented by proxy for purposes of determining the existence of a quorum
for purposes of this Section 8. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
SECTION 9. VOTING. When a quorum is present at any meeting, a
majority of the votes cast shall decide any question (other than the election of
directors, which shall be determined by a plurality vote) brought before such
meeting, unless the question is one upon which by express provision of statute,
these By-Laws or of the certificate of incorporation, a different vote is
required, in which case such express provision shall govern and control the
decision of such question. Abstentions shall not be included in calculating the
number of votes cast on, in favor of, or in opposition to any question.
SECTION 10. VOTING POWER. Unless otherwise specifically
provided by statute, these By-Laws or the certificate of incorporation, each
stockholder shall at every meeting of the stockholders be entitled to one vote
for each Share held by such stockholder.
SECTION 11. PROXIES. Each stockholder entitled to vote at a
meeting of stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act for him
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period.
SECTION 12. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Unless
otherwise provided in the certificate of incorporation, any action required to
be taken at any annual or special meeting of stockholders of the corporation, or
any action which may be taken at any
3
<PAGE>
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
shares of capital stock of the corporation having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing.
SECTION 13. INSPECTORS. The board of directors, in advance of
any stockholders' meeting, shall appoint one or more inspectors to act at the
meeting or any adjournment thereof and to make a written report thereof. In case
any person appointed fails to appear or act, the vacancy may be filled by
appointment made by the board of directors in advance of the meeting or at the
meeting by the persons presiding thereat. Each inspector, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and according
to the best of his ability.
The inspectors shall ascertain the number of shares of capital
stock of the corporation outstanding and the voting power of each, determine the
shares of capital stock of the corporation represented at the meeting and the
validity of proxies and ballots, count all votes and ballots, determine and
retain for a reasonable period a record of the disposition of any challenges
made to any determination by the inspectors, and certify their determination of
the number of shares of capital stock of the corporation represented at the
meeting and their count of all votes and ballots. The inspectors may appoint or
retain other persons or entities to assist the inspectors in the performance of
the duties of the inspectors.
In determining the validity and counting of proxies and
ballots, the inspectors shall be limited to an examination of the proxies, any
envelopes submitted with those proxies, any information provided in accordance
with Section 212(c)(2) of the Delaware General Corporation Law (the "DGCL"),
ballots and the regular books and records of the corporation, except that the
inspectors may consider other reliable information for the limited purpose of
reconciling proxies and ballots submitted by or on behalf of banks, brokers,
their nominees or similar persons which represent more votes than the holder of
a proxy is authorized by the record owner to cast or more votes than the
stockholder holds of record. If the inspectors consider other reliable
information for the limited purpose permitted herein, the inspectors at the time
they make their certification pursuant to the paragraph above shall specify the
precise information considered by them, including the person or persons from
whom they obtained the information, when the information was obtained, the means
by which the information was obtained and the basis for the inspectors' belief
that such information is accurate and reliable.
The date and time of the opening and the closing of the polls
for each matter upon which the stockholders will vote at a meeting shall be
announced at the meeting. No ballot, proxies or votes nor any revocations
thereof or changes thereto, shall be accepted by the
4
<PAGE>
inspectors after the closing of the polls unless the Court of Chancery of the
State of Delaware, upon application by a stockholder, shall determine otherwise.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER; ELECTION BY STOCKHOLDERS; FILLING
VACANCIES. The authorized number of directors may be determined from time to
time by a vote of a majority of the then authorized number of directors;
provided, however, that such number shall initially be eight, and provided
further, that such number shall not be less than three nor more than 11; and
provided further, that such number and such minimum and maximum may be increased
pursuant to resolution of the board adopted pursuant to the certificate of
incorporation. The directors shall be elected at annual meetings of stockholders
and may be elected at any special meeting of stockholders, except as otherwise
provided herein, and each director shall hold office until a successor is
elected and qualified or until that director's earlier resignation or removal.
Except as otherwise provided in the certificate of incorporation, newly created
directorships resulting from any increase in the number of directors and any
vacancies on the board of directors resulting from death, resignation,
disqualification, removal, or other cause shall be filled by the affirmative
vote of a majority of the remaining directors then in office, even if less than
a quorum of the board, or by a sole remaining director. Any director elected in
accordance with the preceding sentence shall hold office until the next annual
meeting of stockholders. No person shall serve as a director of this corporation
after the annual stockholders meeting next following his or her 70th birthday.
No decrease in the number of directors constituting the board of directors shall
shorten the term of any incumbent director. Subject to the provisions of Article
XII of these bylaws, if there are no directors in office, then an election may
be held in the manner provided by statute.
SECTION 2. ADVANCE NOTICE PROVISIONS FOR ELECTION OF
DIRECTORS. Nominations for any election of a director may be made by the board
of directors, a committee appointed by the board of directors, or by any
stockholder entitled to vote generally in the election of directors who complies
with the procedures set forth in this Section 2 of Article III. All nominations
by stockholders must be made pursuant to timely notice in proper written form to
the secretary of the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than 30 days nor more than 60 days prior to the date of the
meeting; provided, however, that in the event that less than 40 days notice or
prior public disclosure of the date of the meeting is given to stockholders, for
such notice by the stockholder to be timely, it must be so received prior to the
date of the meeting and not later than the close of business on the tenth day
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. To be in proper written form, such
stockholder's notice shall set forth in writing (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended, including, without limitation, such person's written consent to
being named in the proxy statement as a nominee and to serving as a director if
elected; and (b) as to the
5
<PAGE>
stockholder giving the notice (i) the name and address, as they appear on the
corporation's books, of such stockholder and (ii) the class and number of shares
of capital stock of the corporation which are beneficially owned by such
stockholder. At the request of the board of directors, any person nominated by
the board of directors, or a committee appointed by the board of directors, for
election as a director shall furnish to the secretary of the corporation the
information required to be set forth in a stockholder's notice of nomination
which pertains to the nominee. The chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by this Section 2 of Article III, and
the defective nomination shall thereupon be disregarded.
SECTION 3. POWERS OF THE BOARD OF DIRECTORS. The business of
the corporation shall be managed by its board of directors which may exercise
all such powers of the corporation and do all such lawful acts and things as are
not by statute or by the certificate of incorporation or by these By-Laws
directed or required to be exercised or done only by the stockholders.
SECTION 4. PLACE OF MEETING. The board of directors of the
corporation may hold meetings, both regular and special, either within or
without the State of Delaware or the State of Illinois.
SECTION 5. REGULAR MEETINGS. The board of directors shall hold
regular meetings at such times and places as may be designated from time to time
by the chairman of the board or, in his absence, the president; provided that
the board shall meet at least four times during each calendar year.
SECTION 6. SPECIAL MEETINGS. Special meetings of the board of
directors may be called by the chairman of the board or by the president on two
days notice to each director, either personally or by mail or by telegram.
Special meetings shall be called by the chairman of the board or the president
or secretary in like manner and on like notice on the written request of two
directors. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting except as provided in Article IV of
these By-Laws.
SECTION 7. QUORUM AND MANNER OF ACTING. At all meetings of the
board of directors, a majority of the entire board shall constitute a quorum for
the transaction of business and the act of a majority of the directors present
at any meeting at which there is a quorum shall be the act of the board of
directors, except as may be otherwise specifically provided by statute or by the
certificate of incorporation. If a quorum shall not be present at any meeting of
the board of directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
SECTION 8. ACTION BY CONSENT. Unless otherwise restricted by
the certificate of incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the board of directors, or of any
committee thereof, may be taken without a meeting, if all members of the board
or committee as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of the proceedings of the board or
committee.
6
<PAGE>
SECTION 9. COMMITTEES. The board of directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution of the board of directors and to the extent permitted by Delaware
law, shall have and may exercise all of the powers and authority of the board of
directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the board.
SECTION 10. MINUTES OF COMMITTEES. Each committee shall keep
regular minutes of its meetings and report the same to the board of directors.
SECTION 11. FEES AND COMPENSATION. Directors may he paid such
compensation for their services, and such reimbursement for expenses for
attendance at regular, special and committee meetings, as the board of directors
may from time to time determine. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor.
SECTION 12. ELECTION OF CHAIRMAN. The board of directors shall
elect one of its members as the chairman of the board. The chairman of the
board, who shall not be considered an officer of the corporation, shall preside
at each meeting of the board of directors or the stockholders and shall perform
such other duties as may from time to time be assigned to him by the board of
directors.
SECTION 13. RESIGNATION. A resignation of a director shall be
effective upon receipt by the chairman of the board of a signed written notice
of such resignation, or, should such notice contain a specified date of
resignation, at such specified date. Acceptance by the board of directors is not
required for such resignation to be effective.
SECTION 14. REMOVAL. Any director may be removed from office
by the affirmative vote of the holders of at least a majority of the voting
power of all shares of capital stock of the corporation entitled to vote
generally in the election of directors, voting together as a single class.
ARTICLE IV
NOTICES
SECTION 1. WRITTEN NOTICE AND METHOD OF DELIVERY. Whenever,
under the provisions of the statutes or of the certificate of incorporation or
of these By-Laws, notice is required to be given to any director or stockholder,
such notice shall be in writing and shall be given in person or by mail to such
director or stockholder. If mailed, such notice shall be addressed to such
director or stockholder at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the
7
<PAGE>
time when the same shall be deposited in the United States mail. Notice to
directors may also be given by telegram.
SECTION 2. WAIVER OF NOTICE. Whenever any notice is required
to be given under the provisions of the statutes or of the certificate of
incorporation or of these By-Laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
SECTION 1. GENERAL. The officers of the corporation shall be
chosen by the board of directors and shall be a president, a vice president, a
secretary and a treasurer. The board of directors may also choose additional
vice presidents, and one or more assistant secretaries and assistant treasurers.
Any number of offices may be held by the same person, unless the certificate of
incorporation or these By-Laws otherwise provide.
SECTION 2. ANNUAL ELECTIONS. The board of directors at its
first meeting after each annual meeting of stockholders shall choose a
president, one or more vice presidents, a secretary and one or more assistant
secretaries and a treasurer.
SECTION 3. OTHER APPOINTMENTS. The board of directors may
appoint such other officers and agents as it may deem necessary who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board.
SECTION 4. COMPENSATION. The salaries of all officers of the
corporation shall be fixed by the board of directors.
SECTION 5. TERM. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the whole board of directors. Any vacancy
occurring in any office of the corporation shall be filled by the board of
directors.
SECTION 6. PRESIDENT. The president shall be the chief
executive officer and the chief operating officer of the corporation, shall have
the power to call meetings of the board of directors and special meetings of
stockholders, shall preside (in the absence of the chairman of the board or in
the event of his inability or refusal to act) at all meetings of the
stockholders and the board of directors, and shall have general charge of the
business of the corporation and shall see to it that all orders and resolutions
of the board of directors are performed and carried into effect. All current
reports and other day-to-day activities in the ordinary course of the
corporation's business shall be channeled by other officers and divisional
executives through or to the president, except as otherwise provided by these
By-Laws.
8
<PAGE>
The president shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
president to some other officer or agent of the corporation. The president shall
vote all shares of capital stock of the corporation of any other corporation
standing in the name of this corporation, except where the voting thereof shall
be delegated by the board of directors to some other officer or agent of the
corporation, and he shall employ required or appropriate executive,
administrative or professional personnel. In general, he shall perform all
duties incident to the offices of chief executive officer, chief operating
officer and president, and such other duties as may be prescribed from time to
time by the board of directors.
SECTION 7. VICE PRESIDENTS. In the absence of the president or
in the event of his inability or refusal to act, the vice president (or in the
event there be more than one vice president, the vice presidents in the order
designated by the directors, or in the absence of any designation, then in the
order of their election) shall perform the duties of the president, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the president. The vice presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
The board of directors, at its discretion, may designate any
vice president as senior vice president, executive vice president, or any other
designation as it may choose.
SECTION 8. SECRETARY. The secretary shall attend all meetings
of the board of directors and all meetings of stockholders and record all the
proceedings of the meetings of the corporation and of the board of directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors or president, under whose supervision he shall be. He shall have
custody of the corporate seal of the corporation and he, or an assistant
secretary, shall have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by the signature of
such assistant secretary. The board of directors may give general authority to
any other officer to affix the seal of the corporation and to attest the
affixing by his signature.
SECTION 9. ASSISTANT SECRETARY. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by the
board of directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
SECTION 10. TREASURER. The treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuables in the name
9
<PAGE>
and to the credit of the corporation in such depositaries as may be designated
by the board of directors.
The treasurer shall disburse the funds of the corporation as
may be ordered by the board of directors, taking proper vouchers for such
disbursements and shall render to the president and the board of directors when
the president or board of directors so requires, an account of all his
transactions as treasurer and of the financial condition of the corporation.
If required by the board of directors, the treasurer shall
give the corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the board of directors for the faithful performance of
the duties of his office and for the restoration to the corporation, in case of
his death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
SECTION 11. ASSISTANT TREASURER The assistant treasurer, of if
there shall be more than one, the assistant treasurers in the order determined
by the board of directors (or if there be no such determination, then in the
order of their election), shall, in the absence of the treasurer or in the event
of his inability or refusal to act, perform the duties and exercise the powers
of the treasurer and shall perform such other duties and have such other powers
as the board of directors may from time to time prescribe.
ARTICLE VI
INTERESTED DIRECTORS AND OFFICERS
SECTION 1. No contract or transaction between the corporation
and one or more of its directors or officers, or between the corporation and any
other corporation, partnership, association, or other organization in which one
or more of its directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board of directors or a committee thereof which authorized the contract or
transaction, or solely because his or their votes are counted for such purpose,
if:
(a) The material facts as to his interest and as to the
contract or transaction are disclosed or are known to the board of directors or
committee, which in good faith authorizes the contract or transaction by a vote
sufficient for such purpose without counting the vote of the interested director
or directors; or
(b) The material facts as to his interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation
as of the time it is authorized, approved or ratified by the board of directors
or the stockholders.
10
<PAGE>
Interested directors may be counted in determining the presence of a quorum at a
meeting of the board of directors or of a committee which authorizes the
contract or transaction.
ARTICLE VII
INDEMNIFICATION
SECTION 1. RIGHT TO INDEMNIFICATION. Each person who was or is
a party or is threatened to be made a party to or is involved in or called as a
witness in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, and any appeal
therefrom (hereinafter collectively a "proceeding"), by reason of the fact that
he, or a person of whom he is the legal representative, is, was or had agreed to
become a director, officer, or Delegate (as defined hereinafter) of the
corporation, shall be indemnified and held harmless by the corporation, to the
fullest extent permitted under the DGCL as the same now exists or may hereafter
be amended (but in the case of any such amendment, only to the extent that such
amendment permits the corporation to provide broader indemnification rights than
the DGCL permitted the corporation to provide prior to such amendment), against
all expenses (including, but not limited to, attorneys' fees and expenses of
litigation) reasonably incurred, and all liabilities and losses (including, but
not limited to, judgments, fines, excise taxes, ERISA penalties and amounts paid
in settlement) incurred by him in connection with such proceeding; provided that
except as explicitly provided herein, the corporation shall indemnify any such
person seeking indemnity in connection with a proceeding (or part thereof)
initiated by such person only if authorization for such proceeding (or part
thereof) initiated by such person was not denied by a majority of the board of
directors prior to the earlier of (i) 30 days after receipt of notice thereof
from such person or (ii) an Event, as defined hereinafter. For purposes of this
Article VII, a "Delegate" is any director or officer who is or was serving at
the request of the corporation or the board of directors as a director, officer,
trustee, fiduciary, partner, employee or agent of an entity or enterprise other
than the corporation (including, but not limited to, a partnership, joint
venture, trust, other corporation, or an employee benefit plan or trust); and an
"Event" shall be deemed to have occurred if (i) any "Person" (as that term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes (except in a transaction approved in advance by the board
of directors) the beneficial owner (as defined in Rule 13d-3 under such Act),
directly or indirectly, of securities of the corporation representing 25% or
more of the combined voting power of the corporation's then outstanding
securities, provided that the UNR Asbestos-Disease Claims Trust (as defined in
the Plan of Reorganization dated March 14, 1989 (the "Plan")) holding securities
of the corporation pursuant to the Plan shall not be deemed a Person for
purposes of this Article VII, or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the board of
directors of the corporation cease for any reason to constitute at least a
majority thereof unless the election of each director who was not a director at
the beginning of the period was approved by either (x) a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period or (y) the UNR Asbestos-Disease Claims Trust (as defined
in the Plan).
11
<PAGE>
SECTION 2. EXPENSES. Expenses, including attorneys' fees,
incurred by a person indemnified pursuant to Section 1 of this Article VII in
defending or otherwise being involved in a proceeding shall be paid by the
corporation in advance of the final disposition of such proceeding upon receipt
of an undertaking (the "Undertaking") by or on behalf of such person to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation; provided that in connection with a proceeding
(or part thereof) initiated by such person except as provided in Section 3 of
this Article VII for proceedings to enforce a person's right to the advancing of
expenses for either a proceeding not initiated by such person or a proceeding
initiated by such person for which authorization was not denied, the corporation
shall pay said expenses in advance of final disposition only if authorization
for such proceeding (or part thereof) was not denied by a majority of the board
of directors of the corporation. A person to whom expenses are advanced pursuant
hereto shall not be obligated to repay pursuant to the Undertaking until the
final determination of any pending proceeding in a court of competent
jurisdiction, including appeals therefrom, concerning the right of such person
to be indemnified or the obligations of such person to repay pursuant to the
Undertaking.
SECTION 3. PROTECTION OF RIGHTS. If a claim under Section 1 of
this Article VII is not promptly paid in full by the corporation after a written
claim has been received by the corporation or if expenses pursuant to Section 2
of this Article VII have not been promptly advanced after a written request for
such advancement accompanied by the Undertaking has been received by the
corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim or the advancement of
expenses. If successful, in whole or in part, in such suit such claimant shall
also be entitled to be paid the reasonable expense thereof. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required Undertaking has been tendered to the corporation)
that the claimant has not met the standards of conduct which make it permissible
under the DGCL for the corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the corporation. If
an Event has occurred, a claimant making a claim under Section 1 of this Article
VII or seeking to avoid repayment to the corporation pursuant to an Undertaking
shall have (i) the right, but not the obligation, to have a determination made
by independent legal counsel as to whether indemnification of the claimant is
proper because he has met the applicable standard of conduct required under the
DGCL, and (ii) the right to select as independent legal counsel for such purpose
any law firm designated for such purpose in a resolution adopted by a majority
of the board of directors prior to the Event and in full force and effect
immediately prior to the Event. If a determination has been made in accordance
with the preceding sentence, no determination inconsistent therewith by other
legal counsel, by the board of directors, or by stockholders shall be of any
force or effect. Neither the failure of the corporation (including its board of
directors, independent legal counsel, or its stockholders) to have made a
determination, if required, prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he has
met the applicable standard of conduct required under the DGCL, nor an actual
determination by the corporation (including its board of directors, independent
legal counsel, or its stockholders) that the claimant had not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that claimant had not met the applicable standard of conduct.
12
<PAGE>
SECTION 4. MISCELLANEOUS.
(a) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any
person by this Article VII shall not be deemed exclusive of any other right
which such person may have or hereafter acquire under any statute, provision of
the certificate of incorporation, By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity at the request of the corporation while
holding such office, and shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such person. The board of directors shall have the authority,
by resolution, to provide for such indemnification of employees or agents of the
corporation or others and for such other indemnification of directors, officers
or Delegates as it shall deem appropriate.
(b) INSURANCE. The corporation shall have power to purchase
and maintain insurance, at its expense, to protect itself and any director,
officer, employee or agent of the corporation, or any person who is or was
serving at the request of the corporation in any other capacity with the
corporation, another corporation, a partnership, a joint venture, trust or other
enterprise against any expenses, liabilities or losses, asserted against him or
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such expenses, liabilities or losses under the DGCL.
(c) CONTRACTUAL NATURE. The provisions of this Article VII
shall be applicable to all proceedings commenced after its adoption, whether
such arise out of events, acts or omissions which occurred prior or subsequent
to such adoption, and shall continue as to a person who has ceased to be a
director, officer or Delegate and shall inure to the benefit of the heirs,
executors and administrators of such person. This Article VII shall be deemed to
be a contract between the corporation and each person who, at any time that this
Article VII is in effect, serves or agrees to serve in any capacity which
entitles him to indemnification hereunder and any repeal or other modification
of this Article VII or any repeal or modification of the DGCL or any other
applicable law shall not limit any rights of indemnification existing or arising
out of events, acts or omissions occurring prior to such repeal or modification
to enforce this Article VII with regard to acts, omissions or events arising
prior to such repeal or modification.
(d) SEVERABILITY. If this Article VII or any portion hereof
shall be invalidated or held to be unenforceable on any ground by any court of
competent jurisdiction, the decision of which shall not have been reversed on
appeal, such invalidity or unenforceability shall not affect the other
provisions hereof, and this Article VII shall be construed in all respects as if
such invalid or unenforceable provisions had been omitted therefrom.
ARTICLE VIII
CERTIFICATES OF CAPITAL STOCK
SECTION 1. STOCK CERTIFICATES. Every holder of shares of
capital stock of the corporation shall be entitled to have a certificate, signed
by, or in the name of the corporation by,
13
<PAGE>
the chairman of the board or the president or a vice president, and by the
treasurer or an assistant treasurer, or the secretary or an assistant secretary,
of the corporation, certifying the number of shares owned by him in the
corporation.
SECTION 2. FACSIMILE SIGNATURES. Any or all of the signatures
on the certificate may be facsimile. In case the chairman of the board, any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.
SECTION 3. LOST CERTIFICATES. The board of directors may
direct a new certificate or certificates of shares of capital stock of the
corporation to be issued in place of any certificate or certificates theretofore
issued by the corporation, alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the certificate
of shares of capital stock of the corporation to be lost, stolen or destroyed.
When authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond, in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
SECTION 4. TRANSFER OF STOCK. Upon surrender to the
corporation or the transfer agent of the corporation of a certificate for shares
of capital stock of the corporation duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books;
provided, however, that such duty shall be subject to federal and state
securities and other applicable laws, the certificate of incorporation, and any
legends and stop transfer instructions with respect to such old certificate.
SECTION 5. FIXING RECORDING DATE. In order that the
corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of shares
of capital stock of the corporation or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the board of directors may fix a new record date for the adjourned meeting.
SECTION 6. REGISTERED STOCKHOLDERS. The corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares of capital
14
<PAGE>
stock of the corporation to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person registered on its books as the
owner of shares of capital stock of the corporation, and shall not be bound to
recognize any equitable or other claim to or interest in such share or shares of
capital stock of the corporation on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
ARTICLE IX
DIVISIONS
SECTION 1. DESIGNATION. The president may from time to time
designate one or more divisions of the corporation as the organizations through
which the operations of the corporation are to be conducted, and may also from
time to time prescribe the area of operations for each division so designated.
SECTION 2. MANAGEMENT. The president shall from time to time
appoint individuals to manage the operations of these divisions and these
individuals shall be designated by such titles as may be appropriate. These
titles shall include the name of the division and may include the word
president, vice-president or manager. Such individuals, however, irrespective of
such titles, shall not be, nor shall they be deemed to be, officers of the
corporation. Such division personnel shall be authorized to have general and
active management of the activities of their respective divisions, all subject
to the right of the president to (a) delegate any specific management power, (b)
fix their compensation, and (c) remove such personnel at any time without
further prior authorization of the board of directors.
ARTICLE X
GENERAL PROVISIONS
DIVIDENDS
SECTION 1. DIVIDENDS. Dividends upon the shares of capital
stock of the corporation, subject to any additional requirements of the
certificate of incorporation, if any, may be declared by the board of directors
at any regular or special meeting, pursuant to law. Dividends may be paid in
cash, in property, or in shares of capital stock of the corporation, subject to
the provisions of the certificate of incorporation.
SECTION 2. RESERVES. Before payment of any dividend, there may
be set aside out of any funds of the corporation available for dividends such
sum or sums as the board of directors from time to time, in its absolute
discretion, shall think proper as a reserve or reserves to meeting
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the board of directors
shall think conducive to the interest of the corporation, and the board of
directors may modify or abolish any such reserve in the manner in which it was
created.
15
<PAGE>
SECTION 3. CHECKS. All checks or demands for money and notes
of the corporation shall be signed by such officer or officers, or such other
person or persons as the board of directors may from time to time designate.
SECTION 4. FISCAL YEAR. The fiscal year of the corporation
shall end on December 31.
SECTION 5. STOCKHOLDER RECORD. The corporation shall keep at
its principal place of business in Illinois, or at the office of a transfer
agent or a registrar in Illinois, records of the stockholders in the
corporation, giving the names and addresses of all stockholders and the number
of shares of capital stock of the corporation held by each.
SECTION 6. SEAL. The corporate seal shall have inscribed
thereon the name of the corporation and the words "CORPORATE SEAL, DELAWARE."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
ARTICLE XI
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or repealed
and new By-Laws may be adopted by the board of directors at any meeting thereof,
or by the stockholders.
16
<PAGE>
Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of November 11, 1999 (this
"AGREEMENT"), is entered into by and between ROHN Industries, Inc., a Delaware
corporation (the "COMPANY"), and Brian B. Pemberton (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 President and Chief Executive Officer 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 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 Board. 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 $340,000 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 May 1, 2000.
The Base Salary shall be payable in accordance with the normal payroll practices
of the Company then in effect.
(b) 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").
(c) 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.
(d). 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.
(e) 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 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
2
<PAGE>
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 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
3
<PAGE>
with the normal payroll practices of the Company, until April 30, 2001 or for
twelve (12) months following the Termination Date, whichever period is longer.
(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, until April 30, 2001 or for twelve (12) months
following the Termination Date, whichever period is longer.
(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 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
4
<PAGE>
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 "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
5
<PAGE>
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 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
6
<PAGE>
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: Maureen B. Bellantoni
If to the Employee: Brian B. Pemberton
12822 North Georgetowne Road
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 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.
7
<PAGE>
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 employment on behalf of the Company on or prior
to the Termination Date but not previously paid to the Executive.
8
<PAGE>
"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 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:
9
<PAGE>
(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 (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
10
<PAGE>
(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/ MAUREEN B. BELLANTONI
-----------------------------------
Name: Maureen B. Bellantoni
Title: Vice President & CFO
BRIAN B. PEMBERTON
/s/ BRIAN B. PEMBERTON
--------------------------------------
12
<PAGE>
Exhibit 10.8
AMENDED AND RESTATED
ROHN INDUSTRIES, INC. 1994 NONEMPLOYEE DIRECTOR
STOCK OWNERSHIP PLAN
(As Amended Through March 27, 2000)
ARTICLE I - PURPOSE OF THE PLAN
The purpose of the Amended and Restated ROHN Industries, Inc. 1994
Nonemployee Director Stock Ownership Plan (formerly known as the URN
Industries, Inc., 1994 Nonemployee Director Stock Ownership Plan) is to further
the growth, development, and financial success of the Corporation by
strengthening the Corporation's ability to attract and retain the services of
experienced and knowledgeable Nonemployee Directors by enabling them to
participate in the Corporation's growth and by linking the personal interests of
Nonemployee Directors to those of the Corporation's shareholders.
ARTICLE II - CERTAIN DEFINITIONS
Unless the context clearly indicates otherwise, the following terms shall have
the following meanings:
2.1 "AWARD" means the crediting of Stock Units to a Participant's Stock
Unit Account under the Plan.
2.2 "BOARD" means the board of directors of ROHN Industries, Inc.
2.3 "CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:
(a) The acquisition, by a person or group of persons acting in concert, of
a beneficial ownership interest in the Corporation, resulting in the total
beneficial ownership of such person or group of persons equaling or exceeding
50% of the outstanding Shares and warrants of the Corporation; provided,
however, that no such person or group of persons shall be deemed to beneficially
own (i) any Shares or warrants acquired directly from the Corporation or (ii)
any Shares or warrants held by the Corporation or any of its subsidiaries or any
employee benefit plan (or any related trust) of the Corporation or its
subsidiaries. The Change in Control shall be deemed to occur on the date the
beneficial ownership of the acquiring person or group of persons first equals or
exceeds 50% of the outstanding Shares and warrants of the Corporation.
<PAGE>
(b) A change, within any period of twenty-four (24) months or less, in the
composition of the Board such that at the end of such period a majority of the
directors who are then serving were not serving at the beginning of such period,
unless at the end of such period the majority of the directors in office were
nominated upon the recommendation of a majority of the Board at the beginning of
such period. The Change in Control shall be deemed to occur on the date the last
director necessary to result in a Change in Control takes office or resigns from
office, as applicable.
(c) Approval by securityholders of the Corporation of a merger,
consolidation or other reorganization having substantially the same effect, or
the sale of all or substantially all the consolidated assets of the Corporation
in each case, with respect to which the person or group of persons who were the
respective beneficial owners of the Shares or warrants immediately prior to such
event do not, following such event, beneficially own, directly or indirectly,
more than 50% of the then outstanding voting securities of the
corporation resulting from such event or the Corporation purchasing or receiving
assets pursuant to such event. The Change in Control shall be deemed to occur on
the date on which the transaction is approved by the Corporation's
securityholders.
2.4 "CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
2.5 "CORPORATION" means ROHN Industries, Inc.
2.6 "DISABILITY" means total disability within the meaning of
Section 22(e)(3) of the Code.
2.7 "EMPLOYEE" means any full time worker, paid hourly or by salary, in
the employment of the Corporation or any of its subsidiaries.
2.8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
2.9 "FAIR MARKET VALUE" means on any date the average of the average of
the highest and lowest sales prices of Shares on the National Association of
Securities Dealers, Inc.'s Automated Quotation/National Market System
("NASDAQ/NMS") (or if Shares are not then traded on the NASDAQ/NMS, on the
principal market where Shares are actively traded) (as reported in THE WALL
STREET JOURNAL, Midwest Edition) on each of the five trading days immediately
preceding such date.
2.10 "NONEMPLOYEE DIRECTOR" means any individual who is a member of the
Board, but who is not otherwise an Employee of the Corporation.
-2-
<PAGE>
2.11 "PARTICIPANT" means a Nonemployee Director who has received an Award
under the Plan.
2.12 "PLAN" means the ROHN Industries, Inc. 1994 Nonemployee Director Stock
Ownership Plan, as amended from time to time.
2.13 "STOCK UNITS" means units credited to a Participant's Stock Unit
Account pursuant to Article V hereof.
2.14 "STOCK UNIT ACCOUNT" mean a memorandum account established on the
books of the Corporation on behalf of a Participant to which is credited a
number of Stock Units pursuant to Article V hereof.
2.15 "SHARE" means a share of common stock of the Corporation.
2.16 "SHARE DELIVERY DATE" means the date which is the earlier of (a) the
termination of a Participant's service as a director, other than for cause, or
(b) a Change of Control.
ARTICLE III - ADMINISTRATION
3.1 ADMINISTRATION OF PLAN. The Plan shall be administered by the Board,
subject to the restrictions set forth in the Plan.
3.2 AUTHORITY OF THE BOARD. The Board shall have the full power,
discretion, and authority to interpret and administer the Plan in a manner which
is consistent with the Plan's provisions.
3.3 EFFECT OF BOARD DETERMINATIONS. All determinations and decisions made
by the Board pursuant to the provisions of the Plan and all related orders or
resolutions of the Board shall be final, conclusive, and binding on all persons,
including the Corporation, its shareholders, Employees, Participants and their
estates and beneficiaries.
ARTICLE IV - STOCK UNITS AND SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES SUBJECT TO THE PLAN. Subject to adjustment as
provided herein, the total number of Shares available for issuance under the
Plan may not exceed 200,000. If any Stock Units or Shares Awarded under the Plan
shall be forfeited, such
-3-
<PAGE>
Shares or the Shares underlying such Stock Units shall again become available
for future Awards under the Plan.
4.2 CAPITAL ADJUSTMENTS. In the event of any merger, reorganization,
consolidation, recapitalization, liquidation, stock split, stock dividend, split
up, share combination, or other change in the corporate structure of the
Corporation affecting the Shares, the Board may make appropriate adjustments to
(a) outstanding Awards to prevent dilution or enlargement of rights, and (b) the
number of Shares available for Awards under the Plan.
ARTICLE V - STOCK UNITS AWARDS
5.1 CREDITING OF STOCK UNITS. Each Nonemployee Director shall have the
right to elect to receive in lieu of all or a portion of his or her annual
retainer and/or meeting fees otherwise payable in cash, a number of Stock Units
which shall be credited to his or her Stock Unit Account on the date or dates
that such annual retainer and/or meeting fees would otherwise be paid in cash.
The number of Stock Units so credited shall be determined by dividing the amount
of the retainer or fee otherwise paid in cash on such date by the Fair Market
Value of a Share on such date. Each Stock Unit shall represent the right to
receive one Share upon the Share Delivery Date. An election made under this
Section 5.1 to receive Stock Units or to revoke a previously made election to
receive Stock Units must be made in writing and filed with the Secretary of the
Corporation prior to November 30 to be effective with respect to a retainer or
fees payable in the following calendar year; PROVIDED, HOWEVER, that an election
in respect of the retainer and meeting fees payable during the period beginning
on or after May 8, 2000 and ending December 31, 2000 must be filed with the
Secretary of the Corporation prior to April 8, 2000. An election made under this
Section shall remain in effect from year to year until a new election is made in
accordance with this Section 5.1 and shall otherwise be irrevocable.
5.2 DIVIDEND EQUIVALENTS. In the event of a dividend paid with respect to
Shares:
(a) in the case of a cash dividend, or a dividend of stock of the
Corporation (other than Shares) or other property, each Participant shall
receive from the Corporation an amount of such cash, stock or property, as the
case may be, as if such Participant held a number of Shares equal to the number
of Stock Units credited to such Participant's Stock Unit Account on the record
date for the payment of such dividend;
(b) in the case of a dividend consisting of Shares, each Participant's
Stock Unit Account will be credited with a number of Stock
-4-
<PAGE>
Units equal to the number of Stock Units in such account immediately prior to
such dividend multiplied by the number of Shares paid as a dividend per Share.
5.3 VESTING. Participants shall be fully (100%) vested in their Stock
Unit Accounts at all times.
ARTICLE VI - PAYMENT OF STOCK UNIT ACCOUNT
6.1 SHARE DELIVERY DATE. Upon the Share Delivery Date, one or more
certificates representing a number of Shares equal to the number of Stock Units
credited to the Participant's Stock Unit Account, including any Stock Units
credited as a result of dividend equivalents, (rounded to the nearest whole
number) shall be delivered to such Participant, or in the case of the
Participant's death or Disability, to the Participant's personal representative
or to the person to whom such Shares are transferred by will or by the
applicable laws of descent and distribution.
6.2 TERMINATION FOR CAUSE. In the event a Participant's service as a
Nonemployee Director is terminated on account of (a) fraud or intentional
misrepresentation, or (b) embezzlement, misappropriation, or conversion of
assets or opportunities of the Corporation, all Stock Units awarded to such
Participant prior to the date of termination shall be immediately forfeited.
ARTICLE VII - AMENDMENT, MODIFICATION AND TERMINATION
7.1 AMENDMENT, MODIFICATION AND TERMINATION. Subject to the terms set
forth in this Section 7.1, the Board may terminate, amend, or modify the Plan at
any time and from time to time. The Plan shall terminate when all of the Shares
subject to it have been awarded according to the provisions of the Plan.
Without the approval of the voting securityholders of the Corporation as
may be required by the Code, by the rules of Section 16 of the Exchange Act, by
any national securities exchange or system on which the Shares are then listed
or reported, or by a regulatory body having jurisdiction with respect hereto, no
such termination, amendment or modification may:
(a) Materially increase the total number of Shares which may be available
for grants of Awards under the Plan, except as provided in Section 4.2 herein;
(b) Materially modify the requirements with respect to eligibility to
participate in the Plan; or
-5-
<PAGE>
(c) Materially increase the benefits accruing to Nonemployee Directors
under the Plan.
7.2 AWARDS PREVIOUSLY GRANTED. Unless required by law, no termination,
amendment or modification of the Plan shall materially affect, in an adverse
manner, any Award previously granted under the Plan, without the consent of the
Participant to whom the Award was made.
ARTICLE VIII - MISCELLANEOUS
8.1 NO RIGHTS OF A SHAREHOLDER. Participants shall have none of the rights
of shareholders of the Corporation with respect to any Stock Unit.
8.2 NO RIGHT OF NOMINATION. Nothing in the Plan shall be deemed to create
any obligation on the part of the Board to nominate any Participant for
reelection by the Corporation's securityholders.
8.3 NONASSIGNABILITY. The right to receive benefits under the Plan may not
be anticipated, alienated, sold, transferred, assigned, pledged, encumbered or
subjected to any garnishment, charge or legal process.
8.4 UNSECURED GENERAL CREDITOR. Participants shall have no legal or
equitable rights, interest or claims in any property or assets of the
Corporation. For purposes of the payment of benefits under the Plan, any and all
of the Corporation's assets shall be, and remain, the general, unpledged
unrestricted assets of the Corporation. The Corporation's obligations under the
Plan shall be merely that of an unfunded and unsecured promise to make payments
in the future.
8.5 REQUIREMENTS OF LAW. The granting of Awards under the Plan and the
issuance of stock certificates shall be subject to all applicable laws, rules,
and regulations and to such approvals by any governmental agencies or national
securities exchanges as may be required.
8.6 EFFECTIVE DATE. The Amended and Restated Plan is effective as of
March 27, 2000.
-6-
<PAGE>
Exhibit 10.9
ROHN INDUSTRIES, INC.
1999 STOCK OPTION PLAN
(AS AMENDED NOVEMBER 11, 1999)
SECTION 1. PURPOSE. The purpose of the Rohn Industries, Inc. 1999 Stock
Option Plan (this "Plan") is to benefit Rohn Industries, Inc. (the "Company")
and its subsidiaries by offering certain present and future employees, including
officers, a favorable opportunity to become holders of stock in the Company over
a period of years, thereby giving them a stake in the growth and prosperity of
the Company and encouraging the continuance of their services with the Company
or its subsidiaries.
SECTION 2. ADMINISTRATION.
2.1 COMMITTEE. This Plan shall be administered by the Compensation
Committee (the "Committee") of the Board of Directors of the Company (the
"Board"). The Committee's interpretation and construction of any terms or
provisions of this Plan or any option issued hereunder, or of any rule or
regulation adopted in connection therewith, shall be conclusive and binding on
all interested parties, so long as such interpretation and construction with
respect to incentive stock options corresponds to the requirements of Section
422 of the Internal Revenue Code, as amended (the "Code") and the regulations
thereunder.
2.2 GRANTS TO SECTION 16 PERSONS. For so long as the Company's Common
Stock is registered under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Committee may not grant options to an officer
of the Company subject to Section 16 of the Exchange Act unless the grant is (i)
approved in advance by the Committee in accordance with the provisions of Rule
16b-3(d)(1) under the Exchange Act (where the Committee is composed solely of
two or more non-employee directors who satisfy the requirements of Rule
16b-3(b)(3) under the Exchange Act), (ii) approved in advance, or subsequently
ratified by the stockholders in accordance with the provisions of Rule
16b-3(d)(2) under the Exchange Act or (iii) absent approval pursuant to clauses
(i) or (ii), no officer of the Company may sell shares received upon the
exercise of an option during the six-month period immediately following the
grant of such option.
2.3 GRANTS TO SECTION 162(m) OFFICERS. The Board may not grant options
to an officer subject to Section 162(m) of the Code unless the grant is approved
by the Committee where the Committee is composed of at least two "outside
directors" (as defined in the regulations promulgated under Section 162(m) of
the Code).
2.4 SECTION 16(b) COMPLIANCE AND BIFURCATION OF PLAN. It is the
intention of the Company that this Plan comply in all respects with Section
16(b) and Rule 16b-3 under the Exchange Act, to the extent applicable, and, if
any Plan provision is later found not to be in compliance with such Section or
Rule, the provision shall be deemed null and void, and the Plan shall be
construed in favor of its meeting the requirements of Section 16(b) and Rule
16b-3 under the Exchange Act. Notwithstanding anything in
<PAGE>
the Plan to the contrary, the Committee, in its absolute discretion, may
bifurcate the Plan so as to limit the use of any provision of the Plan to
participants who are executive officers or other persons subject to Section
16(b) of the Exchange Act without so restricting, limiting or conditioning the
Plan with respect to other participants.
SECTION 3. STOCK SUBJECT TO THIS PLAN. The stock subject to this Plan
shall be the Company's common stock, par value $.01 per share (the "Common
Stock"), authorized but unissued or held in the Company's treasury or
subsequently acquired by the Company. Subject to adjustment as provided in
Section 7 hereof, the aggregate amount of Common Stock to be delivered upon the
exercise of all options granted under this Plan shall not exceed 2,500,000
shares as such Common Stock was constituted on the effective date of this Plan.
If any option granted under this Plan shall expire, or be surrendered, exchanged
for another option, canceled or terminated for any reason without having been
exercised in full, the unpurchased shares subject thereto shall thereupon again
be available for purposes of this Plan, including for replacement options which
may be granted in exchange for such surrendered, canceled or terminated options.
SECTION 4. ELIGIBILITY. An incentive stock option may be granted only
to an individual who, at the time the option is granted, is an employee of the
Company or any subsidiary. A nonqualified stock option may be granted to any
employee of the Company or any subsidiary, whether an individual or an entity.
Any party to whom an option is granted under this Plan shall be referred to
hereinafter as an "Optionee."
SECTION 5. TERMS AND CONDITIONS OF OPTIONS. Options granted under this
Plan shall contain such terms, conditions, limitations and restrictions as the
Committee shall deem advisable and which are not inconsistent with this Plan.
Notwithstanding the foregoing, options shall include or incorporate by reference
the following terms and conditions:
5.1 NUMBER OF SHARES AND PRICE. The maximum number of shares that may
be purchased pursuant to the exercise of each option and the price per share at
which such option is exercisable (the "exercise price") shall be as established
by the Committee, provided that the Committee shall act in good faith to
establish an exercise price which shall be not less than the fair market value
per share of the Common Stock at the time the option is granted with respect to
incentive stock options and not less than 85% of the fair market value per share
of the Common Stock at the time the option is granted with respect to
nonqualified stock options and also provided that, with respect to incentive
stock options granted to greater than 10% stockholders, the exercise price shall
be as required by Section 6. In addition, in any five-year period, no individual
may be granted options under the Plan to purchase more than 1,000,000 shares of
Common Stock, subject to adjustment as set forth in Section 7.
5.2 TERM AND MATURITY. Subject to the restrictions contained in Section
6 with respect to granting incentive stock options to greater than 10%
stockholders, the
2
<PAGE>
term of each incentive stock option shall be as established by the Committee
and, if not so established, shall be 10 years from the date it is granted but in
no event shall the term of any incentive stock option exceed 10 years. The term
of each nonqualified stock option shall be as established by the Committee and,
if not so established, shall be 10 years from the date it is granted. To ensure
that the Company or its subsidiaries will achieve the purpose and receive the
benefits contemplated in this Plan, any option granted to any Optionee hereunder
shall, unless the condition of this sentence is waived by resolution adopted by
the Committee, be exercisable according to the following schedule:
<TABLE>
<CAPTION>
PERIOD OF OPTIONEE'S
CONTINUOUS EMPLOYMENT
WITH THE COMPANY OR RELATED
CORPORATION FROM THE DATE PORTION OF TOTAL OPTION
THE OPTION IS GRANTED WHICH IS EXERCISABLE
--------------------------- -----------------------
<S> <C>
after 1 year 33-1/3%
after 2 years 66-2/3%
after 3 years 100%
</TABLE>
5.3 EXERCISE. Subject to the vesting schedule described in Section 5.2
above, each option may be exercised in whole or in part; provided, however, that
no fewer than 100 shares (or the remaining shares then purchasable under the
option, if less than 100 shares) may be purchased upon any exercise of option
rights hereunder and that only whole shares will be issued pursuant to the
exercise of any option. Options shall be exercised by delivery to the Company of
notice of the number of shares with respect to which the option is exercised,
together with payment of the exercise price.
5.4 PAYMENT OF EXERCISE PRICE. Payment of the option exercise price
shall be made in full at the time the notice of exercise of the option is
delivered to the Company and shall be in cash, bank certified or cashier's check
or personal check (unless at the time of exercise the Committee in a particular
case determines not to accept a personal check) for the Common Stock being
purchased.
The Committee can determine at the time the option is granted for
incentive stock options, or at any time before exercise for nonqualified stock
options, that additional forms of payment will be permitted. To the extent
permitted by the Committee and applicable laws and regulations (including, but
not limited to, federal tax and securities laws and regulations and state
corporate law), an option may be exercised by:
(a) delivery of shares of Common Stock held by an Optionee
having a fair market value equal to the exercise price, such fair
market value to be determined in good faith by the Committee;
3
<PAGE>
(b) delivery of a properly executed exercise notice, together
with irrevocable instructions to a broker, all in accordance with the
regulations of the Federal Reserve Board, to promptly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price
and any federal, state or local withholding tax obligations that may
arise in connection with the exercise; provided, that the Committee, in
its sole discretion, may at any time determine that this subparagraph
(b), to the extent the instructions to the broker call for an immediate
sale of the shares, shall not be applicable to any Optionee whose
employment with the Company has terminated prior to the time of
exercise; or
(c) delivery of a properly executed exercise notice together
with instructions to the Company to withhold from the shares that would
otherwise be issued upon exercise that number of shares having a fair
market value equal to the option exercise price.
5.5 WITHHOLDING TAX REQUIREMENT. The Company or any subsidiary shall
have the right to retain and withhold from any payment of cash or Common Stock
under the Plan the amount of taxes required by any government to be withheld or
otherwise deducted and paid with respect to such payment. At its discretion, the
Company may require an Optionee receiving shares of Common Stock to reimburse
the Company for any such taxes required to be withheld by the Company and
withhold such shares in whole or in part until the Company is so reimbursed. In
lieu thereof, the Company shall have the right to withhold from any other cash
amounts due or to become due from the Company to the Optionee an amount equal to
such taxes or retain and withhold a number of shares having a market value not
less than the amount of such taxes required to be withheld by the Company to
reimburse the Company for any such taxes and cancel (in whole or in part) any
such shares so withheld. If required by Section 16(b) of the Exchange Act, the
election to pay withholding taxes by delivery of shares held by any person who
at the time of exercise is subject to Section 16(b) of the Exchange Act, shall
be made either six months prior to the date the option exercise becomes taxable
or at such other times as the Company may determine as necessary to comply with
Section 16(b) of the Exchange Act.
5.6 ASSIGNABILITY AND TRANSFERABILITY OF OPTION. Options granted under
this Plan and the rights and privileges conferred hereby may not be transferred,
assigned, pledged or hypothecated in any manner (whether by operation of law or
otherwise) other than (i) by will or by the applicable laws of descent and
distribution, (ii) pursuant to a property settlement in connection with a
divorce proceeding, or (iii) as otherwise determined by the Committee by
resolution. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of any option under this Plan or of any right or privilege conferred
hereby, contrary to the Code or to the provisions of this Plan, or the sale or
levy or any attachment or similar process upon the rights and privileges
conferred hereby shall be null and void. The designation by an Optionee of a
beneficiary does not, in and of itself, constitute an impermissible transfer
under this Section.
4
<PAGE>
5.7 TERMINATION OF EMPLOYMENT. If the Optionee's employment with the
Company or any subsidiary ceases for any reason other than termination for
cause, death or total disability, and unless by its terms the option sooner
terminates or expires, then the Optionee may exercise, for an 18-month period
(and in the case of incentive stock options, for a three-month period) that
portion of the Optionee's option which is exercisable at the time of such
cessation, but the Optionee's option shall terminate at the end of the 18-month
period (three-month period for incentive stock options) following such cessation
as to all shares for which it has not theretofore been exercised, unless such
provision is waived by resolution adopted by the Committee within 90 days of
such cessation.
If an Optionee is terminated for cause, any option granted hereunder
shall automatically terminate as of the first discovery by the Company of any
reason for termination for cause, and such Optionee shall thereupon have no
right to purchase any shares pursuant to such option. "Termination for cause"
shall mean dismissal for dishonesty, conviction or confession of a crime
punishable by law (except minor violations), fraud, misconduct or unauthorized
disclosure of confidential information. If an Optionee's employment with the
Company or any subsidiary is suspended pending an investigation of whether or
not the Optionee shall be terminated for cause, all Optionee's rights under any
option granted hereunder likewise shall be suspended during the period of
investigation.
If an Optionee's employment with the Company or any subsidiary ceases
because of a total disability, the Optionee's option shall not terminate until
the end of the 18-month period and, in the case of an incentive stock option,
shall not cease to be treated as an incentive stock option until the end of the
12-month period, following such cessation (unless by its terms it sooner
terminates and expires). As used in this Plan, the term "total disability"
refers to a mental or physical impairment of the Optionee which is expected to
result in death or which has lasted or is expected to last for a continuous
period of 12 months or more and which causes the Optionee to be unable, in the
opinion of the Company and two independent physicians, to perform his or her
duties for the Company and to be engaged in any substantial gainful activity.
Total disability shall be deemed to have occurred on the first day after the
Company and the two independent physicians have furnished their opinion of total
disability to the Committee.
For purposes of this Section 5.7, a transfer of employment between or
among the Company and/or any subsidiary shall not be deemed to constitute a
cessation of employment with the Company or any subsidiary. For purposes of this
Section 5.7, with respect to incentive stock options, employment shall be deemed
to continue while the Optionee is on military leave, sick leave or other bona
fide leave of absence (as determined by the Committee). The foregoing
notwithstanding, employment shall not be deemed to continue beyond the first 90
days of such leave, unless the Optionee's reemployment rights are guaranteed by
statute or by contract.
5
<PAGE>
5.8 DEATH OF OPTIONEE. If an Optionee dies while he or she is employed
by the Company or any subsidiary or within the 12-month period following
cessation of such employment, any option held by such Optionee to the extent
that the Optionee would have been entitled to exercise such option, may be
exercised within 12 months after his or her death by the personal representative
of his or her estate or by the person or persons to whom the Optionee's rights
under the option shall pass by will or by the applicable laws of descent and
distribution.
5.9 STATUS OF SHAREHOLDER. Neither the Optionee nor any party to which
the Optionee's rights and privileges under the option may pass shall be, or have
any of the rights or privileges of, a shareholder of the Company with respect to
any of the shares issuable upon the exercise of any option granted under this
Plan unless and until such option has been exercised.
5.10 CONTINUATION OF EMPLOYMENT. Nothing in this Plan or in any option
granted pursuant to this Plan shall confer upon any Optionee any right to
continue in the employ of the Company or of a subsidiary, or to interfere in any
way with the right of the Company or of any such subsidiary to terminate his or
her employment with the Company at any time.
5.11 MODIFICATION AND AMENDMENT OF OPTION. Subject to the requirements
of Code Section 422 with respect to incentive stock options and to the terms and
conditions and within the limitations of this Plan, the Committee may modify or
amend outstanding options granted under this Plan. The modification or amendment
of an outstanding option shall not, without the consent of the Optionee, impair
or diminish any of his or her rights or any of the obligations of the Company
under such option. Except as otherwise provided in this Plan, no outstanding
option shall be terminated without the consent of the Optionee. Unless the
Optionee agrees otherwise, any changes or adjustments made to outstanding
incentive stock options granted under this Plan shall be made in such a manner
so as not to constitute a "modification" as defined in Code Section 424(h) and
so as not to cause any incentive stock option issued hereunder to fail to
continue to qualify as an incentive stock option as defined in Code Section
422(b).
5.12 LIMITATION ON VALUE FOR INCENTIVE STOCK OPTIONS. As to all
incentive stock options granted under the terms of this Plan, to the extent that
the aggregate fair market value (determined at the time the incentive stock
option is granted) of the stock with respect to which incentive stock options
are exercisable for the first time by the Optionee during any calendar year
(under this Plan and all other incentive stock option plans of the Company, a
subsidiary or a predecessor corporation) exceeds $100,000, such options shall be
treated as nonqualified stock options. The previous sentence shall not apply if
the Code is amended or if the Internal Revenue Service publicly rules, issues a
private ruling to the Company, any Optionee, or any legatee, personal
representative or distributee of an Optionee or issues regulations, changing or
6
<PAGE>
eliminating such annual limit, in which case the limitation shall be that
provided by the Code or the Internal Revenue Service, as the case may be.
5.13 VALUATION OF COMMON STOCK RECEIVED UPON EXERCISE
5.13.1 EXERCISE OF OPTIONS UNDER SECTIONS 5.4(a) AND (c). The
value of Common Stock received by the Optionee from an exercise under
Sections 5.4(a) and 5.4(c) hereof shall be the fair market value as
determined by the Committee, provided that, if the Common Stock is
traded in a public market, such valuation shall be the average of the
high and low trading prices or bid and asked prices, as applicable, of
the Common Stock for the date of receipt by the Company of the
Optionee's delivery of shares under Section 5.4(a) hereof or delivery
of the exercise notice under Section 5.4(c) hereof.
5.13.2 EXERCISE OF OPTION UNDER SECTION 5.4(b). The value of
Common Stock received by the Optionee from an exercise under Section
5.4(b) hereof shall equal (a) in the case of the sale of the Common
Stock received as a result of the exercise by a broker on the date of
receipt by the Company of the Optionee's exercise notice, the sales
price received for such shares; and (b) in all other cases, the average
of the high and low trading prices or bid and asked prices, as
applicable, of the Common Stock for the date of receipt by the Company
of the Optionee's exercise notice.
SECTION 6. GREATER THAN 10% STOCKHOLDERS.
6.1 EXERCISE PRICE AND TERM OF INCENTIVE STOCK OPTIONS. If incentive
stock options are granted under this Plan to employees who own more than 10% of
the total combined voting power of all classes of stock of the Company or any
subsidiary, the term of such incentive stock options shall not exceed five years
and the exercise price shall be not less than 110% of the fair market value of
the Common Stock at the time the incentive stock option is granted. This
provision shall control notwithstanding any contrary terms contained in any
other document. The term and exercise price limitations of this provision shall
be amended to conform to any change required by a change in the Code or by a
ruling or pronouncement of the Internal Revenue Service.
6.2 ATTRIBUTION RULE. For purposes of Section 6.1, in determining stock
ownership, an employee shall be deemed to own the stock owned, directly or
indirectly, by or for his or her brothers, sisters, spouse, ancestors and lineal
descendants. Stock owned, directly or indirectly, by or for a corporation,
partnership, estate or trust shall be deemed to be owned proportionately by or
for its stockholders, partners or beneficiaries. If an employee or a person
related to the employee owns an unexercised option or warrant to purchase stock
of the Company, the stock subject to that portion of the option or warrant which
is unexercised shall not be counted in determining stock ownership. For purposes
of this Section 6, stock owned by an employee shall include
7
<PAGE>
all stock owned by him which is actually issued and outstanding immediately
before the grant of the incentive stock option to the employee.
SECTION 7. ADJUSTMENT.
7.1 UPON CHANGES IN CAPITALIZATION. The aggregate number and class of
shares for which options may be granted under this Plan, the number and class of
shares covered by each outstanding option, and the exercise price per share
thereof (but not the total price), and each such option, shall all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a split-up or consolidation of shares or
any like capital adjustment, or the payment of any stock dividend.
7.2 EFFECT OF CHANGE IN CONTROL.
7.2.1 Except as otherwise determined by the Committee at the
time an option is granted, options outstanding on the date of a Change
of Control and held by an Optionee who is an employee of the Company or
any subsidiary on such date shall be immediately exercisable in full on
or after such date during its term, without regard to any time of
exercise established under Section 5 hereof. "Change in Control" shall
mean the occurrence, at any time during the specified term of an option
granted under the Plan, of any of the following events:
(i) The acquisition, by a person or group of persons
acting in concert, of a beneficial ownership interest in the
Company, resulting in the total beneficial ownership of such
persons or group of persons equaling or exceeding 50% of the
outstanding Common Stock; provided, however, that no such
person or group of persons shall be deemed to beneficially own
(i) any Common Stock acquired directly from the Company or
(ii) any Common Stock held by the Company or any subsidiary or
any employee benefit plan (or any related trust) of the
Company or its subsidiaries. The Change in Control shall be
deemed to occur on the date the beneficial ownership of the
acquiring person or group of persons first equals or exceeds
50% of the outstanding Common Stock.
(ii) A change, within any period of 24 months or
less, in the composition of the Board such that at the end of
such period a majority of the directors who are then serving
were not serving at the beginning of such period, unless at
the end of such period the majority of the directors in office
were nominated upon the recommendation of a majority of the
Board at the beginning of such period. The Change in Control
shall be deemed to occur on the date the last director
necessary to result in a Change in Control takes office or
resigns from office, as applicable.
(iii) Approval by shareholders of the Company of a
merger, consolidation or other reorganization having
substantially the same effect,
8
<PAGE>
or the sale of all or substantially all the consolidated
assets of the Company in each case, with respect to which the
persons or group of persons who were the respective beneficial
owners of the Common Stock immediately prior to such event do
not, following such event, beneficially own, directly or
indirectly, more than 50% of the then outstanding voting
securities of the Company resulting from such event or the
Company purchasing or receiving assets pursuant to such event.
If more than one of the foregoing events shall occur, each
such event shall constitute a separate Change in Control.
7.2.2 Except as otherwise determined by the Committee at the
time an option is granted, notwithstanding any other provisions in the
Plan, prior to the passage of one year from and after any Change in
Control, each Optionee shall have the right to require the Company (or,
if the Company is not the survivor of a merger, consolidation or
reorganization with an acquiror, the acquiror) to purchase from him or
her any or all unexercised options granted under this Plan at a
purchase price equal to (i) the excess of the fair market value per
share over the exercise price multiplied by (ii) the number of option
shares specified by the Optionee for purchase in a written notice to
the Company (or, if the Company is not the survivor of a merger,
consolidation or reorganization with an acquiror, the acquiror),
attention of the Secretary.
7.2.3 For purposes of Section 7.2.2 above, "fair market value
per share" shall mean, (i) except in the case of a merger,
consolidation or reorganization with an acquiror in which the Company
is not the survivor (a "Termination Merger"), the higher of (A) the
average of the highest sales price per share of the Company's Common
Stock on the NASDAQ Stock Market (as reported in THE WALL STREET
JOURNAL, Midwest Edition) (or, if the Company's Common Stock is not
then traded on the NASDAQ Stock market, on the principal market where
such Common Stock is actively traded) on each of the five trading days
immediately preceding the date the Optionee so notifies the Company or
(B) the average of the highest sales price per share of the Company's
Common Stock on the NASDAQ Stock Market (as reported in THE WALL STREET
JOURNAL, Midwest Edition) (or, if the Company's Common Stock is not
then traded on the NASDAQ Stock Market, reported on the principal
market where such Common Stock is actively traded) on each of the five
trading days immediately preceding the date of the Change in Control,
and (ii) in the case of a Termination Merger, the higher of (C) the
fair market value of the consideration receivable per share by holders
of Common Stock in such Termination Merger, which fair market value
as to any securities included in such consideration shall be the
average of the highest sales price per unit of such security on the
NASDAQ Stock Market (as reported in THE WALL STREET JOURNAL, Midwest
Edition) (or, if such security is not then traded on the NASDAQ Stock
Market, reported on the principal market where such security is
actively traded) on each of the five trading days immediately
9
<PAGE>
preceding the date of the Termination Merger and as to any such
security not actively traded in any market and as to all other property
included in such consideration, shall be the amount determined by the
Committee in its discretion or (D) the amount determined pursuant to
Clause (i)(B) of this Section 7.2.3. The amount payable to each
Optionee by the Company or acquiror, as the case may be, shall be in
cash or by certified check and shall be reduced by any taxes required
to be withheld.
7.3 FRACTIONAL SHARES. In the event of any adjustment in the number of
shares covered by an option, any fractional shares resulting from such
adjustment shall be disregarded and each such option shall cover only the number
of full shares resulting from such adjustment.
7.4 DETERMINATION OF COMMITTEE TO BE FINAL. All Section 7 adjustments
shall be made by the Committee, and its determination as to what adjustments
shall be made, and the extent thereof, shall be final, binding and conclusive.
Unless an Optionee agrees otherwise, any change or adjustment to an incentive
stock option shall be made in such a manner so as not to constitute a
"modification" as defined in Code Section 424(h) and so as not to cause his or
her incentive stock option issued hereunder to fail to continue to qualify as an
incentive stock option as defined in Code Section 422(b).
SECTION 8. SECURITIES REGULATION. Shares shall not be issued with
respect to an option granted under this Plan unless the exercise of such option
and the issuance and delivery of such shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, any applicable
state securities laws, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange or inter-dealer quotation system upon which the shares may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance, including the availability of an
exemption from registration for the issuance and sale of any shares hereunder.
Inability of the Company to obtain from any regulatory body having jurisdiction
the authority deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any shares hereunder or the unavailability of an exemption
from registration for the issuance and sale of any shares hereunder shall
relieve the Company of any liability in respect of the nonissuance or sale of
such shares as to which such requisite authority shall not have been obtained.
As a condition to the exercise of an option, the Company may require
the Optionee to represent and warrant at the time of any such exercise that the
shares are being purchased only for investment and without any present intention
to sell or distribute such shares if, in the opinion of counsel for the Company,
such representation is required by any relevant provision of the aforementioned
laws. At the option of the Company, a stop-transfer order against any shares of
stock may be placed on the official stock books and records of the Company, and
a legend indicating
10
<PAGE>
that the stock may not be pledged, sold or otherwise transferred unless an
opinion of counsel is provided (concurred in by counsel for the Company) stating
that such transfer is not in violation of any applicable law or regulation, may
be stamped on stock certificates in order to assure exemption from registration.
The Company may also require such other action or agreement by the Optionees as
it may from time to time deem to be necessary or advisable. THE COMPANY SHALL
NOT BE OBLIGATED, BY REASON OF THIS PROVISION OR OTHERWISE, TO UNDERTAKE
REGISTRATION OF THE OPTIONS OR STOCK HEREUNDER.
Should any of the Company's capital stock of the same class as the
stock subject to options granted hereunder be listed on a national securities
exchange or inter-dealer quotation system, shares shall not be issued with
respect to an option granted this Plan unless, prior to issuance, such exchange
or inter-dealer quotation system shall have authorized the listing of the shares
thereon.
SECTION 9. AMENDMENT AND TERMINATION.
9.1 BOARD ACTION. The Board may at any time suspend, amend or terminate
this Plan, provided that except as set forth in Section 7, the approval of the
holders of a majority of the Company's outstanding shares of voting capital
stock present and entitled to vote at any meeting is necessary for the adoption
by the Board of any amendment which will:
(a) increase the number of shares which are to be reserved for
the issuance of options under this Plan;
(b) permit the granting of stock options to a class of persons
other than those currently permitted to receive stock options under
this Plan; or
(c) require shareholder approval under applicable law,
including Section 16(b) of the Exchange Act.
9.2 AUTOMATIC TERMINATION. Unless sooner terminated by the Board, this
Plan shall terminate ten years from the earlier of (a) the date on which this
Plan is adopted by the Board or (b) the date on which this Plan is approved by
the stockholders of the Company. No option may be granted after such termination
or during any suspension of this Plan. The amendment or termination of this Plan
shall not, without the consent of the option holder, alter or impair any rights
or obligations under any option theretofore granted under this Plan.
SECTION 10. EFFECTIVENESS OF THIS PLAN. This Plan shall become
effective upon adoption by the Board so long as it is approved by the holders of
a majority of the Company's outstanding shares of voting capital stock present
and entitled to vote at any meeting at any time within 12 months before or after
the adoption of this Plan. Options may be granted hereunder prior to such
stockholder approval, but subject thereto.
11
<PAGE>
Adopted by the Board of Directors on April 9, 1999 and approved by the
stockholders on May 18, 1999.
12
<PAGE>
Exhibit 10.11
ROHN Industries, Inc. has entered into an Indemnification Agreement
with the following directors and employees in the form that follows:
- -------------------------------------------------------------------------------
Name Date
- -------------------------------------------------------------------------------
Michael E. Levine May 18, 1999
- -------------------------------------------------------------------------------
Stephen E. Gorman September 10, 1999
- -------------------------------------------------------------------------------
John H. Laeri, Jr. May 18, 1999
- -------------------------------------------------------------------------------
Gene Locks May 18, 1999
- -------------------------------------------------------------------------------
Brian B. Pemberton May 18, 1999
- -------------------------------------------------------------------------------
Jordan Roderick November 23, 1999
- -------------------------------------------------------------------------------
Alan Schwartz May 18, 1999
- -------------------------------------------------------------------------------
James R. Cote May 18, 1999
- -------------------------------------------------------------------------------
Lester H. Nelson, III May 18, 1999
- -------------------------------------------------------------------------------
Richard L. Rohn May 18, 1999
- -------------------------------------------------------------------------------
1
<PAGE>
INDEMNIFICATION AGREEMENT
THIS AGREEMENT, made and entered into this ___ day of ____________,
19__ ("Agreement"), by and between ROHN Industries, Inc. a Delaware corporation
("Corporation", which term shall include one or more of its subsidiaries where
appropriate), and ____________________ ("Indemnitee"):
WHEREAS, highly competent persons are becoming more reluctant to serve
corporations as directors or officers or in other capacities unless they are
provided with adequate protection through insurance or adequate indemnification
against inordinate risks of claims and actions against them arising out of their
service to, and activities on behalf of, such corporations; and
WHEREAS, the current impracticability of obtaining adequate insurance
and the uncertainties relating to indemnification have increased the difficulty
of attracting and retaining such persons;
WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined that the difficulty in attracting and retaining such persons is
detrimental to the best interests of the Corporation's stockholders and that the
Corporation should act to assure such persons that there will be increased
certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Corporation
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Corporation free from undue concern that they will not be so indemnified; and
WHEREAS, Indemnitee is willing to serve, continue to serve and/or to
undertake additional service for or on behalf of the Corporation on the
condition that he be so indemnified; and
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree as
follows:
1. SERVICES BY INDEMNITEE. Indemnitee agrees to serve or continue to
serve as a director and/or officer of the Corporation. This Agreement shall not
impose any obligation on the Indemnitee or the Corporation to continue the
Indemnitee's position with the Corporation beyond any period otherwise
applicable.
2
<PAGE>
2. GENERAL. The Corporation shall indemnify Indemnitee for, and hold
Indemnitee harmless from and against, any Losses or Expenses (as hereinafter
defined) at any time incurred by or assessed against Indemnitee arising out of
or in connection with the service of Indemnitee as a director or officer of the
Corporation to the fullest extent permitted by the laws of the State of Delaware
in effect on the date hereof or as such laws may from time to time hereafter be
amended to increase the scope of such permitted indemnification. Without
diminishing the scope of such permitted indemnification provided by this
Section, the rights of indemnification of Indemnitee provided hereunder shall
include but shall not be limited to those rights set forth hereinafter.
3. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE
CORPORATION. Indemnitee shall be entitled to the rights of indemnification
provided in this Section 3 if, by reason of (a) his Corporate Status (as
hereinafter defined) or (b) anything done or not done by Indemnitee in any such
capacity, he, was or is, or is threatened to be made, a party to any Proceeding
(as hereinafter defined) or is involved (including, without limitation as a
witness) in an Proceeding, other than a Proceeding by or in the right of the
Corporation. Pursuant to this Section 3, Indemnitee shall be indemnified against
all Losses and Expenses actually and reasonably incurred by him or on his behalf
in connection with such Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal Proceeding, had no reasonable cause to believe his conduct was
unlawful.
4. PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION. Indemnitee shall
be Entitled to the rights of indemnification provided in this Section 4 if, by
reason of (a) his Corporate Status or (b) anything done or not done by
Indemnitee in any such capacity he was or is, or is threatened to be made, a
party to any, Proceeding brought by or in the right of the Corporation to
procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified against all Losses and Expenses actually and reasonably incurred by
him or on his behalf in connection with the defense or settlement of such
Proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation. Notwithstanding
the foregoing, no indemnification against such Losses or Expenses shall be made
in respect of any claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Corporation if such indemnification is not
permitted by Delaware or other applicable law, provided, however, that
indemnification against all Losses and Expenses shall nevertheless be made by
the Corporation in such event to the extent that the Court of Chancery of the
State of Delaware, or the court in which such proceeding shall have been brought
or is pending, shall determine.
3
<PAGE>
5. INDEMNIFICATION FOR LOSSES AND EXPENSES OF A PARTY WHO IS WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of (a) his Corporate Status or (b) anything
done or not done by Indemnitee in any such capacity, a party to and is wholly
successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Losses and Expenses actually and reasonably incurred by
him or on his behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such proceeding,
the Corporation shall indemnify Indemnitee to the maximum extent permitted by
law against all Losses and Expenses actually and reasonably incurred by him or
on his behalf in connection with each successfully resolved claim, issue or
matter. In any review or Proceeding to determine the extent of indemnification,
the Corporation shall bear the burden of proving any lack of success and which
amounts sought in indemnity are allocable to claims, issue or matters which were
not successfully resolved. For purposes of this Section 5 and without
limitation, the termination of any claim, issue or matter in such a Proceeding
by dismissal or withdrawal with or without prejudice, shall be deemed to be a
successful result as to such claims, issue or matter.
6. PAYMENT FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of his
Corporate Status, a witness in any Proceeding, the Corporation agrees to pay to
Indemnitee all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection therewith.
7. ADVANCEMENT OF EXPENSES. The Corporation shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee (or reasonably
expected by Indemnitee to be incurred by Indemnitee within three months) in
connection with any Proceeding within twenty (20) days after the receipt by the
Corporation of a statement or statements from Indemnitee requesting such advance
or advances from time to time, whether prior to or after final disposition of
such Proceeding, whether or not a determination to indemnify has been made under
Section 8. Indemnitee's entitlement to such advancement of Expenses shall
include those incurred in connection with any Proceeding by Indemnitee seeking
an adjudication or award in arbitration pursuant to this Agreement. The
financial ability of Indemnitee to repay an advance shall not be a prerequisite
to the making of such advance. Such statement or statements shall reasonably
evidence the Expenses (which shall not include in any case the right of
indemnitee to receive payments pursuant to Section 6 and Section 7 hereof, which
shall not be subject to this Section 8), incurred (or reasonably expected to be
incurred) by Indemnitee in connection therewith and shall include or be preceded
or accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined pursuant to the terms of
this agreement that Indemnitee is not entitled to be indemnified against such
Expenses. Unpaid expenses shall bear
4
<PAGE>
interest accruing at the prime rate of interest from the twenty-first (21) day
after receipt by the Corporation of such statement until said expenses are paid.
8. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) To obtain indemnification under this Agreement, Indemnitee shall
submit to the Corporation a written request, including therein or
therewith such documentation and information as is reasonably available
to Indemnitee and is reasonably necessary to determine whether and to
what extent Indemnitee is entitled to indemnification. Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but
in no event later than 60 days after receipt by the Corporation of
Indemnitee's written request for indemnification. The Secretary of the
Corporation shall, promptly upon receipt of such a request for
indemnification, advise the Board and counsel for the Corporation in
writing the Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 8(a) hereof, a determination, if required by applicable law,
with respect to Indemnitee's entitlement thereto shall be made in the
specific case: (i) if a Change in Control (as hereinafter defined)
shall have occurred, by Independent Counsel (as hereinafter defined) in
a written opinion to the Board, a copy of which shall be delivered to
Indemnitee (unless Indemnitee shall request that such determination be
made by the Board or the stockholders, in which case the determination
shall be made in the manner provided below in clause (ii) or (iii);
(ii) if a Change of Control shall not have occurred, (A) by the Board
by a majority vote even though less than a quorum consisting of
Disinterested Directors (as hereinafter defined), (B) by a committee of
such directors designated by majority vote of such directors, even
though less than a quorum (B) if there are no such directors or if
directors so directs, by Independent Counsel in a written opinion to
the Board, a copy of which shall be delivered to Indemnitee, or (C) by
the stockholders of the Corporation; or (iii) as provided in Section
9(b) of this Agreement; and, if it is so determined that Indemnitee is
entitled to the indemnification, payment to Indemnitee shall be made
within ten (10) days after such determination. Indemnitee shall
cooperate with the person, persons or entity making such determination
with respect to Indemnitee's entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance
request any documentation or information that is not privileged or
otherwise protected from disclosure and which is reasonably available
to Indemnitee and reasonably necessary to such determination. Any costs
or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating shall be borne by the Corporation
(irrespective of the determination as to Indemnitee's entitlement to
indemnification) and the
5
<PAGE>
Corporation hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(c) If the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 8(b) of this Agreement,
the Independent Counsel shall be selected as provided in this Section
8(c). If a Change of Control shall not have occurred, the Independent
Counsel shall be selected by the Board, and the Corporation shall give
written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. If a Change of Control shall have
occurred, the Independent Counsel shall be selected by Indemnitee
(unless Indemnitee shall request that such selection be made by the
Board, in which event the preceding sentence shall apply), and
Indemnitee shall give written notice to the Corporation advising it of
the identity of the Independent Counsel so selected. In either event,
Indemnitee or the Corporation, as the case may be, may, within seven
(7) days after such written notice of selection shall have been given,
deliver to the Corporation or to Indemnitee, as the case may be, a
written objection to such selection. Such objection may be asserted
only on the ground that the Independent Counsel so selected does not
meet the requirement of "Independent Counsel" as defined in Section 15
of this Agreement, and the objection shall set forth with particularly
the factual basis of such assertion. If such written objection is made,
the Independent Counsel so selected may not serve as Independent
Counsel unless and until a court has determined that such objection is
without merit. If, within twenty (20) days after submission by
Indemnitee of a written request for indemnification pursuant to Section
8(a) of this Agreement, no Independent Counsel shall have been selected
or, if selected, shall have been objected to, in accordance with this
Section 8(c), either the Corporation or Indemnitee may petition the
Court of Chancery of the State of Delaware or other court or competent
jurisdiction for resolution of any objection that shall have been made
by the Corporation or Indemnitee to the other's selection of
Independent Counsel of a person selected by the Court or by such other
person as the Court shall designate, and the person with respect to
whom an objection is favorably resolved or the person as so appointed
shall act as Independent Counsel under Section 8(b) of this Agreement.
The Corporation shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection
with acting pursuant to Section 8(b) of this Agreement, and the
Corporation shall pay all reasonable fees and expenses incident to the
procedures of this Section 8(c), regardless of the manner in which such
Independent Counsel was selected or appointed. Upon the due
commencement of any judicial proceeding or arbitration pursuant to
Section 10(a)(iii) of this Agreement, Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity
(subject to the applicable standards of professional conduct then
prevailing).
6
<PAGE>
9. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS.
(a) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder,
the person, persons or entity making such determination shall presume
that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance
with Section 8(a) of this Agreement, and the Corporation shall have the
burden of proof to overcome that presumption in connection with the
making by any person, persons or entity of any determination contrary
to that presumption.
(b) If the person, persons or entity empowered or selected under
Section 7 of this Agreement to determine whether Indemnitee is entitled
to indemnification shall not have made such determination within sixty
(60) days after receipt by the Corporation of the request therefor, the
requisite determination of entitlement to indemnification shall be
deemed to have been made and Indemnitee shall be entitled to such
indemnification, absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee's
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such sixty-day period may be
extended for a reasonable time, not to exceed an additional thirty (30)
days, if the person, persons or entity making the determination with
respect to entitlement to indemnification in good faith requires such
additional time for the obtaining or evaluating of documentation and/or
information relating thereto; and provided, further, that the foregoing
provisions of this Section 8(b) shall not apply (i) if the
determination of entitlement to indemnification is to be made by the
stockholders pursuant to Section 8(b) of this Agreement and if (A)
within fifteen (15) days after receipt by the Corporation of the
request such determination the Board has resolved to submit such
determination to the stockholders for their consideration at an annual
meeting thereof to be held within seventy-five (75) days after such
receipt and such determination is made threat, or (B) a special meeting
of stockholders is called within fifteen (15) days after such receipt
for the purpose of making such determination, such meeting is held for
such purpose within sixty (60) days after having been so called and
such determination of entitlement is made thereat, or (ii) if the
determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 8(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein by judgment, order, settlement or conviction, shall not (except
as otherwise expressly provided in this Agreement) of itself adversely
affect the right of
7
<PAGE>
Indemnitee to indemnification hereunder or create a presumption that
Indemnitee did not act in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the
Corporation or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct wads
unlawful.
(d) For purposes of any determination of good faith hereunder,
Indemnitee shall be deemed to have acted in good faith if in taking
such action Indemnitee relied on the records or books of account of the
Corporation, including financial statements, or on information supplied
to Indemnitee by the officers of the Corporation in the course of their
duties, or on the advice of legal counsel for the Corporation or on
information or records given or reports made to the Corporation by an
independent certified public accountant or by an appraiser or other
expert selected with reasonable care to the Corporation. The
Corporation shall have the burden of establishing the absence of good
faith. The provisions of this Section 9(d) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which
Indemnitee may be deemed to have met the applicable standard of conduct
set forth in this Agreement.
(e) The knowledge and/or actions, or failure to act, of any other
director, officer, agent or employee of the Corporation shall not be
imputed to Indemnitee for purposes of determining the right to
indemnification under this Agreement.
10. REMEDIES OF INDEMNITEE.
(a) If (i) a determination is made pursuant to Section 8 of this
Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 7 of this Agreement, (iii) the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 8(b) of this Agreement and such determination shall not have
been made and delivered in a written opinion within ninety (90) days
after receipt by the Corporation of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5 of
this Agreement within ten (10) days after receipt by the Corporation of
a written request therefor or (v) payment of indemnification or such
determination is deemed to have been made pursuant to Section 9 of this
Agreement, Indemnitee shall be entitled to a final adjudication in an
appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may
seek an award in arbitration to be conducted by a single arbitrator,
which arbitrator shall be a member of the bar in the State of Illinois,
pursuant to the rules of the American Arbitration Association.
Indemnitee shall commence such proceeding seeking an adjudication or an
8
<PAGE>
award in arbitration within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to
this Section 10(a). The Corporation shall not oppose Indemnitee's right
to any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 8 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced
pursuant to this Section 10 shall be conducted in all respects as a de
novo trial, or arbitration, on the merits and Indemnitee shall not be
prejudiced by reason of that adverse determination. Regardless of
whether a Change of Control shall have occurred, in any judicial
proceeding or arbitration commenced pursuant to this Section 9 the
Corporation shall have the burden of proving that Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may
be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 8 or 9 of this Agreement that Indemnitee is
entitled to indemnification, the Corporation shall be bound by such
determination in any judicial proceeding or arbitration commenced
pursuant to this Section 10, absent (i) a misstatement by Indemnitee of
a material fact, or an omission of a material fact necessary to make
Indemnitee's statement not materially misleading, in connection with
the request for indemnification or (ii) a prohibition of such
indemnification under applicable law.
(c) The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 10 that
the procedures and presumptions of this Agreement are not valid,
binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Corporation is bound by all the provisions
of this Agreement.
(d) If Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall
be entitled to recover from the Corporation, and shall be indemnified
by the Corporation against, any and all expenses (of the types
described in the definition of Expenses in Section 14 of this
Agreement) actually and reasonably incurred by him in such judicial
adjudication or arbitration, but only if he prevails therein. If it
shall be determined in said judicial adjudication or arbitration that
Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the expenses
incurred by Indemnitee in connection with such judicial adjudication or
arbitration shall be appropriately prorated.
9
<PAGE>
11. SECURITY
(a) To the extent requested by the Indemnitee and approved by the
Board, the Corporation may at any time and from time to time provide
security to the Indemnitee for the Corporation's obligations hereunder
through an irrevocable bank line of credit, funded trust or other
collateral. Any such security, once provided to the Indemnitee, may not
be revoked or released without the prior written consent of Indemnitee.
(b) For each Proceeding in which Indemnitee is entitled to
indemnification, the Corporation, at the time such Proceeding is
commenced, shall deposit a minimum of One Million Dollars ($1,000,000)
in an escrow account to fund any Losses or Expenses for or on behalf of
Indemnitee pursuant to this Agreement. In the event a single Proceeding
involves more than one Indemnitee, only one such escrow account shall
be established with respect to such Proceeding. The Corporation shall
maintain a minimum balance in each such escrow account of One Million
Dollars ($1,000,000) and shall increase such amount from time to time
as it shall deem necessary or desirable to meet the Corporation's
anticipated obligations in connection with such Proceeding, pursuant to
this Agreement. The amount deposited by the Corporation in any such
escrow account shall not limit the Corporation's liability under this
Agreement. At the termination of any such Proceeding, after payment of
all Losses and Expenses, judgments, fines or settlement amounts, the
balance of funds remaining in the escrow account established for such
Proceeding shall be returned to the Corporation for its general
purposes and such escrow account shall be closed.
12. NON-EXCLUSIVITY; DURATION OF AGREEMENT; INSURANCE; SUBROGATION.
(a) The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive at
any other rights to which Indemnitee may at any time be entitled under
applicable law, the Corporation's certificate of incorporation or
bylaws, any other agreement, a vote of stockholders or a resolution of
directors, or otherwise both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such
office. To the extent Indemnitee would be prejudiced thereby, no
amendment, alteration, rescission or replacement of this Agreement or
any provision hereof shall be effective as to Indemnitee with respect
to any action taken or omitted by such Indemnitee in Indemnitee's
position with the Corporation or any other entity which Indemnitee is
or was serving at the request of the Corporation prior to such
amendment, alteration, rescission or replacement. This Agreement shall
continue until and terminate upon the latter of: (a) ten (10) years
after the date that Indemnitee shall have ceased to serve as
10
<PAGE>
a director and officer of the Corporation or as an officer, employee,
agent or fiduciary of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise that Indemnitee served at the request of the Corporation; or
(b) one year after the final termination of all pending or threatened
Proceedings in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 9 of this
Agreement relating thereto. This Agreement shall be binding upon the
Corporation and its successors and assigns and shall inure to the
benefit of Indemnitee and his heirs, executors and administrators.
(b) If the Corporation maintains an insurance policy or policies
providing liability insurance for directors or officers of the
Corporation of fiduciaries of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise that such
person serves at the request of the Corporation, Indemnitee shall be
covered by such policy or policies in accordance with the terms thereof
to the maximum extent of the coverage available for any such director
or officer under such policy or policies.
(c) If any payment is made under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to
enforce such rights.
(d) The Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the
extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under any
insurance policy, contact, agreement or otherwise.
13. SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including, without limitation, each portion of any Section of
this Agreement containing any such provision held to invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to
be invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable.
11
<PAGE>
14. EXCEPTION TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF EXPENSES.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement with
respect to any Proceeding, or any claim, issue or matter therein, brought or
made by him against the Corporation, except as may be provided in Section 9(e)
of this Agreement.
15. DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:
(a) "Change in Control" means a change in control of the Corporation of
a nature that would be required to be reported in response to Item 5(f)
of Schedule 14A of Regulation 14A (or in response to any similar item
or any similar schedule or form) promulgated under the Securities
Exchange Act of 1934, as amended (the "Act"), whether or not the
Corporation is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be
deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Corporation representing 20% or more
of the combined voting power of the Corporation's then outstanding
securities without the prior approval of at least two-thirds of the
members of the Board in office immediately prior to such person
attaining such percentage interest; (ii) the Corporation is a party to
a merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board in office
immediately prior to such transaction or event constitute less than a
majority of the Board thereafter; or (iii) during any period of two (2)
consecutive years, individuals who at the beginning of such period
constituted the Board (including for this purpose any new director
whose election or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
such period) cease for any reason to constitute at least a majority of
the Board.
(b) "Corporate Status" describes the status of a person who is or was
or has agreed to become a director of the Corporation, or is or was an
officer, employee, agent or fiduciary of the Corporation or of any
other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise that such person is or was serving at the
request of the Corporation.
(c) "Disinterested Directors" means a director of the Corporation who
is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees, retainers,
court costs,
12
<PAGE>
transcript costs, fees of experts and witnesses, travel expenses,
duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses
of the type customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend or investigating a
Proceeding.
(e) "Fines" shall include any excise taxes assessed on Indemnitee with
respect to any employee benefit plan.
(f) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither at the
time of designation is, nor in the five years immediately preceding
such designation was, retained to represent: (i) the Corporation or
Indemnitee in any matter material to either such party or (ii) any
other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any person who, under the
applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Corporation or
Indemnitee in an action to determine Indemnitee's rights under this
Agreement arising on or after the date of this Agreement, regardless of
when the Indemnitee's act or failure to act occurred.
(g) "Losses" shall mean all expenses, liabilities, losses and claims
(including attorneys' fees, judgments, fines, excise taxes under the
Employee Retirement Income Security Act of 1974, as amended from time
to time, penalties and amounts to be paid in settlement) incurred in
connection with any Proceeding.
(h) "Proceeding" includes any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing an any other proceeding
(including any appeals from any of the foregoing) whether civil,
criminal, administrative or investigative, except one initiated by an
Indemnitee pursuant to Section 10 of this Agreement to enforce his
rights under this Agreement.
16. HEADINGS. The headings of the Sections of this Agreement are
inserted for Convenience of reference only and shall not be deemed to
constitute part of this Agreement or to affect the construction
thereof.
17. MODIFICATION AND WAIVER. This Agreement may be amended from time to
time to reflect changes in Delaware law or for other reasons. No
supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this
13
<PAGE>
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar) nor shall waiver constitute a continuing waiver.
18. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify the
Corporation in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter that may be subject to indemnification or advancement of Expenses
covered hereunder; provided, however, that the failure to give any such notice
shall not disqualify the Indemnitees from indemnification hereunder.
19. NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i) if
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, at the time of delivery, or (ii) if
mailed by certified mail (return receipt requested) with postage prepaid, on the
third business day after the date on which it is so mailed, and addressed:
(a) if to Indemnitee, to:
-----------------------------
-----------------------------
-----------------------------
(b) if to the Corporation, to:
ROHN Industries, Inc.
6718 W. Plank Road
Peoria, IL 61604
Attention: Secretary
or to such other address as may have been furnished by like notice to Indemnitee
by the Corporation or to the Corporation by Indemnitee, as the case may be.
20. GOVERNING LAW. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware applicable to contracts made and to be performed in such state
without giving effect to the principles of conflicts of laws.
21. ENTIRE AGREEMENT. Subject to the provisions of Section (12) hereof,
this Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter hereof.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above set forth.
ROHN Industries, Inc.
By:____________________________________
Its:___________________________________
Indemnitee
_______________________________________
15
<PAGE>
Exhibit 10.12
UNR INDUSTRIES, INC.
KEY EXECUTIVES' STOCK OPTION PLAN
(As Amended and Restated May 6, 1993)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PARAGRAPH TITLE PAGE
--------- ----- ----
<S> <C> <C>
1. Purpose and Definitions................................................................1
2. Scope of the Plan......................................................................2
3. Administration.........................................................................3
4. Eligibility............................................................................4
5. Grants.................................................................................4
6. Change of Control......................................................................6
7. Exercise...............................................................................8
8. Termination of Employment.............................................................11
9. No Employment Rights..................................................................11
10. Nature of Payments....................................................................12
11. Stockholders'Rights...................................................................12
12. Adjustments...........................................................................12
13. Amendment of the Plan.................................................................12
14. Termination of the Plan...............................................................12
15. Substituted Options...................................................................12
16. Funding...............................................................................13
17. Controlling Law.......................................................................13
18. Action by the Company.................................................................13
</TABLE>
<PAGE>
UNR INDUSTRIES, INC. KEY EXECUTIVES' STOCK OPTION PLAN
THE PLAN. The Company established the Plan, effective March 6,
1990 (the "Effective Date"). The Company hereby amends and restates the Plan,
effective May 30, 1990. Such establishment of the Plan, as so amended and
restated, is subject to the approval by the holders of a majority of the shares
of common stock and warrants of the Company present or represented and voting at
a meeting duly called and held. Grants may be made hereunder prior to
securityholder approval, provided that any such grants shall be subject to such
securityholders' approval.
1. PURPOSE AND DEFINITIONS. The purpose of the Plan is to
advance the interests of the Company and its subsidiaries by encouraging and
facilitating the acquisition of a larger personal financial interest in the
Company by those employees upon whose judgment and interest the Company and its
subsidiaries are largely dependent for the successful conduct of its operations.
It is anticipated that the acquisitions of such a financial interest will
stimulate the efforts of such employees on behalf of the Company and its
subsidiaries and strengthen their desire to continue in the service of the
Company and its subsidiaries. It is also anticipated that the opportunity to
obtain such a financial interest will prove attractive to promising executive
talent and will assist the Company and its subsidiaries in attracting such
employees.
For the purposes of the Plan, the following terms have the
following meanings:
(a) "Board" means the Board of Directors of the Company.
(b) "Change of Control" has the meaning set forth in
Paragraph 6.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Committee, as described in
Paragraph 3, which administers the Plan.
(e) "Company" means UNR Industries, Inc., a Delaware
corporation, or any successor thereto.
(f) "Disability" means a mental or physical condition which
renders a Grantee unable or incompetent to carry out the job responsibilities he
held or tasks to which he was assigned at the time the disability was incurred.
(g) "Fair Market Value" means, subject to adjustment as
provided in Paragraph 12, (1) if on the applicable date the Stock is listed for
trading on a national or regional securities exchange or authorized for
quotation on the National Association of Securities Dealers Inc.'s NASDAQ,
National Market System ("NASDAQ/NMS"), the
1
<PAGE>
closing price of the stock on such exchange or NASDAQ/NMS, as the case may be,
on the applicable date, or if no sales of Stock shall have occurred on such
exchange or NASDAQ/NMS, as the case may be, on the applicable date, the closing
price of the Stock on the next preceding date on which there were such sales,
(2) if on the applicable date the Stock is not listed for trading on a national
or regional securities exchange or is not authorized for quotation on
NASDAQ/NMS, the Fair Market Value of the Stock as determined in good faith by
the Committee, or (3) solely for purposes of determining the benefit payable on
the exercise of a change of control right, the highest value (determined under
clause (1) or (2) above) of one share of Stock during the 180-day period
preceding the date of the Change of Control or, if greater, the highest price
per share of Stock paid in connection with the Change of Control.
(h) "Grant Date" means the date set forth on Paragraph 5.
(i) "Grantee" means an individual to whom options or change of
control rights are granted under the Plan.
(j) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Option Price" means the purchase price of the Stock
subject to an option as determined under Paragraph 5.
(l) "Plan" means the UNR Industries, Inc. Key Executives'
Stock Option Plan as amended from time to time.
(m) "Stock" means the shares of common stock of the Company,
par value $.01 per share.
2. SCOPE OF THE PLAN. An aggregate of 2,500,000 of the
Company's authorized but unissued shares of Stock is hereby made available and
shall be reserved for issuance under this Plan with respect to the exercise of
options, reduced by the number of shares of Stock acquired to be held as
treasury shares reserved for issuance under this Paragraph 2. An aggregate of
2,500,000 change of control rights is hereby made for issuance under the Plan.
The aggregate number of shares of stock and change of control rights available
under this Plan shall be subject to adjustment on the occurrence of any of the
events and in the manner set forth in Paragraph 12.
If, and to the extent, an option shall expire or terminate for
any reason without having been exercised in full, the shares of Stock subject
thereto which have not become outstanding shall (unless the Plan shall have
terminated) become available for other options under the Plan. However, if, and
to the extent, change of control rights are exercised, the shares of Stock
subject to the related option which have not become outstanding shall not again
become available for the grant of other options.
2
<PAGE>
The Board or such person or persons that the Board shall
specifically authorize or direct to act on its behalf shall have the authority
to cause the Company to purchase from time to time, in such amounts and at such
prices as the Board, in its discretion, shall deem advisable or appropriate,
shares of Stock to be held as treasury shares and reserved and used solely for
or in connection with grants under the Plan, at the discretion of the Committee.
3. ADMINISTRATION. The Plan shall be administered by the
Compensation Committee of the Board ("Committee"), which shall consist of not
less than three persons, each of whom is a Disinterested Person. "Disinterested
Person" means disinterested person as defined from time to time in Rule 16(b)-3
under Section 16(b) of the 1934 Act or any successor rule promulgated under
section 16(b) of the 1934 Act. The Committee shall have full and final
authority, in its discretion, but subject to the express provisions of the the
Plan:
(a) to select eligible employees in accordance with Paragraph
4 to whom options or change of control rights shall be granted;
(b) to determine to what extent options and change of control
rights are to be granted under the Plan;
(c) to determine the terms and conditions of any option or
change of control rights granted under the Plan;
(d) to prescribe the method by which grants of option and
change control rights shall be evidenced;
(e) to cancel, with the consent of the Grantee, outstanding
options and change of control rights, and to grant new options and change of
control rights in substitution therefor;
(f) to make all other determinations deemed necessary or
advisable for the administration of the Plan;
(g) to impose such additional conditions, restrictions, and
limitations upon exercise or retention of options, shares of Stock purchased
pursuant to options and change of control rights as the Committee may, prior to
or concurrently with the grant thereof, deem appropriate;
(h) to accelerate the exercisability of any option, subject to
such terms and conditions as the Committee deems necessary arid appropriate to
effectuate the purpose of the Plan; and
3
<PAGE>
(i) at any time prior to the expiration or termination of any
option previously granted, to extend the terms of any option for such additional
period or periods as the Committee, in its discretion, may determine.
The determination of the Committee on all matters relating to
the Plan, any option agreement or change of control rights agreement shall be
conclusive and final. No member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any grant
thereunder.
4. ELIGIBILITY. Options or change of control rights may be
granted to officers and other key employees of the Company, its subsidiaries,
and affiliates (excluding any person who serves solely as a director of the
Company, one of its subsidiaries, or one of its affiliates).
5. GRANTS. The Grant Date of an option or change of control
right shall be the date on which the Committee awards the grant or such later
date as specified in advance by the Committee. Subject to the provisions of
Paragraph 2 and Paragraph 4, a Grantee may, if he is otherwise eligible, be
granted additional options or change of control rights if the Committee shall so
determine. Subject to the other provisions of the Plan, the Committee may grant
options or change of control rights with differing terms and conditions among
the Grantees. To the extent not set forth in the Plan, the terms and conditions
of each grant of an option or change of control rights shall be set forth in a
written agreement between the Company and the Grantee thereof.
(a) GRANTS OF NON-QUALIFIED OPTIONS. At the time of the grant
of any option, the Committee shall determine the Option Price of stock subject
to each non-qualified option, provided that the Option Price shall not be less
than the greater of (1) fifty percent (50%) of the Fair Market Value of the
Stock on the Grant Date or (2) the par value of the Stock. The Option Price
shall be reduced (but not below the greater of (i) fifty percent (50%) of the
Fair Market Value of the Stock on the Grant Date, or (ii) the par value of the
Stock) by the amount of any Extraordinary Dividend made after the Grant Date of
the option. "Extraordinary Dividend" means a distribution of the Company's
property to the securityholders as a dividend in partial liquidation, by way of
return of capital, or otherwise, other than a regular periodic cash dividend
payable out of funds legally available for dividends under the laws of the State
of Delaware at an annual rate not in excess of $.20.
When granted, a non-qualified option shall be identified with
specific change of control rights of the Grantee equal to the number of shares
of Stock subject to the option. At the time a non-qualified option identified
with change of control rights is exercised, the number of the change of control
rights equal in number to the shares of Stock purchased shall be canceled.
4
<PAGE>
(b) GRANTS OF INCENTIVE STOCK OPTIONS. At the time of the
grant of any option, the Committee may designate that such option shall to be
made subject to additional restrictions to permit it to qualify as an "incentive
stock option" under the requirements of Section 422A (or any successor
provision) of the Code. Any option designated as an incentive stock option
(1) shall have an Option Price of (i) not less than 100% of
the Fair Market Value of the Stock on the Grant Date or (ii) in the case of an
employee who owns stock (including stock treated as owned under Section 425(d)
of the Code) possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its subsidiaries (a "10% Owner") , not
less than 110% of the Fair Market Value of the Stock on the Grant Date;
(2) shall be for a period of not more than ten (10) years,
five (5) years, in the case of a 10% Owner) from the Grant Date, and shall be
subject to earlier termination as herein provided;
(3) notwithstanding the provisions relating to termination of
employment set forth in Paragraph 8, shall not be exercisable more than three
(3) months (or one (1) year, in the case of a Grantee who is disabled within the
meaning of Section 22(e)(2) of the Code) after termination of employment;
(4) shall not have an aggregate Fair Market Value (determined
for each incentive stock option at the time it is granted) of Stock with respect
to which incentive stock options are exercisable for the first time by such
Grantee during any calendar year (under this Plan and any other employee stock
option plan of the Company or any parent or subsidiary thereof ("Other Plans")),
determined in accordance with the provisions of Section 422A of the Code (after
amendment by the Tax Reform Act of 1986), which exceeds $100,000 (the "$100,000
Limit");
(5) shall, if the aggregate Fair Market Value of stock
(determined on the Grant Date) with respect to all incentive stock options
previously granted under this Plan and the other plans ("Price Grants") and any
incentive stock options under such grant (the "Current Grant") which are
exercisable for the first time during any calendar year would exceed the
$100,000 Limit, be exercisable as follows:
(i) the portion of the Current Grant exercisable for the first
time by the Grantee during any calendar year which would be, when added
to any portions of any Prior Grants exercisable for the first time by
the Grantee during any such calendar year with respect to Stock which
would have an aggregate Fair Market Value (determined at the time of
each such grant) in excess of the $100,000 Limit shall, notwithstanding
the terms of the Current Grant, be exercisable for the first time by
the Grantee in the first subsequent calendar year or years in which it
could
5
<PAGE>
be exercisable for the first time by the Grantee when added to
all Prior Grants without exceeding the $100,000 Limit;
(ii) if, viewed as of the date of the Current Grant, any
portion of a Current Grant could not be exercised under the provisions
of the immediately preceding sentence during any calendar year
commencing with the calendar year in which it is first exercisable
through and including the last calendar year in which it may by its
terms be exercised, such portion of the Current Grant shall not be an
incentive stock option, but shall be exercisable as a separate
non-qualified option at such date or dates as are provided in the
Current Grant;
(6) shall be granted within ten (10) years from the earlier of
the date the Plan is adopted or the date the Plan is approved by the
securityholders of the Company; and
(7) shall require the Grantee to notify the Committee of any
disposition of any Stock issued pursuant to the exercise of the incentive stock
option under the circumstances described in Section 421(b) of the Code (relating
to certain disqualifying dispositions), within ten (10) days of such
disposition.
(c) GRANT OF CHANGE OF CONTROL RIGHTS. Change of control
rights shall automatically be granted to each Grantee upon the grant of any
non-qualified option under the Plan. Each change of control right shall be
identified with a share of Stock subject to the non-qualified option of the
Grantee and the number of change of control rights granted to a Grantee shall
equal the number of shares of Stock subject to the option with which such change
of control rights are identified. At the time change of control rights of the
Grantee are exercised, a number of shares of Stock subject to the option equal
in number to the change of control rights exercised shall be canceled.
(d) NON-TRANSFERABILITY OF OPTIONS AND CHANGE OF CONTROL
RIGHTS. An option or change of control right granted hereunder shall, by its
terms, not be assignable or transferable other than by will or the laws of
descent and distribution and may be exercised, during his lifetime, only by the
Grantee.
(e) TERMS OF OPTIONS AND CHANGE OF CONTROL RIGHTS. The term of
each option of change of control right granted hereunder shall be for a period
of no more than ten years from the Grant Date, and shall be subject to earlier
termination as herein provided.
6. CHANGE OF CONTROL. For purposes of this Plan, "Change of
Control" means
6
<PAGE>
(a) The acquisition by a person or group of persons acting in
concert, of a beneficial ownership interest in the Company, resulting in the
total beneficial ownership of such persons or group of persons equaling or
exceeding 50% of the outstanding common stock and warrants of the Company;
provided, however, that no such person or group of persons shall be deemed to
beneficially own (i) any common stock or warrants acquired directly from the
Company or (ii) any common stock or warrants held by the Company or any of its
subsidiaries or any employee benefit plan (or any related trust) of the Company
or its subsidiaries. The Change of Control shall be deemed to occur on the date
the beneficial ownership of the acquiring person or group of persons first
equals or exceeds 50% of the outstanding common stock and warrants of the
Company.
(b) A change, within any period of twenty-four (24) months or
less, in the composition of the Board such that at the end of such period a
majority of the directors who are then serving were not serving at the beginning
of such period, unless at the end of such period the majority of the directors
in office were nominated upon the recommendation of a majority of the Board at
the beginning of such period. The Change of Control shall be deemed to occur on
the date the last director necessary to result in a Change of Control takes
office or resigns from office, as applicable.
(c) Approval by the securityholders of the Company of a
merger, consolidation or other reorganization having substantially the same
effect, or the sale of all or substantially all the consolidated assets of the
Company in each case, with respect to which the persons or group of persons who
were the respective beneficial owners of the common stock or warrants
immediately prior to such event do not, following such event, beneficially own,
directly or indirectly, more than 50% of, respectively, the then outstanding
voting securities of the corporation resulting from such event or the
corporation purchasing or receiving assets pursuant to such event. The Change of
Control shall be deemed to occur on the date on which the transaction is
approved by the Company's Securityholders.
If more than one of the foregoing events shall occur, each
such event shall constitute a separate Change of Control.
Notwithstanding the foregoing provisions of this Paragraph 6,
a Change of Control shall be deemed not to have occurred with respect to any
event occurring prior to or concurrently with the securityholders' approval of
this Plan.
The impact on the Plan of a Change of Control shall be (1) the
acceleration. of the exercisability of options and change of control rights as
provided in Paragraphs 7(b) and (c) and (2) the use for determining the benefit
payable upon exercise of change of control rights of the definition of Fair
Market Value contained on Paragraph 1(g)(3).
7
<PAGE>
The Company shall notify all Grantees of the occurrence of a
Change of Control promptly after its occurrence, but any failure of the Company
to notify shall not deprive the Grantees of any rights accruing hereunder by
virtue of a Change of Control.
7. EXERCISE. Except as otherwise determined by the Committee,
and subject to the provisions of Paragraph 8, each option shall be exercisable
as follows:
<TABLE>
<CAPTION>
Percentage of Shares of
Year After Grant Date Stock Exercisable
- --------------------------------------------- -----------------------
<S> <C>
less than one year 0%
one year but less than two years 33-1/3%
two years but less than three years 66-2/3%
three years or more 100%
</TABLE>
Options shall be exercised by delivery to the Company of
written notice of intent to purchase a specific number of shares of stock. The
exercise of a non-qualified option shall cancel a number of change of control
rights identified with such option equal to the number of shares of Stock
purchased upon exercise of the option. The Option Price of any shares of Stock
as to which an option shall be exercised shall be paid in full at the time of
the exercise. Payment of the Option Price shall be made (1) in cash or (2) in
whole or in part, in Stock of the Company held by the Grantee for a period of at
least six months, valued at Fair Market Value.
Notwithstanding the foregoing, if the Grantee's employment is
terminated by the Grantee's retirement pursuant to the terms of any
tax-qualified retirement plan of the Company or any of its subsidiaries, or by
the Disability or death of the Grantee, any unexercised options held by the
Grantee on the date of such retirement, Disability or death shall become
immediately exercisable.
(b) EXERCISE OF CHANGE OF CONTROL RIGHTS. Subject to the
provisions of Paragraph 8, each change of control right held by a Grantee who is
subject to potential liability for "short-swing" profits under Section 16(b) of
the 1934 Act at the time of a Change of Control shall become exercisable upon
the occurrence of the Change of Control. No change of control right held by any
Grantee who is not subject to potential liability for "short-swing" profits
under Section 16(b) of the 1934 Act at the time of a Change of Control shall
become exercisable upon the occurrence of the Change of Control. The exercise of
change of control rights shall cancel a number of shares of Stock subject to the
option identified with such change of control rights equal to the number of
change of control rights exercised. Change of control rights shall be exercised
by delivery to the Company, within sixty (60) days following the date of such
Change of Control, of written notice of intent to exercise a specific number of
change of control rights.
8
<PAGE>
Within three (3) days following the exercise of any change of
control right, the Company shall pay the Grantee, in cash, an amount equal to
the difference between
(1) the Fair Market Value of one share of Stock on the date of
exercise of the change of control right, and
(2) the Option Price of the option identified with the change
of control right.
(c) ACCELERATED EXERCISE. subject to Paragraph 7(g), all
outstanding options granted hereunder shall be fully exercisable on the date of
a Change of Control.
(d) WITHHOLDING TAXES. Whenever under the Plan, shares of
Stock are to be delivered upon exercise of an option the Company shall be
entitled to require as a condition of delivery that the Grantee remit an amount
sufficient to satisfy all federal, state, and other governmental withholding tax
requirements related thereto. A Grantee may, subject to Committee approval,
elect the withholding ("Share Withholding") by the Company of a portion of the
shares of Stock otherwise deliverable to such Grantee upon such Grantee's
exercise of an option having a Fair Market Value equal to
(1) the amount necessary to satisfy such Grantee's required
federal, state, or other governmental withholding tax liability with respect to
the exercise of the option, or
(2) a greater amount, not to exceed the estimated total amount
such Grantee's tax liability with respect to the exercise of the option.
Share Withholding is subject to Committee approval. Each Share
Withholding election by a Grantee shall be subject to the following
restrictions.
(1) it shall be made prior to the date on which the amount of
tax to be withheld is determined (the "Tax Date");
(2) it shall be irrevocable;
(3) it shall be subject to the disapproval of the Committee;
(4) if a Grantee is subject to potential liability for
"short-swing" profits under Section 16(b) of the 1934 Act, such election may not
be made within six (6) months after the Grant Date of the related option (except
that this limitation shall not apply if the death or Disability of the
participant occurs prior to the expiration of the six-month period or if, in the
opinion of counsel for the Company, such limitation is unnecessary to satisfy
the requirements of Rule 16B-3 under Section 16(b) of the 1934 Act or the rules
of any exchange on which the Stock is listed for trading; and
9
<PAGE>
(5) If a Grantee is subject to potential liability for
"short-swing" profits under Section 16(b) of the 1934 Act, such election must he
made either six (6) months prior to the Tax Date or in the ten business day
"window period" beginning on the third business day following the release of the
Company's quarterly or annual summary statement of sales and earnings, unless,
in the opinion of counsel for the Company, such limitation is unnecessary to
satisfy the requirements of Rule 16b-3 under Section 16(b) of the 1934 Act or
the rules of any exchange on which the Stock is listed for trading.
If any disqualifying disposition described in Paragraph 5(b),
(7) or any election described in Paragraph 7(e) is made, then the person making
such disposition or election shall remit to the Company an amount sufficient to
satisfy all federal, state, and other governmental withholding taxes thereby
incurred; provided that, in lieu of or in addition to the foregoing, the Company
shall have the right to withhold such sums from compensation otherwise due to
such person.
(e) NOTIFICATION UNDER SECTION 83(b). Provided that the
Committee does not prohibit such Grantee from making the following election, if
a Grantee shall in connection with the exercise of any option make the election
permitted under Section 83(b) of the Code (i.e., an election to include in such
Grantee's gross income in the year of transfer the amount specified in section
83(b) of the Code), then such Grantee shall notify the committee of such
election within ten (10) days of filing notice of the election with the Internal
Revenue Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Section 83(b) of the Code.
(f) STOCK PURCHASED FOR INVESTMENT. Shares of Stock purchased
under an option shall be purchased for investment and without present intention
of resale and the certificates representing such Stock shall bear an appropriate
legend, unless, in the opinion of counsel for the Company, the shares may be
purchased without investment representation. Where an investment representation
is deemed necessary, the Committee may require a written representation to that
effect by the Grantee at the time the option is exercised.
(g) SPECIAL RULES FOR OFFICERS AND DIRECTORS. No officer or
director shall exercise an option identified with change of control rights or
change of control rights for six months from the Grant Date of such options or
change of control rights except that this limitation shall not apply in the
event the death or Disability of the Grantee occurs prior to the expiration of
the six-month period or if, in the opinion of counsel for the Company, such
limitation is unnecessary to satisfy the requirements of Rule 16b-3 under
Section 16(b) of the 1934 Act or the rules of any exchange on which the Stock is
listed for trading.
10
<PAGE>
8. TERMINATION OF EMPLOYMENT. Except as provided below or as
determined by the Committee, an unexercised option shall terminate upon the
Grantee's termination of employment. Termination of employment means the first
date the Grantee is no longer an employee of the Company or any of its
subsidiaries or, with respect to a Grantee who is an employee of a subsidiary of
the Company, on the first date on which the Company no longer (directly or
indirectly) owns shares of stock conferring at least fifty percent (50%) of the
aggregate voting power of such subsidiary's outstanding stock (both events
hereunder are referred to as "termination of employment").
(a) Except as provided in (b) and (c), any unexercised options
previously granted to the Grantee and otherwise exercisable on such Grantee's
termination of employment may be exercised, in whole or in part, at any time
within six months after the Grantee's termination of employment
(b) If such employment is terminated by death of the Grantee,
any unexercised options on the date of death may be exercised, in whole or in
part, at any time within 18 months after the date of death by the Grantee's
personal representative or by the person to whom the option is transferred by
will or the applicable laws of descent and distribution; and
(c) If such employment is terminated by reason of the
Grantee's retirement pursuant to the terms of any tax-qualified retirement plan
of the Company or any of its subsidiaries or Disability of the Grantee, any
unexercised options on the date of such retirement or Disability may be
exercised, in whole or in part, at any time within 18 months after date of such
termination of employment, provided that, if such person dies after such
termination of employment, and before the expiration of the 18-month period,
such options may be exercised by the deceased Grantee's personal representative
or by the person to whom the options are transferred by will or the applicable
laws of descent and distribution within such 18-month period.
Any unexercised change of control right exercisable on the
Grantee's termination of employment shall remain exercisable until the end of
the sixty-day period provided for in Paragraph 7(b).
Any of the provisions of this Paragraph 8 to the contrary
notwithstanding, in no event shall any option or change of control right be
exercised after ten years from the Grant Date.
9. NO EMPLOYMENT RIGHTS. Neither the establishment of, nor the
awarding of options or change of control rights under, the Plan shall be
construed to give any employee the right to be retained in the Company's (or any
of its subsidiaries') service or to any benefits not specially provided by the
Plan, or to modify in any manner the Company's right to modify, amend or
terminate any of its pension or retirement plans.
11
<PAGE>
10. NATURE OF PAYMENTS. Any and all grants of options or
change of control rights or deliveries of shares of Stock hereunder shall
constitute special incentive payments to the Grantee and shall not be taken into
account in computing the amount of salary or compensation of the Grantee for the
purposes of determining any pension, retirement, death or other benefits under
(a) any pension, retirement, profit-sharing, bonus, life insurance or other
employee benefit plan of the Company or any of its Subsidiaries, or (b) any
agreement between the Company or any of its subsidiaries and the Grantee, except
as such plan or agreement shall otherwise expressly provide.
11. STOCKHOLDERS' RIGHTS. A Grantee shall not, by reason of
any options or change of control rights granted hereunder, have any right of a
stockholder of the Company with respect to the shares of Stock subject to his
options.
12. ADJUSTMENTS. Any option agreement or change of control
rights agreement entered into hereunder shall contain provisions for equitable
adjustment of
(a) the number, class, and series of shares of stock subject
thereto, or
(b) the Option Prices,
to reflect a stock dividend, stock split-up, share combination,
recapitalization, merger, consolidation, asset spin-off, reorganization, or
similar event, of or by the Company. In any such event, regardless of whether
specified in an option agreement or change of control rights agreement, the
aggregate number, class and series of shares of stock and change of control
rights available under the Plan, the number, class and series of shares of stock
subject to the option agreement, or the Option Price shall be appropriately
adjusted to equitably reflect such event.
13. AMENDMENT OF THE PLAN. The Board may not amend the Plan
without further approval of the securityholders of the Company, unless, in the
opinion of counsel for the Company, such approval is unnecessary to satisfy the
requirements of Rule 16B-3 under Section 16(b) of the 1934 Act or the rules of
any exchange on which the Stock is listed for trading and except as provided in
Paragraph 12.
14. TERMINATION OF THE PLAN. The Plan shall terminate ten
years after the Effective Date, or at such earlier time as the Board may
determine. Any termination, whether in whole or in part, shall not effect any
options or change of control rights then outstanding under the Plan.
15. SUBSTITUTED OPTIONS. If the Committee cancels, with the
consent of a Grantee, any options granted under this Plan, and a new option is
substituted therefor, then the Committee may, in its discretion, provide that
the Grant Date of the canceled option (other than an option subject to the
restrictions of paragraph 5(b)), shall (subject to
12
<PAGE>
the provisions of Paragraph 7(g)) be the date used to determine the earliest
date for exercising the new substituted option under Paragraph 7 so that the
Grantee may exercise the substituted option at the same time as if the Grantee
had held the substituted option since the Grantee Date of the canceled option.
16. FUNDING. Benefits payable under the Plan to any person
shall be paid directly by the Company. The Company shall not be required to
fund, or otherwise segregate assets to be used for payment of, benefits under
the Plan.
17. CONTROLLING LAW. The law of the State of Illinois, except
its law with respect to choice of law, shall be controlling in all matters
relating to the Plan.
18. ACTION BY THE COMPANY. Any action required by the Company
under the Plan shall be by resolution of the Board.
13
<PAGE>
Exhibit 10.13
[LOGO]
COMMONWEALTH OF PENNSYLVANIA
INTEGRATED VOICE AND DATA RADIO SYSTEM
STATEWIDE RADIO SYSTEM
SITE DEVELOPMENT
BETWEEN
THE GOVERNOR'S OFFICE OF ADMINISTRATION
COMMONWEALTH OF PENNSYLVANIA
AND
ROHN CONSTRUCTION, INC., A TEXAS CORPORATION
CONTRACT NO. ME 950102
<PAGE>
CONTRACT FOR A
STATEWIDE RADIO SYSTEM SITE DEVELOPMENT
BETWEEN
THE GOVERNOR'S OFFICE OF ADMINISTRATION
COMMONWEALTH OF PENNSYLVANIA
AND
ROHN CONSTRUCTION, INC., A TEXAS CORPORATION
CONTRACT NO. ME 950102
This Contract ("Contract"), made and entered into this 23rd day of November,
1999, at Harrisburg, PA, in the County of Dauphin, Commonwealth of Pennsylvania,
by and between the Commonwealth of Pennsylvania, Governor's Office of
Administration, with offices in the Finance Building, Harrisburg, PA,
(hereinafter the "Commonwealth"), and Rohn Construction, Inc., a Texas
corporation, with offices at 6178 W. Plank Road, Peoria, Illinois acting through
its proper officials (Rohn hereinafter referred to as the "Contractor"). The
Commonwealth and the Contractor are hereinafter collectively called the
"Parties".
WITNESSETH THAT:
WHEREAS, the Commonwealth has need of a Statewide Radio System Site
Development, training, support and initial maintenance hereinafter defined as
the "System"; and,
WHEREAS, the Commonwealth has made known its requirements for the
System through issuance of a Request For Proposal No. RFP # 1998-SD-1, dated
December 4, 1998 and subsequent Addenda; and
WHEREAS, by Act 1996-148, the Capital Budget for Fiscal Year 1996-1997,
the General Assembly of the Commonwealth authorized the development of a
Statewide Mobile Radio and Microwave System as a public improvement project and
further authorized the Governor's Office of Administration to solicit and award
such contracts as may be necessary for the project; and,
WHEREAS, the Contractor has made known to the Commonwealth, through
submission of a proposal, dated March 12, 1999, and that the Contractor has
available the system, equipment, training, support and maintenance and the
ability to furnish the System which the Contractor is willing to make available
to the Commonwealth in accordance with the terms and conditions hereinafter
contained in this Contract:
<PAGE>
NOW, THEREFORE, for and in consideration of the foregoing premises and
the mutual promises hereinafter set forth, the Parties hereto agree, with the
intention of being legally bound, as follows:
1. The Contractor will furnish the System, with associated equipment, and as
applicable, install and maintain the System and provide training and
support services in accordance with the terms and conditions described
hereinafter, and in the following RIDERS which are hereby incorporated by
reference and made a part hereof:
RIDER A -- TERMS AND CONDITIONS
RIDER B -- STATEMENT OF WORK AND DELIVERABLES
RIDER C -- EQUIPMENT LIST AND CHARGES
RIDER D -- PROJECT SCHEDULE
RIDER E -- MILESTONE PAYMENT PLAN
RIDER F -- WARRANTY AND MAINTENANCE AGREEMENT
RIDER G -- PERFORMANCE BOND
RIDER H -- ACCEPTANCE TESTING
2. The Commonwealth will, in compliance with RIDERS A through H attached
hereto, the Commonwealth's Request For Proposal, and the Contractor's
Proposal, incorporated herein by reference, pay to the Contractor the
compensation for the System and ancillary service as therein specified.
3. This Contract is a firm fixed price ordering agreement, with an estimated
total cost to the Commonwealth for this Contract in an amount not to exceed
$ 40,000,000.00. In addition, other entities and political subdivisions may
make eligible purchases under Paragraph A.65 of Rider A of this Contract in
an amount to be determined.
<PAGE>
IN WITNESS WHEREOF, the Parties to this Contract have executed it through their
respective duly authorized offices, to be effective as of the date first above
written. This Contract will not be binding on the Parties unless and until all
signatures are affixed hereto.
ATTEST: Rohn Construction, Inc.
BY:_________________________________ BY: ___________________
NAME: NAME: Brian B. Pemberton
TITLE: TITLE: President and Chief Executive
Officer
DATE: _________, 1999 DATE: ____________, 1999
FED TAX ID NO: ____________
Commonwealth
COMMONWEALTH OF PENNSYLVANIA:
WITNESS: OFFICE OF ADMINISTRATION
BY: ________________________________ BY: _______________________________
NAME: _____________________________ NAME: _____________________________
TITLE: _____________________________ TITLE: ____________________________
DATE: _____________________________ DATE: _____________________________
APPROVED FOR FORM AND LEGALITY: CERTIFICATION OF FUNDS:
I HEREBY CERTIFY THAT FUNDS
____________________________________ ARE AVAILABLE IN THE AMOUNT
OFFICE OF GENERAL COUNSEL DATE OF $ ___________________________.
________________________________
COMPTROLLER DATE
____________________________________ APPROVED:
OFFICE OF ATTORNEY GENERAL DATE SECRETARY OF THE BUDGET
BY: ______________________________
COMPTROLLER DATE
<PAGE>
RIDER A Terms & Conditions, including Definitions
RIDER B Statement of Work & Deliverables with Installation Standards
RIDER C Equipment List and Charges
RIDER D Project Schedule
RIDER E Payment Schedule
RIDER F Warranty, Maintenance, & Support
RIDER G Performance Bond
RIDER H Acceptance Testing
A.1 DEFINITION OF TERMS
- ----------------------------
A. ACCEPTANCE DATE - The date on which the Commonwealth agrees in writing
that a particular Site or Subsystem has successfully passed the
appropriate Acceptance Test Procedure as defined in Rider H.
B. ACCEPTANCE TESTING - Testing as defined in Rider H, conducted by the
Contractor, and witnessed by the Commonwealth, to validate compliance
with this Contract.
C. ADDITIONAL EQUIPMENT - Equipment added during the term of this
Contract, and any extension, which supplements the Equipment in Rider
C.
D. ALTERATION - Any material change to the System which deviates from the
Contractor's physical, mechanical, civil, software, or electrical
design whether or not additional devices or parts are required.
E. BENEFICIAL USE - Application of a Site or Subsystem as a means of
supporting wireless communications by the Commonwealth, following
written notification to the Contractor by the Commonwealth of the date
that such use of the Site or Subsystem will begin. Beneficial use
shall not begin prior to such written notice.
F. CONTRACT IMPLEMENTATION REVIEW (CIR) - Meeting conducted to review all
system and performance requirements as defined in Rider B.
G. COMPONENT - An individual unit, part, hardware, assembly, accessory,
feature, function, or supporting software, whether or not separately
identified by type and/or model number in Rider C.
H. CRITICAL DESIGN REVIEW (CDR) - Meeting conducted for system-level
review as defined in Rider B.
I. DOCUMENTATION - The then-current standard informational materials
provided in digital form, if available, published by the Contractor
and made available for the Commonwealth's use with the Site, a
Subsystem, or Component as defined in Rider B.
J. DETAILED DESIGN DOCUMENT (DDD) - Final System documentation submitted
by the Contractor to the Commonwealth at the time of Final System
Acceptance.
K. ENGINEERING AND QUALITY ASSURANCE CONTRACTOR (EQAC) - The entity
designated by the Commonwealth to coordinate the overall activities
and schedules of the prime contractors for the System.
<PAGE>
L. EQUIPMENT - Any item or items listed in Rider C.
M. EQUIPMENT FAILURE - An all-inclusive term that pertains to failure of
any Subsystem, Component, supporting software, or Site function or
feature.
N. FACTORY WARRANTY - The Contractor's standard commercial warranty as
outlined in Rider F.
O. FACTORY ACCEPTANCE TESTING - The process identified in Rider H as the
testing procedure for a subsystem assembled at the Staging Area.
P. FACTORY STAGING AREA - The location, designated by the Contractor and
approved by the Commonwealth, that is the Contractor's final factory
assembly area for Subsystems or Equipment during testing by the
Commonwealth prior to shipment.
Q. FIELD MODIFICATION - Any change to the specifications of a Component,
Subsystem, or the System which is performed where the System is
installed at a Commonwealth location, as opposed to returning the
Component to a factory or other non-Commonwealth location for such
changes.
R. FISCAL YEAR/PERIOD - For the purpose of this Contract the Fiscal Year
of the Commonwealth is twelve (12) consecutive months beginning July 1
and ending June 30.
S. HOLIDAYS - Those non-working weekdays so identified in Rider B.
T. INOPERATIVE COMPONENT - A Component or Subsystem which does not comply
with the applicable operational and technical specifications.
U. INSTALLATION - The provision of Components, Equipment, Subsystems,
and/or services by the Contractor to make Equipment supplied from
Rider C fully functional and complete in accordance with Rider B and
this Contract.
V. INSTALLATION DATE - The work day following the day the System or
aSubsystem is installed and capable of functioning to manufacturer's
published specifications and is certified by the Contractor as Ready
For Acceptance Testing.
W. INTERCONNECTION - The mechanical, electrical, radio frequency, or
electronic interconnection to a Contractor-supplied Subsystem or Site
of Components or Subsystems not supplied by the Contractor.
X. MAINTENANCE - Optional equipment and services as detailed in Rider F
provided by the Contractor to support Equipment acquired under this
Contract.
Y. MICROWAVE AGREEMENT - The contract entered into by the Commonwealth
with the entity that will supply and install the microwave
point-to-point radio links.
Z. PRELIMINARY DESIGN REVIEW (PDR) - Formal collective engineering
presentation and analysis held as specified in Rider B.
AA. PRODUCTS - Equipment, Systems, Subsystems, Components, documentation,
and software described in this Contract.
BB. PROPOSAL - Contractor's Proposal to the Commonwealth dated
___________.
<PAGE>
CC. PROPRIETARY INFORMATION - Any data, information, software, or
intelligence, including corrections, modifications, revisions and
copies thereof, whether digital form or visually readable containing
information which is the property of, and is confidential to the
Contractor and/or its licensors, and is designated by the Contractor
as proprietary.
DD. READY FOR ACCEPTANCE TESTING - The point in time at which the Site,
or a Subsystem, is installed and certified by the Contractor, in
writing, to the Commonwealth that all operational and technical
specifications are met and that Acceptance Testing can begin.
EE. READY FOR USE - The point in time at which the Site or a Subsystem is
installed and has completed Acceptance Testing.
FF. REGION - A geographical area so identified by the Commonwealth
comprised of a group of Equipment and Components that constitute a
functional group.
GG. REPLACEMENT - The exchange or substitution of a Component, Equipment,
or Subsystem for another due to its malfunction or inability to
function according to its published specifications.
HH. REQUEST FOR DESIGN - A written notification to the Contractor from the
Commonwealth that the Contractor shall proceed with generation of Site
Equipment designs for consideration by the Commonwealth.
II. RFP - The Commonwealth's Request for Proposals No.: RFP #1998-SD-1,
dated _________, 1998 and subsequent Addenda.
JJ. SERVICES - The furnishing of the effort by the Contractor necessary to
implement or support the System. Examples include, but are not limited
to, installation, training, maintenance, warranty, engineering or
other professional, technical, consultative, programming, and
analytical services not specified elsewhere in this Contract.
KK. SITE - The location(s) where Equipment is to be installed.
LL. SITE ACCEPTANCE TESTING - The process identified in Rider H as the
testing procedure for a Site following completion and successful
acceptance testing of all Subsystems.
MM. SITE DEPLOYMENT ORDER (SDO) - A written notification to the Contractor
from the Commonwealth that the Contractor may proceed with
Installation at a particular Site or Sites in accordance with Riders
B, D and H.
NN. SITE DESIGN DOCUMENT (SDD) - A Contractor deliverable outcome of the
SDR and its associated process as submitted to the Commonwealth for
its approval.
OO. SITE PRODUCTION RELEASE (SPR) - Written confirmation from the
Commonwealth to the Contractor in response to an approved SDD
notifying the Contractor to proceed with acquisition and staging of a
Site, Sites, or Subsystems detailed in either the approved SDD, or in
a design of the Commonwealth's choosing.
<PAGE>
PP. SITE DESIGN REVIEW (SDR) - Formal analysis and evaluation of a
Contractor-submitted proposed SDD as defined in Rider B.
QQ. SITE PREPARATION - The activities to be performed in preparing the
physical location(s) at a Site for the installation of the Site
Equipment and Subsystems.
RR. SOFTWARE - All computer or microprocessor instructions that the
Contractor is to supply. This includes, but is not limited to,
operating systems, programs, routines, application systems,
subroutines, translators, compilers, and related items.
SS. SUBSTITUTE EQUIPMENT - Alternate(s) for Equipment, Component(s), or
Subsystem(s) listed in Rider C that are acceptable to the
Commonwealth, have at least equal capabilities or greater capabilities
at the Contractor's option, are capable of performing the functions of
the original in accordance with this Contract's specifications and
operational requirements, and are supplied to the Commonwealth at
equal or lower cost than listed for the original in Rider C.
TT. SUBSYSTEM - A complement of individual Components, Equipment, and
Software designated and acquired by the Commonwealth through this
Contract to operate as an integrated and functional part of a Site.
Subsystems include but are not limited to: towers, equipment shelters,
generators, battery plants, and site development.
UU. SITE ACCEPTANCE TESTING - The process identified in Rider H as the
testing procedure for a Site or Sites following completion of
Installation of all supplied Equipment and Subsystems.
VV. SYSTEM - The total complement of individual Components, Equipment,
Subsystems and Software which are being acquired through this Contract
to operate as the entire Statewide System.
WW. SYSTEM FAILURE - See EQUIPMENT FAILURE.
XX. SYSTEM WARRANTY - The two-year period, beginning on the date the
Commonwealth notifies the Contractor in writing that the System has
successfully completed Final Acceptance Testing in Rider H, during
which the Contractor provides ongoing System technical support as
specified in Rider F.
A.2 GENERAL PURPOSE
The purpose of this Contract is to obtain Site Design Documentation, Site
Preparation, Installation, Equipment and Services, as defined herein.
A.3 TERM OF CONTRACT
The term of this Contract shall begin on the date that this Contract is fully
executed and approved and shall expire, unless earlier terminated pursuant to
the Contract, when the Contractor has performed all of its obligations under
this Contract including the ongoing obligations as specified in this Contract
and in the Proposal and the Contractor has received payment in full.
A.4 CONTRACT DOCUMENTS AND ORDER OF PRECEDENCE
<PAGE>
This Contract includes its attachments, the RFP and the Contractor's Proposal,
and addenda as though they were fully stated herein. In the event of a dispute
of terms or interpretation, the order of control shall be the Contract, the
Proposal, and then the RFP.
A.5 INTEGRATION PROVISION
This Contract, as above defined, constitutes the entire agreement between the
Parties with regard to the subject matter of this Contract, and it supersedes
any prior agreements, understandings or other arrangements not incorporated
herein. No agent, representative, employee or officer of either the Commonwealth
or the Contractor has authority to make, or has made, any statement, agreement
or representation, oral or written, in connection with this Contract, which in
any way can be deemed to modify, add to or detract from, or otherwise change or
alter its terms and conditions. No negotiations between the parties, nor any
custom or usage, shall be permitted to modify or contradict any of the terms and
conditions of this Contract. No modifications, alterations, changes or waiver to
this Contract or any of its terms shall be valid or binding unless accompanied
by a written amendment signed by both parties. All such amendments or
modifications will be made using the appropriate Commonwealth form.
A.6 OVERALL DESIGN PROCESS
A. The Contractor and the Commonwealth shall jointly conduct the
following formal Reviews as further defined in Rider B:
i. Contract Implementation Review
ii. Preliminary Design Review
iii. Critical Design Review
iv. Regional Design Reviews
B. System designs submitted by the Contractor shall conform to the
Commonwealth's requirements for Site Development as defined in the RFP
document and in Rider B.
C. Designs shall provide the functions, services, and performances
outlined in the RFP document, in Rider B, and further detailed in each
of the Reviews in A.6A.
A.7 REGIONAL DESIGN PROCESS
<PAGE>
A. Contractor shall proceed with design of each Site in each Region in
response to a written Request for Design from the Commonwealth.
Regions shall be designed in an order determined by the Commonwealth.
B. The Commonwealth shall confirm in writing to Contractor any specific
exceptional needs or requirements for any Site or the set of Sites
within the Region. This confirmation shall consist only of those needs
or requirements that are exceptions to those noted in paragraph A.6
above.
C. The Commonwealth shall supply Contractor with all such specific
information noted in Rider B regarding each Site that is available to
the Commonwealth.
D. Contractor shall, upon receipt of the information noted in the
paragraphs above, review the information for completeness. Contractor
shall notify the Commonwealth immediately of any missing information
required prior to Contractor proceeding with design efforts.
E. Contractor acknowledges that Site selection responsibility and
authority rests with the Commonwealth
A.8 SITE DESIGN PROCESS
A. All Contractor Site design efforts shall include the Commonwealth and
the Commonwealth's Engineering and Quality Assurance Contractor as
active participants.
B. Contractor shall, upon receipt of the Commonwealth's written Request
for Design, perform such field, engineering, professional, or
production investigative and/or design efforts as required. A.6B
C. Contractor shall supply the Commonwealth, as a deliverable prior to
each Site Design Review, Site and Subsystem designs submitted as the
proposed Site Design Document. Each proposed SDD shall include, at a
minimum, the following:
i. Site Survey (including, as appropriate; geotechnical reports,
survey results, stress analysis, foundation analysis, and other
engineering or professional reports)
ii. Design Parameters
iii. List of Components, Equipment, and Subsystems Required
iv. Draft engineering drawings, schematics, and layouts sufficient
for the Review
v. Proposed Site Installation Schedule
vi. Itemized listing of Costs, reconciled to Rider C
vii. Itemized list of Options, including the impact of Options on
those items above
D. The Contractor, the Commonwealth, and the Commonwealth's EQAC shall
jointly
<PAGE>
review the proposed SDD and determine the efficiency, completeness,
suitability and appropriateness of the design. The proposed SDD shall
be modified during this process, as determined by the participants, to
best meet the Commonwealth's design objectives.
E. The Commonwealth and the Contractor shall both sign the revised design
document as indication of their agreement that the design meets the
requirements of paragraph A.6. Upon signature by both the Commonwealth
and the Contractor, the document becomes the Site Design Document
(SDD) for its Site.
A.9 ACQUISITION AND STAGING
A. The Contractor shall proceed with Site Preparation and Fabrication or
Acquisition of Equipment or Subsystems following receipt by the
Contractor of a written Site Production Release (SPR) from the
Commonwealth.
B. The Contractor shall notify the Commonwealth when Equipment or a
Subsystem is available for Factory Acceptance Testing, as required and
as appropriate. The Contractor shall deliver required documentation
concurrent with notification to the Commonwealth that Equipment or a
Subsystem is available for Factory Acceptance Testing as described in
Rider B.
A.10 INSTALLATION
A. The Contractor shall proceed with Installation of Equipment or
Subsystems following receipt by the Contractor of a written Site
Deployment Order (SDO) from the Commonwealth.
B. Following receipt of each SDO, the Contractor shall install the
applicable Site and/or Subsystems as specified in the SDO and make
them available for Site Acceptance Testing as specified in Rider H.
C. The Contractor shall notify the Commonwealth in writing of the
completion of each Site Installation.
D. Installation Dates may be changed by mutual consent of the Contractor
and the Commonwealth in writing. However, consent of the Contractor is
not required if, at least thirty (30) days prior to the Installation
Date of any Site or Subsystem, the Commonwealth directs in writing a
later Installation Date for such Site or Subsystem. In either event
the SDO shall be modified in writing, accordingly. Any period of
mutually agreed upon delay, or Commonwealth directed delay, which
results in changes to other related dates contained herein shall not
be subject to liquidated damages as specified in paragraph A.13 of
this Contract.
A.11 ACCEPTANCE TESTING
A. Acceptance Testing shall be scheduled by mutual agreement as soon as
practicable
<PAGE>
following completion of Installation of the Site or Subsystem as
detailed in Riders B and H. Acceptance Testing may proceed by Site or
Subsystem at the Commonwealth's option.
B. The Commonwealth, the EQAC, or the Commonwealth's designee shall
attend all Acceptance Testing of Sites and Subsystems. Contractor
shall provide the Commonwealth with a minimum of fourteen (14)
calendar days written advance notice of the location, date, and time
of such Acceptance Testing. Immediately upon successful completion of
such Acceptance Testing, the Commonwealth shall notify the Contractor
in writing that the Contractor has passed the applicable Acceptance
Test and authorize the payment of applicable charges per Rider E.
C. If the Commonwealth does not accept or approve of an initial
Acceptance Test, or the Site, Subsystem(s), or Equipment do not pass
the Acceptance Test, the Contractor shall submit the results of that
Acceptance Test in writing to the Commonwealth along with a report of
its efforts to correct the cause or causes of Acceptance Test failure.
The Commonwealth shall have thirty (30) calendar days after its
receipt of such results to notify the Contractor in writing of
acceptance of the Site or Subsystem and authorize the payment of
applicable charges, or to schedule a repeat Acceptance Test.
D. The Commonwealth is under no obligation to accept ownership, make
progress or other payments, or acknowledge receipt of any equipment
until successful completion of all applicable Acceptance Test
Procedures as defined in Rider H.
E. The Commonwealth may, at its option, accept a Site or Subsystem prior
to successful completion of Acceptance Testing, recognizing that some
discrepancies exist. These discrepancies shall be compiled and listed
at the time of Acceptance Testing and acknowledged by the contractor
on what is commonly referred to as a "punch list". Before the
Commonwealth shall exercise this option, an agreement in writing shall
be established between the Commonwealth and the contractor stating
that the contractor shall make all corrections noted on the punch list
by the date agreed to. If the contractor fails to make correction of
all deficiencies noted on the punch list on the date specified, the
Commonwealth may take appropriate legal action against the contractor,
and the surety company under the performance bond, for damages
incurred by the Commonwealth.
F. If successful completion of repeated Acceptance Testing is not
attained within one hundred twenty (120) days of the Installation
Date, the Commonwealth shall have the option of terminating this
Contract, or continuing repeated Acceptance Tests. The Commonwealth's
option to terminate this Contract shall remain in effect until such
time as a successful completion of the Acceptance Testing is attained.
If termination occurs, the Contractor shall be liable for all inbound
and outbound preparation and shipping costs for contracted items
returned.
G. After a Site or Subsystem has completed a successful Acceptance Test,
a Site or Subsystem which:
<PAGE>
i. is field modified from one model to another; or,
ii. is installed as a Replacement by the Contractor,
shall be subject to a new original Acceptance Test, which shall be in
accordance with the provisions of this paragraph, but independently of
other Sites or Subsystems in the System. The Commonwealth and the
Contractor jointly shall maintain appropriate records to satisfy the
requirements of this paragraph.
A.12 TERMS OF PAYMENT AND BILLING
A. Contractor shall send and receive all correspondence and submittals
under this Contract in electronically usable format as follows:
i. Contractor shall submit all invoices, equipment delivery
statements, and production submittals electronically using the
software program EXPEDITION by Primavera, Inc., in its most
recent commercially available version. Such submittals shall use
conventions, accounts, formatting, and methods of submittal as
specified by the Radio Project Office.
ii. All Contractor schedule and milestone submittals shall use the
software program SURETRAK by Primavera, Inc.
iii. Contractor shall submit all drawings in a format compatible with
AUTOCAD by AutoDesk, Inc.
B. Contractor shall prepare a submittal showing milestones completed,
along with supporting documentation, for approval by the Commonwealth
Project Director. Such submittal shall reflect the milestones achieved
to include the last day of the proceeding month. Payment shall be due
based on the completion of each milestone specified in Rider E, minus
any sums to be withheld. The Contractor shall submit invoices for
completed service each month to the Commonwealth's EXPEDITION server
per paragraph A above.
C. Payments under this Contract shall be based on Contractor's
accomplishment of milestones. These milestones and the percent of
applicable payment to be made to Contractor are specified in Rider E.
D. A proper invoice must include the following information and/or
attached documentation:
i. Name and address of business concern as designated in the
Contract.
ii. Federal Tax Identification Number of business concern as
designated in the Contract.
iii. Invoice remittance address as designated in the Contract.
<PAGE>
iv. Description including time period, serial numbers, sites,
subsystems, and services and deliverables actually rendered or
delivered as specified in the Statement of Work.
v. The Contract number.
vi. Work sheets detailing materials provided and tasks performed.
E. If an invoice contains a defect or impropriety and/or it is not a
proper invoice, as defined in this section, a written notification and
the improper invoice shall be sent to the business concern at the
address designated for Receipt of Notices within ten (10) calendar
days. The notice shall contain a description of the defect or
impropriety and any additional information necessary to correct the
defect or impropriety. If such notification has been sent, the
required payment date shall be thirty (30) days after the receipt of a
proper invoice in accordance with this section.
F. Payments under the Contract will be due and payable on the thirtieth
(30th) calendar day after the date of actual receipt of a proper
invoice in the office designated to receive the invoice, or the date
the Commonwealth receives acknowledgement of a completed milestone in
accordance with the terms of the Contract, whichever is later. The
date of the warrant issued in payment shall be considered the date
payment is made. Contractor payment shall not be initiated before an
invoice is received. If Contractor is a designated small business,
Management Directive 305.7 Amended, June 12, 1986 shall apply.
G. Payment by wire transfer is permitted upon receipt of wire transfer
instructions from the Contractor.
A.13 LIQUIDATED DAMAGES
A. The installation dates set forth in the SDOs will be fixed in such a
manner that the integration of the System is consistent with the
timing and schedules of the Commonwealth's programs. If the Contractor
does not complete Installations within the time limits specified in
the SDOs, the delays will interfere with the proper implementation of
the Commonwealth's System and with coordination between the various
contractors installing the system to the loss and damage of the
Commonwealth. From the nature of the case it would be impractical and
extremely difficult to fix the actual damage sustained in the event of
any such action. The Commonwealth and the Contractor, therefore,
presume that in the event of any such delay the amount of damage
sustained from the delay will be the amount set forth in this
paragraph. They further agree that in the event of any such delay, the
Contractor shall pay such amount as liquidated damages and not as a
penalty; and that such liquidated damages are in lieu of all other
damages arising from such delay. The Commonwealth is not obligated for
payment of liquidated damages under the terms of this Contract.
<PAGE>
B. If the Contractor does not meet the Installation Date(s) of the
SDO(s), the Contractor shall pay the Commonwealth, as fixed and agreed
liquidated damages for each calendar day between the required
Installation Date and the actual Installation Date, but not for more
than one hundred eighty (180) calendar days in any instance, in lieu
of all other damages due to such non-installation, an amount of 0.05%
(0.0005) daily of the purchase price including maintenance, but less
the purchase price applicable to installed Components, for each
Subsystem rendered inoperable as a result of such delay in Ready for
Use.
C. Delays of the contractor in meeting scheduled Installation Date for a
Site, a Subsystem, or the System as specified in the SDO shall result
in a loss to the Commonwealth of 0.05% (0.0005) per day of the
purchase price, for a maximum of 180 working days for each subsystem
rendered inoperable as a result of each calendar day delay in
completing the tasks. An extension of time granted by the Commonwealth
shall not be construed as a waiver of liquidated damages unless such
extension shall specifically provide such waiver.
D. If the delays are caused by a subcontractor, and if such delay arises
out of causes beyond the control of both the Contractor and
subcontractor, and without the fault or negligence of any of them, the
Contractor shall not be liable for liquidated damages for delays,
unless the Equipment or Services to be furnished by the Contractor or
Subcontractor were obtainable from other sources in sufficient time to
permit the Contractor to meet the required Installation Date.
E. The Commonwealth shall have the option of billing the Contractor or
deducting from any invoice an amount equal to the above as liquidated
damages or waiting for the Contractor's certification so the
Acceptance Testing can begin.
F. If the delay of installation of any Equipment is more than thirty (30)
calendar days, then during that or the subsequent thirty (30) day
period the Contractor may elect to install substitute Equipment,
acceptable to the Commonwealth, of at least equal capabilities (or
greater capabilities at the Contractor's option) and capable of
performing the functions of such Equipment, as specified in the
manufacturer's published specifications for the Equipment and the
Commonwealth's required functions and features. If the Contractor does
not elect to install substitute Equipment during either such period,
then by written notice to the Contractor, the Commonwealth may
terminate the right of the Contractor to install such original or such
substitute Equipment, and may obtain other Equipment in place thereof.
The Commonwealth is not liable for any packing, unpacking, drayage,
rigging, shipping and installation charges for any of the Contractor's
substitute Equipment.
G. If some, but not all, of the System or a Subsystem is Ready For Use by
the required date, and the Commonwealth uses for operational purposes
any such installed Subsystem, liquidated damages shall not accrue
against the Subsystem used.
H. If the delays are caused by the Engineering and Quality Assurance
Contractor, the Site
<PAGE>
Development contractor or the Microwave contractor, the delay shall be
handled in the same manner as a delay in Site availability and
liquidated damages shall not apply.
A.14 NEED FOR EQUIPMENT DUE TO EMERGENCY
A. For a period of two (2) years after System Acceptance, the Contractor
shall make reasonable efforts to assist the Commonwealth in procuring
use of Equipment compatible with that used by the Commonwealth to meet
emergencies such as, but not limited to, major breakdowns and
unforeseen incidents.
B. The Commonwealth, at its option, may accept or reject the offer of use
of emergency Equipment. If accepted, the charge for such use, if any,
shall be by separate arrangement between the Commonwealth and the
entity providing the emergency Equipment.
C. Contractor shall make available spare parts and service support for
all equipment supplied under this procurement for a minimum of 10
years from the date of execution of the contract. Contractor agrees to
supply the Commonwealth with written notification of the
discontinuance of production of any Contractor-manufactured hardware
or equipment no later than 1 year prior to discontinuance.
A.15 ALTERATIONS AND INTERCONNECTIONS
A. The Commonwealth may make Alterations or install Interconnections to
Sites, Subsystems, Equipment or Components at the Commonwealth's
expense.
B. When such Alterations or Interconnections are made by other than the
Contractor:
i. The Commonwealth shall be responsible for damage to the System
caused by or resulting from such Alterations or Interconnections;
ii. The Contractor shall not be held responsible for any defects or
malfunctions or non-conformance caused by or resulting from such
Alterations or Attachments;
iii. The Commonwealth shall pay the Contractor for any increase in the
cost of effort related to maintenance service for the System,
caused by or resulting from such Alterations or Interconnections;
iv. Such Alterations or Interconnections shall be removed and the
Equipment restored to the prior configuration at the
Commonwealth's expense upon return of the Equipment to the
Contractor; and
v. There shall be no effect on the Contractor under this Contract as
a result of such Alterations or Interconnections, whether for
warranty, time of performance or other purposes.
A.16 TRAINING AND TECHNICAL SERVICES
A. The Contractor shall provide training as specified in Rider D. Any
training or
<PAGE>
additional Services over and above that referenced in Rider D shall be
at the Contractor's then standard terms and charges.
B. The Contractor's technical personnel shall be available to assist the
Commonwealth in development and implementation of the System, as
specified in Riders B and D. Any technical Services over and above
that referenced in Riders B and D will be made available to the
Commonwealth at the Contractor's then standard terms and charges.
A.17 ASSIGNED PERSONNEL
A. The Contractor shall provide to the Commonwealth a summary of
technical qualifications for each individual assigned to the
Commonwealth at the Commonwealth's location in support of this
contract. The Commonwealth must approve the selection of these
personnel in advance of their assignment to this project.
B. Contractor agrees that key personnel, including management,
engineering, and supervisory, assigned to the project shall remain
assigned to the project unless terminated or due to unforeseen
circumstances.
C. In the event of termination or unforeseen circumstances, substitutes
for assigned personnel shall be approved in advance by the
Commonwealth, shall have comparable levels of responsibility and
authority, and shall have substantially equivalent experience and
skill. Contractor agrees to make available for interview purposes any
individuals proposed for this project, and agrees to supply the
Commonwealth with resume, work history, or other requested
documentation supporting the contractor's proposed assignment or
substitution. The Commonwealth reserves the right to accept or reject
any or all individuals recommended for project assignment.
A.18 SITE PREPARATION
A. The Contractor will notify the Commonwealth in writing as to the
adequacy of the Commonwealth's planned layout of each Site for the
Equipment within thirty (30) days after receipt of the Commonwealth's
plans. The parties shall mutually agree upon any changes, if a planned
layout is not adequate. If such agreement is not reached, Paragraph
A.53 shall be applicable.
B. Any Contractor alterations or modifications in Site Preparation, which
are attributable to incomplete or erroneous investigations,
calculations, or engineering requirements provided by the Contractor
and which involve additional expense to the Commonwealth, shall be
made at the expense of the Contractor.
C. If any such alterations as specified in Paragraph C above, cause a
delay in the installation, the provisions as specified in LIQUIDATED
DAMAGES paragraph of this Contract will apply in accordance with the
provision thereof.
D. If Commonwealth or federal environmental agencies provide the
Contractor with guidelines or directives on site preparation, which
are followed in good faith by the
<PAGE>
Contractor, and it later proves to be erroneous or incomplete,
the Commonwealth will pay the additional expense and no
liquidated damages shall be applicable.
A.19 TRANSPORTATION OF EQUIPMENT
A. Shipment to the installation Sites shall be made at no expense to the
Commonwealth.
B. Transportation charges for the shipment of empty packing cases shall
be paid by the Contractor except when Equipment is moved from one
Commonwealth location to another.
C. Relocation of Equipment for the Commonwealth's convenience shall be at
the Commonwealth's expense. However, if relocation is due to the
Contractor's improper initial location of Equipment, the Contractor
shall be liable for relocation, packing and unpacking of Equipment
without charge to the Commonwealth.
A.20 RISK OF LOSS
The Commonwealth shall be relieved from all risk of loss or damage to the
Equipment while it is at the Contractor's storage and service facilities, when
it is shipped to installation locations, and until the Commonwealth accepts the
System. However, Contractor shall not be responsible for loss or damage caused
by the Commonwealth, its Engineering and Quality Assurance Contractor, the
Microwave System contractor or the Trunked Radio System contractor.
A.21 LAWS AND REGULATIONS
A. The attention of Contractor is directed to the federal state and local
laws, regulations, and ordinances in reference to labor, materials,
equipment, specifications, proposals, contracts, bonds (bid,
performance, and payment), environmental impacts, and all other
matters pertaining to the relationship between the Commonwealth and
Contractor. Contractor shall be aware of and shall at all times
observe and comply with federal, state, and local laws, ordinances,
and regulations, which in any manner affect the Contract or the work.
Contractor shall be responsible for ascertaining the applicable laws,
ordinances, rules, regulations, permit requirements, or other legal
requirements governing the Contractor's activities hereunder.
B. Contractor shall indemnify, save and hold harmless the Commonwealth
against any claim, judgement, fine, penalty, or other cost arising
from the violation of such laws, ordinances, or regulations, whether
committed by the Contractor, or the Contractor's agents, servants, or
employees, or the Contractor's subcontractors, their agents, servants,
or employees. In the event the Commonwealth becomes aware or receives
notice of a violation, the Commonwealth shall provide prompt written
notice of any matter covered by this Paragraph, and Contractor shall
have the right to assume the defense thereof.
A.22 NON-DISCRIMINATION/SEXUAL HARASSMENT CLAUSE
During the term of the Contract, the Contractor agrees as follows:
<PAGE>
A. In the hiring of any employees for the manufacture of supplies,
performance of work, or any other activity required under the Contract
or any subcontract, the Contractor, subcontractor or any person acting
on behalf of the Contractor or subcontractor shall not by reason of
gender, race, creed, color, disability, national origin, ancestry or
age discriminate against any citizen of the Commonwealth who is
qualified and available to perform the work to which the employment
relates.
B. Neither the Contractor nor any subcontractor nor any person on their
behalf shall in any manner discriminate against or intimidate any
employee involved in the manufacture of supplies, the performance of
work or any other activity required under the Contract on account of
gender, race, creed, color disability, national origin, ancestry or
age.
C. Contractor and subcontractors shall establish and maintain a written
sexual harassment policy and shall inform their employees of the
policy.
D. The Contractor and each subcontractor shall furnish all necessary
employment documents and records to and permit access to their books,
records, and accounts by the contracting officer and the Department of
General Services' Bureau of Contract Administration and Business
Development for purposes of investigation to ascertain compliance with
the provisions of the Nondiscrimination/Sexual Harassment Clause. If
the Contractor or any subcontractor does not possess documents or
records reflecting the necessary information request, it shall furnish
such information on reporting forms supplied by the contracting
officer of the Bureau of Contract Administration and Business
Development.
E. The Contractor shall include the provisions of this
Nondiscrimination/Sexual Harassment Clause in every subcontract so
that such provision will be binding upon each subcontractor.
F. The Commonwealth may cancel or terminate the Contract and all money
due or to become due under the Contract may be forfeited for a
violation of the terms and conditions of this Nondiscrimination/Sexual
Harassment Clause.
A.23 QUARTERLY REPORT - MBE, WBE, SERB
The Contractor must provide the Department of General Services, Bureau of
Contract Administration and Business Development, Room 502 North Office
Building, Harrisburg, Pennsylvania 17125, with quarterly reports that indicate
whether the Contractor utilized a Minority Business Enterprise, Women's Business
Enterprise, or Socially/Economically Restricted Business, Women's Business for
activities under this Contract during the quarter. The quarterly reports must
include a list of names and the amount paid to the Minority Business Enterprise,
Women's Business Enterprise, or Socially/Economically Restricted Business
utilized. The first such report shall be due on the 100th day after the starting
date of this Contract, and subsequent reports shall be due each 100th day after
the starting date of this Contract, and subsequent reports shall be due each
100th day thereafter. However, a report is not required if a
<PAGE>
Minority Business Enterprise, Women's Business Enterprise, or
Socially/Economically Restricted Business was not used during the reporting
period.
A.24 LICENSE AND PERMITS
Contractor shall procure at his own expense all licenses and permits necessary
to perform the work except for such permits as may be provided by the
Commonwealth as set forth elsewhere herein.
A.25 PRIME CONTRACTOR ROLE
A. The Contractor shall be prime contractor for the effort hereunder. The
Contractor will be required to assume responsibility for all
contractual activities offered in the Proposal whether or not the
Contractor performs them. Further, the Commonwealth will consider the
Contractor to be the sole point of contact with regard to contractual
matters including payment of any and all charges resulting from this
Contract.
B. Contractor shall employ a competent responsible representative who
shall represent Contractor at Sites at all times during the execution
of services in performance of this Contract. Contractor shall notify
the Commonwealth in writing of the name of its representative(s), and
of subsequent changes, for approval.
C. Contractor shall provide the proper tools and equipment, and shall
secure the services of technical experts, and other employees
necessary to the performance of the work. The employees of Contractor
shall be competent and willing to perform satisfactorily the work
required of them. A worker, subcontractor, or other agent who, in the
opinion of the Commonwealth is intemperate, disorderly, disruptive, or
who neglects or refuses to perform the work in a safe and competent
manner shall, upon request of the Commonwealth, be promptly removed
from the Site and shall be allowed to return to the Site only with the
Commonwealth's consent upon Contractor's representation that the
worker, subcontractor, or agent is willing and able to perform
satisfactorily.
D. Assignment, delegation or subletting of this Contract or rights or
duties hereunder by Contractor, in which the value of the contract
exceeds $100,000, without the written consent of the Commonwealth
shall be void. No consent is required for such identified contractors.
Subject to the foregoing, this Contract shall bind and inure to the
benefit of the parties and their successors and assigns.
E. The Commonwealth reserves the right to approve subcontractors for this
project and to require the Contractor to replace subcontractors found
to be unacceptable. The Contractor is totally responsible for
adherence by the subcontractor(s) to all provisions of the Contract.
F. The Commonwealth acknowledges responsibility for integration of the
System purchased under this Contract and other systems and equipment
purchased through other related contracts. Contractor agrees to
provide the Commonwealth with technical support, including engineering
investigation and research if required, necessary to enable the
Commonwealth to fully characterize the interface requirements
<PAGE>
of Contractor's System as needed to complete system integration.
G. The Commonwealth reserves the right to delegate its responsibilities
for technical review, implementation supervision, acceptance testing,
or other non-fiduciary responsibilities under this Contract to the
EQAC, to Commonwealth agencies, to the Commonwealth's partners, to
other Commonwealth contractors, or to designated individuals as it
deems appropriate. Contractor shall be notified of such delegation, if
it occurs, by written notice as provided for in this Contract.
A.26 CONFLICTS OF INTEREST
A. No personnel of the Contractor or member of the governing body of any
locality, or other public official or employee of any such locality in
which, or relating to which, the work under this Contract is being
carried out, and who exercises any functions or responsibilities in
connection with the review or approval of the undertaking or carrying
out of the work shall, prior to the completion of the work voluntarily
acquire any personal interest, direct or indirect, which is
incompatible, or in conflict with the discharge and fulfillment of
such person's functions and responsibilities with respect to the
implementation of such work.
B. Any person who acquires an incompatible or conflicting personal
interest, prior to, on or after the effective date of this Contract,
or who involuntarily acquires any such incompatible or conflicting
personal interest, shall immediately disclose his or her interest to
the Commonwealth in writing. Thereafter, such person shall not
participate in any action affecting the work under this Contract,
unless the Commonwealth shall determine that in the light of the
personal interest disclosed, such person's participation in any such
action would not be contrary to the public interest.
A.27 ACCOUNTING AND BOOKKEEPING REQUIREMENTS
<PAGE>
A. The Contractor shall keep all financial records in a manner consistent
with generally accepted accounting principles. Documentation to
support each action shall be filed in a manner allowing it to be
readily located.
B. All disbursements made for the Contract shall be only for obligations
incurred in the performance of this Contract and shall be supported by
contracts, invoices, vouchers, and other data as appropriate to
support such disbursements. All disbursements for the Contract shall
be for obligations incurred only after the effective date of the
Contract, unless specific authorization for prior disbursements has
been given in writing by the Commonwealth.
C. During the period covered by the Contract, and until the expiration of
three (3) years after final payment under the Contract, the Contractor
agrees to provide the Commonwealth, its duly authorized
representative, and any person, agency or instrumentality providing
the Commonwealth with financial support to the work undertaken
hereunder with access to and the right to examine any books,
documents, papers, and records of the Contractor involving
transactions related to such work.
A.28 SINGLE AUDIT ACT
In compliance with the Single Audit Act of 1984, the Contractor agrees to the
following:
A. This Contract is subject to audit by Federal and state agencies or
their authorized representative in accordance with the auditing
standards promulgated by the Comptroller General of the United States
and specified in Standards for Audits of Governmental Organizations,
Programs, Activities, and Functions (Yellow Book - 1981 Revisions).
B. The audit requirement of this Contract will be satisfied if a single
audit is performed under the provisions of the Single Audit Act of
1984, 341 U.S.C. 7501 et seq., and all rules and regulations
promulgated pursuant to the Act.
C. The Commonwealth reserves the right for Federal and State agencies or
their authorized representatives to perform additional audits of a
financial/compliance, economy/efficiency or program results nature, if
deemed necessary.
D. The Contractor further agrees to comply with requirements that may be
issued by the State Agency upon receipt of additional guidance
received from the Federal Government regarding the Single Audit Act of
1984.
A.29 OWNERSHIP
The Contractor hereby retains, on an exclusive basis, all rights, title, and
interest in any computer software, systems design, source code, work papers, and
all other information, documents and materials delivered, prepared or created by
the Contractor for or in connection with the Contract with the Commonwealth.
Computer software, systems design, source code and all other information,
documents and materials prepared for or in connection with the Contract shall be
licensed by the Contractor to the Commonwealth for use of all of these items
pursuant to Rider
<PAGE>
H. Work papers pertaining to the tasks and reports shall be made available, upon
request, to the Commonwealth or its representative for review, inspection, and
if desired, reproduction. Such work papers shall be retained for at least three
(3) years subsequent to the final payment under the Contract.
A.30 CONFIDENTIALITY
The Parties acknowledge that some of the data they each may be exposed to in the
performance of this Contract is of a confidential nature. Except as otherwise
required by applicable law, the Parties agree to observe complete
confidentiality with respect to all aspects of any confidential information,
proprietary data or trade secrets and any parts thereof, belonging to the other
or other manufacturer, contractor or distributor that each one's personnel gain
access to under or in connection with this Contract. The restrictions herein
shall survive the termination or expiration of this Contract for any reason and
shall continue in full force and effect and shall be binding upon the Parties or
any party claiming an interest in this Contract on behalf of or under the rights
of the Parties. The Parties shall advise their agents, employees, successors,
assigns, and subcontractors that are engaged in performance hereunder of the
restrictions, present and continuing, set forth herein. Each Party shall defend
and incur its respective costs, including reasonable attorney fees, for actions
which arise as a result of noncompliance by such Party regarding the
restrictions herein.
A.31 PUBLICITY
Any use or reference to the RFQC and this Contract by the Contractor to
promote, solicit, or disseminate information regarding the scope of the
Contract is prohibited unless otherwise agreed to in writing by the
Commonwealth. The Commonwealth agrees to be used as a reference by the
Contractor; provided however, that Contractor hereby holds harmless and
indemnifies the Commonwealth from any claims or damages arising from such
reference information
A.32 NOTICES
A. Notices to be given under this Contract shall be formulated in writing and
sent to the respective Party as follows:
FOR THE CONTRACTOR:
---------------
---------------
---------------
---------------
---------------
FOR THE COMMONWEALTH:
Governor's Office of Administration
Radio Project Office
Donald Appleby, Program Manager
One Technology Park
Harrisburg, PA 17110-2913
<PAGE>
B. A party shall be deemed to have given notice for purposes of this
Contract upon deposit of the correspondence (a) in registered or
certified U. S. mail, postage prepaid, (b) with a nationally
recognized courier service that maintains verifications of actual
delivery, (c) by facsimile, with a copy sent by first-class U.S. mail,
or (d) by delivering the same in person.
C. Either party may change its notification address by giving the other
party written notice of the change.
A.33 COMPLETENESS OF PROPOSAL, ESTIMATES, AND DRAWINGS
A. Contractor acknowledges and understands the extent to which the RFQC
and Proposal, as accepted (including drawings, data, etc.), is
complete and that no change in the Contract price(s) shall be allowed
to the extent that the Proposal is not complete. The Proposal and
drawings are specifying the quality of work required, its nature and
position, and the method of construction and operation insofar as
these are determinable in advance.
B. Contractor hereby agrees that it will make no claim for damages, for
anticipated profits, or for losses because of differences between the
quantities of the various items of work actually done or services and
materials actually furnished, and the quantities indicated in the RFQC
and Proposal.
C. The various parts of the Contract are intended to supplement but not
necessarily duplicate each other. Any work exhibited in one part and
not in another shall be performed as if it had been set forth in all
parts, so that the work will be performed according to the Contract.
D. Compensation for all profit and loss, both anticipated and actual,
shall be considered as fully made in the Contract price(s) contained
in Rider C.
A.34 OTHER CONTRACTS
A. Contractor is advised that this Contract is a part of a larger
project, and that related contracts may be let accordingly. Contractor
shall afford other contractors and subcontractors a reasonable
opportunity for the performance of their work, and shall properly
coordinate and schedule its work with theirs.
B. If a part of Contractor's work depends upon the work of another
contractor or subcontractors for proper performance and results,
Contractor shall carefully review and promptly report to the
Commonwealth in writing any defect or delay in the performance of such
work that renders it unsuitable for Contractor's proper performance
and results, or that Contractor believes excuse the full and timely
performance by Contractor.
A.35 RIGHT OF ENTRY
<PAGE>
The Commonwealth reserves the right at any time to enter the property or
location on which the work is to be performed, by such agent or agents, as it
may elect, for the purpose of inspecting the work.
A.36 SAFETY REQUIREMENTS
A. All parts of this Contract shall be performed in strict accordance
with the safety requirements of applicable codes and statues, federal,
state and local requirements, and the best industry practice.
Contractor is fully obligated to follow all safety procedures on
behalf of its Site personnel, Equipment, and properties involved in
this project, including Contractor's subcontractors, the
Commonwealth's employees and visitors.
B. All work performed by the Contractor at above-ground elevations,
including work on masts, poles, towers, monopoles, rooftops, chimneys,
and similar installation sites and antenna support structures, shall
comply with regulations established by OSHA and with the guidelines
established by the National Association of Tower Erectors.
A.37 PROTECTION OF PROPERTY AND EQUIPMENT
<PAGE>
A. Contractor shall use its best efforts to protect the adjacent or
adjoining properties and equipment from damage or loss from
Contractor's operations or its subcontractors' operations. Contractor
shall bear the costs of damage or loss caused by its operations or
those of his subcontractors.
B. Existing underground installations such as water pipes, oil and gas
pipelines, sewers, telephone lines, power lines, and buried structures
in the vicinity of the Work are indicated on the drawings only to the
extent such information has been made available to or discovered by an
Architect, Engineer, or the Commonwealth in preparing the drawings.
There is no guarantee as to the accuracy or completeness of such
information, and the responsibility for accuracy and completeness is
expressly disclaimed. Contractor shall be responsible for the location
and protection of underground installations that are crossed or
exposed by his design.
C. Contractor shall be solely responsible for accurately locating
existing underground installations in advance of excavating or
trenching, by contacting their owners and by having the owners locate
and mark the location of the underground facilities placed within the
Site. Repair of damage to underground installations for which the
Contractor is legally responsible shall be paid by the Contractor.
D. Delays, additional Work, or extra cost to Contractor caused by
existing underground installations shall not constitute a claim for
extra Work, additional payment, damages, or extensions of time. In the
event that it is determined that existing underground installations
may cause to be incurred, additional costs, delays, damages, etc.,
Contractor will notify the Commonwealth to arrange for the appropriate
disposition. This disposition may include, but not be limited to:
additional compensation, modification/extension of the Schedule,
relocation of the applicable Work to another Site, etc.
A.38 HOLD HARMLESS CLAUSE ISSUE
The Contractor shall be responsible for and agrees to indemnify and hold
harmless the Commonwealth from damages to property or personal injuries
(including wrongful death) to any person(s) and from related losses, damages,
expenses, claims, demands, suits and actions arising in connection with the work
performed by the Contractor. The Commonwealth shall give prompt written notice
to Contractor upon Commonwealth becoming aware of or receiving notice of any
matter covered by this Paragraph and Contractor shall have the right to
participate in the defense thereof.
A.39 FORCE MAJEURE
A. The term Force Majeure as used herein shall mean any and all causes
beyond the reasonable control and without any fault or negligence of
the Party failing to perform, such as action of the elements,
including floods, tornadoes, or hurricanes, acts of public authorities
and/or regulatory agencies, including inability to obtain required
permits or authorizations, acts of public enemy, insurrection, riots,
strikes, labor and material shortages, fires, explosions, breakdowns
of or damage to plant, equipment or
<PAGE>
facilities, interruptions of transportation, embargoes, acts of
military authorities, or other causes of a similar nature which wholly
or partly prevent the performance of an obligation under this
Contract.
B. Inclement weather including rain, snow, ice, or conditions resulting
therefrom shall not be considered Force Majeure. However, such
inclement weather may provide the basis for a requested extension of
schedule at the discretion of the Commonwealth without being
considered Force Majeure.
C. If because of Force Majeure, either Party hereto is delayed in the
performance of an obligation(s) under this Contract (other than the
obligation of a party for monetary payment in connection with the
performance of this Contract), and if such Party shall promptly
deliver to the other Party written notice of such Force Majeure, then
such obligation of the Party giving notice shall be suspended, as of
the date of the notice, to the extent made necessary by Force Majeure
and during its continuance. However, the Party giving notice shall use
its best efforts to eliminate or overcome Force Majeure in order to
minimize any delay in performance. The Party claiming Force Majeure
shall use all reasonable efforts to mitigate the effects of Force
Majeure upon the performance of the Contract.
D. Each party shall bear the costs it encounters as a result of the Force
Majeure delay and the required efforts to mitigate the effects of the
Force Majeure.
A.40 EXTENSION OF TIME DUE TO FORCE MAJEURE
A. After the beginning of any delay due to Force Majeure, Contractor
shall promptly notify the Commonwealth verbally and in writing of the
circumstances, and describe the action being taken to mitigate the
effects of the delay.
B. Upon cessation of the Force Majeure, Contractor shall notify the
Commonwealth in writing of the extension of time required, the
Commonwealth shall then ascertain the facts, the effect on the
Contract schedule(s), and make a good faith determination of the
extension of time required, if any, and so notify Contractor in
writing of the delay in the Contract schedule.
C. At a minimum, each day of Force Majeure delay should provide for an
equivalent delay in the Contract schedule.
A.41 DAMAGES FOR DELAYS
A. Contractor shall receive no compensation for delays or hindrances to
the work, except when direct and unavoidable extra cost to the
Contractor is caused by the failure of the Commonwealth to provide
information or material, if any, which is to be furnished by the
Commonwealth and except as otherwise provided in this Contract.
B. When such extra compensation is claimed, the Contractor shall present
a written claim to the Project Manager. Disapproval by the
Commonwealth shall be subject to review
<PAGE>
under Paragraph A.53, Dispute Resolution Process.
C. If delay is caused by specific orders given by the Project Manager to
stop work, or by the performance of extra work, or by the failure of
the Commonwealth to provide material or necessary instructions for
carrying on the work, then such delay will entitle the Contractor to
an equivalent extension of time, its applications for which shall,
however, be subject to the approval of the Commonwealth; and no such
extension of time shall release the Contractor or the surety on its
performance bond from all of Contractor's obligations hereunder which
shall remain in full force until the discharge of the Contract.
D. Contractor hereby covenants and agrees that each subcontract shall
contain the following clause:
"Except where the Contractor is found to be at fault or
contributorily negligent, Contractor shall not be liable to a
subcontractor for any delay to a subcontractor's work resulting from
any act, negligence or default of the Commonwealth, or by reason of
fire of other casualty, or on account of riots, strikes or other
combined action of the workers or others, or on account of any acts of
God or any other cause beyond Contractor's control; or on account of
any circumstances caused or contributed to by a subcontractor."
A.42 BACKGROUND CHECKS
Contractor understands that its employees, agents, and subcontractors may have
access to sensitive or confidential information or materials under the control
of the Commonwealth during this Contract. Contractor agrees to require its
employees, agents, and subcontractors, and their employees, to agree to execute
signed individual releases authorizing the Commonwealth to conduct
investigations into those employees' backgrounds, criminal records, driving
records, and other desired measures as a condition of approval for assignment to
work on this Contract. Contractor further agrees that assignment of individuals,
agents, or subcontractors to work on this Contract shall be contingent upon
completion of such investigations with results to the satisfaction of the
Commonwealth.
A.43 INTOXICANTS AND DRUGS
A. Contractor shall not permit the introduction or use of intoxicating
liquors or illegal drugs or any other drugs or substances which impair
or may reasonably be expected to impair the performance or safety
practices of any worker on the Site or on any of the grounds occupied
or controlled by Contractor. Contractor shall not permit any worker or
any other person on the Site who is or appears to be under the
influence of any of the above stated substances.
B. If Contractor has an established drug screening program for its
employees, Contractor shall apply such program to the work performed
on the Site of the Contract.
A.44 PERFORMANCE BOND
<PAGE>
Contractor shall cause its surety to issue and maintain in favor of the
Commonwealth a performance bond in form and substance as set forth in Rider G.
A.45 PATENT, TRADEMARK, AND COPYRIGHT INFRINGEMENT INDEMNITY
A. WARRANTY. Contractor warrants that all goods, services, processes, and
intellectual property furnished through, or used to perform this
Contract will not infringe any patent, trademark, trade secret or
copyright, provided that these items are not designed by the
Commonwealth without Contractor's assistance. Contractor shall obtain
all required licenses for the Commonwealth to use all software and
hardware. If the use of any good, service, process or intellectual
property furnished or used under this Contract is adjudged infringing
and its use enjoined, Contractor shall, at its own expense, procure
for use by the Commonwealth the right to continue using it, or replace
it with a non-infringing equivalent, or modify it so that it becomes
non-infringing. Contractor shall defend and reimburse the Commonwealth
for any losses, costs and expenses including attorney's fees in
connection with the enforcement of this warranty.
B. INDEMNITY. Contractor shall defend at its own expense any suits or
proceedings brought against by the Commonwealth based on a patent,
trademark or copyright infringement claim pertaining to any goods,
services, processes, or intellectual property furnished or used by
Contractor under this Contract. Upon receipt of a notice of a claim,
the Commonwealth shall promptly notify Contractor of such a claim and
provide assistance and information at Contractor's expenses. The
Commonwealth has the right of participation in the suit or
proceedings, if necessary. Contractor shall pay all judgments,
damages, royalties and costs awarded against the Commonwealth and
shall reimburse the Commonwealth therefor. This indemnity shall not
apply to items designed by the Commonwealth without the Contractor's
assistance.
A.46 REQUIRED INSURANCE COVERAGE
A. Contractor agrees to furnish certificates of insurance coverage issued
by companies qualified to do business in the Commonwealth and in form
acceptable to Commonwealth evidencing the following coverage and terms
as hereinafter stated:
i. Worker's compensation insurance for all of the Contractor's
employees and those of any subcontractor engaged in work at the
Site of the project in accordance with the Worker's Compensation
Act of 1915 and any supplements or amendments thereof.
ii. Public liability and property damage insurance to protect the
Commonwealth, the Contractor, and any and all subcontractors from
claims for damages for personal injury (including bodily injury),
sickness or disease, accidental death, and damage to property,
including loss of use resulting from any property damage, which
may arise from operations under this Contract, whether such
operation be by the Contractor or by anyone directly or
indirectly employed by either. The limits of such insurance shall
be in an amount not less than $5,000,000 each person and
<PAGE>
$5,000,000 each occurrence, personal injury and property damage
combined. Such policies shall be occurrence rather than claims
made policies and shall name the Commonwealth as an additional
insured.
iii. The insurance shall also cover the following: Contractor's own
trucks and automobiles, trucks and automobiles hired by the
Contractor, trucks and automobiles not owned or hired by the
Contractor but used in connection with this project. The
Automobile Liability Policy shall cover the use of automobiles
and trucks on and off the Site of this Contract.
iv. No policy of insurance provided hereunder shall contain any
endorsements or any other form or clause designed to limit and
restrict any action by the Commonwealth as an additional insured
against the insurance coverage in regard to the work performed
for the Commonwealth.
v. The deductible portion of each type of coverage shall not exceed
five percent (5%) of the coverage limit.
B. Prior to commencement of work under the Contract, the Contractor shall
provide the Office of Administration, Director, Radio Project Office,
with current certificates of insurance as set forth above. These
certificates shall contain a provision that coverage afforded under
the policies will not be canceled or changed until at least thirty
(30) days prior written notice has been given to the Office of
Administration, Radio Project Office.
A.47 SUSPENSION
A. The Commonwealth shall have the right at any time to suspend all or
any part of the work upon written notice to the Contractor.
Thereafter, the Commonwealth shall pay to Contractor the difference
between the value of the work performed, and the sum of the payments
made prior to the date of suspension. This additional payment, if any,
shall be credited to payments due following resumption of the work.
Further payments in accordance with the terms of payment shall cease
during the period of suspension, and Contractor shall be compensated
for the delay and related damages incurred by it. When directed by the
Commonwealth to resume the suspended work, Contractor and the
Commonwealth shall establish a revised Project Schedule and revised
deliverable dates.
B. The Contract price shall be adjusted to reflect any costs or savings
attributable to such suspension of the work and extension of the
schedule, and the adjustment to the Contract price shall be based upon
the revised completion dates. Contract payments in accordance with
terms of payment shall resume based upon the revised completion dates
and revised Contract price.
C. If the work or any portion thereof has been suspended in accordance
with the foregoing paragraph, and if the Commonwealth does not give
notice in writing to Contractor to resume the work within thirty (30)
days, then Contractor may declare the
<PAGE>
suspended work or the suspended portion thereof as terminated for
convenience, and then the termination charges as specified in
Paragraph A.48 shall be based only on the portion of the work that is
so terminated.
A.48 TERMINATION/CANCELLATION
A. The rights of termination and cancellation shall take precedence over
the other provisions of the Contract.
B. The Commonwealth has the right to terminate this Contract for any of
the following reasons:
i. TERMINATION FOR CONVENIENCE: The Commonwealth may terminate this
Contract for its convenience if the Commonwealth determines
termination to be in its best interest. The Contractor shall be
paid for work satisfactorily completed prior to the effective
date of the termination as well as for work in process and its
costs of termination, but in no event shall the Contractor be
entitled to recover loss of profits.
ii. NON-APPROPRIATION: Contractor understands that the Commonwealth's
funds for this Contract are contingent on the availability of
lawful appropriations by the Pennsylvania Legislature and
authorization by the Governor. If the Pennsylvania Legislature or
the Governor fails at any time to continue funding for the
Contract, the Commonwealth's obligations under the Contract are
terminated as of the date that the funding expires without
further obligations of the Commonwealth. The Commonwealth
represents that as at the date of this Contract sufficient funds
have been appropriated for the full payment under this Contract.
In the event this Contract is terminated pursuant to this
Paragraph, the Commonwealth shall not procure the same or a
similar statewide radio system for the remainder of the current
fiscal year, unless less than 182 calendar days remain in the
current fiscal year, in which case the Commonwealth shall not
procure the same or similar statewide radio system until the end
of the following fiscal year.
iii. TERMINATION FOR CAUSE: Unless otherwise specified herein, the
Commonwealth reserves the right to terminate this Contract upon
written notice for Contractor's nonperformance or inadequate
performance if Contractor fails to commence remedial actions to
cure the same within thirty (30) days after receipt of written
notice thereof.
C. Upon termination or cancellation for any reason, Contractor shall
deliver to the Commonwealth at the Site, in good operating condition,
and normal wear and tear excepted, materials or equipment supplied to
Contractor by the Commonwealth.
A.49 PERFORMANCE GUARANTEES
During the period of this contract, Contractor guarantees that the performance
of the materials furnished under the Contract will meet the requirements of the
Contract relating to design and
<PAGE>
performance when operated in accordance with generally accepted operating
practices of public safety.
A.50 TAXES
A. The Commonwealth and the Contractor understand and agree that the
Contractor will not be responsible for paying or collecting
Pennsylvania sales and use tax, or any similar tax, levy, duty or
charge ("Sales Tax"), with respect to any services or property,
whether tangible or intangible, provided to the Commonwealth by the
Contractor under this Contract. In particular, it is agreed and
acknowledged that all tangible property to be transferred to the
Commonwealth under this Contract will either retain its character as
tangible personal property or will be considered building machinery
and equipment for purposes of the Sales Tax. The Commonwealth shall
provide such exemption certificates as may be required by the
Contractor from time to time to substantiate or qualify for any
applicable exemptions from the Sales Tax.
B. The amounts payable to the Contractor under this Contract have been
determined based upon the assumption that no county, municipality,
city, town or other political subdivision of the Commonwealth will
impose a mercantile license tax, business privilege tax or any other
local tax, duty, levy or similar charge ("Local Tax") on the
Contractor with respect to this Contract or the Contractor's
activities hereunder.
C. If and to the extent that a Sales Tax is imposed on any services or
property transferred by the Contractor to the Commonwealth under this
Contract, or that any Local Tax is imposed on the Contractor with
respect to this Contract or the Contractor's activities hereunder, the
Commonwealth shall reimburse the Contractor, as an additional payment
under the Contract, the amount of any such Sales Tax or Local Tax.
D. The Commonwealth is exempt from all excise taxes imposed by the
Internal Revenue Service and has accordingly registered with the
Internal Revenue Service to make tax free purchases under Registration
No. 2374001-K. With the exception of purchases of the following items,
no exception certificates are required and none will be issued: undyed
diesel fuel, tires, trucks, gas-guzzler emergency vehicles, and sports
fishing equipment. The Commonwealth is also exempt from the
Pennsylvania Sales Tax. The Sales and Use Tax Regulations provide that
exemption certificates are not required for sales made to government
entities and none will be issued. Nothing in this paragraph is meant
to exempt a construction contractor from payment of sales tax or use
tax required to be paid with respect to its purchase or use of
tangible personal property used or transferred in connection with the
performance of its construction contract.
A.51 WARRANTY
A. Contractor shall provide Factory Warranty on all items purchased via
this Contract as specified in Rider F. Factory Warranty is included in
the price of Equipment as listed in Rider C. This is Contractor's
standard twelve (12) month "Return to Factory" commercial product
warranty, covering repair or replacement only of defective
<PAGE>
products, with the warranty period starting the date the product is
shipped from the factory. The factory is defined as the Factory
Staging Facility for the Commonwealth and as the point of manufacture
for other purchasers (i.e., counties and municipalities).
B. Regional Warranty is a separately priced and optional service provided
by Contractor available only to the Commonwealth. Regional Warranty
covers the Subsystems deployed to Sites within a Region and provides
materials, labor and specific response/repair (frequency of
response/repair times to be determined) as specified in Rider F. This
Warranty, if purchased, will be utilized during the System
Pre-Acceptance period on a Region by Region basis upon receipt by
Contractor of written authorization from the Commonwealth, and can be
ordered at any time before or after Regional Subsystem Acceptance.
This coverage will be invoiced monthly, at a flat fee by Region as
noted in Rider C.
C. System Warranty is a service provided by Contractor as part of the
Commonwealth System acquisition, and is available to the Commonwealth
only. System Warranty duration is a two (2) year period starting
immediately after Final System Acceptance. Specific notice from the
Commonwealth for commencement of the System Warranty is not required
once notification is received that the Commonwealth has accepted the
System. Coverage will provide materials, labor and specific
response/repair (frequency of response/repair times to be determined)
as in Rider F. System Warranty will apply to the entire System during
the two (2) year period.
D. System Maintenance is an optional service offered by the Contractor to
the Commonwealth only. System Maintenance includes the identical
coverage as provided for in "System Warranty". The commencement date
will follow the expiration of the two (2) year System Warranty and
extend for either two (2) years or five (5) years (two distinct priced
options provided). The frequency of response/repair times is to be
determined at selection of options as specified in Rider F. The
Commonwealth must provide written notification of its intent to
exercise either the two (2) year or five (5) year System Maintenance
option at least sixty (60) days prior to the expiration of the two (2)
year System Warranty.
E. Factory Extended Warranty is a separately priced optional service
offered by the Contractor to any purchaser of items from Rider C. This
Extended Warranty provides extended and supplemental equipment
maintenance services beyond or in augmentation of the Factory
Warranty. Price and scope is as determined in Rider C. Options include
on-site response, drive in/depot repairs, return to factory extension,
etc.
F. Contractor shall respond to system and equipment malfunctions, while
services included in Paragraphs B, C, and D above are in effect, by
having a qualified technician arrive at the site within the times
specified in Rider F. For minor failures as defined in Rider F, the
contractor shall agree to pay to the Commonwealth as liquidated
damages the sum of $200 for each and every hour of delay, for a
maximum of 360 days per incident. For major failures as defined
in Rider F, the contractor shall
<PAGE>
agree to pay to the Commonwealth as liquidated damages the sum
of $300 for each and every hour of delay, for a maximum of 360 days
per incident.
G. THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE ARE HEREBY EXCLUDED.
A.52 CHANGES IN THE WORK
A. The Commonwealth may direct reasonable changes in the work called for
in the Proposal by making alternations or additions to or deletions
from the work, without invalidating the Contract and without relieving
or releasing Contractor from any responsibility or guarantee given by
it pursuant to the Contract. All changes in the work shall be
performed under the terms, conditions, and specifications of the
original Contract, and in all respects shall be in conformance with
the requirements of the Contract, as though originally included
therein.
B. A claim for an adjustment to the contract price or schedule for
changes in the work shall be promptly brought to the Commonwealth's
attention and agreed upon in advance of the change order authorizing
the change in the work. Contractor shall be entitled to no claim for
damages, other than for costs already incurred and for termination
costs, and for anticipated profits or overhead on any portion of the
Work that may be deleted by a change order. Agreed upon changes in the
Contract price, task price, or schedule, if any, shall be stated on
the change order.
C. Except in any emergency endangering life or property, changes in the
Scope of Work shall be made only in accordance with a written change
order originated by the Commonwealth stating the nature and extent of
the change.
D. For any authorized change in the work, the contracting parties are
restricted to the use of one of the following pricing methods to
determine the amount to be added to or deducted from the Contract
price for the change in work. The pricing method to be used shall be
agreed upon and stated on the change order prior to Contractor's
starting the change.
i. Method (1): By agreement upon unit prices, where applicable unit
prices are not stipulated in the Contract, for the work to be
done; or
ii. Method (2): By agreement upon a lump sum price for the work to be
done; or
iii. Method (3): By agreement that Contractor to be paid on a time and
material basis at a fixed hourly rate by labor category plus
materials at cost including a materials handling rate. If this
method is agreed upon, Contractor shall maintain accurate,
current, itemized records for such time as the Commonwealth may
require for a correct accounting of hours expended by labor
category and the cost of materials, together with all proper
vouchers and supporting documents.
E. If the change in work results in a credit to the Commonwealth from
Contractor or from a subcontractor, the amount credited to the
Commonwealth shall be the total actual
<PAGE>
cost (as defined above) of the change in work.
F. An itemized statement of actual cost for changes increasing the work
or for net credit to the Commonwealth for changes decreasing the work,
shall be rendered by Contractor no later than fifteen (15) calendar
days after completion of the additional work, or after issuance of the
change order if a decrease in work.
A.53 DISPUTE RESOLUTION PROCESS
A. In the event of a controversy or claim arising from the Contract, the
Contractor must file a written notice of controversy or claim with the
Contracting Officer for a determination.
B. Upon receipt of such a notice, the Contracting Officer shall
investigate the notice and send his or her written determination to
the Contractor.
C. The Contractor may request an administrative appeal of the Contracting
Officer's determination within 60 days of issuance of the Contracting
Officer's determination. The Deputy Secretary for Information
Technology, Governor's Office of Administration, shall review the
administrative appeal. The Deputy Secretary shall investigate the
appeal and issue a written determination to the Contractor.
D. The decision of the Deputy Secretary shall be final, conclusive, and
unreviewable in all respects unless the Contractor files a claim with
the Commonwealth Board of Claims pursuant to Act of May 20, 1937, P.L.
728, as amended (72 P.S. 4651-1).
E. Contractor may seek review of an adverse decision of the Commonwealth
Board of Claims to the Commonwealth Court of Pennsylvania as provided
by applicable law. Any disputes arising under this Contract, but
outside the jurisdiction of the Commonwealth Board of Claims, shall be
brought only in the courts of the Commonwealth of Pennsylvania or in
the federal courts in the Middle District of Pennsylvania.
F. Pending a final resolution of a controversy or claim, including the
final judicial resolution thereof, the Contractor shall proceed
diligently with the performance of the Contract in a manner consistent
with the interpretation of the Contracting Officer and the
Commonwealth shall compensate the Contractor pursuant to the terms of
the Contract.
A.54 OFFSET PROVISION FOR COMMONWEALTH CONTRACTS
The Contractor agrees that the Commonwealth may set off the amount of any state
tax liability or other debt of the Contractor or its subsidiaries that is owed
to the Commonwealth and not being contested on appeal against any payments due
the Contractor under this or any other contract with the Commonwealth.
A.55 CONTRACTOR RESPONSIBILITY PROGRAM
<PAGE>
A. As indicated in Management Directive 215.9 "Contractor Responsibility
Program", the Commonwealth has established a system to monitor vendor
performance. If Contractor has not performed as required by the
Contract, the using agency will notify the Department of General
Services. The information provided will be reviewed and if deemed to
be appropriate, will be entered in the central Contractor
Responsibility File. This information will be used by the Commonwealth
to assist in determining if a vendor is responsible. If it is
determined the Contractor is not responsible, they will be ineligible
for contract awards.
B. Contractor certifies that it is not currently under suspension or
debarment by the Commonwealth, any other state, or the federal
government, and if the Contractor cannot so certify, then it agrees to
submit along with the bid/proposal, a written explanation of why such
certification cannot be made.
C. If Contractor enters into any subcontracts or employs under this
Contract any subcontractors/individuals who are currently suspended or
debarred by the Commonwealth or federal government or who become
suspended or debarred by the Commonwealth or federal government during
the term of this Contract or any extensions or renewals thereof, the
Commonwealth shall have the right to require the Contractor to
terminate such subcontracts or employment.
D. The Contractor agrees to reimburse the Commonwealth for the reasonable
costs of investigation incurred by the Office of the Inspector General
for investigations of the Contractor's compliance with the terms of
this or any other agreement between the Contractor and the
Commonwealth which results in the suspension or debarment of the
Contractor. Such costs shall include, but not be limited to, salaries
of investigators, including overtime; travel and lodging expenses; and
expert witness and documentary fees. The Contractor shall not be
responsible for investigative costs for investigations which do not
result in the Contractor's suspension or debarment.
E. The Contractor may obtain the current list of suspended and debarred
contractors by contacting the:
Department of General Services
Office of Chief Counsel
603 North Office Building
Harrisburg, PA 17125
Telephone No.: (717) 783-6472
FAX No.: (717) 787-9138
A.56 AMERICANS WITH DISABILITIES ACT
During the term of this Contract, the Contractor agrees as follows:
A. Pursuant to federal regulations promulgated under the authority of The
Americans With Disabilities Act, 28 C.F.R. 35.101 et seq., the
Contractor understands and agrees that no individual with a disability
shall, on the basis of the disability, be excluded from participation
in the Contract or from activities provided for under this Contract.
<PAGE>
As a condition of accepting and executing this Contract, the
Contractor agrees to comply with the "General Prohibitions Against
Discrimination," 28 C.F.R. 35.130, and all other regulations
promulgated under Title II of The Americans With Disabilities Act,
which are applicable to the benefits, services, programs, and
activities provided by the Commonwealth through contracts with outside
contractors.
B. The Contractor shall be responsible for and agrees to indemnify and
hold harmless the Commonwealth from losses, damages, expenses, claims,
demands, suits, and actions brought by any party against the
Commonwealth as a result of the Contractor's failure to comply with
the provisions of paragraph A above. Upon receipt of notice of a
claim, the Commonwealth shall provide prompt written notice to
Contractor of any matter covered by this Paragraph and Contractor
shall have the right to participate in the defense thereof.
A.57 CONTRACTOR INTEGRITY PROVISIONS
A. Definitions:
i. CONFIDENTIAL INFORMATION means information that is not public
knowledge, or available to the public on request, disclosure of
which would give an unfair, unethical, or illegal advantage of
another desiring to contract with the Commonwealth.
ii. CONSENT means written permission signed by a duly authorized
officer or employee of the Commonwealth, provided that where the
material facts have been disclosed, in writing, by
prequalification, bid, proposal, or contractual terms, the
Commonwealth shall be deemed to have consented by virtue of
execution of this Contract.
iii. CONTRACTOR means the individual or entity that has entered into
this Contract with the Commonwealth, including directors,
officer, partners, managers, key employees and owners of more
than five percent (5%) interest.
iv. FINANCIAL INTEREST means:
a. ownership of more than five percent (5%) interest in any
business; or
b. holding a position as an officer, director, trustee,
partner, employee, or the like, or holding any position of
management.
<PAGE>
v. GRATUITY means any payment of more than normal monetary value in
the form of cash, travel, entertainment, gifts, meals, lodging,
loans, subscriptions, advances, deposits of money, services,
employment, or contracts of any kind.
B. The Contractor shall maintain the highest standards of integrity in
the performance of this Contract and shall take no action in violation
of state or federal laws, regulations, or other requirements that
govern contracting with the Commonwealth.
C. The Contractor shall not disclose to others any confidential
information gained by virtue of this Contract.
D. The Contractor shall not, in connection with this or any other
agreement with the Commonwealth, directly or indirectly, offer,
confer, or agree to confer any pecuniary benefit on anyone as
consideration for the decision, opinion, recommendation, vote, other
exercise of discretion, or violation of a known legal duty by any
officer or employee of the Commonwealth.
E. The Contractor shall not, in connection with this or any other
contract with the Commonwealth, directly or indirectly, offer, give or
agree or promise to give anyone any gratuity for the benefit of at the
direction or request of any office or employee of the Commonwealth.
F. Except with the consent of the Commonwealth, neither the Contractor
nor anyone in privity with him or her shall accept or agree to accept
from, or give or agree to give to, any person, any gratuity from any
person in connection with the performance of work under this Contract
except as provided herein.
G. Except with the consent of the Commonwealth, the Contractor shall not
have a financial interest in any other contractor, subcontractor, or
supplier providing services, labor or material on this project.
H. The Contractor, upon being informed that any violation of these
provisions has occurred or may occur, shall immediately notify the
Commonwealth in writing.
I. The Contractor, by execution of the Contract and by the submission of
any bills or invoices for payment pursuant thereto, certifies and
represents that he or she has not violated any of these provisions.
J. The Contractor, upon the inquiry or request of the Inspector General
of the Commonwealth or any of that official's agents or
representatives, shall provide, or if appropriate, make promptly
available for inspection or copying, any information of any type or
form deemed relevant by the Inspector General to the Contractor's
integrity or responsibility, as those terms are defined by the
Commonwealth's statutes, regulations, or management directives. Such
information may include, but shall not be limited to, the Contractor's
business or financial records, documents or files of any type or form
which refer to or concern this Contract. Such information shall be
retained by the Contractor for a period of three years beyond the
termination of this Contract unless otherwise provided by law.
<PAGE>
K. For violation of any of the above provisions, the Commonwealth may
terminate this and any other contract with the Contractor, claim
liquidated damages in an amount equal to the value of anything
received in breach of these provisions, claim damages for all expenses
incurred in obtaining another contractor to complete performance
hereunder, and debar and suspend the Contractor from doing business
with the Commonwealth. These rights and remedies are cumulative, and
the use or nonuse of any one shall not preclude the use of all or any
other. These rights and remedies are in addition to those the
Commonwealth may have under law, statute, regulation, or otherwise.
A.58 CAPTIONS, NUMBERING AND LETTERING
The captions to sections and the numbering or lettering of sections in this
Contract are for convenience only and shall not be considered in construing the
intent of the parties.
A.59 CONSTRUCTION OF TERMS, CHOICE OF LAW
The terms of this Contract have been arrived at after mutual negotiation and,
therefore, it is the intent of the parties that its terms not be construed
against either of the Parties by reason of the fact that the Contract Documents
were prepared by one of the Parties. This Contract shall be deemed a contract
made in the Commonwealth for all purposes and shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania.
A.60 YEAR 2000 COMPLIANCE
The Contractor presents and warrants that each hardware, software and firmware
product delivered (or service performed) under the Contract, including
enhancements, shall be able to accurately process, provide and/or receive
date/time date (including, but not limited to, calculating, comparing and
sequencing) from, into and between the 20th and 21st centuries and the year 1999
and 2000, including leap year calculations, when used in accordance with the
Documentation provided by the Contractor, provided that all listed or unlisted
products (e.g. hardware, software, firmware, etc.) used in combination with such
product properly exchange date/time date with it.
No hardware, software, firmware or service provided under the Contract shall
change the status of hardware, software and firmware product not supplied by
Contractor which is Year 2000 compliant from Year 2000 compliant to Year 2000
noncompliant. The Contractor must notify the Commonwealth of any Year 2000
noncompliant hardware, software and firmware product located by the Contractor
during the course of performance of the Contract, design a plan of remediation
to create Year 2000 compliance and provide an estimate of the cost, if any, to
the Commonwealth to achieve Year 2000 compliance.
The Contractor shall not deliver any third-party hardware, software, firmware or
service to the Commonwealth which has not been represented and warranted in
writing by the third-party manufacturer to be Year 2000 compliant, as described
above. The Contractor shall pass through the third-party representation and
warranty from the third-party manufacturer to the Commonwealth.
<PAGE>
Any modifications or changes made by the Commonwealth or any of its third
parties to any hardware, software, or firmware provided under the Contract that
alters Year 2000 compliance shall void the Year 2000 warranty of the product.
This Year 2000 compliance representation and warranty shall be in effect until
the later of December 31, 2002 or the expiration of the Contractor's warranty.
In any event this representation and warranty shall survive termination of the
Contract and shall run until December 21, 2002. In no event will the acceptance
by the Commonwealth of any hardware, software or firmware product or service
delivered to the Commonwealth, by or though the Contractor, or any payment by
the Commonwealth to the Contractor under the Contract limit the effectiveness or
survival of this Year 2000 compliance representation and warranty.
A.61 RELATIONSHIP OF THE PARTIES
The status of the Contractor under this Contract will be that of an independent
contractor. No provision of this Contract will be interpreted to make the
parties to this Contract a partnership, principal-agent, employer-employee, or
trustee or beneficiary of any type.
A.62 WAIVERS
No delay, waiver, omission, or forbearance on the part of the Commonwealth to
exercise any right, option, duty, or power arising from the breach or default by
Contractor or a subcontractor of any of the terms, provision, or covenants
contained herein will constitute a waiver by the Commonwealth thereof to enforce
such right, option, or power as to any subsequent breach or default by
Contractor or a subcontractor.
A.63 PARTIAL INVALIDITY
Any provision of this Contract prohibited by law or by court decree in any
locality or state shall be suspended to the extent of such prohibition without
invalidating or affecting the remaining provisions of this Contract.
A.64 LIMITATION OF LIABILITY
Except (i) under Paragraph A.45 entitled Patent, Trademark and Copyright
Infringement Indemnity and (ii) with respect to personal injury and property
damage, in no event shall Contractor's liability hereunder, whether for breach
of warranty or contract, tort (including negligence) or otherwise, exceed an
amount equal to the aggregate value of RPRs issued under this Contract at the
time the Commonwealth first became aware of the occurrence of the event
allegedly giving rise to such liability. Such amount shall be reduced by any
monies paid to the Commonwealth pursuant to the Liquidated Damages clause to the
extent that such liability is attributable to Contractor caused delays. Any work
or services provided by the Performance Bond shall be taken into consideration
as mitigating any damage to the Commonwealth. In no event shall Contractor of
Contractor's suppliers or licensors have liability to the Commonwealth in excess
of $500,000 for consequential, indirect, incidental, or special damages
including but not limited to loss of revenue.
A.65 ELIGIBLE PURCHASES
<PAGE>
A. The contractor's prices for all equipment included in Rider C shall be
included in State Contract 5820-06. The Commonwealth of Pennsylvania,
Department of General Services administers state Contract 5820-06 via
the Bureau of Purchases. Contractor agrees to allow state agencies and
other eligible entities to purchase all equipment, services, and
subsystems at the prices listed in Rider C except those items
specifically excluded.
B. Contractor's pricing for State Contract 5820-06 shall remain fixed
during the duration of this contract. The contractor shall participate
in State Contract 5820-06 with the equipment listed in Rider C for a
minimum of ten (10) years. Pricing adjustments to State Contract
5820-06 shall only be permitted upon the Commonwealth's issuance of a
new State Contract 5820-06. Pricing of all equipment in Rider C may
not be increased in percentage more than the percentage increase to
contractor's similar equipment included in newly adjusted GSA
Contracts.
C. Contractor shall allow using agencies and other eligible Commonwealth
entities to issue field purchase orders directly to the contractor for
any equipment and subsystems that are covered by this Contract and
included in State Contract 5820-06. Political subdivisions,
commissions or authorities created by a political subdivision, private
colleges or universities, GPU Energy, and other eligible entities are
permitted to participate in or purchase from Contract 5820-06.
D. Quantities of equipment orders placed under State Contract 5820-06 are
estimated only and may be increased or decreased in accordance with
the actual requirements of the Commonwealth and associated entities.
The Commonwealth shall only purchase the supplies, equipment, and
materials in such quantities that represent the actual requirements of
the Commonwealth.
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
[LOGO]
ROHN CONSTRUCTION, INC.
RIDER B
STATEMENT OF WORK
AND DELIVERABLES
- --------------------------------------------------------------------------------
2144 PA Rider B Page 1 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RIDER B - TABLE OF CONTENTS
---------------------------
<S> <C>
B-1 PROGRAM MANAGEMENT..............................................................................5
PROJECT MANAGEMENT.................................................................................5
ENGINEERING........................................................................................6
SITE DEVELOPMENT MANAGEMENT........................................................................6
B-2 DELIVERABLES....................................................................................8
PROGRAM DOCUMENTATION..............................................................................8
B-2.1.1 PROGRAM IMPLEMENTATION PLAN (PIP).......................................................8
B-2.1.2 PROGRAM SCHEDULE........................................................................8
B-2.1.3 REQUEST FOR DESIGN (RFD) - SITE.........................................................9
B-2.1.4 REQUEST FOR DESIGN (RFD) -REGION........................................................9
B-2.1.5 PRELIMINARY SITE PLAN (PSP).............................................................9
B-2.1.6 SITE DESIGN DOCUMENT (SDD).............................................................10
B-2.1.7 SITE PRODUCTION RELEASE (SPR)..........................................................10
B-2.1.8 SITE DEPLOYMENT ORDER (SDO)............................................................10
B-2.1.9 INTERFACE SPECIFICATIONS...............................................................11
B-2.1.10 DETAILED EQUIPMENT LIST................................................................11
B-2.1.11 DETAILED DESIGN DOCUMENT (DDD).........................................................11
B-2.1.12 QUALITY STANDARDS MANUAL...............................................................12
B-2.1.13 SITE DOCUMENTATION PACKAGE.............................................................13
B-2.1.14 TRAINING MANUALS.......................................................................13
B-2.1.15 MONTHLY PROJECT REPORT.................................................................13
B-2.1.16 MBE, WBE, SERB QUARTERLY REPORT........................................................13
PROGRAM REVIEWS...................................................................................13
B-2.2.1 MONTHLY PROGRAM REVIEWS................................................................13
B-2.2.2 CONTRACT IMPLEMENTATION REVIEW (CIR)...................................................14
B-2.2.3 PRELIMINARY DESIGN REVIEW (PDR)........................................................14
B-2.2.4 CRITICAL DESIGN REVIEW (CDR)...........................................................14
B-2.2.5 REGIONAL DESIGN REVIEWS (RDR)..........................................................14
B-2.2.6 TECHNICAL INTERFACE COMMITTEE REVIEWS..................................................15
B-2.2.7 SITE-READY VERIFICATION REVIEW.........................................................15
B-2.2.8 SITE DOCUMENTATION REVIEW..............................................................15
B-2.2.9 FINAL CONTRACT CLOSE-OUT REVIEW........................................................15
B-3 SHELTERS.......................................................................................16
SHELTER DESIGN....................................................................................16
B-3.1.1 REQUIREMENTS...........................................................................16
B-3.1.2 VARIABLE REQUIREMENTS..................................................................17
B-3.1.3 OPTIONAL REQUIREMENTS..................................................................17
SHELTER STANDARDS.................................................................................17
B-3.2.1 BUILDING CODES.........................................................................17
B-3.2.2 ELECTRICAL CODES.......................................................................18
SHELTER PERFORMANCE...............................................................................18
B-3.3.1 SHELTER EMERGENCY GENERATOR ROOM.......................................................18
B-3.3.2 SHELTER DIMENSIONS.....................................................................18
SHELTER CONFIGURATIONS............................................................................18
B-3.4.1 SHELTER ACCEPTANCE.....................................................................19
B-3.4.2 SHELTER DELIVERY.......................................................................19
</TABLE>
- --------------------------------------------------------------------------------
2144 PA Rider B Page 2 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHELTER SUBMITTALS................................................................................19
B-3.5.1 ENGINEERING DRAWINGS...................................................................19
B-3.5.2 ELECTRICAL DESIGN DRAWINGS.............................................................19
B-3.5.3 FOUNDATION DESIGN DRAWINGS.............................................................20
SHELTER INSTALLATION..............................................................................20
B-3.6.1 INSTALLATION REQUIREMENTS..............................................................20
B-3.6.2 SHELTER INSTALLATION AT OPERATIONAL SITES..............................................21
CONTRACTOR RESPONSIBILITIES.......................................................................21
B-3.7.1 SHELTER SUBSYSTEM TO GENERATOR SUBSYSTEM VENDOR INTERFACE..............................21
B-3.7.2 SHELTER SUBSYSTEM TO TOWER SUBSYSTEM VENDOR INTERFACE..................................23
B-3.7.3 SHELTER SUBSYSTEM VENDOR TO MICROWAVE SYSTEM CONTRACTOR INTERFACE......................23
B-3.7.4 SHELTER SUBSYSTEM VENDOR TO RADIO SYSTEM CONTRACTOR INTERFACE..........................24
B-3.7.5 ADDITIONAL SHELTER SUBSYSTEM VENDOR RESPONSIBILITIES...................................24
B-4 EMERGENCY GENERATOR............................................................................26
EMERGENCY GENERATOR DESIGN........................................................................26
EMERGENCY GENERATOR PERFORMANCE...................................................................26
EMERGENCY GENERATOR CONFIGURATIONS................................................................26
EMERGENCY GENERATOR SHIPPING AND DELIVERY PROCESS.................................................27
B-4.4.1 EMERGENCY GENERATOR FINAL SHIPPING DESTINATION.........................................27
EMERGENCY GENERATOR SUBMITTALS....................................................................27
B-4.5.1 ENGINEERING DRAWINGS...................................................................28
GENERATOR INSTALLATION............................................................................28
GENERATOR WARRANTY................................................................................28
CONTRACTOR RESPONSIBILITIES.......................................................................28
B-4.8.1 SHELTER SUBSYSTEM......................................................................28
B-4.8.2 TOWER SUBSYSTEM........................................................................30
B-4.8.3 MICROWAVE SUBSYSTEM....................................................................31
B-4.8.4 RADIO SUBSYSTEM........................................................................31
B-4.8.5 CIVIL CONTRACTOR.......................................................................31
B-4.8.6 ADDITIONAL GENERATOR SUBSYSTEM VENDOR RESPONSIBILITIES.................................32
B-5 TOWERS.........................................................................................33
TOWER DESIGN......................................................................................33
TOWER PERFORMANCE.................................................................................33
TOWER CONFIGURATION...............................................................................34
TOWER SUBMITTALS..................................................................................34
TOWER SHIPPING AND DELIVERY.......................................................................35
TOWER INSTALLATION................................................................................36
TOWER WARRANTY AND MAINTENANCE....................................................................37
CONTRACTOR RESPONSIBILITIES.......................................................................37
B-5.8.1 SHELTER SUBSYSTEM......................................................................38
B-5.8.2 GENERATOR SUBSYSTEM....................................................................38
B-5.8.3 MICROWAVE SUBSYSTEM....................................................................38
B-5.8.4 RADIO SUBSYSTEM........................................................................38
B-5.8.5 CIVIL CONTRACTOR.......................................................................38
B-5.8.6 TOWER SUBSYSTEM........................................................................39
B-6 SITE WORK......................................................................................40
SITE WORK REQUIREMENTS AND SPECIFICATIONS.........................................................40
GENERAL CONSTRUCTION REQUIREMENTS.................................................................40
SITE WORK DEFINITIONS.............................................................................40
B-6.3.1 SITE WORK SUBMITTALS...................................................................41
B-7 CIVIL ENGINEERING..............................................................................42
</TABLE>
- --------------------------------------------------------------------------------
2144 PA Rider B Page 3 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
B-7.1.1 PROFESSIONAL ENGINEERING CERTIFICATION.................................................42
B-7.1.2 TOWER DRAWINGS.........................................................................42
B-7.1.3 KEY TOWER ERECTION DRAWINGS............................................................43
B-7.1.4 SECONDARY TOWER DRAWINGS...............................................................43
B-7.1.5 DRAWING PACKAGES.......................................................................43
B-8 ACCEPTANCE TESTING.............................................................................44
SUBSYSTEM ACCEPTANCE TESTING......................................................................44
B-8.1.1 EQUIPMENT SHELTER SUBSYSTEM ACCEPTANCE TESTING.........................................44
B-8.1.2 EMERGENCY GENERATOR SUBSYSTEM ACCEPTANCE TESTING.......................................44
B-8.1.3 TOWER SUBSYSTEM ACCEPTANCE TESTING.....................................................44
B-8.1.4 SITE WORK SUBSYSTEM ACCEPTANCE TESTING.................................................44
SUBSYSTEM INTEROPERABILITY ACCEPTANCE TESTING.....................................................44
B-9 PROJECT LOGISTICS AND SUPPORT..................................................................45
INSTALLATION......................................................................................45
B-9.1.1 INSTALLATION DOCUMENTATION.............................................................45
B-9.1.2 INSTALLATION INSPECTIONS...............................................................46
SHIPPING..........................................................................................46
TRAINING..........................................................................................46
WARRANTY / MAINTENANCE............................................................................46
SPARES............................................................................................46
</TABLE>
- --------------------------------------------------------------------------------
2144 PA Rider B Page 4 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-1 PROGRAM MANAGEMENT
The Statement of Work is described in the following categories as outlined in
this, and the following, Work Breakdown Structure (WBS) sections.
PROJECT MANAGEMENT
This WBS collects costs and efforts associated with the Contractor's Project
Management activities for the preparation, administration, implementation,
inspection, and acceptance of the Site Development System or Subsystems.
The Contractor shall provide shelters, generators, towers, and fuel tanks to
include shipping, delivery, unloading, installation, tools, test equipment,
spares, modification, warranty, maintenance and/or removal of commodities as
detailed in the Site Development RFP. The Contractor shall also provide
foundations, ramps, grounding systems, fencing, clearing, grading, gravel,
spoils removal, excavation, backfill, and site development design and
engineering services to insure proper installation and maintenance of the site
infrastructure and equipment supplied by the Contractor. The contract Start Date
is the calendar date when all parties sign the completed contract. The baseline
program schedule is based upon a standard Monday through Friday, 8 AM - 5 PM
(Eastern U.S. Time Zone) workweek excluding Contractor holidays as follows.
CONTRACTOR HOLIDAYS:
- November 25, 1999 Thanksgiving Day Holiday
- November 26, 1999 Thanksgiving Shutdown
- December 24, 1999 Christmas Eve Shutdown
- December 31, 1999 News Years Eve Shutdown
- April 21 , 2000 Good Friday
- May 29, 2000 Memorial Day Holiday
- July 3, 2000 Independence Day Shutdown
- July 4, 2000 Independence Day Holiday
- September 4, 2000 Labor Day Holiday
- November 23, 2000 Thanksgiving Holiday
- November 24, 2000 Thanksgiving Shutdown
- December 25, 2000 Christmas Holiday
- December 26, 2000 Christmas Holiday Shutdown
- January 1, 2001 New Years Day Holiday
- --------------------------------------------------------------------------------
2144 PA Rider B Page 5 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
The Contractor shall provide the necessary level of Program Management, Systems
Engineering, Product Engineering, Manufacturing, Assembly, Test, Field
Installation, System Integration, Quality Verification, Acceptance Testing,
System Maintenance and Product Documentation, Training and other services as
outlined in the Site Development Request For Proposal, RFP # 1998-SD-1, dated
December 4, 1998 with Addenda.
ENGINEERING
This WBS collects costs and efforts associated with Engineering activities for
the preparation, administration, implementation, inspection, and acceptance of
the System or Subsystems.
The design baseline will be presented to the Commonwealth through Preliminary
and Critical Design Reviews as outlined in this Work Breakdown Structure (WBS).
Detailed Regional Design baselines shall be established by a Regional Design
Review (RDR), for each region.
The Contractor shall simultaneously develop multiple sites in accordance with
and in response to issuance of Commonwealth Site Deployment Order(s) (SDO).
All site equipment provided and installation methods used by the Contractor
shall comply with all current local, state and federal codes for installation
and operation of electrical and non-electrical equipment. Site preparation and
installations will be in accordance with the Contractor's Quality Standards
Manual (QSM). The Contractor shall ensure that sufficient Professional Engineers
(PE), licensed in Pennsylvania, are available to allow the timely preparation
and delivery of sealed drawings or drawing packages required for site
development.
SITE DEVELOPMENT MANAGEMENT
The Contractor's site superintendent shall monitor and coordinate the scheduling
of all on-site activities for which the Contractor is responsible, and shall
ensure compliance with all applicable specifications, drawings, and quality
standards. The Contractor's on-site site superintendent shall be responsible for
the day to day management and coordination of all phases of site work, tower
erection, shelter and generator installations. The Contractor's site
superintendents shall report the status of all site development activity under
their supervision, directly to the Contractor's Project Superintendent located
in the Harrisburg, Pennsylvania area. This status shall be submitted, at a
minimum, on a weekly basis through the Contractor's Project Superintendent to
the Commonwealth Radio Project Office, using the Primavera suite of program
management tools, Expedition and SureTrak.
The contractor shall provide a complete and functional site including all
equipment or parts required, but not specifically mentioned herein, without any
claim for additional payment. It shall be understood that the final contract and
agreement requires the
- --------------------------------------------------------------------------------
2144 PA Rider B Page 6 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
construction, services and installation of a completely operational tower,
shelter, emergency generator system and site development work that meets the
standards and requirements of the RFP.
It shall be the responsibility of the contractor to provide a turnkey
installation of the provided equipment. Optimization, trouble shooting, and
adjustment of each subsystem shall be the contractors responsibility. This
includes any changes and/or additions in order to meet performance criteria. Any
additional equipment required after the contract is awarded, to meet the system
performance criteria of the defined standards and/or specifications in the RFP
or defined herein shall be at the sole expense of the contractor, unless the
Commonwealth issues a change order.
Towers, shelters, generators, microwave, and radio equipment will be implemented
in an orderly manner and in full consideration to other contractors and their
responsibilities.
Any questions regarding lines of demarcation, system integration, or equipment
interface issues, between contractors' systems or subsystems not specifically
addressed in the RFP, the Proposal, or the Contract shall be addressed via the
Technical Interface Committee. The Technical Interface Committee shall consist
of a representative from each of the Contractors on the Statewide Voice and Data
System Project, the Commonwealth's Radio Project Office and their Affiliates.
The Technical Interface Committee shall address these issues on a discussion
basis building to a consensus. Electronic Data Exchange, Telephone Conference
Calls and Video Teleconferencing shall be used to the greatest extent possible
to discuss and resolve these issues. The outcome of this process will be a
recommended solution presented to the Contractors' Project Managers for their
concurrence and the Commonwealth's Project Director's approval.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 7 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-2 DELIVERABLES
Unless otherwise noted, initial delivery of all draft and final program
documentation shall be accomplished electronically via e-mail or File Transfer
Protocol (FTP) to the Radio Project Office central e-mail address:
[email protected]. Following the electronic submittal, final versions of all
program documentation shall be delivered to the Radio Project Office in six (6)
hardcopies, accompanied by two electronic softcopies, each on a single 3.5"
floppy diskette, or if too large to fit on a 3.5" disk, on a CD-ROM disk.
All drawings and drawings sets shall be delivered in two sizes 8 1/2" by 14" and
ANSI D (24" x 36") size. The quantity of each size shall be at a 2:1 ratio to
meet the total required quantity. Version control, tracking, submission, review,
and approval of all deliverables, submittals, drawings, change requests,
contract documents, schedules, and invoices shall be accomplished using the
Primavera suite of program management tools including, but not limited to,
Expedition and SureTrak.
PROGRAM DOCUMENTATION
The program documentation described in the following sections shall be delivered
to the Commonwealth Radio Project Office, One Technology Park Room 190,
Harrisburg, PA 17110-2913.
All program documentation shall be supplied in accordance with the following
list and timeframes as referenced below. All references to internal and external
document sections shall include paragraph and/or section number, not by page
number alone.
B-2.1.1 PROGRAM IMPLEMENTATION PLAN (PIP)
The Program Implementation Plan (PIP) establishes the baseline from which the
program is to be executed. The PIP includes a program overview, master program
schedule, management organization, and a description of the Contractor's cost
and schedule control systems.
B-2.1.2 PROGRAM SCHEDULE
The Program Schedule WBS element collects the effort associated with the
planning and management of the Contractor program schedule. Administration and
management of tasks on the schedule is the responsibility of the Contractor
Program Manager. Separate Regional and Site Schedules will be provided weekly to
the Commonwealth of Pennsylvania, Radio Program Office in latest commercially
available version of Primavera SureTrak format. The Contractor will provide the
Commonwealth an Integrated Baseline Program Schedule 30 days after the Program
Start date.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 8 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-2.1.3 REQUEST FOR DESIGN (RFD) - SITE
The Request for Design is a written notification to the Contractor from the
Commonwealth that the Contractor shall proceed with generation of a preliminary
site development design for consideration by the Commonwealth. The RFD will be
accompanied by a Site Information Package, in which the Commonwealth will
provide the Contractor with specific site details to the extent it is available.
Any information not available at the time the RFD is released, will be provided
to the Contractor during the initial site visit or upon approval of the
Preliminary Site Plan. Site Information Packages will be provided for either new
sites or existing sites that may require site development modification.
The Site Information Package (SIP) will consist of the site description
including: site location, latitude and longitude data, site elevation, legal
description, and travel directions; site access information including:
identification of any locked gates and key locations, land/site owner to include
a point of contact and telephone number, site use agreement, or authorization as
applicable. The SIP will also provide (if available) any known easements, zoning
or permit issues; access road, compound information, and existing utility
locations. Also included will be planned or existing: tower type, height,
lighting requirements, and ice bridges; shelter size and orientation, generator
size and positioning, fuel tank size and positioning, and existing or planned
foundation type and location. The Site Information Package will also provide
approximate tower and shelter loading to the extent that the appropriate tower,
shelter, and power/generator templates can be incorporated into the Preliminary
Site Plan. Inclusion or omission of any of the above data in the SIP, by the
Commonwealth does not relieve the Contractor of their responsibilities to gather
Site Planning and Design data as described in the RFP, the Proposal or the
Contract.
B-2.1.4 REQUEST FOR DESIGN (RFD) - REGION
The Request for Design - Region is a written notification from the Commonwealth
to the Contractor to proceed with generation of a regional development design,
incorporating the various approved SDDs, for consideration by the Commonwealth.
The RFD shall be reviewed as part of and shall generate the occurrence of the
Regional Design Review.
B-2.1.5 PRELIMINARY SITE PLAN (PSP)
The Contractor's initial response to the Commonwealth's Request for Design shall
consist of a Preliminary Site Plan. The PSP shall include the results of the
Contractor's land search, an annotated site sketch (to scale) noting the
location of any proposed and existing site infrastructure elements. These
elements include towers, (with existing antenna and microwave dish elevation),
shelters, generators, fuel tanks, foundations, utilities, fences and gates,
grounding, and guy wire and anchors.
For existing sites, the contractor will also propose a set of modifications to
the existing site infrastructure, that comply with the Commonwealth's Quality
Standards Manual, that will allow continued use by existing users concurrent
with the addition of the
- --------------------------------------------------------------------------------
2144 PA Rider B Page 9 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
Commonwealth's system requirements. The modification detail shall include
sufficient product, cost, and schedule information necessary to enable the
Commonwealth to conduct a cost/benefit analysis of modifying the site versus
other available options.
B-2.1.6 SITE DESIGN DOCUMENT (SDD)
The Site Design Document is a Contractor deliverable outcome of the Site Design
Review and its associated process, as submitted to the Commonwealth for
approval, following approval of the Preliminary Site Plan (PSP). In conjunction
with approval of the PSP, the Commonwealth will direct the Contractor to proceed
with development of selected elements of the SDD as required on a site by site
basis. The SDD elements include the following items as defined in the RFP.
>> Site Survey
>> Vicinity Map
>> Boundary Map
>> Site Elevations
>> Compound Layout
>> Tower Location/Orientation
>> Access Road Design
>> Drainage Design
>> Grading Design
>> Foundations Design
>> Tower Design
>> Shelter Design
>> Geotechnical Report
>> Utility Design
>> Design Notes
B-2.1.7 SITE PRODUCTION RELEASE (SPR)
The Site Production Release is written confirmation from the Commonwealth to the
Contractor as a result of an approved SDD notifying the Contractor to proceed
with acquisition and staging of a Site, Sites, or Subsystems detailed in either
the approved SDD, or in a design of the Commonwealth's choosing. It is the
Commonwealth's intention to place quantity orders of towers, shelters, and
generators as soon as practicable following contract execution. These "bulk"
orders will be based on the Radio and Microwave Systems' Regional Design Reviews
and design templates provided by the Contractor, in order to expedite delivery
of these items for Site Development. The ordering of these items for a group of
sites prior to the completion of specific SDDs for those sites, may require the
Contractor to store or stage some of those items for use at a site in the next
region.
B-2.1.8 SITE DEPLOYMENT ORDER (SDO)
The Site Deployment Order is a written notification from the Commonwealth to the
Contractor to proceed with Installation at a particular Site or Sites. The SDO
will be issue following approval of the SDD and in accordance with the regional
schedule.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 10 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-2.1.9 INTERFACE SPECIFICATIONS
The Contractor, along with the Radio and Microwave contractors, shall provide
its interface requirements to the Commonwealth's Program Office during the
Critical Design Review (CDR), and updated as necessary during Regional Design
Reviews (RDR) as deemed necessary by the Engineering and Quality Assurance
Contractor (EQAC). The Contractor shall incorporate interface requirements into
the system and subsystem designs as agreed to between the associated Contractors
via the Technical Interface Committee and as defined in the RFP.
B-2.1.10 DETAILED EQUIPMENT LIST
The Contractor identified the detailed equipment lists
on a regional basis in the Proposal. Equipment list updates will be provided at
the Preliminary Design Review (PDR), Critical Design Review (CDR), and each
Regional Design Review (RDR) as required.
B-2.1.11 DETAILED DESIGN DOCUMENT (DDD)
The Contractor, the Commonwealth and its Engineering and Quality Assurance
Contractor (EQAC) will jointly develop the DDD. The DDD consists of, but is not
limited to, the Contractor supplied Preliminary Design Document, Critical Design
Document, Regional Design Document, and Acceptance Test Plan.
B-2.1.11.1 PRELIMINARY DESIGN REVIEW (PDR) DOCUMENTATION PACKAGE
The PDR package defines the various tower and shelter templates jointly
developed by the Contractor, the Commonwealth and its Affiliates. The PDR
package will provide the contractor's life cycle; cost-benefit analysis based
recommendation for use of tower types. The same analysis shall be provided for
generators housed in an attached versus detached generator room, or installed on
an exterior concrete pad. The PDR package shall also include the Contractor's
Draft Site Quality Manual. The outcome of the PDR shall be a select set of
subsystem templates that will allow a streamlined approach to site design and
development.
B-2.1.11.2 CRITICAL DESIGN REVIEW (CDR) DOCUMENTATION PACKAGE
The CDR is the final site design review. The CDR package will consist of a final
set of site development templates as updated as a result of the PDR process. The
CDR shall also serve as the final review of the Acceptance Test Plan and QSM
prior to submission to the Commonwealth for approval. Each of these documents
will be updated as necessary and presented at Regional Design Review's (RDR)
held for each region(s).
B-2.1.11.3 REGIONAL DESIGN REVIEW (RDR) DOCUMENTATION PACKAGE
The RDR Documentation Package consists of the RDR presentation and the proposed
Regional Design Document (RDD). The RDR shall present the regional architecture,
site locations, equipment types, quantities and configurations. The RDR
documentation shall be traceable back to the CDR documentation baseline. The
result of the RDR shall be the creation of the approved Regional Design Document
(RDD).
- --------------------------------------------------------------------------------
2144 PA Rider B Page 11 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
Site location and physical characteristics shall be finalized on a Regional
basis as part of the RDD. All design decisions are to be documented with
supporting analysis, trade-studies, and rationale. All site development is based
upon the Regional Design Document submitted by the Contractor, and approved by
the Commonwealth.
B-2.1.11.4 ACCEPTANCE TEST PLAN (ATP)
The Acceptance Test Plan forms a part of the Detail Design Document (DDD). The
ATP shall verify functionality and performance criteria from Subsystem through
Final System Acceptance. The ATP shall include Site Development Quality
Inspection Points (QIPs) identified by the Commonwealth. The successful
completion of ATP procedures shall demonstrate that all system performance
requirements are satisfied. Refer to Rider "H" Acceptance Testing
B-2.1.11.5 PREVENTIVE MAINTENANCE PLAN (PMP)
The Contractor shall deliver a preventive maintenance plan including schedules
and types of preventive maintenance and inspections to be performed on the
various subsystems, within 60 days of contract start date.
B-2.1.12 QUALITY STANDARDS MANUAL
The Contractor shall provide a Quality Standards Manual (QSM) to the
Commonwealth within 30 days of contract award. Development of the QSM is
captured by this WBS element. The QSM shall be updated at each RDR as required.
The following subjects at a minimum, to include detailed installation procedures
and reference to applicable industry regulatory standards that must be met by
the Contractor, will be addressed in detail as part of the manual.
B-2.1.12.1 DC POWER PLANT
To include but not limited to: battery subsystems, battery installation, rating
of batteries, charging systems.
B-2.1.12.2 CABLING
To include but not limited to: internal cabling, site wiring guidelines, power
cables, and control cables.
B-2.1.12.3 EQUIPMENT
To include but not limited to: tower, shelter, generator, and associated
subsystems and end items.
B-2.1.12.4 GROUNDING
To include but not limited to: electrostatic discharge considerations, ESD
guidelines, grounding at tower sites, grounding at cell sites, grounding at
building sites, and lightning arrestor.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 12 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-2.1.12.5 PHYSICAL CONFIGURATION
To include but not limited to: layout of equipment and general work area
requirements, anchoring of equipment racks and cabinets and support equipment,
subsystem/equipment plumb, equipment square, spacing guidelines, anchoring
guidelines, anchoring equipment to raised floors, overhead and wall mounting,
distribution frame configurations, distribution frame equipment connections, and
associated installation guidelines.
B-2.1.13 SITE DOCUMENTATION PACKAGE
Installation documentation shall be generated at the Factory and be available
on-site for installation. As-built documentation shall be generated from the
marked-up installation documentation following installation on site, and will be
included as part of the Site Documentation Review process.
The "As-Built" documentation package shall include, but is not limited to,
hardware configuration information, staging area build and test results, rack
drawings, cable and cabling drawings. It also shall contain the "System As-Built
Manual" (as defined in Project Logistics and Support, below) and final site
configuration including at a minimum: vendor product literature, block diagram,
rack diagrams, and electrical diagrams, hardware revision numbers.
B-2.1.14 TRAINING MANUALS
The Contractor shall provide training material for the
generators and the tower lighting kits.
B-2.1.15 MONTHLY PROJECT REPORT
Monthly reports shall be generated updating the status of all aspects of the
project including but not limited to schedule adherence, technical status,
milestone accomplishments, action items, and problem areas.
B-2.1.16 MBE, WBE, SERB QUARTERLY REPORT
Quarterly reports shall be generated updating the status of MBE, WBE, and SERB
project participation as defined in Rider A - Terms and Conditions.
PROGRAM REVIEWS
B-2.2.1 MONTHLY PROGRAM REVIEWS
The Monthly Program Status Review WBS collects the efforts associated with
preparing, conducting and attending the monthly program reviews. The program
reviews are held to review the project schedule (Reference Section B.2.1.2),
milestone accomplishments, technical status and any action items.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 13 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-2.2.2 CONTRACT IMPLEMENTATION REVIEW (CIR)
This WBS element collects the efforts associated with preparing and conducting
the meetings held to review all contract and systems performance requirements.
The CIR will be conducted in conjunction with the PDR.
B-2.2.3 PRELIMINARY DESIGN REVIEW (PDR)
The Design Review WBS element collects the Engineering effort associated with
conducting the formal design reviews held to ensure that the site development
design is complete. The PDR defines the various tower and shelter templates
jointly developed by the Contractor, the Commonwealth and its Affiliates in
accordance with the Commonwealth's requirements in the RFP. It is structured
to accomplish the following:
>> Technical review of the statewide system concept preliminary
design,
>> Authorization to proceed with detail design, and
>> Long lead item procurement approval.
One Preliminary Design Review (PDR) is scheduled and will be conducted within 15
days of Contract Award.
B-2.2.4 CRITICAL DESIGN REVIEW (CDR)
The CDR effort collects the engineering effort associated with conducting the
formal design reviews held to ensure that the system design is complete. The
purpose of CDR is to demonstrate that the detail design meets all specification
requirements. The CDR is structured to accomplish the following:
>> Critical technical review of the complete Site Development
design
>> Ensure that documents are complete and accurate
>> Ensure that all configuration items will perform as intended
and its functions meet all requirements, and
>> Ensure that configuration items can be serviced and
maintained as part of the system.
One Critical Design Review (CDR) is scheduled and will be conducted within 30
days of contract award.
B-2.2.5 REGIONAL DESIGN REVIEWS (RDR)
The Regional Design Review collects the engineering effort associated with
conducting the formal design reviews, held to ensure that the infrastructure
design for a particular Region is complete. The Contractor shall identify the
system architecture and all
- --------------------------------------------------------------------------------
2144 PA Rider B Page 14 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
equipment on a site by site basis as part of each RDR. The result of the
Regional Design Review is the RDD.
One Regional Design Review (RDR) will be held for each region in response to a
Request For Design - Region.
B-2.2.6 TECHNICAL INTERFACE COMMITTEE REVIEWS
Technical Interface Committee (TIC) reviews will address any TIC issues
initiated, pending, or closed, during the preceding month, in the Contractor's
Monthly Program Review. See Paragraph B.1.3 for a discussion of the TIC process.
B-2.2.7 SITE-READY VERIFICATION REVIEW
The Site-Ready Verification Review is conducted by the Commonwealth in
conjunction with the Site Development Contractor to verify the physical ready
state of a site location. The Radio System and the Microwave System Contractors'
representatives will also be present for this review. The Site-Ready
Verification Review is conducted to verify the physical ready state of a site. A
single verification visit is planned per site and will be conducted following
Site Acceptance Testing. The Site Ready Verification Review process will be
included in the Acceptance Test Plan, and shall include the Contractor's
Responsibilities as detailed in the RFP and the Contract Riders.
B-2.2.8 SITE DOCUMENTATION REVIEW
The Site Documentation Review collects the efforts associated with preparing
Site Documentation Packages and conducting the Site Documentation review. This
includes, but is not limited to, "as-built" drawings, previously conducted test
results from completed site system and subsystem tests, the physical
installation records, and final equipment configuration lists.
B-2.2.9 FINAL CONTRACT CLOSE-OUT REVIEW
The Final Contract Review WBS collects the effort associated with preparing and
conducting the final contract review. The final contract review is held with the
Customer to review that all deliverables, system requirements, and contractual
commitments have been met.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 15 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-3 SHELTERS
The shelter system is defined as a set of specific combinations or
configurations intended to meet the requirements for the radio and microwave
subsystems.
SHELTER DESIGN
The majority of the Statewide Voice and Data Radio System sites will require new
radio equipment shelters, towers, and emergency generators to support the
communications infrastructure equipment. The shelter system will be defined as a
set of specific combinations or configurations intended to meet the requirements
for the radio and microwave subsystems. These requirements were defined in the
RFP and under the following sections.
B-3.1.1 REQUIREMENTS
All shelter configurations will have basic requirements that have been utilized
to define the basic building block for each type of shelter defined in the RFP.
These basic requirements are the same for all shelters and are independent of
the size of the shelter or the existence of a generator room. The following
listings of basic requirements are defined in the RFP.
BASIC SHELTER REQUIREMENTS:
>> Wiring and Conduit Requirements
>> Telephone Cable Entry
>> Concrete Entrance Ramp
>> Radio Shelter Alarms
>> Bulletproof Construction
>> Meet Zone II for Earthquakes
>> Installation of Generator Transfer Switch
>> Automatic Transfer Switch
>> Manual Transfer Switch
>> Fire Extinguisher
>> Shelter Grounding system
>> Interior Lighting System
>> Exterior Lighting System
>> Cable Ladder Trays
>> Cable Entry Ports
>> Flooring Requirements
>> Shelter Foundation Design
>> Shipping/Delivery Charges
>> Off-Loading
>> 2 Year Warranty Maintenance
- --------------------------------------------------------------------------------
2144 PA Rider B Page 16 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-3.1.2 VARIABLE REQUIREMENTS
In addition, there are variable requirements. As shelter sizes increase these
variable requirements may require more material, increase in capacity, or
replacement of a specific item to provide required functional performance. The
Contractor shall provide the following variable requirements as detailed in the
RFP and as selected by the Commonwealth as part of the Site Design Document
(SDD) approval process. The following listings of variable requirements are
defined in the RFP.
VARIABLE SHELTER REQUIREMENTS:
>> AC Power & Electrical Service Capacity and Distribution
>> Main Distribution Panel
>> Heating and Air Conditioning
>> Patch Block Mounting Surface
>> Exterior Radio Shelter Fascia Style
B-3.1.3 OPTIONAL REQUIREMENTS
There are also optional features that may be applied to any shelter, as
required, on a site by site basis. These optional features are IN ADDITION to
the basic or variable requirements of any shelter configuration. In some
specific circumstances, an optional feature may all together replace a basic or
variable requirement. The following listings of optional requirements are
defined in the RFP.
OPTIONAL SHELTER REQUIREMENTS:
>> DC Power Plant and Batteries
>> Generator Room
>> Fire Suppression
>> Installation of Emergency Generator
>> Manual Transfer Switch
>> Removal of Existing Shelter Foundation
>> Removal of Existing Shelter
>> Warranty - 3 Year Extended Warranty Maintenance
>> Maintenance - 2 Year
>> Maintenance - 3 Year Extended
SHELTER STANDARDS
All shelter materials, design and construction procedures shall be in accordance
with the applicable codes as defined in the Site Development RFP, the Proposal,
and the Contract including the following.
B-3.2.1 BUILDING CODES
The shelter structural requirements shall comply with all federal, state and
local building codes including the latest edition of the Uniform Building Code
(UBC).
- --------------------------------------------------------------------------------
2144 PA Rider B Page 17 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-3.2.2 ELECTRICAL CODES
Installation of all electrical equipment, power distribution, lighting and
outlet assemblies, alarms and grounding systems with associated wireways and
wiring shall comply with the most recent edition of the National Electrical Code
(NEC), National Fire Protection Association (NFPA) and Occupational Safety and
Health Administration (OSHA).
All electrical equipment and devices shall be listed, approved or certified by
Underwriters Laboratories (UL) when available.
SHELTER PERFORMANCE
The radio shelter designs shall be supplied in six- (6) different exterior
dimensions for radio equipment, ranging from 12 ft. x 8 ft. to 12 ft. x 30-ft.
in size.
B-3.3.1 SHELTER EMERGENCY GENERATOR ROOM
The shelters shall be capable of being supplied with or without attached
emergency generator rooms. Generator rooms shall be considered options and thus
all shelter configurations must support the inclusion or exclusion of this
option. Shelters with attached emergency generator rooms shall not reduce the
internal size of the radio equipment room. The following dimensions are
specified in order to develop the overall requirements for the Statewide Radio
System.
B-3.3.2 SHELTER DIMENSIONS
EXTERIOR DIMENSIONS WITH MINIMUM FLOOR TO CEILING HEIGHTS OF 9 FT. 6 INCH.
(Ceiling height requirements apply to all shelter configurations)
>> 12 ft. by 8 ft.
>> 12 ft. by 12 ft.
>> 12 ft. by 16 ft.
>> 12 ft. by 20 ft.
>> 12 ft. by 24 ft.
>> 12 ft. by 30 ft.
SHELTER CONFIGURATIONS
As shelter sizes increase or decrease, some of the basic and optional
requirements shall be upgraded or downgraded in size, capacity or change in some
way to meet the intent of the functionality and performance requirements.
Shelter construction shall be TYPE I CONCRETE AGGREGATE, TYPE II FIBERGLASS, OR
TYPE III STEEL exterior with plywood interior walls capable of meeting
bulletproof requirements. Roofing shall be designed to prevent penetration by
ice falling from the tower at the site.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 18 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
The roof shall be designed to prevent accumulation and penetration of water.
Interior walls shall be designed to allow mounting of electrical and electronic
equipment.
B-3.4.1 SHELTER ACCEPTANCE
Title to and ownership of all equipment or systems shall remain with the
contractor until the equipment is delivered, successfully installed and
operational at the radio site, as characterized in the acceptance test plan. The
Commonwealth's acceptance date shall occur after the equipment has passed the
acceptance test.
B-3.4.2 SHELTER DELIVERY
Shelter deliveries shall be coordinated through the Contractor's Harrisburg
Office to the Radio Project Office via Expedition and SureTrak.
Every package, bill of lading, shipping memorandum and invoice shall be marked
with a purchase order or number of the Commonwealth. An itemized delivery
ticket, bearing the Commonwealth's purchase order number shall be provided with
the goods to insure their receipt. If a carrier makes a delivery for the
Contractor, then an itemized delivery ticket shall be attached to the outside of
the package.
Delivery ticket and purchase order numbers of delivered items shall be tracked
via Expedition.
SHELTER SUBMITTALS
The radio shelter contractor shall be responsible for submitting appropriate
engineering drawings to obtain local approvals for site development, in
accordance with Commonwealth policy directives. The following items are primary
submissions but may not necessarily be totally inclusive of all required
submissions.
B-3.5.1 ENGINEERING DRAWINGS
The radio shelter contractor shall prepare and submit for approval, engineering
drawings of the shelter depicting its overall dimensions, electrical layout and
floor plan, as part of the SDD. These drawings will be used, as required, for
obtaining zoning and building permits.
A Registered Professional Engineer licensed in the Commonwealth of Pennsylvania
will seal drawings.
B-3.5.2 ELECTRICAL DESIGN DRAWINGS
The Contractor shall provide electrical design drawings for review and approval
by the Commonwealth.
Six (6) sets of approval drawings for the radio shelters shall consist of a line
diagram (indicating power distribution for both shelters and circuit directories
of power panels
- --------------------------------------------------------------------------------
2144 PA Rider B Page 19 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
etc.), Electrical plans for both equipment and radio shelters indicating
physical locations of equipment/devices such as power equipment, lighting &
outlets etc. with associated wiring & Electrical Bill of Materials for all
equipment, devices, conduit and wire shall be submitted to the Commonwealth.
Approval Drawings shall be updated with the Commonwealth's comments and six (6)
sets of Final Drawings shall be submitted to the Commonwealth for its records.
Final drawings shall be identical to the "As-Built" installation condition of
each shelter.
A registered professional engineer licensed in the Commonwealth of Pennsylvania
shall seal drawings.
B-3.5.3 FOUNDATION DESIGN DRAWINGS
The Contractor shall submit, for approval, a suitable foundation design based
upon normal soil conditions per ANSI/TIA/EIA-222-F (or latest version). Final
foundation design and cost shall be determined on receipt of soil boring
information. A registered professional engineer licensed in the Commonwealth of
Pennsylvania shall seal drawings.
SHELTER INSTALLATION
The radio shelter contractor shall be responsible for installing the shelter.
The following items are primary submissions but may not necessarily be totally
inclusive of all required submissions.
B-3.6.1 INSTALLATION REQUIREMENTS
The Contractor shall be responsible for the installation of the shelter products
to be provided, in accordance with the RFP. The following describes the
requirements and responsibilities of the Contractor.
>> All installation work performed shall be in accordance with
laws, regulations and ordinances, of all State, Local, and
Federal agencies.
>> The contractor shall provide all the necessary personnel,
tools, equipment, and transportation for the installation of
all equipment provided.
>> The contractor shall ensure that all material and components
are delivered to the proposed sites in a timely manner.
>> The contractor is responsible for the complete and proper
installation of any and all supplied shelter equipment
furnished in accordance with this RFP. The contractor shall
provide all the necessary hardware and supplies.
Notwithstanding the details presented in the RFP and the Proposal, it is the
responsibility of the contractor's project manager to verify the correctness of
the
- --------------------------------------------------------------------------------
2144 PA Rider B Page 20 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
material lists and suitability of devices proposed in the SDD and various
Shelter Design Templates.
B-3.6.2 SHELTER INSTALLATION AT OPERATIONAL SITES
All existing radio communications systems shall remain fully operational during
the installation of the provided equipment and until the Commonwealth provides
final acceptance. Because existing systems support public safety operations,
interruptions in service due to contractor or subcontractor activities cannot be
tolerated.
If any interruptions in service are deemed by the contractor to be unavoidable,
written notification detailing the nature and duration of such interruptions
shall be provided to the Commonwealth for review and approval.
CONTRACTOR RESPONSIBILITIES
The shelter contractor shall have turnkey responsibility for the delivery,
installation and acceptance testing of the shelters. In order to develop a
complete and operational system, the points of demarcation between systems and
all contractors is critical to the system implementation process. Therefore, the
Shelter Contractor's responsibilities are defined. The Contractor's
Responsibilities listed apply to those commodities and subsystems included in
each approved Site Design Document.
Contractors shall follow good engineering practices in the preparation,
administration, implementation, inspection and acceptance of each individual
subsystem at the designated sites.
The Site Development Contractor shall be the responsible party for site
management and act as the general site manager for all construction and
coordination between contractors, vendors and the Commonwealth until Final Site
Acceptance by the Commonwealth. The Contractors shall comply with the following
representative sequence and order of subsystem installations.
B-3.7.1 SHELTER SUBSYSTEM TO GENERATOR SUBSYSTEM VENDOR INTERFACE
>> The shelter subsystem vendor shall install the following
generator equipment in the shelter per the RFP; Automatic
transfer switch
>> Exterior manual transfer switch (supplied by the shelter
manufacturer)
>> Exterior portable generator plug
The shelter subsystem vendor shall perform the following electrical connections
to the generator equipment per the RFP.
ATTACHED GENERATOR ROOM CONFIGURATION
>> Automatic transfer switch to the main electrical distribution
panel
- --------------------------------------------------------------------------------
2144 PA Rider B Page 21 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Portable generator plug to the manual transfer switch
>> Manual transfer switch to the automatic transfer switch
DETACHED GENERATOR ROOM CONFIGURATION
>> Automatic transfer switch to the main electrical distribution
panel
>> Portable generator plug to the manual transfer switch
>> Manual transfer switch to the automatic transfer switch
>> Utility AC power from main distribution panel to sub-fed
detached generator room distribution panel
OUTSIDE GENERATOR CONFIGURATION
>> Automatic transfer switch to the main electrical distribution
panel
>> Portable generator plug to the manual transfer switch
>> Manual transfer switch to the automatic transfer switch
The shelter subsystem vendor shall perform the following connections from
interior shelter ground system to the generator equipment:
ATTACHED GENERATOR ROOM CONFIGURATION
>> Automatic transfer switch
>> Manual transfer switch
DETACHED GENERATOR ROOM CONFIGURATION
>> Automatic transfer switch
>> Manual transfer switch
>> Detached generator room distribution panel
The shelter subsystem vendor shall perform the following connections from
exterior shelter ground system to the generator equipment:
OUTSIDE GENERATOR CONFIGURATION
>> Automatic transfer switch
>> Manual transfer switch
The shelter subsystem contractor shall provide the following information to the
Generator System contractor per the RFP.
ATTACHED GENERATOR ROOM CONFIGURATION
>> Shelter floor plan indicating equipment locations
DETACHED GENERATOR ROOM CONFIGURATION
- --------------------------------------------------------------------------------
2144 PA Rider B Page 21 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Shelter floor plan indicating equipment locations
>> Location of AC outlets or detached generator room distribution
panel for generator battery charger and block heater power
connections
OUTSIDE GENERATOR
>> Shelter floor plan indicating equipment locations
B-3.7.2 SHELTER SUBSYSTEM TO TOWER SUBSYSTEM VENDOR INTERFACE
The shelter subsystem vendor shall install the following tower equipment into
the shelter per the RFP.
>> Tower light control panel
The shelter subsystem vendor shall perform the following electrical connections
to the tower equipment per the RFP.
>> Main distribution panel to tower light control panel
The shelter subsystem vendor shall perform the following connections from
interior shelter ground system to the tower equipment:
>> Tower light control panel
The shelter subsystem vendor shall provide the following information to the
tower subsystem vendor per the RFP.
>> Shelter floor plan indicating equipment locations and
locations of entrance ports for conduits to detached generator
room, electrical service entrance, and extensions from
interior ground halo to exterior ground halo.
B-3.7.3 SHELTER SUBSYSTEM VENDOR TO MICROWAVE SYSTEM CONTRACTOR INTERFACE
The shelter subsystem vendor responsibilities, including all required material
and labor, shall be comprised of, but not be limited to, the following tasks:
The shelter subsystem vendor shall provide the following information to the
Microwave System Contractor per the RFP.
>> Shelter floor plan indicating equipment locations
>> Available power connection requirements:
>> DC power: location of shelter DC power plant for the DC buss
connection
>> AC power: location of AC outlets
- --------------------------------------------------------------------------------
2144 PA Rider B Page 23 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-3.7.4 SHELTER SUBSYSTEM VENDOR TO RADIO SYSTEM CONTRACTOR INTERFACE
The shelter subsystem vendor responsibilities, including all required material
and labor, shall be comprised of, but not be limited to, the following tasks:
The shelter subsystem vendor shall provide following information to the Radio
System contractor per the RFP.
>> Shelter floor plan indicating equipment locations
>> DC power: location of shelter DC buss for connection
>> AC power: location of AC outlets
B-3.7.5 ADDITIONAL SHELTER SUBSYSTEM VENDOR RESPONSIBILITIES
In addition to the previously described tasks, the shelter system contractor
responsibilities, including all required material and labor, shall be comprised
of, but not be limited to, the following tasks per the RFP.
B-3.7.5.1 EQUIPMENT
The shelter subsystem vendor shall install the following equipment into the
shelter per the RFP.
>> HVAC
>> Fire suppression system
>> Interior/exterior lighting systems
>> Interior/exterior AC outlets
>> Main and UPS electrical distribution panels
>> Maintenance bypass switch
>> Emergency interior light(s)
B-3.7.5.2 ELECTRICAL
The shelter subsystem vendor shall perform the following electrical connections
per the RFP.
>> HVAC
>> Fire suppression system
>> Interior/exterior lighting systems
>> Interior/exterior AC outlets
>> Emergency interior light(s)
>> UPS system to UPS distribution panel
>> Maintenance bypass switch to UPS system and UPS distribution
panel
>> Main distribution panel to maintenance bypass switch
- --------------------------------------------------------------------------------
2144 PA Rider B Page 24 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-3.7.5.3 INTERIOR SHELTER HALO GROUNDING
The shelter subsystem vendor shall perform the following connections to the
interior shelter ground system per the RFP.
>> HVAC
>> Fire suppression system
>> Main electrical distribution panels
>> DC power system
>> Maintenance bypass switch
>> All metal objects not previously indicated, including cable
ladders, doors and doorframes (utilizing a copper strap, etc.)
B-3.7.5.4 EXTERNAL GROUND SYSTEM
Shelter System contractor shall perform the following connections to the
external shelter ground system per the RFP.
>> Connect shelter to external ground system per specifications
B-3.7.5.5 OTHER RESPONSIBILITIES
The shelter subsystem vendor shall deliver shelters to site and set up the
shelter subsystems per the RFP.
>> Coordinate shelter delivery to the site
>> Deliver the shelter to the site
>> Offload, install, and position the shelter per specifications
>> Shelter vendor to perform shelter Subsystem ATP
- --------------------------------------------------------------------------------
2144 PA Rider B Page 25 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-4 EMERGENCY GENERATOR
The generator system is defined as a set of specific combinations or
configurations intended to meet the requirements for the radio and microwave
subsystems.
EMERGENCY GENERATOR DESIGN
The majority of the Statewide Voice and Data Radio System sites will require new
emergency generators to support the communications infrastructure equipment. The
generator system will be defined as a set of specific combinations or
configurations intended to meet the requirements for the radio and microwave
subsystems. These requirements were defined in the RFP and under the following
sections.
EMERGENCY GENERATOR PERFORMANCE
The emergency generator designs shall be supplied in seven (7) different
capacities ranging from 8 kW to 100 kW in size per the RFP.
EMERGENCY GENERATOR CONFIGURATIONS
The following list represents the minimum functionality, performance, or quality
requirements that shall be included in each emergency generator configuration.
The following list defines the required functionality or the specific
requirements of the Emergency Generator per the RFP.
>> Emergency Generator
>> Wiring and Conduit
>> Generator Alarms
>> Grounding
>> Patch Blocks
>> Generator Foundation
>> Industrial Rated Engine with Skid Base
>> Block Heater
>> Exhaust Silencer
>> Alternator
>> Voltage Regulator
>> Battery and Charger
>> Full Load Pick-Up
>> Liquid Cooled System
- --------------------------------------------------------------------------------
2144 PA Rider B Page 26 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Generator Set Control System (per NFPA 110)
>> On-Site/ Checkout
>> Fuel Tank Capacity (1 day and 7 days)
>> Automatic Transfer Switch with Exerciser Clock (100, 200, and
400 Amps)
>> Manual Transfer Switch (100, 200, and 400 Amps)
>> Propane Tank Burial
>> Off Site Installation
>> Cost for Shipping of Generator to Shelter Manufacturer
>> Weather Protective Enclosure and Silencer
>> Sub-Base Diesel Fuel Tanks
>> Removal Of Old Generator
>> Removal Of Existing Generator Foundation
>> Portable Generator
EMERGENCY GENERATOR SHIPPING AND DELIVERY PROCESS
Shelter deliveries shall be coordinated through the Contractor's Harrisburg
Office to the Radio Project Office via Expedition and SureTrak.
Every package, bill of lading, shipping memorandum and invoice shall be marked
with a Commonwealth purchase order number. An itemized delivery ticket, bearing
the Commonwealth's purchase order number shall be provided with the goods to
insure their receipt. If a carrier makes a delivery for the Contractor, then an
itemized delivery ticket shall be attached to the outside of the package.
Delivery ticket and purchase order numbers of delivered items shall be tracked
via Expedition.
B-4.4.1 EMERGENCY GENERATOR FINAL SHIPPING DESTINATION
The shelter contractor may be responsible for the shipping of the generators,
depending upon the final arrangements between the generator and shelter
contractors. The shelter and generator contractors are totally responsible for
providing safe transportation and delivery of all materials provided within the
shelter and emergency generator specifications. The shipment from the place of
origin to designated locations within the Commonwealth of Pennsylvania are to be
covered by these two contractors as related to the provided two products and as
further define in the RFP Section 5.7 - Shipping and Delivery Charges.
EMERGENCY GENERATOR SUBMITTALS
The radio Emergency Generator contractor shall be responsible for submitting
appropriate engineering drawings. The following items are primary submissions
but may not necessarily be totally inclusive of all required submissions.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 27 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-4.5.1 ENGINEERING DRAWINGS
The Emergency Generator contractor shall prepare and submit for approval,
engineering drawings sets for the emergency generator. These specific drawings
shall be as follows;
>> Interconnection Wiring Schematic Diagrams
>> Alarm Wiring Schematic Drawings
GENERATOR INSTALLATION
All installation work performed shall be in accordance with laws, regulations
and ordinances of all State, Local, and Federal agencies. The contractor shall
provide all the necessary personnel, tools, equipment, and transportation for
the installation of all equipment provided per the RFP specification. It shall
be the responsibility of the contractor to provide a turnkey installation of the
provided equipment. Optimization, trouble shooting, and adjustment of each
subsystem shall be the contractors responsibility.
GENERATOR WARRANTY
A no deductible warranty that provides for on site service by a factory
authorized service contractor shall be provided. This warranty shall provide
coverage against all defects in materials and workmanship as defined in Rider F
- - Warranty and Maintenance.
CONTRACTOR RESPONSIBILITIES
The generator system contractor shall have turnkey responsibility for the
delivery, installation and acceptance testing of the generators. In order to
develop a complete and operational system, the points of demarcation between
systems and all contractors is critical to the system implementation process.
Therefore, the Generator Contractor's responsibilities are defined. The
Contractor's Responsibilities listed apply to those commodities and subsystems
included in each approved Site Design Document.
Contractors shall follow good engineering practices in the preparation,
administration, implementation, inspection and acceptance of each individual
subsystem at the designated sites.
The Site Development Contractor shall be the responsible party for site
management and act as the general site manager for all construction and
coordination between contractors, vendors and the Commonwealth until Final Site
Acceptance by the Commonwealth. The Contractors shall comply with the following
representative sequence and order of subsystem installations.
B-4.8.1 SHELTER SUBSYSTEM
The generator system contractor responsibilities, including all
required material and labor, shall be comprised of, but not be limited to, the
following tasks:
- --------------------------------------------------------------------------------
2144 PA Rider B Page 28 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
The Generator System contractor shall provide the following
items to the Shelter System contractor per the RFP.
>> Automatic transfer switch
>> Manual transfer switch
>> Generator
>> Portable generator receptacle
The Generator System contractor shall perform the installation of following
equipment into the shelter per the RFP.
ATTACHED GENERATOR ROOM CONFIGURATION
>> Generator and all related accessories or attachments
>> RJ45 patch block for generator alarms
DETACHED GENERATOR ROOM CONFIGURATION
>> Generator and all related accessories or attachments
>> Two (2) RJ45 patch blocks for generator alarms
>> One (1) located in detached generator room
>> One (1) located in equipment shelter
OUTSIDE GENERATOR CONFIGURATION
>> Generator and all related accessories or attachments
>> One (1) RJ45 patch blocks for generator alarms located in
equipment shelter
>> Connection of alarms on a terminal strip at the generator
The Generator System contractor shall perform the following electrical
connections in the shelter per the RFP.
ATTACHED GENERATOR ROOM CONFIGURATION
- Generator to manual transfer switch
- All generator/transfer switch alarms to generator alarm patch
block
DETACHED GENERATOR ROOM CONFIGURATION
>> Generator to manual transfer switch
>> All generator/transfer switch alarms to generator alarm patch
block in detached generator room, through conduit provided
between detached generator room and equipment shelter, to
second generator alarm patch block in equipment shelter
- --------------------------------------------------------------------------------
2144 PA Rider B Page 29 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Generator battery charger
>> Generator block heater
OUTSIDE GENERATOR CONFIGURATION
>> Generator to manual transfer switch
>> All generator/transfer switch alarms to generator alarm patch
block in detached generator room, through conduit provided
between detached generator room and equipment shelter, to
second generator alarm patch block in equipment shelter
>> Generator battery charger
>> Generator block heater
The Generator System contractor shall perform the following connections to the
interior/exterior ground system
ATTACHED GENERATOR ROOM CONFIGURATION
>> Generator engine block to interior ground system
>> Alternator to interior ground system
DETACHED GENERATOR ROOM CONFIGURATION
- Generator engine block to exterior ground system
- Alternator to exterior ground system
OUTSIDE GENERATOR CONFIGURATION
>> Generator engine block to exterior ground system
>> Alternator to exterior ground system
The Generator System contractor shall provide the following information to the
Shelter System contractor per the RFP.
>> Electrical loads of all equipment
>> Thermal loads of all equipment
>> Amount of floor space required
>> Floor loading requirement
>> Requested location in shelter for equipment
B-4.8.2 TOWER SUBSYSTEM
Tower System contractor shall perform the following site construction pertaining
to the generator equipment per the RFP.
ATTACHED GENERATOR ROOM CONFIGURATION
>> Provide extension ground cable(s) from exterior halo ground
system to be bonded to fuel tank(s)
- --------------------------------------------------------------------------------
2144 PA Rider B Page 30 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Construct foundation(s) for fuel tank(s)
DETACHED GENERATOR ROOM CONFIGURATION
>> Provide extension ground cable(s) from exterior halo ground
system to be bonded to fuel tank(s)
>> Provide three (3) extension ground cables from exterior halo
ground system to be routed into the detached generator room
for bonding to generator engine block, alternator, and
electrical distribution panel
>> Install generator AC power, alarm/control, and utility AC
power conduits from shelter to detached generator room
>> Construct foundation(s) for fuel tank(s) and detached
generator room
OUTSIDE GENERATOR CONFIGURATION
>> Provide extension ground cable(s) from exterior halo ground
system to be bonded to fuel tank(s)
>> Provide three (3) extension ground cables from exterior halo
ground system to be routed into the detached generator room
for bonding to generator engine block, alternator, and
electrical distribution panel
>> Install generator AC power, alarm/control, and utility AC
power conduits from shelter to detached generator room
>> Construct foundation(s) for fuel tank(s) and detached
generator room
B-4.8.3 MICROWAVE SUBSYSTEM
Generator System contractor shall provide the following information to the
Microwave System contractor per the RFP.
>> Equipment list and description of generator alarms to be
interfaced with network management system
B-4.8.4 RADIO SUBSYSTEM
Generator System contractor shall provide the following information to
the Radio System contractor per the RFP.
>> List and description of generator alarms to be interfaced with
network management system
B-4.8.5 CIVIL CONTRACTOR
Generator System contractor shall provide the following information to the Civil
contractor per the RFP.
ATTACHED GENERATOR ROOM CONFIGURATION
>> Requested locations for fuel tank(s)
DETACHED GENERATOR ROOM CONFIGURATION
>> Requested locations for fuel tank(s)
- --------------------------------------------------------------------------------
2144 PA Rider B Page 31 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Floor plan of detached generator room indicating locations for
generator AC power, alarm/control, and utility AC power
conduits and exterior ground extension cables
OUTSIDE GENERATOR CONFIGURATION
>> Requested locations for fuel tank(s)
>> Floor plan of detached generator room indicating locations for
generator AC power, alarm/control, and utility AC power
conduits and exterior ground extension cables
B-4.8.6 ADDITIONAL GENERATOR SUBSYSTEM VENDOR RESPONSIBILITIES
In addition to the previously described tasks, the generator system contractor
responsibilities, including all required material and labor, shall be comprised
of, but not be limited to, the following tasks per the RFP.
PERFORM THE INSTALLATION OF THE FOLLOWING EQUIPMENT ON SITE
>> Fuel tank(s) and fuel line(s) from fuel tank to generator.
Shall including proper fuel filters, vapor traps and automatic
fuel shut off valve
>> Make all necessary and required connections
>> Connect fuel tank(s) to exterior ground system
>> Deliver generators and perform setup of generator subsystems
>> Perform generator subsystem ATP
- --------------------------------------------------------------------------------
2144 PA Rider B Page 32 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-5 TOWERS
The tower system is intended to support the two-way voice, data, and microwave
communications equipment for the Commonwealth of Pennsylvania Statewide Radio
System. The Commonwealth shall define the actual types, heights and locations
based upon the final radio and microwave system designs.
The Commonwealth has developed requirements for towers and has composed a set of
specifications. The RFP defines basic and optional requirements to support the
system implementation of the microwave and radio subsystems. The following
defines these requirements and tasks as provided in the RFP.
TOWER DESIGN
All towers will have basic requirements. These basic requirements are the same
for all towers. An example of a basic requirement is wind loading of 80 mph with
concurrent 1/2-inch radial ice (non-derated). The performance of this
requirement is independent of the size of the tower, material type, or the
foundation design.
In addition to basic requirements, there will also be variable requirements. As
tower sizes increase these variable requirements may require more material,
increase in capacity, or replace a specific item to provide required
performance. An example of a variable requirement is the use of different tower
members to support different antenna loads. The tower members need to be
stronger in order to support greater antenna loads.
There will also be variable features that can be applied to any tower as
required on a site by site basis. These variable features shall be in addition
to the basic requirements of any tower. In some specific circumstances, an
optional feature may altogether replace a basic requirement. This is noted in
the RFP. An example of a variable feature is the type of tower lighting. Some
tower locations may require different lighting systems due to FAA regulations or
local zoning. This will be determined during the microwave and radio systems
procurements.
TOWER PERFORMANCE
The following list defines the functionally and requirements as needed to
develop and implement the Statewide Radio System. The Commonwealth will define
the towers to the Tower Contractor based on the following criteria.
The following general requirements and tasks apply to all towers per the RFP.
>> Tower Heights
>> Type of Tower
>> Wind and Ice Loading
- --------------------------------------------------------------------------------
2144 PA Rider B Page 33 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Tower Member Construction Types
>> Tower Design
TOWER CONFIGURATION
The following list of basic, variable and optional requirements represents the
minimum functionality, performance, or quality requirements that shall be
included in each tower design per the RFP. The list is not necessarily totally
inclusive of all requirements.
>> Tower Loading and Stress Design
>> Tower Twist, Sway and Displacement
>> Tower Grounding System
>> Transmission Line Cable Ladder System
>> Climbing Ladder
>> Waveguide Bridge
>> Tower Foundation Design
>> Tower Loading
>> Wind and Ice Loading
>> Tower Painting
>> Tower Lighting
>> Wiring and Conduit Requirements
>> Tower Alarms
>> Microwave Dish Ice Shields
>> Disassembling And Removal Of Existing Tower
>> Removal Of Existing Tower Foundations
TOWER SUBMITTALS
The tower drawing package will be specifically developed and packaged by the
tower vendor for each site. This drawing package will contain Key Erection and
Secondary Drawings per the RFP and shall be submitted in accordance with Section
B.2.
KEY ERECTION DRAWINGS
The key erection drawings will include, but not be limited to, the
following:
>> Site name
>> List of all secondary drawings
>> Chart of complete antenna/waveguide data
>> Elevation View to include tower member descriptions, assembly
and erection details
>> Guy wire information (Changes in elevation, sizes, etc.)
>> A plan view of the tower showing guy wire azimuth,
transmission line ladder, climbing ladder and transmission
lines
SECONDARY DRAWINGS
Secondary drawings will include:
- --------------------------------------------------------------------------------
2144 PA Rider B Page 34 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Foundation drawings with all necessary details shown
>> Lighting kit installation
>> Grounding
>> Packing list showing part number, sizes and weights of
associates materials
>> Antenna mounting detail
>> Installation of any miscellaneous appurtenances
>> Cable bridge detail
DRAWING PACKAGES
When drawing packages are sent to the Commonwealth, in addition to the
requirements of Section B.2, the following practices shall apply:
>> Two blue/black line sets shall be issued to the Commonwealth
for field construction.
>> Three sets of design calculations and computer analysis will
be provided to the Commonwealth in the
final site package.
TOWER SHIPPING AND DELIVERY
Tower deliveries shall be coordinated through the Contractor's Harrisburg Office
to the Radio Project Office via Expedition and SureTrak.
Every package, bill of lading, shipping memorandum and invoice shall be marked
with a Commonwealth purchase order number. An itemized delivery ticket, bearing
the Commonwealth's purchase order number shall be provided with the goods to
insure their receipt. If a carrier makes a delivery for the Contractor, then an
itemized delivery ticket shall be attached to the outside of the package.
Delivery ticket and purchase order numbers of delivered items shall be tracked
via Expedition.
The tower contractors are totally responsible for providing safe transportation,
delivery and off-loading of all materials provided within the tower
specification from the place of origin to designated locations within the
Commonwealth of Pennsylvania. ALL costs to ship the tower are the responsibility
of the tower manufacturer. This includes shipping, delivery to site, and
off-loading of the tower at the site.
All packaging of materials shall conform to good packing practices to protect
against any possible shipping damage.
The tower contractor shall ascertain site suitability for off loading prior to
shipment of any tower steel or components.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 35 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
Tower packaging and shipping shall be arranged to preclude damage to steel or
galvanizing during transport and off loading.
After off loading at the site, the tower manufacturer will inventory all
materials. Any discrepancies in quantity, quality or content shall be reported
immediately to the Commonwealth's project manager.
Delivery shall be made to ensure that the system is installed to meet the
Commonwealth's critical dates as defined in Rider D and the Master Program
Schedule. The contractor shall indicate how equipment or systems will be
delivered, i.e. identifying the carrier, and shall notify the Commonwealth's
Project Manager of firm shipping and delivery dates. The Commonwealth's Project
Manager shall be informed of any changes in shipping and delivery dates.
Title to and ownership of all equipment or systems shall remain with the
contractor until the equipment is delivered, successfully installed and
operational at the radio site, as characterized in the acceptance test plan. The
Commonwealth's acceptance date shall occur after the equipment has passed the
acceptance test.
Delivery of partial shipments is not acceptable unless authorized by the Radio
Project Office.
Charges for express freight, cartage, or packing that deviates from the contract
shall not be allowed or paid by the Commonwealth, unless otherwise expressly
stated by the Commonwealth.
Every package, bill of lading, shipping memorandum and invoice shall be marked
with a purchase order number of the Commonwealth.
An itemized delivery ticket, bearing the Commonwealth's purchase order number
shall be provided with the goods to insure their receipt. If a carrier makes a
delivery, then an itemized delivery ticket shall be attached to the outside of
the package.
TOWER INSTALLATION
All installation work performed shall be in accordance with laws, regulations
and ordinances, of all State, Local, and Federal agencies.
The contractor shall provide all the necessary personnel, tools, equipment, and
transportation for the installation of all equipment provided.
The Commonwealth has critical deadlines for the implementation phase of the
project. Site Development requires that site design work begin immediately
following contract
- --------------------------------------------------------------------------------
2144 PA Rider B Page 36 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
award to meet these critical dates. The contractor shall ensure that all
material and components are delivered to the proposed sites.
It shall be the responsibility of the contractor to provide a turnkey
installation of the provided equipment. Optimization, trouble shooting, and
adjustment of each subsystem shall be the contractors responsibility. This
includes any changes and/or additions in order to meet performance criteria. Any
additional equipment required after the contract is awarded to meet the system
performance criteria of the defined standards and/or specifications shall be at
the sole expense of the contractor unless the Commonwealth issues a change order
or an addition to Rider C
Equipment shall be installed in a neat and workman like manner, in accordance
with good practice, by competent technicians or mechanics. Personnel designated
by the Commonwealth shall complete inspection and approve all installations.
Such approval shall be limited in scope to the specific subsystem physical
installation, and shall not be construed to imply full acceptance of the system,
or subsystem.
Notwithstanding the details presented in these specifications, it is the
responsibility of the contractor's project manager to verify the correctness of
the material lists and suitability of devices proposed to meet the intent of the
specifications. The contractors shall be responsible for providing or arranging
for all parts necessary for the equipment and its installation up to and
including final system acceptance.
TOWER WARRANTY AND MAINTENANCE
The Tower Contractor shall provide warranty and maintenance for the supplied
products as required by the RFP and as defined in Rider F - Warranty and
Maintenance.
CONTRACTOR RESPONSIBILITIES
The tower system contractor shall have turnkey responsibility for the delivery,
installation and acceptance testing of the tower. In order to develop a complete
and operational system, the points of demarcation between systems and all
contractors is critical to the system implementation process. Therefore, the
Tower Contractor's responsibilities are defined. The Contractor's
Responsibilities listed apply to those commodities and subsystems included in
each approved Site Design Document.
Contractors shall follow good engineering practices in the preparation,
administration, implementation, inspection and acceptance of each individual
subsystem at the designated sites.
The Site Development Contractor shall be the responsible party for site
management and act as the general site manager for all construction and
coordination between
- --------------------------------------------------------------------------------
2144 PA Rider B Page 37 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
contractors, vendors and the Commonwealth until Final Site Acceptance by the
Commonwealth. The Contractors shall comply with the following representative
sequence and order of subsystem installations.
B-5.8.1 SHELTER SUBSYSTEM
Tower System contractor shall provide the following items to the Shelter System
contractor per the RFP
>> Tower light controller
The Tower System contractor shall install the following equipment into the
shelter per the RFP.
>> RJ45 patch blocks for tower alarms
The Tower System contractor shall perform the following electrical connections
in the shelter per the RFP.
>> Power wires from tower lights to tower light controller
Tower System contractor shall provide the following information to the Shelter
System contractor per the RFP.
>> Electrical loads of all equipment
>> Thermal loads of all equipment
>> Amount of floor/wall space required
>> Floor/wall loading requirement
>> Requested location in shelter for equipment
B-5.8.2 GENERATOR SUBSYSTEM
- None Required -
B-5.8.3 MICROWAVE SUBSYSTEM
Tower System contractor shall provide the following information to the Microwave
System contractor per the RFP.
>> List and description of tower alarms to be interfaced with
network management system
B-5.8.4 RADIO SUBSYSTEM
Tower System contractor shall provide the following information to the Radio
System contractor per the RFP.
>> List and description of tower alarms to be interfaced with
network management system
B-5.8.5 CIVIL CONTRACTOR
- None Required -
- --------------------------------------------------------------------------------
2144 PA Rider B Page 38 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-5.8.6 TOWER SUBSYSTEM
In addition to the previously described tasks, the tower system contractor
responsibilities shall include all required material and labor, and shall be
comprised of, but not be limited to, the following tasks per the RFP.
PERFORM THE INSTALLATION OF THE FOLLOWING EQUIPMENT ON SITE
>> Deliver tower steel to site, offload, and stack and/or store
securely
>> Erect tower and all related sub-assemblies
>> Perform tower ATP
PERFORM THE FOLLOWING CONNECTIONS TO EXTERIOR GROUND SYSTEM
SELF-SUPPORTING TOWER CONFIGURATION:
>> legs of tower to external ground system
>> waveguide/ice bridge to external ground system
GUYED TOWER CONFIGURATION:
>> base of tower to external ground system
>> guy anchor ground systems, connected above and below the
anchor turnbuckle
>> waveguide/ice bridge to external ground system
- --------------------------------------------------------------------------------
2144 PA Rider B Page 39 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-6 SITE WORK
The Civil Contractor responsibilities, including all required material and labor
shall be comprised of, but not limited to, the following responsibilities and
tasks per the RFP.
SITE WORK REQUIREMENTS AND SPECIFICATIONS
The civil contractor shall provide the installation of the tower foundation,
shelter foundation, generator foundation, fuel tank foundation, grounding, and
all other site related civil construction as outlined the RFP.
Site work requirements will vary considerably based on the initial condition of
the site. Sites will vary from an existing active site requiring limited
modification of the infrastructure to an undeveloped, heavily forested, remote
mountain top location. Therefore, a statement of work for each site shall be
developed and included in the Preliminary Site Plan after the preliminary site
visits have been accomplished
GENERAL CONSTRUCTION REQUIREMENTS
All materials, design, and construction procedures shall be in accordance with
the RFP.
SITE WORK DEFINITIONS
The following section describes the primary work requirements, to be performed
by the Contractor at a typical site. As site specific designs and plans are
defined, the Civil Contractor shall provide a statement of work for each site in
accordance with the specific work tasks and variations in work as defined in the
RFP. The following basic requirements must be tailored in size or capacity to
meet the intent of the functionality and work tasks listed in the RFP.
DEVELOPMENT AND CONSTRUCTION OF:
>> Access Road
>> Compound Road
>> Compound Clearance
>> Road Locations
>> Road Clearing
>> Road Construction
>> Road Grading
>> Road Drainage
>> Bridges, Culverts, and Fords
>> Road Maintenance
>> Access Road Gates
>> Highway Occupancy and Driveway Permits
>> Seeding For Road Construction
>> Environmental Protection For Road Construction
- --------------------------------------------------------------------------------
2144 PA Rider B Page 40 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
>> Forest Fire Prevention and Control
B-6.3.1 SITE WORK SUBMITTALS
Civil contractors shall submit the final site work based on the site plan
drawings. The Civil contractor will provide a Site Design Document (SDD) for
each of the sites to be contracted. Civil contractors shall "mark-up" the SDD
drawings for final approval by the Commonwealth prior to any work being started
at a site. These marked-up drawings shall become the site work submittals. To
develop the site, the civil contractor shall use these marked-up and approved
drawings. The civil contractors will utilize the following information for the
development of each site per the RFP.
>> Preliminary Site Staking
>> Soil Borings
>> Soil Test Results
>> Final Site Survey
>> Preliminary Site Plan
>> Site Design Document
- --------------------------------------------------------------------------------
2144 PA Rider B Page 41 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-7 CIVIL ENGINEERING
The Contractor shall be responsible for the quality and accuracy of all site
design work and civil engineering services. These engineering services shall
include the following items and be supplied to the site development contractor
performing the actual site work. The site contractor shall utilize the following
design documentation to construct the radio sites.
>> Land Search
>> Preliminary Site Staking
>> Soil Borings
>> Soil Test Results
>> Final Site Visit
>> Final Site Survey
>> Site Plan
The following items shall be included as part of the Site Design Document per
the RFP.
>> Site Survey
>> Vicinity Map
>> Boundary Map
>> Site Elevations
>> Compound Layout
>> Tower Location (Lat./Long.)
>> Access Road Design
>> Drainage Design
>> Grading Design
>> Design Notes
>> Include Foundation Designs -Tower, Shelter, Fuel Tank,
Generator (provided by other contractors)
>> Include Tower Drawings (provided by Tower contractor)
>> Include Soil Boring and Test Results
>> Utility Access Design
B-7.1.1 PROFESSIONAL ENGINEERING CERTIFICATION
All site-specific drawings and associated design calculations shall bear the
stamp of a Professional Engineer licensed in the Commonwealth of Pennsylvania
when required by state and local authorities. Drawing sets shall be provided to
the Commonwealth by the civil contractor in accordance with Section B.2.
B-7.1.2 TOWER DRAWINGS
A tower drawing package shall be developed by the tower vendor and packaged for
each site. This drawing package shall contain key erection and secondary
drawings as
- --------------------------------------------------------------------------------
2144 PA Rider B Page 42 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
described in Section B.5.1. will be provided for the civil contractors review
and understanding.
The drawings shall be supplied on ANSID(24" x 36")size for ease of distribution.
The drawings shall also be supplied in an electronic format suitable for storage
and retrieval. Vendors are to supply all drawings in AutoCAD version 13.
B-7.1.3 KEY TOWER ERECTION DRAWINGS
The key erection drawings shall include but not be limited to the following per
the RFP.
>> Site name
>> List of all secondary drawings
>> Chart of complete antenna/waveguide data
>> Elevation View (to include tower member descriptions, assembly
and erection details.)
>> Guy wire information (Changes in elevation, sizes, etc.)
>> A plan view of the tower showing guy wire azimuth,
transmission line ladder, climbing ladder and transmission
lines
B-7.1.4 SECONDARY TOWER DRAWINGS
Secondary drawings shall include but not limited to the following per the RFP.
>> Foundation drawings with all necessary details shown.
>> Lighting kit installation.
>> Grounding.
>> Packing list showing part number, sizes and weights of
associates materials.
>> Antenna mounting detail.
>> Miscellaneous appurtenances installation
>> Cable bridge detail
B-7.1.5 DRAWING PACKAGES
When drawing packages are sent to the Commonwealth, the following practices
shall apply.
>> Two blue/black line sets shall be issued to the Commonwealth
for field construction.
>> One reproducible set of drawings will be issues for a
permanent record to the Commonwealth upon completion of the
project.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 43 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-8 ACCEPTANCE TESTING
The following section defines the types of acceptance testing which will need to
be performed in order to meet the RFP specification and maintain quality control
of the development of the radio sites.
SUBSYSTEM ACCEPTANCE TESTING
The Subsystem Acceptance WBS element collects the effort for the preparation and
conducting site subsystem acceptance tests or other subsystems as required.
Subsystem Acceptance is a combination of analysis, inspect, and demonstrations.
Refer to Rider "H" Acceptance Testing for Subsystem Acceptance Test Procedures.
B-8.1.1 EQUIPMENT SHELTER SUBSYSTEM ACCEPTANCE TESTING
Equipment Shelter Subsystem Tests shall apply to the Equipment Shelter and all
Ancillary Equipment.
B-8.1.2 EMERGENCY GENERATOR SUBSYSTEM ACCEPTANCE TESTING
Emergency Generator Subsystem Tests shall apply to the Emergency Generator and
all Ancillary Equipment.
B-8.1.3 TOWER SUBSYSTEM ACCEPTANCE TESTING
Tower Subsystem Tests shall apply to the Tower and all Ancillary Equipment.
B-8.1.4 SITE WORK SUBSYSTEM ACCEPTANCE TESTING
Site Work Subsystem Tests shall apply to the Site Work and all Ancillary
Equipment.
SUBSYSTEM INTEROPERABILITY ACCEPTANCE TESTING
This WBS element collects the efforts for interoperational verification of all
provided subsystems at a site as defined in Rider "H"- Acceptance Testing.
Quality Inspection Points shall be defined as part of the Acceptance Testing
Plan.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 44 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-9 PROJECT LOGISTICS AND SUPPORT
This WBS element collects the efforts for Project Logistics and Support for site
development as defined in the RFP
INSTALLATION
The Installation WBS element collects the costs and effort associated with
installation of equipment and subsystems at the final site location.
B-9.1.1 INSTALLATION DOCUMENTATION
The Contractor's shall provide a "System As-Built Manual". This manual will
contain equipment model, options, location, installation, interconnection and
electrical level information necessary for complete maintenance and trouble
shooting for each site. The system documentation binders as a minimum shall
conform to the Detailed Design Document procedures and shall contain specific
diagrams with regard to the following:
>> Site floor plan, cable tray and equipment rack layouts
>> System block diagram
>> Equipment programming parameters/templates and jumpering
configurations
>> Detailed interconnection drawings
>> All external equipment inter-cabling, cable and/or wiring,
shall be labeled with pre-printed adhesive wire markers.
Markers shall be placed at each end, adjacent to the
connector, plug or terminus.
>> Inventory with serial numbers and equipment references
>> Interconnection drawings that show all connections between
sub-assemblies, such as terminal boards, panel assemblies or
other equipment, to which external connections are made.
>> Hardware version numbers
>> Numbering and labeling of all interconnecting cabling
associated with remote control units
>> Numbering and labeling of all connections to modular panels
>> Numbering and labeling of all interconnecting cabling between
any remote site controllers or processors, alarm circuits, and
leased telephone company circuits
>> Site level setting block diagrams
>> Spare set of cable labels shall be provided in each site "as
built" manual
>> Theory of Operation and Maintenance Manual for each deployed
product
- --------------------------------------------------------------------------------
2144 PA Rider B Page 45 of 46 March 22, 2000
<PAGE>
Rider B - Statement of Work
- --------------------------------------------------------------------------------
B-9.1.2 INSTALLATION INSPECTIONS
The Acceptance Test Plan as delivered by the Contractor shall include quality
inspection points as provided by the Commonwealth. Each checkpoint shall require
verification by the Commonwealth or its affiliates, before installation efforts
may proceed. The Commonwealth, may at its discretion, accept written
verification from the Contractor that the quality checkpoint was verified by the
Contractor's on-site superintendent, in lieu of the Commonwealth performing the
inspection.
SHIPPING
The Shipping WBS element collects the costs and effort associated with shipment
of equipment and subsystems from the Contractor's facility to the final site
location for installation. The contractor is responsible for the shipping,
unloading and installation of all equipment proposed as defined in the RFP.
TRAINING
Training is the WBS element summarizing the efforts to prepare and present the
training courses as defined in the RFP.
WARRANTY / MAINTENANCE
The Warranty WBS element collects the status of the warranty support which
begins upon total site acceptance by the Commonwealth of Pennsylvania. Refer to
Rider "F" Warranty / Maintenance, of the contract for terms and conditions for
Warranty and Maintenance.
SPARES
The Spares WBS element is the WBS element summarizing the spares for the service
technicians in the field.
- --------------------------------------------------------------------------------
2144 PA Rider B Page 46 of 46 March 22, 2000
<PAGE>
RIDER C - Equipment List
- -------------------------------------------------------------------------------
[LOGO]
COMMONWEALTH OF PENNSYLVANIA
ROHN CONSTRUCTION, INC.
SITE DEVELOPMENT SYSTEM
RIDER C - EQUIPMENT LIST
- --------------------------------------------------------------------------------
2145n PA Rider C 1 of 9 October 1, 1999
<PAGE>
RIDER C-Equipment List
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RIDER C - TABLE OF CONTENTS
<S> <C>
C-1 GENERAL OVERVIEW.....................................................3
C-2 EQUIPMENT SHELTER SYSTEM.............................................4
C-3 EMERGENCY GENERATOR SYSTEM...........................................5
C-4 TOWER SYSTEM.........................................................6
C-5 SITE DEVELOPMENT SERVICES............................................7
C-6 SITE DEVELOPMENT ENGINEERING SERVICES................................8
C-7 EQUIPMENT LIST.......................................................9
</TABLE>
- -------------------------------------------------------------------------------
2145 PA Rider C 2 of 9 October 1,1999
<PAGE>
RIDER C-Equipment List
- -------------------------------------------------------------------------------
C-1 GENERAL OVERVIEW
The purpose of this EQUIPMENT LIST is to identify the various equipment,
products, subsystems (ITEMS) that shall be required for the project. The
Equipment List shall define all Items that can be purchased by the Commonwealth,
Agencies of the Commonwealth, system participants as well as other entities
(local municipalities, counties, etc) able to purchase from the State Contract
5820-06.
The Equipment List shall contain a deliverable which shall fully detail the
specific product model numbers, options, and subsystem assemblies and materials.
These material items shall also contain quantity and pricing. Installation and
other applicable services shall also be defined. All third party equipment shall
be separately priced and the Contractor shall provide optional third party
equipment for the Commonwealth's consideration.
The following Equipment shall be categorized into the following primary
sections:
Equipment Shelter System
Emergency Generator System
Tower System
Site Development System
Site Development Engineering System
The Equipment List and pricing considerations are based upon quantities
contained in the PROPOSAL. Equipment and Subsystem prices shall be independently
defined for software, hardware, installation services and 3rd party equipment
and/or services. Item pricing as defined shall be directly available for the
State Purchasing Contract 5820-06. Specific Items may be unavailable for other
entity purchase subject to mutually agreement between the Commonwealth and the
Contractor. The Contractor shall update the equipment list to accommodate
additional equipment and subsystems as required by the Commonwealth or as new
equipment and product lines become available.
- -------------------------------------------------------------------------------
2145 PA Rider C 3 of 9 October 1,1999
<PAGE>
RIDER C-Equipment List
- -------------------------------------------------------------------------------
C-2 EQUIPMENT SHELTER SYSTEM
(Refer to C-7. Pages TBD)
This section details all equipment, product and subsystem items associated with
Equipment shelters. This includes quantity and pricing for materials and
installation as well as any other applicable services. Items include but are not
limited to: AC Power and Electrical Service, UPS System and Battery Bank,
Heating and Air Conditioning, Fire Extinguisher, Shelter Grounding System,
Interior Lighting System, Exterior Lighting System, Cable Ladder Trays, Cable
Entry Ports, Patch Block Mounting Surface, Shelter Foundation Design, Doors -
Locks and Keys, DC Power Plant, Generator Room - Attached and Detached,
Acceptance Testing, Warranty, Maintenance and Support, Shipping and Delivery,
Installation, off-loading, and maintenance documentation and as-built
documentation.
- -------------------------------------------------------------------------------
2145 PA Rider C 4 of 9 October 1,1999
<PAGE>
RIDER C-Equipment List
- -------------------------------------------------------------------------------
C-3 EMERGENCY GENERATOR SYSTEM
(Refer to C-7. Pages TBD)
This section details all equipment, product and subsystem items associated with
Emergency Generators. This includes quantity and pricing for materials and
installation as well as any other applicable services. Items include but are not
limited to: Generator Alarms, Patch Blocks, Battery and Charger, Automatic
Transfer Switch, Manual Transfer Switch, Generator Set Control System, Fuel
Tank, Weather Protective Enclosure, Acceptance Testing, Warranty, Maintenance
and Support, Shipping and Delivery, Installation, off-loading, maintenance
documentation and as-built documentation.
- -------------------------------------------------------------------------------
2145 PA Rider C 5 of 9 October 1,1999
<PAGE>
RIDER C-Equipment List
- -------------------------------------------------------------------------------
C-4 TOWER SYSTEM
(Refer to C-7. Pages TBD)
This section details all equipment, product and subsystem items associated with
the tower systems. This includes quantity and pricing for materials and
installation as well as any other applicable services. Items include but are not
limited to: Tower Design, Tower Foundation Design, Transmission Line Cable
Ladder, Waveguide Bridge, Climbing Ladder, Tower Lighting, Microwave Dish Ice
Shields, Tower Painting, Acceptance Testing, Warranty, Maintenance and Support,
Shipping and Delivery, Installation, off-loading, maintenance and as-built
documentation.
- -------------------------------------------------------------------------------
2145 PA Rider C 6 of 9 October 1,1999
<PAGE>
RIDER C-Equipment List
- -------------------------------------------------------------------------------
C-5 SITE DEVELOPMENT SERVICES
(Refer to C-7. Pages TBD)
This section details all equipment, product and subsystem Items associated with
the site development services. This includes quantity and pricing for materials
and installation as well as any other applicable services. Items include but are
not limited to: Install Tower Foundation, Install Shelter Foundation, Install
Generator Foundation, Install shelter Ramps, Install Fuel Tank Foundation,
Install Waveguide Bridge Piers, Construct Access Road, Construct Compound Road,
Clearing of Compound Area, Install Electrical and Telephone Pedestal, Install
Drainage, Install Compound Fencing and Gate, Install Fence Grounding, Perfrom
Final Grading, Site Gravelling, Remove Spoils, Excavate and Backfill, Acceptance
Testing, Warranty, Maintenance and Support, Shipping and Delivery, Installation,
Off-loading,. Maintenance and as-built documentation.
- --------------------------------------------------------------------------------
2145 PA Rider C 7 of 9 October 1,1999
<PAGE>
RIDER C-Equipment List
- -------------------------------------------------------------------------------
C-6 SITE DEVELOPMENT ENGINEERING SERVICES
(Refer to C-7. Pages TBD)
This section details all equipment, product and subsystem Items associated with
the site development engineering services. This includes quantity and pricing
for all applicable services. Items include but are not limited to: Land Search,
Preliminary Site Staking, Soil Borings, Soil Testing and Report, Final Site
Visit, Final Site Survey, and Site Plan.
- -------------------------------------------------------------------------------
2145 PA Rider C 8 of 9 October 1,1999
<PAGE>
RIDER C-Equipment List
- -------------------------------------------------------------------------------
C-7 EQUIPMENT LIST
(Please refer to attached Equipment List)
- -------------------------------------------------------------------------------
2145 PA Rider C 9 of 9 October 1,1999
<PAGE>
ROHN CONSTRUCTION, INC. RIDER E
SCHEDULE OF PAYMENTS
- - 100% of engineering costs, by site, at the time of Commonwealth
acceptance of the Site Design Document.
- - 100% of shelter costs, by site, at the time of acceptance by the
Commonwealth.
- - 100% of generator costs, by site, at the time of acceptance by the
Commonwealth.
- - 100% of tower costs, by site, at the time of acceptance by the
Commonwealth.
- - 100% of civil construction costs, by site, upon final acceptance of the
site by the Commonwealth.
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
COMMONWEALTH OF PENNSYLVANIA
ROHN CONSTRUCTION, INC.
SITE DEVELOPMENT CONTRACT
ROHN INDUSTRIES, INC.
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
2147 PA Rider F Page 1 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
<S> <C>
F-1 GENERAL OVERVIEW AND REQUIREMENTS..................................................................3
F-1.1 DEGREES OF FAILURE ON INFRASTRUCTURE EQUIPMENT...............................................3
F-1.1.1 MAJOR FAILURE..........................................................................3
F-1.1.2 MINOR FAILURE..........................................................................3
F-1.2 MALFUNCTIONED EQUIPMENT......................................................................3
F-1.3 PREVENTATIVE MAINTENANCE.....................................................................3
F-1.4 TEST EQUIPMENT CALIBRATION...................................................................4
F-1.5 GUARANTEES (MATERIAL AND LABOR)..............................................................4
F-1.6 SYSTEM WARRANTY AND SYSTEM MAINTENANCE PERFORMANCE REPORTS...................................4
F-1.7 CENTRALIZED SUPPORT ORGANIZATION (CSO).......................................................4
F-2 STANDARD WARRANTY TERMS............................................................................5
F-2.1 ON-SITE WARRANTY.............................................................................6
F-3 COMMENCEMENT OF WARRANTY...........................................................................7
F-3.1 WARRANTY -SITE FACILITY......................................................................7
F-4 SHELTER SYSTEM WARRANTY............................................................................8
F-4.1 2 YEAR WARRANTY..............................................................................8
F-4.2 EXTENDED WARRANTY AND MAINTENANCE -3 ADDITIONAL YEARS (24 HR COVERAGE).......................8
F-4.3 EXTENDED WARRANTY AND MAINTENANCE -3 ADDITIONAL YEARS (NON 24HR COVERAGE)....................9
F-5 EMERGENCY GENERATOR SYSTEM........................................................................11
F-5.1 2 YEAR WARRANTY.............................................................................11
F-5.2 EXTENDED WARRANTY AND MAINTENANCE -3 ADDITIONAL YEARS (24 HR COVERAGE)).....................11
F-5.3 EXTENDED WARRANTY AND MAINTENANCE -3 ADDITIONAL YEARS (NON 24HR COVERAGE)...................12
F-6 TOWER SYSTEM......................................................................................13
F-6.1 10 YEAR WARRANTY............................................................................13
F-6.2 EXTENDED WARRANTY AND MAINTENANCE -3 ADDITIONAL YEARS (24 HR COVERAGE)......................13
F-6.3 EXTENDED WARRANTY AND MAINTENANCE -3 ADDITIONAL YEARS (NON 24HR COVERAGE)...................14
F-7 SITE WORK.........................................................................................15
F-7.1 5 YEAR WARRANTY.............................................................................15
F-7.2 EXTENDED WARRANTY AND MAINTENANCE -3 ADDITIONAL YEARS (24 HR COVERAGE)......................15
F-7.3 EXTENDED WARRANTY AND MAINTENANCE -3 ADDITIONAL YEARS (NON 24HR COVERAGE)...................16
</TABLE>
- --------------------------------------------------------------------------------
2147 PA Rider F Page 2 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
F-1 GENERAL OVERVIEW AND REQUIREMENTS
The purpose of this document is to define the Warranty and Maintenance Support
System that shall be provided by the Contractor to ensure the reliability of the
Statewide-Integrated Voice and Data System (IV&D) being purchased by the
Commonwealth as it pertains to the Site Development RFP # 1998-SD-1.
This Warranty shall pertain specifically to all material, labor and services as
purchased in accordance with this contract and based upon the Site Development
RFP that called for the purchase of Shelter System, Emergency Generator System,
Tower System and Site Work.
F-1.1 DEGREES OF FAILURE ON INFRASTRUCTURE EQUIPMENT
The following defines two categories of failure. Major and Minor failures shall
have different response and restoration times as described below.
F-1.1.1 MAJOR FAILURE
Any failure that results in a loss of voice or data service, a complete
outage or reduction of System capacity, that are not restored by hot standby or
fault tolerant Equipment, shall constitute a major failure. All major failures
require immediate service as stipulated by the response and repair times
associated with the various Equipment types outlined in this document.
F-1.1.2 MINOR FAILURE
Any failure that generates a concern or alarm of any nature other
than major, as defined above, shall be deemed a minor failure. All minor
failures must be cleared during the course of the normal workday on which they
occur. In the event a minor failure occurs after hours, on a weekend or holiday,
as defined in Rider B, shall be repaired during the next normal working day.
F-1.2 MALFUNCTIONED EQUIPMENT
Malfunctions that cannot be immediately or unequivocally diagnosed and
pinpointed to a certain item of Equipment or service shall require the
participation of all service suppliers until responsibility for the problem
has been established. In no instance shall the failure to resolve the issue
of responsibility relieve any of the suppliers of the mutual obligation to
restore System operability with the least impact on the availability of the
System to the end users.
F-1.3 PREVENTATIVE MAINTENANCE
Contractor shall provide preventative maintenance on all Equipment as specified
in order to be compliant with the response times as indicated in this rider. In
addition Rider B (Statement of Work) shall further define the Preventive
Maintenance Plan and the
- --------------------------------------------------------------------------------
2147 PA Rider F Page 3 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
Schedule as a specific deliverable. A complete description of preventive
maintenance shall specify the frequency of preventive maintenance required for
all proposed Equipment and Systems. Preventive maintenance shall be performed
according to a schedule that is mutually acceptable to the Commonwealth and
Contractor. The schedule shall be consistent with the operation requirements of
the Commonwealth and shall be based upon the specific needs of the Equipment
being maintained.
F-1.4 TEST EQUIPMENT CALIBRATION
All test equipment utilized for installation, warranty and
maintenance on the Statewide-Integrated Voice and Data System shall be
calibrated as recommended by the Equipment manufacture(s) and traceable to the
National Bureau of Standards. The Contractor Program Manager must maintain
certificates of calibration.
F-1.5 GUARANTEES (MATERIAL AND LABOR)
Contractor guarantees that all Equipment supplied pursuant to this RFP will be
new and of first quality throughout. All replaced parts or Equipment will become
property of the Commonwealth.
F-1.6 SYSTEM WARRANTY AND SYSTEM MAINTENANCE PERFORMANCE REPORTS
Contractor shall furnish the Commonwealth with a monthly report of all warranty
and maintenance requests. As a minimum the following data is required:
/ / Date and time of arrival on Site
/ / Description of malfunction reported
/ / Diagnosis of failure and work performed
/ / Date and time failure was corrected
/ / Charges for service, if applicable
/ / Name of person performing service
/ / All preventative maintenance results
F-1.7 CENTRALIZED SUPPORT ORGANIZATION (CSO)
Due to the vastness of the system being implemented, the vendor shall list the
locations and functionally of each in-state and out-of-state service center(s).
The Contractor shall open a Centralized Support Organization (CSO). This
facility shall report directly to the Contractor Project Manager and interface
with the Commonwealth via the Radio Project Office. This center shall provide
Warranty Services, be capable of receiving repair calls and dispatching service
personnel to meet response times on a 24-hour, 365-day basis. Contractor shall
provide a SINGLE toll-free telephone number for all maintenance, repair and
emergency service requirements. The CSO shall remain in effect from the
beginning of the Contract until the end of the optional System Maintenance
period selected by the Commonwealth.
- --------------------------------------------------------------------------------
2147 PA Rider F Page 4 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
F-2 STANDARD WARRANTY TERMS
Warranty shall be defined as the standard Contractor Warranty Terms, as
indicated below.
CONTRACTOR'S STANDARD WARRANTY
Contractor warrants for a period of twenty-four (24) months from the date of
completion and acceptance of a site commodity that the Equipment will be free
from defects in material and workmanship and will be in conformity with
applicable specifications and drawings (the "Specifications"); provided,
however, that this warranty shall not apply to any Equipment which shall have
been abused or misused physically or electrically, or on which the trademark
shall have been defaced or obliterated. Buyer shall request written return
material authorization within the warranty period prior to the return of any
nonconforming Equipment. If Equipment is found not in conformance with this
warranty, it will be covered by this warranty only if written authorization is
requested within a period of twenty-four (24) months from the date of
commencement.
Authorization for return must be secured from Contractor and will not commit
Contractor to the making of any repair or replacement hereunder. Requests for
return authorization should list types and quantities of Equipment involved, the
reason for the request, information concerning operating conditions involved,
and the period of use. In addition, the Order number and, where possible, the
original invoice number covering the original purchase of the Equipment involved
must be shown. Returned Equipment must be shipped, and transportation prepaid,
by the most practical method of shipment. Shipping costs will be credited to the
Buyer for all Equipment found to be not in compliance with this warranty.
Excessive transportation costs will not be allowed. Contractor can accept no
billing for packing, inspection, labor charges or other incidental costs in
connection with any Equipment returned. Unless otherwise requested by Buyer,
returned Equipment found not subject to this warranty will be sent back to
Buyer, transportation collect. In all cases, Contractor's determination will be
final. With respect to Equipment found not in conformity with this warranty, the
remedy will take the form, at Contractor's option, of a replacement or repair of
the defective or nonconforming Equipment.
In the event that it is uneconomical to replace or repair warranted Equipment,
Contractor may, at its sole option, remit the dollar equivalent based upon the
original Equipment sales price and said remittance will be calculated by
applying the pro rata percentage of the unexpired warranty to the original
Equipment sales price. Seller makes no representation or warranty, express,
implied (including but not limited to warranties of merchantability and fitness
for particular purposes), statutory, or related to "Year 2000" matters, other
than the foregoing express warranty. THIS WARRANTY IS IN LIEU OF ALL OTHER
WARRANTIES WHETHER WRITTEN, ORAL, EXPRESS OR IMPLIED (INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE). IN NO EVENT WILL CONTRACTOR BE
- --------------------------------------------------------------------------------
2147 PA Rider F Page 5 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING FROM
BREACH OF THIS WARRANTY, EVEN IF CONTRACTOR HAS BEEN ADVISED OF THE
POSSIBILITIES OF SUCH DAMAGES. THE FOREGOING CONSTITUTES BUYER'S SOLE REMEDY AND
CONTRACTOR'S SOLE LIABILITY FOR BREACH OF WARRANTY. In the event of replacement
pursuant to the foregoing warranty, such warranty shall apply to the replaced
product.
F-2.1 ON-SITE WARRANTY
In the event that warranted Equipment must be repaired on-site, the Contractor
shall provide the necessary material and trained personnel to repair and make
right all items in a professional and proper manner.
- --------------------------------------------------------------------------------
2147 PA Rider F Page 6 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
F-3 COMMENCEMENT OF WARRANTY
Warranty shall begin upon completion and acceptance of work on a specific
commodity at a site. The definition of work and acceptance is further defined in
Riders B (Statement of Work) and Rider H (Acceptance Testing).
F-3.1 WARRANTY - SITE FACILITY
Infrastructure Equipment shall be defined as Equipment supporting the
development of a "site". This will include the Shelter System, the Emergency
Generator System, the Tower System and the Site Work. This shall be further
defined as the "Site Facilities".
Warranty shall be defined as agreement(s) between the Contractor and the
Commonwealth for using the supplied Site Facility. All such agreements shall be
paid for and managed by the Commonwealth through the Radio Project Office (RPO).
This type of agreement would allow for specific response and repair times during
the Warranty period on Equipment purchased directly by the Commonwealth.
Contractor shall provide pricing on all Warranty Equipment listed in Rider C
(Equipment List and Charges).
- --------------------------------------------------------------------------------
2147 PA Rider F Page 7 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
F-4 SHELTER SYSTEM WARRANTY
The following section defines the Warranty for the Shelter System.
F-4.1 2 YEAR WARRANTY
This (2)-two year Warranty shall provide on-site service by a factory authorized
service provider.
The coverage includes repair or replacement of any defective equipment, system
hardware and software that is initially delivered defective or becomes defective
through normal wear and usage.
All batteries shall be warranted for a period of TEN YEARS from date of system
acceptance.
COVERAGE - 24 HR. BY 7 DAYS
8 hour response, 4 hour repair
Roof
Electrical System
HVAC
Lights - Internal and External
UPS to Include Batteries and Charger (Batteries 10 year warranty)
DC Power Plant (Batteries 10 warranty)
Alarms
Fire Extinguishers
24 hour response, 2 day repair
Walls
Doors
All Seals
Foundations
Floors
Cable Trays
Entrance Ports
Internal Grounding
F-4.2 EXTENDED WARRANTY AND MAINTENANCE - 3 ADDITIONAL YEARS (24 HR COVERAGE)
This (3)-three-year extended Warranty shall provide on-site service by a factory
authorized service provider. This package will include maintenance of all items
installed. This maintenance will follow the manufacturer's maintenance
guidelines at the manufacturer's recommended periodicity.
This coverage includes any defective equipment that becomes defective through
normal wear and usage.
- --------------------------------------------------------------------------------
2147 PA Rider F Page 8 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
COVERAGE - 24 HR. BY 7 DAYS
8 hour response, 4 hour repair
Roof
HVAC
UPS to Include Batteries and Charger (Batteries 10 year warranty)
DC Power Plant (Batteries 10 warranty)
Alarms
Fire Extinguishers
24 hour response, 2 day repair
Walls
Doors
All Seals
Floors
F-4.3 EXTENDED WARRANTY AND MAINTENANCE - 3 ADDITIONAL YEARS (NON 24HR
COVERAGE)
This (3)-three-year extended Warranty for non-24 hour coverage shall provide
on-site service by a factory authorized service provider. This is an optional
package, which the Commonwealth shall evaluate and determine its value prior to
contracting services from the contractor.
This package will include maintenance of all items installed. This maintenance
will follow the manufacturer's maintenance guidelines at the manufacturer's
recommended periodicity.
The coverage includes any defective equipment that becomes defective through
normal wear and usage.
COVERAGE - 8 HR. BY 5 DAYS
8 hour response, 8 hour repair
Roof
Electrical System
HVAC
Lights - Internal and External
UPS to Include Batteries and Charger (Batteries 10 year
warranty)
DC Power Plant (Batteries 10 warranty)
Alarms
Fire Extinguishers
24 hour response, 2 day repair
Walls
Doors
- --------------------------------------------------------------------------------
2147 PA Rider F Page 9 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
All Seals
Foundations
Floors
Cable Trays
Entrance Ports
Internal Grounding
- --------------------------------------------------------------------------------
2147 PA Rider F Page 10 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
F-5 EMERGENCY GENERATOR SYSTEM
The following section defines the Warranty for the Emergency Generator System.
F-5.1 2 YEAR WARRANTY
This (2)-two year Warranty shall provide on-site service by a factory authorized
service provider.
The coverage includes repair or replacement of any defective equipment, system
hardware and software that is initially delivered defective or becomes defective
through normal wear and usage.
All batteries shall be warranted for a period of TEN YEARS from date of system
acceptance.
COVERAGE - 24 HR. BY 7 DAYS
2 hour response, 4 hour repair
Emergency Generator and Controls
Emergency Generator Transfer Switch
Emergency Generator Batteries and Charger (Batteries Warranty
for 10 years)
Fuel Tank
F-5.2 EXTENDED WARRANTY AND MAINTENANCE - 3 ADDITIONAL YEARS (24 HR
COVERAGE)
This (3)-three-year extended Warranty shall provide on-site service by a factory
authorized service provider. This package will include maintenance of all items
installed. This maintenance will follow the manufacturer's maintenance
guidelines at the manufacturer's recommended periodicity.
This coverage includes any defective equipment that becomes defective through
normal wear and usage.
COVERAGE - 24 HR. BY 7 DAYS
8 hour response, 4 hour repair
Emergency Generator and Controls
Emergency Generator Transfer Switch
Emergency Generator Batteries and Charger (Batteries Warranty
for 10 years)
Fuel Tank
- --------------------------------------------------------------------------------
2147 PA Rider F Page 11 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
F-5.3 EXTENDED WARRANTY AND MAINTENANCE - 3 ADDITIONAL YEARS (NON 24HR
COVERAGE)
This (3)-three-year extended Warranty for non-24 hour coverage shall provide
on-site service by a factory authorized service provider. This is an optional
package, which the Commonwealth shall evaluate and determine its value prior to
contracting services from the contractor.
This package will include maintenance of all items installed. This maintenance
will follow the manufacturer's maintenance guidelines at the manufacturer's
recommended periodicity.
The coverage includes any defective equipment that becomes defective through
normal wear and usage.
COVERAGE - 8 HR. BY 5 DAYS
8 hour response, 8 hour repair
Emergency Generator and Controls
Emergency Generator Transfer Switch
Emergency Generator Batteries and Charger (Batteries Warranty
for 10 years)
Fuel Tank
- --------------------------------------------------------------------------------
2147 PA Rider F Page 12 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
F-6 TOWER SYSTEM
The following section defines the Warranty for the Tower System.
F-6.1 10 YEAR WARRANTY
This (10)-ten year Warranty shall provide on-site service by a factory
authorized service provider.
All lighting and controls shall be warranted for a period of TWO YEARS from date
of system acceptance.
The coverage includes repair or replacement of any defective equipment, system
hardware and software that is initially delivered defective or becomes defective
through normal wear and usage.
COVERAGE - 24 HR. BY 7 DAYS (FIRST TWO YEARS)
8 hour response, 4 hour repair
Tower
Cable Ladder
Waveguide Bridge
Lighting and Controls (Two Year Warranty)
24 hour response, 2 day repair
Climbing Ladder
COVERAGE - 8 HR. BY 5 DAYS (YEAR THREE THROUGH YEAR TEN)
8 hour response, 4 hour repair
Tower
Cable Ladder
Waveguide Bridge
24 hour response, 2 day repair
Climbing Ladder
F-6.2 EXTENDED WARRANTY AND MAINTENANCE - 3 ADDITIONAL YEARS (24 HR COVERAGE)
This (3)-three-year extended Warranty shall provide on-site service by a factory
authorized service provider. This package will include maintenance of all items
installed. This maintenance will follow the manufacturer's maintenance
guidelines at the manufacturer's recommended periodicity.
- --------------------------------------------------------------------------------
2147 PA Rider F Page 13 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
This coverage includes any defective equipment that becomes defective through
normal wear and usage.
COVERAGE - 24 HR. BY 7 DAYS
8 hour response, 4 hour repair
Lighting and Controls
F-6.3 EXTENDED WARRANTY AND MAINTENANCE - 3 ADDITIONAL YEARS (NON 24HR
COVERAGE)
This (3)-three-year extended Warranty for non-24 hour coverage shall provide
on-site service by a factory authorized service provider. This is an optional
package, which the Commonwealth shall evaluate and determine its value prior to
contracting services from the contractor.
This package will include maintenance of all items installed. This maintenance
will follow the manufacturer's maintenance guidelines at the manufacturer's
recommended periodicity.
The coverage includes any defective equipment that becomes defective through
normal wear and usage.
COVERAGE - 8 HR. BY 5 DAYS
8 hour response, 8 hour repair
Lighting and Controls
- --------------------------------------------------------------------------------
2147 PA Rider F Page 14 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
F-7 SITE WORK
The following section defines the Warranty for the Site Work.
F-7.1 5 YEAR WARRANTY
This (5)-five year Warranty provides on-site service by an authorized service
contractor.
The coverage includes any defectives in civil construction materials and
workmanship.
This Warranty excludes vegetation growth and acts of God.
COVERAGE - 24 HR. BY 7 DAYS
24 hour response, 24 hour repair
Tower Foundation
Shelter Foundation
Generator Foundation
Fuel Tank Foundation
Compound Construction (All related construction at the
compound)
Access Road Construction (All related construction of the
access road)
Site Grounding
Utility Construction
Fence Construction
F-7.2 EXTENDED WARRANTY AND MAINTENANCE - 3 ADDITIONAL YEARS (24 HR COVERAGE)
This (3)-three year extended Warranty provides on-site service by an authorized
service contractor.
The coverage includes any defectives in civil construction materials and
workmanship.
- --------------------------------------------------------------------------------
2147 PA Rider F Page 15 of 16 October 1, 1999
<PAGE>
RIDER F - WARRANTY AND MAINTENANCE
- --------------------------------------------------------------------------------
This Warranty excludes vegetation growth and acts of God.
COVERAGE - 24 HR. BY 7 DAYS
24 hour response, 24 hour repair
Tower Foundation
Shelter Foundation
Generator Foundation
Fuel Tank Foundation
Compound Construction (All related construction at the
compound)
Access Road Construction (All related construction of the
access road)
Site Grounding
Utility Construction
Fence Construction
F-7.3 EXTENDED WARRANTY AND MAINTENANCE - 3 ADDITIONAL YEARS (NON 24HR
COVERAGE)
This (3)-three year extended Warranty for non-24hr provides on-site service by
an authorized service contractor.
The coverage includes any defectives in civil construction materials and
workmanship.
This Warranty excludes vegetation growth and acts of God.
COVERAGE - 8 HR. BY 5 DAYS
24 hour response, 24 hour repair
Tower Foundation
Shelter Foundation
Generator Foundation
Fuel Tank Foundation
Compound Construction (All related construction at the
compound)
Access Road Construction (All related construction of the
access road)
Site Grounding
Utility Construction
Fence Construction
- --------------------------------------------------------------------------------
2147 PA Rider F Page 16 of 16 October 1, 1999
<PAGE>
RIDER H - Acceptance Testing
- --------------------------------------------------------------------------------
COMMONWEALTH OF PENNSYLVANIA
ROHN CONSTRUCTION, INC.
SITE DEVELOPMENT SYSTEM
RIDER H - ACCEPTANCE TESTING
- --------------------------------------------------------------------------------
2148 PA Rider H 1 of 8 October 1, 1999
<PAGE>
RIDER H - Acceptance Testing
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RIDER H - TABLE OF CONTENTS
---------------------------
<S> <C>
H-1 GENERAL OVERVIEW.................................................................................3
H-1.1 SUBSYSTEM ACCEPTANCE TESTING................................................................3
H-1.2 SUBSYSTEM INTEROPERABILITY ACCEPTANCE TESTING...............................................4
H-2 SUBSYSTEM ACCEPTANCE TESTING.....................................................................5
H-2.1 EQUIPMENT SHELTER SUBSYSTEM TESTS...........................................................5
H-2.2.1 SHELTER CONSTRUCTION VERIFICATION......................................................5
H-2.2.2 SHELTER INSTALLATION VERIFICATION......................................................5
H-2.2.3 SHELTER GROUND SUBSYSTEMS VERIFICATION.................................................5
H-2.2.4 PROVIDED ANCILLARY EQUIPMENT VERIFICATION..............................................5
H-2.2.5 SHELTER ELECTRICAL SUBSYSTEMS VERIFICATION.............................................5
H-2.2.6 HVAC SUBSYSTEMS VERIFICATION...........................................................5
H-2.2.7 ALARM SUBSYSTEMS VERIFICATION..........................................................6
H-2.2 EMERGENCY GENERATOR SUBSYSTEM TESTS.........................................................6
H-2.2.1 EMERGENCY GENERATOR INSTALLATION VERIFICATION..........................................6
H-2.2.2 EMERGENCY GENERATOR SUBSYSTEM..........................................................6
H-2.2.3 AUTOMATIC TRANSFER SWITCH..............................................................6
H-2.2.4 MANUAL TRANSFER SWITCH.................................................................6
H-2.3 TOWER SUBSYSTEM TESTS.......................................................................6
H-2.3.1 TOWER INSTALLATION VERIFICATION........................................................6
H-2.3.2 TOWER SUBSYSTEM TESTS..................................................................6
H-2.3.3 FOUNDATION SUBSYSTEM TESTS.............................................................7
H-2.4 SITE WORK SUBSYSTEM TESTS...................................................................7
H-2.4.1 SITE WORK INSTALLATION VERIFICATION....................................................7
H-2.4.2 ACCESS ROAD SUBSYSTEM TESTS............................................................7
H-2.4.3 SITE SUBSYSTEM TESTS...................................................................7
H-2.4.4 FOUNDATION SUBSYSTEM TESTS.............................................................7
H-2.4.5 GROUNDING SUBSYSTEM TESTS..............................................................7
H-2.4.6 FENCING SUBSYSTEM TESTS................................................................7
H-3 SUBSYSTEM INTEROPERABILITY ACCEPTANCE TESTING....................................................8
</TABLE>
- --------------------------------------------------------------------------------
2148 PA Rider H 2 of 8 October 1, 1999
<PAGE>
RIDER H - Acceptance Testing
- --------------------------------------------------------------------------------
H-1 GENERAL OVERVIEW
The purpose of the ACCEPTANCE TESTING is to demonstrate performance compliance
of all equipment, subsystems and system designs supplied by the Contractor as
required by the Contract. An Acceptance Test Plan Document (ATP) shall be
delivered within 30 days that details the testing procedures, processes and
performance criteria. The ATP shall contain a set of subsystem and system tests,
performance criteria, and installation standards as referenced in the RFP, the
Contractor's proposal, the Contract and Contract Riders. The criteria detailed
in the ATP shall be mutually agreed to between the Commonwealth and the
Contractor. This mutual agreement shall be documented as a result of the
Contractor submitting and the Commonwealth approving the ATP Deliverable. All
acceptance tests and installation verifications contained in the ATP shall be
performed by the Contractor and verified by the Commonwealth. These tests shall
provide verification compliance of equipment and system performance based upon
the RFP specifications and Rider B deliverables.
The ATP shall fully detail the specific tests and procedures as well as the time
and materials required for each test to be performed as part of the deployment
schedule. Quality control inspections shall insure that installations have been
completed in compliance with the methods and techniques specified in the RFP and
Statement of Work (Rider B.
The following test categories shall be defined and performed:
H-1.1 SUBSYSTEM ACCEPTANCE TESTING
Subsystem Acceptance Testing shall apply to the individual subsystem and its
ancillary equipment to include the following:
EQUIPMENT SHELTER SUBSYSTEM TESTS
Equipment Shelter Subsystem Tests shall apply to the Equipment Shelter and all
Ancillary Equipment.
EMERGENCY GENERATOR SUBSYSTEM TESTS
Emergency Generator Subsystem Tests shall apply to the Emergency Generator and
all Ancillary Equipment.
TOWER SUBSYSTEM TESTS
Tower Subsystem Tests shall apply to the Tower and all Ancillary Equipment.
SITE WORK SUBSYSTEM TESTS
Site Work Subsystem Tests shall apply to the Site Work and all Ancillary
Equipment.
- --------------------------------------------------------------------------------
2148 PA Rider H 3 of 8 October 1, 1999
<PAGE>
RIDER H - Acceptance Testing
- --------------------------------------------------------------------------------
H-1.2 SUBSYSTEM INTEROPERABILITY ACCEPTANCE TESTING
Subsystem Interoperability Acceptance Tests shall apply to the interoperability
of all provided subsystems.
The test procedures shall be completed, agreed upon and delivered within the
first 30 days from the date of a signed contract between the Commonwealth and
the Contractor. Any omissions of this Rider or the Contract shall yield to the
most rigorous requirements of RFP, its addenda, the PROPOSAL, or the Statement
of Work and Deliverables (Rider B).
The Commonwealth shall be notified 48 hours in advance of the Contractor
conducting any subsystem and system level tests. The Commonwealth or its
authorized representative(s) will monitor any or all testing, and performance or
installation verifications deemed appropriate. Regardless of the Commonwealth or
its authorized representative(s) presence, the Contractor shall document in
writing, the outcome of all testing and verifications listed in the ATP. Failure
of a test shall require re-testing at no expense to the Commonwealth. The
Commonwealth reserves the right to disapprove any test(s), test procedure(s), or
test result(s), which deviate from the approved test procedures. It shall be the
sole responsibility of the Contractor to remedy any such disapproved tests to
the satisfaction of, and at no additional cost to, the Commonwealth.
The results of the tests and the associated Punch List of outstanding items to
be compiled or re-tested shall be signed by the representatives of both the
Commonwealth and the Equipment Shelter Contractor and forwarded to the
Commonwealth for review and acceptance. The outstanding items shall be resolved
within seven (7) working days and these items shall be retested. If the
outstanding items have an effect on other previously performed tests then
re-testing shall also be required.
The system equipment shall be accurately measured with commonly available test
equipment, instruments and tools. The specific items of test equipment required
shall be listed in the ATP. Appropriate amount of test equipment shall be made
available to accommodate concurrent testing processes. All test equipment and
tools, designated for testing or other support functions shall be calibrated by
a Precision Measurement Equipment Laboratory within the valid calibration
period.
- --------------------------------------------------------------------------------
2148 PA Rider H 4 of 8 October 1, 1999
<PAGE>
RIDER H - Acceptance Testing
- --------------------------------------------------------------------------------
H-2 SUBSYSTEM ACCEPTANCE TESTING
This section shall categorize the deliverable of Subsystem Acceptance Testing.
Subsystem Acceptance Testing shall be performed on all equipment provided by the
Contractor at each site. All Subsystem Acceptance Testing shall be completed
prior to the Contractor receiving Final Site Acceptance.
H-2.1 EQUIPMENT SHELTER SUBSYSTEM TESTS
This section shall categorize the deliverable of the Equipment
Shelter System Tests. Equipment Shelter System Tests shall provide functional
performance verification of the Equipment Shelter System and provided Ancillary
equipment. This documentation shall be supplied as part of the Detailed Design
Document as described in Rider B. The tests to be performed shall include, but
not be limited to, the following items:
H-2.2.1 SHELTER CONSTRUCTION VERIFICATION
This section shall contain detailed information that defines
particular Field Tests to be performed to verify that the Equipment Shelter
meets the construction requirements of the RFP.
H-2.2.2 SHELTER INSTALLATION VERIFICATION
This section shall contain detailed information that defines
particular Field Tests to be performed to verify that the Equipment Shelter was
installed in a manner consistent with the requirements of the RFP.
H-2.2.3 SHELTER GROUND SUBSYSTEMS VERIFICATION
This section shall contain detailed
information that defines particular Field Tests to be performed to verify that
the Shelter Ground Subsystems meet the requirements of the RFP.
H-2.2.4 PROVIDED ANCILLARY EQUIPMENT VERIFICATION
This section shall contain detailed information
that defines particular Field Tests to be performed to verify that the Provided
Ancillary Equipment meets the requirements of the RFP.
H-2.2.5 SHELTER ELECTRICAL SUBSYSTEMS VERIFICATION
This section shall contain detailed
information that defines particular Field Tests to be performed to verify that
the Shelter Electrical Subsystems meets the requirements of the RFP.
H-2.2.6 HVAC SUBSYSTEMS VERIFICATION
This section shall contain detailed information
that defines particular Field Tests to be performed to verify that the HVAC
Subsystems meets the requirements of the RFP.
- --------------------------------------------------------------------------------
2148 PA Rider H 5 of 8 October 1, 1999
<PAGE>
RIDER H - Acceptance Testing
- --------------------------------------------------------------------------------
H-2.2.7 ALARM SUBSYSTEMS VERIFICATION
This section shall contain detailed information that defines
particular Field Tests to be performed to verify that the Alarm Subsystems meets
the requirements of the RFP.
H-2.2 EMERGENCY GENERATOR SUBSYSTEM TESTS
This section shall categorize the deliverable of the Emergency Generator System
Tests. Emergency Generator System Tests shall provide functional performance
verification of the Emergency Generator System and provided Ancillary equipment.
This documentation shall be supplied as part of the Detailed Design Document.
The tests to be performed shall include, but not be limited to, the following
items:
H-2.2.1 EMERGENCY GENERATOR INSTALLATION VERIFICATION
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Emergency Generator and provided
Ancillary Equipment were installed in a manner consistent with the requirements
of the RFP.
H-2.2.2 EMERGENCY GENERATOR SUBSYSTEM
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Emergency Generator Subsystems meets
the requirements of the RFP.
H-2.2.3 AUTOMATIC TRANSFER SWITCH
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Automatic Transfer Switch meets the
requirements of the RFP.
H-2.2.4 MANUAL TRANSFER SWITCH
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Manual Transfer Switch meets the
requirements of the RFP.
H-2.3 TOWER SUBSYSTEM TESTS
This section shall categorize the deliverable of the Tower System Tests. Tower
System Tests shall provide functional performance verification of the Tower
System and provided Ancillary equipment. This documentation shall be supplied as
part of the Detailed Design Document. The tests to be performed shall include,
but not be limited to, the following items:
H-2.3.1 TOWER INSTALLATION VERIFICATION
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Tower and provided Ancillary Equipment
were installed in a manner consistent with the requirements of the RFP.
H-2.3.2 TOWER SUBSYSTEM TESTS
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Tower Subsystems meets the requirements
of the RFP.
- --------------------------------------------------------------------------------
2148 PA Rider H 6 of 8 October 1, 1999
<PAGE>
RIDER H - Acceptance Testing
- --------------------------------------------------------------------------------
H-2.3.3 FOUNDATION SUBSYSTEM TESTS
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Foundation Subsystems meets the
requirements of the RFP.
H-2.4 SITE WORK SUBSYSTEM TESTS
This section shall categorize the deliverable of Site Work System Tests. Site
Work System Tests shall provide functional performance verification of
subsystems deployed at final site location(s). Deployed Subsystem Tests shall be
completed on applicable subsystems prior to commencement of Final System
Acceptance Tests. This documentation shall be supplied as part of the Detailed
Design Document. The tests to be performed shall include, but not be limited to,
the following items:
H-2.4.1 SITE WORK INSTALLATION VERIFICATION
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Site Work Systems were installed in a
manner consistent with the requirements of the RFP.
H-2.4.2 ACCESS ROAD SUBSYSTEM TESTS
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Access Road Subsystems meets the
requirements of the RFP.
H-2.4.3 SITE SUBSYSTEM TESTS
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Site Subsystems meets the requirements
of the RFP.
H-2.4.4 FOUNDATION SUBSYSTEM TESTS
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Foundation Subsystems meets the
requirements of the RFP.
H-2.4.5 GROUNDING SUBSYSTEM TESTS
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Grounding Subsystems meets the
requirements of the RFP.
H-2.4.6 FENCING SUBSYSTEM TESTS
This section shall contain detailed information that defines particular Field
Tests to be performed to verify that the Fencing Subsystems meets the
requirements of the RFP.
- --------------------------------------------------------------------------------
2148 PA Rider H 7 of 8 October 1, 1999
<PAGE>
RIDER H - Acceptance Testing
- --------------------------------------------------------------------------------
H-3 SUBSYSTEM INTEROPERABILITY ACCEPTANCE TESTING
This section shall categorize the deliverable of Subsystem Interoperability
Acceptance Testing. Subsystem Interoperability Acceptance Testing shall be
performed to verify the interoperability of all subsystems provided by the
Contractor at each site by verification of Quality Inspection Points (QIP). All
Subsystem Interoperability Acceptance Testing shall be performed to verify that
all provided subsystems meet the specified design/implementation requirements.
The following Quality Inspection Points shall be included as part of the
verification process during Acceptance Testing. These QIPs, at a minimum, shall
be included in the ATP.
>> Foundation Steel Installed
>> Concrete Slump Test and Pour
>> Back Fill Around Foundations
>> Grounding System Installed
>> Concrete Cure Strength Test (7day)
>> Power Connection to Tower for Aviation Warning Lights
>> All Shelter Systems Inspected and Tested
>> Generator Power Connected to Shelter and Tested
>> Final Grade of Site
>> Fencing and Gate Connected to Site Ground System
>> Acceptance Inspection of Site
>> Final Acceptance Inspection
- --------------------------------------------------------------------------------
2148 PA Rider H 8 of 8 October 1, 1999
<PAGE>
Exhibit 21.1
Subsidiaries
ROHN Industries, Inc.
6718 West Plank Road
Peoria, Illinois 61604
ROHN, Inc. (Alabama)
ROHN Products, Inc. (Indiana)
ROHN Construction, Inc. (Texas)
ROHN de Mexico S.A. de C.V. (Mexico)
Folding Carrier Corp. (Delaware)
ROHN Foreign Sales Corp. (Barbados)
ROHN Foreign Holdings, Inc. (Delaware)
UNR Realty, Inc. (Illinois)
Midwest Corp. (West Virginia)
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our reports included in this Form 10-K, into the Company's
previously filed Registration Statement Nos. 33-39422, 33-51732 and 33-55393.
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 30, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS AND NOTES THERETO INCLUDED IN THE COMPANY'S ANNUAL REPORT ON FORM
10-K FOR THE YEAR ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 27,634
<SECURITIES> 0
<RECEIVABLES> 35,297
<ALLOWANCES> 1,246
<INVENTORY> 25,885
<CURRENT-ASSETS> 91,741
<PP&E> 51,905
<DEPRECIATION> 24,815
<TOTAL-ASSETS> 121,848
<CURRENT-LIABILITIES> 29,968
<BONDS> 9,164
0
0
<COMMON> 534
<OTHER-SE> 79,882
<TOTAL-LIABILITY-AND-EQUITY> 121,848
<SALES> 141,896
<TOTAL-REVENUES> 142,844
<CGS> 109,055
<TOTAL-COSTS> 19,263
<OTHER-EXPENSES> 1,955
<LOSS-PROVISION> 245
<INTEREST-EXPENSE> 831
<INCOME-PRETAX> 11,740
<INCOME-TAX> 4,500
<INCOME-CONTINUING> 7,240
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,240
<EPS-BASIC> .14
<EPS-DILUTED> .14
</TABLE>
<PAGE>
EXHIBIT 99.1
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE SECURITIES REFORM ACT OF 1995
--------------------------------------------
We caution readers that the important factors set forth below, as well
as factors discussed in other documents filed by us with the Securities and
Exchange Commission, among others, could cause our actual results to differ
materially from statements contained in this report, our future filings with the
Securities and Exchange Commission, our press releases and oral statements made
by or on behalf of our Company. Forward-looking statements are not guarantees of
future performance and are subject to risks, uncertainties and other factors
(many of which are beyond our control) that could cause actual results to differ
materially from future results expressed or implied by such forward-looking
statements. The word "estimate", "project", "anticipate", "expect", "intend",
"believe", "target", and similar expressions are intended to identify
forward-looking statements. Among these statements are those concerning
- Our anticipated growth and business strategies
- Our expected growth in international markets
- Our ability to expand into new markets such as HDTV towers
- Anticipated trends and conditions in the telecommunications
industry
- Our future capital needs
- Our ability to compete, on time and on budget, large scale
projects, such as our Level III and State of Pennsylvania
projects, where the Company acts as a project Manager, as well
as a manufacturer.
- Our continued ability to decrease costs and maintain or
increase our margins
- Our ability to compete
The forward-looking statements regarding such matters are based certain
assumptions and analyses made by us in light of our management's experience and
its perception of historical trends, current conditions, and expected future
developments, as well as other factors it believes are appropriate in the
circumstances.
Important factors that could cause actual results to differ materially
from those implicit in our forward-looking statements include, without
limitation:
(1) the price and quality of similar or comparable communications
infrastructure equipment offered or to be offered by our
competitors; increased price-based competition could have a
significant impact on our margins;
(2) decreases in demand of, or continued softness levels of demand
for, our tower and enclosure products;
(3) fluctuations in demand for our products resulting in
inefficient labor force utilization;
2
<PAGE>
(4) difficulties in obtaining or retaining management or other
human resource competencies we need to achieve our business
objectives;
(5) failure to penetrate new markets, especially in Latin
America;
(6) general economic conditions in the United States and Latin
America;
(7) increases in domestic or international interest rates;
(8) the price and availability of certain raw materials used in
our production processes; and
(9) future domestic or international legislation or regulatory
actions relating to wireless communications services or
telecommunications generally.
3
