ALPINE GROUP INC /DE/, 10-K, 1997-07-29

ALPINE GROUP INC /DE/
10-K, 1997-07-29
DRAWING & INSULATING OF NONFERROUS WIRE

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DRAFT 7/24/97
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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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 APRIL 30, 1997

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to

COMMISSION FILE NUMBER 1-9078

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THE ALPINE GROUP, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
DELAWARE
(State or other 22-1620387
jurisdiction of (I.R.S. Employer
incorporation or Identification No.)
organization)

1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
(Address of principal (Zip code)
executive offices)
</TABLE>

Registrant's telephone number, including area code 212-757-3333

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Securities registered pursuant to Section 12(b) of the Act:

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<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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<S> <C>
Common Stock, par value $.10 per share............................... New York Stock Exchange
</TABLE>

Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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. / /

At July 28, 1997, the registrant had 16,889,781 shares of common stock, par
value $.10 per share, outstanding, and the aggregate market value of the
outstanding shares of voting stock held by non-affiliates of the registrant on
such date was $165.5 million, based on the closing price of $11.5 per share of
such common stock on such date.

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DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement for the Company's Annual Meeting of Stockholders in Part III of
this Form 10-K.
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PART I

ITEM 1. BUSINESS

GENERAL

The Alpine Group, Inc. (together with its subsidiaries, unless the context
otherwise requires, "Alpine" or the "Company") is an industrial company
principally engaged in the manufacture and sale of telecommunications wire and
cable and the manufacture and supply of refractories products and services.
Alpine has positioned itself as a major participant in each of these industries.

Alpine was incorporated in New Jersey on May 7, 1957 and reincorporated in
Delaware on February 3, 1987. Its principal executive offices are located at
1790 Broadway, New York, New York 10019-1417 and its telephone number is (212)
757-3333.

SUPERIOR TELECOM INC. The Company's 50.1% owned subsidiary, Superior
TeleCom Inc. ("Superior TeleCom"), is engaged in the manufacture and sale of
copper wire and cable for the telecommunications industry, and, to a lesser
degree, the manufacture and sale of data communications and other electronics
products for military and commercial applications. Alpine entered the copper
telecommunications wire and cable industry with the acquisition (the "Superior
Acquisition") in 1993 of Superior Telecommunications Inc. ("Superior"), formerly
Superior TeleTec Inc. Following this acquisition, Alpine became one of the two
largest North American manufacturers of copper telecommunications wire and cable
products with the May 1995 acquisition (the "Alcatel Acquisition") of the U.S.
and Canadian copper telecommunications wire and cable business (the "Alcatel
Business") of Alcatel NA Cable Systems, Inc. and Alcatel Canada Wire, Inc.
(collectively, "Alcatel NA").

On October 2, 1996, the Company completed a reorganization (the
"Reorganization") of its wholly-owned subsidiaries, Superior and DNE Systems
Inc. ("DNE"). In connection with the Reorganization, (i) Superior issued the
Company 20,000 shares of Superior's 6% Cumulative Preferred Stock (the "Superior
Preferred Stock"), (ii) Superior and DNE declared a dividend payable to the
Company, (iii) the Company contributed all of the common stock of both Superior
and DNE to its newly-formed wholly-owned subsidiary, Superior TeleCom and (iv)
Superior TeleCom entered into a revolving credit facility (the "Superior Credit
Facility") (see Note 5 to Alpine's consolidated financial statements), the
proceeds of which were used to repay the intercompany debt then owed to the
Company and to pay a portion of the aforementioned declared dividend.

On October 17, 1996, Superior TeleCom sold 6,000,000 shares of its common
stock in an initial public offering at $16.00 per share (the "Offering").
Superior TeleCom used the net proceeds of the Offering to fund the repayment of
a portion of the amount outstanding under the Superior Credit Facility and to
pay to the Company the balance of the previously declared dividend.

In November 1996, the underwriters of the Offering exercised their
overallotment option to purchase an additional 900,000 shares of Superior
TeleCom common stock at $16.00 per share. Superior TeleCom used a portion of the
net proceeds to repurchase 450,000 shares of its common stock, with the balance
of such proceeds being used to reduce the amount outstanding under the Superior
Credit Facility. The Superior TeleCom common stock repurchased was then
transferred to the Company in exchange for 8,055 shares of the Superior
Preferred Stock. After giving effect to the Offering and related transactions,
the Company's ownership interest in Superior TeleCom was reduced to 50.1%.

In connection with the Reorganization, the Company entered into an agreement
(the "Services Agreement") with Superior TeleCom. Pursuant to the Services
Agreement, the Company agreed to provide certain financial, audit and
accounting, corporate finance and strategic planning, legal, treasury, insurance
and administrative services to Superior TeleCom in return for an annual fee in
addition to reimbursement of actual costs and expenses incurred in connection
with the Company's provision of such services. Such annual fee initially was set
at the rate of $925,000 per year. As of May 1, 1997, the Services Agreement was
amended to increase such annual fee to $2.7 million per year, which is estimated
to reflect commercially reasonable costs for the services provided.
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Also, in connection with the Reorganization, Alpine refinanced a substantial
portion of its outstanding debt, which resulted in, among other things, the
redemption, at a premium, of $131.9 million in face amount of the Company's
12.25% Senior Secured Notes (the "Senior Notes").

REFRACO INC. The Company's wholly-owned subsidiary, Refraco Inc.
("Refraco"), is a worldwide manufacturer and supplier of refractories products
and services to the iron and steel, cement, aluminum and glass industries.
Refractories are consumable heat-resistant products used as insulation on
surfaces exposed to high temperature processes. Alpine entered the refractories
industry with its December 1994 acquisition (the "Adience Acquisition") of
Adience, Inc. ("Adience"), one of the largest domestic manufacturers and
installers of specialty refractory products. Alpine became the sixth largest
worldwide manufacturer and supplier of refractories products and services with
the Company's April 1997 acquisition (the "Refraco UK Acquisition") of Hepworth
Refractories (Holdings) Limited ("HRHL"), a subsidiary of Hepworth PLC with
manufacturing operations in Great Britain, Belgium, France and Canada and
supported by a global distribution network (collectively, the "Hepworth
Business").

As part of the Refraco UK Acquisition, the Company incorporated Refraco and
contributed to it all the capital stock of Adience. A newly-formed wholly-owned
subsidiary of Adience, Refraco Holdings Limited, a U.K. corporation ("RHL"),
acquired all the capital stock of HRHL to effect the Refraco UK Acquisition.
Following the consummation of the Refraco UK Acquisition, the Company changed
the name of HRHL to Refraco (UK) Limited ("Refraco UK").

The Refraco UK Acquisition was financed with initial borrowings under a
$130.0 million Senior Secured Facility entered into by Adience, Refraco, Refraco
UK and certain subsidiaries, and a $60.0 million Secured Floating Rate Loan
Facility entered into by Refraco. See Note 6 to Alpine's consolidated financial
statements.

TELECOMMUNICATIONS WIRE AND CABLE BUSINESS

COPPER TELECOMMUNICATIONS WIRE AND CABLE INDUSTRY OVERVIEW

Superior is a leading domestic manufacturer of copper telecommunications
wire and cable products for the local loop segment of the telecommunications
network in the United States. Copper telecommunications wire and cable is the
most widely used medium for transmission in the local loop portion of the
telecommunications infrastructure, which comprises approximately 160 million
residential and business access lines in the United States. To a lesser degree,
Superior is involved in the manufacture and sale of high speed data
communication copper wire products, including unshielded twisted pair ("UTP")
wire for on-premise applications, such as in computer networks. Superior's
products are sold primarily to the regional Bell operating companies ("RBOCs")
and the two largest independent telephone companies under multi-year supply
arrangements.

Superior has led a recent consolidation in the copper telecommunications
wire and cable industry by acquiring the Alcatel Business and certain other
assets. Through these acquisitions, as well as through internal capacity
expansion, Superior increased its annual production capacity from 28 billion
conductor feet ("bcf") in one plant to an aggregate of 97 bcf in four
geographically dispersed plants. Due to the industry-wide consolidation that has
occurred over the past three years, total industry capacity has been reduced,
the number of manufacturers has declined and the size of the remaining
manufacturers has increased. As a result, the Company has become a key supplier
of copper wire and cable to six of the RBOCs and to the two largest independent
telephone companies and believes that it will continue to be able to compete
effectively as its major customers consolidate their vendor base in order to
stabilize their sources of supply and ensure timely delivery of quality products
on a consistent basis. The Company estimates that its share of domestic copper
telephone cable and wire production was approximately 35% for fiscal 1997.

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The Company believes that copper will continue to be the transmission medium
of choice in the local loop due to factors such as: the installed base of copper
cable in the local loop representing an investment of over $150 billion that
must be maintained by the RBOCs and other local telephone companies; the lower
installation and maintenance costs of copper compared to optical fiber and other
media; technological advancements that increase the bandwidth of the installed
local loop copper network, such as integrated services digital networks
("ISDN"), high-bit-rate digital subscriber lines ("HDSL") and asymmetric digital
subscriber lines ("ADSL"), which allow the continued use of copper as the
transmission medium for the expanded voice, data, video and multi-media uses
demanded by customers; the increasing demand for enhanced services, which,
because of technological advances, can be supported by a copper-based local
loop; and the increasing demand for multiple residential access lines.

Demand for copper telecommunications wire and cable is dependent on several
factors, including the rate at which new lines are installed in homes and
businesses; the level of spending for highways, bridges and other parts of the
infrastructure, which often necessitates installation of telecommunications
cable; and the level of general maintenance spending by telephone companies. The
installation of new access lines is, in turn, partially dependent on the level
of new construction and, increasingly in recent years, on demand for second
telephone lines and lines dedicated to facsimile machines and computer modems
which are used for, among other purposes, business communications and access to
the Internet.

A substantial majority of Superior's products sold in the United States are
purchased by the RBOCs and other domestic telephone companies. Prior to the
break-up of AT&T in 1984, AT&T was the sole supplier of copper
telecommunications wire and cable products to its operating companies. However,
after the break-up, the RBOC market became open to all suppliers. It is
estimated that the RBOCs purchase approximately 60% of the copper
telecommunications distribution wire and cable purchased by U.S. telephone
companies, while the two major independent telephone holding companies (GTE
Corporation and North Supply (Sprint) Corporation) purchase approximately 21%
and over 1,200 small local telephone operating companies purchase the remainder.

The Company believes it is well-positioned to take advantage of the rapid
changes in the telecommunications industry as the demand for voice, data and
video services over the local loop increases dramatically and new technologies
and products are developed to enable the local loop to satisfy that demand.

INSTALLED BASE. The local loop is the segment of the telecommunications
network that connects the customer's premises to the nearest telephone company
switching center or central office. It comprises approximately 160 million
residential and business access lines in the United States. The installed base
of copper wire and cable in the local loop represents an investment of over $150
billion that must be maintained by the RBOCs and other local telephone
companies. Although other media, such as fiber optic cable, are used for trunk
lines between central offices, substantially all local loop lines continue to be
copper-based. Local loop lines are continually maintained and replaced,
providing a steady demand for copper wire and cable.

LOWER INSTALLATION COSTS AND EASE OF REPAIR. The Company believes that in
the local loop, copper has significantly lower installation costs and is easier
to repair than other media primarily because it does not require an additional
power source and other electronics. Installation of fiber optic cable is both
capital and labor intensive, and deployment of fiber optic cable generally has
been limited to trunk and feeder lines and wide area loop configurations.

TECHNOLOGICAL ADVANCES. Copper dominance in the local loop continues to be
supported by technological advances that expand the use and bandwidth of the
installed local loop copper network. These advances include ISDN and digital
subscriber line ("DSL") technologies, including HDSL and ADSL. These
technologies permit telecommunications carriers, private network owners and
end-user consumers

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to employ the existing copper wire and cable infrastructure for high speed and
bandwidth-intensive applications.

ISDN is a set of digital transmission signaling protocols and interfaces
that provides end-to-end digital connectivity to support a wide range of
services. ISDN service over the existing copper local loop is rapidly expanding
due to the increased demand for digital telecommunications applications such as
remote office connectivity and Internet access. The Company believes that
globally-standardized ISDN service will become a widely-used vehicle for digital
network services, including Internet access, and that it will support the
continued dominance of copper wire and cable in the local loop.

Another technological advance is DSL technology. DSL technology, which
includes ADSL and HDSL, has increased the bandwidth capacity of copper wire and
cable products in the local loop through sophisticated multiplexing and
modulation techniques. DSL technology currently expands the bandwidth capacity
of twisted pair copper wire in the local loop from 1.5 million bits per second
("bps") (over a T-1 line) to over 6 million bps.

ADSL transmits interactive video and data services including video on
demand, on-line shopping, banking and other data services, as well as Internet
access, over the existing copper-based local loop, requiring substantially less
investment of capital and labor than alternatives such as installing fiber optic
or hybrid fiber optic/coaxial cable products in the local loop. ADSL is
asymmetric in that it is high bandwidth in one direction and lower bandwidth in
the other. This arrangement is primarily intended to support one way high
bandwidth applications, such as the provision of broadcast quality video into
the home. It is easily installed and portable, relatively inexpensive compared
to fiber optic or coaxial cable and can be deployed for an individual user
anywhere in the network in a short time period.

HDSL, as opposed to ADSL, derives its name from the high bandwidth that is
transmitted in both directions over twisted pair copper wire. HDSL provides
advanced digital voice, data and video services to local loop customers with a
high level of signal quality over the existing copper infrastructure while
doubling the distance a digital signal can travel without the need for
amplification or repeaters. In contrast to fiber optic cable applications, HDSL
uses a minimal amount of power on the remote end of the line, making the
traditional power supplied by copper telecommunications wire sufficient for its
use. In corporate campuses of office buildings, several satellite locations can
be linked with HDSL quickly and inexpensively using existing copper wire to
produce the equivalent of fiber optic quality transmission.

DEMAND FOR NEW SERVICES. Technological advances, regulatory developments
and increased competition among service providers have accelerated the demand
for and introduction of new bandwidth intensive telecommunication services.
These services include integrated voice and data, broadcast and conference
quality video, Internet and on-line data services access, high speed local area
network ("LAN") to LAN connectivity, collaborative network processing and other
specialized, bandwidth-intensive applications.

DEMAND FOR MULTIPLE RESIDENTIAL ACCESS LINES. An increasing number of U.S.
households are installing additional access lines for multiple telephone lines,
facsimile machines, access to the Internet, home offices and other purposes.
Additional access lines increase the demand for copper telecommunications wire
and cable in the local loop.

BUSINESS STRATEGY

The Company believes that the ongoing alignment of productive capacity with
market demand, technological developments that have enhanced the ability of
end-users to utilize the existing copper wire and cable telecommunications
infrastructure for high speed data, video and imaging transmissions, industry
consolidation and Superior's emphasis on new, higher margin products will
continue to strengthen Superior's competitive position, profitability and cash
flow.

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Superior's strategy in the telecommunications products business is to (i)
respond to the current and changing needs of its customers' communications
networks and continue to expand its business in the local loop by continuing to
develop, manufacture and sell a full line of telecommunications wire and cable
products (including hybrid coaxial/copper and fiber/copper products); (ii)
expand its product lines to include transmission media such as data cable,
including expanded UTP product capabilities and fiber optic cable for LAN
applications; (iii) take advantage of strategic acquisition opportunities in
data cable, the local loop and its other markets; and (iv) expand its
international business through increased export sales and the establishment of
joint ventures, acquisitions or similar arrangements and otherwise increase its
presence in international markets.

SUPERIOR'S COPPER TELECOMMUNICATIONS WIRE AND CABLE PRODUCTS

Superior manufactures a wide variety of copper telecommunications wire and
cable products. Cable is the transmission medium in the part of the local loop
from a local telephone company's central office to a subscriber's property line;
whereas wire is the transmission media that begins at the subscriber's property
line and runs to the subscriber's access device, which may be either outside or
on-premises. Superior's products include distribution cable and wire and
premises wire products, ranging in size from a single twisted pair wire to a
4,200 pair cable. These products are variously configured for aerial and
underground use in the local loop and for on-premise applications.

The basic unit of virtually all copper telecommunications wires and cables
is the "twisted pair," a pair of insulated wires twisted around each other. Both
wires in the pair are used to complete the telecommunications connection.
Twisted pairs are bundled together to form telecommunications wires and cables.

Superior's copper telecommunications cable products range in size and are
differentiated by design variations depending on where the cable is to be
installed. Cable products used for direct underground burial are designed to be
water resistant and are filled with compounds to prevent moisture from getting
into the cable structure. The individual copper wires in these cables utilize
either a solid polyethylene or polypropylene insulation or cellular polyethylene
covered with a solid polyethylene skin. Cable products used for underground duct
or aerial applications, where water penetration is not a major concern, are
designed with solid polyethylene insulation and no filling compound. The copper
telecommunications cable products normally have metallic shields for mechanical
protection and electromagnetic shielding of the copper wires, as well as an
outer polyethylene jacket.

Superior's distribution wire products range in size from a single twisted
pair to a six-pair product. Similar to copper cable products, distribution wire
products are designed for both direct burial and aerial applications and are
also manufactured in a variety of designs, including a number of different
metallic shield configurations and several different jacketing materials.

Superior's copper telecommunications wire for interior use, or premises
wire, generally ranges in size from a single twisted pair to a twenty-five pair
product. Premises wire is used within buildings to connect telecommunications
devices (telephones, facsimile machines and computer modems) to the
telecommunications network and, in commercial buildings, to establish LANs.

An important element of Superior's strategy in the wire and cable business
is to expand into performance-enhanced copper-based wire products that provide
opportunities for higher growth and higher margins than Superior's current
product lines. Superior will attempt to sell a broader range of wire and cable
products to its existing customers. As described below, Superior has introduced
and is in the process of introducing a number of new products in this regard.

In fiscal 1995, Superior introduced a line of UTP copper wire products
designed for high-speed data transmission across private networks. UTP, which
was first introduced into the market in the early 1990s as an alternative to
fiber optic cable, has become the medium of choice for distribution applications
in private data network communications due to its (i) significant installation
and maintenance cost advantages over

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fiber optic cable and (ii) performance capabilities, which are sufficient to
address a substantial portion of the market for private data networks requiring
high-speed transmission rates.

Superior also has developed, or is in the process of developing, a number of
other new products, including (i) hybrid products combining twisted-pair copper
wires with coaxial or fiber optic cable for distribution service, (ii) aerial
drop non-metallic support products, which utilize fiberglass yarn and
twisted-pair copper wires for distribution service, (iii) riser products, which
are copper wires used inside high-rise buildings or telephone central offices
for vertical connections providing voice and data transmissions, and (iv) fiber
optic cables used for trunking and distribution applications in LANs. Sales to
date of these products have not been material.

MARKETING AND DISTRIBUTION

During fiscal 1997, 91.1% of Superior's net sales were to the RBOCs and the
two major independent telephone companies, 7.7% were sold to other telephone
companies in the United States and Canada, construction companies and others and
the remaining 1.2% were sold outside the United States and Canada.

Superior sells to the RBOCs and the two major independent telephone
companies on a direct basis through a sales force of five salespersons. The
remainder of Superior's products are sold through distributors, original
equipment manufacturers and sales representatives and agents. The Company
believes that there will be opportunities for international expansion of its
wire and cable business, either through export sales or the establishment of
joint ventures or similar arrangements.

Superior's sales to telephone companies are generally pursuant to multi-year
supply agreements in which the customer agrees to have Superior supply certain
of the customer's wire or cable needs as the primary supplier during the term of
the agreement. Prior to awarding a contract, customers forecast their needs and
manufacturers, such as Superior, bid and quote prices based upon the forecasted
order amount, although customers are not obligated to purchase the forecasted
amount or any minimum amount. Superior currently has multi-year agreements with
respect to certain of its wire and cable products with six of the seven RBOCs
and with the two largest independent telephone companies. During fiscal 1997,
sales to North Supply Corporation (Sprint), NYNEX Corporation, Bell South
Corporation, GTE Corporation and SBC Corporation accounted for 19.2%, 17.2%,
15.5%, 14.4% and 14.3% of Superior's net sales, respectively. No other single
customer accounted for more than 10% of Superior's net sales. Additionally, as
is customary in the industry, Superior's sales to customers other than large
telephone companies are primarily on the "spot" market on the basis of
short-term purchase orders. In recent years these sales have declined as a
proportion of total sales.

MANUFACTURING

Copper rod is the base component for most of Superior's wire and cable
products. The manufacturing processes for these products require that the copper
rod be drawn and insulated. Superior purchases copper rod of 5/16" diameter from
third-party suppliers. Superior then "draws" the wire to one of four American
wire gauges ("AWGs"). Wire drawing is the process of reducing the conductor
diameter by pulling the copper rod through a converging die until the specified
AWG is attained. Since the reduction is limited by the breaking strength of the
conductor, this operation is repeated several times internally within the
machine. As the wire becomes smaller, less pulling force is required. Therefore,
machines operating in specific size ranges are required. Take-up containers or
spools are generally large, allowing one person to operate several machines.
Individual copper wires are then typically insulated with plastic compounds
through an extrusion process. Extrusion involves the feeding, melting and
pumping of a compound through a die to shape it in final form as it is applied
to insulate the wire. Superior uses five primary types of insulating material
compounds: high density polyethylene, high density cellular polyethylene foam,
flame

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retardant polyethylene, fluoropolymers and polyvinyl chloride. Superior
purchases these insulating compounds from a variety of suppliers.

Superior's products also require that the wire be "twisted" so that two
insulated single conductors are combined to create a twisted pair. Superior's
products are often "cabled" or "stranded" so that multiple twisted pairs of
insulated wires are combined to form larger units of multiple pair cables.
Typically, cabling or stranding is done only on large (i.e., 25 or more) numbers
of pairs. Smaller numbers of pairs are not cabled, but are sent directly for
jacketing.

Once insulated, Superior's copper wire and cable products are "jacketed" or
covered through the application of filling, flooding and shielding compounds to
the insulated wire. Products to be installed underground are protected by
metallic shielding (e.g., aluminum and steel) for electrical and mechanical
isolation and by plastic compounds of polyvinyl chloride or polyethylene for
protection against water and other sources of corrosion and interference. After
the wire and cable products are fabricated, they are packaged and shipped either
directly to customers or to distributors.

RAW MATERIALS

The principal raw materials used by Superior in the manufacture of its wire
and cable products are copper, aluminum, bronze, steel and plastics such as
polyethylene and polyvinyl chloride. These raw materials are available from
several sources and Superior has not experienced any shortages in the recent
past.

The cost of copper, the most significant raw material used by Superior in
its wire and cable business, has been subject to considerable volatility over
the past several years. However, this volatility has not had, nor is it expected
to have, an impact on Superior's profitability due to customers' contractual
arrangements that provide for the pass-through of changes in copper costs
through price revisions. Nevertheless, sharp increases in the price of copper
can reduce demand if telephone companies decide to defer their purchases of
copper telecommunications wire and cable products until copper prices decline.

From time to time, particular plastics have been difficult to obtain but,
with the exception of teflon used for UTP production, which was in short supply
in 1996, none of these shortages has required Superior to limit production. The
inability of Superior to obtain sufficient quantities of raw materials could
adversely affect its operating results.

FOREIGN SALES

Superior's copper telecommunications wire and cable business has a plant in
Winnipeg, Manitoba, that supplies both the Canadian and U.S. markets. Superior's
net export sales during fiscal 1997 to customers outside the United States and
Canada were $5.5 million, or 1.2% of net sales, of which the majority were in
Latin America. The accompanying consolidated financial statements provide
information about the Company's domestic and foreign operations.

COMPETITION

The copper telecommunications wire and cable business is very competitive.
Superior has three major domestic competitors in the copper telecommunications
wire and cable business: Cable Systems International, Inc., General Cable
Corporation, a public company and formerly a subsidiary of Wassall, plc; and
Essex International, Inc., a public company. Competition in this market is based
on price, service and quality. Because several RBOCs have adopted policies of
limiting the number of their suppliers and requiring that these suppliers
provide additional services, the degree of competition based on service is
increasing.

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DATA COMMUNICATIONS AND ELECTRONICS

PRODUCTS

DNE designs and manufactures data communications equipment, integrated
access devices and other electronic equipment for defense, government and
commercial applications. It is the largest supplier to the U.S. defense forces
of data and voice multiplexers used in tactical secure military applications.
Multiplexers are integrated access devices that combine several
information-carrying channels into one line, thereby permitting simultaneous
multiple voice and data communications over a single line. DNE also produces
military avionic products, including switches, dimmers, relays and other
electronic controllers, sensors and aerial refueling amplifiers.

DNE has developed a commercial version of its multiplexer, which to date has
generated limited sales. However, DNE believes there are certain limited niche
applications for its commercial multiplexer product whereby its design provides
advantages over its competitors. In that regard, DNE recently has been awarded a
major multi-year supply agreement with a multinational manufacturing company for
commercial paging services. DNE has reduced its dependence on the defense market
in recent years primarily by taking advantage of opportunities to manufacture
equipment on a contract basis. DNE provides contract manufacturing services for
subassembly equipment to original equipment manufacturers in the technology
industry and NASA. DNE expects to expand its contract manufacturing services
business for its existing commercial customers and to add additional commercial
customers in the future. In fiscal 1997, DNE's sales to customers other than
departments of the U.S. government accounted for 35.4% of DNE's sales, compared
to 33.6% in fiscal 1996 and 17.7% in fiscal 1995.

As discussed in Item 7, "Management Discussion and Analysis of Financial
Condition and Results of Operations," DNE experienced a decline in revenues and
profitability in fiscal 1997, which has led to a recent restructuring of its
operations to reduce costs and focus development on new commercial product
initiatives.

REFRACTORY PRODUCTS AND SERVICES

GENERAL

The Company, through Refraco, which owns all of the capital stock of Adience
(which includes Adience's wholly-owned subsidiary, Refraco UK), is the sixth
largest worldwide manufacturer and supplier of refractory products and services,
primarily for use in the production of iron and steel, glass, aluminum, cement
and in the co-generation industry. Refractory products are minerals or man-made
compounds that retain their form, strength and chemical characteristics when
subjected to extremely high temperatures under varying conditions. They are used
in virtually every industrial process requiring heating or containment of a
solid, liquid or gas at high temperatures. Although certain refractories have
been known to last as long as ten years, due to the extreme environment under
which they must perform, the majority of refractory products have short useful
lives and must be replaced frequently. Refraco has manufacturing and
installation facilities in the United States, England, Scotland, Belgium, France
and Canada, allowing the Company to meet the needs of a worldwide customer base
in both the capital project (initial installation) and consumable (replacement)
markets for refractory products and services.

REFRACTORY PRODUCTS AND SERVICES

The Company manufactures a wide range of refractory products and specializes
in producing refractory materials that are custom designed for specific
industrial applications and customers. The principal products are monolithic
(unformed) refractory materials, and formed products such as slide gates, bottom
pour refractories and bricks and blocks. The Company also provides installation
and maintenance services for its customers. Monolithic refractory materials are
cement-like materials that are mixed with water on the customer's premises and
applied to surfaces exposed to high temperatures. Slide

8
<PAGE>
gates and bottom pour refractories are pre-formed units that allow the discharge
of molten metal from the bottom of the furnace, rather than from the top,
resulting in reduced iron and steel impurities. The Company manufactures a wide
range of bricks and blocks, which are used to line industrial furnaces, and
manufactures and installs refractory products in capital (i.e., new or rebuild)
projects, as well as for replacement (i.e., consumable). Because of the high
temperatures involved in the manufacturing and movement of molten iron and other
molten materials, the equipment employed in such processes must utilize linings
made of refractory products, which deteriorate and must be repaired or replaced
frequently. The largest customer for the Company's products and services is the
iron and steel industry, followed by the glass, aluminum, cement and
co-generation industries.

Certain of Refraco's refractory products are used to line furnaces, troughs,
runways and other surfaces exposed to molten metal or the molten tin used in the
float glass method of production. All of these products are manufactured
according to customer specifications. In addition, certain of Refraco's
refractory products are distinguished by their resistance to corrosion.
Corrosion resistance is particularly important in the glass industry where,
unlike the steel industry, certain refractory products are designed to last for
up to 10 years.

The manufacturing process for specialty refractory products involves the
mixing and, in some cases, the kiln firing of various raw materials,
particularly fireclays and minerals such as bauxites, aluminas and magnesite.
Adience operates seven principal refractory plants located near major industrial
centers in the United States and Canada. The Hepworth Business operates ten
principal refractory plants located near major industrial centers in Great
Britain, Belgium, France and Canada. The Company designs its refractory products
for specific applications and customer needs.

Refraco also provides a variety of services, primarily to its iron and steel
customers: it installs refractory products manufactured by it and others; it
provides on-site maintenance of refractory products; and it rebuilds coke ovens.
The ability to react quickly to customer requests for products or installation
and maintenance services is particularly important in the refractory industry
because of the extremely high cost of manufacturing downtime in the iron and
steel industry. Consequently, Adience maintains refractory service facilities
located near its major customers in the United States and Canada. The Hepworth
Business maintains similar facilities in the U.K. and in Belgium. Each facility
has the equipment and skilled staff required for the installation and
maintenance of refractory products. Other personnel required for installation
projects are hired on an as-needed basis from readily available local union
labor pools and are employed only for the duration of each job.

The Company's primary strategy in the refractories business segment is to
exploit synergies and cross-marketing opportunities resulting from Refraco's
assimilation of the operations of Adience and the recently acquired Hepworth
Business. One of Refraco's strategic initiatives is to increase sales of its
expanded line of products and services into the downstream steel making phase of
integrated iron and steel mills in North America. Historically, Adience has
supplied its products and services primarily to the iron making and handling
area of North American integrated iron and steel mills. The steel ladle and
continuous casting phases of such mills utilize substantially greater amounts of
refractory products than Adience's traditional area of focus and, therefore,
represent a potential area for sales growth. The Hepworth Acquisition provides
Adience with an expanded product range, which should permit the Company to
penetrate the downstream steel making phase of North American integrated steel
mills. Another of Refraco's strategic initiatives is to emphasize the use of
Adience's shotcrete technology in the installation of its unformed refractory
materials and to migrate this technology for use in refractory installations for
customers of the Hepworth Business. This shotcrete technology permits a lower
cost and faster installation of monolithic refractory materials in applications
previously dominated by brick refractories. Additionally, Adience is developing
robotic application equipment permitting the installation of refractories at
higher temperatures than currently possible, thereby resulting in less facility
downtime. The Company intends to migrate this robotic technology to customers of
the Hepworth Business. The

9
<PAGE>
Company also intends to exploit consolidation opportunities arising out of the
Refraco UK Acquisition in the research and development, materials procurement
and facilities operations areas.

MARKETING AND DISTRIBUTION

The iron and steel industry has historically been the major consumer of the
refractories segment's products and services. For fiscal 1996 and on a pro forma
basis (taking into account the operations of the Hepworth Business) for fiscal
1997, sales to the iron and steel industry accounted for 73% and 63.1%,
respectively, of refractory product net sales. Other customers for Refraco's
specialty refractory materials are the glass, aluminum, cement and co-generation
industries. The Company also sells its refractory products to other refractory
contractors and buys refractory products produced by other manufacturers in
performing its contracting services.

Within the iron and steel industry, Adience's principal customers have
traditionally been the largest companies in the industry. USX-US Steel Group,
Inc., Bethlehem Steel Corporation and LTV Steel Company, Inc. together accounted
for approximately 33.6% and 32.3% of the net sales of this business segment for
fiscal 1996 and 1997, respectively. USX-US Steel Group, Inc. alone accounted for
15.2% and 16.1% of this business segment's net sales during fiscal 1996 and
1997, respectively. Each of the other companies accounted for less than 10% of
this business segment's net sales during such periods. The Hepworth Business has
long-standing relationships with iron and steel, aluminum and glass companies in
Europe, North America and the Far East. On average, relationships of the
Hepworth Business with its major customers are longer than 20 years. Excepting
British Steel, which represents approximately 15% of the sales of the Hepworth
Business during fiscal 1997, no other customer represents over 10% of such sales
during such period. Marketing of Adience's products and services is conducted by
a sales force working out of 15 sales offices located in eight states and
Canada. The Hepworth Business sales teams for major project work are headed by a
director or senior sales manager with appropriate technical support. In general,
the sales process involves combining product specialists with geographic sales
teams on a customer by customer basis. The Hepworth Business also has a number
of commercial and technical teams based in the U.K. and in Belgium that are
dedicated to each major industry and that work closely with geographic sales
personnel. The Hepworth Business also sells the Company's products through a
network of local agents operating in over 40 countries.

Product produced by Adience and the Hepworth Business generally is delivered
directly to end users. A small number of stocking distributors are used in the
international (non-U.K.) markets, and the Hepworth Business maintains two
warehouse operations in the U.K. The warehouse operations carry limited product
lines and largely supply monolithic and other consumable items to customers who
operate small furnaces, as well as to independent contractors.

RAW MATERIALS

In manufacturing its specialty refractory products, Adience uses more than
100 different raw materials which come from a variety of sources, the majority
of which are obtained within the United States. The Hepworth Business similarly
uses more than 100 different raw materials and obtains those raw materials from
around the world. Some of the more important raw materials used in the
refractories business segment are alumina, bauxite, magnesite, silicon carbide,
andalusite, calcium aluminate cements and clays. The number of sources of supply
varies with each raw material and certain key raw materials, such as zirconia
and andalusite, are found in a limited number of locations. The Company believes
that it is not dependent in its manufacturing processes on any one source of
supply. The Company anticipates coordinating and consolidating its procurement
activities with respect to the requirements of its Adience operations and the
Hepworth Business, thereby realizing cost savings and efficiencies.

10
<PAGE>
FOREIGN SALES

Adience's refractory business has a plant in Smithville, Ontario, that
supplies both the Canadian and U.S. markets. Adience's net export sales during
fiscal 1997 to customers outside the United States and Canada were $5.0 million,
or 4.7% of net sales. Approximately 98% of Adience's sales during fiscal 1997
were to customers based in North and Central America. During fiscal 1997, the
Hepworth Business sales to its customers based in Europe, Asia, North, Central
and South America and Africa were 65%, 20%, 10% and 5%, respectively. The
accompanying consolidated financial statements provide information about the
Company's domestic and foreign operations.

BUSINESS STRATEGY

The Company believes that the significant international manufacturing and
sales distribution operations realized through the Refraco UK Acquisition,
including Refraco's comprehensive range of refractory products and services and
its sales and manufacturing presence in over 40 countries, together with the
cost savings and cross-marketing of products, services and customer
opportunities presented by the combination of the operations of Adience and the
Hepworth Business, positions it to grow Refraco's revenues and increase its
profitability and cash flow.

The Company's strategy in the refractories business is to (i) take advantage
of the Refraco UK Acquisition and the resulting opportunities for cost
reductions and cross-marketing of the customers, products and services in the
Adience business and the Hepworth Business, (ii) continue development of
innovative value-added products (including shotcrete and robotic gunning
equipment and processing) and (iii) take advantage of strategic acquisition
opportunities in the refractories industry.

COMPETITION

In the production of refractory materials, Adience competes with a number of
companies in the United States, including North American Refractories Co.,
Harbison Walker, A.P. Green Industries, Inc., National Refractories Co. and
American Premier Refractories & Chemicals, Inc., some of which have greater
resources than Adience. Adience's primary competitors in the installation of
refractory products are in-house employees of iron and steel companies and also
regional refractory service contractors which, unlike Adience, do not engage in
the production of such materials. Other major refractory producers typically
contract with these regional companies to install the product, or their
customers install the products themselves. Competition is based primarily on
service, price and product performance. The Company believes that its ability to
produce, install and maintain its refractory products without dependence upon
third parties strengthens its competitive position.

In the international markets, Refraco manufactures and sells to the alumino
silicate, basic, carbon, silica and specialty refractory product sectors.
Refraco competes with those few companies (such as Veitsch-Radex/Didier of
Austria and Harbison-Walker of the United States) that supply the broad range of
materials offered by Refraco, since most refractory suppliers in the
international market tend to focus on a limited number of specific product
sectors.

RESEARCH AND DEVELOPMENT

In response to the changing requirements of the telecommunications industry,
Superior established, during the fourth quarter of fiscal 1997, a product
development center. This 29,150 square foot facility is located in Kennesaw,
Georgia (within 15 miles of Superior's corporate headquarters) and is dedicated
to defining and creating new wire and cable systems that meet the needs of the
evolving communications networks. Recent projects include the development of
single mode and multimode fiber optic cable products for use in trunking
applications both in LANs as well as telephone networks. Initial delivery of
these products is expected in the latter part of fiscal 1998. Superior also has
development projects underway for performance enhanced copper-based wire
products that are designed to meet the existing

11
<PAGE>
and future needs of the telephone companies. Several of these projects have been
undertaken in conjunction with Superior's telephone company customers and
include the development of composite cables that incorporate copper twisted pair
wire and coaxial cable or optical fibers in a single cable construction.
Superior is also developing extensions of its UTP product line, such as patch
cords for use in connecting Superior products within premises and 25-pair UTP
cables for certain data transmission applications. Superior believes its ability
to capitalize on new product offerings will be enhanced by the establishment of
its product development center. Further, Superior intends to continue to explore
and exploit new product development opportunities to meet the needs of its
customers.

Constant revisions to industry processes and chemistries require changes in
refractory products to meet customer demand. Adience maintains research and
development facilities in South Webster, Ohio and Snowshoe, PA for improving
existing refractory products and installation methods and developing new
products for existing and new markets. The Hepworth Business has a research and
development staff based in facilities at Worksop, Manuel, St. Ghislain and
Buzancais. The staff works closely with the production staff and customers to
ensure quality standards are maintained and improved. Key areas of current
development work include process development, product improvement and new
product areas. Recent developments include the introduction of a new generation
of ceramic ladle valve refractories for steel making and an
environmentally-friendly alternative to magnesia chrome bricks, widely used in
glass making industries. In addition, research and development personnel work
closely with customers to improve product quality and lower costs. As a result
of the Refraco UK Acquisition, the Company expects to consolidate certain
research and development activities currently servicing its refractories
business.

In order to compete for contracts, DNE frequently invests its own funds on
research and development in order to determine the financial and practical
feasibility of manufacturing the products. DNE is currently in the process of
developing an integrated multiplexer with expanded capabilities from its
existing products for use in both the commercial and military markets.

Alpine's research and development expense during fiscal 1995, 1996 and 1997
amounted to $1.6 million, $2.5 million and $3.4 million, respectively.

Although the Company currently holds certain trademarks, licenses and
patents, none is considered to be material to its businesses.

12
<PAGE>
EMPLOYEES

As of April 30, 1997, Alpine employed 3,809 people, including 1,478 in the
telecommunications wire and cable business, 2,186 in the refractories business,
130 in the data communications and electronics business and 15 at Alpine's
corporate offices.

The number of individuals employed in the refractories business does not
reflect members of the building trades, who are hired by Adience as required.
Approximately 1,801 persons employed in the refractory business and
approximately 405 persons employed in the telecommunications wire and cable
business are represented by unions. All of the collective bargaining agreements
in the United Kingdom, Belgium and France, and two such agreements in the United
States, will expire within one year [during the next fiscal year]. Such
agreements cover 75% of all employees in the refractories business segment.
Alpine considers relations with its employees to be satisfactory.

ENVIRONMENTAL MATTERS

Alpine's manufacturing operations are subject to extensive and evolving
federal, foreign, state and local environmental and land use laws and
regulations relating, among other things, to the storage, handling, disposal,
emission, transportation and discharge of hazardous substances, materials and
waste products and often imposing stringent permitting requirements. Compliance
with these laws and regulations has not been material to the operations,
business or financial results of Alpine and has not had a material effect upon
its capital expenditures, earnings or competitive position. However, violation
of or non-compliance with such laws or regulations, even if inadvertent, could
result in an adverse impact on the operations, business or financial results of
Alpine.

Operations of Alpine and certain of its predecessors have resulted in
releases of hazardous substances or wastes at sites currently or formerly owned
or operated by Alpine. Alpine is presently involved in investigatory and
remedial activities at certain sites, some of which are being conducted under
the oversight of governmental authorities. In connection with certain
acquisitions and divestitures, Alpine has also assumed responsibility for and
indemnified purchasers against certain liabilities associated with
contamination, if any, existing at certain current and former facilities.

Soil and groundwater at Superior's Brownwood, Texas facility has been found
to be contaminated with volatile organic compounds as a result of operations at
the facility which management believes occurred prior to Superior's acquisition
of the facility. Superior has developed and filed for approval with the Texas
Natural Resource Conservation Commission a remediation plan. Based upon work
completed and investigations performed to date, the Company believes that the
cost of this remediation will not be in excess of $0.5 million. Pursuant to an
agreement between Superior and the former owner of the facility, the Company has
been reimbursed for approximately 85% of the costs incurred to date in
connection with the investigation and remediation of this facility, and is
entitled to reimbursement of future expenses at percentages ranging from 85% to
25% (depending on the time at which such expenses are incurred), subject to an
aggregate expense reimbursement of not less than 75%.

In connection with the sale of a facility in Woburn, Massachusetts formerly
owned by and currently under lease to DNE (which conducts no operations at such
facility, but rather subleases the facility to a third party), low levels of
volatile organic compounds were discovered in shallow groundwater. DNE has
assumed responsibility for this contamination pursuant to an indemnity granted
to the purchaser of the facility, which indemnity is in turn guaranteed by
Alpine. This facility has been designated as a non-priority site by the
Massachusetts Department of Environmental Protection ("MDEP") which granted a
waiver to Alpine allowing it to proceed with further investigation and, if
necessary, remediation, of the groundwater contamination without MDEP oversight,
subject to certain conditions. Based on the results of a comprehensive site
investigation completed during May 1996, it appears that no remedial activities
are warranted, and the required filings with the MDEP have been made so
certifying.

13
<PAGE>
In connection with the sale of its former East Windsor, Connecticut facility
and pursuant to Connecticut property transfer laws, the Company was required by
the Connecticut Department of Environmental Protection to develop a plan to
investigate the existence of contamination, if any, at that facility. The
Company has developed and is implementing the required investigative plan. Based
upon information available to date, Alpine does not believe that fulfilling its
obligations with respect to the East Windsor facility will have a material
adverse effect on its operations, business or financial results.

Certain Adience and recently acquired Hepworth Business facilities contain
areas which, in the past, have been used for the disposal of waste materials
generated by facility operations, some of which may contain elements or
compounds classified as hazardous or otherwise regulated under environmental
laws or which may otherwise cause environmental contamination. If it is
determined that past disposal or facility operations practices have resulted in
releases of regulated contaminants to soil or groundwater, investigation and
remediation of such contamination may be required. If substantial environmental
contamination is found at any or all of the Adience or Hepworth Business
facilities, it could have a material adverse effect on the operations, business
and financial results of Alpine.

14
<PAGE>
ITEM 2. PROPERTIES

Alpine conducts its principal operations at the facilities set forth below:

MANUFACTURING FACILITIES
Brownwood, Texas...................................................... 328,000 Leased (expires 2013 )
(subject to five-year
renewals)
Tarboro, North Carolina............................................... 295,000 Owned
Winnipeg, Manitoba.................................................... 190,000 Owned
Elizabethtown, Kentucky............................................... 163,000 Owned
Kennesaw, Georgia..................................................... 29,000 Leased (expires 2002 )

CORPORATE OFFICE
Atlanta, Georgia...................................................... 30,600 Leased (expires 2001 )
</TABLE>

Depending on product mix, aggregate capacity in Superior's four facilities
in this segment currently ranges from 95 to 100 bcf. Each of the facilities is
operating at utilization rates in excess of 90%. Facilities in this segment are
suitable and adequate for the business being conducted. Capital spending plans
for the operations in this segment are primarily designed to keep up with
current technology, to increase capacity in existing product lines and for cost
reduction initiatives.

Wallingford, Connecticut.............................................. 65,000 Leased (expires 2007 )
</TABLE>

15
<PAGE>
DNE's facility in Wallingford, Connecticut is adequate and suitable for the
businesses being conducted and operates at a utilization rate of between 70% and
75%.

<TABLE>
<CAPTION>
LOCATION SQUARE FOOTAGE LEASED/OWNED
- ----------------------------------------------------------------------- -------------- ------------------------
<S> <C> <C>
REFRACTORIES

NORTH AMERICAN MANUFACTURING FACILITIES
Washington, Pennsylvania............................................. 201,881 Owned
Snow Shoe, Pennsylvania.............................................. 171,425 Owned
South Webster, Ohio.................................................. 125,082 Owned
Crown Point, Indiana................................................. 79,116 Owned
Altoona, Pennsylvania................................................ 47,260 Owned
Smithville, Ontario.................................................. 47,000 Owned
Canon City, Colorado................................................. 44,286 Owned
Johnstown, Pennsylvania.............................................. 30,000 Owned
Hamilton, Ontario.................................................... 18,000 Leased (expires 2004)

UK MANUFACTURING FACILITIES
Manuel............................................................... 1,068,497 Owned
Worksop.............................................................. 454,203 Owned
Loxley............................................................... 364,669 Leased (expires 2012)
Bawtry............................................................... 219,841 Owned
Newton Cap........................................................... 15,220 Owned

CONTINENTAL EUROPE MANUFACTURING FACILITIES
St.Ghislain, Belgium................................................. 537,763 Owned
Libos, France........................................................ 257,902 Owned
Hautrage, Belgium.................................................... 240,196 Owned
Buzancais, France.................................................... 183,459 Owned

CORPORATE OFFICES
Carnegie, Pennsylvania............................................... 77,500 Owned

EUROPEAN CORPORATE OFFICES
Alfreton, UK......................................................... 4,000 Leased (expires 2001)
</TABLE>

The corporate headquarters for Adience's operations are located in a
facility which is also used for warehousing. The Hepworth Business also leases
office facilities in Milan, Italy, Duisburg, Germany, Buzancais, France and
Singapore.

Depending on product mix, capacity in the refractories segment ranges from
650,000 to 700,000 tons of refractory products. The facilities are operating at
various utilization rates with an overall utilization between 50% and 55%.
Facilities in this segment are adequate and suitable for the business. Capital
spending plans are primarily designed to modify existing product lines.

<TABLE>
<CAPTION>
LOCATION SQUARE FOOTAGE LEASED/OWNED
- ---------------------------------------------------------------------------- -------------- --------------------
<S> <C> <C>
CORPORATE OFFICES
New York, New York........................................................ Leased (expires
5,375 2002)
</TABLE>

ITEM 3. LEGAL PROCEEDINGS

Adience's J.H. France unit, which was merged into Adience in December 1991,
has been named as a party in approximately 3,400 pending lawsuits, some of which
contain both multiple claimants and multiple defendants, filed in twelve
jurisdictions principally by employees and former employees of certain

16
<PAGE>
customers of J.H. France and involving approximately 10,000 claimants, alleging
in certain cases that a single product, a plastic insulating cement manufactured
more than 20 years ago by J.H. France, caused them to suffer from asbestosis
related diseases and in other cases alleging that products manufactured or sold
by J.H. France caused silica related diseases. The majority of the lawsuits seek
monetary damages ranging from $20,000 each, which is the minimal jurisdictional
requirement for personal injury cases in a majority of the applicable
jurisdictions, to $1.0 million each. J.H. France and its insurance carriers
historically have settled these lawsuits, typically for an average amount per
case of less than the minimum amount stated. Otherwise, J.H. France has been
dismissed from certain of these lawsuits by agreement or upon application to the
Court. Punitive damages have also been claimed in some cases.

In addition to the lawsuits against J.H. France, Adience, as successor in
interest to BMI Inc. ("BMI"), has been named a party in approximately 500
similar pending lawsuits, some of which contain both multiple claimants and
multiple defendants, filed in the States of Pennsylvania, Ohio, Michigan, West
Virginia, Wisconsin, Kentucky, Indiana and North Dakota, principally by
employees and former employees of certain customers of BMI and involving
approximately 5,500 claimants, alleging that products produced by BMI caused
silicosis in such persons, and in other cases alleging products manufactured or
sold by BMI caused asbestos related diseases in such persons. The majority of
such lawsuits seek monetary damages ranging from $20,000 each, which is the
minimal jurisdictional requirement for personal injury cases in a majority of
such state courts, to $1.0 million each. Adience and its insurance carriers
historically have settled these lawsuits, typically for an average amount per
case of less than the minimum amount stated. Otherwise, Adience has been
dismissed from certain of those lawsuits by agreement or upon application to the
Court. Punitive damages have also been claimed in some cases.

Virtually all of the J.H. France and BMI claims discussed above, as well as
all costs of defense for such cases, are covered by insurance. The J.H. France
and BMI claims are covered by insurance policies issued by different insurance
companies.

The insurance companies which had issued policies covering the J.H. France
cases initially denied coverage for these claims. In June 1993, the Supreme
Court of Pennsylvania held that the insurance policies covering the claims in
these J.H. France cases covered liabilities and defense costs up to the amounts
of the limits of the respective policies, without regard to the period of time
said policies were in effect. In addition to primary and excess liability
policies, J.H. France purchased an excess "umbrella" policy which is the subject
of pending litigation. An appeal is pending of a lower court ruling that the
insurer may declare the excess umbrella policy void.

Based upon Adience's experience in obtaining dismissals or settlements in
closed cases, Adience anticipates, although no assurance can be given, that the
expected costs and liabilities in all pending cases will be adequately covered
by insurance and that the aggregate limits on the insurance policies in effect
exceed the liabilities and defense costs which will be incurred in the 3,400
J.H. France cases and in the 500 BMI cases.

The Company and certain of its subsidiaries are defendants in other
lawsuits, certain of which lawsuits are insured claims arising in the ordinary
course of the operations of the Company and such subsidiaries; and none of which
lawsuits management believes will have a material adverse effect on the
operations, financial condition or liquidity of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Alpine did not submit any matter to a vote of security holders during the
fourth quarter of the fiscal year ended April 30, 1997.

17
<PAGE>
PART II

ITEM 5. MARKET FOR REGISTRANT'S SECURITIES AND RELATED SECURITY HOLDER MATTERS

(a) Market Information

Alpine's Common Stock, $0.10 par value (the "Alpine Common Stock"), has been
listed on the New York Stock Exchange (the "NYSE") under the symbol AGI since
October 11, 1996. Prior to that time, the Alpine Common Stock traded on the
American Stock Exchange. The following table sets forth the range of high and
low daily closing sales prices for the Alpine Common Stock for the last two
fiscal years on the NYSE since October 11, 1996 and on the American Stock
Exchange prior to such date.

<TABLE>
<CAPTION>
HIGH LOW
----- ---
<S> <C> <C>
Fiscal 1996
First Quarter..................................................................................... 6 1/2 4 1/4
Second Quarter.................................................................................... 6 3/4 4 3/16
Third Quarter..................................................................................... 5 3/4 3 5/8
Fourth Quarter.................................................................................... 4 3/8 3 5/16

Fiscal 1997
First Quarter..................................................................................... 5 3/4 4
Second Quarter.................................................................................... 7 9/16 4 3/8
Third Quarter..................................................................................... 8 3/4 6 1/2
Fourth Quarter.................................................................................... 9 3/8 7 1/2
</TABLE>

(b) Holders

The Company's transfer agent is American Stock Transfer & Trust Company, 40
Wall Street, New York, New York 10005.

At July 10, 1997, 16,984,481 shares of Alpine Common Stock were issued and
outstanding, and there were approximately 6,000 record holders thereof.

Alpine has no recent history of paying dividends and does not currently
intend to declare dividends on the Alpine Common Stock in the foreseeable
future. Any payment of future dividends and the amounts thereof will be
dependent upon the Company's earnings, financial requirements and other factors,
including contractual obligations.

ITEM 6. SELECTED FINANCIAL DATA

HISTORICAL FINANCIAL DATA

Set forth below are certain selected historical consolidated financial data
of Alpine. This information should be read in conjunction with the Consolidated
Financial Statements of Alpine and related notes thereto appearing elsewhere
herein and "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations." The selected historical consolidated financial data
for, and as of the end of, each of the fiscal years in the five-year period
ended April 30, 1997 are derived from the audited consolidated financial
statements of Alpine.

18
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED APRIL 30, (1)
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1996 1997
---------- ---------- ---------- ---------- ----------

<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATION DATA:
Net sales............................................ $ 27,897 $ 68,510 $ 198,135 $ 524,113 $ 579,794
Cost of goods sold................................... 15,915 56,250 169,125 453,785 477,791
---------- ---------- ---------- ---------- ----------
Gross profit....................................... 11,982 12,260 29,010 70,328 102,003
Selling, general and administrative.................. 10,482 12,168 20,487 35,148 40,833
Amortization of goodwill............................. 395 2,292 1,527 2,658 3,054
---------- ---------- ---------- ---------- ----------
Operating income (loss)............................ 1,105 (2,200) 6,996 32,522 58,116
Interest income...................................... 209 242 345 2,146 2,023
Interest (expense)................................... (2,301) (2,363) (8,197) (27,795) (22,995)
Gain on sale of subsidiary stock..................... -- -- -- -- 80,397
Other income (expense), net.......................... (1,469) (506) 28 22 505
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations before
income taxes..................................... (2,456) (4,827) (828) 6,895 118,046
Provision for income taxes........................... -- (68) (348) (1,676) (53,103)
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations before
minority interest................................ (2,456) (4,895) (1,176) 5,219 64,943
Minority interest in earnings of subsidiary.......... -- -- -- -- 8,097
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations........... (2,456) (4,895) (1,176) 5,219 56,846
Loss from discontinued operations(2)................. (8,377) (25,236) (4,868) (2,213) --
---------- ---------- ---------- ---------- ----------
Income (loss) before extraordinary (loss).......... (10,833) (30,131) (6,044) 3,006 56,846
Extraordinary (loss) on early extinguishment of
debt............................................... (1,262) (47) -- (4,856) (20,126)
---------- ---------- ---------- ---------- ----------
Net income (loss)................................ $ (12,095) $ (30,178) $ (6,044) $ (1,850) $ 36,720
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) PER SHARE OF COMMON STOCK:
Income (loss) from continuing operations........... $ (0.32) $ (0.38) $ (0.11) $ 0.23 $ 3.04
(Loss) from discontinued operations................ (0.94) (1.78) (0.27) (0.12) --
Extraordinary (loss) on early extinguishment of
debt............................................. (0.14) -- -- (0.27) (1.09)
Preferred stock redemption premium................. -- -- -- -- (0.28)
---------- ---------- ---------- ---------- ----------
Net income (loss) per share of common stock........ $ (1.40) $ (2.16) $ (0.38) $ (0.16) $ 1.67
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital...................................... $ 7,256 $ 24,594 $ 7,080 $ 50,679 $ 134,967
Total assets......................................... 27,998 113,796 233,778 354,904 588,224
Total debt........................................... 13,651 43,745 119,179 209,777 310,824
Preferred stock...................................... 4,677 6,177 17,250 11,758 1,927
Total stockholders' equity........................... 10,602 47,998 44,658 43,136 54,426
</TABLE>

- ------------------------

(1) Alpine's results of operations have been significantly impacted by
acquisitions in fiscal 1994, 1995 and 1996. On November 11, 1993, Alpine
acquired Superior for $60.8 million in a combination of cash and Alpine
Common Stock. On December 21, 1994, Alpine acquired Adience for $10.7
million in a combination of cash, Alpine 8% Preferred Stock and PolyVision
Corporation common stock. On May 11, 1995, Alpine's subsidiary, Superior,
completed the Alcatel Acquisition for $103.4 million in cash.

(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

19
<PAGE>
(FOOTNOTES CONTINUED FROM PRECEDING PAGE)

(2) In July 1995, Alpine completed the spin-off of its information display
segment, PolyVision Corporation, which consisted of Alpine PolyVision Inc.
("APV"), Posterloid Corporation and Information Display Technologies, Inc.
The results of operations for this segment have been reflected as (loss)
from discontinued operations for all the periods presented. See Note 7 to
Alpine's Consolidated Financial Statements.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

Alpine, through its subsidiaries, Superior TeleCom and Refraco, operates in
three industry segments. Superior TeleCom, a 50.1% owned subsidiary (see Note 5
to the accompanying Consolidated Financial Statements) operates in the following
industry segments: (i) copper wire and cable products for telecommunications
applications through its subsidiary, Superior, and (ii) data communications and
electronics products and systems for defense, governmental and commercial
applications through its subsidiary, DNE. Refraco, the Company's wholly-owned
subsidiary, provides refractory products and services for the iron and steel,
glass, aluminum, cement and co-generation industries. Refraco includes the
operations of Adience (which was acquired on December 21, 1994) and Refraco UK
(which was acquired on April 15, 1997 -- See Note 6 to the accompanying
Consolidated Financial Statements).

RESULTS OF OPERATIONS

The following comparative table includes operating statement data for Alpine
on an industry segment basis. Such industry segment operating data is presented
on an historical reporting basis for the years ended April 30, 1995, 1996 and
1997. Further, pro forma operating data for fiscal 1995 is also included in the
table to reflect the impact of the Adience and Alcatel Acquisitions as if they
occurred on May 1, 1994. Such pro forma data, which incorporates the historical
results of the Alcatel Business and Adience prior to their respective
acquisition by Alpine (along with certain pro forma adjustments), is presented
to provide comparability in analyzing industry segment operating data for fiscal
1995. The pro forma data is not necessarily indicative of the results that would
have been achieved had such acquisitions actually occurred on May 1, 1994, nor
are they necessarily indicative of Alpine's future results.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED APRIL 30,
--------------------------------------------------
<S> <C> <C> <C> <C>
1995 1996 1997
------------------------ ----------- -----------

<CAPTION>
HISTORICAL PRO FORMA HISTORICAL HISTORICAL
----------- ----------- ----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Net sales
Telecommunications wire and cable................................ $ 136.6 $ 340.8 $ 384.2 $ 442.5
Data communications and electronics.............................. 27.9 27.9 26.2 21.3
Refractories..................................................... 33.6 100.9 113.7 116.0
----------- ----------- ----------- -----------
Combined net sales........................................... 198.1 469.6 524.1 579.8
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Gross profit(1)(2)
Telecommunications wire and cable................................ $ 14.2 $ 28.4 $ 39.6 $ 74.1
Data communications and electronics.............................. 8.2 8.2 7.9 5.5
Refractories..................................................... 6.6 18.4 22.8 22.4
----------- ----------- ----------- -----------
Combined gross profit........................................ 29.0 55.0 70.3 102.0
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

20
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED APRIL 30,
--------------------------------------------------
1995 1996 1997
------------------------ ----------- -----------
HISTORICAL PRO FORMA HISTORICAL HISTORICAL
----------- ----------- ----------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Selling, general and administrative expense(3)
Telecommunications wire and cable................................ $ 5.1 $ 6.2 $ 8.3 $ 9.6
Data communications and electronics.............................. 6.5 6.5 5.8 5.9
Refractories..................................................... 5.7 16.0 15.0 15.6
Corporate........................................................ 3.2 3.2 6.0 9.7
----------- ----------- ----------- -----------
Combined selling, general and administrative expense......... 20.5 31.9 35.1 40.8
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Amortization of goodwill (4)
Telecommunications wire and cable................................ $ 1.0 $ 1.4 $ 1.5 $ 1.7
Data communications and electronics.............................. -- -- -- --
Refractories..................................................... 0.5 1.2 1.2 1.4
----------- ----------- ----------- -----------
Combined amortization of goodwill............................ 1.5 2.6 2.7 3.1
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Operating income (3)
Telecommunications wire and cable................................ $ 8.1 $ 20.8 $ 29.9 $ 62.8
Data communications and electronics.............................. 1.7 1.7 2.0 (0.4)
Refractories..................................................... 0.4 1.2 6.6 5.4
Corporate........................................................ (3.2) (3.2) (6.0) (9.7)
----------- ----------- ----------- -----------
Combined operating income.................................... 7.0 20.5 32.5 58.1
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

<TABLE>
<CAPTION>
AS A PERCENTAGE OF NET SALES
------------------------------------------------------------
<S> <C> <C> <C> <C>
Supplemental Data:
Gross margin
Telecommunications wire and cable............................... 10.4% 8.3% 10.3% 16.7%
Data communications and electronics............................. 29.4 29.4 30.2 25.8
Refractories.................................................... 19.6 18.2 20.1 19.3
Combined gross margin........................................... 14.6 11.7 13.4 17.6
Operating income margin
Telecommunications wire and cable............................... 5.9% 6.1% 7.8% 14.2%
Data communications and electronics............................. 6.1 6.1 7.6 (1.9)
Refractories.................................................... 1.2 1.2 5.8 4.7
Combined operating income margin................................ 3.5 4.4 6.2 10.0
</TABLE>

- ------------------------

(1) Cost of goods sold has been reduced by $4.5 million in fiscal 1995 to
reflect changes in historical depreciation resulting from Alpine's
allocation of the purchase price for the Superior, Adience and Alcatel
Acquisitions.

(2) Cost of goods sold has been further reduced by $2.5 million in fiscal 1995
to reflect reduced operating expenses and other charges at Superior and
Adience resulting primarily from the reduction in headcount at the Alcatel
Business and the elimination of charges for non-recurring inventory write-
downs at Adience. At the time of the Adience Acquisition, Alpine management
determined that certain Adience product lines would be discontinued. Adience
recorded a charge to reduce the carrying value of the related inventory to
net realizable value, which charge has been eliminated in the pro forma
results presentation.

(3) Selling, general and administrative expense has been adjusted to reflect
changes to historical depreciation expense and eliminate expenses incurred
by Adience, Superior and the Alcatel Business which would not have been
incurred if the related acquisition had occurred on May 1, 1994. The
elimination

(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

21
<PAGE>
(FOOTNOTES CONTINUED FROM PRECEDING PAGE)

of these expenses amounted to $11.2 million in fiscal 1995, of which $9.1
million represented elimination of management fees and allocated
administrative fees incurred by the Alcatel Business.

(4) Amortization of goodwill has been adjusted to reflect changes resulting from
Alpine's allocation of the purchase price for the Superior, Adience and the
Alcatel Acquisitions.

SUPPLEMENTAL DATA FOR THE TELECOMMUNICATIONS WIRE AND CABLE SEGMENT:

Copper is a significant raw material component of Superior's finished
products. Fluctuations in the price of copper affect per unit product pricing
and related revenues. However, the cost of copper has not had a material impact
on Superior's profitability due to contractually mandated copper-based price
adjustments contained in Superior's customer sales contracts. The Company
believes that the following supplemental comparative data, which is based upon a
constant copper cost of $1.00 per pound for the indicated periods, provides
additional meaningful information concerning Superior's sales and its gross
margin percentage.
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA OPERATING
DATA
-------------------------------
<S> <C> <C> <C>
FISCAL YEARS ENDED APRIL,
-------------------------------

<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
Net sales............................................................................ $ 327.6 $ 350.4 $ 431.9
Gross profit......................................................................... 28.4 39.6 74.1
Gross margin percentage.............................................................. 8.7% 11.3% 17.1%
</TABLE>

SUPERIOR--RESULTS OF OPERATIONS

Superior achieved substantial growth in revenues and profitability in both
fiscal 1997 and fiscal 1996. This growth was attributable to increased unit
volume sales as well as improved market prices for its telecommunications wire
and cable products.

In fiscal 1997, Superior's net sales were $442.5 million representing an
increase of $58.3 million, or 15.2%, as compared to fiscal 1996 net sales of
$384.2 million. Comparative fiscal 1996 net sales reflected a similar trend,
increasing by 12.7%, or $43.4 million, as compared to fiscal 1995 pro forma net
sales. The comparative increase in fiscal 1997 and fiscal 1996 net sales
adjusted to a constant copper cost of $1.00 per pound was 23.2% and 7.0%,
respectively (see "Supplemental Data" for Superior included elsewhere herein).

The increase in net sales in both fiscal 1997 and fiscal 1996 resulted from
a number of factors including: (1) the increased demand in recent years for
copper wire and cable products due to both the growth in new copper-based
telephone access lines and increased maintenance spending by several of
Superior's major telephone company customers; (2) an increase in Superior's
market share in both fiscal 1996 and fiscal 1997 under new multi-year supply
agreements entered into during such periods; and (3) the impact of price
increases instituted during the latter half of fiscal 1996 on substantially all
of Superior's long term supply agreements (which supply agreements comprise in
excess of 90% of Superior's net sales). To keep pace with the growth in demand
and increased market share, Superior has increased its annual production
capacity (measured in billions of conductor feet or "bcf") from approximately 80
bcf in fiscal 1995 (on a pro forma basis) to approximately 97 bcf at the end of
fiscal year 1997. Superior intends to further increase its bcf production
capability in fiscal 1998 as required to meet additional anticipated product
demand and market share growth (see "Financial Condition and Liquidity" for
discussion of fiscal 1998 capital expenditure initiatives).

22
<PAGE>
Along with the increase in revenues in fiscal 1997 and fiscal 1996, Superior
also achieved substantial growth in gross profit and a significant increase in
its gross margin percentage during such fiscal periods. In fiscal 1997, gross
profit increased $34.5 million, or 87.1%, to $74.1 million, as compared to
fiscal 1996 gross profit of $39.6 million. The comparative increase in gross
profit in fiscal 1996 was $11.2 million, or 39.4%, as compared to fiscal 1995
pro forma gross profit. The gross margin percentage for fiscal 1995 (pro forma),
1996 and 1997 based on (i) net sales as reported and (ii) net sales adjusted to
constant copper price of $1.00 per pound (see "Supplemental Data" for Superior )
was as follows:

<TABLE>
<CAPTION>
GROSS MARGIN PERCENTAGE
BASED ON:
--------------------------
<S> <C> <C>
PRO FORMA ADJUSTED
NET SALES NET SALES
------------- -----------
Fiscal 1995................................................................................ 8.3% 8.7%
Fiscal 1996................................................................................ 10.3% 11.3%
Fiscal 1997................................................................................ 16.7% 17.1%
</TABLE>

Superior has generated sequentially improving gross margins for each fiscal
quarter during the past two fiscal years, beginning with the first quarter of
fiscal 1996 (which was the period in which the acquisition of the Alcatel
Business was completed). The increasing gross margin for the past two fiscal
years is attributable to a combination of factors, including: (i) the
aforementioned price increases instituted primarily during the latter half of
fiscal 1996 on substantially all of Superior's existing customer contract
business; (ii) higher market prices on new long term supply agreement awards
entered into in fiscal 1996 and fiscal 1997; (ii) manufacturing cost reductions
resulting from the integration of the Alcatel Business and from capital
expenditure initiatives focused on production efficiencies; and (iv) improved
cost absorption resulting from higher sales volume. Market prices for the
Company's telephone wire and cable products stabilized during the latter half of
fiscal 1997 and management does not foresee any material changes in market
prices in the near future. However, the Company plans to continue to invest in
cost reduction projects to further its improvement in gross margin in fiscal
1998 and future years.

Selling, general and administrative expenses ("SG&A expenses") increased
from $6.2 million on a pro forma basis in fiscal 1995 to $8.3 million and $9.6
million in fiscal 1996 and fiscal 1997, respectively. The increase in SG&A
expenses in fiscal 1996 and fiscal 1997 was attributable to (i) costs associated
with incremental sales and marketing staff to support the increased level of
sales activity, (ii) expansion of administrative activities, particularly in the
area of information systems to support the level of growth and the integration
of the Alcatel Business operations, and (iii) in fiscal 1997, the expansion of
product development activities, including establishment and staffing of a
product development facility in the fourth quarter of fiscal 1997.

Commensurate with the growth in net sales and gross profit. Superior's
operating income increased substantially in both fiscal 1997 and fiscal 1996.
Operating income in fiscal 1997 was $62.8 million, representing an increase of
110.0%, as compared to fiscal 1996 operating income of $29.9 million. The
comparative growth in fiscal 1996 operating income was $9.1 million or 43.8% as
compared to pro forma fiscal 1995 operating income. During this same period,
operating income as a percentage of net sales increased from 6.1% in fiscal 1995
(pro forma) to 7.8% and 14.2% in fiscal 1996 and fiscal 1997, respectively.

DNE--RESULTS OF OPERATIONS

During fiscal 1997, DNE experienced declining sales and profitability
associated with a slowdown in government procurement of DNE's military and
electronic products and a decline in DNE's contract manufacturing activities
related to overall softness in the semi-conductor equipment manufacturing
sector. As a result, DNE's comparative net sales declined $4.9 million in fiscal
1997 and operating income decreased from $2.0 million in fiscal 1996 to an
operating loss of $0.4 million in fiscal 1997. In fiscal 1996,

23
<PAGE>
DNE's comparative revenues declined by 6.1% as compared to fiscal 1995; however,
as a result of operating expense reductions, fiscal 1996 comparative operating
income actually increased by approximately $0.4 million as compared to fiscal
1995.

DNE has taken recent actions to reduce its manufacturing and general and
administrative overhead by approximately $2.0 million (on an annual basis). DNE
has also reallocated engineering resources toward developing enhancements to its
multiplexer product line to provide for broader product application
opportunities. The Company expects that, with the recent introduction of new
products, government sales levels will improve in the future and that the trend
of lower sales will be reduced or reversed which, when coupled with the
aforementioned overhead cost reductions, should result in a near term
improvement in DNE's profitability.

REFRACO--RESULTS OF OPERATIONS

Refraco's net sales were $116.0 million for fiscal 1997 representing an
increase of $2.3 million, or 2.0%, as compared to fiscal 1996 net sales. The
increase in net sales resulted primarily from the contribution of $8.4 million
in net sales from the Refraco U.K. operations, acquired on April 15, 1997 (see
Note 6 to the accompanying consolidated financial statements). Net sales of the
U.S. operations of Refraco declined by $6.1 million, or 5.4%, to $107.6 million
in fiscal 1997 as compared to $113.7 million in fiscal 1996.

The decline in net sales of the U.S. operations resulted primarily from a
slowdown in activities during the second half of fiscal 1997 throughout the
operations. In particular, the Furnco construction division, which specializes
in the rebuilding of coke ovens, and the specialty refractory block products
division, which serves the plate glass industry, experienced a decline in net
sales in the second half of fiscal 1997. A further factor contributing to the
fiscal 1997 decline in net sales was a continuing strike at one of the Company's
customer facilities.

Refraco's fiscal 1996 net sales were $113.7 million, representing an
increase of $12.8 million, or 12.7%, over pro forma fiscal 1995 net sales of
$100.9 million. Approximately $6.0 million of the fiscal 1996 pro forma net
sales increase was attributable to increased activity in the Furnco construction
division and approximately $3.0 million was attributable to higher sales of
refractory block products to the plate glass industry. The remainder of the
fiscal 1996 comparative sales increase resulted from a number of factors,
including favorable market conditions with modest increases in demand,
introduction of new products and the entry into new geographic markets,
including international markets.

Refraco's gross profit for fiscal 1997 was $22.4 million representing a
decrease of $0.4 million, or 1.8%, as compared to the $22.8 million in gross
profit in fiscal 1996. The fiscal 1997 gross margin was 19.3%, as compared to a
gross margin of 20.1% in fiscal 1996. After adjusting gross profit and gross
margin to eliminate the impact of the Refraco UK Acquisition, gross profit and
gross margin in fiscal 1997 was $21.1 million and 19.6%, respectively. The
comparative decrease in the fiscal 1997 gross margin resulted primarily from the
aforementioned reduction in sales in the Furnco construction division which
contributes higher gross margins as compared to Refraco's other divisions.

Refraco's gross profit for fiscal 1996 was $22.8 million representing an
increase of $4.4 million, or 23.9%, as compared to pro forma gross profit of
$18.4 million in fiscal 1995. Refraco's gross margin increased to 20.1% for
fiscal 1996, as compared to 18.2% (pro forma) for fiscal 1995. The comparative
gross margin improvement in fiscal 1996 was due primarily to the elimination of
unprofitable product lines and cost reductions in Refraco's specialty block
division, and a proportional increase in revenues from Refraco's Furnco
construction division which, as previously noted, contributes higher gross
margins as compared to Refraco's other divisions.

Refraco's SG&A expense for fiscal 1997 was $15.6 million representing an
increase of $0.6 million, or 4.0%, as compared to $15.0 million in fiscal 1996.
After eliminating the increase resulting from the Refraco

24
<PAGE>
UK Acquisition, SG&A decreased by $0.5 million, or 3.3%, to $14.5 million in
fiscal 1997. The decrease in SG&A expense resulted principally from savings
achieved from the consolidation of corporate facilities and functions and the
elimination of expense associated with lower production and sales levels.

Refraco's SG&A expense for fiscal 1996 was $15.0 million representing a
decline of $1.0 million, or 6.3%, as compared to fiscal 1995 pro forma SG&A
expenses of $16.0 million. Refraco's lower SG&A expenses in fiscal 1996 resulted
from reductions in corporate staffing associated with the completion of an
overall corporate reorganization and a reduction in sales and marketing staff
associated with a consolidation of its sales force across product lines and
markets.

Refraco's operating income for fiscal 1997 was $5.4 million representing a
decrease of $1.2 million, or 18.2%, as compared to $6.6 million in fiscal 1996.
After eliminating the effect of the Refraco UK Acquisition, fiscal 1997
operating income was $5.3 million representing a decrease of $1.3 million, or
19.7%, as compared to fiscal 1996. The decrease in operating income resulted
primarily from the reduction in net sales and gross margin in fiscal 1997,
offset somewhat by lower SG&A expense.

Refraco's operating income for fiscal 1996 was $6.6 million representing an
increase of $5.4 million, or 450.0%, as compared to pro forma operating income
of $1.2 million in fiscal 1995. Refraco's improved operating profit was
attributable to higher sales, reductions in cost and overhead and elimination of
unprofitable product lines.

CONSOLIDATED RESULTS OF OPERATIONS

The growth in net sales of the Company's telecommunications wire and cable
segment and its refractories segment resulted in fiscal 1997 comparative
consolidated net sales increasing by 10.6% to $579.8 million. In fiscal 1996,
net sales of $524.1 million reflected an increase over fiscal 1995 pro forma net
sales of $469.6 million, or 11.6%, which increase was also attributable to the
growth in sales of telecommunications wire and cable products and refractory
products. The fiscal 1996 increase in net sales as compared to fiscal 1995
historical net sales amounted to 164.6% and was largely attributable to the
revenues associated with the acquisition of the Alcatel Business and the
acquisition of Adience.

The increase in net sales, along with an associated increase in the
telecommunications wire and cable segment's gross margins, gave rise to a
consolidated comparative increase in gross profit of $31.7 million, or 45.1%, in
fiscal 1997 and $15.3 million, or 27.8%, in fiscal 1996 (as compared to fiscal
1995 pro forma results).

Consolidated SG&A expense in fiscal 1997 was $40.8 million, reflecting an
increase of $5.7 million, or 16.2%, as compared to fiscal 1996. The major
components of this increase included $1.3 million in higher SG&A expenses in the
telecommunications wire and cable segment (discussed separately herein) and a
$2.7 million increase in corporate expenses reflecting primarily (i) incremental
separate public company related expenses incurred by Superior TeleCom since
completion of the Offering, and (ii) an increase in variable based accounting
charges for certain stock and performance option grants made in prior years,
which charges were substantially impacted by the increase in the per share
market value of the Company's common stock in fiscal 1997. In fiscal 1996, SG&A
expense increased by $3.2 million, or 10.0%, as compared to fiscal 1995 pro
forma SG&A expense. This increase was attributable to an increase in corporate
expenses and in operating expenses of the telecommunication wire and cable
segment.

As a result of the increase in consolidated net sales and gross margin,
operating income increased in fiscal 1997 by $25.6 million, or 78.8%, as
compared to fiscal 1996. The increase in operating income in fiscal 1996 as
compared to pro forma fiscal 1995 operating income was $12.0 million, or 58.5%,
which was also attributable to the fiscal 1996 increase in net sales and gross
margins. The actual operating income recorded in fiscal 1995 was $7.0 million,
which differs from the pro forma operating income for such period of $20.5
million due to the aforementioned pro forma impact of the Alcatel Business
operations and the acquisition of Adience.

25
<PAGE>
Consolidated interest expense for fiscal 1997 was $23.0 million,
representing a decrease of $4.8 million, or 17.3%, as compared to consolidated
interest expense of $27.8 million for fiscal 1996. The decrease in consolidated
interest expense reflected primarily the reduction in borrowing costs resulting
from the Reorganization and associated refinancing of a substantial portion of
the Company's outstanding debt at lower effective interest rates (see Notes 5
and 10 to the accompanying Consolidated Financial Statements).

Consolidated interest expense in fiscal 1996 of $27.8 million represented an
increase of $19.6 million over fiscal 1995 interest expense of $8.2 million.
This increase was due primarily to interest cost associated with debt assumed in
the Adience acquisition and debt incurred in connection with the acquisition of
the Alcatel Business.

In October 1996, the Company completed the sale of 6,900,000 shares
(amounting to 49.9% of the outstanding shares) of its Superior TeleCom
subsidiary (see Note 5 to the accompanying Consolidated Financial Statements).
Net cash proceeds from the sale amounted to approximately $101.6 million and
resulted in a pre-tax gain of $80.4 million which was recorded as non-operating
income. Current and deferred income tax expense related to this transaction of
$39.0 million has been included in the Company's provision for income taxes.
Thus, on an after tax basis, the net gain on sale of subsidiary stock in fiscal
1997 amounted to $41.4 million, or $2.24 per share.

In fiscal 1997, the provision for income tax expense was $53.1 million.
Included in the fiscal 1997 income tax provision was $39.0 million related to
the gain on sale of subsidiary stock. Excluding income taxes associated with
such gain, the fiscal 1997 effective tax rate would have been 37.5%. This
compares with fiscal 1996 income tax expense of $1.7 million, representing an
effective tax rate of 24.3%. The lower effective tax rate in fiscal 1996 was due
to the availability of tax loss carryforwards not previously recognized to
offset substantially all of the Company's federal income tax liability during
such period.

As a result of the aforementioned sale of a 49.9% interest in the common
stock of Superior TeleCom, a minority interest charge of $8.1 million was
recorded in fiscal 1997, representing the minority stockholders' interest in
Superior TeleCom's net income from October 17, 1996 (date of Superior's initial
public offering), through the end of the fiscal year.

Fiscal 1997 net income from continuing operations was $56.8 million ($3.04
per share). However, excluding the after tax gain on sale of subsidiary stock,
net income for fiscal 1997 was $15.4 million ($0.80 per share). Fiscal 1996 net
income from continuing operations was $5.2 million ($0.23 per share). The
comparative increase in net income from continuing operations for fiscal 1997
was due to the significant increase in operating income and somewhat lower
interest expense, offset partially by minority interest charges and higher
incremental tax rates. The fiscal 1996 comparative increase of $6.4 million in
net income from continuing operations from $1.2 million loss from continuing
operations for fiscal 1995 was due primarily to the impact of the acquired
Alcatel Business operations and the acquisition of Adience, partially reduced by
an increase in interest expense on acquisition related debt.

DISCONTINUED OPERATIONS

The loss from discontinued operations recorded in fiscal 1995 and fiscal
1996 related to the dividend distribution of a substantial portion of the
Company's common equity ownership in PolyVision Corporation. As a result of the
distribution, the operations of PolyVision Corporation were reported as
discontinued operations.

EXTRAORDINARY ITEM

In fiscal 1997, the Company incurred an after tax extraordinary loss of
$20.1 million on the early extinguishment of debt as compared with $4.9 million
in fiscal 1996. The extraordinary losses related to major refinancings which
were completed in both fiscal 1996 and fiscal 1997. See Note 10 to the
accompanying Consolidated Financial Statements.

26
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

For the twelve months ended April 30, 1997, the Company generated $37.9
million in cash flow from operating activities, consisting of $59.0 million in
cash flow generated from operations (net income plus non-cash charges) less
$21.1 million in cash flow used for working capital changes. Cash used for
investing activities amounted to $122.8 million which included $13.9 million in
capital expenditures and $101.1 million used in the Refraco UK acquisition (see
Note 6 to the accompanying consolidated financial statements). Cash provided by
financing activities amounted to $105.4 million, consisting of $156.4 million in
long-term borrowings, $68.8 million in borrowings under the Company's revolving
credit facilities and $62.7 million in net cash proceeds from the sale of
subsidiary stock, offset by $140.1 million in repayments of long-term
borrowings, $8.3 million in debt issuance costs, $15.0 million used for
repurchases of the Company's preferred stock and $20.0 million used for the
repurchase of Company and subsidiary treasury shares.

As discussed in Note 5 to the accompanying consolidated financial
statements, in October 1996 the Company completed the Reorganization involving
two of its wholly owned subsidiaries, Superior and DNE. In connection with the
Reorganization, Superior TeleCom (a new wholly owned subsidiary) became the
parent company of Superior and DNE and (i) completed an initial public offering
of 49.9% of its outstanding common stock for net proceeds of $101.6 million and
(ii) entered into a $150.0 million revolving credit facility of which net
proceeds of approximately $116.7 million were borrowed as of the date of
completion of the initial public offering. Net proceeds from these transactions
aggregating $205.0 million were paid to Alpine. The completion of the initial
public offering and related transactions resulted in the Company's ownership of
Superior TeleCom being reduced to 50.1%. Cash proceeds received by Alpine from
these transactions (net of applicable income taxes) along with $45.0 million in
borrowings under an interim bank credit facility were applied as follows: (i)
$48.5 million was used to repay in full the Company's existing revolving credit
facility; (ii) $143.5 million was used to redeem at a premium $131.9 million
face amount ($122.3 million recorded amount) of the Senior Notes; (iii) $15.6
million was used to redeem Alpine convertible preferred stock; and (iv) the
balance was added to Alpine's cash, cash equivalents and marketable securities
reserves.

As a result of the aforementioned transactions, the Company substantially
reduced the outstanding Senior Notes balance which carried an effective interest
rate of 14.5%, resulting in a material reduction in the Company's cost of
borrowings and interest expense. As of April 30, 1997, the remaining balance of
Senior Notes outstanding amounted to $21.1 million principal amount ($19.4
million recorded amount).

As discussed in Note 6 to the accompanying consolidated financial
statements, in April 1997 the Company formed Refraco, a new holding company for
its refractory segment, and acquired the Hepworth Business for a purchase price
of approximately $106.0 million. Refraco (and its subsidiaries) entered into
credit facilities aggregating $190 million, with the proceeds thereunder used to
complete the Refraco UK Acquisition and repay the $45.0 million balance
outstanding under the aforementioned interim credit facility. Included in the
Refraco credit facilities is a $35.0 million revolving credit arrangement, of
which $5.8 million was drawn at April 30, 1997.

At April 30, 1997, the Company's consolidated long term debt was $310.8
million, with the components of such debt, on an entity basis, consisting of the
following:

<TABLE>
<S> <C>
(in)
Long term debt obligation of: millions
Refraco and subsidiaries....................................... $ 170.0
Superior TeleCom and subsidiaries.............................. 121.3
Alpine corporate............................................... 19.5
-----------
$ 310.8
-----------
-----------
</TABLE>

The Company, on a consolidated basis, had $37.4 million in cash, cash
equivalents and marketable securities at April 30, 1997. Of such amount, $4.9
million was maintained by Refraco and subsidiaries, $1.1 million by Superior
TeleCom and subsidiaries, and $31.4 million at the Alpine corporate level. In
addition

27
<PAGE>
to the Alpine corporate cash, cash equivalents and marketable securities, Alpine
also holds approximately 6,470,000 shares (representing 50.1% common share
ownership) of Superior TeleCom (NYSE:SUT) which, based on the closing price on
July 22, 1997, had a market value of approximately $205.4 million and a
consolidated carrying value as recorded by the Company (net of minority
interest) of approximately $22.1 million. Superior TeleCom common stock owned by
Alpine with a market value of $60.0 million is pledged as collateral to secure
certain debt of Refraco.

As of April 30, 1997, Superior TeleCom had approximately $38.3 million in
excess funds availability under its revolving credit facility. Superior
TeleCom's principal debt service commitments over the next 12 months amount to
$0.4 million and management anticipates that capital expenditures of $9.0-$12.0
million will be required over such period. Superior TeleCom has typically
generated substantial cash flows from operating activities. Since the
Reorganization in October 1997, Superior TeleCom's cash flows from operating
activities approximated $25.8 million. Management anticipates that Superior
TeleCom will be able to generate sufficient cash flows from operating activities
to meet its commitments (including principal debt service and capital
expenditures). However, should any shortfall arise due to working capital
fluctuations or other factors, funds available under the revolving credit
facility should be sufficient to cover any such shortfall.

At April 30, 1997, Refraco had $29.2 million in excess funds available under
its revolving credit facility and an additional $4.9 million in cash and cash
equivalents. Refraco's principle debt service commitments over the next twelve
months amount to $2.7 million. Management also anticipates capital expenditures
over the next twelve months of $10.0-$15.0 million of which approximately $6.0
million consist of specifically identified cost reduction initiatives and are
not of a recurring nature. The Company anticipates that it will generate
positive cash flow from its operating activities, and that such cash flows along
with availability under its revolving credit facility and its cash and cash
equivalents should be sufficient to meet the aforementioned obligations over the
next twelve month period.

The above mentioned refinancings of Superior TeleCom and Refraco resulted in
a reduction of direct debt obligations at the Alpine corporate level to $19.4
million at April 30, 1997. However, the Superior TeleCom and Refraco credit
arrangements include restrictions and/or limitations on dividends or other
payments made by such subsidiaries to Alpine. For the next twelve month period,
Alpine expects to fund its corporate activities (which includes approximately
$6.0 million in estimated cash corporate overhead expenses and $2.5 million in
interest expense) from allowable management fees payable by its subsidiaries to
Alpine and from interest income, with any shortfall funded from Alpine's
existing corporate cash, cash equivalents and marketable securities reserves.

EXCEPT FOR THE HISTORICAL INFORMATION HEREIN, THE MATTERS DISCUSSED IN THIS
FORM 10-K INCLUDE FORWARD-LOOKING STATEMENTS THAT MAY INVOLVE A NUMBER OF RISKS
AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY SIGNIFICANTLY BASED ON A NUMBER OF
FACTORS, INCLUDING, BUT NOT LIMITED TO, RISKS IN PRODUCT AND TECHNOLOGY
DEVELOPMENT, MARKET ACCEPTANCE OF NEW PRODUCTS AND CONTINUING PRODUCT DEMAND,
THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING, AND CHANGING ECONOMIC
CONDITIONS, INCLUDING CHANGES IN SHORT TERM INTEREST RATES AND OTHER RISK
FACTORS DETAILED IN THE COMPANY'S MOST RECENT FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Alpine's consolidated financial statements at April 30, 1996 and 1997 and
for each of the three years in the period ended April 30, 1997 and the report of
the independent accountants thereon and financial statement schedules required
under Regulation S-X are submitted herein as a separate section following Item
14 of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

28
<PAGE>
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

The information required by this Item is incorporated herein by reference to
Alpine's definitive Proxy Statement to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A within 120 days after the end of the
fiscal year covered by this report ("Alpine's Proxy Statement").

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by reference to
Alpine's Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is incorporated herein by reference to
Alpine's Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated herein by reference to
Alpine's Proxy Statement.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1), (a)(2) See the separate section of this report following Item 14 for
a list of financial statements and schedules filed herewith.

(a)(3) Exhibits as required by Item 601 of Regulation S-K are listed in Item
14(c) below.

(b) The Company filed one Report on Form 8-K during the fourth quarter of
fiscal 1997. The report, dated April 15, 1997 and filed April 30, 1997, reported
the Hepworth Acquisition and the Refraco Credit Agreement and Term Loan
Agreement entered into in connection therewith. On June 27, 1997, the Company
filed Amendment No. 1 to the foregoing Report on Form 8-K/A which, among other
things, included financial statements of the business acquired and unaudited pro
forma condensed combined financial statements of the Company.

ITEM 14(C) EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------ ----------------------------------------------------------------------------
<S> <C>

2(a) Asset Purchase Agreement, dated as of March 17, 1995 by and among Alcatel NA
Cable Systems, Inc., Alcatel Canada Wire, Inc. Superior Cable Corporation
and Superior TeleTec Inc. (the "Alcatel Acquisition Agreement")
(incorporated herein by reference to Exhibit 1 to the Current Report on
Form 8-K of Alpine dated May 24, 1995)

2(b) Amendment dated May 11, 1995 to Asset Purchase Agreement by and among
Alcatel NA Cable Systems, Inc., Alcatel Canada Wire, Inc., Superior Cable
Corporation and Superior TeleTec Inc. (incorporated herein by reference to
Exhibit 2 to the Current Report on Form 8-K of Alpine dated May 24, 1995)

2(c) Agreement Regarding Certain Employee Benefit Plans, amending the Alcatel
Acquisition Agreement, dated June 10, 1996 (incorporated herein by
reference to Exhibit 2(b) to the Annual Report on Form 10-K of Alpine for
the year ended April 30, 1996 (the "1996 10-K")
</TABLE>

29
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------ ----------------------------------------------------------------------------
<S> <C>
2(d) Agreement and Plan of Merger, dated as of December 21, 1994, as amended, by
and among Information Display Technology, Inc., IDT PolyVision Acquisition
Corp., IDT Posterloid Acquisition Corp., The Alpine Group, Inc.,
Alpine/PolyVision, Inc. and Posterloid Corporation (incorporated herein by
reference to Exhibit 2 to Amendment No. 1 to Alpine's Statement on
Schedule 13D relating to its beneficial ownership of equity securities of
Information Display Technology, Inc. dated December 28, 1994)

2(e) Amendment to the Agreement and Plan of Merger, dated as of December 21,
1994, by and among Information Display Technology, Inc., IDT PolyVision
Acquisition Corp., IDT Posterloid Acquisition Corp., The Alpine Group,
Inc., Alpine/ PolyVision, Inc. and Posterloid Corporation (incorporated
herein by reference to Exhibit 1 to Amendment No. 2 to Alpine's Statement
on Schedule 13D relating to its beneficial ownership of equity securities
of Information Display Technology Inc. dated May 5, 1995)

2(f) Amended and Restated Stock Purchase Agreement, dated as of October 11, 1994,
by and among The Alpine Group, Inc. and certain stockholders of Adience,
Inc. ("Adience") as listed therein, as amended (incorporated herein by
reference to Exhibit 2.1 to the Company's Current Report on Form 8-K dated
January 5, 1995)

2(g) Share Purchase Agreement, dated April 15, 1997, between Hepworth R. and M.
Holdings Limited, Hepworth P.L.C., Refraco Holdings Limited and Alpine
(incorporated herein by reference to Exhibit 1 to the Company's Current
Report on Form 8-K dated April 15, 1997 (the "April 1997 8-K"))

3(a) Certificate of Incorporation of Alpine (incorporated herein by reference to
Exhibit 3(a) to the Annual Report on Form 10-K of Alpine for the year
ended April 30, 1995 (the "1995 10-K"))

3(b) Amendment to the Certificate of Incorporation of Alpine (incorporated herein
by reference to Exhibit 3(aa) of Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (Registration No. 33-53434) of Alpine,
as filed with the Commission on May 12, 1993)

3(c) Certificate of the Powers, Designations, Preferences and Rights of the 9%
Cumulative Convertible Preferred Stock of Alpine (incorporated herein by
reference to Exhibit 1 to the Quarterly Report on Form 10-Q of Alpine for
the quarter ended January 31, 1989)

3(d) Certificate of the Powers, Designations, Preferences and Rights of the 9%
Cumulative Convertible Senior Preferred Stock of Alpine (incorporated
herein by reference to Exhibit 3(c) to the Annual Report on Form 10-K of
Alpine for the fiscal year ended April 30, 1992 ("1992 10-K"))

3(e) Certificate of the Powers, Designations, Preferences and Rights of the 8.5%
Cumulative Convertible Senior Preferred Stock of Alpine (incorporated
herein by reference to Exhibit 3(e) to the Annual Report on Form 10-K of
Alpine for the fiscal year ended April 30, 1994)

3(f) Certificate of the Powers, Designations, Preferences and Rights of the 8%
Cumulative Convertible Senior Preferred Stock of the Company (incorporated
herein by reference to Exhibit 3(f) to the 1995 10-K)
</TABLE>

30
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------ ----------------------------------------------------------------------------
<S> <C>
3(g) By-laws of Alpine (incorporated herein by reference to Exhibit 3(g) to the
1995 10-K)

4(a) Indenture, dated as of July 15, 1995, by and among Alpine, Adience, Superior
Telecommunications Inc., Superior Cable Corporation and Marine Midland
Bank ("Marine Midland"), as trustee (incorporated herein by reference to
Exhibit 10(ee) to the 1995 10-K)

4(b)* Supplemental Indenture to the above Indenture, dated as of October 2, 1996,
among Alpine, Superior, Adience, Superior Cable Corporation and Marine
Midland, as trustee

4(c)* Second Supplemental Indenture to the above Indenture, dated as of January
31, 1997, among Alpine, Superior, Adience, Superior Cable Corporation and
Marine Midland, as trustee

4(d) Pledge Agreement, dated as of July 21, 1995, by and between Alpine and
Marine Midland (incorporated herein by reference to Exhibit 10(ff) to the
1995 10-K)

4(e)* Amendment, dated as of October 2, 1996, between Alpine and Marine Midland,
as trustee, to the above Pledge Agreement

4(f)* Amendment No. 2, dated as of January 27, 1997, between Alpine and Marine
Midland, as trustee, to the above Pledge Agreement

4(g) Indenture, dated as of June 30, 1993, between Adience, Inc. ("Adience") and
IBJ Schroder Bank & Trust Company ("IBJ"), as trustee (incorporated herein
by reference to Registration Statement No. 33-72024 of Adience, Inc.)

4(h) Supplemental Indenture, dated as of July 21, 1995, to Indenture by and
between Adience and IBJ dated as of June 30, 1993 (incorporated herein by
reference to Exhibit 10(cc) to the 1995 10-K)

10(a) Amended and Restated 1984 Restricted Stock Plan of Alpine (incorporated
herein by reference to Exhibit 10.5 to Form S-4 (Registration No. 33-9978)
of Alpine, as filed with the Commission on October 5, 1993 (the "S-4
Registration Statement")

10(b) Amended and Restated 1987 Long Term Equity Incentive Plan of Alpine
(incorporated herein by reference to Exhibit 10.4 to the S-4 Registration
Statement)

10(c) Stock Purchase Agreement, dated February 14, 1992, by and between Alpine and
Dataproducts Corporation, relating to the purchase of shares of capital
stock of DNE (incorporated herein by reference to Exhibit 1 to the Current
Report on Form 8-K of Alpine dated March 2, 1992 (the "March 1992 8-K"))

10(d) Loan Agreement, dated as of February 13, 1992, by and among Alpine, DNE and
the Connecticut Development Authority (incorporated herein by reference to
Exhibit 3 to the March 1992 8-K)

10(e) Agreement and Plan of Merger by and between Alpine and Superior TeleTec
Inc., dated as of June 17, 1993 and amended on September 24, 1993
(incorporated herein by reference to Exhibit 2 to the S-4 Registration
Statement)
</TABLE>

31
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------ ----------------------------------------------------------------------------
<S> <C>
10(f) Exchange Agreement, dated June 17, 1993 by and among Alpine, PV Partners,
Suez Ventures, EUROC, and Samuel Montagu Finance (incorporated herein by
reference to Exhibit 10.1 to the S-4 Registration Statement)

10(h) Amended and Restated Debt Exchange Agreement, dated as of October 11, 1994,
among Alpine and certain debtholders of Adience as listed therein (as
amended through April 14, 1995) (incorporated herein by reference to
Exhibit 10(k) to the 1995 10-K)

10(j) Lease Agreement by and between ALP(TX) QRS 11-28, Inc., and Superior TeleTec
Transmission Products, Inc., dated as of December 16, 1993 (incorporated
herein by reference to Exhibit (i) to the Quarterly Report on Form 10-Q of
Alpine for the Quarter ended January 31, 1994)

10(k) First Amendment to Lease Agreement, dated as of May 10, 1995, by and between
ALP (TX) QRS 11-28, Inc. and Superior TeleTec Inc. (incorporated herein by
reference to Exhibit 10(o) to the 1995 10-K)

10(l) Second Amendment to Lease Agreement, dated as of July 21, 1995, by and
between ALP(TX) QRS 11-28, Inc. and Superior Telecommunications Inc.
(incorporated herein by reference to Exhibit 10(x) to the 1995 10-K)

10(m) Third Amendment to Lease Agreement, dated as of October 2, 1996, by and
between ALP(TX) QRWS 11-28, Inc. and Superior Telecommunications Inc.
(incorporated herein by reference to Exhibit 10.12 to the Registration
Statement on Form S-1 (Registration No. 333-09933) of Superior TeleCom, as
filed with the Commission on August 9, 1996, as amended (the "TeleCom
S-1"))

10(n) Amended and Restated Debt Exchange Agreement, dated as of October 11, 1994,
among Alpine and certain debtholders of Adience as listed therein (as
amended through April 14, 1995) (incorporated herein by reference to
Exhibit 10(k) to the 1995 10-K)

10(o) Amendment dated as of June 30, 1995, to Amended and Restated Debt Exchange
Agreement dated as of October 11, 1994, among Alpine and certain
debtholders of Adience, as listed therein (incorporated herein by
reference to Exhibit 10(bb) to the 1995 10-K)

10(p)* Form of Amendment dated as of October 15, 1995, to Amended and Restated Debt
Exchange Agreement dated as of October 11, 1994, among Alpine and certain
debtholders of Adience, as listed therein

10(q) Note Purchase Agreement by and among Alpine, Superior TeleTec, Inc.,
Superior Cable Corporation and Nomura International Trust Company
(incorporated herein by reference to Exhibit 3 to Alpine's Current Report
on Form 8-K dated May 24, 1995)

10(r) Letter Agreement, dated May 24, 1995, by and between Alpine and PolyVision
Corporation ("PolyVision") relating to $5,000,000 credit commitment
(incorporated herein by reference to Exhibit 10(m) to 1995 10-K)]
</TABLE>

32
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------ ----------------------------------------------------------------------------
<S> <C>
10(s) Purchase Agreement, dated as of July 14, 1995, by and among Alpine, Adience,
Superior Telecommunications Inc., Superior Cable Corporation, Merrill
Lynch & Co., Nomura Securities International, Inc. and First Albany
Corporation (incorporated herein by reference to Exhibit 10(p) to the 1995
10-K)

10(t) Employment Agreement, dated as of April 26, 1996, by and between Alpine and
Steven S. Elbaum (incorporated herein by reference to Exhibit 10(q) to the
1996 10-K)

10(u) Employment Agreement, dated as of April 26, 1996, by and between Alpine and
Stewart H. Wahrsager (incorporated herein by reference to Exhibit 10(r) to
the 1996 10-K)

10(v) Employment Agreement, dated as of April 26, 1996, by and between Alpine and
Bragi F. Schut (incorporated herein by reference to Exhibit 10(s) to the
1996 10-K)

10(w) Employment Agreement, dated as of April 26, 1996, by and between Alpine and
Stephen M. Johnson (incorporated herein by reference to Exhibit 10(t) to
the 1996 10-K)

10(x) Employment Agreement, dated as of April 26, 1996, by and between Alpine and
David S. Aldridge (incorporated herein by reference to Exhibit 10(u) to
the 1996 10-K)

10(y) Employment Agreement, dated as of April 26, 1996, between Superior and
Justin F. Deedy, Jr. (incorporated herein by reference to Exhibit 10.3 to
the TeleCom S-1)

10(z) Employment Agreement, dated as of October 17, 1996, between TeleCom and
Steven S. Elbaum (incorporated herein by refrence to Exhibit 10(14) to the
Quarterly Report: on Form 10-Q of Superior TeleCom, Inc. for the Quarter
ended January 31, 1997)

10(aa) Alpine Pledge Agreement, dated as of April 15, 1997, made by Alpine in favor
of Bankers Trust Company, as Collateral Agent for the benefit of the
Secured Creditors (as defined therein) (incorporated herein by reference
to Exhibit 4 to Amendment No. 1 to Alpine's Current Report on Form 8-K/A
dated June 27, 1997 (the "June 1997 8-K/A").

10(bb) First Amendment, dated as of June 11, 1997, to the Alpine Pledge Agreement
(incorporated herein by reference to Exhibit 5 to the June 1997 8-K/A).

10(cc) Guaranty, dated as of April 15, 1997, made by Alpine for the benefit of the
Secured Creditors (as defined therein) (incorporated herein by reference
to Exhibit 6 to the June 1997 8-K/A).

10(dd) First Amendment, dated as of June 11, 1997, to the Guaranty (incorporated
herein by reference to Exhibit 7 to the June 1997 8-K/A).

10(ee) Credit Agreement, dated as of April 15, 1997, among Refraco, Inc., Adience,
Refraco Holdings Limited, Hepworth Refractories (Holdings) Limited,
various banks, and Bankers Trust Company, as Administrative Agent
(incorporated herein by reference to Exhibit 2 to the April 1997 8-K).

10(ff) First Amendment, dated as of June 11, 1997, to the Credit Agreement
(incorporated herein by reference to Exhibit 8 to the June 1997 8-K/A).
</TABLE>

33
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------------ ----------------------------------------------------------------------------
<S> <C>
10(gg) Second Amendment, dated as of June 12, 1997, to the Credit Agreement
(incorporated herein by reference to Exhibit 9 to the June 1997 8-K/A).

10(hh) Term Loan Agreement, dated as of April 15, 1997, among Refraco Inc., various
banks, and Bankers Trust Company, as Administrative Agent (incorporated
herein by reference to Exhibit 3 to the April 1997 8-K).

10(ii) First Amendment, dated as of June 11, 1997, to the Term Loan Agreement
(incorporated herein by reference to Exhibit 10 to the 1997 8-K/A).

10(jj) Second Amendment, dated as of June 12, 1997, to the Term Loan Agreement
(incorporated herein by reference to Exhibit 11 to the June 1997 8-K/A).

10(kk) Letter Agreement between the Company and Superior TeleCom, dated October 8,
1996, relating to a capital contribution by the Company to Superior
TeleCom (incorporated herein by reference to Exhibit 10.2 to the TeleCom
S-1)

10(ll) Letter Agreement between the Company and Superior TeleCom, dated October 2,
1996, relating to tax indemnification (incorporated herein by reference to
Exhibit 10.5 to the TeleCom S-1)

10(mm) Tax Allocation Agreement among the Company, Superior TeleCom, and its
subsidiaries, dated as of October 2, 1996 (incorporated herein by
reference to Exhibit 10.9 to the TeleCom S-1)

10(nn) Exchange Agreement between the Company and Superior TeleCom, dated October
2, 1996 (incorporated herein by reference to Exhibit 10.10 to the TeleCom
S-1)

10(oo) Services Agreement, dated October 2, 1996, between the Company and Superior
TeleCom (incorporated herein by reference to Exhibit 10.4 to the TeleCom
S-1)

10(pp)* Amendment No. 1, dated as of May 1, 1997, to the Services Agreement.

10(qq) Revolving Credit Agreement among Superior TeleCom, each domestic subsidiary
of Superior TeleCom, certain lending institutions and Bankers Trust
Company, dated as of October 2, 1996 (incorporated herein by reference to
Exhibit 10.6 to the TeleCom S-1)

10(rr) Registration Rights Agreement, dated October 2, 1996, between the Company
and Superior TeleCom (incorporated herein by reference to Exhibit 10.11 to
the TeleCom S-1)

10(ss)* 1997 Interim Stock Option Plan

10(tt)* 1997 Stock Option Plan

21* List of Subsidiaries

23(a)* Consent of Arthur Andersen LLP

27* Financial Data Schedule
</TABLE>

- ------------------------

* filed herewith

34
<PAGE>
INDEX TO FINANCIAL STATEMENTS

AUDITED CONSOLIDATED FINANCIAL STATEMENTS:

<TABLE>
<CAPTION>
<S> <C>
Report of independent public accountants.............................................. F-2
Consolidated balance sheets at April 30, 1996 and 1997................................ F-3
Consolidated statements of operations for the years ended April 30, 1995, 1996 and
1997................................................................................ F-4
Consolidated statements of stockholders' equity for the years ended April 30, 1995,
1996 and 1997....................................................................... F-5
Consolidated statements of cash flows for the years ended April 30, 1995, 1996 and
1997................................................................................ F-8
Notes to consolidated financial statements............................................ F-11

SCHEDULE:
Schedule I--Condensed Financial Information of Registrant (Parent Company)............ F-33
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders of
The Alpine Group, Inc.:

We have audited the accompanying consolidated balance sheets of The Alpine
Group, Inc. ("Alpine") (a Delaware corporation) and subsidiaries as of April 30,
1996 and 1997, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three years in the period
ended April 30, 1997. These consolidated financial statements and the financial
statement schedule referred to below are the responsibility of Alpine's
management. Our responsibility is to express an opinion on these consolidated
financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
Alpine Group, Inc. and subsidiaries as of April 30, 1996 and 1997 and the
results of their operations and their cash flows for each of the three years in
the period ended April 30, 1997 in conformity with generally accepted accounting
principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statements is presented for the purpose of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic 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 financial statements taken as a
whole.

Arthur Andersen, LLP

Atlanta, Georgia
June 13, 1997

F-2
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
APRIL 30,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
(IN THOUSANDS)
ASSETS
Current assets:
Cash and cash equivalents............................................................... $ 1,119 $ 21,606
Marketable securities................................................................... 7,713 15,807
Accounts receivable (less allowance for doubtful
accounts of $506 in 1996 and $2,631 in 1997).......................................... 60,670 119,506
Inventories............................................................................. 68,990 119,234
Other current assets.................................................................... 7,850 17,321
---------- ----------
Total current assets................................................................ 146,342 293,474
Property, plant and equipment, net........................................................ 99,425 155,484
Long-term investments and other assets.................................................... 26,403 32,388
Goodwill, net............................................................................. 82,734 106,878
---------- ----------
Total assets........................................................................ $ 354,904 $ 588,224
---------- ----------
---------- ----------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable........................................................................ $ 53,167 $ 85,906
Accrued expenses........................................................................ 40,364 69,948
Current portion of long-term debt....................................................... 2,132 2,653
---------- ----------
Total current liabilities........................................................... 95,663 158,507
---------- ----------
Long-term debt, less current portion...................................................... 207,645 308,171
Minority interest in subsidiary........................................................... -- 22,094
Other long-term liabilities............................................................... 8,460 45,026
---------- ----------
Total liabilities................................................................... 311,768 533,798
---------- ----------
Commitments and contingencies
Stockholders' equity:
8% cumulative convertible preferred stock at liquidation value.......................... 9,831 --
9% cumulative convertible preferred stock at liquidation value.......................... 1,927 1,927
Common stock, $.10 par value; authorized 25,000,000 shares;
19,307,012 shares issued in 1996 and 18,834,256 shares issued in 1997................. 1,931 1,883
Capital in excess of par value.......................................................... 113,843 113,459
Cumulative translation adjustment....................................................... (82) (1,316)
Unrealized loss on securities available for sale, net of deferred tax................... -- (716)
Accumulated deficit..................................................................... (78,998) (48,048)
---------- ----------
48,452 67,189
Shares of common stock in treasury, at cost;
1996, 1,025,496 shares; 1997, 1,612,047 shares.......................................... (4,806) (12,130)
Receivable from stockholders.............................................................. (510) (633)
---------- ----------
Total stockholders' equity............................................................ 43,136 54,426
---------- ----------
Total liabilities and stockholders' equity.......................................... $ 354,904 $ 588,224
---------- ----------
---------- ----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
----------------------------------
<S> <C> <C> <C>
1995 1996 1997
---------- ---------- ----------

<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
Net sales.................................................................... $ 198,135 $ 524,113 $ 579,794
Cost of goods sold........................................................... 169,125 453,785 477,791
---------- ---------- ----------
Gross profit............................................................... 29,010 70,328 102,003
Selling, general and administrative.......................................... 20,487 35,148 40,833
Amortization of goodwill..................................................... 1,527 2,658 3,054
---------- ---------- ----------
Operating income........................................................... 6,996 32,522 58,116
Interest income.............................................................. 345 2,146 2,023
Interest (expense)........................................................... (8,197) (27,795) (22,995)
Gain on sale of subsidiary stock............................................. -- -- 80,397
Other income, net............................................................ 28 22 505
---------- ---------- ----------
Income (loss) from continuing operations before income taxes............... (828) 6,895 118,046
Provision for income taxes................................................... (348) (1,676) (53,103)
---------- ---------- ----------
Income (loss) from continuing operations before minority interest.......... (1,176) 5,219 64,943
Minority interest in earnings of subsidiary.................................. -- -- 8,097
---------- ---------- ----------
Income (loss) from continuing operations................................... (1,176) 5,219 56,846
(Loss) from discontinued operations.......................................... (4,868) (2,213) --
---------- ---------- ----------
Income (loss) before extraordinary (loss).................................. (6,044) 3,006 56,846
Extraordinary (loss) on early extinguishment of debt......................... -- (4,856) (20,126)
---------- ---------- ----------
Net income (loss).......................................................... (6,044) (1,850) 36,720
Preferred stock dividends.................................................... (801) (1,098) (575)
Preferred stock redemption premium........................................... -- -- (5,195)
---------- ---------- ----------
Net income (loss) applicable to common stock............................. $ (6,845) $ (2,948) $ 30,950
---------- ---------- ----------
---------- ---------- ----------
Net income (loss) per share of common stock:
Income (loss) from continuing operations................................... $ (0.11) $ 0.23 $ 3.04
(Loss) from discontinued operations........................................ (0.27) (0.12) --
Extraordinary (loss) on early extinguishment of debt....................... -- (0.27) (1.09)
Preferred stock redemption premium......................................... -- -- (0.28)
---------- ---------- ----------
Net income (loss) per share of common stock.............................. $ (0.38) $ (0.16) $ 1.67
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED APRIL 30, 1995, 1996 AND 1997
<TABLE>
<CAPTION>
8.5%
CUMULATIVE
9% CUMULATIVE 8% CUMULATIVE CONVERTIBLE
CAPITAL CONVERTIBLE CONVERTIBLE PREFERRED
COMMON STOCK IN PREFERRED STOCK PREFERRED STOCK STOCK
---------------------- EXCESS ------------------------ ---------------------- -----------
SHARES AMOUNT OF PAR SHARES AMOUNT SHARES AMOUNT SHARES
--------- ----------- --------- ----------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Balance at April 30,
1994.................. 18,073,512 $ 1,808 $ 109,593 2,677 $ 2,677 -- $ -- 3,500
Compensation expense
related to stock
options and grants.... 114,579 11 377
Dividends on preferred
stock.................
Foreign currency
translation...........
Conversion of
convertible preferred
stock................. 140,000 14 736 (750) (750)
Conversion of
convertible notes..... 7,165 1 40
Exercise of stock
options............... 93,885 9 247
Shares issued for
directors' fees....... 21
Purchase of treasury
stock.................
Exchange of common stock
for preferred stock... (1,000,000) (100) (7,900) 160,000 8,000
Acquisition of Adience,
Inc................... 82,267 4,113
Repurchase of preferred
stock................. (5,787) (290)
Net (loss) for the year
ended April 30,
1995..................
--------- ----------- --------- ----- ----------- --------- ----------- -----
Balance at April 30,
1995.................. 17,429,141 $ 1,743 $ 103,114 1,927 $ 1,927 236,480 $ 11,823 3,500
--------- ----------- --------- ----- ----------- --------- ----------- -----
--------- ----------- --------- ----- ----------- --------- ----------- -----

FOREIGN TREASURY STOCK
ACCUMULATED CURRENCY ---------------------- RECEIVABLE FROM
AMOUNT DEFICIT TRANSLATION SHARES AMOUNT STOCKHOLDERS TOTAL
----------- ------------ ----------- --------- ----------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>

Balance at April 30,
1994.................. $ 3,500 $ (69,205) $ -- (14,511) $ (61) $ (314) $ 47,998
Compensation expense
related to stock
options and grants.... 388
Dividends on preferred
stock................. (801) (801)
Foreign currency
translation........... 144 144
Conversion of
convertible preferred
stock.................
Conversion of
convertible notes..... 41
Exercise of stock
options............... 256
Shares issued for
directors' fees....... 10,221 43 64
Purchase of treasury
stock................. (229,000) (1,211) (1,211)
Exchange of common stock
for preferred stock...
Acquisition of Adience,
Inc................... 4,113
Repurchase of preferred
stock................. (290)
Net (loss) for the year
ended April 30,
1995.................. (6,044) (6,044)
----------- ------------ ----------- --------- ----------- ----- ---------
Balance at April 30,
1995.................. $ 3,500 $ (76,050) $ 144 (233,290) $ (1,229) $ (314) $ 44,658
----------- ------------ ----------- --------- ----------- ----- ---------
----------- ------------ ----------- --------- ----------- ----- ---------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)
FOR THE YEARS ENDED APRIL 30, 1995, 1996 AND 1997
<TABLE>
<CAPTION>
8.5%
CUMULATIVE
9% CUMULATIVE 8% CUMULATIVE CONVERTIBLE
CAPITAL CONVERTIBLE CONVERTIBLE PREFERRED
COMMON STOCK IN PREFERRED STOCK PREFERRED STOCK STOCK
---------------------- EXCESS ------------------------ ---------------------- -----------
SHARES AMOUNT OF PAR SHARES AMOUNT SHARES AMOUNT SHARES
--------- ----------- --------- ----------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Balance at April 30,
1995................ 17,429,141 $ 1,743 $ 103,114 1,927 $ 1,927 236,480 $ 11,823 3,500
Compensation expense
related to stock
options and
grants.............. 123,584 12 591
Loans to
stockholders........
Dividends on preferred
stock...............
Foreign currency
translation.........
Conversion of
convertible
preferred stock..... 737,476 74 3,804 (3,500)
Conversion of
convertible notes... 51,483 5 246
Exercise of stock
options............. 46,060 5 115
Shares issued for
directors' fees..... (18)
Purchase of treasury
stock...............
Retirement of Adience
11% Senior Notes.... 44,900 2,244
Adience acquisition
and debt exchange
reset............... 919,268 92 4,945 (84,731) (4,236)
PolyVision merger and
distribution........ 1,046
Net (loss) for the
year ended April 30,
1996................
--------- ----------- --------- ----- ----------- --------- ----------- -----------
Balance at April 30,
1996................ 19,307,012 $ 1,931 $ 113,843 1,927 $ 1,927 196,649 $ 9,831 --
--------- ----------- --------- ----- ----------- --------- ----------- -----------
--------- ----------- --------- ----- ----------- --------- ----------- -----------

FOREIGN TREASURY STOCK
ACCUMULATED CURRENCY ---------------------- RECEIVABLE FROM
AMOUNT DEFICIT TRANSLATION SHARES AMOUNT STOCKHOLDERS TOTAL
----------- ------------ ------------- --------- ----------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>

Balance at April 30,
1995................ $ 3,500 $ (76,050) $ 144 (233,290) $ (1,229) $ (314) $ 44,658
Compensation expense
related to stock
options and
grants.............. 603
Loans to
stockholders........ (196) (196)
Dividends on preferred
stock............... (1,098) (1,098)
Foreign currency
translation......... (226) (226)
Conversion of
convertible
preferred stock..... (3,500) 378
Conversion of
convertible notes... 5,000 20 271
Exercise of stock
options............. 120
Shares issued for
directors' fees..... 11,042 59 41
Purchase of treasury
stock............... (808,248) (3,656) (3,656)
Retirement of Adience
11% Senior Notes.... 2,244
Adience acquisition
and debt exchange
reset............... 801
PolyVision merger and
distribution........ 1,046
Net (loss) for the
year ended April 30,
1996................ (1,850) (1,850)
----------- ------------ ----- --------- ----------- ----- ---------
Balance at April 30,
1996................ -- $ (78,998) $ (82) (1,025,496) $ (4,806) $ (510) $ 43,136
----------- ------------ ----- --------- ----------- ----- ---------
----------- ------------ ----- --------- ----------- ----- ---------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)
FOR THE YEARS ENDED APRIL 30, 1995, 1996 AND 1997
<TABLE>
<CAPTION>
9% CUMULATIVE 8% CUMULATIVE
CAPITAL CONVERTIBLE CONVERTIBLE
COMMON STOCK IN PREFERRED STOCK PREFERRED STOCK
---------------------- EXCESS ------------------------ ---------------------- ACCUMULATED
SHARES AMOUNT OF PAR SHARES AMOUNT SHARES AMOUNT DEFICIT
--------- ----------- --------- ----------- ----------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Balance at April 30,
1996.................... 19,307,012 $ 1,931 $ 113,843 1,927 $ 1,927 196,649 $ 9,831 $ (78,998)
Compensation expense
related to stock options
and grants.............. 113,651 11 2,220
Loans to stockholders.....
Dividends on preferred
stock................... (575)
Foreign currency
translation.............
Redemption of preferred
stock................... (196,649) (9,831)
Preferred stock redemption
premium................. (5,195)
Exercise of stock
options................. 405,254 40 1,918
Employee stock purchase
plan.................... 8,339 1 48
Purchase of treasury
stock...................
Retirement of treasury
stock................... (1,000,000) (100) (4,570)
Unrealized loss on
securities available for
sale....................
Net income for the year
ended April 30, 1997.... 36,720
--------- ----------- --------- ----- ----------- --------- ----------- ------------
Balance at April 30,
1997.................... 18,834,256 $ 1,883 $ 113,459 1,927 $ 1,927 -- -- $ (48,048)
--------- ----------- --------- ----- ----------- --------- ----------- ------------
--------- ----------- --------- ----- ----------- --------- ----------- ------------

<CAPTION>
UNREALIZED
(LOSS) ON
FOREIGN SECURITIES TREASURY STOCK
CURRENCY AVAILABLE -------------------- RECEIVABLE FROM
TRANSLATION FOR SALE SHARES AMOUNT STOCKHOLDERS TOTAL
----------- ------------- --------- --------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C>

Balance at April 30,
1996.................... $ (82) $ -- (1,025,496) $ (4,806) $ (510) $ 43,136
Compensation expense
related to stock options
and grants.............. 2,231
Loans to stockholders..... (123) (123)
Dividends on preferred
stock................... (575)
Foreign currency
translation............. (1,234) (1,234)
Redemption of preferred
stock................... (9,831)
Preferred stock redemption
premium................. (5,195)
Exercise of stock
options................. 1,958
Employee stock purchase
plan.................... 49
Purchase of treasury
stock................... (1,586,551) (11,994) (11,994)
Retirement of treasury
stock................... 1,000,000 4,670
Unrealized loss on
securities available for
sale.................... (716) (716)
Net income for the year
ended April 30, 1997.... 36,720
----------- ----- --------- --------- ----- ---------
Balance at April 30,
1997.................... $ (1,316) $ (716) (1,612,047) $ (12,130) $ (633) $ 54,426
----------- ----- --------- --------- ----- ---------
----------- ----- --------- --------- ----- ---------
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-7
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-----------------------------------
<S> <C> <C> <C>
1995 1996 1997
--------- ----------- -----------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Income (loss) from continuing operations................................... $ (1,176) $ 5,219 $ 56,846
Adjustments to reconcile income (loss) from continuing operations to net
cash provided by continuing operations:
Depreciation and amortization............................................ 6,169 12,566 14,442
Amortization of deferred debt issuance costs and accretion of debt
discount............................................................... 885 2,564 2,157
Compensation expense related to stock options and grants................. 388 603 2,231
Provision (benefit) for deferred income taxes............................ (47) (74) 16,681
Minority interest in earnings of subsidiary.............................. -- -- 8,097
Gain on sale of subsidiary stock, net of income taxes.................... -- -- (41,427)
Other, net............................................................... 30 271 --
Change in assets and liabilities, net of effects from companies acquired:
Accounts receivable.................................................... (8,001) 8,165 (4,509)
Inventories............................................................ (3,164) (975) (48)
Other current assets................................................... (659) (187) 1,134
Other assets........................................................... (2,126) (268) (1,082)
Accounts payable and accrued expenses.................................. 11,123 9,966 (13,781)
Other long-term liabilities............................................ (241) 528 (2,867)
--------- ----------- -----------
Cash provided by continuing operations....................................... 3,181 38,378 37,874
--------- ----------- -----------

Loss from discontinued operations.......................................... (4,868) (2,213) --
Adjustments to reconcile loss from discontinued operations to net cash used
for discontinued operations:
Depreciation and amortization............................................ 746 -- --
Change in net assets..................................................... (11) 1,257 --
--------- ----------- -----------
Cash used for discontinued operations.................................... (4,133) (956) --
--------- ----------- -----------
Cash (used for) provided by operating activities............................. (952) 37,422 37,874
--------- ----------- -----------
Cash flows from investing activities:
Acquisitions, net of cash acquired......................................... 802 (105,216) (101,100)
Capital expenditures for continuing operations............................. (2,635) (6,228) (13,863)
Capital expenditures for acquisition of BICC assets........................ -- (5,447) --
Investment in marketable securities........................................ 477 (6,218) (8,094)
Advances to PolyVision Corporation......................................... -- (3,086) (2,467)
Proceeds from sale of assets............................................... -- -- 3,174
Other...................................................................... 124 (222) (455)
--------- ----------- -----------
Cash (used for) investing activities......................................... (1,232) (126,417) (122,805)
--------- ----------- -----------
</TABLE>

F-8
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
----------------------------------
<S> <C> <C> <C>
1995 1996 1997
--------- ---------- -----------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from financing activities:
Short-term borrowings (repayments).......................................... $ 20,685 $ (21,000) $ --
Borrowings under revolving credit facilities, net........................... (1,530) 16,643 68,809
Long-term borrowings of continuing operations............................... 636 281,726 156,442
Repayments of long-term borrowings of continuing operations................. (3,478) (185,776) (140,091)
Proceeds from sale of stock of subsidiary, net of income taxes.............. -- -- 62,672
Proceeds from exercise of stock options..................................... 256 120 1,835
Debt issuance costs......................................................... -- (12,573) (8,280)
Redemption of preferred stock............................................... -- -- (15,026)
Dividends on preferred stock................................................ (505) (720) (575)
Purchase of treasury shares................................................. (1,211) (3,656) (11,994)
Purchase of subsidiary common stock......................................... -- -- (8,055)
Other....................................................................... 370 (196) (319)
--------- ---------- -----------
Cash provided by financing activities......................................... 15,223 74,568 105,418
--------- ---------- -----------
Net increase (decrease) in cash and cash equivalents.......................... 13,039 (14,427) 20,487
Cash and cash equivalents at beginning of year................................ 2,507 15,546 1,119
--------- ---------- -----------
Cash and cash equivalents at end of year...................................... $ 15,546 $ 1,119 $ 21,606
--------- ---------- -----------
--------- ---------- -----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-9
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
------------------------------------
<S> <C> <C> <C>
1995 1996 1997
---------- ----------- -----------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Supplemental Disclosures:
Cash paid for interest................................................... $ 5,615 $ 19,810 $ 23,913
---------- ----------- -----------
---------- ----------- -----------
Cash paid for income taxes............................................... $ 287 $ 631 $ 27,741
---------- ----------- -----------
---------- ----------- -----------
Noncash investing and financing activities:
Exchange of common stock for preferred stock:
Preferred stock acquired............................................... $ 750 $ 7,736
---------- -----------
Dividends on preferred stock exchanged................................. $ 451
-----------
Common stock issued.................................................... $ 750 $ 8,915
---------- -----------
Exchange of preferred stock for common stock:
Common stock acquired.................................................. $ 8,000
----------
Preferred stock issued................................................. $ 8,000
----------
Preferred stock issued in connection with the retirement of Adience 11%
Senior Notes........................................................... $ 2,244
-----------
Acquisition of businesses:
Assets, net of cash acquired............................................. $ 107,837 $ 126,127 $ 194,856
Preferred stock issued................................................... (4,113) -- --
Contingent consideration................................................. (5,733) -- --
Liabilities assumed...................................................... (98,793) (22,718) (93,756)
---------- ----------- -----------
Net cash (paid) received................................................. $ 802 $ (103,409) $ (101,100)
---------- ----------- -----------
Conversion of notes and exchange of debentures:
Conversions and retirements of debt...................................... $ 38 $ 300
---------- -----------
Fair value of common stock issued........................................ $ 41 $ 251
---------- -----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-10
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

The accompanying consolidated financial statements include the accounts of
The Alpine Group, Inc. ("Alpine") and its majority-owned subsidiaries
(collectively "Alpine" or the "Company", unless the content otherwise requires).
All significant intercompany accounts and transactions have been eliminated.

Alpine was incorporated in New Jersey on May 7, 1957 and was reincorporated
in Delaware on February 3, 1987.

Alpine's operations are carried out through its two subsidiaries, Superior
TeleCom Inc. ("Superior TeleCom") and Refraco Inc. ("Refraco"). Superior
TeleCom, a 50.1% owned subsidiary (see Note 5) manufactures and sells (i)
telecommunications wire and cable products through its subsidiary Superior
Telecommunications Inc. ("Superior") and (ii) data communications and
electronics products and systems for defense, governmental and commercial
applications through its subsidiary DNE Systems, Inc. ("DNE"). Superior
manufactures copper telecommunications wire and cable products for the local
loop segment of the telecommunications network. Superior contributed 76% of
Alpine's fiscal 1997 consolidated revenues. DNE develops and manufactures data
communications and other equipment, including multiplexers for defense,
government and commercial applications and provides contract manufacturing
services to the electronics industry. DNE's revenues comprised less than 4% of
Alpine's fiscal 1997 consolidated revenues. Refraco, a wholly owned subsidiary,
manufactures and installs refractory products, which are used primarily by the
iron, steel, aluminum, glass and concrete industries. Refractory products are
consumable materials used as insulation on surfaces exposed to high temperatures
such as those generated by molten metals. Refraco operates through its
subsidiaries, Adience, Inc. ("Adience") and Refraco UK Limited ("Refraco UK"),
which was acquired on April 15, 1997 (see Note 6). Refraco contributed
approximately 20% of Alpine's fiscal 1997 consolidated revenues.

CONTRACT REVENUE RECOGNITION

Revenues related to certain of DNE's and Refraco's long-term contracts are
recognized by the percentage of completion method of accounting measured on the
basis of costs incurred to estimated total costs, which approximates contract
performance to date. Provisions for losses on uncompleted contracts are made if
it is determined that a contract will ultimately result in a loss. Recognized
revenue is that percentage of total contractual revenue that incurred costs to
date bear to estimated total costs after giving effect to the most recent
estimates of costs to complete. All other revenues are recognized when the
products are delivered or services performed.

CASH AND CASH EQUIVALENTS

All highly liquid investments purchased with a maturity at acquisition of 90
days or less are considered to be cash equivalents.

INVENTORIES

Inventories are stated at the lower of cost or market, using the first-in,
first-out ("FIFO") or average cost method.

F-11
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost, less accumulated
depreciation and amortization. Leasehold improvements are amortized over the
lesser of the estimated useful lives of the assets or the lease terms.
Depreciation and amortization are provided over the estimated useful lives of
the assets using the straight-line method. The estimated lives are as follows:

<TABLE>
<S> <C>
5 to 40
Buildings and improvements........................................ years
3 to 15
Machinery and equipment........................................... years
</TABLE>

Maintenance and repairs are charged to expense as incurred. Long-term
improvements are capitalized as additions to property, plant and equipment. Upon
retirement, or other disposal, the asset cost and related accumulated
depreciation are removed from the accounts and the net amount, less any
proceeds, is charged or credited to income.

GOODWILL

The excess of the purchase price over the net identifiable assets of
businesses acquired is amortized ratably over periods not exceeding 30 years.
Accumulated amortization of goodwill at April 30, 1996, and 1997 was $5.0
million and $8.1 million, respectively. Alpine periodically reviews goodwill to
assess recoverability from future operations using undiscounted cash flows, in
accordance with the provisions of Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." Impairments would be recognized in
operating results if a permanent diminution in value occurred.

DEFERRED FINANCING COSTS

The costs incurred in connection with outstanding debt financings are
included in the consolidated balance sheet in long-term investments and other
assets and are being amortized through the relevant maturity dates of the
related debt.

STOCK BASED COMPENSATION

In October 1995, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123, "Accounting for Stock-Based Compensation." The statement defines a
fair value based method of accounting for employee stock options. Companies may
elect, however, to adopt SFAS No. 123 through a pro forma disclosure option,
while continuing to apply the intrinsic value based method of accounting
prescribed by Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees." Under the disclosure option, companies must make
pro forma disclosures of net income and earnings per share, as if the fair value
method of accounting prescribed by SFAS No. 123 had been applied.

Under the SFAS No. 123 fair value method, compensation expense is measured
at the grant date based on the value of the award and is recognized over the
service (or vesting) period. Under the intrinsic value based method,
compensation expense is recognized only to the extent of the excess, if any, of
the quoted market price of the stock at grant date over the amount an employee
must pay to acquire the stock.

F-12
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Alpine has elected to continue its practice of recognizing compensation
expense for its stock option plans using the intrinsic value based method of
accounting and to provide the required pro forma information required under SFAS
No. 123 for stock options granted after May 1, 1995.

FOREIGN CURRENCY TRANSLATION

The financial position and results of operations of Alpine's foreign
subsidiaries are measured using local currency as the functional currency.
Assets and liabilities of operations denominated in foreign currencies are
translated into U.S. dollars at exchange rates in effect at fiscal year-end. The
resulting translation gains and losses are charged directly to cumulative
translation adjustment, a component of stockholders' equity, net of income tax
expense, and are not included in net income until realized through sale or
liquidation of the investment. Revenues and expenses are translated at average
exchange rates prevailing during the fiscal year. Foreign currency exchange
gains and losses incurred on foreign currency transactions are included in
income as they occur.

CONCENTRATIONS OF CREDIT RISK

During fiscal 1995, 1996, and 1997, sales to the six regional Bell operating
companies and two major independent telephone companies represented 77%, 88%,
and 91%, respectively, of Superior's net sales. At April 30, 1996 and 1997,
accounts receivable from these customers were $41.9 million, and $43.0 million,
respectively.

At April 30, 1996 and 1997, Refraco accounts receivable from customers in
the iron and steel industry were $13.1 million and $45.7 million, respectively.

USE OF ESTIMATES

Alpine's consolidated financial statements are prepared in accordance with
generally accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain reclassifications have been made to the 1995 and 1996 consolidated
financial statements to conform with the 1997 presentation.

2. MARKETABLE SECURITIES

The Company's short-term investments are comprised of marketable securities
which are all classified as trading securities and are stated at fair value. Net
unrealized holding gains and losses at fiscal year-end are included in net
income and net realized gains and losses are determined at the time of sale on
the specific identification cost basis.

F-13
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. INVENTORIES

The components of inventories are as follows:

<TABLE>
<CAPTION>
1996 1997
--------- ----------
<S> <C> <C>
(IN THOUSANDS)
Raw materials............................................................... $ 14,885 $ 32,894
Work in process............................................................. 14,870 19,211
Finished goods.............................................................. 39,235 67,129
--------- ----------
$ 68,990 $ 119,234
--------- ----------
--------- ----------
</TABLE>

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, consists of the following:

<TABLE>
<CAPTION>
1996 1997
--------- ----------
<S> <C> <C>
(IN THOUSANDS)
Land........................................................................ $ 4,408 $ 10,988
Buildings and improvements.................................................. 26,755 41,758
Machinery and equipment..................................................... 84,712 129,412
--------- ----------
115,875 182,158
Less accumulated depreciation............................................... 16,450 26,674
--------- ----------
$ 99,425 $ 155,484
--------- ----------
--------- ----------
</TABLE>

Depreciation expense for the years ended April 30, 1995, 1996 and 1997 was
$4.6 million, $9.9 million, and $11.4 million, respectively.

5. SALE OF SUBSIDIARY STOCK

On October 2, 1996, the Company completed a reorganization and refinancing
(the "Reorganization") of its then wholly-owned subsidiaries, Superior and DNE.
In connection with the Reorganization (i) Superior issued the Company 20,000
shares of Superior's 6% Cumulative Preferred Stock ("Superior Preferred Stock"),
par value $1.00 per share, with a liquidation preference of $1,000 per share,
(ii) Superior and DNE declared a dividend to the Company of $117.1 million,
(iii) the Company contributed all of the common stock of both Superior and DNE
to a newly-formed wholly-owned subsidiary, Superior TeleCom and (iv) Superior
TeleCom entered into a revolving credit facility (the "Superior Credit
Facility") (see Note 10), the proceeds of which were used to repay the
intercompany debt then owed to the Company and to pay $63.8 million of the
declared dividend.

On October 17, 1996, Superior TeleCom sold 6,000,000 shares of its common
stock in an initial public offering at $16.00 per share. Superior TeleCom used
the net proceeds of approximately $88.3 million to fund the repayment of $34.4
million under the Superior Credit Facility and to pay to the Company the balance
of the previously declared dividend. As a result of the offering, the Company's
ownership interest in Superior TeleCom declined to 50.1% and the Company
recorded a gain of $80.4 million ($41.4 million, or $2.24 per share, after
provision for current and deferred income taxes).

In November 1996, the underwriters of the initial public offering of
Superior TeleCom exercised their overallotment option to purchase an additional
900,000 shares of Superior TeleCom common stock at

F-14
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. SALE OF SUBSIDIARY STOCK (CONTINUED)
$16.00 per share. Superior TeleCom used the net proceeds of approximately $13.3
million to repurchase 450,000 shares of its common stock for approximately $8.1
million with the balance of such proceeds being used to reduce the amount
outstanding under the Superior Credit Facility. The Superior TeleCom common
stock repurchased was then transferred to the Company in exchange for $8.1
million in liquidation value of Superior Preferred Stock. After giving effect to
the exercise of the overallotment option and the subsequent repurchase and
exchange of the Superior TeleCom common stock, the Company's ownership interest
in Superior TeleCom remained at 50.1%. On February 12, 1997, Superior redeemed
at liquidation value an additional $11.3 million principal amount of Superior
Preferred Stock.

6. ACQUISITIONS

HEPWORTH ACQUISITION

On April 15, 1997, the Company contributed all the capital stock of Adience
to Refraco, a newly formed wholly-owned subsidiary of the Company. Concurrent
with this transaction, Adience, through a newly formed wholly-owned subsidiary
Refraco UK, acquired for $101.1 million 100% of the outstanding common stock of
Hepworth Refractories (Holdings) Limited ("Hepworth"), a UK based worldwide
manufacturer of refractory products. Upon completion of the acquisition,
Hepworth changed its name to Refraco Holdings Limited ("RHL"). In connection
with the acquisition, Refraco, Adience, Refraco UK and RHL entered into a $130.0
million Senior Secured Credit Facility and a $60.0 million Secured Floating Rate
Loan Facility, the proceeds of which were used to pay the aforementioned
purchase price and to refinance approximately $45.0 million of existing debt,
with the balance available for working capital purposes. The acquisition has
been accounted for using the purchase method, and accordingly, the results of
operations of RHL have been included in the consolidated financial statements on
a prospective basis from the date of the acquisition. The purchase price was
allocated based upon estimated fair values of assets and liabilities at the date
of acquisition, and is subject to adjustment. The excess of the purchase price
over the net assets acquired was $28.7 million and is being amortized on a
straight-line basis over 30 years.

ALCATEL ACQUISITION

During fiscal 1996, Alpine, through its Superior subsidiary, completed the
acquisition (the "Alcatel Acquisition") of the U.S. and Canadian copper wire and
cable business (the "Alcatel Business") of Alcatel NA Cable Systems, Inc. and
Alcatel Canada Wire, Inc. (collectively, "Alcatel NA") for $103.4 million.

The Alcatel Acquisition was accounted for using the purchase method, and
accordingly, the results of operations of the Alcatel Business are included in
the Company's consolidated results on a prospective basis from the date of the
acquisition. The purchase price was allocated based upon estimated fair values
of assets and liabilities at the date of acquisition. The excess of the purchase
price over the fair value of the net assets acquired was $17.2 million and is
being amortized on a straight line basis over 30 years.

ADIENCE ACQUISITION

During fiscal 1995, Alpine acquired 82.3% of the outstanding common stock of
Adience which, when combined with Adience common stock previously purchased by
Alpine, resulted in Alpine owning 87.2% of Adience's outstanding common stock on
such date (the "Adience Acquisition"). The purchase price

F-15
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. ACQUISITIONS (CONTINUED)
consideration consisted of 82,267 shares of Alpine's 8% cumulative convertible
senior preferred stock ("8% Preferred Stock"), with a liquidation preference of
$4.1 million, 170,615 shares of PolyVision (see Note 7) common stock (subject to
a valuation reset under certain conditions) and $2.6 million in cash. On July
21, 1995, Alpine acquired the remaining 12.8% of Adience common stock for $1.8
million in cash.

During fiscal 1996 and 1997, the former Adience stockholders agreed to
exchange all of the shares of the 8% Preferred Stock received in the Adience
Acquisition and to terminate the right to receive $5.7 million in additional
consideration payable under the aforementioned valuation reset, in consideration
for the issuance by Alpine of 491,184 shares of Alpine common stock, the
delivery of 129,542 additional shares of PolyVision common stock and the payment
of $2.4 million in cash. The excess of the amount of the valuation reset
consideration due over the fair market value of the consideration issued in this
transaction was accounted for as a reduction in the purchase price of Adience's
common stock.

Also in connection with the Adience Acquisition, Alpine entered into a debt
exchange agreement with the holders of a majority of Adience's 11% Senior Notes.
The debt exchange agreement, which was completed on July 21, 1995, resulted in
Alpine retiring $44.1 million aggregate principle amount of Adience's 11% Senior
Notes ($40.1 million recorded amount) for $35.3 million in cash, 44,900 shares
of 8% Preferred Stock with a liquidation preference of $2.2 million, and 66,801
shares of PolyVision common stock (subject to a valuation reset under certain
conditions). On October 31, 1995, the former Adience note holders agreed to
exchange all of the shares of 8% Preferred Stock received in the debt exchange
and to terminate the right to receive $1.5 million in value under the valuation
reset, in consideration for the issuance by Alpine of 428,084 shares of Alpine
common stock and the delivery of 121,929 additional shares of PolyVision common
stock. The difference between the recorded value of the Adience 11% Senior Notes
and the value of the exchange consideration paid or issued by Alpine in the debt
exchange was recorded as a reduction in the purchase price for Adience's common
stock.

F-16
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. ACQUISITIONS (CONTINUED)
PRO FORMA FINANCIAL DATA

Unaudited condensed pro forma results of operations which give effect to the
Hepworth acquisition and Alcatel Acquisition as if both transactions had
occurred on May 1, 1995 are presented below. The pro forma amounts reflect
acquisition related purchase accounting adjustments, including adjustments to
depreciation and amortization expense and interest expense on acquisition debt
and certain other adjustments, together with related income tax effects. The pro
forma financial information does not purport to be indicative of either the
results of operations that would have occurred had the acquisitions taken place
at the beginning of the periods presented or of future results of operations.
<TABLE>
<CAPTION>
PRO FORMA
----------------------
<S> <C> <C>
(UNAUDITED)
----------------------

<CAPTION>
1996 1997
---------- ----------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
Net sales................................................................................. $ 787,319 $ 808,418
Income from continuing operations before income taxes..................................... 10,047 120,314
Income from continuing operations......................................................... 6,850 58,615
(Loss) from discontinued operations....................................................... (2,213) --
Extraordinary (loss) on early extinguishment of debt...................................... (4,856) (20,126)
Net income (loss) applicable to common stock.............................................. (1,317) 32,719

Net income (loss) per share of common stock:
Income from continuing operations....................................................... $ 0.32 $ 3.14
(Loss) from discontinued operations..................................................... (0.12) --
Extraordinary (loss) on early extinguishment of debt.................................... (0.27) (1.09)
Preferred stock redemption premium...................................................... -- (0.28)
---------- ----------
Net income (loss) per share........................................................... $ (0.07) $ 1.77
---------- ----------
---------- ----------
</TABLE>

7. DISCONTINUED OPERATIONS

In fiscal 1995, Alpine adopted a plan to dispose of its information display
segment consisting of its interest in Alpine PolyVision, Inc. ("APV") and
Posterloid Corporation ("Posterloid") resulting in the historical financial
statements of Alpine being restated to reflect such operations as discontinued.
In May 1995, APV and Posterloid were merged (the "PolyVision Merger") into
PolyVision Corporation ("PolyVision") (formerly Information Display Technology,
Inc.), a subsidiary of Adience.

On June 14, 1995, Alpine distributed to its stockholders 73% of the
outstanding PolyVision common stock (the "PolyVision Spin-Off"). This
distribution, when combined with shares of PolyVision common stock used as
partial consideration in connection with the Adience Acquisition, resulted in
the ownership by Alpine of less than 20% of the outstanding shares of PolyVision
common stock. Accordingly, Alpine is accounting for its remaining interest in
PolyVision as a long-term investment (see Note 8). Because the shares of
PolyVision common stock distributed had a negative book value, Alpine's
stockholders' equity was not reduced by the PolyVision Spin-Off. During fiscal
1995 and 1996, the Company recorded a loss from PolyVision's discontinued
operations of $4.9 million and $2.2 million, respectively.

F-17
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. LONG-TERM INVESTMENTS AND OTHER ASSETS

Long-term investments and other assets consist of the following:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
(IN THOUSANDS)
Equity investment in PolyVision (a).......................................... $ 11,502 $ 10,400
Advances to PolyVision (b)................................................... 3,086 5,553
Deferred financing charges (net of accumulated amortization)................. 8,483 9,414
Other assets................................................................. 3,332 7,021
--------- ---------
$ 26,403 $ 32,388
--------- ---------
--------- ---------
</TABLE>

- ------------------------

(a) Alpine's investment in PolyVision consists of $25.2 million face amount of
PolyVision 8% preferred stock and PolyVision common stock with a fair market
value of $0.4 million at April 30, 1997. The common stock owned by the
Company is classified as an equity security available for sale, with
unrealized gains and losses at fiscal year-end included as a component of
stockholders' equity, until realized. During fiscal 1997, the market price
of PolyVision's common stock declined resulting in the Company recording a
$716,000 reduction (net of related tax impact) in stockholders' equity. The
Company has assessed the remaining investment in PolyVision and considers it
to be fairly valued based on financial models and projections prepared by
PolyVision management. The financial models and projections are based on
assumptions which may or may not be realized. The value of this investment
will be periodically reevaluated for any impairment.

(b) Advances to PolyVision consist of the following:

(i) $5.0 million unsecured note and with interest based on Alpine's
average cost of debt (8.5% at April 30, 1997). The principal balance is due
on May 24, 2005, subject to mandatory prepayment of principal and interest,
in whole or in part, from the net cash proceeds of any public or private
equity or debt financing by PolyVision at any time before maturity. Alpine
has committed to provide financial support to PolyVision, if necessary,
during fiscal 1998. Any advances made pursuant to this committment are not
expected to be material to Alpine's financial position or liquidity.

(ii) $0.6 million unsecured note with interest at Alpine's average cost
of funds.

9. ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
(IN THOUSANDS)
Accrued wages, salaries and employee benefits................................ $ 7,854 $ 19,416
Accrued insurance............................................................ 10,693 9,646
Accrued interest............................................................. 5,770 2,291
Other accrued expenses....................................................... 16,047 38,595
--------- ---------
$ 40,364 $ 69,948
--------- ---------
--------- ---------
</TABLE>

F-18
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. DEBT

During the year ended April 30, 1997, the Company refinanced a substantial
portion of its outstanding debt and entered into new credit facilities in
connection with the Reorganization (see Note 5) and the Hepworth acquisition
(see Note 6).

The refinancing associated with the Reorganization included (i) repayment
and termination of Alpine's existing revolving credit facility (with a balance
of $48.5 million on the date of repayment) and (ii) the redemption at a premium
of $131.9 million face amount ($122.3 million recorded amount) of the Company's
12.25% Senior Secured Notes (the "Senior Notes"). The funds utilized to complete
this refinancing included approximately $120.0 million from net borrowings under
the Superior Credit Facility, $45.0 million in net proceeds from a bank credit
facility ("Interim Credit Facility") obtained in January 1997, and the balance
being funded by a portion of the net proceeds from the Superior TeleCom initial
public offering (see Note 5).

The refinancing associated with the Hepworth acquisition included (i) $100.8
million in borrowings under a $130.0 million Senior Secured Credit Facility
(including $35.0 million under a revolving credit facility, $50.0 million under
a term loan A and $45.0 million under a term loan B) and $60.0 million in
borrowings under a Secured Floating Rate Note Facility. Proceeds from these
credit facilities were used to complete the Hepworth acquisition (See Note 6)
and repay the $45.0 million Interim Credit Facility described above.

In connection with the aforementioned refinancings, the Company recognized
an after tax extraordinary charge of $20.1 million ($1.09 per share), on the
early extinguishment of debt. This charge represents the premium paid on the
redemption of the Senior Notes, prepayment penalties related to the termination
of the existing Alpine revolving credit facility, and the associated write-off
of the unamortized portion of deferred loan fees related to the debt
extinguished.

At April 30, 1996 and 1997, long-term debt consists of the following:

<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
(IN THOUSANDS)
Superior revolving credit facility (a)..................................... $ -- $ 111,657
Refraco floating rate note (b)............................................. -- 60,000
Refraco revolving credit facility (c)...................................... -- 5,805
Refraco term loan A (c).................................................... -- 50,000
Refraco term loan B (c).................................................... -- 45,000
12.25% Senior Secured Notes (principal amount $153.0 million and $21.1
million, respectively at April 30, 1996 and 1997, respectively) (d)...... 141,070 19,382
Alpine revolving credit facility........................................... 48,654 --
Mortgage loan (e).......................................................... 4,996 3,834
Lease finance obligations (f).............................................. 5,853 5,801
Other...................................................................... 9,204 9,345
---------- ----------
Total debt............................................................. 209,777 310,824
Less current portion of long-term debt..................................... 2,132 2,653
---------- ----------
$ 207,645 $ 308,171
---------- ----------
---------- ----------
</TABLE>

F-19
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. DEBT (CONTINUED)
At April 30, 1997, the fair value of Alpine's debt, based on the quoted
market prices for the same or similar issues or on the current rates offered to
Alpine for debt of the same remaining maturities, approximates its recorded
value.

The aggregate maturities of long-term debt for the five years subsequent to
April 30, 1997, are as follows (in thousands):

<TABLE>
<S> <C>
Fiscal year
1998.................................................................. $ 2,653
1999.................................................................. 5,548
2000.................................................................. 6,564
2001.................................................................. 20,683
2002.................................................................. 117,410
Thereafter............................................................ 157,966
---------
$ 310,824
---------
---------
</TABLE>

- ------------------------

(a) Interest on the Superior Credit Facility is payable quarterly based upon the
base rate (prime) plus 0.5% or the Eurodollar rate plus 1.50%. The variable
components of these rates are subject to periodic adjustment after October
1997 based on the ratio of debt to cash flow (as defined). The Superior
Credit Facility has a five-year term with a total commitment of $150.0
million, which is reduced by $25.0 million in October 1999 and October 2000.
Loans under the Superior Credit Facility are guaranteed by Superior
TeleCom's domestic subsidiaries (but not by Alpine) and are secured by
substantially all of the assets of Superior TeleCom and by the stock of each
of Superior TeleCom's domestic subsidiaries.

(b) The Refraco floating rate note facility is due in 2006. Interest is based
upon the base rate (prime) plus 2.75% or the Eurodollar rate plus 3.75%.
Interest is payable quarterly in the case of base rate notes but may be
payable over shorter periods in the case of Eurodollar rate notes. The
Refraco floating rate notes are secured by a pledge of substantially all of
the common stock of Refraco's operating subsidiaries and are guaranteed by
Alpine. The Alpine guaranty is secured by the pledge of the common stock of
Refraco and a portion of the common stock of Superior TeleCom owned by
Alpine with a market value of $60.0 million.

(c) The Refraco revolving credit facility represents borrowings by Adience and
RHL. Borrowings under the facility may be made by either Adience or RHL
(subject to certain sublimits) but may not exceed $35.0 million in the
aggregate. Interest on the outstanding balance is based upon the base rate
(prime) plus 1.50% or the Eurodollar rate plus 2.50% and is payable at least
quarterly. The facility terminates on April 15, 2003.

The Refraco term loan A represents the dollar equivalent of pounds sterling
borrowings by Refraco UK and is repayable in varying amounts over six years
with interest payable at least quarterly based upon the base rate (prime)
plus 1.50% or the Eurodollar rate plus 2.50%.

The Refraco term loan B represents borrowings by both Adience ($35.0 million)
and Refraco UK ($10.0 million), with such borrowings repayable in varying
amounts over eight years with interest

F-20
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. DEBT (CONTINUED)
payable at least quarterly based upon the base rate (prime) plus 3.00% or
the Eurodollar rate plus 3.00%.

All borrowings under the above described credit arrangements are guaranteed
by Refraco. All borrowings of Refraco UK and RHL are guaranteed by Adience.
Refraco UK has guaranteed all borrowings of RHL, and RHL has guaranteed all
borrowings of Refraco UK. The stock of all subsidiaries of Adience has been
pledged to secure certain of these guarantees. The obligations under these
credit arrangements are secured by substantially all of the assets of
Adience, Refraco UK and RHL.

(d) The Senior Notes are due 2003 and pay interest semiannually on January 15
and July 15 of each year. The Senior Notes were issued at a price of 91.74%
and the discount is being added to the recorded amount through maturity
utilizing the effective interest method.

(e) The mortgage loan is payable by DNE to the Connecticut Development
Authority. The loan was repaid in full in June 1997.

(f) The lease finance obligations result from the sale/leaseback of two
properties which, because of the Company's continuing involvement in the
form of repurchase options, have been recorded under the finance method. The
lease finance obligations at April 30, 1997 consisted of: (a) $5.0 million
related to the sale/leaseback of a Superior manufacturing facility and (b)
$801,000 related to the sale/leaseback of a manufacturing facility
previously owned by DNE. The term of the Superior leaseback is 20 years,
with five additional option terms (at Superior's election) of five years
each. Superior has a one-time option to repurchase the property during the
eleventh year of the lease. Superior's annual lease payments are $630,000,
subject to adjustment. The term of the DNE leaseback is nine years, and
annual lease payments are approximately $178,000, subject to adjustment.
Alpine has an option to repurchase the property during the fourth and fifth
years of the lease term.

11. INCOME (LOSS) PER SHARE

Net income (loss) per share was determined by dividing net income (loss), as
adjusted, by the applicable weighted average number of common and common
equivalent shares outstanding. Stock options are considered to be common stock
equivalents. The income (loss) was adjusted by (i) the aggregate amount of
dividends on Alpine's preferred stock, which amounted to $801,000, $1.1 million
and $575,000 in fiscal 1995, 1996 and 1997, respectively, and (ii) the premium
paid on the redemption of preferred stock in fiscal 1997 of $5.2 million (see
Note 19). The number of shares used in computing income (loss) per share was
17,857,905, 17,987,219 and 18,500,809 in fiscal 1995, 1996 and 1997,
respectively.

In February 1997, the FASB issued SFAS No. 128, "Earnings Per Share," which
specifies the computation, presentation and disclosure requirements for earnings
per share ("EPS"). SFAS No. 128 revises the current EPS methodology,
retroactively, and will be effective for the Company beginning with its quarter
ended January 31, 1998. Had SFAS No. 128 been implemented as of April 30, 1997,
the reported EPS as of April 30, 1997 would not be materially different.

F-21
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. STOCK BASED COMPENSATION PLANS

Effective January 1, 1997, the Company established the Alpine Employee Stock
Purchase Plan ("ESPP") which allows eligible employees the right to purchase
common stock of the Company on a quarterly basis at the lower of 85% of the fair
market value on the day immediately prior to the first day of a calendar quarter
or on the last day of a calendar quarter. There are 500,000 shares of Alpine
common stock reserved under the ESPP, of which 8,339 were issued to employees
during fiscal 1997.

Alpine has two long term equity incentive plans (collectively the "Plans").
The 1987 Long-Term Equity Incentive Plan (the "1987 Plan") has 2,440,215 shares
of common stock reserved for issuance, whereas the 1997 Interim Stock Option
Plan (the "1997 Plan") has 536,900 shares of common stock reserved for issuance.
There were 27,561 shares of common stock available under the Plans for granting
of options at April 30, 1996 and no shares available for granting at April 30,
1997. Participation in the Plans is limited generally to key employees and
directors of Alpine and its subsidiaries. The Plans provide for grants of
incentive and non-incentive stock options. In addition to options, the Plans
permit the grant of stock appreciation rights ("SARs") and phantom stock units
("Units"). Under the Plans, options are not exercisable in the first year nor
after ten years from the date of grant.

Statement No. 123, "Accounting for Stock-Based Compensation" was issued by
the FASB and, if fully adopted, changes the method for recognition of cost on
plans similar to those of the Company. In accordance with the provisions of SFAS
No. 123, the Company has elected to continue to apply APB Opinion No. 25 and
related Interpretations in accounting for its stock-based compensation plans
(including options issued under the Plans and the ESPP). Application of the
provisions of APB No. 25 resulted in a charge to earnings of $1.4 million in
fiscal 1997 for certain performance based stock options granted in prior years.
However, had the Company elected to recognize compensation expense based on the
fair value at the grant date for awards under its stock-based compensation plans
as prescribed by SFAS No. 123, Alpine's net income (loss), net income (loss)
applicable to common stock and net income (loss) per share of common stock for
fiscal 1996 and 1997 would approximate the pro forma amounts below:
<TABLE>
<CAPTION>
1996 1997
------------------------ ------------------------
<S> <C> <C> <C> <C>
AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- ----------- ----------- -----------

<CAPTION>
(IN THOUSANDS, EXCEPT
(IN THOUSANDS, EXCEPT PER
PER SHARE DATA) SHARE DATA)
<S> <C> <C> <C> <C>
Net income (loss) $ (1,850) $ (2,254) $ 36,720 $ 35,668
Net income (loss) applicable to common stock (2,948) (3,352) 30,950 29,898
Net income (loss) per share of common stock (0.16) (0.19) 1.67 1.64
</TABLE>

The effects of applying SFAS No. 123 in the pro forma disclosure are not
necessarily indicative of future amounts since the estimated fair value of
common stock options is amortized to expense over the vesting period and
additional options may be granted in future years. The fair value for these
options was estimated at the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions for fiscal
1997: dividend yield of 0%, expected volatility of 50%, risk-free interest rate
of 6.42%, and expected life of 5 years. The weighted average per share fair
value of options granted during fiscal 1996 and 1997 was $2.33 and $3.73,
respectively.

The Black-Sholes option-pricing model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in

F-22
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. STOCK BASED COMPENSATION PLANS (CONTINUED)
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

The following table summarizes stock option activity for fiscal 1996 and
1997:

<TABLE>
<CAPTION>
SHARES PRICE
OUTSTANDING RANGE
----------- ---------------
<S> <C> <C>
Outstanding at April 30, 1995.................................. 1,715,896 $ 2.50-$12.00
Exercised.................................................... (80,816) $ 2.05-$3.33
Canceled..................................................... (132,528) $ 2.46-$6.66
Adjustment for PolyVision Spin-Off........................... 361,059
Granted...................................................... 1,368,133 $ 3.75-$5.13
-----------
Outstanding at April 30, 1996.................................. 3,231,744 $ 2.05-$9.84
Exercised.................................................... (419,545) $ 2.05-$7.23
Canceled..................................................... (419,576) $ 3.14-$9.84
Granted...................................................... 879,747 $ 3.14-$8.13
-----------
Outstanding at April 30, 1997.................................. 3,272,370 $ 2.05-$9.84
-----------
-----------
</TABLE>

In November 1996, the exercise price of stock options outstanding and the
number of Alpine shares which such options were exercisable into were adjusted
to reflect the effect of the PolyVision Spin-Off (see Note 7).

Information with respect to stock-based compensation plan stock options
outstanding and exercisable at April 30, 1997 is as follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
----------------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
WEIGHTED-
NUMBER AVERAGE WEIGHTED- NUMBER WEIGHTED-
RANGE OF OUTSTANDING REMAINING AVERAGE EXERCISABLE AVERAGE
EXERCISE AT APRIL 30, CONTRACTUAL EXERCISE AT APRIL 30, EXERCISE
PRICES 1997 LIFE PRICE 1997 PRICE
- ------------- --------------- ----------- ----------- --------------- -----------
$2.05-$3.75 1,074,429 5.44 years $ 3.08 612,986 $ 2.72
$3.80-$5.75 1,277,937 7.39 $ 5.27 387,937 $ 5.35
$5.80-$7.75 70,750 3.08 $ 6.19 68,116 $ 6.19
$7.80-$9.84 849,254 8.07 $ 8.15 302,836 $ 8.18
--------------- ---------------
3,272,370 6.83 $ 5.31 1,371,875 $ 4.84
--------------- ---------------
--------------- ---------------
</TABLE>

Alpine also has a Restricted Stock Plan under which a maximum of 600,000
shares of Alpine common stock have been reserved for issuance. At April 30,
1997, there are 142,464 shares available for issuance. During fiscal 1996 and
1997, non-cash compensation expense of $603,000 and $900,000, respectively, was
recorded representing the amortization, over the applicable vesting period, of
the fair market value of common stock issued under the Restricted Stock Plan.

13. POSTRETIREMENT HEALTH CARE BENEFITS

Superior provides postretirement employee health care benefits for certain
employees. The policy provides each employee and spouse, upon reaching normal or
early retirement and upon achieving certain

F-23
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. POSTRETIREMENT HEALTH CARE BENEFITS (CONTINUED)
minimum service requirements, a fixed monthly benefit for the purchase of
Superior-sponsored health care insurance. The amount of the fixed monthly
benefit will not be increased in the future, notwithstanding medical-based
inflation cost increases.

The accumulated postretirement health care benefit obligation, which is
included in long-term liabilities in the accompanying balance sheets, consisted
of the following at April 30, 1996 and 1997:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
(IN THOUSANDS)
Retirees................................................................... $ 427 $ 327
Fully eligible active plan participants.................................... 284 306
Other active plan participants............................................. 571 632
--------- ---------
1,282 1,265
Unrealized net gain from past experiences and change in assumptions........ 211 178
--------- ---------
$ 1,493 $ 1,443
--------- ---------
--------- ---------
</TABLE>

Net periodic postretirement benefit cost includes the following components
for fiscal 1995, 1996 and 1997:

<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
(IN THOUSANDS)
Service cost for benefits earned...................................... $ 45 $ 45 $ 43
Interest cost on accumulated postretirement benefit obligation........ 118 117 96
--------- --------- ---------
$ 163 $ 162 $ 139
--------- --------- ---------
--------- --------- ---------
</TABLE>

An increase in the health care cost trend assumptions would not change the
annual expense or obligation amounts as the employer cost is effectively capped.

The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 8.0% for fiscal 1995 and 7.75% for fiscal
1996 and 1997.

14. DEFINED CONTRIBUTION RETIREMENT PLANS

The Company sponsors several defined contribution plans covering
substantially all U.S. employees. These plans provide for limited company
matching of participants' contributions. The Company's contributions during
fiscal 1995, 1996, and 1997 were $516,000, $808,000, and $871,000, respectively.

15. DEFINED BENEFIT RETIREMENT PLANS

Certain employees of Adience and Superior participate in defined benefit
retirement plans. These plans generally provide for payment of benefits,
commencing at retirement between the ages of 55 and 65, based on the employee's
length of service and earnings.

Superior sponsors a defined benefit pension plan for employees of its
Canadian manufacturing facility. Benefits under the plan are based on length of
service. Plan assets at April 30, 1996 and 1997 totaled $2.3 million and $2.8
million, respectively, and projected benefit obligations for service to date for

F-24
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. DEFINED BENEFIT RETIREMENT PLANS (CONTINUED)
the plan totaled $2.3 million and $2.6 million at April 30, 1996 and 1997,
respectively. The components of net periodic pension costs is not material to
the consolidated financial statements.

Adience's defined benefit pension plans had plan assets at April 30, 1996
and 1997 totaling $6.8 million and $7.6 million, respectively, and projected
benefit obligations for service to date of $6.8 million and $7.1 million at
April 30, 1996 and 1997, respectively. The components of net periodic pension
cost for the years ended April 30, 1996 and 1997 are not material to the
consolidated financial statements.

The actuarial present value of the projected benefit obligations at April
30, 1996 and 1997 was determined using a weighted average discount rate of 7.5%.
The expected long-term rate of return on plan assets was 8.0% at April 30, 1996
and 1997, respectively. Plan assets are invested in cash, short-term investment,
equities and fixed income instruments.

Certain union employees of Adience and its subsidiary are covered by
multi-employer defined benefit retirement plans. Expense relating to these plans
amounted to $0.4 million, $1.6 million and $1.5 million during fiscal years
1995, 1996 and 1997, respectively.

In connection with the Hepworth acquisition, (Note 6) the Company has
assumed the obligation to provide retirement benefits for all UK employees who
participated in the Hepworth Plc defined benefit retirement plan (the "Hepworth
Plan"). The Company will terminate such employees' participation in the Hepworth
Plan by December 31, 1997 and will provide benefits under an alternative
retirement plan as of such date.

Effective February 1, 1997, the Company implemented a non-qualified
Supplemental Executive Retirement Plan ("SERP"), which is unfunded and provides
eligible executives defined pension benefits based on average earnings, years of
service and age of retirement. As of April 30, 1997, the projected benefit
obligation was $2.1 million, of which $2.0 million is subject to amortization.

16. INCOME TAXES

The provision for income tax expense (benefit) is comprised of the
following:

<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ---------
<S> <C> <C> <C>
(IN THOUSANDS)
Current:
Federal...................................................... $( 699) $ 194 $ 22,759
State........................................................ 316 909 2,128
Foreign...................................................... 58 349 566
--------- --------- ---------
( 325) 1,452 25,453
--------- --------- ---------
Deferred:
Federal...................................................... 101 -- 16,913
State........................................................ ( 148) (53) (1,516)
Foreign...................................................... -- (21) 1,284
--------- --------- ---------
( 47) (74) 16,681
--------- --------- ---------
$( 372) $ 1,378 $ 42,134
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-25
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. INCOME TAXES (CONTINUED)
The provision for income tax expense (benefit) differs from the amount
computed by applying the U.S. federal income tax rate of 35% because of the
effect of the following items:

<TABLE>
<CAPTION>
1995 1996 1997
--------- --------- ----------
<S> <C> <C> <C>
(IN THOUSANDS)
Continuing operations:
Tax at U.S. federal income tax rate on continuing operations.... $ (290) $ 2,413 $ 41,316
State income taxes, net of U.S. federal income tax benefit...... 59 556 400
Taxes on foreign income at rates which differ from the U.S.
federal statutory tax rate.................................... -- -- 395
Gain on reorganization of subsidiary............................ -- -- 8,247
Goodwill amortization........................................... -- 806 850
Net change in valuation allowance............................... -- (1,358) 1,685
Other........................................................... 579 (741) 210
--------- --------- ----------
Provision for income taxes from continuing operations............. 348 1,676 53,103
Discontinued operations......................................... (720) (19) --
Extraordinary loss.............................................. -- (279) (10,969)
--------- --------- ----------
Total income tax expense (benefit)............................ $ (372) $ 1,378 $ 42,134
--------- --------- ----------
--------- --------- ----------
</TABLE>

The Company accounts for income taxes under an asset and liability approach
that requires the recognition of deferred tax assets and liabilities for both
the expected future tax impact of temporary differences arising from assets and
liabilities whose tax basis are different from financial statement amounts, and
for the expected future tax benefit to be derived from tax loss carryforwards. A
valuation allowance is established if it is more likely than not that all or a
portion of deferred tax assets will not be realized. Realization of the future
tax benefits of deferred tax assets (including tax loss carryforwards) is
dependent on Alpine's ability to generate taxable income within the carryforward
period and the periods in which net temporary differences reverse. Although no
assurance can be given that sufficient taxable income will be generated for
utilization of certain of the Company's consolidated net operating loss
carryforwards or for reversal of certain temporary differences, the Company
believes it is more likely than not that all of the net deferred tax asset will
be realized.

F-26
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. INCOME TAXES (CONTINUED)
Items that result in deferred tax assets and liabilities and the related
valuation allowance at April 30, 1996 and 1997 are as follows:

<TABLE>
<CAPTION>
1996 1997
--------- ---------
<S> <C> <C>
(IN THOUSANDS)
Deferred tax assets:
Inventory................................................................... $ 1,921 $ 2,835
Sale/leaseback.............................................................. 1,927 1,930
Accruals not currently deductible for tax................................... 8,991 8,557
Compensation expense related to unexercised stock options and stock
grants.................................................................... 1,146 1,899
Net operating loss carryforwards............................................ 13,839 15,261
Alternative minimum tax credit carryforwards................................ 738 419
Foreign tax credit carryforwards............................................ 275 --
Other....................................................................... 482 2,445
--------- ---------
Total deferred tax assets................................................. 29,319 33,346
Less valuation allowance.................................................... 16,178 17,863
--------- ---------
Net deferred tax assets................................................... 13,141 15,483
--------- ---------
Deferred tax liabilities:
Depreciation................................................................ 13,643 26,131
Long-term investments....................................................... 3,196 11,701
Other....................................................................... -- 6,192
--------- ---------
Total deferred tax liabilities............................................ 16,839 44,024
--------- ---------
Net deferred tax liability................................................ $ 3,698 $ 28,541
--------- ---------
--------- ---------
</TABLE>

At April 30, 1997, Alpine had unused net U.S. federal operating loss
carryforwards of approximately $3.0 million that can be used to offset future
taxable income. These loss carryforwards do not include the Adience
pre-acquisition loss carryforwards discussed below. The net operating loss
carryforwards expire in 2004.

Alpine has entered into certain transactions that have resulted in ownership
changes under Section 382 of the Internal Revenue Code of 1986 which imposes
annual limitations on the amount of future taxable income which may be offset by
Alpine's pre-change net operating loss carryforwards. The unused portion of the
annual limitations for any year may be carried forward to increase the annual
limitation in succeeding years.

Alpine acquired Adience on December 21, 1994 and from that date forward
Adience was included in Alpine's consolidated U.S. Federal tax return. Adience
had net operating loss carryforwards at the date of its acquisition by Alpine
which are available to offset Alpine's future consolidated taxable income,
subject to the imposition of an annual limitation on the utilization of such
carryforwards. As of April 30, 1997, Adience pre-acquisition net operating loss
carryforwards that are subject to the aforementioned limitation amounted to
$17.9 million.

Alpine's tax returns for years subsequent to 1980 have not been reviewed by
the Internal Revenue Service (the "IRS"). Availability of the net operating loss
carryforwards might be challenged by the IRS

F-27
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. INCOME TAXES (CONTINUED)
upon examination of such returns which could affect the availability of such
carryforwards incurred prior or subsequent to the aforementioned change in
ownership or both. Alpine believes, however, that any IRS challenges that would
limit the utilization of net operating loss carryforwards would not have a
material adverse effect on Alpine's financial position.

17. COMMITMENTS AND CONTINGENCIES

Total rent expense under cancelable and non-cancelable operating leases was
$1.4 million, $2.8 million and $3.2 million for the years ended April 30, 1995,
1996, and 1997, respectively.

At April 30, 1997, future minimum lease payments under non-cancelable
operating leases are as follows:

<TABLE>
<CAPTION>
REAL AND
PERSONAL
PROPERTY
(IN
THOUSANDS)
-------------
<S> <C>
Fiscal Year:
1998....................................................................... $ 2,268
1999....................................................................... 1,856
2000....................................................................... 1,442
2001....................................................................... 970
2002....................................................................... 287
Thereafter................................................................. 420
------
$ 7,243
------
------
</TABLE>

Approximately 58% of the Company's total labor force is covered by
collective bargaining agreements. Five collective bargaining agreements
representing 43% of Alpine's total labor force will expire within one year.

The Company is self-insured for workers' compensation, general liability and
auto liability up to predetermined deductible levels above which third-party
insurance applies. The Company accrues for claim exposures which are probable of
occurrence and can be reasonably estimated; and does not deem its deductible
exposure to be a material risk.

The Company is subject to routine lawsuits incidental to its business. In
the opinion of management, based on its examination of such matters and
discussions with counsel, the ultimate resolution of all pending or threatened
litigation, claims and assessments will have no material adverse effect upon
Alpine's consolidated financial position, liquidity or results of operations.

Certain executives of the Company have employment contracts which generally
provide minimum base salaries, cash bonuses based on the Company's achievement
of certain performance objectives, stock options and restricted stock grants of
Alpine, and certain retirement and other employee benefits. Further, in the
event of termination or voluntary resignation for "good reason" accompanied by a
change in control of Alpine, as defined, such employment agreements provide for
severance payments not in excess of two times annual cash compensation and
bonus, and the continuation for stipulated periods of other benefits, as
defined.

F-28
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. RELATED PARTY TRANSACTIONS

Alpine's acquisition of Adience (see Note 6) included the purchase of shares
(representing 5.8% of Adience's total shares) from Steib & Company, ("Steib"),
an investment partnership in which two Alpine officers have a majority interest.
In connection with the acquisition of such shares from Steib, Alpine reimbursed
Steib for costs incurred by Steib in connection with its investment in Adience
common stock, and Steib agreed to terminate a three-year advisory agreement with
Adience and voluntarily surrender options to purchase 7.2% of Adience common
stock at $1.25 per share.

During fiscal 1988, Alpine loaned certain officers $463,000 relating to the
exercise of stock options of which $163,000 has been repaid as of April 30,
1997. The unpaid balance, which is deducted from stockholders' equity and is
repayable in Alpine common stock, bears interest at prime plus 0.5%.

19. PREFERRED STOCK

Alpine has authorized 500,000 shares of preferred stock with a par value of
$1.00 per share. The preferred stock may be issued at the discretion of the
board of directors in one or more series with differing terms, limitations and
rights.

At April 30, 1997, Alpine has outstanding, 1,750 shares of 9% Cumulative
Convertible Senior Preferred Stock ("9% Senior Preferred Stock") and 177 shares
of 9% Cumulative Convertible Preferred Stock ("9% Preferred Stock").

The 9% Senior Preferred Stock is senior in ranking to holders of Alpine's
common stock and the 9% Preferred Stock. Each share is convertible at any time
into shares of Alpine common stock at a conversion price of $7.90 per share,
subject to customary adjustments. Alpine may redeem the stock, in whole or in
part, at a price equal to the liquidation value (i) during the period commencing
three years from and ending on the seventh year after the date of issuance, if
for any 30 trading days within a period of 45 consecutive trading days ending
five (5) days prior to the date of the notice of such redemption, the market
price of Alpine's common stock equals or exceeds one hundred forty percent
(140%) of the conversion price, or (ii) subsequent to the seventh year after
issuance of the preferred stock.

The 9% Senior Preferred Stock carries 100 votes per share. The 9% Senior
Preferred Stock votes as a single class with Alpine's common stock on all
matters submitted to stockholders and is entitled to vote as a separate class in
the event of any proposal to (i) amend any of the principal terms of the
preferred stock; (ii) authorize, create, issue or sell any class of stock senior
to or on a parity with the 9% Senior Preferred Stock as to dividends or
liquidation preference; or (iii) merge into or consolidate with, or sell all or
substantially all of the assets of Alpine to another entity. The holders of not
less than 66 2/3% of the 9% Senior Preferred Stock must approve any transaction
subject to the class voting rights.

The 9% Preferred Stock is convertible into 105 1/2 shares of common stock,
subject to customary adjustments. Alpine may redeem the stock at any time, in
whole or in part at a price equal to the liquidation value per share.

During fiscal 1997, 36,649 shares of 8% Cumulative Convertible Senior
Preferred Stock ("8% Preferred Stock") plus accrued dividends were retired in
connection with the Adience acquisition (see Note 6). Also during fiscal 1997,
160,000 shares of 8% Preferred Stock with a par value of $8.0 million were
repurchased for $13.2 million. In accordance with generally accepted accounting
principles, the repurchase price paid in excess of the par value of such
preferred stock has been recorded as a redemption premium and, therefore, as a
reduction of net income attributable to common stockholders (see Note 11).

F-29
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20. SEGMENT INFORMATION

Alpine conducts business in three segments: telecommunications wire and
cable products (through Superior, acquired in November 1993, and the Alcatel
Business, acquired in May 1995); data communications and electronics (through
DNE, acquired in February, 1992); and refractories (through Adience, acquired in
December 1994 and Hepworth, acquired in April 1997).

The following provides information about each business segment as of April
30, 1995, 1996, and 1997:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
(IN THOUSANDS)
Net sales (a):
Telecommunications wire and cable.......................................... $ 136,578 $ 384,237 $ 442,486
Data communications and electronics........................................ 27,907 26 ,176 21,354
Refractories............................................................... 33,650 113,700 115,954
---------- ---------- ----------
$ 198,135 $ 524,113 $ 579,794
---------- ---------- ----------
---------- ---------- ----------
Operating income (loss):
Telecommunications wire and cable.......................................... $ 8,128 $ 29,885 $ 62,779
Data communications and electronics........................................ 1,710 2,039 (444)
Refractories............................................................... 383 6,558 5,525
Corporate.................................................................. (3,225) (5,960) (9,744)
---------- ---------- ----------
$ 6,996 $ 32,522 $ 58,116
---------- ---------- ----------
---------- ---------- ----------
Identifiable assets at year end:
Telecommunications wire and cable.......................................... $ 98,785 $ 226,282 $ 225,286
Data communications and electronics........................................ 16,820 18,020 14,425
Refractories............................................................... 104,300 97,028 304,151
Corporate.................................................................. 13,873 13,574 44,362
---------- ---------- ----------
$ 233,778 $ 354,904 $ 588,224
---------- ---------- ----------
---------- ---------- ----------
Depreciation and amortization expense:
Telecommunications wire and cable.......................................... $ 3,570 $ 7,575 $ 8,595
Data communications and electronics........................................ 872 732 700
Refractories............................................................... 1,670 4,207 4,966
Corporate.................................................................. 57 52 181
---------- ---------- ----------
$ 6,169 $ 12,566 $ 14,442
---------- ---------- ----------
---------- ---------- ----------
Capital expenditures (b):
Telecommunications wire and cable.......................................... $ 1,388 $ 9,337 $ 9,294
Data communications and electronics........................................ 394 449 513
Refractories............................................................... 426 1,767 3,518
Corporate.................................................................. 67 122 538
---------- ---------- ----------
$ 2,275 $ 11,675 $ 13,863
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

(a) (i) Two customers in the telecommunications wire and cable segment
accounted for 30% and 16% of net sales in fiscal 1995; five customers
accounted for 22%, 17%, 16%, 13% and 13% of net sales in fiscal 1996; and
five customers accounted for 19%, 17%, 16%, 14%, and 14% of net sales in
fiscal 1997.

F-30
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20. SEGMENT INFORMATION (CONTINUED)
(ii) Three customers in the refractories segment accounted for a total
of 31%, 34% and 33.5% of net sales in fiscal 1995, 1996, and 1997,
respectively, of which one accounted for 14% and 15% in fiscal 1995 and
1996, respectively.

(iii) The data communications and electronics segment has historically
been dependent on government funding of programs in which it participates.
Significant changes in the levels of funding for such programs could have a
materially adverse effect on the segment. Sales to agencies of the U.S.
government were 82.3%, 66.4%, and 64.6% of net sales of this segment for
fiscal 1995, 1996, and 1997, respectively.

(b) During fiscal 1996, Superior acquired certain Canadian assets of
BICC Phillips, Inc. for $5.4 million, which is reflected in capital
expenditures.

The following provides information about domestic and foreign operations as
of, and for the fiscal years ended, April 30, 1995, 1996 and 1997:

<TABLE>
<CAPTION>
1995 1996 1997
---------- ---------- ----------
<S> <C> <C> <C>
(IN THOUSANDS)
Net sales:
United States.............................................................. $ 194,468 $ 479,234 $ 516,454
Canada..................................................................... 3,667 44,879 54,908
Europe(a).................................................................. -- -- 8,432
---------- ---------- ----------
$ 198,135 $ 524,113 $ 579,794
---------- ---------- ----------
---------- ---------- ----------
Operating income (loss):
United States.............................................................. $ 6,849 $ 31,919 $ 52,097
Canada..................................................................... 147 603 5,714
Europe(a).................................................................. -- -- 305
---------- ---------- ----------
$ 6,996 $ 32,522 $ 58,116
---------- ---------- ----------
---------- ---------- ----------
Identifiable assets at year end:
United States.............................................................. $ 227,064 $ 322,241 $ 370,133
Canada..................................................................... 6,714 32,663 29,711
Europe..................................................................... -- -- 188,380
---------- ---------- ----------
$ 233,778 $ 354,904 $ 588,224
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

(a) Represents the activity of the Hepworth business for the 15 days ended April
30, 1997 (see Note 6).

F-31
<PAGE>
THE ALPINE GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

21. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
FISCAL 1996 QUARTER ENDED
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
JULY 31 OCTOBER 31 JANUARY 31 APRIL 30 YEAR
---------- ----------- ----------- ---------- ----------

<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Net sales........................................... $ 128,784 $ 136,252 $ 119,504 $ 139,573 $ 524,113
Gross profit........................................ 16,328 16,523 15,708 21,769 70,328
Operating income.................................... 7,753 7,711 6,426 10,632 32,522
Income from continuing operations................... 1,354 981 221 2,663 5,219
(Loss) from discontinued operations................. (379) (1,834) -- -- (2,213)
Extraordinary gain (loss) on early extinguishment of
debt.............................................. (5,180) 324 -- -- (4,856)
---------- ----------- ----------- ---------- ----------
Net income (loss)............................... $ (4,205) $ (529) $ 221 $ 2,663 $ (1,850)
---------- ----------- ----------- ---------- ----------
Income (loss) per share of common stock:
Income from continuing operations................. $ 0.06 $ 0.04 $ -- $ 0.13 $ 0.23
Discontinued operations........................... (0.02) (0.11) -- -- (0.12)
Extraordinary gain (loss) on early extinguishment
of debt......................................... (0.30) 0.02 -- -- (0.27)
---------- ----------- ----------- ---------- ----------
Net income (loss) per share of common stock..... $ (0.26) $ (0.05) $ -- $ 0.13 $ (0.16)
---------- ----------- ----------- ---------- ----------
---------- ----------- ----------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
FISCAL 1997 QUARTER ENDED
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
JULY 31 OCTOBER 31 JANUARY 31 APRIL 30 YEAR
---------- ----------- ----------- ---------- ----------

<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Net sales........................................... $ 151,447 $ 154,019 $ 121,172 $ 153,156 $ 579,794
Gross profit........................................ 23,964 27,359 21,585 29,095 102,003
Operating income.................................... 13,413 15,385 12,338 16,980 58,116
Gain on sale of subsidiary stock.................... -- 80,397 -- -- 80,397
Minority interest................................... -- (333) (3,059) (4,705) (8,097)
Income from continuing operations................... 4,246 46,941 2,329 3,330 56,846
Extraordinary (loss) on early extinguishment of
debt.............................................. -- (13,412) (5,977) (737) (20,126)
---------- ----------- ----------- ---------- ----------
Net income (loss)............................... $ 4,246 $ 33,529 $ (3,648) $ 2,593 $ 36,720
---------- ----------- ----------- ---------- ----------
---------- ----------- ----------- ---------- ----------
Income (loss) per share of common stock:
Income from continuing operations................. $ 0.22 $ 2.50 $ 0.12 $ 0.18 $ 3.04
Extraordinary (loss) on early extinguishment of
debt............................................ -- (0.72) (0.32) (0.04) (1.09)
Preferred stock redemption premium................ -- (0.28) -- -- (0.28)
---------- ----------- ----------- ---------- ----------
Net income (loss) per share of common stock..... $ 0.22 $ 1.51 $ (0.20) $ 0.14 $ 1.67
---------- ----------- ----------- ---------- ----------
---------- ----------- ----------- ---------- ----------
</TABLE>

F-32
<PAGE>
SCHEDULE 1

THE ALPINE GROUP, INC.
(PARENT COMPANY)

CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
APRIL 30,
---------------------
<S> <C> <C>
1996 1997
---------- ---------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................................ $ 683 $ 15,624
Marketable securities.................................................................... 7,713 15,807
Other current assets..................................................................... 528 1,619
---------- ---------
Total current assets................................................................... 8,924 33,050
Advances and loans to subsidiaries......................................................... 163,816 --
Investment in consolidated subsidiaries.................................................... 53,748 41,815
Property, plant and equipment, net......................................................... 146 563
Long-term investments and other assets..................................................... 23,666 13,352
---------- ---------
Total assets........................................................................... $ 250,300 $ 88,780
---------- ---------
---------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt........................................................ $ 804 $ --
Accounts payable......................................................................... 324 822
Accrued expenses......................................................................... 11,285 217
Advances and loans from subsidiaries..................................................... -- 416
---------- ---------
Total current liabilities.............................................................. 12,413 1,455
Long-term debt, less current portion....................................................... 189,847 19,505
Other long-term liabilities................................................................ 3,076 13,394
Adience acquisition obligation............................................................. 1,828 --
---------- ---------
Total liabilities...................................................................... 207,164 34,354
---------- ---------
Stockholders' equity:
8% cumulative convertible preferred stock at liquidation value........................... 9,831 --
9% cumulative convertible preferred stock at liquidation value........................... 1,927 1,927
Common stock, $.10 par value; authorized 25,000,000 shares; 19,307,012 shares issued in
1996 and 18,834,256 shares issued in 1997.............................................. 1,931 1,883
Capital in excess of par value........................................................... 113,843 113,459
Cumulative translation adjustment........................................................ (82) (1,316)
Unrealized loss on securities available for sale, net of deferred tax.................... -- (716)
Accumulated deficit...................................................................... (78,998) (48,048)
---------- ---------
48,452 67,189
Shares of common stock in treasury, at cost;
1996, 1,025,496 shares; 1997, 1,612,047 shares......................................... (4,806) (12,130)
Receivable from stockholders............................................................. (510) (633)
---------- ---------
Total stockholders' equity............................................................. 43,136 54,426
---------- ---------
Total liabilities and stockholders equity $ 250,300 $ 88,780
---------- ---------
---------- ---------
</TABLE>

F-33
<PAGE>
SCHEDULE 1 (CONTINUED)

THE ALPINE GROUP, INC.
(PARENT COMPANY)

CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-------------------------------
<S> <C> <C> <C>
1995 1996 1997
--------- --------- ---------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues:
Interest income................................................................ $ 345 $ 1,357 $ 1,902
Intercompany interest.......................................................... -- 18,517 14,298
Gain on sale of subsidiary..................................................... -- -- 80,397
Other income................................................................... 111 -- 73
--------- --------- ---------
456 19,874 96,670
--------- --------- ---------
Expenses:
General and administrative..................................................... 2,992 5,960 8,086
Interest expense............................................................... 1,661 20,571 14,825
Other expense.................................................................. 531 33 --
--------- --------- ---------
5,184 26,564 22,911
--------- --------- ---------
(4,728) (6,690) 73,759
Provision for income taxes....................................................... -- -- (34,912)
--------- --------- ---------
(4,728) (6,690) 38,847
Equity in net income (loss) of subsidiaries before extraordinary item (a)........ (1,316) 6,893 17,289
--------- --------- ---------
Income (loss) before extraordinary item.......................................... (6,044) 203 56,136
Extraordinary (loss) on early extinguishment of debt............................. -- (2,053) (19,416)
--------- --------- ---------
Net income (loss).............................................................. $ (6,044) $ (1,850) $ 36,720
--------- --------- ---------
--------- --------- ---------
</TABLE>

- ------------------------

(a.) Equity in net income (loss) of subsidiaries before extraordinary item
includes losses from discontinued operations of $4.9 million and $2.2
million in fiscal 1995 and 1996, respectively. (See Note 7)

F-34
<PAGE>
SCHEDULE 1 (CONTINUED)

THE ALPINE GROUP, INC.
(PARENT COMPANY)

CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
-----------------------------------
<S> <C> <C> <C>
1995 1996 1997
--------- ----------- -----------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C>
Cash (used for) provided by operating activities............................. $ (6,383) $ 7,798 $ 5,298
--------- ----------- -----------
Cash flows from investing activities:
Capital expenditures....................................................... (67) (122) (538)
Acquisitions, net of cash acquired......................................... (2,424) -- --
Investment in/sale of subsidiaries......................................... -- (3,157) --
Proceeds from (investment in) marketable securities........................ 477 (6,218) (8,094)
Payments received from subsidiary preferred stock.......................... -- -- 11,300
Dividends received from subsidiaries, net of income tax.................... 2,000 -- 78,159
Loan to PolyVision Corporation............................................. -- (3,086) (2,467)
Other...................................................................... 300 -- --
--------- ----------- -----------
Cash provided by (used for) investing activities............................. 286 (12,583) 78,360
--------- ----------- -----------
Cash flows from financing activities:
Short-term borrowings (repayments)......................................... 20,685 (21,000) --
Borrowings under revolving credit facility, net............................ -- 48,654 (48,654)
Long-term borrowings....................................................... -- 149,802 --
Repayments of long-term borrowings......................................... -- (1,701) (135,535)
Capitalized financing costs................................................ -- (9,208) --
Dividends on preferred stock............................................... (505) (720) (575)
Proceeds from stock options exercised...................................... 256 120 1,835
Advances and loans to subsidiaries, net.................................... (1,659) (169,926) 141,232
Redemption of preferred stock.............................................. -- -- (15,026)
Purchase of treasury shares................................................ (1,211) (3,656) (11,994)
Other...................................................................... -- (196) --
--------- ----------- -----------
Cash provided by (used for) financing activities............................. 17,566 (7,831) (68,717)
--------- ----------- -----------
Net increase (decrease) in cash and cash equivalents......................... 11,469 (12,616) 14,941
Cash and cash equivalents at beginning of year............................... 1,830 13,299 683
--------- ----------- -----------
Cash and cash equivalents at end of year..................................... $ 13,299 $ 683 $ 15,624
--------- ----------- -----------
--------- ----------- -----------
Supplemental cash flow disclosures:
Cash paid for interest..................................................... $ 1,287 $ 13,973 $ 18,134
--------- ----------- -----------
--------- ----------- -----------
Cash paid for income taxes................................................. $ -- $ -- $ 18,895
--------- ----------- -----------
--------- ----------- -----------
</TABLE>

F-35
<PAGE>
SCHEDULE 1 (CONTINUED)

THE ALPINE GROUP, INC.
(PARENT COMPANY)

APPENDIX A
<TABLE>
<CAPTION>
APRIL 30,
----------------------
<S> <C> <C>
1996 1997
---------- ----------

<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
Long-term debt:
Long-term debt consists of:
12.25% Senior Secured Notes due 2003 face value $153,000,000(a)......................... $ 141,070 $ 19,382
Revolving credit facility (a)........................................................... 48,654 --
10% Convertible Senior Subordinated Notes due July 31, 1996 ($804,500 face value at
April 30, 1996)....................................................................... 804 --
Other................................................................................. 123 123
---------- ----------
190,651 19,505
Less, current portion..................................................................... 804 --
---------- ----------
$ 189,847 $ 19,505
---------- ----------
---------- ----------
</TABLE>

Minimum current maturities of long-term debt outstanding as of April 30,
1996, are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
- ------------------------------------------------------------------------- ---------
<S> <C>
1998................................................................... $ --
1999................................................................... --
2000................................................................... --
2001................................................................... --
2002................................................................... --
Thereafter............................................................. $ 19,505
</TABLE>

F-36
<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated: July 29, 1997

THE ALPINE GROUP, INC.

BY: /S/ STEVEN S. ELBAUM
-----------------------------------------
Steven S. Elbaum
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

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.

Chairman of the Board and
/s/ STEVEN S. ELBAUM Chief Executive Officer
- ------------------------------ (principal executive July 29, 1997
Steven S. Elbaum officer)

Chief Financial Officer
/s/ DAVID S. ALDRIDGE and
- ------------------------------ Treasurer (principal July 29, 1997
David S. Aldridge financial and accounting
officer)

/s/ KENNETH G. BYERS, JR.
- ------------------------------ Director July 29, 1997
Kenneth G. Byers, Jr.

/s/ RANDOLPH HARRISON
- ------------------------------ Director July 29, 1997
Randolph Harrison

/s/ JOHN C. JANSING
- ------------------------------ Director July 29, 1997
John C. Jansing

/s/ ERNEST C. JANSON, JR.
- ------------------------------ Director July 29, 1997
Ernest C. Janson, Jr.

/s/ JAMES R. KANELY
- ------------------------------ Director July 29, 1997
James R. Kanely

/s/ GENE E. LEWIS
- ------------------------------ Director July 29, 1997
Gene E. Lewis

/s/ BRAGI F. SCHUT
- ------------------------------ Director July 29, 1997
Bragi F. Schut

<PAGE>
4(G)
EX. 4(B)

THE ALPINE GROUP, INC.,

ISSUER,

SUPERIOR TELECOMMUNICATIONS INC.,
ADIENCE, INC., AND SUPERIOR CABLE CORPORATION,

SUBSIDIARY GUARANTORS

AND

MARINE MIDLAND BANK,

TRUSTEE

---------------------

SUPPLEMENTAL INDENTURE

DATED AS OF OCTOBER 2, 1996

------------------------

SUPPLEMENTING AND AMENDING THE INDENTURE
DATED AS OF JULY 15, 1995
WITH RESPECT TO $153,000,000
12 1/4% SENIOR SECURED NOTES DUE 2003
AND
12 1/4% SERIES B SENIOR SECURED NOTES DUE 2003
<PAGE>
SUPPLEMENTAL INDENTURE, dated as of October 2, 1996 (this "Supplemental
Indenture"), made by and between The Alpine Group, Inc., a Delaware corporation
(the "Company"), Superior Telecommunications Inc., a Georgia corporation,
Adience, Inc., a Delaware corporation, Superior Cable Corporation, an Ontario
corporation, and Marine Midland Bank, a New York banking corporation and trust
company (the "Trustee"), to the Original Indenture (as such term is hereinafter
defined).

WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have
heretofore entered into the Original Indenture, pursuant to the provisions of
which the Company has heretofore issued $153,000,000 in aggregate principal
amount of the Notes;

WHEREAS, the Company desires to supplement and amend, and to obtain the
waiver of certain provisions under, the Original Indenture in accordance with
its terms;

WHEREAS, Section 902 of the Original Indenture provides that the Company and
the Trustee may amend the Original Indenture with the written consent of the
Holders of at least a majority of the aggregate principal amount of the
outstanding Notes;

WHEREAS, Holders of at least a majority of the aggregate principal amount of
the outstanding Notes have provided such written consent to the Trustee; and

WHEREAS, all conditions and requirements necessary to authorize the
execution and delivery of this Supplemental Indenture have been duly complied
with or done and performed by the Company, and all actions necessary to make
this Supplemental Indenture and the Original Indenture, as supplemented by this
Supplemental Indenture, valid, binding and legal instruments according to their
terms (and, with respect to this Supplemental Indenture, in accordance with the
terms of the Original Indenture) have been complied with or done and performed;

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH that, for and in
consideration of the premises and of the mutual covenants herein contained and
for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Subsidiary Guarantors covenant and
agree with the Trustee, for the benefit of all present and future Holders of the
Notes, as follows:

Section 1. The definitions set forth or incorporated by reference in the
Original Indenture shall be applicable to this Supplemental Indenture as fully
and to the same extent and effect as if set forth herein, except as otherwise
expressly provided herein. As used in this Supplemental Indenture, the term
"Original Indenture" shall mean the Indenture, dated as of July 15, 1995, among
the Company, the Subsidiary Guarantors and the Trustee, with respect to the
Notes.

Section 2. The Trustee waives compliance by the Company with the provisions
of the Original Indenture, including without limitation Sections 801, 1011, 1016
and 1407, for the purpose of, and any Event of Default that may arise in
connection with, the completion of any or all of the transactions described in
the Offer to Purchase and Consent Solicitation Statement, dated August 29, 1996,
of the Company (as amended, the "Statement"), including without limitation:

(a) the reorganization of Superior and DNE described therein; and

(b) the recapitalization of Superior as described therein.

Section 3. The definition of Permitted Investments in Section 101 is
amended by deleting the word "and" at the end of clause (v) thereof, deleting
the period and adding "; and" at the end of clause (vi) thereof, and inserting a
new clause (vii) as follows:

"(vii) Investments in the managed investment accounts of the Company
existing on the date of the initial issuance of the Notes, Investments held
in any such accounts and Investments of any proceeds of the sale or exchange
of any assets held in such accounts, including without limitation an
Investment of all or any part of the assets in such accounts in a Subsidiary
formed for the purpose of managing such Investments; provided that in the
event the Company makes an Investment in such a Subsidiary, such Subsidiary
shall not be a Restricted Subsidiary for any purpose under this Indenture."
<PAGE>
Section 4. The first paragraph of Section 205 (Form of Reverse of Note) is
amended to read in its entirety as follows:

"This Note is one of a duly authorized issue of securities of the
Company designated as its 12 1/4% Series B Senior Secured Notes due 2003
(herein called the "Notes"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $153,000,000,
which may be issued under an indenture (herein called the "Indenture") dated
as of July 15, 1995, among the Company, Superior Telecommunications Inc., a
corporation organized under the laws of the State of Georgia ("Superior"),
Adience, Inc., a corporation organized under the laws of the State of
Delaware ("Adience," and together with all successor guarantors under the
Indenture, the "Subsidiary Guarantors") and Superior Cable Corporation, a
corporation organized under the laws of Ontario, Canada ("Superior Canada")
and Marine Midland Bank, trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture) to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties, obligations and
immunities thereunder of the Company, the Subsidiary Guarantors, Superior,
Superior Canada, the Trustee and the Holders of the Notes, and of the terms
upon which the Notes are, and are to be, authenticated and delivered."

Section 5. (a) The Trustee waives compliance by the Company with the
provisions of Section 1014 for the purpose of permitting the Board of Directors
of the Company to designate Superior Telecommunications Inc., Superior Cable
Corporation, and DNE Technologies, Inc., and any subsidiaries of such companies
or subsidiaries of the Company (including, without limitation, Superior TeleCom
Inc., a Delaware corporation) holding, directly or indirectly, the capital stock
of such companies, and any subsidiary of any of the foregoing subsidiaries, as
an Unrestricted Subsidiary, and each such company is and hereafter shall be an
Unrestricted Subsidiary.

(b) The second paragraph of Section 1014 is amended by changing the
parenthetical phrase in the first sentence thereof to read "(other than
Adience and its subsidiaries)."

(c) The third paragraph of Section 1014 is amended by changing the
proviso in the first sentence thereof to read "provided that in no event
shall the business currently operated by Adience and its subsidiaries be
transferred to or held by an Unrestricted Subsidiary."

Section 6. (a) Each of Superior Telecommunications Inc., Superior Cable
Corporation, and DNE Technologies, Inc., and each subsidiary of each such
company, is hereby released from and relieved of any obligations under Article
Thirteen and its Subsidiary Guarantee.

(b) The Guarantee Agreement of Superior Cable Corporation is hereby
terminated and of no further force or effect and Superior Cable Corporation
is hereby released from and relieved of any obligations thereunder.

(c) The Trustee waives compliance by the Company with the provisions of
Section 1306 for the purpose of the releases contemplated by this Section 6.

Section 7. Subparagraph (a) of Section 1407 is hereby deleted.

Section 8. Subparagraph (b), clause (vii), of Section 1011 is amended by
adding the following at the end thereof: "; provided, however, that if the
public offering by Superior TeleCom Inc. of its common stock described in
Section 3 of the Offer to Purchase and Consent Solicitation Statement of the
Company, dated August 29, 1996 (as amended, the "Statement"), occurs on or prior
to December 31, 1996, such amount thereupon shall be increased to $25,000,000,
without regard to any payments made in connection with the Transactions defined
and described in Section 3 of the Statement."

Section 9. This Supplemental Indenture is a supplemental indenture pursuant
to Section 902 of the Original Indenture. Upon execution and delivery of this
Supplemental Indenture, the terms and conditions of this Supplemental Indenture
shall be part of the terms and conditions of the Original Indenture for any

2
<PAGE>
and all purposes, and all the terms and conditions of both shall be read
together as though they constitute one instrument, except that in case of
conflict, the provisions of this Supplemental Indenture will control.

Section 10. This Supplemental Indenture shall become effective no earlier
than the Acceptance Date, as such term is defined in the Statement.

Section 11. Except as they have been modified in this Supplemental
Indenture, each and every term and provision of the Original Indenture shall
continue in full force and effect, and all references to the Indenture in the
Original Indenture shall hereafter be deemed to mean the Original Indenture as
supplemented and amended pursuant hereto.

Section 12. This Supplemental Indenture may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original, but which counterparts shall together constitute but one and the
same instrument.

Section 13. This Supplemental Indenture shall be governed by and construed
in accordance with the law of the State of New York as applied to agreements
among New York residents entered into and to be performed entirely within New
York.

Section 14. The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Supplemental Indenture
or for or in respect of the recitals contained herein, all of which recitals are
made solely by the Company.

[SIGNATURE PAGE FOLLOWS]

3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first written above.

<TABLE>
<S> <C> <C>
THE ALPINE GROUP, INC.

By: /s/ BRAGI F. SCHUT
-----------------------------------------
Bragi F. Schut
EXECUTIVE VICE PRESIDENT

SUPERIOR TELECOMMUNICATIONS INC.,

By: /s/ BRAGI F. SCHUT
-----------------------------------------
Name: Bragi F. Schut
Title: Senior Vice President

ADIENCE, INC.

By: /s/ BRAGI F. SCHUT
-----------------------------------------
Name: Bragi F. Schut
Title: Senior Vice President

SUPERIOR CABLE CORPORATION

By: /s/ BRAGI F. SCHUT
-----------------------------------------
Name: Bragi F. Schut
Title: Senior Vice President

MARINE MIDLAND BANK,
as Trustee

By: /s/ FRANK GODINO
-----------------------------------------
Name: Frank Godino
Title: Assistant Vice President
</TABLE>

S-1

<PAGE>
THE ALPINE GROUP, INC.,
ISSUER,
SUPERIOR TELECOMMUNICATIONS INC.,
ADIENCE, INC., AND SUPERIOR CABLE CORPORATION,
SUBSIDIARY GUARANTORS
AND
MARINE MIDLAND BANK,
TRUSTEE

------------------------

SECOND SUPPLEMENTAL INDENTURE
DATED AS OF JANUARY 31, 1997

------------------------

SUPPLEMENTING AND AMENDING THE INDENTURE
DATED AS OF JULY 15, 1995
WITH RESPECT TO $153,000,000
12 1/4% SENIOR SECURED NOTES DUE 2003
AND
12 1/4% SERIES B SENIOR SECURED NOTES DUE 2003
AS AMENDED BY THE
SUPPLEMENTAL INDENTURE
DATED AS OF OCTOBER 2, 1996
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of January 31, 1997 (this "Second
Supplemental Indenture"), made by and among The Alpine Group, Inc., a Delaware
corporation (the "Company"), Superior Telecommunications Inc., a Georgia
corporation, Adience, Inc., a Delaware corporation, Superior Cable Corporation,
an Ontario corporation, and Marine Midland Bank, a New York banking corporation
and trust company (the "Trustee"), to the Indenture (as such term is hereinafter
defined).

WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have
heretofore entered into the Original Indenture (as such term is hereinafter
defined), pursuant to the provisions of which the Company has heretofore issued
$153,000,000 in aggregate principal amount of the Notes;

WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have
heretofore entered into a supplemental indenture, dated as of October 2, 1996,
to the Original Indenture (the Original Indenture, as amended by the
supplemental indenture dated as of October 2, 1996, the "Indenture").

WHEREAS, the Company desires to supplement and amend the Indenture in
accordance with its terms;

WHEREAS, Section 902 of the Indenture provides that the Company and the
Trustee may amend the Indenture with the written consent of the Holders of at
least a majority of the aggregate principal amount of the outstanding Notes;

WHEREAS, Holders of at least a majority of the aggregate principal amount of
the outstanding Notes have provided such written consent to the Trustee; and

WHEREAS, all conditions and requirements necessary to authorize the
execution and delivery of this Second Supplemental Indenture have been duly
complied with or done and performed by the Company, and all actions necessary to
make this Second Supplemental Indenture and the Indenture, as supplemented by
this Second Supplemental Indenture, valid, binding and legal instruments
according to their terms (and, with respect to this Second Supplemental
Indenture, in accordance with the terms of the Indenture) have been complied
with or done and performed;

Section 1. The definitions set forth or incorporated by reference in the
Indenture shall be applicable to this Second Supplemental Indenture as fully and
to the same extent and effect as if set forth herein, except as otherwise
expressly provided herein. As used in this Second Supplemental Indenture, the
term "Original Indenture" shall mean the Indenture, dated as of July 15, 1995,
among the Company, the Subsidiary Guarantors and the Trustee, with respect to
the Notes. As used in this Second Supplemental Indenture, the term "Amended
Indenture" shall mean the Original Indenture, as amended by the supplemental
indenture dated as of October 2, 1996.

Section 2. Each of Subsections (iii), (v), (vi) and (vii) of Section 501 of
the Indenture is hereby deleted and replaced with "[Deleted]".

Section 3. In each of Subsection (iv) of Section 501, Section 502 and
Subsection (b) of Section 507 of the Indenture, "25%" shall be deleted and
replaced with "51%" in each instance where such percentage appears.

Section 4. Each of Subsections (iii) and (iv) of Section 801 of the
Indenture is hereby deleted and replaced with "[Deleted]".

Section 5. Each of Sections 1004, 1005, 1006, 1007, 1008, 1009, 1010, 1011,
1012, 1013, 1014, 1015, 1016, 1017, 1018, and 1019 of the Indenture is hereby
deleted and replaced with "[Deleted]".
<PAGE>
Section 6. Article Thirteen (Section 1301 ET SEQ.) of the Indenture is
hereby deleted and replaced with "[Deleted]". Accordingly, each Subsidiary
Guarantee is hereby terminated and of no further force and effect and each
Guarantee Agreement is hereby terminated and of no further force and effect.

Section 7. Article Fourteen (Section 1401 ET SEQ.) of the Indenture is
hereby deleted and replaced with "[Deleted]". Accordingly, the Pledge Agreement
is hereby terminated and of no further force and effect and the Trustee is
hereby directed to release the Collateral to the Company.

Section 8. Article Fifteen (Section 1501 ET SEQ.) of the Indenture is
hereby deleted and replaced with "[Deleted]".

Section 9. All Defaults and Events of Default under the Indenture and the
Pledge Agreement occurring prior to the effectiveness of this Second
Supplemental Indenture as set forth in Section 14 hereof are hereby waived,
except that this provision shall not constitute a waiver of: (a) a default in
respect of a covenant or provision hereof which under Article Nine of the
Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected or (b) those matters set forth in Section 10
below.

Section 10. This Second Supplemental Indenture is not intended to, nor
shall it, constitute: (a) the waiver of any Default or Event of Default in the
payment of principal of or premium, if any, or interest on any Note or (b) the
making of any change in the provisions of the Indenture relating to waivers of
past defaults.

Section 11. All references in the Indenture to defined terms or other terms
or provisions deleted by this Second Supplemental Indenture also shall be deemed
deleted hereby.

Section 12. This Second Supplemental Indenture is a supplemental indenture
pursuant to Section 902 of the Indenture. Upon execution and delivery of this
Second Supplemental Indenture, the terms and conditions of this Second
Supplemental Indenture shall be part of the terms and conditions of the
Indenture for any and all purposes, and all the terms and conditions of both
shall be read together as though they constitute one instrument, except that in
case of conflict, the provisions of this Second Supplemental Indenture will
control.

Section 13. Superior Telecommunications Inc., Adience, Inc., and Superior
Cable Corporation hereby are removed as parties to the Indenture.

Section 14. This Second Supplemental Indenture shall become effective on
the Closing Date, as such term is defined in the Purchase and Consent Agreement,
dated as of January , 1997, among the Company and the parties listed on
Exhibit A thereto.

Section 15. Except as they have been modified in this Second Supplemental
Indenture, each and every term and provision of the Indenture shall continue in
full force and effect, and all references to the Indenture in the Original
Indenture and the Amended Indenture shall hereafter be deemed to mean the
Original Indenture as supplemented and amended pursuant both to the Amended
Indenture and hereto.

Section 16. This Second Supplemental Indenture may be executed in any
number of counterparts, each of which when so executed and delivered shall be
taken to be an original, but which counterparts shall together constitute but
one and the same instrument.

Section 17. This Second Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York as applied to
agreements among New York residents entered into and to be performed entirely
within New York.

[SIGNATURE PAGE FOLLOWS]

2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed as of the date first written above.

THE ALPINE GROUP, INC.

BY: /S/ BRAGI F. SCHUT
-----------------------------------------
Bragi F. Schut
Executive Vice President

SUPERIOR TELECOMMUNICATIONS INC.

BY: /S/ STEUART H. WAHRSAFAR
-----------------------------------------
Name: Steuart H. Wahrsafar
Title: Assistant Secretary

ADIENCE, INC.

BY: /S/ BRIAN F. SENDT
-----------------------------------------
Name: Brian F. Sendt
Title: Senior Vice President

SUPERIOR CABLE CORPORATION

BY: /S/ STEUART H. WAHRSAFAR
-----------------------------------------
Name: Steuart H. Wahrsafar
Title: First Assistant Secretary

MARINE MIDLAND BANK, AS TRUSTEE

BY: /S/ FRANK FROINO
-----------------------------------------
Name: Frank Froino
Title: Assistant Vice President

S-1

<PAGE>
AMENDMENT TO PLEDGE AGREEMENT

AMENDMENT, dated as of October 2, 1996 (the "Amendment"), made by and
between The Alpine Group, Inc., a Delaware corporation (the "Company"), and
Marine Midland Bank, a New York banking corporation and trust company (the
"Trustee"), to the Pledge Agreement, dated as of July 21, 1995, between the
Company and the Trustee (the "Pledge Agreement").

WHEREAS, the Company and the Trustee have heretofore entered into the
Original Indenture, pursuant to the provisions of which the Company has
heretofore issued $153,000,000 in aggregate principal amount of the Notes;

WHEREAS, the Company and the Trustee are simultaneously with the execution
hereof entering into a Supplemental Indenture in order to supplement and amend,
and to obtain the waiver of certain provisions under, the Original Indenture;

WHEREAS, Section 902 of the Original Indenture provides that the Company and
the Trustee may amend the Pledge Agreement with the written consent of the
Holders of at least a majority of the aggregate principal amount of the
outstanding Notes;

WHEREAS, Holders of at least a majority of the aggregate principal amount of
the outstanding Notes have provided such written consent to the Trustee; and

WHEREAS, all conditions and requirements necessary to authorize the
execution and delivery of this Amendment have been duly complied with or done
and performed by the Company, and all actions necessary to make this Amendment
valid, binding and legal instruments according to its terms have been complied
with or done and performed;

NOW, THEREFORE, THIS AMENDMENT WITNESSETH that, for and consideration of the
premises and of the mutual covenants herein contained and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company covenants and agrees with the Trustee as follows:

Section 1. The definitions set forth or incorporated by reference in the
Original Indenture and the Pledge Agreement shall be applicable to this
Amendment as fully and to the same extent and effect as if set forth herein,
except as otherwise expressly provided herein. As used in this Amendment, the
term "Original Indenture" shall mean the Indenture, dated as of July 15, 1995,
among the Company, the Subsidiary Guarantors and the Trustee, with respect to
the Notes.

Section 2. Schedule I to the Pledge Agreement is deleted and replaced in its
entirety by Schedule I to this Amendment. The Collateral listed on Schedule I to
the Pledge Agreement that is not listed on Schedule I to this Amendment is and
shall be released from the assignment and security interest granted by the
Pledge Agreement. The Trustee shall, at the Pledgor's expense, execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably request to
evidence such release. The Company hereby pledges to the Trustee for its benefit
and the ratable benefit of the holders, and grants to the Trustee for its
benefit and the ratable benefit of the Holders, a continuing first priority
security interest in all of its right, title and interest in the Capital Stock
listed on Schedule I, as amended, PROVIDED, HOWEVER, that in the event the
Company desires to use any cash paid in redemption of the preferred stock of
Superior Telecommunications Inc. listed on Schedule 1 to acquire shares of
common stock of Superior TeleCom Inc., all as contemplated by the Statement (as
defined below), then (a) the Company shall give notice thereof to the Trustee
setting forth the amount of cash to be so used and the date on which such cash
is required, (b) such cash shall be released by the Trustee from the pledge
under the Pledge Agreement and paid to the Company in accordance with
instructions provided to the Trustee by the Company, and (c) the Company shall
promptly deliver and pledge the shares so acquired to the Trustee for its
benefit and the ratable benefit of the Holders as Collateral.

Section 3. This Amendment is an amendment to the Pledge Agreement pursuant
to Section 902 of the Original Indenture. Upon execution and delivery of this
Amendment, the terms and conditions of this Amendment shall be part of the terms
and conditions of the Pledge Agreement for any and all purposes,
<PAGE>
and all the terms and conditions of both shall be read together as though they
constitute one instrument, except that in case of conflict, the provisions of
this Amendment will control.

Section 4. This Amendment shall become effective no earlier than the
Acceptance Date, as such term is defined in the Offer to Purchase and Consent
Solicitation Statement, dated August 29, 1996, of the Company, as amended (the
"Statement)".

Section 5. Except as they have been modified in this Amendment, each and
every term and provision of the Pledge Agreement shall continue in full force
and effect, and all references to the Agreement in the Pledge Agreement shall
hereafter be deemed to mean the Pledge Agreement as amended pursuant hereto.

Section 6. This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original,
but which counterparts shall together constitute but one and the same
instrument.

Section 7. This Amendment shall be governed by and construed in accordance
with the law of the State of New York as applied to agreements among New York
residents entered into and to be performed entirely within New York.

Section 8. The Trustee shall not be responsible in any manner whatsoever for
or in respect of the validity or sufficiency of this Amendment or for or in
respect of the recitals contained herein, all of which recitals are made solely
by the Company.

[SIGNATURE PAGE FOLLOWS]

2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first written above.

THE ALPINE GROUP, INC.

By: /s/ BRAGI F. SCHUT
------------------------------------------
Bragi F. Schut
Executive Vice President

MARINE MIDLAND BANK,
AS TRUSTEE

By: /s/ FRANK GODINO
------------------------------------------
Frank Godino
Assistant Vice President

S-1
<PAGE>
SCHEDULE I

PLEDGED STOCK

<TABLE>
<CAPTION>
STOCK PERCENTAGE OF
CLASS OF CERTIFICATE NUMBER OF OUTSTANDING
STOCK ISSUER STOCK PAR VALUE NO(S) SHARES SHARES
- ------------------------------------ ----------- ---------------------- ----------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Adience, Inc........................ Common $1.00 per share No. 1 10 100%
Superior TeleCom Inc................ Common $.01 per share No. 1 6,024,048 100%
Superior Telecommu-
nications Inc..................... Preferred $1.00 per share No. B-1 20,000 100%
</TABLE>

<PAGE>
AMENDMENT NO. 2 TO PLEDGE AGREEMENT

AMENDMENT NO. 2, dated as of January 27, 1997 ("Amendment No. 2"), made by
and between The Alpine Group, Inc., a Delaware corporation (the "Company"), and
Marine Midland Bank, a New York banking corporation and trust company (the
"Trustee"), to the Pledge Agreement, dated as of July 21, 1995, between the
Company and the Trustee, as amended by the Amendment ("Amendment No. 1") dated
as of October 2, 1996 (collectively, the "Pledge Agreement").

WHEREAS, the Company and the Trustee have heretofore entered into the
Indenture, pursuant to the provisions of which the Company has issued
$153,000,000 in aggregate principal amount of the Notes;

WHEREAS, the Company and the Trustee, simultaneously with the execution of
Amendment No. 1, entered into a Supplemental Indenture (the "Supplemental
Indenture");

WHEREAS, Section 901(d) of the Indenture provides that the Company and the
Trustee may amend the Pledge Agreement without the consent of any Holder of a
Note to, among other things, make any change that does not adversely affect the
legal rights under the Indenture or under the Pledge Agreement of any Holder of
the Notes;

WHEREAS, this Amendment No. 2 is intended to clarify the provisions of the
Pledge Agreement concerning the release by the Trustee of certain shares of 6%
Cumulative Redeemable Preferred Stock of Superior Telecommunications Inc.
("Superior Preferred Stock") held as Collateral, upon the delivery to the
Trustee by Alpine in substitution therefor of certain shares of common stock of
Superior TeleCom Inc. ("TeleCom Common Stock") to be held by the Trustee as
Collateral, all in connection with the exercise by the underwriters of an
over-allotment option to purchase additional shares of TeleCom Common Stock in
conjunction with the initial public offering of such stock, and the substitution
as Collateral thereafter of the number of shares of TeleCom Common Stock
required to return the Company's percentage ownership of such stock to 50.1%
following the exercise of such over-allotment option for shares of Superior
Preferred Stock, all as more fully described in the Offer to Purchase and
Consent Solicitation Statement, dated August 29, 1996, of the Company, as
amended;

WHEREAS, Section 2 of Amendment No. 1 expressly permits the substitution of
TeleCom Common Stock for Superior Preferred Stock through the release to the
Company by the Trustee of cash proceeds of the redemption of Superior Preferred
Stock for the purpose of the Company's purchase of the number of shares of
TeleCom Common Stock required to return the Company's percentage ownership of
such stock to 50.1% following the exercise of such over-allotment option;

WHEREAS, the provisions of this Amendment No. 2 will clarify that the
Company has the authority to substitute as Collateral shares of TeleCom Common
Stock for Superior Preferred Stock in order to effect the same result set forth
in Amendment No. 1, which, because it achieves the same result, does not
adversely affect the legal rights under the Indenture or under the Pledge
Agreement of any Holder of the Notes; and

WHEREAS, all conditions and requirements necessary to authorize the
execution and delivery of this Amendment No. 2 have been duly complied with or
done and performed by the Company, and all actions necessary to make this
Amendment No. 2 a valid, binding and legal instrument according to its terms
have been complied with or done and performed;

NOW, THEREFORE, THIS AMENDMENT NO. 2 WITNESSETH that, for and consideration
of the premises and of the mutual covenants herein contained and for other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company covenants and agrees with the Trustee as follows:

Section 1. The definitions set forth or incorporated by reference in the
Indenture and the Pledge Agreement shall be applicable to this Amendment No. 2
as fully and to the same extent and effect as if set forth herein, except as
otherwise expressly provided herein. As used in this Amendment, the term
"Indenture" shall mean the Indenture, dated as of July 15, 1995, among the
Company, the Subsidiary Guarantors named therein and the Trustee, with respect
to the Notes, as amended by the Supplemental Indenture, dated as of October 2,
1996.
<PAGE>
Section 2. Alpine is hereby permitted to exchange with the Trustee, and the
Trustee is hereby authorized to exchange, in order to substitute as Collateral,
450,000 shares of common stock of Superior TeleCom Inc. for 8,055 shares of 6%
Cumulative Redeemable Preferred Stock of Superior Telecommunications Inc. held
by the Trustee as Collateral.

Section 3. Schedule I to the Pledge Agreement is deleted and replaced in
its entirety by Schedule I to this Amendment No. 2. The Collateral listed on
Schedule I to the Pledge Agreement that is not listed on Schedule I to this
Amendment No. 2 is and shall be released from the assignment and security
interest granted by the Pledge Agreement. The Trustee shall, at the Pledgor's
expense, execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence such release. The Company hereby pledges to the
Trustee for its benefit and the ratable benefit of the Holders, and grants to
the Trustee for its benefit and the ratable benefit of the Holders, a continuing
first priority security interest in all of its right, title and interest in the
Capital Stock listed on Schedule I, as amended. The Collateral listed on
Schedule I to the Pledge Agreement that has not yet been delivered to the
Trustee is being so delivered simultaneously herewith.

Section 4. This Amendment No. 2 is an amendment to the Pledge Agreement
pursuant to Section 901 of the Indenture. Upon execution and delivery of this
Amendment No. 2, the terms and conditions of this Amendment No. 2 shall be part
of the terms and conditions of the Pledge Agreement for any and all purposes,
and all the terms and conditions of both shall be read together as though they
constitute one instrument, except that in case of conflict, the provisions of
this Amendment No. 2 will control.

Section 5. Except as they have been modified in this Amendment No. 2, each
and every term and provision of the Pledge Agreement shall continue in full
force and effect, and all references to the Agreement in the Pledge Agreement
shall hereafter be deemed to mean the Pledge Agreement as amended pursuant
hereto.

Section 6. This Amendment No. 2 may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original, but which counterparts shall together constitute but one and the
same instrument.

Section 7. This Amendment No. 2 shall be governed by and construed in
accordance with the law of the State of New York as applied to agreements among
New York residents entered into and to be performed entirely within New York.

Section 8. The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Amendment No. 2 or for
or in respect of the recitals contained herein, all of which recitals are made
solely by the Company.

[SIGNATURE PAGE FOLLOWS]

2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed as of the date first written above.

THE ALPINE GROUP, INC.

By: /s/ BRAGI F. SCHUT
-----------------------------------------
Bragi F. Schut
EXECUTIVE VICE PRESIDENT

MARINE MIDLAND BANK,
as Trustee

By: /s/ FRANK GEDINO
-----------------------------------------
Name: Frank GeDino
Title: Assistant Vice President

S-1
<PAGE>
SCHEDULE I (AS OF JANUARY 27, 1997)
PLEDGED STOCK

<TABLE>
<CAPTION>
PERCENTAGE
STOCK OF
CLASS OF PAR CERTIFICATE NUMBER OF OUTSTANDING
STOCK ISSUER STOCK VALUE NO(S) SHARES SHARES
- -------------------------------- ------------ ----------------- --------------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Adience, Inc.................... Common $1.00 per share No. 1 10 100%

Superior TeleCom Inc............ Common $.01 per share No. 1 6,024,048 46.6%

Superior TeleCom Inc............ Common $.01 per share No. ST-0172 450,000 3.5

Superior Telecommunications 6% $1.00 per share No. B-2 11,945 59.7%
Inc........................... Cumulative
Redeemable
Preferred
</TABLE>

<PAGE>
AMENDMENT
TO
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
AND
DEBT EXCHANGE AGREEMENT

AMENDMENT, dated as of October 15, 1995, between the person or entity whose
name is set forth on the Signature Page hereto (the "Holder") and The Alpine
Group, Inc., a Delaware corporation with offices at 1790 Broadway, New York, New
York 10019 ("Alpine").

RECITALS

The Holder and Alpine are parties to an Amended and Restated Stock Purchase
Agreement, and an Amended and Restated Debt Exchange Agreement, each dated as of
October 11, 1994 (as amended to date, collectively the "Agreements"). In
connection with the transactions contemplated by the Agreements, the Holder
received, and is currently the legal and beneficial owner of, the respective
numbers of shares of Alpine 8% Preferred Stock and PolyVision Common Stock set
forth in Exhibit A hereto.

Pursuant to Section 1.06 of the Agreements, the Holder is entitled to
receive certain Reset Consideration from Alpine. The parties wish to provide for
the payment and settlement of all of Alpine's obligations with respect to the
Reset Consideration. Accordingly, the Holder and Alpine wish to amend the
Agreements as provided herein.

THEREFORE, in consideration of the mutual agreements herein contained and
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

1. Definitions. Terms defined in the Agreements and used but not otherwise
defined herein shall have the meanings given to them in the Agreements.

2. Exchange.

a. In full consideration and satisfaction of Alpine's obligations with
respect to the Reset Consideration, pursuant to Section 1.06 of the
Agreements or otherwise, Alpine shall transfer and deliver to the Holder the
number of shares of Alpine Common Stock and PolyVision Common Stock set
forth on Exhibit A, and the Holder shall transfer and deliver to Alpine the
number of shares of Alpine 8% Preferred Stock set forth on Exhibit A. The
transfers and deliveries contemplated by this Amendment shall take place
simultaneously with the execution of this Amendment.

b. Neither certificates nor scrip for fractional shares of Alpine
Common Stock or PolyVision Common Stock will be issued in connection with
the transaction contemplated hereby, but in lieu thereof the Holder
otherwise entitled to a fraction of a share of Alpine Common Stock or
PolyVision Common Stock as set forth on Exhibit A shall be paid in cash an
amount equal to such fraction multiplied by (1) $5.75 (in the case of a
fractional share of Alpine Common Stock) or (2) $3.5625 (in the case of a
fractional share of PolyVision Common Stock), in each case rounded upward or
downward to the nearest whole cent.

3. Registration. Alpine confirms that it will effect a registration under
the Securities Act of the Alpine Common Stock transferred and delivered
hereunder in accordance with the provisions of Section 5.02 of the Agreements
and that the provisions of Section 5.01 of the Agreements (relating to
registration of the PolyVision Common Stock) apply to the PolyVision Common
Stock transferred hereunder. The Holder acknowledges and agrees that Alpine will
not be required to effect, and no registration will be effected, with respect to
the Alpine 8% Preferred Stock.

4. Representations.

a. The Holder represents to Alpine that the Holder is the legal and
beneficial owner of the respective numbers of shares of Alpine 8% Preferred
Stock and PolyVision Common Stock set forth on Exhibit A. The Holder repeats
and reaffirms each of the representations and warranties set forth in
<PAGE>
Sections 2.01 and 2.02 of the Agreements, modified to apply to the Alpine 8%
Preferred Stock being transferred and delivered by it hereunder and to the
PolyVision Common Stock owned by it.

b. The Holder repeats and reaffirms each of the representations and
warranties set forth in Sections 2.03 through 2.05 of the Agreements,
modified to apply to the Alpine Common Stock and PolyVision Common Stock
being acquired hereunder.

c. Alpine repeats and reaffirms each of the representations and
warranties set forth in Sections 3.01 through 3.05 of the Agreements,
modified to apply to the Alpine 8% Preferred Stock being acquired hereunder.

5. Other. All other terms and conditions of the Agreements shall remain
in full force and effect without modification.

[SIGNATURE PAGE FOLLOWS]

2
<PAGE>
This Amendment has been duly executed on the date hereinabove set forth.

THE ALPINE GROUP, INC.

By:
------------------------------------------------------------------------------
Name:
Title:

The Holder:

REFERENCE IS MADE TO THE
COUNTERPART HOLDER'S SIGNATURE PAGE,
EXECUTED BY THE HOLDER AND MADE A PART
HEREOF

<PAGE>
As of May 1, 1997

The Alpine Group, Inc.
1790 Broadway, Suite 1500
New York, New York 10019-1412

Re: Services Agreement dated as of October 2, 1996 by and between The Alpine
Group, Inc. and Superior Telecom Inc. (the "Agreement")

This will confirm our agreement in modification of the captioned Agreement
as follows:

1. Section 3(b) of the Agreement is hereby amended by deleting the dollar
amount of "$925,000" and replacing it with the dollar amount of
"$2,717,000".

2. Section 4(a) of the Agreement is hereby amended by deleting the first
sentence thereof and inserting the following:

a. Effective from and after May 1, 1997 in respect of the twelve month
period immediately succeeding such date, Superior shall pay Alpine the
fee provided for under Section 3(b) quarterly in advance effective May 1,
1997."

The amendments provided for herein have been approved by the Audit Committee
of the Board of Directors of Superior Telecom Inc.

As modified hereby, the Agreement is hereby expressly ratified and
confirmed.

If the foregoing conforms with your understanding of the agreement reached
between us, kindly execute a copy of this letter so indicating.

Very truly yours,

SUPERIOR TELECOM INC.

BY: /S/ STEVEN S. ELBAUM
----------------------------------------
Steven S. Elbaum
Its: PRESIDENT AND
CHIEF EXECUTIVE OFFICER

Agreed to as of the date first
herein above set forth

THE ALPINE GROUP, INC.

By: /s/ BRAGI F. SCHUT
---------------------
Bragi F. Schut
Its: EXECUTIVE VICE PRESIDENT

<PAGE>
THE ALPINE GROUP, INC.

1997 INTERIM STOCK OPTION PLAN

SECTION 1. PURPOSE. The purpose of The Alpine Group, Inc. 1997 Interim
Stock Option Plan effective April 9, 1997 (hereinafter referred to as the
"Plan"), is to provide a special incentive to selected key employees and
directors of The Alpine Group, Inc. (hereinafter referred to as the "Company")
and its subsidiaries to promote the Company's business. It is intended that this
purpose will be effected through the granting of stock options which will allow
participating employees and directors to share in the success of the Company's
business.

SECTION 2. AWARDS UNDER THE PLAN. Awards under the Plan shall be in the
form of "stock options" to purchase common stock, $.10 par value per share, of
the Company (the "Common Stock") in accordance with the terms of the instrument
evidencing such option.

SECTION 3. ADMINISTRATION. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (hereinafter
referred to as the "Committee"), each member of which shall be a "non-employee
director" with the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act"). The Committee shall consist
of not less than two members. To the extent not otherwise inconsistent with the
Plan, the Committee shall have the authority and discretion to (a) determine the
employees or directors to be granted stock options; (b) determine whether stock
options granted to any employees shall be incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or other stock options or both (provided, however, that to the extent
that the aggregate fair market value of the Common Stock (determined on the date
of grant) underlying incentive stock options which are first exercisable by any
employee during any calendar year exceeds $100,000, the portion of such
incentive stock options (determined by accounting for incentive stock options in
the order in which they were granted and options granted on the same date pro
rata) relating to such excess Common Stock shall be treated as options which are
not incentive stock options); (c) determine the number of shares of Common Stock
to be subject to each stock option; (d) determine the option price of the shares
of Common Stock subject to each stock option and the method of payment for such
price; (e) prescribe the form or forms of the instruments evidencing any stock
options granted under the Plan and of any other instruments required under the
Plan and to change such forms from time to time; (f) adopt, amend and rescind
rules and regulations for the administration of the Plan; and (g) decide all
questions and settle all controversies and disputes which may arise in
connection with the Plan. All decisions, determinations, and interpretations of
the Committee shall be binding on all parties concerned.

SECTION 4. PARTICIPANTS. The participants in the Plan shall be such common
law employees and directors of the Company and/or its subsidiaries as may be
selected by the Committee in its sole discretion. The receipt by a participant
of a stock option at any one time shall not confer upon such participant the
right to receive a future grant of stock options.

SECTION 5. STOCK TO BE DELIVERED. Subject to the provisions of Section 12
hereof, the number of shares of Common Stock which may be delivered pursuant to
the Plan shall not exceed 536,900. Common Stock to be delivered pursuant to the
exercise of stock options issued under the Plan may constitute an original issue
of authorized Common Stock or may consist of previously issued Common Stock
acquired by the Company, as shall be determined by the Board of Directors of the
Company. The Board of Directors and the proper officers of the Company shall
take the appropriate action required for such delivery.

SECTION 6. LIMITATIONS. No stock option shall be granted under the Plan on
or after the tenth anniversary of the date of adoption of the Plan. Subject to
adjustment as provided in Section 12 of the Plan, the number of shares of Common
Stock which may be delivered under the Plan shall not exceed 536,900 in the
aggregate. To the extent that any stock option granted under the Plan shall
expire or terminate unexercised, or for any reason become unexercisable, as to
any shares of Common Stock subject
<PAGE>
thereto, such shares as relate to such stock option shall thereafter be
available for further grants under the Plan, within the limit specified above,
and to the extent permitted under Rule 16b-3.

SECTION 7. TERMS AND CONDITIONS. All stock options granted under the Plan
shall be subject to the following terms and conditions (except as provided in
Section 12 below) and to such other terms and conditions as the Committee shall
determine are appropriate to accomplish the purposes of the Plan:

(a) OPTION PRICE. The option price under each stock option shall be
determined by the Committee, provided, however, that stock options intended
to be incentive stock options shall have an option price of not less than
100% of the fair market value per share of Common Stock at the time the
option is granted. With respect to participants who own stock representing
more than 10% of the total combined voting power of all classes of the
Company's (or any subsidiary's) capital stock, within the meaning of Section
422 of the Code, the option price for incentive stock options shall not be
less than 110% of the fair market value per share of Common Stock at the
time the incentive stock option is granted.

(b) TERM OF STOCK OPTIONS. Except with respect to stock options granted
to a participant who owns stock representing more than 10% of the total
combined voting power of all classes of the Company's (or any subsidiary's)
capital stock, within the meaning of Section 422 of the Code, the term of an
incentive stock option shall be no longer than ten years from the date of
grant. With respect to participants who own stock representing more than 10%
of the total combined voting power of all classes of the Company's (or any
subsidiary's) capital stock, within the meaning of Section 422 of the Code,
the term of an incentive stock option shall be no longer than five years
from the date of grant.

(i) With respect to each grant, stock options awarded thereunder shall
become exercisable at such time and in such amounts as the Committee may
decide, subject to the limitations set forth under Section 7(b) hereof. The
Committee may at any time accelerate the exercisability of all or any part
of a stock option.

(ii) Stock options intended to be incentive stock options, as
defined in the Code, shall contain and be subject to such provisions
relating to exercise and other matters as are required of incentive stock
options under the applicable provisions of the Code and Treasury
Regulations promulgated thereunder, as from time to time in effect.

(iii) Stock options may be exercised by delivering to the Committee
payment in respect thereof plus such other documentation as the Committee
shall require. Payment may be made in the form of cash, Common Stock or
such other consideration as shall be determined by the Committee.

SECTION 8. OBLIGATIONS WITH RESPECT TO DELIVERY OF COMMON STOCK. The
Company shall not be obligated to deliver any shares of Common Stock or cash
unless and until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with, or in the event
the outstanding Common Stock is at the time listed upon any stock exchange,
unless and until the shares of Common Stock to be delivered have been listed or
authorized to be added to the list upon official notice of issuance to such
exchange, or unless or until all other legal matters in connection with the
issuance and delivery of shares of Common Stock or cash have been approved by
the Company's counsel. Without limiting the generality of the foregoing, the
Company may require from the participant before issuing shares of Common Stock
upon exercise, such investment representations or such agreements, if any, as
counsel for the Company may consider necessary in order to comply with federal
and state securities laws.

SECTION 9. CHANGE IN CONTROL. Notwithstanding any other provision of this
Plan, in the event of a Change in Control, as hereinafter defined, all of the
outstanding stock options held by a participant which

2
<PAGE>
are not yet exercisable shall become immediately exercisable and all the rights
and benefits relating to such options may be exercised and shall become fixed
and not subject to change or revocation by the Company.

(a) For purposes of this Section 9, a Change in Control shall be deemed to
have occurred upon the happening of either of the following events: (i) any
person within the meaning of Section 13(d) and 14(d) of the 1934 Act, other than
the Company or any officer or director of the Company, becomes the beneficial
owner, within the meaning of Rule 13d-3 under the 1934 Act, of 20% or more of
the combined voting securities of the Company or (ii) a change of 20% or more in
the composition of the Board of Directors of the Company occurs without the
approval of the majority of the Board of Directors as it exists at the time
immediately preceding such change in composition.

SECTION 10. NONTRANSFERABILITY OF STOCK OPTIONS. No stock option may be
transferred by participant other than by will or by the laws of descent and
distribution or pursuant to a domestic relations order, and during the lifetime
of the participant a stock option may be exercised by no person other than the
participant. The designation of a beneficiary by a participant does not
constitute a transfer.

SECTION 11. TERMINATION OF EMPLOYMENT. If a participant terminates
employment with the Company or its subsidiaries, outstanding stock options held
by the participant may be exercised in accordance with such provisions as are
established by the Committee at or subsequent to the time of grant.

In no event may any stock option be exercised after the expiration of the
term of such stock option.

SECTION 12. CHANGES IN STOCK. In the event of a stock dividend, split-up or
combination of shares of Common Stock, recapitalization or merger in which the
Company is the surviving corporation, or other similar capital change, the
number and kind of shares of Common Stock or securities of the Company to be
subject to the Plan to stock options then outstanding or to be granted
thereunder, the maximum number of shares of Common Stock or securities which may
be issued or sold under the Plan, the option price and any other relevant
provisions shall be appropriately adjusted by the Board of Directors of the
Company, whose determination shall be binding on all persons including the
Company and the participants. In the event of a consolidation or a merger in
which the Company is not the surviving corporation, or in the event of complete
liquidation of the Company, all outstanding stock options shall terminate only
if prior to the effective date of any such consolidation or merger, the Board of
Directors of the Company shall either (a) modify all outstanding options such
that they shall become immediately exercisable, or (b) (i) arrange with the
surviving corporation to grant replacement stock options to the participants,
and (ii) any replacement incentive stock option shall not constitute a
modification, within the meaning of Section 424 of the Code, of a terminated
incentive stock option.

SECTION 13. EMPLOYMENT RIGHTS. The adoption of the Plan shall not confer
upon any employee of the Company (or any subsidiary) any right to continued
employment with the Company (or any subsidiary), nor shall it interfere in any
way with the right of the Company (or any subsidiary) to terminate the
employment of its (their) employees at any time.

SECTION 14. AUTHORITY OF THE BOARD OF DIRECTORS. The Board of Directors of
the Company may at any time amend the Plan or modify any outstanding stock
options for the purposes of satisfying the requirements of any changes in
applicable laws or regulations or for any other purpose which may at the time be
permitted by law.

<PAGE>
THE ALPINE GROUP, INC.
1997 STOCK OPTION PLAN
<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS

<S> <C> <C>
PAGE
-----
ARTICLE I. PURPOSE............................................................... 1

ARTICLE II. DEFINITIONS........................................................... 1

ARTICLE III. ADMINISTRATION........................................................ 4

ARTICLE IV. SHARE AND OTHER LIMITATIONS........................................... 7

ARTICLE V. ELIGIBILITY........................................................... 10

ARTICLE VI. STOCK OPTION GRANTS................................................... 10

ARTICLE VII. STOCK APPRECIATION RIGHTS............................................. 12

ARTICLE VIII. NON-TRANSFERABILITY AND TERMINATION OF EMPLOYMENT/ CONSULTANCY
PROVISIONS.......................................................... 14

ARTICLE IX. TERMINATION OR AMENDMENT OF THE PLAN.................................. 15

ARTICLE X. UNFUNDED PLAN......................................................... 16

ARTICLE XI. GENERAL PROVISIONS.................................................... 16

ARTICLE XII. EFFECTIVE DATE OF PLAN................................................ 19

ARTICLE XIII. TERM OF PLAN.......................................................... 19

ARTICLE XIV. NAME OF PLAN.......................................................... 19
</TABLE>

i
<PAGE>
THE ALPINE GROUP, INC.
1997 STOCK OPTION PLAN

ARTICLE I.

PURPOSE

The purpose of The Alpine Group, Inc. 1997 Stock Option Plan (the "Plan") is
to enhance the profitability and value of The Alpine Group, Inc. (the "Company")
and its subsidiaries for the benefit of their stockholders by enabling the
Company (i) to offer employees and Consultants of the Company and Subsidiaries,
stock based incentives and other equity interests in the Company, thereby
creating a means to raise the level of stock ownership by employees and
Consultants in order to attract, retain and reward such individuals and
strengthen the mutuality of interests between such individuals and the Company's
stockholders.

ARTICLE II.

DEFINITIONS

For purposes of this Plan, the following terms shall have the following
meanings:

2.1. "Acquisition Events" shall have the meaning set forth in Section
4.2(d).

2.2. "Award" shall mean any award under this Plan of any Stock Option and
Stock Appreciation Right. All Awards shall be confirmed by, and subject to the
terms of, a written agreement executed by the Company and the Participant.

2.3. "Board" shall mean the Board of Directors of the Company.

2.4. "Cause" shall mean, with respect to a Participant's Termination of
Employment or Termination of Consultancy, unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced, thereafter,
termination due to a Participant's dishonesty, fraud, insubordination, willful
misconduct, refusal to perform services (for any reason other than illness or
incapacity) or materially unsatisfactory performance of his or her duties for
the Company or a Subsidiary, as determined by the Committee in its sole
discretion.

2.5. "Code" shall mean the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision.

2.6. "Committee" shall mean a committee of the Board appointed from time to
time by the Board, which committee shall be intended to consist of two or more
non-employee directors, each of whom shall be, to the extent required by Rule
16b-3 and Section 162(m) of the Code, a non-employee director as defined in Rule
16b-3 and an outside director as defined under Section 162(m) of the Code. To
the effect that no Committee exists which has the authority to administer the
Plan, the functions of the Committee shall be exercised by the Board. If for any
reason the appointed Committee does not meet the requirements of Rule 16b-3 or
Section 162(m) of the Code, such noncompliance with the requirements of Rule
16b-3 and Section 162(m) of the Code shall not affect the validity of Awards,
grants, interpretations or other actions of the Committee.

2.7. "Common Stock" shall mean the Common Stock, $.10 par value per share,
of the Company.

2.8. "Company" shall mean The Alpine Group, Inc., a Delaware corporation.

2.9. "Consultant" shall mean any adviser or consultant to the Company and
its Subsidiaries who is eligible pursuant to Section 5.1 to be granted Awards
under this Plan.

2.10. "Disability" shall mean total and permanent disability, as defined in
Section 22(e)(3) of the Code.

2.11. "Effective Date" shall mean April 9, 1997, subject to Article XII.
<PAGE>
2.12. "Eligible Employees" shall mean the employees of the Company and the
Subsidiaries who are eligible pursuant to Section 5.1 to be granted Awards under
this Plan.

2.13. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

2.14. "Fair Market Value" for purposes of this Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the last sales price reported for the
Common Stock on the applicable date (i) as reported by the principal national
securities exchange in the United States on which it is then traded, or (ii) if
not traded on any such national securities exchange, as quoted on an automated
quotation system sponsored by the National Association of Securities Dealers. If
the Common Stock is not readily tradable on a national securities exchange or
any system sponsored by the National Association of Securities Dealers, its Fair
Market Value shall be set in good faith by the Committee on the advice of a
registered investment adviser (as defined under the Investment Advisers Act of
1940). For purposes of the grant of any Award, the applicable date shall be the
date for which the last sales price is available at the time of grant. For
purposes of the exercise of any Stock Appreciation Right the applicable date
shall be the date a notice of exercise is received by the Committee or, if not a
day on which the applicable market is open, the next day that it is open.

2.15. "Good Reason" shall mean, with respect to a Participant's Termination
of Employment or Termination of Consultancy, unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced, thereafter,
a voluntary termination due to "good reason," as the Committee, in its sole
discretion decides to treat as a Good Reason termination.

2.16. "Incentive Stock Option" shall mean any Stock Option awarded under
this Plan intended to be and designated as an "Incentive Stock Option" within
the meaning of Section 422 of the Code.

2.17. "Limited Stock Appreciation Right" shall mean an Award made pursuant
to Section 7.5 of this Plan which may be a Tandem Stock Appreciation Right or a
Non-Tandem Stock Appreciation Right.

2.18. "Non-Qualified Stock Option" shall mean any Stock Option awarded under
this Plan that is not an Incentive Stock Option.

2.19. "Non-Tandem Stock Appreciation Right" shall mean a Stock Appreciation
Right entitling the holder to receive an amount in cash or stock equal to the
excess of (x) the Fair Market Value of a share of Common Stock as of the date
such right is exercised, over (y) the aggregate exercise price of such right,
otherwise than on surrender of a Stock Option.

2.20. "Participant" shall mean the following persons to whom an Award has
been made pursuant to this Plan: Eligible Employees and Consultants of the
Company and Subsidiaries.

2.21. "Reference Stock Option" shall have the meaning set forth in Section
7.1.

2.22. "Retirement" with respect to a Participant's Termination of Employment
or Termination of Consultancy shall mean a Termination of Employment or
Termination of Consultancy without Cause or for Good Reason from the Company
and/or a Subsidiary by a Participant who has attained (i) at least age 65; or
(ii) such earlier date after age 55 as approved by the Committee with regard to
such Participant.

2.23. "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b) of the Exchange
Act as then in effect or any successor provisions.

2.24. "Section 162(m) of the Code" shall mean the exception for
performance-based compensation under Section 162(m) of the Code and any Treasury
regulations thereunder.

2.25. "Stock Appreciation Right" shall mean the right pursuant to an Award
granted under Article VII.

2.26. "Stock Option" or "Option" shall mean any Option to purchase shares of
Common Stock granted to Eligible Employees or Consultants pursuant to Article
VI.

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2.27. "Subsidiary" shall mean any subsidiary of the Company within the
meaning of Section 424(f) of the Code.

2.28. "Tandem Stock Appreciation Right" shall mean a Stock Appreciation
Right entitling the holder to surrender to the Company all (or a portion) of a
Stock Option in exchange for an amount in cash or stock equal to the excess of
(i) the Fair Market Value, on the date such Stock Option (or such portion
thereof) is surrendered, of the Common Stock covered by such Stock Option (or
such portion thereof), over (ii) the aggregate exercise price of such Stock
Option (or such portion thereof).

2.29. "Ten Percent Stockholder" shall mean a person owning stock of the
Company possessing more than 10% of the total combined voting power of all
classes of stock of the Company, as defined in Section 422 of the Code.

2.30. "Termination of Consultancy" shall mean, with respect to a Consultant,
that the Consultant is no longer acting as a Consultant to the Company and its
Subsidiaries. In the event an entity shall cease to be a Subsidiary, there shall
be deemed a Termination of Consultancy of any individual who is not otherwise a
Consultant of the Company or another Subsidiary at the time the entity ceases to
be a Subsidiary.

2.31. "Termination of Employment" shall mean (i) a termination of service of
a Participant from the Company and its Subsidiaries; or (ii) when an entity
which is employing a Participant ceases to be a Subsidiary, unless the
Participant thereupon becomes employed by the Company or another Subsidiary.

2.32. "Transfer" or "Transferred" shall mean anticipate, alienate, attach,
sell, assign, pledge, encumber, charge or otherwise transfer.

ARTICLE III.

ADMINISTRATION

3.1. THE COMMITTEE. The Plan shall be administered and interpreted by the
Committee.

3.2. AWARDS. The Committee shall have full authority to grant, pursuant to
the terms of this Plan (including Article V hereof) Stock Options and Stock
Appreciation Rights to Eligible Employees and Consultants. In particular, the
Committee shall have the authority:

(a) to select the Eligible Employees and Consultants to whom Stock
Options and Stock Appreciation Rights may from time to time be granted
hereunder;

(b) to determine whether and to what extent Stock Options and Stock
Appreciation Rights are to be granted hereunder to one or more Eligible
Employees or Consultants;

(c) to determine, in accordance with the terms of this Plan, the number
of shares of Common Stock to be covered by each Award to an Eligible
Employee or Consultant hereunder;

(d) to determine the terms and conditions, not inconsistent with the
terms of this Plan, of any Award granted hereunder to an Eligible Employee
or Consultant (including, but not limited to, the exercise or purchase price
(if any), any restriction or limitation, any vesting schedule or
acceleration thereof or any forfeiture restrictions or waiver thereof,
regarding any Stock Option or Stock Appreciation Right, and the shares of
Common Stock relating thereto, based on such factors, if any, as the
Committee shall determine, in its sole discretion);

(e) to determine whether and under what circumstances a Stock Option may
be settled in cash and/or Common Stock under Section 6.3(d);

(f) to determine whether, to what extent and under what circumstances to
provide loans (which may be on a recourse basis and shall bear interest at
the rate the Committee shall provide) to Eligible Employees and Consultants
in order to exercise Options under the Plan;

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<PAGE>
(g) to determine whether a Stock Appreciation Right shall be a Tandem
Stock Appreciation Right or Non-Tandem Stock Appreciation Right;

(h) to determine whether to require an Eligible Employee or Consultant,
as a condition of the granting of any Award, to not sell or otherwise
dispose of shares acquired pursuant to the exercise of an Option or as an
Award for a period of time as determined by the Committee, in its sole
discretion, following the date of the acquisition of such Option or Award;
and

(i) to modify, extend or renew an Award, subject to Section 9.1 herein,
provided, however, that if an Award is modified, extended or renewed and
thereby deemed to be the issuance of a new Award under the Code or the
applicable accounting rules, the exercise price of an Award may continue to
be the original exercise price even if less than the Fair Market Value of
the Common Stock at the time of such modification, extension or renewal.

3.3. GUIDELINES. Subject to Article IX hereof, the Committee shall have the
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing this Plan and perform all acts, including the delegation of
its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of this Plan and
any Award issued under this Plan (and any agreements relating thereto); and to
otherwise supervise the administration of this Plan. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in this Plan or
in any agreement relating thereto in the manner and to the extent it shall deem
necessary to carry this Plan into effect, but only to the extent any such action
would be permitted under the applicable provisions of both Rule 16b-3 and
Section 162(m) of the Code. The Committee may adopt special guidelines and
provisions for persons who are residing in, or subject to, the taxes of,
countries other than the United States to comply with applicable tax and
securities laws.

3.4. DECISIONS FINAL. Any decision, interpretation or other action made or
taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with this Plan
shall be within the absolute discretion of the Company, the Board or the
Committee, as the case may be, and shall be final, binding and conclusive on the
Company and all employees and Participants and their respective heirs,
executors, administrators, successors and assigns.

3.5. RELIANCE ON COUNSEL. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other counsel,
with respect to its obligations or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall not be liable with
respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.

3.6. PROCEDURES. If the Committee is appointed, the Board shall designate
one of the members of the Committee as chairman and the Committee shall hold
meetings, subject to the By-Laws of the Company, at such times and places as the
Committee shall deem advisable. A majority of the Committee members shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by all the Committee members in accordance with the By-Laws of the
Company shall be fully as effective as if it had been made by a vote at a
meeting duly called and held. The Committee may keep minutes of its meetings and
may make such rules and regulations for the conduct of its business as it shall
deem advisable.

3.7. DESIGNATION OF CONSULTANTS/LIABILITY.

(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the administration of this
Plan and may grant authority to employees to execute agreements or other
documents on behalf of the Committee.

(b) The Committee may employ such legal counsel, consultants and agents
as it may deem desirable for the administration of this Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred by
the Committee or Board in the engagement of any such counsel, consultant or
agent shall

4
<PAGE>
be paid by the Company. The Committee, its members and any person designated
pursuant to Section 3.7(a) shall not be liable for any action or
determination made in good faith with respect to this Plan. To the maximum
extent permitted by applicable law, no officer of the Company or member or
former member of the Committee or of the Board shall be liable for any
action or determination made in good faith with respect to this Plan or any
Award granted under it. To the maximum extent permitted by applicable law
and the Certificate of Incorporation and By-Laws of the Company and to the
extent not covered by insurance, each officer and member or former member of
the Committee or of the Board shall be indemnified and held harmless by the
Company against any cost or expense (including reasonable fees of counsel
reasonably acceptable to the Company) or liability (including any sum paid
in settlement of a claim with the approval of the Company), and advanced
amounts necessary to pay the foregoing at the earliest time and to the
fullest extent permitted, arising out of any act or omission to act in
connection with this Plan, except to the extent arising out of such
officer's, member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification the
officers, directors or members or former officers, directors or members may
have under applicable law or under the Certificate of Incorporation or
By-Laws of the Company or Subsidiary. Notwithstanding anything else herein,
this indemnification will not apply to the actions or determinations made by
an individual with regard to Awards granted to him or her under this Plan.

ARTICLE IV.

SHARE AND OTHER LIMITATIONS

4.1. SHARES.

(a) GENERAL LIMITATION. The aggregate number of shares of Common Stock
which may be issued or used for reference purposes under this Plan shall not
exceed 1,500,000 shares (subject to any increase or decrease pursuant to
Section 4.2) which may be either authorized and unissued Common Stock or
Common Stock held in or acquired for the treasury of the Company. If any
Option or Stock Appreciation Right granted under this Plan expires,
terminates or is canceled for any reason without having been exercised in
full, the number of shares of Common Stock underlying any unexercised Stock
Appreciation Right or Option shall again be available for the purposes of
Awards under this Plan. If a Tandem Stock Appreciation Right or a Limited
Stock Appreciation Right granted in tandem with an Option is granted under
this Plan, such grant shall only apply once against the maximum number of
shares of Common Stock which may be issued under this Plan.

(b) INDIVIDUAL PARTICIPANT LIMITATIONS. (i) The maximum number of shares
of Common Stock subject to any Option or any Stock Appreciation Right which
may be granted under this Plan during any fiscal year of the Company to each
Eligible Employee shall be 200,000 shares per type of Award (subject to any
increase or decrease pursuant to Section 4.2). If a Tandem Stock
Appreciation Right or Limited Stock Appreciation Right is granted in tandem
with an Option it shall apply against the Eligible Employee's individual
share limitations for both Stock Appreciation Rights and Options. To the
extent that shares of Common Stock for which Options or Stock Appreciation
Rights are permitted to be granted to a Participant pursuant to Section
4.1(b) during a fiscal year of the Company are not covered by a grant of an
Option or a Stock Appreciation Right in the Company's fiscal year, such
shares of Common Stock shall be available for grant or issuance to the
Participant in any subsequent fiscal year during the term of the Plan.

4.2. CHANGES.

(a) The existence of this Plan and the Awards granted hereunder shall
not affect in any way the right or power of the Board or the stockholders of
the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, or Subsidiaries, any
issue of bonds, debentures, preferred or

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<PAGE>
prior preference stock ahead of or affecting Common Stock, the authorization
or issuance of additional shares of Common Stock, the dissolution or
liquidation of the Company or Subsidiaries, any sale or transfer of all or
part of its assets or business or any other corporate act or proceeding.

(b) In the event of any change in the capital structure or business of
the Company by reason of any stock dividend or extraordinary dividend, stock
split or reverse stock split, recapitalization, reorganization, merger,
consolidation, or exchange of shares, distribution with respect to its
outstanding Common Stock or capital stock other than Common Stock,
reclassification of its capital stock, any sale or transfer of all or part
of the Company's assets or business, or any similar change affecting the
Company's capital structure or business and the Committee determines an
adjustment is appropriate under this Plan, then the aggregate number and
kind of shares which thereafter may be issued under this Plan, the number
and kind of shares or other property (including cash) to be issued upon
exercise of an outstanding Option or other Awards granted under this Plan
and the purchase or exercise price thereof shall be appropriately adjusted
consistent with such change in such manner as the Committee may deem
equitable to prevent substantial dilution or enlargement of the rights
granted to, or available for, Participants under this Plan or as otherwise
necessary to reflect the change, and any such adjustment determined by the
Committee in good faith shall be binding and conclusive on the Company and
all Participants and employees and their respective heirs, executors,
administrators, successors and assigns.

(c) Fractional shares of Common Stock resulting from any adjustment in
Options or Awards pursuant to Section 4.2(a) or (b) shall be aggregated
until, and eliminated at, the time of exercise by rounding-down for
fractions less than one-half and rounding-up for fractions equal to or
greater than one-half. No cash settlements shall be made with respect to
fractional shares eliminated by rounding. Notice of any adjustment shall be
given by the Committee to each Participant whose Option or Award has been
adjusted and such adjustment (whether or not such notice is given) shall be
effective and binding for all purposes of this Plan.

(d) In the event of a merger or consolidation in which the Company is
not the surviving entity or in the event of any transaction that results in
the acquisition of all or substantially all of the Company's outstanding
Common Stock by a single person or entity or by a group of persons and/or
entities acting in concert, or in the event of the sale or transfer of all
or substantially all of the Company's assets (all of the foregoing being
referred to as "Acquisition Events"), then the Committee may, in its sole
discretion, terminate all outstanding Options and Stock Appreciation Rights
of Eligible Employees and Consultants, effective as of the date of the
Acquisition Event, by delivering notice of termination to each such
Participant at least 30 days prior to the date of consummation of the
Acquisition Event; provided, that during the period from the date on which
such notice of termination is delivered to the consummation of the
Acquisition Event, each such Participant shall have the right to exercise in
full all of his or her Options and Stock Appreciation Rights that are then
outstanding (whether vested or not vested) but contingent on the occurrence
of the Acquisition Event, and, provided that, if the Acquisition Event does
not take place within a specified period after giving such notice for any
reason whatsoever, the notice and exercise shall be null and void. If an
Acquisition Event occurs, to the extent the Committee does not terminate the
outstanding Options and Stock Appreciation Rights pursuant to this Section
4.2(d), then the provisions of Section 4.2(b) shall apply.

4.3. PURCHASE PRICE. Notwithstanding any provision of this Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.

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ARTICLE V.

ELIGIBILITY

5.1. All employees and Consultants of the Company and its Subsidiaries are
eligible to be granted Options and Stock Appreciation Rights under this Plan.
Eligibility under this Plan shall be determined by the Committee.

ARTICLE VI.

STOCK OPTION GRANTS

6.1. OPTIONS. Each Stock Option granted hereunder shall be one of two types:
(i) an Incentive Stock Option intended to satisfy the requirements of Section
422 of the Code or (ii) a Non-Qualified Stock Option.

6.2. GRANTS. The Committee shall have the authority to grant to any Eligible
Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options (in each case with or without Stock Appreciation
Rights). To the extent that any Stock Option does not qualify as an Incentive
Stock Option (whether because of its provisions or the time or manner of its
exercise or otherwise), such Stock Option or the portion thereof which does not
so qualify, shall constitute a separate Non-Qualified Stock Option. The
Committee shall have the authority to grant to any Consultant one or more
Non-Qualified Stock Options (with or without Stock Appreciation Rights).
Notwithstanding any other provision of the Plan to the contrary or any provision
in an agreement evidencing the grant of an Option to the contrary, any Option
granted to a Consultant shall be a Non-Qualified Stock Option.

6.3. TERMS OF OPTIONS. Options granted under this Plan shall be subject to
the following terms and conditions, and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable:

(a) OPTION PRICE. The option price per share of Common Stock purchasable
under an Incentive Stock Option shall be determined by the Committee at the
time of grant but shall not be less than 100% of the Fair Market Value of a
share of Common Stock at the time of grant; provided, however, that if an
Incentive Stock Option is granted to a Ten Percent Stockholder, the purchase
price shall be no less than 110% of the Fair Market Value of the Common
Stock. The purchase price of shares of Common Stock subject to a
Non-Qualified Stock Option shall be determined by the Committee but shall
not be less than the 100% of the Fair Market Value of a share of Common
Stock at the time of grant.

(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than 10 years after
the date the Option is granted, provided, however, the term of an Incentive
Stock Option granted to a Ten Percent Stockholder may not exceed five years.

(c) EXERCISABILITY. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at the time of grant. If the Committee provides, in its
discretion, that any Stock Option is exercisable subject to certain
limitations (including, without limitation, that it is exercisable only in
installments or within certain time periods), the Committee may waive such
limitations on the exercisability at any time at or after the time of grant
in whole or in part (including, without limitation, that the Committee may
waive the installment exercise provisions or accelerate the time at which
Options may be exercised), based on such factors, if any, as the Committee
shall determine, in its sole discretion.

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(d) METHOD OF EXERCISE. Subject to whatever installment exercise and
waiting period provisions apply under Section 6.3(c), Stock Options may be
exercised in whole or in part at any time during the Option term, by giving
written notice of exercise to the Company specifying the number of shares to
be purchased. Such notice shall be accompanied by payment in full of the
exercise price in such form, or such other arrangement for the satisfaction
of the exercise price, as the Committee may accept. If and to the extent
determined by the Committee in its sole discretion at or after grant,
payment in full or in part may also be made in the form of Common Stock
owned by the Participant for at least 6 months (and for which the
Participant has good title free and clear of any liens and encumbrances and
has represented that he has owned the shares of Common Stock for at least 6
months) based on the Fair Market Value of the Common Stock on the payment
date, or, if the Common Stock is traded on a national securities exchange,
through the delivery of irrevocable instructions to a broker to deliver
promptly to the Company an amount equal to the purchase price. No shares of
Common Stock shall be issued until payment therefor, as provided herein, has
been made or provided for.

(e) INCENTIVE STOCK OPTION LIMITATIONS. To the extent that the aggregate
Fair Market Value (determined as of the time of grant) of the Common Stock
with respect to which Incentive Stock Options are exercisable for the first
time by an Eligible Employee during any calendar year under this Plan and/or
any other stock option plan of the Company or any Subsidiary or parent
corporation (within the meaning of Section 424(e) of the Code) exceeds
$100,000, such Options shall be treated as Options which are not Incentive
Stock Options.

Should the foregoing provision not be necessary in order for the Stock
Options to qualify as Incentive Stock Options, or should any additional
provisions be required, the Committee may amend this Plan accordingly,
without the necessity of obtaining the approval of the stockholders of the
Company.

(f) FORM, MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
terms and conditions and within the limitations of this Plan, an Option
shall be evidenced by such form of agreement or grant as is approved by the
Committee, and the Committee may modify, extend or renew outstanding Options
granted under this Plan (provided that the rights of a Participant are not
reduced without his consent), or accept the surrender of outstanding Options
(up to the extent not theretofore exercised) and authorize the granting of
new Options in substitution therefor (to the extent not theretofore
exercised).

(g) OTHER TERMS AND CONDITIONS. Options may contain such other
provisions, which shall not be inconsistent with any of the foregoing terms
of the Plan, as the Committee shall deem appropriate.

ARTICLE VII.

STOCK APPRECIATION RIGHTS

7.1. TANDEM STOCK APPRECIATION RIGHTS. A Tandem Stock Appreciation Right may
be granted in conjunction with all or part of any Stock Option (a "Reference
Stock Option") granted under this Plan. In the case of a Tandem Stock
Appreciation Right which is granted in conjunction with a Non-Qualified Stock
Option, such rights may be granted either at or after the time of the grant of
such Reference Stock Option. In the case of a Tandem Stock Appreciation Right
which is granted in conjunction with an Incentive Stock Option, such rights may
be granted only at the time of the grant of such Reference Stock Option.
Consultants shall not be eligible for a grant of Tandem Stock Appreciation
Rights granted in conjunction with all or part of an Incentive Stock Option.

7.2. TERMS AND CONDITIONS OF TANDEM STOCK APPRECIATION RIGHTS. Tandem Stock
Appreciation Rights shall be subject to such terms and conditions, not
inconsistent with the provisions of this Plan, as shall be determined from time
to time by the Committee, including Article VIII and the following:

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(a) TERM. A Tandem Stock Appreciation Right or applicable portion
thereof granted with respect to a Reference Stock Option shall terminate and
no longer be exercisable upon the termination or exercise of the Reference
Stock Option, except that, unless otherwise determined by the Committee, in
its sole discretion, at the time of grant, a Tandem Stock Appreciation Right
granted with respect to less than the full number of shares covered by the
Reference Stock Option shall not be reduced until and then only to the
extent the exercise or termination of the Reference Stock Option causes the
number of shares covered by the Tandem Stock Appreciation Right to exceed
the number of shares remaining available and unexercised under the Reference
Stock Option.

(b) EXERCISABILITY. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the Reference
Stock Options to which they relate shall be exercisable in accordance with
the provisions of Article VI and this Article VII.

(c) METHOD OF EXERCISE. A Tandem Stock Appreciation Right may be
exercised by an optionee by surrendering the applicable portion of the
Reference Stock Option. Upon such exercise and surrender, the Participant
shall be entitled to receive an amount determined in the manner prescribed
in this Section 7.2 and the Reference Stock Option or part thereof to which
such Stock Appreciation Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in Article IV of the
Plan on the number of shares of Common Stock to be issued under the Plan.
The Stock Options which have been so surrendered, in whole or in part, shall
no longer be exercisable to the extent the related Tandem Stock Appreciation
Rights have been exercised.

(d) PAYMENT. Upon the exercise of a Tandem Stock Appreciation Right a
Participant shall be entitled to receive an amount in cash and/or Common
Stock (as chosen by the Committee in its sole discretion) equal in value to
the excess of the Fair Market Value of one share of Common Stock over the
option price per share specified in the Reference Stock Option multiplied by
the number of shares in respect of which the Tandem Stock Appreciation Right
shall have been exercised, with the Committee having the right to determine
the form of payment.

7.3. NON-TANDEM STOCK APPRECIATION RIGHTS. Non-Tandem Stock Appreciation
Rights may also be granted without reference to any Stock Options granted under
this Plan.

7.4. TERMS AND CONDITIONS OF NON-TANDEM STOCK APPRECIATION RIGHTS.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article VIII and the
following:

(a) TERM. The term of each Non-Tandem Stock Appreciation Right shall be
fixed by the Committee, but shall not be greater than 10 years after the
date the right is granted.

(b) EXERCISABILITY. Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee at grant. If the Committee provides,
in its discretion, that any such right is exercisable subject to certain
limitations (including, without limitation, that it is exercisable only in
installments or within certain time periods), the Committee may waive such
limitation on the exercisability at any time at or after grant in whole or
in part (including, without limitation, that the Committee may waive the
installment exercise provisions or accelerate the time at which rights may
be exercised), based on such factors, if any, as the Committee shall
determine, in its sole discretion.

(c) METHOD OF EXERCISE. Subject to whatever installment exercise and
waiting period provisions apply under subsection (b) above, Non-Tandem Stock
Appreciation Rights may be exercised in whole or in part at any time during
the option term, by giving written notice of exercise to the Company
specifying the number of Non-Tandem Stock Appreciation Rights to be
exercised.

(d) PAYMENT. Upon the exercise of a Non-Tandem Stock Appreciation Right
a Participant shall be entitled to receive, for each right exercised an
amount in cash and/or Common Stock (as chosen by

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the Committee in its sole discretion) equal in value to the excess of the
Fair Market Value of one share of Common Stock on the date the right is
exercised over the Fair Market Value of one share of Common Stock on the
date the right was awarded to the Participant.

7.5. LIMITED STOCK APPRECIATION RIGHTS. The Committee may, in its sole
discretion, grant Limited Stock Appreciation Rights. Limited Stock Appreciation
Rights may be exercised only upon the occurrence of a change in control (as
defined by the Committee) or such other event as the Committee may, in its sole
discretion, designate at the time of grant or thereafter. Upon the exercise of
Limited Stock Appreciation Rights, except as otherwise provided in an Award
agreement, the Participant shall receive in cash or Common Stock, as determined
by the Committee, an amount equal to the amount (1) set forth in Section 7.2(d)
with respect to Tandem Stock Appreciation Rights or (2) set forth in Section
7.4(d) with respect to Non-Tandem Stock Appreciation Rights.

ARTICLE VIII.

NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY PROVISIONS

8.1. No Stock Option or Stock Appreciation Right shall be Transferred by the
Participant otherwise than by will or by the laws of descent and distribution.
All Stock Options and all Stock Appreciation Rights shall be exercisable, during
the Participant's lifetime, only by the Participant. Tandem Stock Appreciation
Rights may be Transferred, to the extent permitted above, only with the
underlying Stock Option. No Award shall, except as otherwise specifically
provided by law or herein, be Transferred in any manner, and any attempt to
Transfer any such Award shall be void, and no such Award shall in any manner be
used for the payment of, subject to, or otherwise encumbered by or hypothecated
for the debts, contracts, liabilities, engagements or torts of any person who
shall be entitled to such Award, nor shall it be subject to attachment or legal
process for or against such person. Notwithstanding the foregoing, the Committee
may determine at the time of grant or thereafter, that a Stock Option that is
otherwise not transferable pursuant to this Article VIII is transferable in
whole or part and in such circumstances, and under such conditions, as specified
by the Committee.

8.2. TERMINATION OF EMPLOYMENT OR TERMINATION OF CONSULTANCY. Subject to the
applicable provisions of the Award agreement and this Plan, upon a Participant's
Termination of Employment or Termination of Consultancy for any reason during
any period of restriction as may be applicable for a given Award, the Award in
question will vest or be forfeited and shall be exercisable in accordance with
the terms and conditions established by the Committee at grant or thereafter,
provided, however that in the event a Participant has entered into an individual
employment agreement or individual consultancy agreement with the Company or
Subsidiary, to the extent that an Award conflicts, or is inconsistent, with the
terms, conditions and provisions of such individual employment agreement or
individual consultancy agreement, such individual employment agreement or
individual consultancy agreement shall control, and the Award shall be deemed to
be modified accordingly. Notwithstanding the foregoing, unless otherwise
determined by the Committee at grant or individual employment agreement or
individual consultancy agreement, if applicable, or, if no rights of the
Participant are reduced, thereafter, if a Participant's Termination of
Employment or Termination of Consultancy is for Cause for any reason, any Stock
Option or Stock Appreciation Right held by such Participant shall thereupon
terminate and expire as of the date of termination.

10
<PAGE>
ARTICLE IX.

TERMINATION OR AMENDMENT OF THE PLAN

9.1. TERMINATION OR AMENDMENT. Notwithstanding any other provision of this
Plan, the Board or the Committee may at any time, and from time to time, amend,
in whole or in part, any or all of the provisions of the Plan (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in this Article IX), or suspend or terminate
it entirely, retroactively or otherwise; provided, however, that, unless
otherwise required by law or specifically provided herein, the rights of a
Participant with respect to Awards granted prior to such amendment, suspension
or termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the stockholders of the Company in
accordance with the laws of the State of Delaware, to the extent required by the
applicable provisions of Rule 16b-3 or Section 162(m) of the Code, or with
respect to Incentive Stock Options, Section 422 of the Code, no amendment may be
made which would (i) increase the aggregate number of shares of Common Stock
that may be issued under this Plan; (ii) increase the maximum individual
Participant limitations for a fiscal year under Section 4.1(b); (iii) change the
classification of employees and Consultants eligible to receive Awards under
this Plan; (iv) decrease the minimum option price of any Stock Option; or (v)
extend the maximum option term under Section 6.3(b). In no event may this Plan
be amended without the approval of the stockholders of the Company in accordance
with the applicable laws of the State of Delaware to increase the aggregate
number of shares of Common Stock that may be issued under the Plan (subject to
Section 4.2), decrease the minimum option price of any Stock Option, or to make
any other amendment that would require stockholder approval under the rules of
any exchange or system on which the Company's securities are listed or traded at
the request of the Company.

The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Article IV or as otherwise
specifically provided herein, no such amendment or other action by the Committee
shall impair the rights of any Participant without the Participant's consent.

ARTICLE X.

UNFUNDED PLAN

10.1. UNFUNDED STATUS OF PLAN. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments as to which a Participant has a fixed and vested interest but which are
not yet made to a Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a general
creditor of the Company.

ARTICLE XI.

GENERAL PROVISIONS

11.1. LEGEND. The Committee may require each person receiving shares
pursuant to an Award under the Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on Transfer.

All certificates for shares of Common Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations

11
<PAGE>
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed or any national securities
association system upon whose system the Common Stock is then quoted, any
applicable Federal or state securities law, and any applicable corporate law,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

11.2. OTHER PLANS. Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

11.3. NO RIGHT TO EMPLOYMENT/CONSULTANCY. Neither this Plan nor the grant of
any Award hereunder shall give any Participant or other employee or Consultant
any right with respect to continuance of employment or consultancy by the
Company or any subsidiary, nor shall they be a limitation in any way on the
right of the Company or any subsidiary by which an employee is employed or
consultant retained to terminate his employment or consultancy, as applicable,
at any time.

11.4. WITHHOLDING OF TAXES. The Company shall have the right to deduct from
any payment to be made to a Participant, or to otherwise require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld.

The Committee shall permit any such withholding obligation with regard to
any Eligible Employee or Consultant to be satisfied by reducing the number of
shares of Common Stock otherwise deliverable or by delivering shares of Common
Stock already owned. Any fraction of a share of Common Stock required to satisfy
such tax obligations shall be disregarded and the amount due shall be paid
instead in cash by the Participant.

11.5. LISTING AND OTHER CONDITIONS.

(a) As long as the Common Stock is listed on a national securities
exchange or system sponsored by a national securities association, the issue
of any shares of Common Stock pursuant to an Award shall be conditioned upon
such shares being listed on such exchange or system. Notwithstanding the
foregoing, the grant of an Award hereunder is not intended to be conditional
and the Company shall have no obligation to issue such shares unless and
until such shares are so listed; provided, however, that any delay in the
issuance of such shares shall be based solely on a reasonable business
decision and the right to exercise any Option with respect to such shares
shall be suspended until such listing has been effected.

(b) If at any time counsel to the Company shall be of the opinion that
any sale or delivery of shares of Common Stock pursuant to an Award is or
may in the circumstances be unlawful or result in the imposition of excise
taxes on the Company under the statutes, rules or regulations of any
applicable jurisdiction, the Company shall have no obligation to make such
sale or delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act of 1933, as amended,
or otherwise with respect to shares of Common Stock or Awards, and the right
to exercise any Option shall be suspended until, in the opinion of said
counsel, such sale or delivery shall be lawful or will not result in the
imposition of excise taxes on the Company.

(c) Upon termination of any period of suspension under this Section
11.5, any Award affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before
such suspension and as to shares which would otherwise have become available
during the period of such suspension, but no such suspension shall extend
the term of any Option.

11.6. GOVERNING LAW. This Plan shall be governed and construed in accordance
with the laws of the State of Delaware (regardless of the law that might
otherwise govern under applicable Delaware principles of conflict of laws).

12
<PAGE>
11.7. CONSTRUCTION. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply. To the
extent applicable, this Plan shall be limited, construed and interpreted in a
manner so as to comply with Section 162(m) of the Code and the applicable
requirements of Rule 16b-3; however, noncompliance with Section 162(m) of the
Code and Rule 16b-3 shall have no impact on the effectiveness of an Award under
the Plan.

11.8. OTHER BENEFITS. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its subsidiaries nor affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits
is related to the level of compensation.

11.9. COSTS. The Company shall bear all expenses included in administering
this Plan, including expenses of issuing Common Stock pursuant to any Awards
hereunder.

11.10. NO RIGHT TO SAME BENEFITS. The provisions of Awards need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.

11.11. DEATH/DISABILITY. The Committee may in its discretion require the
transferee of a Participant's Award to supply the Company with written notice of
the Participant's death or Disability and to supply the Company with a copy of
the will (in the case of the Participant's death) or such other evidence as the
Committee deems necessary to establish the validity of the Transfer of an Award.
The Committee may also require that the transferee agree in writing to be bound
by all of the terms and conditions of this Plan.

11.12. SECTION 16(B) OF THE EXCHANGE ACT. All elections and transactions
under the Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable exemptive
condition under Rule 16b-3. The Committee may establish and adopt written
administrative guidelines, designed to facilitate compliance with Section 16(b)
of the Exchange Act, as it may deem necessary or proper for the administration
and operation of this Plan thereunder.

11.13. SEVERABILITY OF PROVISIONS. If any provision of this Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.

11.14. HEADINGS AND CAPTIONS. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of this Plan,
and shall not be employed in the construction of the Plan.

ARTICLE XII.

EFFECTIVE DATE OF PLAN

The Plan is an amendment and restatement of The Alpine Group, Inc. 1997
Interim Stock Option Plan which was originally effective on the Effective Date.
The Plan, as amended and restated, is conditioned upon the approval of the Plan
by the stockholders in accordance with the requirements of the laws of the State
of Delaware and is effective upon the approval by the stockholders of the
Company.

13
<PAGE>
ARTICLE XIII.

TERM OF PLAN

No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the earlier of the Effective Date or the date of stockholder
approval, but Awards granted prior to such tenth anniversary may extend beyond
that date.

ARTICLE XIV.

NAME OF PLAN

This Plan shall be known as The Alpine Group, Inc. 1997 Stock Option Plan.

<PAGE>
EXHIBIT 21

<TABLE>
<CAPTION>
JURISDICTION
OF
SUBSIDIARY ORGANIZATION
- ------------------------------------------------------------------------------------------------ ----------------

<S> <C>
Superior TeleCom Inc. .......................................................................... Delaware
Superior Telecommunications Inc. ............................................................... Delaware
Refraco Inc. ................................................................................... Delaware
Adience, Inc. .................................................................................. Delaware
Refraco Holdings Limited (UK)................................................................... Great Britain
Adience Canada Inc. ........................................................................... Ontario
</TABLE>

<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our report dated June 13, 1997 included in this Form 10-K, into The Alpine
Group, Inc.'s previously filed Registration Statements on Forms S-8 (File Nos.
333-16703, 2-70015 and 33-62544) and on Forms S-3 (File Nos. 33-30246 and
33-53434).

Arthur Andersen LLP

Atlanta, Georgia

July 24, 1997

<PAGE>
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<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> APR-30-1997
<EXCHANGE-RATE> 1
<CASH> 21,606
<SECURITIES> 15,807
<RECEIVABLES> 122,137
<ALLOWANCES> 2,631
<INVENTORY> 119,234
<CURRENT-ASSETS> 293,474
<PP&E> 182,158
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<TOTAL-ASSETS> 588,224
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<BONDS> 0
0
1,927
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</TABLE>