SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK-ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1998.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO _________
COMMISSION FILE NUMBER 0-9514
ANDREW CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 36-2092797
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
10500 W. 153RD STREET, ORLAND PARK, ILLINOIS 60462
(Address of principal executive offices and zip code)
(708) 349-3300
(Registrant's telephone number, including area code)
NO CHANGE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period as the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $.01 Par Value-- 82,842,178 shares as of January 31, 1999
<PAGE>
INDEX
ANDREW CORPORATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets--December 31, 1998 and
September 30, 1998.
Consolidated statements of income--Three months ended
December 31, 1998 and 1997.
Consolidated statements of cash flows--Three months ended
December 31, 1998 and 1997.
Notes to consolidated financial statements--December 31, 1998.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
Exh. 10(a)c(iii) Executive Severance Benefit Plan Agreement with John E. DeSana.
Exhibit 27 Financial Data Schedule for the period ended December 31, 1998.
SIGNATURES
<PAGE>
<TABLE>
ANDREW CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION>
December 31 September 30
1998 1998
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 43,346 $ 78,395
Accounts Receivable, less allowances
(Dec. $3,243; Sep. $3,026 ) 186,666 181,389
Inventories
Finished Products 58,029 56,736
Materials and Work in Process 112,266 111,057
------------ ------------
170,295 167,793
Miscellaneous Current Assets 10,950 9,229
------------ ------------
Total Current Assets 411,257 436,806
OTHER ASSETS
Cost in excess of net assets of businesses
acquired, less accumulated amortization
(Dec. $10,678; Sep. $10,291 ) 22,790 23,177
Investment in and Advances to Affiliates 61,473 59,691
Investments and other assets 9,194 9,267
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 15,818 15,507
Building 84,262 83,789
Equipment 310,941 301,757
Allowances for Depreciation 252,907 247,091
------------ ------------
158,114 153,962
------------ ------------
TOTAL ASSETS $ 662,828 $ 682,903
============ ============
<FN>
The balance sheet at September 30, 1998 has been derived from the audited
financial statements at that date.
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ANDREW CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION>
December 31 September 30
1998 1998
------------ ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes Payable $ 4,411 $ 13,897
Accounts Payable 28,775 32,867
Accrued expenses and other liabilities 16,439 17,098
Compensation and related expenses 16,561 32,424
Income taxes 25,554 15,835
Current portion of long-term debt 6,225 4,568
------------ ------------
TOTAL CURRENT LIABILITIES 97,965 116,689
DEFERRED LIABILITIES 13,878 14,044
LONG-TERM DEBT, less current portion 44,871 38,031
MINORITY INTEREST 5,530 5,361
STOCKHOLDERS' EQUITY
Common stock (par value, $.01 a share:
400,000,000 shares authorized; 102,718,210
shares issued, including treasury) 1,027 1,027
Additional paid-in capital 55,096 53,309
Accumulated other comprehensive income (9,430) (7,617)
Retained earnings 674,284 651,103
Treasury stock, at cost (19,840,683 shares
in Dec.; 18,210,250 shares in Sep.) (220,393) (189,044)
------------ ------------
500,584 508,778
------------ ------------
TOTAL LIABILITIES AND EQUITY $ 662,828 $ 682,903
============ ============
<FN>
The balance sheet at September 30, 1998 has been derived from the audited
financial statements at that date.
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
<CAPTION>
Three Months Ended
December 31
-------------------
1998 1997
-------- --------
<S> <C> <C>
Sales $218,573 $231,136
Cost of Products Sold 139,041 141,539
-------- --------
GROSS PROFIT 79,532 89,597
OPERATING EXPENSES
Research and development 5,631 7,071
Sales and administrative 38,915 38,437
-------- --------
44,546 45,508
-------- --------
OPERATING INCOME 34,986 44,089
OTHER
Interest expense 1,452 1,614
Interest income (2,023) (1,073)
Other (income) expense 435 616
-------- --------
(136) 1,157
-------- --------
PRETAX INCOME 35,122 42,932
Income Taxes 11,941 14,598
-------- --------
NET INCOME $ 23,181 $ 28,334
======== ========
BASIC AND DILUTED EARNINGS PER SHARE $ 0.28 $ 0.32
======== ========
AVERAGE SHARES OUTSTANDING
Basic 83,814 89,187
======== ========
Diluted 83,938 89,719
======== ========
<FN>
See Notes to Consolidated Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<CAPTION>
Three Months Ended
December 31
-----------------------
1998 1997
---------- ----------
<S> <C> <C>
CASH FLOW FROM OPERATIONS
Net Income $ 23,181 $ 28,334
ADJUSTMENTS TO NET INCOME
Restructuring costs 0 (232)
Depreciation and amortization 8,777 8,642
(Increase) decrease in accounts receivable (5,615) 4,723
(Increase) decrease in inventories (2,896) 5,194
Increase in miscellaneous
current and other assets (1,741) (1,916)
Decrease in accounts payable and other liabilities (5,320) (8,888)
Other 172 12
---------- ----------
NET CASH FROM OPERATIONS 16,558 35,869
INVESTING ACTIVITIES
Capital Expenditures (13,869) (12,505)
Acquisition of business, net of cash acquired 0 (3,000)
Investments in and advances to affiliates (1,835) 11,497
Proceeds from sales of property, plant
and equipment 578 92
---------- ----------
NET CASH USED FOR INVESTING ACTIVITIES (15,126) (3,916)
FINANCING ACTIVITIES
Proceeds from long-term borrowings 3,153 6,131
Payments on short-term borrowings (3,622) (3,546)
Payments to acquire treasury stock (36,249) (32,463)
Stock option plans 883 380
---------- ----------
NET CASH USED FOR FINANCING ACTIVITIES (35,835) (29,498)
Foreign currency translation adjustments (646) (2,530)
---------- ----------
DECREASE FOR THE PERIOD (35,049) (75)
Cash and equivalents at beginning of period 78,395 93,823
---------- ----------
CASH AND EQUIVALENTS AT END OF PERIOD $ 43,346 $ 93,748
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</FN>
</TABLE>
<PAGE>
ANDREW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended December 31,
1998 are not necessarily indicative of the results that may be expected for the
year ending September 30, 1999. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended September 30, 1998.
NOTE B--EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three Months Ended
December 31
-----------------------
1998 1997
--------- ---------
<S> <C> <C>
(In thousands, except per share amounts)
BASIC EARNINGS PER SHARE
Numerator:
Numerator for net income per share $23,181 $28,334
Denominator:
Weighted average shares outstanding 83,814 89,187
========= =========
Net income per share - basic $0.28 $0.32
========= =========
DILUTED EARNINGS PER SHARE
Numerator:
Numerator for net income per share $23,181 $28,334
Denominator:
Weighted average shares outstanding 83,814 89,187
Effect of dilutive securities:
Stock options 124 532
========= =========
83,938 89,719
========= =========
Net income per share - diluted $0.28 $0.32
========= =========
</TABLE>
Options to purchase 2,899,000 shares of common stock, at prices ranging from
$17.11 - $38.17 per share, were not included in the December 1998 computation of
diluted earnings per share, because the option's exercise price was greater than
the average market price of the common shares. Options to purchase 706,000
shares of common stock at prices ranging from $27.19 - $38.17 per share were not
included in the December 1997 diluted earnings per share calculation since the
option's exercise price was higher than the average market price of the common
shares.
<PAGE>
NOTE C--COMPREHENSIVE INCOME
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income". Statement No. 130 establishes new rules
for the reporting and display of comprehensive income and its components. The
adoption of this statement had no impact on the company's net income or
stockholders' equity. Statement No. 130 requires the company to report foreign
currency translation adjustments, which were previously reported as a separate
component of stockholders' equity, as a component of other comprehensive income.
Prior year financial statements have been reclassified to conform with the
requirements of Statement No. 130.
During the first quarter of fiscal years 1999 and 1998, total comprehensive
income amounted to $21,368,000 and $23,277,000, respectively.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Sales for the quarter ended December 31, 1998 were $218.6 million, 5% lower than
the same period last fiscal year. From a product standpoint, coaxial cable
sales, for the first quarter of fiscal year 1999, were down overall with
declines in domestic and Asian sales offsetting growth in Europe and Latin
America, compared to the same period last fiscal year. Terrestrial microwave
antenna sales increased overall, with gains in the U.S. and Europe offsetting
weakness in Asia and Latin America. Special antennas and other sales in fiscal
year 1999 increased overall compared to the first quarter of fiscal year 1998.
Sales of broadcast antennas, base station antennas and equipment buildings
showed growth in the first quarter of fiscal year 1999 compared to the same
period last fiscal year, while sales of earth station antennas, towers and
distributed communications systems were all down. Wireless accessories sales
decreased during the quarter, mainly in Europe.
From a market standpoint, wireless infrastructure sales, including cellular, PCS
and land mobile radio, were lower overall, with declines in the U.S., Canada and
Asia offsetting growth in Europe and Latin America. Common carrier and private
microwave sales, for the first quarter of fiscal year 1999, declined compared to
the same period last fiscal year. Broadcast and government sales declined
overall, despite growth in the broadcast market.
Gross margin, as a percentage of sales, was 36.4% for the quarter ended
December 31, 1998 compared to 38.8% for the first quarter of fiscal year 1998.
The 2.4% decrease was caused primarily by competitive market conditions
resulting in increased price pressure, which caused prices to be on average 4 to
5% lower than the comparable quarter last fiscal year. Product mix also
contributed to the decrease in gross margin as a percentage of sales.
Operating expenses as a percentage of sales for the quarter ended December 31,
1998 were 20.4% compared to 19.7% for the same period last fiscal year. Research
and development expenses for the first quarter of fiscal year 1999 were $5.6
million, a decrease of 20.4% compared to the same period last fiscal year. As a
percentage of sales, research and development expenses were 2.6% compared to
3.1% to the first quarter of fiscal year 1998. The decrease in research and
development expenses is due in part to the sale of the company's fiber optic
sensors business in fiscal year 1998. Sales and administrative expenses for the
first quarter of fiscal year 1999 remained relatively unchanged compared to the
same period last fiscal year. As a percentage of sales, sales and administrative
expenses were 17.8% for the first quarter of fiscal year 1999 compared to 16.6%
for the comparable quarter last fiscal year.
Interest expense for the quarter ended December 31, 1998 remained relatively
unchanged compared to the first quarter of fiscal year 1998. Interest income
increased $1.0 million or 88.5% primarily due to interest income received on
advances to the company's Russian joint ventures. Other expense for the first
quarter of fiscal year 1999 remained comparable to fiscal year 1998 levels.
<PAGE>
LIQUIDITY
Cash and cash equivalents decreased $35.0 million during the first quarter of
fiscal year 1999 to $43.3 million at December 31, 1998. Working capital totaled
$313.3 million compared to $320.1 million at September 30, 1998. Management
believes the current working capital level is adequate to meet the company's
normal operating needs. During the first quarter of fiscal year 1999, the
company generated $32.0 million in cash from operations, principally from
earnings of $23.2 million, which included non-cash charges of $8.8 million.
These cash inflows were partially offset by growth in accounts receivable and
inventory balances coupled with payments on outstanding accounts payable
balances and the payout of the company's fiscal year 1998 profit sharing
contribution, resulting in net cash from operations totaling $16.6 million for
the quarter. Days sales in billed receivables increased from 70 days at
September 30, 1998 to 73 days at December 31, 1998. The growth in days sales in
billed receivables is attributable to growth in receivable balances in Europe
and Asia.
Net cash used for investing activities during the first quarter of fiscal year
1999 was $15.1 million. Of the $13.9 million spent on capital additions, the
majority of the funds were used for equipment purchases and upgrades, purchases
of additional switches for the Russian telecommunications networks, the
company's continued investment in upgrading its business information systems and
plant expansion at the company's Orland Park facility.
Net cash used for financing activities totaled $35.8 million at December 31,
1998. During the quarter, the company repurchased 2.1 million shares of stock
for $36.2 million. As of December 31, 1998, the company has repurchased 9.1
million shares out of the 15.0 million shares authorized for repurchase at a
total cost of $183.3 million. In the first quarter of fiscal year 1999, the
company's Brazilian operations borrowed additional U.S. Dollar funds, at
significantly lower interest rates, under its long-term line of credit agreement
with Bank Austria Creditanstaldt in order to pay off its outstanding local
currency line of credit with ABN-AMRO totaling $3.6 million. Funds borrowed
under the Bank Austria Creditanstaldt agreement are due to be repaid in fiscal
year 2001.
<PAGE>
YEAR 2000
The "Year 2000 issue" arose because many existing computer programs use only the
last two digits to refer to a year. Therefore, these computer programs do not
properly recognize a year that begins with "20" instead of "19". If not
corrected, many computer applications could fail or create erroneous results. In
1994, the company instituted a program to routinely review its computer hardware
and software to increase operational efficiency. As an output from this effort,
the company purchased a new business system in 1994 that would not only meet the
company's needs but was also Year 2000 compliant. To date, the company has
completed testing of the system and is currently in the process of
implementing the system at all operating locations. The company expects to have
the system fully implemented at all major locations by April 1999. Amounts
expended or to be expended on information technology systems exclusively to
ensure year 2000 compliance are not expected to be material to the company's
consolidated results of operations or financial position.
Management has also initiated a comprehensive program to prepare the company's
manufacturing and facility systems for the year 2000. The company is actively
engaged in testing and fixing applications such as security, environmental,
desktop computers and production equipment to ensure they are Year 2000 ready.
The company currently does not expect remediation costs to be material nor does
it expect any significant interruption to its operations because of Year 2000
problems. Most of the company's products do not have Year 2000 readiness issues
because they do not contain date-sensitive functions.
The company is in the process of contacting all third parties with which it has
significant relationships, to determine the extent to which the company could be
vulnerable to failure by any of them to obtain Year 2000 compliance. Some of the
company's major suppliers, customers and financial institutions have confirmed
that they anticipate being Year 2000 compliant on or before December 31, 1999,
although many have only indicated that they have Year 2000 readiness programs.
To date, the company is not aware of any significant third parties with a Year
2000 issue that could materially impact the company operations, liquidity or
capital resources. However, the company has no means of ensuring that third
parties will be Year 2000 ready and the potential effect of third-party
non-compliance is currently not determinable.
The company has devoted and will continue to devote the resources necessary to
ensure that all Year 2000 issues are properly addressed. However, there can be
no assurance that all Year 2000 problems are detected. Further, there can be no
assurance that the company's assessment of its third party vendors and suppliers
will be accurate. Some of the potential worst-case scenarios that could occur
include: (1) corruption of data in the company's internal systems; (2) failure
of infrastructure services provided by government agencies; and (3) health,
environmental and safety issues relating to the company's facilities. If any of
these situations were to occur, the company's operations in certain areas could
be temporarily interrupted.
These interruptions could be more severe in countries outside the U.S. where the
company does a considerable amount of its business. The company intends to
develop Year 2000 contingency plans for continuing operations in the event such
problems arise. The company has operations around the world and is considering
shifting operations to different facilities if there are interruptions to
operations in particular countries or regions.
<PAGE>
RISK FACTORS
Safe Harbor for Forward-Looking Statements. We have made forward-looking
statements in this Form 10-Q under "Management's Discussion and Analysis of
Financial Condition and Results of Operations". In addition, other written or
oral statements which constitute forward-looking statements may be made by or
on behalf of the company. Although we have based these statements on the
beliefs and assumptions of our management and on information currently available
to them, they are subject to risks and uncertainties. We wish to ensure that
such statements are accompanied by meaningful cautionary statements, so as to
obtain the protections of the safe harbor established in the Private Securities
Litigation Reform Act of 1995. Accordingly, such statements are qualified by
reference to the discussion below of certain important factors that could cause
actual results to differ materially from those projected in such forward-looking
statements.
We caution the reader that the list of factors may not be exhaustive. We
operate in a continually changing business environment, and new risk factors
emerge from time to time. We cannot predict such risk factors, nor
can we assess the impact, if any, of such risk factors on our business or the
extent to which any factors may cause actual results to differ materially from
those projected in any forward-looking statements. Accordingly, you should not
put undue reliance on any forward looking statements. The company undertakes no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise. While Andrew
Corporation's management is optimistic about the company's long-term prospects,
the following risks and uncertainties, among others, should be considered in
evaluating its growth outlook.
Share Price Volatility. In the past years, the market price of our common stock
has been very volatile. We believe that the price has fluctuated in response to
such things as changes in growth rates of sales, net income and cash flow;
volatility in the U.S. stock market in general and in wireless equipment stocks
in particular; changes in analysts' estimates; and changes in general economic
conditions. We expect that the price of our common stock will fluctuate in the
future, perhaps substantially.
Fluctuations in Operating Results. Historically our quarterly and annual
revenues and operating results have fluctuated. We expect similar fluctuations
in the future. In addition to general economic and political conditions, the
following factors affect our revenues: timing of significant customer orders,
inability to forecast future revenue due to our just-in-time supply approach,
changes in competitive pricing, and wide variations in profitability by product
line. Since our quarterly and annual revenues and operating results vary, we
believe that period-to-period comparisons are not necessarily meaningful and you
should not rely on such comparisons as indicators of our future performance.
Intense Competition and Pricing Pressure. We believe that to be profitable in
the future we must respond effectively to increased competitive pressure. We
consider our principal competitive factors to include product quality and
performance, service and support, pricing and proprietary technology. Over the
past three years, in response to aggressive pricing practices by our
competitors, we have lowered prices for most of our products by 5 to 6% per
year. If we are unable to compete successfully, we may lose market share. We
expect that a significant loss in market share would have a material negative
effect on our business, financial condition and operating results.
Rapid Technological Change and Pressure to Develop New Products. We believe
that our future success depends on our ability to effectively anticipate and
respond to changes in technology, customer needs and industry standards. Failure
to anticipate changes, to adapt current products, to develop and introduce new
products on a timely basis, or to gain market acceptance for new products would
impair our competitiveness and could have a material negative impact on our
business and operating results.
<PAGE>
International Risk. Nearly half of our sales are outside the United States and
in recent years we have significantly increased our international manufacturing
capabilities. We anticipate that international sales will continue to represent
a substantial portion of our revenues and that continued growth and
profitability will require further international expansion. International
business risks include currency fluctuations, tariffs and other trade barriers,
longer customer payment cycles, adverse taxes, restrictions on the repatriation
of earnings, compliance with local laws and regulations, political and economic
instability, and difficulties in managing and staffing operations. In
particular, the recent deterioration of certain economies, such as Brazil, is
expected to have a negative impact on the financial results of our business in
these regions during 1999. We believe that international risk factors could
materially impact our future sales, financial condition and operating results.
Ability to Attract and Retain Qualified People. We believe that our future
success significantly depends on our ability to attract and retain highly
qualified personnel. We cannot be sure that we will be able to attract and
retain key personnel in the future. We believe our inability to do so could
negatively impact our business, financial condition and operating results.
Year 2000 Compliance. We are working toward bringing our business,
manufacturing and facilities systems into Year 2000 compliance. We also are
contacting third parties with whom we have significant relationships to
determine our vulnerability to their failure to achieve Year 2000 compliance.
Our failure to detect and address our own third-party Year 2000 problems could
have a significant negative impact on our business, financial condition and
results of operations.
Dependence on Intellectual Property Rights. Others could obtain or use our
intellectual property without our permission, develop equivalent or superior
technology, or claim that we have infringed on their intellectual property
rights. We rely on a combination of patent, copyright, trademark and trade
secret laws, and non-disclosure and non-competition agreements to protect our
rights. We are dependent on our intellectual property rights as a whole;
however, we do not believe that the loss of exclusivity with respect to any one
right would have a significant negative impact on our business, financial
condition or operating results.
Impact of Governmental Regulation. We are not directly regulated in the U.S.,
but most of our customers and the telecommunications industry generally are
subject to Federal Communications Commission regulation. We believe that
regulatory changes could have a significant negative effect on our business and
operating results by restricting our customers' development efforts, making
current products obsolete or increasing competition. Internationally, where many
of our customers are government owned and operated entities, we also are at risk
of changes in economic policy and communications regulation. In addition, our
joint ventures in Russia and Mexico require telecommunications licenses, which
may limit or otherwise affect the operations of the ventures.
<PAGE>
PART II--OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
a) EXHIBIT INDEX
Exhibit No. Description
- -----------------------------
10.(a)c(iii) Executive Severance Benefit Plan
Agreement with John E. DeSana
27 Financial Data Schedule
December 31, 1998
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended December 31, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date February 16, 1999 /s/ F. L. English
---------------------- -----------------
F. L. English
Chairman, President and Chief
Executive Officer
Date February 16, 1999 /s/ C. R. Nicholas
---------------------- ------------------
C. R. Nicholas
Executive Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- -----------------------------
10.(a)c(iii) Executive Severance Benefit Plan
Agreement with John E. DeSana
27 Financial Data Schedule
December 31, 1998
ANDREW CORPORATION
EXECUTIVE SEVERANCE BENEFIT PLAN AGREEMENT
THIS AGREEMENT made as of 1 January 1999, between Andrew Corporation,
a Delaware corporation (the "Company"), and John E. DeSana (the "Executive").
W I T N E S S E T H:
1. Participation. The Executive has been designated as a participant
in the Andrew Corporation Executive Severance Benefit Plan (the "Plan") by the
Compensation Committee of the Board of Directors of the Company.
2. Plan Benefits. The Executive agrees to be bound by the provisions
of the Plan, including those provisions which relate to his eligibility to
receive benefits and to the conditions affecting the form, manner, time and
terms of benefit payments under the Plan, as applicable. The Executive
understands and acknowledges that his benefit may be reduced pursuant to
Section 10 of the Plan in order to eliminate any "excess parachute payments" as
defined under Section 4999 of the Internal Revenue Code of 1954, as amended.
The Executive may elect to receive his Plan benefits in installment payments,
as provided under Section 9 of the Plan, by signing the statement included on
page three of this Agreement. The Executive may make an election to receive
installment payments, or may revoke any such election, at any time prior to the
date which is ten days prior to the date on which a Change in Control is deemed
to have occurred; provided that any election subsequent to the execution of this
Agreement or any revocation shall be in writing and shall be subject to the
approval of the Compensation Committee.
3. Federal and State Laws. The Executive shall comply with all
federal and state laws which may be applicable to his participation in this
Plan, including without limitation, his entitlement to, or receipt of, any
benefits under the Plan. If the Executive is subject to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 as amended and in effect at
the time of any Plan benefit payment, he shall comply with the provisions of
Section 16(b), including any applicable exemptions thereto, whether or not such
provisions and exemptions apply to all or any portion of his Plan benefit
payments.
4. Amendment and Termination. The Board of Directors may amend,
modify, suspend or terminate the Plan or this Agreement at any time, subject to
the following:
(a) without the consent of the Executive, no such amendment,
modification, suspension or termination shall reduce or diminish
his right to receive any payment or benefit then due and payable
under the Plan immediately prior to such amendment, modification,
suspension or termination; and
(b) in the event of a Change in Control pursuant to Section 5 of the
Plan, no such amendment, modification, suspension or termination
of benefits, and eligibility therefore, will be effective prior to
the expiration of the 48-consecutive-month period following the
date of the Change in Control.
<PAGE>
5. Beneficiary. The Executive hereby designates his primary
beneficiary(ies) as Patricia J. DeSana, who will receive any unpaid benefit
payments in the event of the Executive's death prior to full receipt thereof.
In the event that the primary beneficiary(ies) predeceases the Executive, his
unpaid benefits shall be paid to Stephanie Marie Chang as secondary
beneficiary(ies). If more than one primary or secondary beneficiary has been
indicated, each primary beneficiary or, if none survives, each secondary
beneficiary will receive an equal share of the unpaid benefits unless the
Executive indicates specific percentages next to the beneficiaries' names.
Except as required by applicable law, the Executive's beneficiary or
beneficiaries shall not be entitled to any medical, life or other insurance-type
welfare benefits.
6. Arbitration. The Executive agrees to be bound by any determination
rendered by arbitrators pursuant to Section 11 of the Plan.
7. Employment Rights. The Plan and this Agreement shall not be
construed to give the Executive the right to be continued in the employment of
the Company or to give the Executive any benefits not specifically provided by
the Plan.
IN WITNESS WHEREOF, Andrew Corporation has caused this Agreement to be
executed and the Executive has executed this Agreement, both as of the day and
year first above written.
ANDREW CORPORATION
/s/ John E. DeSana By: /s/ F.L. English
__________________________ ______________________
John E.DeSana F. L. English
Group President Chairman, President and
HELIAX7 Cables and Accessories Chief Executive Officer
ELECTION OF INSTALLMENTS
I hereby elect to receive my Plan benefits in installment payments
pursuant to the terms of Section 9 of the Plan.
/s/ John E. DeSana
_________________________________________
John E. DeSana
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