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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934..............FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 1-5989
ANIXTER INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)
94-1658138
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
2 NORTH RIVERSIDE PLAZA
SUITE 1900
CHICAGO, ILLINOIS 60606
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 902-1515
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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Common Stock, $1 par value New York Stock Exchange
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
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
The aggregate market value of the shares of Registrant's Common Stock, $1 par
value, held by nonaffiliates of Registrant was approximately $705,000,000 as of
March 11, 1996.
At March 11, 1996, 52,175,000 shares of Registrant's Common Stock, $1 par value,
were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Certain portions of the Registrant's Proxy Statement for the 1996 Annual Meeting
of Stockholders of Anixter International Inc. are incorporated by reference into
Part III. This document consists of 112 pages. Exhibit List begins on page 35.
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TABLE OF CONTENTS
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PART I.
Item 1. Business of the Company............................................... 3
Item 2. Properties............................................................ 5
Item 3. Legal Proceedings..................................................... 5
Item 4. Submission of Matters to a Vote of Security Holders................... 5
Executive Officers of the Registrant.................................. 6
PART II.
Item 5. Market for the Registrant's Common Stock and Related Stockholder
Matters............................................................. 7
Item 6. Selected Financial Data............................................... 8
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 9
Item 8. Consolidated Financial Statements and Supplementary Data.............. 14
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................ 14
PART III.
Item 10. Directors and Executive Officers of the Registrant.................... 34
Item 11. Executive Compensation................................................ 34
Item 12. Security Ownership of Certain Beneficial Owners and Management........ 34
Item 13. Certain Relationships and Related Transactions........................ 34
PART IV.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K....... 34
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PART I
ITEM 1. BUSINESS OF THE COMPANY.
GENERAL
Anixter International Inc. (the "Company"), formerly known as Itel
Corporation, which was incorporated in Delaware in 1967, is engaged in providing
networking and cabling solutions for network infrastructure requirements through
Anixter Inc. and its subsidiaries (collectively "Anixter"). As of December 31,
1995 the Company also owned approximately 31% of ANTEC Corporation and its
subsidiaries (collectively "ANTEC"), a broadband communications technology
company.
In 1995 the Company largely completed its strategy of selling its non-core
businesses and investments including the sale of its 9% investment in the common
stock of Santa Fe Energy Resources, Inc. ("Energy").
In 1994, the Company sold its remaining interests in its rail car leasing
business conducted by Itel Rail Corporation ("Rail"). In 1994, 1993 and 1992,
the Company sold all of its other transportation services assets. In 1991, the
Company sold the distribution services business previously conducted by Itel
Distribution Systems, Inc. ("Itel Distribution") and all the stock of Great
Lakes International, Inc. which together with its subsidiaries (collectively
"Great Lakes") was engaged in heavy marine construction, primarily dredging. For
information about the 1994 and 1993 sales see Item 7--Financial Liquidity and
Capital Resources--Asset Sales and Other Dispositions and Note 3 of the Notes to
the Consolidated Financial Statements.
In 1994, the Company sold its 9% investment in the common stock of Catellus
Development Corporation ("Catellus"). In 1991, the Company sold its 15%
investment in the common stock of Santa Fe Pacific Corporation ("Santa Fe") and
its 21% investment in the common stock of American President Companies, Ltd.
("APC"). The financing operations of Signal Capital Corporation and its
subsidiaries (collectively "Signal Capital") are being held for sale. See Note 3
of the Notes to the Consolidated Financial Statements.
At December 31, 1995, the Company and its subsidiaries employed
approximately 5,100 persons. For information on segment and geographic data see
Note 15 of the Notes to the Consolidated Financial Statements.
OPERATIONS
Anixter is a leading supplier of wiring systems, networking and
internetworking products for voice, data and video networks and electrical power
applications in North America, Europe, Asia and Latin America. Anixter stocks
and/or sells a full line of these products from a network of 85 locations in the
United States, 19 in Canada, 17 in the United Kingdom, 28 in Continental Europe,
10 in Latin America, 6 in Australia, and 11 in Asia. Anixter sells approximately
80,000 products to over 60,000 active customers and works with over 2,000
suppliers. Its customers include international, national, regional and local
companies that are end users of these products and engage in manufacturing,
communications, finance, education, health care, transportation, utilities and
government. Also, Anixter sells products to resellers such as contractors,
installers, system integrators, value added resellers, architects, engineers and
wholesale distributors. The average order size is about $1,600.
The products sold by Anixter include communication (voice, data and video)
products used to connect personal computers, peripheral equipment, mainframe
equipment and various networks to each other. The products include an assortment
of transmission media (copper and fiber optic cable) and components, as well as
active data components for networking applications. Anixter sells products that
are incorporated in local area networks ("LANs"), and the internetworking of
LANs to form wide area networks ("WANs"). Anixter's products also include
electrical wiring systems products used for the transmission of electrical
energy and control/monitoring of industrial processes.
Increasingly, the Company's end user customer base is seeking complete
solutions to their network infrastructure needs as opposed to just purchasing
networking products. Therefore, in some circumstances Anixter is providing
network design advice through its sales engineers prior to major sales
commitments as
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well as project management, staging and configuration during customer project
implementation, and customer training. On a post sale basis Anixter provides
network trouble shooting, maintenance and warranty services. Anixter service
offerings do not include cable system installation, application software
development or the provision of terminal devices. The Company has designed its
services to be compatible with and not competitive to the principal activities
of its reseller customer base.
Prior to 1989, Anixter's operations were primarily limited to North America
and the United Kingdom. In 1989, Anixter made a major commitment to expand its
operations into the international voice, data and video communications markets.
Since then, Anixter has opened businesses throughout Western Europe and in
significant markets in the Pacific Rim (other than Japan and Korea) and Latin
America. While most of the European businesses have achieved operating profits,
the Pacific Rim and Latin American expansion programs are considered to be in
the start-up mode.
An important element of Anixter's business strategy is to develop and
maintain close relationships with its key suppliers, which include the world's
leading manufacturers of networking and electrical wiring systems products. Such
relationships stress joint product planning, inventory management, technical
support, advertising and marketing. In support of this strategy, Anixter does
not compete with its suppliers in product design or manufacturing activities.
Approximately 47% of the Company's purchases in 1995 were from its five largest
suppliers.
Anixter's ability to cost effectively serve its customers' needs is
possible through its proprietary computer system which connects all of its
warehouses and sales offices throughout the world. The system is designed for
sales support, order entry, inventory status, order tracking, credit review and
material management. In addition, the Company operates a series of large modern
hub warehouses in key distribution centers in North America, Europe, Asia and
Latin America which provide for cost effective and reliable storage and delivery
of products to its customers. The hub warehouses store the bulk of the Company's
stock units and are to a certain degree specialized by broad product category.
Some smaller warehouses are also maintained to provide for the local pick up
needs of customers in certain cities. Anixter has also developed close
relationships with certain freight, package delivery and courier services to
minimize transit times between its facilities and customer locations.
The combination of its information systems, distribution network and
delivery partnerships allows Anixter to provide a high level of customer
services while maintaining a reasonable level of investment in inventory and
facilities.
Anixter competes with distributors and manufacturers who sell products
directly or through existing distribution channels to end users or other
resellers. In addition, Anixter's future performance could be subject to
economic downturns and possibly rapid changes in applicable technologies. To
guard against inventory obsolescence, Anixter has negotiated various return and
price protection agreements with its key suppliers. Although Anixter's
relationships with its suppliers are good, the loss of a major supplier could
have a temporary adverse effect on Anixter's business but would not have a
lasting impact since comparable products are available from alternate sources.
INVESTMENT IN ANTEC
In 1993, the Company's interest in ANTEC was reduced from 100% to 53% in an
initial public offering of ANTEC common stock. In 1994, the Company's interest
was further reduced to 30% in a second public offering. In 1995, the Company
purchased .4 million shares of ANTEC common stock increasing its investment to
31%.
As of December 31, 1995 and 1994, the Company's interest in ANTEC was
approximately 31% and 30%, respectively. Effective January 1, 1994, the Company
reflects ANTEC as an equity investment in the consolidated financial statements.
As of December 31, 1995, the market value of the Company's 7,113,500 shares of
ANTEC was $128 million compared with a carrying value of $73.7 million. The
Company views ANTEC as a long-term investment, subject to change should future
circumstances warrant.
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ANTEC is a communications technology company, specializing in the design
and engineering of hybrid fiber/coax (HFC) broadband networks and the
manufacturing, materials management and distribution of products for these
networks.
Approximately 70% of ANTEC's consolidated sales for the year ended December
31, 1995 came from sales to the domestic cable industry. Demand for these
products depends primarily on capital spending for constructing, rebuilding,
maintaining or upgrading domestic cable television systems. Capital spending in
the cable industry has been cyclical. The amount of capital spending and,
therefore, ANTEC's sales and profits, are affected by a variety of factors,
including general economic conditions, availability and cost of capital, other
demands and opportunities for capital (such as acquisitions), regulation, demand
for cable services competition and technology, and real or perceived trends or
uncertainties in these factors. The impact of the new telecommunications
legislation, which among other things, will allow long-distance carriers, local
phone companies and cable companies to provide similar services across their
networks is not known. Technological developments are occurring rapidly in the
communications industry and, the effects of such developments are uncertain.
The domestic cable industry is highly concentrated with over 75% of U.S.
domestic subscribers being served by approximately twenty-five major
multi-system operators ("MSO's"). In 1995, over 50% of ANTEC's revenues were
obtained from sales to the twenty-five largest MSO's. A significant portion of
ANTEC's revenue is derived from sales to Tele-Communications, Inc. aggregating
$126.8 million, $151.6 million, and $146.1 million for the years ended December
31, 1995, 1994, and 1993, respectively.
All aspects of ANTEC's business are highly competitive. ANTEC competes with
national, regional and local manufacturers, distributors and wholesalers,
including companies larger than ANTEC, such as General Instrument Corporation
and Scientific-Atlanta, Inc. Various manufacturers who are suppliers to ANTEC
sell directly as well as through distributors into the cable marketplace. In
addition, because of the convergence of the cable, telecommunications and
computer industries and rapid technological development, new competitors are
entering the cable market. Many of ANTEC's competitors or potential competitors
are substantially larger and have greater resources than ANTEC. The principal
methods of competition are product differentiation, performance and quality;
price and terms; and service, technical and administrative support.
ASSETS HELD FOR SALE
The principal assets held for sale at December 31, 1995 are those of Signal
Capital. The finance business of Signal Capital has been classified as assets
held for sale in the Company's consolidated financial statements since its
acquisition in 1988. Subsequent to the purchase, the Company sold or liquidated
portions of the portfolio including $855 million in 1989, $78 million in 1990,
$157 million in 1991, $82 million in 1992, $82 million in 1993, $60 million in
1994 and $67 million in 1995. The $35 million net portfolio at December 31, 1995
represents approximately 2% of the original acquired Signal Capital portfolio.
The Company continues to liquidate the acquired Signal Capital portfolio in an
orderly manner that maximizes its value to shareholders and no material amounts
of new loans or investments are being made by Signal Capital.
ITEM 2. PROPERTIES.
Most of the Company's facilities are leased.
ITEM 3. LEGAL PROCEEDINGS.
In the ordinary course of business, the Company and its subsidiaries became
involved as plaintiffs or defendants in various legal proceedings. The claims
and counterclaims in such litigation, including those for punitive damages,
individually in certain cases and in the aggregate, involve amounts which may be
material. However, it is the opinion of the Company's management, based upon the
advice of its counsel, that the ultimate disposition of pending litigation will
not be material.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the fourth quarter of 1995, no matters were submitted to a vote of
the security holders.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following table lists the name, age as of March 14, 1996, position,
offices and certain other information with respect to the executive officers of
the Company. The term of office of each executive officer will expire upon the
appointment of his successor by the Board of Directors.
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Kirk Brewer, 40............. Senior Vice President--Corporate & Investor Relations of the
Company since February 1992; Midwest Officer and Managing
Director of Georgeson & Co. from 1989 to February 1992.
Rod F. Dammeyer, 55......... Chief Executive Officer, President and Director of the Company
since January 1993; President and Director of the Company from
1985 to 1993.
John A. Dul, 35............. Assistant Secretary of the Company since May 1995; General
Counsel and Secretary of Anixter since January 1996; Associate
General Counsel and Secretary from July 1994 to January 1996;
Associate General Counsel and Assistant Secretary from May 1993
to July 1994; Associate General Counsel from January 1990 to
May 1993.
James M. Froisland, 45...... Vice President--Controller of the Company since February 1996;
Vice President--Corporate Controller of Budget Rent a Car
Corporation from March 1992 to February 1996; Vice President
Finance and Chief Financial Officer of Allsteel Inc., from
August 1990 to March 1992; Corporate Controller and Director of
Management Information Systems of the Haagen-Dazs Company, a
subsidiary of The Pillsbury Company from October 1988 to August
1990.
Robert W. Grubbs Jr., 39.... President and Chief Executive Officer of Anixter since July
1994; President Anixter U.S.A. from August 1993 to July 1994;
Executive Vice President, Sales and Marketing of Anixter from
August 1992 to August 1993; Senior Vice President Southeastern
Group of Anixter from May 1989 to August 1992.
James E. Knox, 58........... Senior Vice President, General Counsel and Secretary of the
Company since 1986.
Dennis J. Letham, 44........ Chief Financial Officer, Senior Vice President--Finance of the
Company since January 1995; Chief Financial Officer, Executive
Vice President of Anixter since July 1993; Chief Financial
Officer, Vice President of National Intergroup, Inc. from March
1991 to July 1993; Chief Financial Officer, Senior Vice
President of FoxMeyer, Inc from September 1990 to July 1993;
Vice President--Controller of National Intergroup, Inc. from
1989 to March 1991.
James A. Loudon, 52......... Vice President--Treasurer of the Company and Anixter since
February 1996; Vice President--Controller of the Company from
March 1995 to February 1996; Vice President--Controller of
Anixter from January 1994 to February 1996; Vice
President--Treasurer of Anixter from February, 1988 to January,
1994.
Philip F. Meno, 37.......... Vice President--Taxes of the Company since May 1993; Director
of Taxes from January 1990 to May 1993; Tax Manager from 1986
to January 1990.
Samuel Zell, 54............. Chairman of the Board of Directors of the Company since January
1993; Chairman of the Board of Directors and Chief Executive
Officer of the Company from 1985 to 1993.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
A. MARKET INFORMATION
Anixter International Inc.'s Common Stock is traded on the New York Stock
Exchange under the symbol AXE.
B. STOCK PRICES
The following table sets forth the high and low sales prices for the Common
Stock on the NYSE.
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1994
First Quarter.......................................... $15 $12 3/8
Second Quarter......................................... 15 3/4 11 1/2
Third Quarter.......................................... 17 11/16 15 5/8
Fourth Quarter......................................... 18 1/8 15 15/16
1995
First Quarter.......................................... $19 5/16 $16 3/4
Second Quarter......................................... 20 3/16 17 1/4
Third Quarter.......................................... 22 1/16 18 9/16
Fourth Quarter......................................... 20 7/8 16 3/4
1996
First Quarter (through March 11, 1996)................. $20 $16 7/8
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C. DIVIDENDS ON COMMON STOCK
The Company has not paid cash dividends on its Common Stock since 1979. On
August 10, 1995, the Company's Board of Directors authorized a two-for-one stock
split in the form of a stock dividend paid October 25, 1995, to stockholders of
record September 22, 1995. This transaction increased the number of outstanding
shares from approximately 26.8 million to 53.6 million. All share and per share
data have been adjusted to reflect this split.
D. NUMBER OF HOLDERS OF COMMON STOCK
There were approximately 5,700 holders of record of the Common Stock as of
March 11, 1996.
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ITEM 6. SELECTED FINANCIAL DATA.
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YEARS ENDED DECEMBER 31,
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1995 1994 1993 1992 1991
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(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
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Results of operations(a):
Revenues --Anixter..................................... $2,194.8 $1,732.6 $1,328.6 $1,163.6 $1,025.8
--ANTEC...................................... -- -- 427.6 301.0 258.3
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Consolidated revenues.................................. $2,194.8 $1,732.6 $1,756.2 $1,464.6 $1,284.1
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Operating income--Anixter and all other................ $ 99.6 $ 69.8 $ 45.8 $ 30.5 $ 25.7
--ANTEC................................ -- -- 22.4 12.1 7.3
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Consolidated operating income.......................... $ 99.6 $ 69.8 $ 68.2 $ 42.6 $ 33.0
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Interest expense and other, net........................ $ (21.6) $ (27.1) $ (58.9) $ (77.9) $ (67.5)
Equity in income (loss) of ANTEC....................... (.6) 7.9 -- -- --
Non-recurring items, net(b)............................ -- 59.0 71.8 -- --
Marketable equity securities losses, principally
write-downs(c)....................................... (3.0) (39.6) (25.0) (25.0) (79.4)
Income (loss) from continuing operations............... 39.1 46.2 28.8 (45.8) (67.5)
Income (loss) from discontinued operations............. -- 200.7 (14.0) (38.1) 3.0
Extraordinary items, net(d)............................ -- -- (16.0) (20.4) 8.8
Net income (loss)...................................... $ 39.1 $ 246.9 $ (1.2) $ (104.3) $ (55.7)
Income (loss) per common and common equivalent
share(g):
Continuing operations.............................. $ .71 $ .72 $ .43 $ (.89) $ (1.07)
Before extraordinary items......................... .71 3.85 .20 (1.55) (1.03)
Net income (loss).................................. .71 3.85 (.07) (1.90) (.90)
Financial position at December 31(a):
Total assets........................................... $1,184.7 $1,110.9 $1,380.6 $1,436.2 $2,395.8
Total debt............................................. 333.7 280.5 494.8 725.6 1,426.9
Stockholders' equity(e)(f)............................. 449.0 543.9 405.3 367.3 563.6
Book value per common and common equivalent
share(f)(g).......................................... $ 8.77 $ 9.25 $ 6.14 $ 5.05 $ 7.48
Weighted average common and common equivalent
shares(g)............................................ 55.410 64.090 60.264 58.170 68.880
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Notes:
(a) Due to the 1994 sale of 4.0 million shares of ANTEC (see Note 1 of the Notes
to the Consolidated Financial Statements), all 1995 and 1994 financial
information reflects ANTEC as an equity investment. All prior financial
information reflects ANTEC as a consolidated subsidiary of the Company.
(b) The non-recurring items in 1994 include a $48.2 million pre-tax gain on the
May 1994 public offering of shares of common stock of ANTEC and a $10.8
million pre-tax gain relating to ANTEC's issuance of common stock in
connection with an acquisition in November 1994. Non-recurring items in 1993
principally include an $84.5 million pre-tax gain on the 1993 initial public
offering of shares of common stock of ANTEC and a $6.4 million pre-tax gain
on other investments offset by a pre-tax loss of approximately $19.1 million
relating to the liquidation of the Company's equity investment in Q-TEL (see
Note 4 of the Notes to the Consolidated Financial Statements).
(c) In 1994, 1993, 1992 and 1991, the Company wrote down the value of its
investments in marketable equity securities by $34.4 million, $25.0 million,
$25.0 million and $50.0 million, respectively. The remaining $5.2 million
pre-tax charge in 1994 relates to the loss on sale of the Company's
investment in Catellus. The remaining $29.4 million pre-tax charge in 1991
relates to the loss on sale of the Company's investment in Santa Fe. The
remaining marketable securities were sold in 1995 resulting in a pre-tax
loss of $3 million.
(d) Extraordinary items in 1993, 1992 and 1991 represent the gain/(loss), net of
related income taxes, on early extinguishment of senior and subordinated
debt at the Company and its subsidiaries.
(e) Stockholders' equity reflects treasury stock purchases of $129.2 million,
$138.9 million, $.3 million, $114.3 million and $147.4 million in 1995,
1994, 1993, 1992 and 1991, respectively. No dividends on common stock were
declared or paid during any of the periods shown.
(f) Stockholders' equity includes unrealized losses on marketable equity
securities available-for-sale, net of deferred income tax benefit of $3.9
million, $23.7 million, $49.1 million and $47.8 million at December 31,
1994, 1993, 1992 and 1991, respectively. Stockholders' equity at December
31, 1992 and 1991 included approximately $83 million of Series C convertible
preferred stock which was converted into 3.8 million shares of Common Stock
in 1993.
(g) All share and per share data has been adjusted to reflect the dividend paid
in the form of a two-for-one stock split on October 25, 1995.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
Asset Sales and Other Dispositions
Recapitalization Program: In 1990, the Company began a program of modifying
its capital structure by reducing certain senior and subordinated debt and
purchasing Common Stock. Over the last several years, the Company also
implemented a program of selling or otherwise monetizing certain assets to fund
the recapitalization program. Since the program began, the Company has used
proceeds to eliminate all debt at the holding company, temporarily reduce
borrowings at the subsidiary level and to repurchase approximately $719 million
of outstanding Common Stock. The financial liquidity and capital resources in
1995 and 1994 reflect the impact of the Company's recapitalization program.
Sale of Rail Car Leasing Business: In 1994, the Company sold its remaining
interest in its rail cars for an aggregate purchase price of $205.5 million
which was used to: (1) repay $150 million of the Corporate senior bank term loan
("Term Loan"); (2) pay the related income tax liability of approximately $25
million caused by the sale which resulted after utilization of the Company's NOL
and ITC carryforwards; and (3) other general corporate purposes including the
purchase of the Company's Common Stock.
ANTEC Public Offerings: In May 1994, the Company completed a public
offering of shares of common stock of ANTEC for approximately $83 million. As a
result of the ANTEC Offering, the Company's ownership of ANTEC common stock was
reduced from 53% to 33%. In addition, in November 1994, ANTEC issued
approximately 2.0 million shares of ANTEC common stock in connection with an
acquisition which lowered the Company's ownership to approximately 30%. In the
fourth quarter of 1995 the Company purchased .4 million shares of ANTEC stock
increasing its ownership to 31%.
In September 1993, the Company and ANTEC completed an initial public
offering of shares of common stock of ANTEC (the "Initial Offering"). Net
proceeds to the Company of approximately $97 million were used to reduce
indebtedness. As a result of the Initial Offering, the Company's ownership of
ANTEC common stock was reduced to 53%.
Liquidation of Signal Capital: Signal Capital has been classified as assets
held for sale since its acquisition in 1988. Subsequent to the purchase, the
Company sold or liquidated portions of the portfolio including $855 million in
1989, $78 million in 1990, $157 million in 1991, $82 million in 1992, $82
million in 1993; $60 million in 1994 and $67 million in 1995. The $35 million
net portfolio at December 31, 1995 represents approximately 2% of the original
acquired Signal Capital portfolio. Proceeds were used to repay indebtedness. The
Company continues to liquidate the acquired Signal Capital portfolio in an
orderly manner that maximizes its value to the Company's shareholders and no
material amounts of new loans or investments are being made.
Other Dispositions: In 1995 the Company sold its investment in Energy for
approximately $72.6 million. In 1994, the Company sold its investment in the
marketable equity securities of Catellus for approximately $47.8 million. In
1994, 1993 and 1992, the Company sold all of its other transportation services
assets. Proceeds from these other dispositions were used to reduce debt or to
purchase the Company's Common Stock.
Cash Flow
Year ended December 31, 1995: Consolidated net cash used by continuing
operating activities was ($38.3) million for the year ended December 31, 1995
compared to ($35.4) million in 1994. Cash used by continuing operating
activities increased due primarily to increased working capital investment
resulting from a 27% increased sales volume and a decrease in net income from
continuing operations partially offset by non-recurring items and marketable
equity security losses in 1994. Consolidated net cash provided by investing
activities was $108.7 million in 1995 versus $381.8 million in 1994.
Consolidated investing activities in 1995
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include approximately $72.6 million of proceeds from the sale of the Company's
investment in Energy. Consolidated investing activities in 1994 include
approximately $82.8 million of proceeds from the Antec Offering and
approximately $60.3 million from the Company's sales of Catellus and Q-TEL. Cash
from discontinued operations, net was $71.2 million in 1995 versus $262.5
million in 1994. Consolidated cash used for net financing activities was ($74.1)
million for the year ended 1995 in comparison to ($363.2) million for the year
ended 1994. 1994 included the paydown of a substantial amount of subordinated
debt. The consolidated net financing activities in 1995 and 1994 also include
$129.2 million and $138.9 million, respectively of treasury stock purchases.
Discontinued operations in 1995 and 1994 include net proceeds from the reduction
of assets at Signal Capital of $67 million and $60 million, respectively and
include net proceeds of $17 million and $10 million, respectively from the sale
of the Company's other transportation assets. Discontinued operations in 1994
include net proceeds of $205.5 million from the sale of the Company's remaining
interest in its rail car leasing business.
Year ended December 31, 1994: Consolidated net cash used by continuing
operating activities was ($35.4) million for the year ended December 31, 1994
compared to ($42.4) million in 1993. Cash used by continuing operating
activities decreased due primarily to significantly improved earnings, after
elimination of non-recurring items and losses on marketable equity securities,
offset somewhat by a $64.5 million net working capital investment by Anixter
used to fund a $400 million increase in sales volume. Consolidated net cash
provided by net investing activities was $381.8 million in 1994 versus $285.7
million in 1993. Consolidated investing activities in 1994 include $262.5
million of cash from discontinued operations, net approximately $82.8 million of
proceeds from the ANTEC Offering, approximately $47.8 million from the sale of
the Company's investment in Catellus and approximately $12.5 million in net
receipts from the liquidation of the Company's equity investment in Q-TEL and
loans due from Q-TEL. Consolidated investing activities in 1993 reflect $156.6
million of proceeds from the ANTEC Initial Offering, $117.4 million from
discontinued operations, net, net receipts from the liquidation of the Company's
equity investment in Q-TEL of $23.7 million and proceeds from the sale of
miscellaneous marketable securities and other investments. Consolidated cash
used for net financing activities was ($363.2) million for the year ended 1994
in comparison to ($234.3) million for the year ended 1993. Both periods include
the paydown of a substantial amount of subordinated debt. The consolidated net
financing activities in 1994 also include $138.9 million of treasury stock
purchases. Cash from discontinued operations, net was $262.5 million in 1994
versus $117.4 million in 1993. Discontinued operations in 1994 include net
proceeds of $205.5 million from the sale of the Company's remaining interest in
its rail car leasing business. Discontinued operations in 1994 and 1993 include
net proceeds from the sale of the Company's other transportation services assets
of $10 million and $46 million, respectively, and cash received from the
reduction of assets at Signal Capital of $60 million and $82 million,
respectively.
Consolidated results in 1993 included ANTEC, while 1995 and 1994
consolidated results present ANTEC as an equity investment. The Company reduced
its interest in ANTEC to approximately 31% and 30% of ANTEC's outstanding shares
in 1995 and 1994, respectively, with a substantial impact on the comparability
of consolidated results. Operating income by the Company's major business
segments in 1995, 1994 and 1993 for Anixter is $99.6 million, $69.8 million and
$45.8 million and in 1993 for ANTEC $22.4 million.
Interest Expense: Consolidated net interest expense and other was $21.6
million, $27.1 million and $58.9 million for the years ended December 31, 1995,
1994 and 1993, respectively. The year ended December 31, 1993 includes $5.0
million of net interest expense and other relating to ANTEC. The Company has
entered into interest rate agreements which effectively fix or cap, for a period
of time, the interest rate on a portion of its floating rate obligations. As a
result, the interest rate on approximately 67% of debt obligations at December
31, 1995 is fixed or capped. The impact of interest rate swaps and caps on
interest expense, net for the years ended December 31, 1995, 1994 and 1993 was
to increase interest expense by approximately $.9 million, $6.0 million and
$10.8 million, respectively.
10
<PAGE> 11
Financings
In November 1995, the Company terminated its $115 million senior bank term
loan facility ("Corporate Loan"). Effective with this termination, all existing
financing facilities are maintained by the operating subsidiaries of the
Company.
In March 1995, the Company increased Anixter's secured domestic revolving
line of credit to $425 million, lowered the interest rate spreads, and extended
the expiration to 2000.
At December 31, 1995, $193.6 million was available under the bank revolving
lines of credit at Anixter, of which $88 million was available to the Company
for general corporate purposes.
Debt Maturities and Repayments
In 1994, the Company repaid the entire $250 million Term Loan with proceeds
from the sale of the Company's rail car leasing business and the ANTEC Offering.
The Term Loan was originally obtained in December 1993 and was secured by the
Company's investments in the capital stock of Anixter, ANTEC and Signal Capital
and its investment in marketable securities.
In 1994 and 1993, respectively, the Company retired $221 million and $337
million of the face value of subordinated debt at the Company.
NOL Carryforwards
As of December 31, 1994, the Company had no NOL or ITC carryforwards for
Federal income tax purposes due to the sale in 1994 of the Company's rail car
leasing business which exhausted virtually all of the remaining carryforwards
existing at December 31, 1993. As of December 31, 1993, the Company had
cumulative NOL carryforwards of approximately $345 million that were set to
expire primarily in 1995 through 2007, and ITC carryforwards of approximately
$16 million that were set to expire between 1994 and 2001. Certain of these
carryforwards have not been examined by the IRS and, therefore, may still be
subject to adjustment.
As a result of the 1995 sale of the Energy shares the Company generated a
capital loss of approximately $80 million, most of which will be carried back
and offset against the 1994 gain on the Rail sale. It is anticipated this
carryback will generate cash refunds of $13.6 million in 1996 and will also
cause $9.0 million of the ITC's claimed in 1994 to be available for carryforward
to 1995. Approximately $3.6 million of the ITC's claimed in 1994 may now expire
as a result of the carryback of the Energy loss.
In addition, at December 31, 1995, various foreign subsidiaries of the
Company had aggregate cumulative NOL carryforwards for foreign income tax
purposes of approximately $41 million which are subject to various tax
provisions of each respective country. Approximately half of this amount expires
between 1996 and 2004 and half of which has an indefinite life.
The availability of tax benefits of NOL and ITC carryforwards to reduce the
Company's Federal income tax liability is subject to various limitations under
the Internal Revenue Code.
Liquidity Considerations and Other
Certain debt agreements entered into by the Company's operating
subsidiaries contain various restrictions including restrictions on payments to
the Company. Such restrictions have not had nor are expected to have an adverse
impact on the Company's ability to meet its cash obligations.
CAPITAL EXPENDITURES
Consolidated capital expenditures were $31.3 million, $17.2 million and
$13.4 million for 1995, 1994 and 1993, respectively.
11
<PAGE> 12
RESULTS OF OPERATIONS
The Company has experienced increased revenues due to the continued growth
of the market for products and services to support data, voice and video
networking technologies. While the Company continues to believe that its revenue
base will grow and its worldwide expansion will result in both increased
revenues and operating profits, there can be no assurance of future financial
performance. Anixter competes with distributors and manufacturers who sell
products directly or through existing distribution channels to end users or
other resellers. In addition, Anixter's future performance could be subject to
economic downturns and possibly rapid changes in applicable technologies.
In July 1994, the Company sold substantially all its remaining interest in
its fleet of rail cars. Results of operations reflect the rail car leasing
business as discontinued operations.
In May 1994, the Company sold in a public offering 4.0 million shares of
common stock of ANTEC. As a result of the ANTEC Offering, the Company's
ownership of ANTEC common stock was reduced from 53% to approximately 33%. In
addition, in November 1994, ANTEC issued approximately 2.0 million shares of
ANTEC common stock in connection with an acquisition which lowered the Company's
ownership to approximately 30%. In the fourth quarter of 1995 the Company
purchased .4 million shares of ANTEC stock increasing its ownership to 31%. The
Company views ANTEC as a long-term investment, subject to change should future
circumstances warrant. Due to the sale and issuance of ANTEC common stock, all
1995 and 1994 financial information reflects ANTEC as an equity investment. All
prior financial information reflects ANTEC as a consolidated subsidiary of the
Company.
Year ended December 31, 1995: Income from continuing operations was $39.1
million in 1995 compared with $46.2 million in 1994. Results in 1994 include a
$48.2 million pre-tax gain on the ANTEC Offering and a $10.8 million pre-tax
gain relating to ANTEC's issuance of common stock in connection with an
acquisition in November 1994. Results of continuing operations in 1994 include
pre-tax charges associated with the sale and write down of marketable equity
securities of $39.6 million. Net income was $39.1 million and $246.9 million for
the years ended December 31, 1995 and 1994, respectively. Net income from 1995
results includes a ($.3) million after tax loss on the Company's equity interest
in ANTEC, due to the one-time pre-tax reorganization charge of $21.7 million
recorded in the third quarter by ANTEC, versus $7.9 million of income in 1994.
In 1995, the Company also recorded a ($3.0) million loss associated with the
sale of its investment in marketable securities. Income from discontinued
operations in 1994 reflects a $202.0 million after-tax gain from the sale of the
Company's rail car leasing business.
Revenues in 1995 rose 27% to $2.2 billion resulting from the continued
growth of the North American business and the continuing penetration in Europe,
Asia, and Latin America. North America revenues in 1995 increased 23% to $1.7
billion due to strong demand for its communications products and focused
marketing efforts in its electrical wiring systems business. Europe revenues in
1995 increased to $429.1 million from $316.8 million due primarily to continued
expansion and increased market penetration, particularly in networking products,
across all geographic territories. Asia and Latin America revenues increased to
$96.4 million in 1995 due to increased market penetration, strong product demand
and expansion into new territories. Revenues by major markets are presented in
the following table.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994
-------- --------
(IN MILLIONS)
<S> <C> <C>
North America................................................. $1,669.3 $1,360.5
Europe........................................................ 429.1 316.8
Asia and Latin America........................................ 96.4 55.3
-------- --------
$2,194.8 $1,732.6
======== ========
</TABLE>
Operating income for 1995 increased 43% to $99.6 million due primarily to
significantly improved volume and earnings in North America. North America
operating income increased 36% to $89.7 million in 1995 due to volume related
economies of scale offset by increased spending for new service and logistics
initiatives. Europe operating income in 1995 increased 167% to $17.6 million
from $6.6 million due primarily to
12
<PAGE> 13
continued expansion and volume related economies of scale. Asia and Latin
America operating losses increased to ($7.7) million from ($2.6) million in 1994
due to geographic expansion, new offices and staff increases. Aggregate gross
start-up losses in expansion markets, which have yet to achieve profitable
operations were $12.6 million through 1995. Operating income (loss) by major
markets is presented in the following table.
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
---------------
1995 1994
----- -----
(IN MILLIONS)
<S> <C> <C>
North America........................................................ $89.7 $65.8
Europe............................................................... 17.6 6.6
Asia and Latin America............................................... (7.7) (2.6)
----- -----
$99.6 $69.8
===== =====
</TABLE>
Consolidated net interest expense and other for 1995 declined to $21.6
million from $27.1 million in 1994 due to the extinguishment of high-cost
corporate debt from the monetization of the Company's non-core assets in the
first half of 1994 partially offset by the cost of funding the stock purchase
program and increased working capital borrowings.
The consolidated tax provision for the year ended December 31, 1995
reflects an effective tax rate of 47.4% based on pre-tax book income adjusted
for goodwill amortization and start up losses in certain international
businesses which are not currently deductible and for which no anticipated
future tax benefit has been recorded. The increase in the effective tax rate
from the prior year period is due to the absence in 1995 of certain
non-recurring tax benefits associated with the secondary offering of ANTEC which
occurred in 1994.
Year ended December 31, 1994: Income from continuing operations was $46.2
million in 1994 compared with $28.8 million in 1993. Results in 1994 include a
$48.2 million pre-tax gain on the ANTEC Offering and a $10.8 million pre-tax
gain relating to ANTEC's issuance of common stock in connection with an
acquisition in November 1994. Results of continuing operations in 1993
principally include an $84.5 million pre-tax gain on the ANTEC Initial Offering
and a $6.4 million pre-tax gain on other investments offset by a pre-tax loss of
approximately $19.1 million relating to the liquidation of the Company's equity
investment in Q-TEL. Results of continuing operations in 1994 and 1993 include
pre-tax charges associated with the sale and write-down of marketable equity
securities of $39.6 million and $25.0 million, respectively. Net income (loss)
was $246.9 million and ($1.2) million for the years ended December 31, 1994 and
1993, respectively. Income from discontinued operations in 1994 reflects a
$202.0 million after-tax gain from the sale of the Company's rail car leasing
business. The Company retired or called for redemption a significant amount of
its subordinated and senior debt resulting in an extraordinary net loss of
($16.0) million in 1993.
Revenues in 1994 rose 30% to $1.7 billion resulting from the continued
growth of the North American business and the continuing penetration in Europe,
Asia, and Latin America. North America revenues in 1994 increased 28% to $1.4
billion due to strong demand for its communications business, focused marketing
efforts in its electrical wiring systems business. Europe revenues in 1994
increased to $316.8 million from $244.6 million due primarily to continued
expansion and increased market penetration, particularly in networking products,
across all geographic territories. Asia and Latin America revenues more than
doubled to $55.3 million in 1994 due to increased market penetration, strong
product demand and expansion into new territories. Revenues by major markets are
presented in the following table.
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
---------------------
1994 1993
-------- --------
(IN MILLIONS)
<S> <C> <C>
North America................................................... $1,360.5 $1,059.6
Europe.......................................................... 316.8 244.6
Asia and Latin America.......................................... 55.3 24.4
-------- --------
$1,732.6 $1,328.6
======== ========
</TABLE>
13
<PAGE> 14
ANTEC revenues, which were reflected in the consolidated results in 1993,
but not in 1994, increased 29% to $553.5 million in 1994 from $427.6 million in
1993 due to 1994 acquisitions and international growth.
Operating income for 1994 increased 52% to $69.8 million due primarily to
significantly improved volume and earnings in North America. North America
operating income increased 41% to $65.8 million in 1994 due to volume related
economies of scale and termination of the equity participation plan and catalog
business in 1993 somewhat offset by increased spending for new service and
logistics initiatives. Europe operating income in 1994 doubled to $6.6 million
from $3.2 million due primarily to continued expansion and volume related
economies of scale and a positive earnings contribution from Continental Europe.
Asia and Latin America operating loss decreased to ($2.6) million from ($4.1)
million in 1993 due to reduced start-up losses in Asia and Latin America
reaching breakeven volume levels. Aggregate gross start-up losses in expansion
markets, which have yet to achieve profitable operations in their respective
years, were ($6.7) million in 1994 compared to ($8.6) million in 1993. Operating
income (loss) by major markets is presented in the following table.
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
---------------
1994 1993
----- -----
(IN MILLIONS)
<S> <C> <C>
North America........................................................ $65.8 $46.7
Europe............................................................... 6.6 3.2
Asia and Latin America............................................... (2.6) (4.1)
----- -----
69.8 45.8
ANTEC................................................................ -- 22.4
----- -----
$69.8 $68.2
===== =====
</TABLE>
ANTEC operating income which was reflected in the consolidated results in
1993 but not in 1994, increased 74% to $39.0 million from $22.4 million in 1993
due to increased volume.
Consolidated net interest expense and other for 1994 declined to $27.1
million from $58.9 million in 1993 due to the use of proceeds from the continued
monetization of the Company's non-core assets to significantly reduce high-cost
subordinated debt.
Impact of Inflation: Inflation has slowed in recent years and is currently
not an important determinant of Anixter's results of operations due, in part, to
rapid inventory turnover.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors...................................... 15
Consolidated Balance Sheets......................................... 16
Consolidated Statements of Operations............................... 17
Consolidated Statements of Cash Flows............................... 18
Consolidated Statements of Stockholders' Equity..................... 19
Notes to the Consolidated Financial Statements...................... 20
Summary Quarterly Financial Information (Unaudited)................. 33
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
14
<PAGE> 15
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Anixter International Inc.
We have audited the accompanying consolidated balance sheets of Anixter
International Inc. as of December 31, 1995 and 1994, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1995. Our audits also
included the financial statement schedules listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Anixter
International Inc. at December 31, 1995 and 1994, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
ERNST & YOUNG LLP
Chicago, Illinois
February 5, 1996
15
<PAGE> 16
ANIXTER INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1994
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents................................................ $ 10,500 $ 14,200
Accounts receivable (net of allowances for doubtful accounts of
$9,000 and $6,000, respectively)................................. 400,000 325,900
Inventories, primarily finished goods............................... 364,100 275,800
Other assets........................................................ 6,400 4,900
---------- ----------
Total current assets........................................ 781,000 620,800
Property, primarily equipment, at cost................................ 97,400 68,600
Accumulated depreciation.............................................. (48,200) (35,200)
---------- ----------
Net property................................................ 49,200 33,400
Goodwill (net of accumulated amortization of $51,500 and $45,500,
respectively)....................................................... 183,000 187,900
Assets held for sale, net............................................. 42,800 105,400
Marketable equity securities available-for-sale (cost of $75,600 in
1994)............................................................... -- 64,500
Investment in ANTEC................................................... 73,700 69,500
Other assets.......................................................... 55,000 29,400
---------- ----------
$1,184,700 $1,110,900
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................... $ 232,400 $ 186,200
Accrued expenses.................................................... 99,500 80,300
---------- ----------
Total current liabilities................................... 331,900 266,500
Income taxes, net, primarily deferred................................. 29,100 600
Other liabilities..................................................... 11,200 11,200
Long-term debt........................................................ 333,700 280,500
---------- ----------
Total liabilities........................................... 705,900 558,800
Minority interests.................................................... 6,400 8,200
Common stock repurchase commitment.................................... 23,400 --
Stockholders' equity:
Common stock--$1.00 par value, 100,000,000 shares authorized,
52,488,090 and 29,426,000 shares issued and outstanding,
respectively..................................................... 52,500 29,400
Capital surplus..................................................... 99,900 262,500
Retained earnings................................................... 308,400 269,300
Cumulative translation adjustments.................................. (11,800) (10,100)
---------- ----------
449,000 551,100
Unrealized losses on marketable equity securities available-for-sale
(net of deferred income tax benefit)............................. -- (7,200)
---------- ----------
Total stockholders' equity.................................. 449,000 543,900
---------- ----------
$1,184,700 $1,110,900
========== ==========
</TABLE>
See accompanying notes to the consolidated financial statements.
16
<PAGE> 17
ANIXTER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Revenues--Anixter..................................... $ 2,194,800 $ 1,732,600 $ 1,328,600
--ANTEC..................................... -- -- 427,600
----------- ----------- -----------
2,194,800 1,732,600 1,756,200
Cost of operations:
Cost of sales....................................... (1,641,100) (1,298,300) (1,324,500)
Operating expenses.................................. (448,100) (358,500) (354,700)
Amortization of goodwill............................ (6,000) (6,000) (8,800)
----------- ----------- -----------
(2,095,200) (1,662,800) (1,688,000)
----------- ----------- -----------
Operating income...................................... 99,600 69,800 68,200
Other (expenses) income:
Interest expense and other.......................... (24,800) (33,000) (72,200)
Interest income and other........................... 3,200 5,900 13,300
Equity in income (loss) of ANTEC.................... (600) 7,900 --
Non-recurring items, net............................ -- 59,000 71,800
Marketable equity securities losses, principally
write-downs...................................... (3,000) (39,600) (25,000)
----------- ----------- -----------
Income from continuing operations
before income taxes................................. 74,400 70,000 56,100
Income tax expense.................................... (35,300) (23,800) (27,300)
----------- ----------- -----------
Income from continuing operations..................... 39,100 46,200 28,800
Income (loss) from discontinued operations
(net of related taxes).............................. -- 200,700 (14,000)
----------- ----------- -----------
Income before extraordinary item...................... 39,100 246,900 14,800
Extraordinary item (net of related taxes)............. -- -- (16,000)
----------- ----------- -----------
Net income (loss)..................................... 39,100 246,900 (1,200)
Preferred stock dividends and amortization............ -- -- (3,100)
----------- ----------- -----------
Income (loss) applicable to common stock.............. $ 39,100 $ 246,900 $ (4,300)
=========== =========== ===========
Income (loss) per common and common equivalent share:
Continuing operations............................... $.71 $ .72 $ .43
Before extraordinary item........................... $.71 $3.85 $ .20
Net income (loss)................................... $.71 $3.85 $(.07)
</TABLE>
See accompanying notes to the consolidated financial statements.
17
<PAGE> 18
ANIXTER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Operating activities:
Income from continuing operations..................... $ 39,100 $ 46,200 $ 28,800
Adjustments to reconcile income from continuing
operations to net cash used by continuing operating
activities:
Depreciation..................................... 15,700 10,000 10,800
Amortization of goodwill......................... 6,000 6,000 8,800
Deferred income tax expense...................... 17,000 20,400 20,500
Non-recurring items, net......................... -- (59,000) (71,800)
Marketable equity securities losses, principally
write-downs................................... 3,000 39,600 25,000
Non-cash financing expense....................... 800 3,900 8,100
Other, net....................................... 3,500 (800) 7,300
Changes in assets and liabilities:
Accounts receivable........................... (75,700) (99,100) (50,100)
Inventories................................... (88,300) (35,400) (55,700)
Accounts payable and accrued expenses......... 61,600 51,800 34,800
Other, net.................................... (21,000) (19,000) (8,900)
--------- --------- ---------
Net cash used by continuing operating
activities............................... (38,300) (35,400) (42,400)
--------- --------- ---------
Investing activities:
Sales of securities................................... 72,600 47,800 3,700
Purchases of property................................. (31,300) (17,200) (13,400)
Sale of and net receipts from ANTEC................... -- 82,800 156,600
Receipts from Q-TEL................................... -- 12,500 23,700
Proceeds from sales of discontinued operations, net... 71,200 262,500 117,400
Other, net............................................ (3,800) (6,600) (2,300)
--------- --------- ---------
Net cash provided by investing activities... 108,700 381,800 285,700
--------- --------- ---------
Net cash provided before financing activities........... 70,400 346,400 243,300
Financing activities:
Borrowings............................................ 836,400 858,600 915,500
Reductions in borrowings.............................. (786,300) (840,700) (817,400)
Reductions in subordinated indebtedness............... -- (246,600) (344,500)
Proceeds from issuance of common stock................ 8,300 8,600 21,100
Purchases of treasury stock........................... (129,200) (138,900) (300)
Other, net............................................ (3,300) (4,200) (8,700)
--------- --------- ---------
Net cash used in financing activities....... (74,100) (363,200) (234,300)
--------- --------- ---------
Cash provided (used).................................... (3,700) (16,800) 9,000
Cash and equivalents at beginning of year............... 14,200 31,000 22,000
--------- --------- ---------
Cash and equivalents at end of year..................... $ 10,500 $ 14,200 $ 31,000
========= ========= =========
</TABLE>
See accompanying notes to the consolidated financial statements.
18
<PAGE> 19
ANIXTER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
CUMULATIVE UNREALIZED LOSSES
PREFERRED COMMON CAPITAL RETAINED TRANSLATION ON MARKETABLE
STOCK STOCK SURPLUS EARNINGS ADJUSTMENTS EQUITY SECURITIES TOTAL
--------- ------- --------- -------- ----------- ----------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992.... $ 83,600 $28,100 $ 281,200 $ 26,700 $ (3,200) $ (49,100) $ 367,300
Net loss........................ -- -- -- (1,200) -- -- (1,200)
Issuance of common stock and
other, net.................... -- 1,100 23,400 -- -- -- 24,500
Foreign currency translation
adjustments................... -- -- -- -- (6,700) -- (6,700)
Preferred stock dividends and
other......................... 200 -- -- (3,100) -- -- (2,900)
Conversion of preferred stock... (83,800) 3,800 78,900 -- -- -- (1,100)
Net change in unrealized losses
on marketable equity
securities
available-for-sale............ -- -- -- -- -- 25,400 25,400
-------- ------- --------- -------- -------- -------- ---------
Balance at December 31, 1993.... -- 33,000 383,500 22,400 (9,900) (23,700) 405,300
Net income...................... -- -- -- 246,900 -- -- 246,900
Issuance of common stock and
other, net.................... -- 500 13,800 -- -- -- 14,300
Foreign currency translation
adjustments................... -- -- -- -- (200) -- (200)
Purchases and retirement of
treasury stock................ -- (4,100) (134,800) -- -- -- (138,900)
Net change in unrealized losses
on marketable equity
securities
available-for-sale............ -- -- -- -- -- 16,500 16,500
-------- ------- --------- -------- -------- -------- ---------
Balance at December 31, 1994.... -- 29,400 262,500 269,300 (10,100) (7,200) 543,900
Net income...................... -- -- -- 39,100 -- -- 39,100
Issuance of common stock and
other, net.................... -- 500 12,600 -- -- -- 13,100
Foreign currency translation
adjustments................... -- -- -- -- (1,700) -- (1,700)
Purchases and retirement of
treasury stock................ -- (4,200) (125,000) -- -- -- (129,200)
Common stock repurchase
commitment.................... -- -- (23,400) -- -- -- (23,400)
Two-for-one stock split......... -- 26,800 (26,800) -- -- -- --
Net change in unrealized losses
on marketable equity
securities
available-for-sale............ -- -- -- -- -- 7,200 7,200
-------- ------- --------- -------- -------- -------- ---------
Balance at December 31, 1995.... $ -- $52,500 $ 99,900 $308,400 $ (11,800) $ -- $ 449,000
======== ======= ========= ======== ======== ======== =========
</TABLE>
See accompanying notes to the consolidated financial statements.
19
<PAGE> 20
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization: Anixter International Inc. (the "Company"), formerly known as
Itel Corporation, which was incorporated in Delaware in 1967, is engaged in
providing networking and cabling solutions for network infrastructure
requirements through Anixter Inc. and its subsidiaries (collectively "Anixter").
As of December 31, 1995 the Company also owned approximately 31% of ANTEC
Corporation and its subsidiaries (collectively "ANTEC"), a broadband
communications technology company.
Consolidation: The consolidated financial statements include the accounts
of Anixter International Inc. and its majority-owned subsidiaries (collectively
"the Company") after elimination of intercompany transactions. The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Reclassifications: Certain 1994 and prior information has been reclassified
to conform to the 1995 presentation.
Cash and equivalents: The Company considers all highly liquid investments
with a purchased maturity of three months or less to be cash equivalents. The
carrying amount of cash and equivalents approximates fair value because of the
short maturity of those instruments.
Inventories: Inventories are valued principally at the lower of average,
approximating first-in, first-out, cost or market.
Depreciation: The Company provides for depreciation of property principally
on the straight-line basis over various useful lives including 3 to 10 years for
equipment and the term of the lease for leasehold improvements.
Goodwill: Goodwill relates to the excess of cost over the fair value of the
net tangible assets of businesses acquired. The Company at each balance sheet
date evaluates, for recognition of potential impairment, its recorded goodwill
against the current and undiscounted expected future operating income before
goodwill amortization expense of the entities to which goodwill relates.
Goodwill is amortized on a straight-line basis over 40 years.
Marketable equity securities available-for-sale: Marketable equity
securities available-for-sale are reflected in the balance sheet at fair value
as of the balance sheet date. The difference between cost and market is
reflected in stockholders' equity net of deferred tax benefit. Realized gains
(losses) on dispositions of securities are determined using the average cost
method. Realized pre-tax gains (losses), before related interest carrying costs,
were ($3.0), ($5.2) million and $.3 million in 1995, 1994 and 1993,
respectively. Aggregate unrealized pre-tax losses on marketable equity
securities available-for-sale amounted to $11.1 million at December 31, 1994
(see Note 6).
Investment in ANTEC: Dilution of the Company's ownership position in ANTEC
which results from the issuance of shares of common stock by ANTEC is treated as
if an equivalent percentage of ownership had been disposed of by the Company. To
the extent ANTEC issues shares of common stock at amounts per share in excess of
or less than the Company's average per share carrying value, gains or losses
from such changes in ownership are recorded in income when such issuances occur.
In May 1994, the Company sold 4.0 million shares of ANTEC common stock in a
public offering (the "ANTEC Offering"). As a result of the ANTEC Offering, the
Company's ownership of ANTEC common stock was reduced from 53% to 33%. In
addition, in November 1994, ANTEC issued approximately 2.0 million shares of
ANTEC common stock in connection with an acquisition which lowered the Company's
ownership to approximately 30%. In the fourth quarter of 1995 the Company
purchased .4 million additional shares of ANTEC stock increasing the ownership
to 31%. The Company reflects ANTEC as an equity investment in the 1995 and 1994
consolidated financial statements. As of December 31, 1995, the market value of
the Company's investment in ANTEC was $128 million.
20
<PAGE> 21
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Interest rate agreements: The Company has entered into interest rate
agreements which effectively fix or cap, for a period of time, the interest rate
on a portion of its floating rate obligations. As a result, the interest rate on
approximately 67% and 45%, of debt obligations at December 31, 1995 and 1994,
respectively, is fixed or capped. At December 31, 1995 and 1994, the Company had
interest rate cap agreements outstanding with notional amounts aggregating $175
million and $125 million, respectively. These interest rate cap agreements
effectively entitle the Company to receive from the banks the amount by which
the Corporation's interest payments on $125 million of its floating rate debt
exceed 6.0% and 6 3/4%, respectively at December 31, 1995 and 1994 and on $50
million exceeding 7.5% in 1995. The $2.3 million and $1.6 million of premiums
paid in 1995 and 1994, respectively, for these interest rate cap agreements are
included in other assets and are being amortized to interest expense over the
life of the respective interest rate cap agreements which expire in 1996 through
1998. Payments received as a result of the interest rate cap agreements are
recognized as a reduction of interest expense. The carrying value of these
interest rate cap agreements is $1.0 million and $1.1 million at December 31,
1995 and 1994, respectively. At December 31, 1995, the Company had an interest
rate swap agreement outstanding with a notional amount of $50 million. This swap
agreement obligates the Company to pay a fixed rate of 5.98% through June 1998.
In 1995 the Company entered into three forward rate agreements with a notional
amount aggregating $100 million. These forward rate agreements obligate the
Company to pay a fixed rate of approximately 6.11% for four years beginning in
July 1996. In 1995 the Company also entered into one forward rate interest
collar agreement with a notional amount of $50 million. This interest rate
agreement entitles the Company to receive from the bank the amount by which
floating rate interest payments exceed 6.50% and for the Company to pay the bank
the difference between 6.30% and the floating rate when interest rates fall
below 5.30%. This interest rate collar starts in January 1996 and matures in
January 2002. The fair value of all of the Company's interest rate agreements at
December 31, 1995 and 1994 is ($4.0) million and $3.6 million, respectively. The
fair value of interest rate agreements is the estimated amount that the Company
would pay to enter into the interest rate agreements at the reporting date,
taking into account current interest rates. The impact of interest rate
agreements on interest expense, net for the years ended December 31, 1995, 1994
and 1993 was to increase interest expense by approximately $.9 million, $6.0
million and $10.8 million, respectively. The Company does not enter into
interest rate transactions for speculative purposes.
Foreign currency forward contracts: The Company has purchased short-term
foreign currency forward contracts to minimize the effect of fluctuating foreign
currencies on its reported income. The impact of these foreign currency forward
contracts on the income statement was insignificant in 1995, 1994 and 1993. The
forward contracts are revalued at current foreign exchange rates, with the
changes in valuation reflected directly in income. At December 31, 1995, the
Company had approximately $61.9 million in foreign currency forward contracts
outstanding.
Revenue recognition: Sales and related cost of sales are recognized
primarily upon shipment of products.
Advertising and sales promotion: Advertising and sales promotion costs are
expensed as incurred.
Income taxes: Provisions for income taxes include deferred taxes resulting
from temporary differences in determining income for financial and tax purposes
using the liability method. Such temporary differences result primarily from
differences in the carrying value of assets and liabilities.
Income (loss) per common share: Income (loss) per share amounts are based
upon net income, and in 1993, after deducting preferred dividends earned and the
amortization of preferred stock discounts. Weighted average common and common
equivalent shares were 55,410,000, 64,090,000 and 60,264,000 for 1995, 1994 and
1993, respectively. All share and per share data other than amounts displayed on
the balance sheets and consolidated statements of stockholders' equity have been
adjusted to reflect the two-for-one stock split in the form of a stock dividend,
paid October 25, 1995.
21
<PAGE> 22
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 2. SUPPLEMENTAL CASH FLOW INFORMATION
Continuing operations of the Company paid interest, including that portion
allocated to discontinued operations, of approximately $24.0 million, $52.4
million and $96.7 million for the years ended December 31, 1995, 1994 and 1993,
respectively. Approximately $24.6 million, $27.8 million and $7.0 million was
paid for income taxes for the years ended December 31, 1995, 1994 and 1993,
respectively.
NOTE 3. DISCONTINUED AND ASSETS HELD FOR SALE
The finance business of Signal Capital Corporation ("Signal Capital") has
been included as assets held for sale since acquisition in 1988. Subsequent to
the purchase, the Company sold or liquidated portions of the portfolio including
$855 million in 1989, $78 million in 1990, $157 million in 1991, $82 million in
1992, $82 million in 1993, $60 million in 1994 and $67 million in 1995. The $35
million net portfolio at December 31, 1995 represents approximately 2% of the
original acquired Signal Capital portfolio. Proceeds were used to repay
indebtedness and repurchase shares of the Company's common stock. The Company
continues to liquidate the acquired Signal Capital portfolio in an orderly
manner that maximizes its value to shareholders and no material amounts of new
loans or investments are being made by Signal Capital.
On July 25, 1994, the Company sold 99.5% of its remaining interests in its
rail cars for $35.0 million in cash and $169.5 million in notes receivable for
an aggregate purchase price of $204.5 million. The buyer prepaid all the notes
and related interest in October 1994. The Company's remaining interest in the
rail cars was sold in October 1994 for cash of approximately $1.0 million. The
net gain on the sale of the Company's entire interest in rail cars was
approximately $202.0 million. The total cash proceeds of $205.5 million were
used to: (1) repay the $150 million Corporate senior bank term loan ("Term
Loan"); (2) pay the related income tax liability of approximately $25 million
caused by the sale which resulted after utilization of the Company's net
operating loss ("NOL") and investment tax credit ("ITC") carryforwards; and (3)
other general corporate purposes including the purchase of the Company's common
stock.
22
<PAGE> 23
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The results of operations of the rail car leasing business, the other
transportation services segment, other previously sold businesses and the
results of the acquired Signal Capital portfolio have been included in
discontinued operations net of allocated corporate interest expense. Allocated
corporate interest expense amounted to $6.3 million and $19.0 million for the
years ended December 31, 1994 and 1993, respectively. No interest was allocated
in 1995. Summarized financial results of discontinued operations were as
follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1995 1994 1993
----- ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues:
Signal Capital............................................. $ 9.0 $ 2.0 $ 21.3
Rail car leasing........................................... -- 89.3 153.0
Other discontinued operations, principally transportation
services................................................ -- .6 49.4
------ ------ ------
$ 9.0 $ 91.9 $223.7
====== ====== ======
Operating income:
Signal Capital............................................. $ 3.0 $ 4.2 $ 8.0
Rail car leasing........................................... -- 52.3 89.7
Other discontinued operations, principally transportation
services................................................ (3.0) .5 4.9
------ ------ ------
$ -- $ 57.0 $102.6
====== ====== ======
Loss from discontinued operations before gain on sales (net
of related taxes).......................................... $ -- $ (1.3) $(14.0)
Gain on sales (net of related taxes)......................... -- 202.0 --
------ ------ ------
Income (loss) from discontinued operations (net of related
tax benefits of $101.1 million and $5.9 million in 1994 and
1993, respectively.)....................................... $ -- $200.7 $(14.0)
====== ====== ======
</TABLE>
The composition of remaining assets held for sale at December 31, 1995 and
1994 consisted primarily of finance receivables.
NOTE 4. NON-RECURRING ITEMS
Non-recurring items in 1994 reflect a $48.2 million pre-tax gain on the
ANTEC Offering relating to the May 1994 public offering of shares of common
stock of ANTEC. The Company sold 4.0 million shares of ANTEC common stock at
$21.75 per share. Net proceeds from the ANTEC Offering were approximately $83
million. Non-recurring items in 1994 also reflect a $10.8 million pre-tax gain
relating to ANTEC's issuance of approximately 2.0 million shares of ANTEC common
stock in connection with an acquisition in November 1994. The Company provided
income taxes relating to the recognized pre-tax book gains.
Non-recurring items in 1993 reflect an $84.5 million pre-tax gain on the
1993 initial public offering of shares of common stock of ANTEC (the "Initial
Offering"). The Company provided income taxes relating to the recognized pre-tax
book gain. The Company and ANTEC sold approximately 4.0 million and 5.4 million
shares of ANTEC common stock, respectively, at $18 per share. Net proceeds from
the Initial Offering to the Company, after considering the redemption by ANTEC
of preferred shares owned by the Company, were approximately $97 million.
Non-recurring items in 1993 also reflect a $6.4 million pre-tax gain on other
investments.
The non-recurring pre-tax gains in 1993 were offset by a pre-tax loss of
approximately $19.1 million relating to the liquidation of the Company's equity
investment in Q-TEL. The remaining written-down equity investment and loans due
from Q-TEL were liquidated during the latter half of 1993 and early 1994.
23
<PAGE> 24
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 5. SUMMARIZED FINANCIAL INFORMATION OF ANTEC
The Company has an approximately 31% and 30% ownership interest in ANTEC at
December 31, 1995 and 1994, respectively and accounts for ANTEC under the equity
method. The following summarizes the financial information for ANTEC:
ANTEC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1995 1994
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Assets:
Current assets.......................................... $ 232.2 $ 234.2
Property, net........................................... 25.9 22.4
Goodwill................................................ 171.8 167.4
Other assets............................................ 27.0 14.0
------ ------
$ 456.9 $ 438.0
====== ======
Liabilities and Stockholders' Equity:
Current liabilities..................................... $ 101.8 $ 83.1
Long-term debt.......................................... 117.9 125.2
Stockholders' equity.................................... 237.2 229.7
------ ------
$ 456.9 $ 438.0
====== ======
</TABLE>
ANTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1995 1994
----------- -----------
(IN MILLIONS)
<S> <C> <C>
Revenues.................................................. $ 658.2 $ 553.5
====== ======
Operating income.......................................... $ 9.7 $ 39.0
====== ======
Income (loss) before income tax expense................... $ (1.3) $ 34.5
====== ======
Net income (loss)......................................... $ (3.6) $ 18.9
====== ======
</TABLE>
Operating income in 1995 includes a $21.7 million one-time reorganization
charge recorded by ANTEC in the third quarter.
NOTE 6. MARKETABLE EQUITY SECURITIES AVAILABLE-FOR-SALE
In 1994 and 1993, the Company wrote down the value of its investments in
marketable equity securities, including Catellus which was sold in 1994, by
$34.4 million and $25.0 million, respectively. The Company has reduced the
pre-tax unrealized losses on marketable equity securities available-for-sale
included in stockholders' equity by $3.9 million at December 31, 1994 to reflect
a deferred tax benefit due to the Company's current ability to either (a)
carryback all December 31, 1994 unrealized capital losses to previously
generated
24
<PAGE> 25
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
capital gains or (b) generate capital gains by the future sale of capital assets
to offset December 31, 1994 unrealized capital losses.
NOTE 7. EXTRAORDINARY ITEMS
In 1993, the Company retired or called for redemption of the senior and
subordinated debt resulting in pre-tax extraordinary losses of ($26.2) million.
NOTE 8. ACCRUED EXPENSES
Accrued expenses consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1994
----- -----
(IN MILLIONS)
<S> <C> <C>
Interest.......................................................... $ 5.6 $ .7
Wages, salaries and related....................................... 44.0 39.8
Taxes other than income........................................... 12.5 9.2
Other............................................................. 37.4 30.6
----- -----
$99.5 $80.3
===== =====
</TABLE>
NOTE 9. DEBT
Debt is summarized below:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1994
------ ------
(IN MILLIONS)
<S> <C> <C>
Bank revolving lines of credit.................................. $309.4 $260.5
Other........................................................... 24.3 20.0
------ ------
Total debt................................................. $333.7 $280.5
====== ======
</TABLE>
Anixter has various secured revolving bank lines of credit worldwide which
provide for up to $503.0 million of borrowings secured by certain assets. At
December 31, 1995, $309.4 million was borrowed and $193.6 million was available
under the bank revolving lines of credit at Anixter, of which $88 million was
available for general corporate purposes. These lines of credit reduce or mature
at various dates from 1998 through 2000. The $425.0 million domestic revolving
line of credit matures in 2000. Floating and fixed interest rate options, based
on the prime or LIBOR rate, are available under these facilities and the average
interest rate at December 31, 1995 was 6.8%. Commitment fees of 1/8% to 1/2% are
payable on the unused portion of these revolving lines of credit. The commitment
fees paid were insignificant for all years.
Certain debt agreements entered into by the Company's subsidiaries contain
various restrictions including restrictions on payments to the Company. Amounts
available under these debt agreements are secured by certain assets of the
subsidiaries aggregating approximately $730.8 million at December 31, 1995. The
Company has guaranteed certain debt and other obligations of Anixter. Restricted
net assets of subsidiaries were approximately $312 million at December 31, 1995.
Aggregate annual maturities of debt are as follows: 1996--none; 1997--none;
1998--$53.8 million; 1999--none; 2000--$255.6; $24.3 million thereafter.
25
<PAGE> 26
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The carrying amount of the Company's debt approximates fair value because
the underlying instruments are at variable rates which reprice frequently.
NOTE 10. INCOME TAXES
The Company and its U.S. subsidiaries file their Federal income tax return
on a consolidated basis. As of December 31, 1994, the Company had no NOL or ITC
carryforwards for Federal income tax purposes due to the sale of the Company's
rail car leasing business which exhausted virtually all carryforwards. These
carryforwards have not been examined by the Internal Revenue Service ("IRS")
and, therefore, may still be subject to adjustment. The availability of tax
benefits of NOL and ITC carryforwards to reduce the Company's Federal income tax
liability is subject to various limitations under the Internal Revenue Code of
1986, as amended (the "Code"). In addition, at December 31, 1995, various
foreign subsidiaries of the Company had aggregate cumulative NOL carryforwards
for foreign income tax purposes of approximately $41 million which are subject
to various provisions of each respective country. Approximately half of this
amount expires between 1996 and 2004 and half of which has an indefinite life.
As a result of the 1995 sale of the Santa Fe Energy Resources, Inc.
("Energy") shares the Company generated a capital loss of approximately $80
million, most of which will be carried back and offset against the 1994 gain on
the Rail sale. It is anticipated this carryback will generate cash refunds of
$13.6 million in 1996 and will also cause $9.0 million of the ITC's claimed in
1994 to be available for carryforward to 1995. Approximately $3.6 million of the
ITC's claimed in 1994 may now expire as a result of the carryback of the Energy
loss.
Domestic income from continuing operations before income taxes was $63.3
million, $70.6 million and $68.9 million for the years ended December 31, 1995,
1994 and 1993, respectively. Foreign income (loss) from continuing operations
before income taxes was $11.1 million, ($.6) million and ($12.8) million for the
years ended December 31, 1995, 1994 and 1993, respectively.
Deferred income taxes reflect the impact of temporary differences between
amounts of assets and liabilities for financial reporting purposes and such
amounts as measured by tax laws. Deferred income taxes also result from
differences between the fair value of assets acquired in business combinations
accounted for as purchases and their tax bases.
26
<PAGE> 27
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Significant components of the Company's deferred tax liabilities and assets
were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1994
------ ------
(IN MILLIONS)
<S> <C> <C>
Deferred tax liabilities:
Tax over book depreciation................................. $ 5.4 $ 9.4
Other deferred tax liabilities............................. 76.4 74.7
------ ------
Total deferred tax liabilities.......................... 81.8 84.1
Deferred tax assets:
Foreign NOL carryforwards.................................. 15.8 15.5
Unrealized losses on investments........................... -- 30.0
Other deferred tax assets.................................. 42.1 49.3
------ ------
Total deferred tax assets............................... 57.9 94.8
Valuation allowance on deferred tax assets................. (13.5) (12.5)
------ ------
Net deferred tax assets................................. 44.4 82.3
------ ------
Net deferred tax liability.............................. $ 37.4 $ 1.8
====== ======
</TABLE>
At December 31, 1995, 1994 and 1993, consolidated valuation allowances for
deferred tax assets were $13.5 million, $12.5 million and $30.1 million,
respectively, including valuation allowances on foreign NOLs.
Income tax (expense) benefit relating to continuing operations was
comprised of:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1995 1994 1993
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Current--Foreign................................. $ (8.5) $ (.1) $ .4
State................................... (2.2) (3.3) (4.1)
Federal................................. (7.6) -- (3.1)
------ ------ ------
(18.3) (3.4) (6.8)
Deferred--Foreign................................ (.7) -- --
State.................................. (3.1) (.9) .9
Federal................................ (13.2) (19.5) (21.4)
------ ------ ------
(17.0) (20.4) (20.5)
------ ------ ------
$(35.3) $(23.8) $(27.3)
====== ====== ======
</TABLE>
27
<PAGE> 28
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Reconciliations of income tax expense in continuing operations to the
statutory corporate Federal tax rate of 35% were as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1995 1994 1993
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory tax expense.............................. $(26.0) $(24.5) $(19.6)
Effects of--
Amortization of goodwill......................... (1.8) (2.1) (3.1)
Losses on foreign operations..................... (4.0) 3.0 (3.6)
State income taxes, net of Federal benefit....... (3.5) (2.7) (2.1)
Impact of Revenue Reconciliation Act of 1993..... -- -- (2.7)
Adjustment to prior years tax accruals........... -- -- 2.4
Equity accounting, net........................... -- 4.5 --
Other, net....................................... -- (2.0) 1.4
------ ------ ------
$(35.3) $(23.8) $(27.3)
====== ====== ======
</TABLE>
NOTE 11. CONTINGENCIES AND LITIGATION
In the ordinary course of business, the Company and its subsidiaries become
involved as plaintiffs or defendants in various legal proceedings. The claims
and counterclaims in such litigation, including those for punitive damages,
individually in certain cases and in the aggregate, involve amounts which may be
material. However, it is the opinion of the Company's management, based upon the
advice of its counsel, that the ultimate disposition of pending litigation will
not be material.
NOTE 12. LEASE COMMITMENTS
Substantially all of the Company's office and warehouse facilities and
equipment are leased under operating leases. Certain of these leases are
long-term operating leases and expire at various dates through 2007. Minimum
lease commitments under operating leases at December 31, 1995 are as follows:
1996 - $29.4 million; 1997 - $23.4 million; 1998 - $16.3 million; 1999 - $10.4
million; 2000 - $7.5 million; beyond 2000 - $25.6 million. Total rental expense
was $30.0 million, $23.3 million and $21.5 million in 1995, 1994 and 1993,
respectively.
NOTE 13. PENSION PLANS, POST-RETIREMENT BENEFITS AND OTHER BENEFITS
The Company's various pension plans are non-contributory and cover
substantially all full-time domestic employees. Retirement benefits are provided
based on compensation as defined in the plans. The Company's policy is to fund
these plans as required by ERISA and the Code.
Assets of the Company's plans at fair value were $45.8 million and $36.7
million at December 31, 1995 and 1994, respectively. Projected benefit
obligations of the Company's plans were $58.3 million and $46.1 million at
December 31, 1995 and 1994, respectively. The accumulated benefit obligations of
the Company's plans were $45.1 million and $35.7 million at December 31, 1995
and 1994, respectively. The weighted-average assumed discount rate used to
measure the projected benefit obligation was 7.25% and 7.8% at December 31, 1995
and 1994, respectively. Pension expense, including the cost of 401(k) plans, for
1995, 1994 and 1993 was insignificant. The Company's liability for
post-retirement benefits other than pensions is insignificant.
28
<PAGE> 29
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 14. PREFERRED STOCK AND COMMON STOCK
The Company has authority to issue 15 million shares of Preferred Stock,
par value $1.00 per share. In 1993, the outstanding Preferred Stock was
converted into approximately 3.8 million shares of Common Stock. On October 25,
1995 the Company paid a dividend in the form of a two-for-one stock split to
shareholders of record on September 22, 1995 which resulted in the issuance of
26,783,000 shares of stock. At December 31, 1995, 1994 and 1993, 52,490,000,
29,430,000 and 33,010,000 shares of Common Stock, respectively, were issued and
outstanding. In connection with the Company's employee stock plans described
below, 3,284,556 shares were reserved for issuance at December 31, 1995.
Stock options and stock grants--
The Company has Employee Stock Incentive Plans ("ESIP") which at their
inception authorized an aggregate of 11.4 million stock options or restricted
grants. In addition, the Company has a Director Stock Option Plan ("DSOP")
authorizing an aggregate of .4 million stock options. Substantially all options
and grants under these plans have been at fair market value or higher. One-third
of the options granted become exercisable each year after the year of grant
(except in the case of director options which vest fully in six months) and the
options expire ten years after the date of grant.
Additionally, the Company has an Employee Stock Purchase Plan ("ESPP")
covering most employees. Participants can request that up to 10% of their base
compensation be applied toward the purchase of Common Stock under the Company's
ESPP. The exercise price is the lower of 85% of the fair market value of the
Common Stock at the date of grant or at the later exercise date (currently one
year).
Under the ESIP, DSOP and ESPP, total options currently exercisable at
December 31, 1995 and 1994 were 1,025,732 and 829,254, respectively.
The following table summarizes the 1995 activity under the ESIP, DSOP and
ESPP.
<TABLE>
<CAPTION>
ESIP DSOP ESPP EXERCISE
OPTIONS OPTIONS OPTIONS PRICE
--------- ------- -------- --------------
<S> <C> <C> <C> <C>
Balance at December 31, 1994.................... 1,252,922 500,000 151,244 $ 4.75-$16.65
Grants during 1995.............................. 3,000 100,000 180,544 $16.58-$20.69
Exercised....................................... (392,296) (90,000) (137,680) $4.75-$16.65
Expirations and terminations.................... -- -- (13,564) $13.34
--------- ------- ------ --------------
Balance at December 31, 1995.................... 863,626 510,000 180,544 $ 5.19-$20.69
========= ======= ====== ==============
</TABLE>
Total stock options exercised for the years ended December 31, 1994 and
1993 were 1,899,834 and 2,268,156, respectively. The purchase price per share
for all stock options exercised ranged from $5.19 to $12.33 in 1994 and $5.19 to
$13.32 in 1993.
Stock option plans of Anixter--
In 1994 and 1995, Anixter granted to key employees of Anixter options to
purchase stock of Anixter. Substantially all options have been at fair market
value. These options vest immediately to four years and terminate one to ten
years from the date of grant. At December 31, 1995, 770,553 options were
exercisable. At
29
<PAGE> 30
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
December 31, 1995, the Company owned 99% of the approximately 33.7 million
shares of outstanding Anixter common stock. The following table summarizes the
1995 activity:
<TABLE>
<CAPTION>
ANIXTER EXERCISE
OPTIONS PRICE
--------- --------------
<S> <C> <C>
Balance at December 31, 1994..................................... 1,867,627 $ 9.00-$11.40
Grants during 1995............................................... 419,100 $14.50
Exercised........................................................ (118,076) $ 9.00-$11.40
Expirations and terminations..................................... (88,775) $ 9.00-$11.40
--------- -------------
Balance at December 31, 1995..................................... 2,079,876 $ 9.00-$14.50
========= =============
</TABLE>
Warrants--
The Company has issued warrants to directors, which are currently
exercisable, to purchase 510,000 shares of Common Stock at prices ranging from
$5.07 to $20.69 per share expiring between 1996 and the year 2005.
Common Stock--
The Company purchased 7,275,000, 8,178,000 and 20,000 shares of Common
Stock in 1995, 1994 and 1993, respectively. All treasury stock was retired.
Common Stock Repurchase Commitment--
On June 27, 1995 the Company agreed to purchase up to 3.8 million shares of
its common stock from Sam Zell, the Company's Chairman, and other related
stockholders. The first 2.5 million shares were purchased on July 10, 1995 at
$18 per share. The remaining 1.3 million shares may be purchased no later than
December 31, 1996 for approximately $19 per share. The purchase of the remaining
shares has been reflected as Common Stock repurchase commitment in the
consolidated financial statements.
30
<PAGE> 31
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 15. BUSINESS SEGMENTS
The Company in 1995 and 1994 is engaged in one principal area of business:
providing networking and cabling solutions for business information and network
infrastructure requirements. Prior to the 1994 and 1993 ANTEC Offerings, the
Company was also engaged in the development and distribution of products used in
the cable television industry (ANTEC). The Company obtains and coordinates
financing, legal and other related services, certain of which are rebilled to
subsidiaries.
Information for the years ended December 31, 1995, 1994 and 1993 regarding
the Company's major business segments is presented in the following table. ANTEC
is reflected as an equity investment in 1995 and 1994.
<TABLE>
<CAPTION>
ANIXTER ANTEC OTHER(A) TOTAL
-------- ------ -------- --------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Revenues:
1995................................................... $2,194.8 $ -- $ -- $2,194.8
1994................................................... 1,732.6 -- -- 1,732.6
1993................................................... 1,328.6 427.6 -- 1,756.2
Operating income:
1995................................................... 99.6 -- -- 99.6
1994................................................... 69.8 -- -- 69.8
1993................................................... 45.8 22.4 -- 68.2
Identifiable assets:
1995................................................... 1,015.9 -- 168.8 1,184.7
1994................................................... 839.6 -- 271.3 1,110.9
1993................................................... 718.3 239.0 423.3 1,380.6
Depreciation and amortization expense:
1995................................................... 21.7 -- -- 21.7
1994................................................... 16.0 -- -- 16.0
1993................................................... 14.8 4.8 -- 19.6
Capital expenditures:
1995................................................... 31.3 -- -- 31.3
1994................................................... 17.2 -- -- 17.2
1993................................................... 11.4 2.0 -- 13.4
</TABLE>
- ---------------
(a) Identifiable assets are principally comprised of marketable equity
securities, discontinued rail car leasing assets, other discontinued and
assets held for sale, and in 1995 and 1994 the Company's investment in
ANTEC.
31
<PAGE> 32
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The classification of the Company's 1995, 1994 and 1993 foreign operations
in the following table includes all revenues and related items of the Company's
non-U.S. operations. Export sales are insignificant.
<TABLE>
<CAPTION>
WORLDWIDE (NON-U.S.)
OPERATIONS
----------------------------
1995 1994 1993
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues:
Europe...................................... $429.1 $316.8 $244.6
Other....................................... 285.8 190.8 142.0
------ ------ ------
$714.9 $507.6 $386.6
====== ====== ======
Operating income (loss):
Europe...................................... $ 17.6 $ 6.6 $ 3.2
Other....................................... $ 4.5 3.6 (4.6)
------ ------ ------
$ 22.1 $ 10.2 $ (1.4)
====== ====== ======
Identifiable assets:
Europe...................................... $193.6 $147.2 $119.7
Other....................................... 136.3 101.2 90.0
------ ------ ------
$329.9 $248.4 $209.7
====== ====== ======
</TABLE>
Foreign operations' revenues were 33%, 29% and 22% of consolidated revenues
in 1995, 1994 and 1993, respectively. Foreign operations' operating income
(loss) were negatively impacted for all years due to economies of scale and
start-up losses in expansion markets. Aggregate start-up losses in expansion
markets were ($9.1) million, ($6.7) million and ($8.6) million in 1995, 1994 and
1993, respectively, as Anixter continues to penetrate new markets in Europe,
Asia and Latin America.
32
<PAGE> 33
SUMMARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following tables summarize the Company's quarterly financial
information.
<TABLE>
<CAPTION>
QUARTERS ENDED
----------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
---------------- ---------------- ---------------- ----------------
1995 1994 1995 1994 1995 1994 1995 1994
------ ------ ------ ------ ------ ------ ------ ------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........................... $502.9 $362.8 $542.0 $422.9 $571.1 $456.3 $578.8 $490.6
Operating income................... $ 23.8 $ 13.7 $ 25.7 $ 16.7 $ 26.3 $ 19.9 $ 23.8 $ 19.5
Income from continuing operations
before income taxes(a)........... $ 20.7 $ 3.6 $ 17.6 $ 26.8 $ 16.7 $ 17.0 $ 19.4 $ 22.6
Income from continuing
operations....................... 11.1 2.7 8.9 16.8 9.1 10.7 10.0 16.0
Net income(b)...................... 11.1 $ 1.8 8.9 $ 16.4 9.1 $215.7 10.0 $ 13.0
====== ====== ====== ====== ====== ====== ====== ======
Income per common and common
equivalent share:
Continuing operations............ $ .19 $ .04 $ .16 $ .26 $ .17 $ .17 $ .19 $ .26
Net income....................... $ .19 $ .03 $ .16 $ .25 $ .17 $ 3.44 $ .19 $ .22
====== ====== ====== ====== ====== ====== ====== ======
Income per common and common
equivalent share--assuming full
dilution:
Continuing operations............ $ .19 $ .04 $ .16 $ .26 $ .17 $ .17 $ .19 $ .26
Net income....................... $ .19 $ .03 $ .16 $ .25 $ .17 $ 3.44 $ .19 $ .22
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
- ---------------
(a) Continuing operations in the second quarter of 1995 include a $3.0 million
pre-tax loss associated with the sale of the Company's investment in Energy.
Continuing operations in the second quarter of 1994 include a $48.2 million
pre-tax gain on the ANTEC Offering. Continuing operations in the fourth
quarter of 1994 include a $10.8 million pre-tax gain relating to ANTEC's
issuance of common stock in connection with an acquisition in November 1994.
Continuing operations in the second quarter of 1994 includes pre-tax charges
of $34.4 million associated with the write-down of the Company's marketable
equity securities. Continuing operations in the first quarter of 1994
includes pre-tax charges of $5.2 million associated with the loss on sale of
the Company's investment in Catellus.
(b) Discontinued operations in the third quarter of 1994 include a $202.0
million pre-tax gain on the sale of the rail car leasing business (see Note
3 of the Notes to the Consolidated Financial Statements).
33
<PAGE> 34
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
See Registrant's Proxy Statement for the 1996 Annual Meeting of
Stockholders--"Election of Directors."
ITEM 11. EXECUTIVE COMPENSATION.
See Registrant's Proxy Statement for the 1996 Annual Meeting of
Stockholders--"Executive Compensation," "Compensation of Directors," "Employment
Contracts and Termination of Employment and Changes in Control Arrangements,"
and "Compensation Committee Interlocks and Insider Participation."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
See Registrant's Proxy Statement for the 1996 Annual Meeting of
Stockholders--"Security Ownership of Management" and "Security Ownership of
Principal Stockholders."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
See Registrant's Proxy Statement for the 1996 Annual Meeting of
Stockholders--"Certain Relationships and Related Transactions."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) Exhibits.
The exhibits listed below in Item 14(a)1, 2 and 3 are filed as part of
this annual report. Each management contract or compensatory plan
required to be filed as an exhibit is identified by an asterisk(*).
(b) Reports on Form 8-K.
None.
ITEM 14(A)1 AND 2. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES.
Financial Statements.
The following Consolidated Financial Statements of Anixter International
Inc. and Report of Independent Auditors are filed as part of this report.
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Report of Independent Auditors.................................................. 15
Consolidated Balance Sheets at December 31, 1995 and 1994....................... 16
Consolidated Statements of Operations for the years ended December 31, 1995,
1994 and 1993................................................................. 17
Consolidated Statements of Cash Flows for the years ended December 31, 1995,
1994 and 1993................................................................. 18
Consolidated Statements of Stockholders' Equity for the years ended December 31,
1995, 1994 and 1993........................................................... 19
Notes to the Consolidated Financial Statements.................................. 20
</TABLE>
34
<PAGE> 35
Financial Statement Schedules.
The following financial statement schedules of Anixter International Inc.
are filed as part of this Report and should be read in conjunction with the
Consolidated Financial Statements of Anixter International Inc.
Consolidated Schedules for the years ended December 31, 1995, 1994 and
1993, except as noted:
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
I. Condensed financial information of Registrant............................... 39
II. Valuation and qualifying accounts and reserves.............................. 42
</TABLE>
All other schedules are omitted because they are not required or are not
applicable, or the required information is shown in the consolidated financial
statements or notes thereto.
ITEM 14(A)3. EXHIBIT LIST. Each management contract or compensation plan
required to be filed as an exhibit is identified by an asterisk(*).
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
--------- -------------------------------------------------------------------------
<C> <S> <C> <C>
(3) Articles of Incorporation and by-laws.
3.1 Restated Certificate of Incorporation of Anixter International
Inc., filed with Secretary of State of Delaware on September 29,
1987 and Certificate of Amendment thereof, filed with Secretary of
Delaware on August 31, 1995........................................
3.2 By-laws of Anixter International Inc. as amended through November
9, 1995............................................................
(4) Instruments defining the rights of security holders, including indentures.+
4.1 (a) Amended and Restated Credit Agreement, dated March 11, 1994,
among Anixter Inc., Chemical Bank, as Agent, and the other banks
named therein. (Incorporated by reference from Itel Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31,
1993, Exhibit 4.2.) ...............................................
(b) Amendment, dated March 24, 1995, to Amended and Restated Credit
Agreement, dated March 11, 1994, among Anixter Inc., Chemical Bank,
as Agent, and the other banks named therein. (Incorporated by
reference from Itel Corporation's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1995, Exhibit 4.1.)....................
(10) Material contracts.+
10.1 Form of the Company's Tax Allocation Agreement, dated January 1,
1987. (Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1987,
Exhibit 10.1.).....................................................
10.2* Company's Management Incentive Plan, dated February 9, 1995.
(Incorporated by reference from Itel Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, Exhibit
10.2.).............................................................
10.3* Company's 1983 Stock Incentive Plan as amended and restated July
16, 1992. (Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992,
Exhibit 10.3.).....................................................
10.4* Warrant Agreement, dated December 5, 1985, between the Company and
Harold Haynes, Jerome Jacobson, Melvyn N. Klein and James D. Woods,
individually. (Incorporated by reference from Itel Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31,
1985, Exhibit 10.14.)..............................................
</TABLE>
35
<PAGE> 36
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
--------- -------------------------------------------------------------------------
<C> <S> <C> <C>
10.5* Warrant Agreement, dated June 24, 1986, between the Company and
William A. Buzick, Jr., F. Philip Handy, Harold Haynes, Jerome
Jacobson, Melvyn N. Klein and James D. Woods, individually.
(Incorporated by reference from Itel Corporation's Registration
Statement on Form S-1, Registration Number 33-7000, filed July 3,
1986, Exhibit 10.17.)..............................................
10.6 * Supplemental Pension Agreement, dated November 17, 1986, between
the Company and Rod F. Dammeyer. (Incorporated by reference from
Itel Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1986, Exhibit 10.14.)...........................
10.7 * (a) Company's Supplemental Retirement Benefits Plan, dated January
1, 1987. (Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1987,
Exhibit 10.16.)....................................................
* (b) Amendment No. 1, dated May 17, 1989 and effective as of January
1, 1989, to the Company's Supplemental Retirement Benefits Plan.
(Incorporated by reference from Itel Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1989, Exhibit
10.9(b).)..........................................................
* (c) Amendment No. 2, dated October 15, 1992, to the Company's
Supplemental Retirement Benefits Plan (Incorporated by reference
from Itel Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Exhibit 10.7(c).)....................
* (d) Amendment No. 3, dated February 25, 1993, to the Company's
Supplemental Retirement Benefits Plan. (Incorporated by reference
from Itel Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Exhibit 10.7(d).)....................
10.8 * Company's Key Executive Equity Plan, as amended and restated July
16, 1992. (Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992,
Exhibit 10.8.).....................................................
10.9 * Warrant Agreement, dated September 10, 1987, between the Company
and William A. Buzick, Jr., F. Philip Handy, Harold Haynes, Jerome
Jacobson, Melvyn N. Klein and James D. Woods, individually.
(Incorporated by reference from Itel Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1988, Exhibit
10.15.)............................................................
10.10* Warrant Agreement, dated July 14, 1988, between the Company and
William A. Buzick, Jr., F. Philip Handy, Harold Haynes, Jerome
Jacobson, Melvyn N. Klein, Robert H. Lurie, John R. Petty and James
D. Woods, individually. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, Exhibit 10.19.).................................
10.11* Executive Supplemental Life Plan, dated June 15, 1989, for the
Company and participating subsidiaries. (Incorporated by reference
from Itel Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989, Exhibit 10.20.)......................
10.12* (a) Company's Supplemental Executive Retirement Plan, dated January
18, 1990. (Incorporated by reference from Itel Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989,
Exhibit 10.23.)....................................................
* (b) Amendment No. 1 dated February 25, 1993, to Company's
Supplemental Executive Retirement Plan. (Incorporated by reference
from Itel Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Exhibit 10.13(b).)...................
</TABLE>
36
<PAGE> 37
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
--------- -------------------------------------------------------------------------
<C> <S> <C> <C>
10.13* Warrant Agreement, dated July 13, 1989, between Company and Bernard
F. Brennan, William A. Buzick, Jr., F. Philip Handy, Harold Haynes,
Jerome Jacobson, Melvyn N. Klein, Robert H. Lurie, John R. Petty
and James D. Woods, individually. (Incorporated by reference from
Itel Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, Exhibit 10.21.)...........................
10.14* Company's Director Stock Option Plan. (Incorporated by reference
from Itel Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1991, Exhibit 10.24.)......................
10.15* Warrant Agreement, dated August 22, 1990, between the Company and
Bernard F. Brennan, William A. Buzick, Jr., F. Philip Handy, Harold
Haynes, Jerome Jacobson, Melvyn Klein, John R. Petty and James D.
Woods, individually. (Incorporated by reference from Itel
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, Exhibit 10.25.).................................
10.16* Letter Agreement, dated December 2, 1991, with John Pigott.
(Incorporated by reference from Itel Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1991, Exhibit
10.26.)............................................................
10.17* (a) Agreement, dated February 9, 1995, with Rod F. Dammeyer
(Incorporated by reference from Itel Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, Exhibit
10.18(d).).........................................................
(b) Amended and Restated Agreement dated February 9, 1995 with Rod
F. Dammeyer........................................................
10.18* Agreement, dated November 1, 1992, with James E. Knox, as
amended............................................................
10.19* Form of Stock Option Agreement. (Incorporated by reference from
Itel Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, Exhibit 10.24.)...........................
10.20 Tax Allocation Agreement with ANTEC Corporation. (Incorporated by
reference from Amendment No. 2 to ANTEC Corporation's Registration
Statement on Form S-1, Registration Number 33-65488, filed August
20, 1993, Exhibit 10.5.)...........................................
10.21 Registration Rights Agreement with ANTEC Corporation. (Incorporated
by reference from Amendment No. 3 to ANTEC Corporation's
Registration Statement on Form S-1, Registration Number 33-65488,
filed September 13, 1993, Exhibit 10.9.)...........................
10.22 Directors & Officers Insurance Agreement with ANTEC Corporation.
(Incorporated by reference to ANTEC Corporation's Registration
Statement on Form S-1, Registration Number 33-65488, filed July 2,
1993, Exhibit 10.8.)...............................................
10.23 Purchase Agreement dated as of June 23, 1994 among the Company,
Itel Rail Holdings Corporation and SCAP Associates, L.L.C.
(Incorporated by reference from Itel Corporation's Current Report
on Form 8-K, November 7, 1994, Exhibit 2.1)........................
10.24* Form of Indemnity Agreement with all directors and officers........
10.25 Agreement, dated June 27, 1995, among Riverside Partners, SZRL
Investments, Equity Holdings and Company. (Incorporated by
reference from Riverside Partners' Amendment No. 20 to its Schedule
13D, filed for an event on June 27, 1995, relating to the shares of
Itel Corporation, Exhibit 1.)......................................
10.26* Anixter International Inc. 1996 Stock Incentive Plan...............
10.27* Form of Stock Option Grant.........................................
10.28* Anixter Excess Benefit Plan........................................
</TABLE>
37
<PAGE> 38
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION OF EXHIBIT NUMBER
--------- -------------------------------------------------------------------------
<C> <S> <C> <C>
10.29* Forms of Anixter Stock Option, Stockholder Agreement and Stock
Option Plan........................................................
10.30* Anixter Deferred Compensation Plan.................................
(21) Subsidiaries of the Registrant.
21.1 List of Subsidiaries of the Registrant.............................
(23) Consents of experts and counsel.
23.1 Consent of Ernst & Young LLP.......................................
(24) Power of attorney.
24.1 Power of Attorney executed by Lord James Blyth, Bernard F. Brennan,
Rod F. Dammeyer, Robert E. Fowler, Jr., F. Philip Handy, Melvyn N.
Klein, John R. Petty, Sheli Rosenberg, Stuart M. Sloan, Thomas C.
Theobald and Samuel Zell...........................................
(27) Financial data schedule.
27.1 Financial data schedule............................................
(28) Additional exhibits.
</TABLE>
This Annual Report on Form 10-K includes the following Financial Statement
Schedules:
ANIXTER INTERNATIONAL INC. AND SUBSIDIARIES--
FINANCIAL SCHEDULES
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Schedule I-- Condensed financial information of Registrant........................ 39
Schedule II-- Valuation and qualifying accounts and reserves....................... 42
</TABLE>
All other schedules are omitted because they are not required or are not
applicable, or the required information is included in the consolidated
financial statements or notes thereto.
- ---------------
+ Copies of other instruments defining the rights of holders of long-term debt
of the Company and its subsidiaries not filed pursuant to Item 601(b)(4)(iii)
of Regulation S-K and omitted copies of attachments to plans and material
contracts will be furnished to the Securities and Exchange Commission upon
request.
For the purposes of complying with the amendments to the rules governing
Form S-8 (effective July 13, 1990) under the Securities Act of 1933, as amended,
the Registrant hereby undertakes as follows, which undertaking shall be
incorporated by reference into the Registrant's Registration Statement on Form
S-8 Nos. 2-93173 (filed September 30, 1987), 33-13486 (filed April 15, 1987),
33-21656 (filed May 3, 1988) and 33-60676 (filed April 5, 1993):
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provision, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
38
<PAGE> 39
ANIXTER INTERNATIONAL INC.
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)
BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents................................................ $ 1,000 $ 2,600
Accounts receivable................................................. 400 700
Amounts currently due from affiliates, net.......................... 61,200 98,500
Other assets........................................................ 500 200
-------- --------
Total current assets................................... 63,100 102,000
Investment in ANTEC................................................... 73,700 69,500
Investment in and advances to subsidiaries............................ 380,700 361,000
Marketable equity securities available-for-sale....................... -- 64,500
Other assets.......................................................... 18,000 1,700
-------- --------
$535,500 $598,700
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses, due currently.................. $ 15,600 $ 41,900
Income taxes, net, primarily deferred................................. 46,100 11,700
Other liabilities..................................................... 1,400 1,200
-------- --------
Total liabilities...................................... 63,100 54,800
Common stock repurchase commitment.................................... 23,400 --
Stockholders' equity:
Common stock........................................................ 52,500 29,400
Capital surplus..................................................... 99,900 262,500
Retained earnings................................................... 308,400 269,300
Cumulative translation adjustments.................................. (11,800) (10,100)
-------- --------
449,000 551,100
Unrealized losses on marketable equity securities available for sale
(net of related deferred income tax benefit)..................... -- (7,200)
-------- --------
Total stockholders' equity............................. 449,000 543,900
-------- --------
$535,500 $598,700
======== ========
</TABLE>
39
<PAGE> 40
ANIXTER INTERNATIONAL INC.
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)
STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
------- -------- --------
<S> <C> <C> <C>
Operating loss................................................. $(3,500) $ (4,700) $ (9,300)
Other (expenses) income:
Corporate interest expense................................... (1,300) (14,900) (65,200)
Interest and investment income, including intercompany....... 14,900 6,200 15,600
Gain on ANTEC Offerings...................................... -- 59,000 84,500
Marketable equity securities losses, principally
write-downs............................................... (3,000) (39,600) (25,000)
-------- -------- --------
10,600 10,700 9,900
-------- -------- --------
Income from operations before income taxes and equity in
earnings of subsidiaries..................................... 7,100 6,000 600
Income tax benefit............................................. 6,500 9,100 3,300
Equity in earnings of subsidiaries............................. 25,500 231,800 10,900
-------- -------- --------
Income before extraordinary items.............................. 39,100 246,900 14,800
Extraordinary items (net of related income taxes).............. -- -- (16,000)
-------- -------- --------
Net income (loss).............................................. $39,100 $246,900 $ (1,200)
======== ======== ========
</TABLE>
40
<PAGE> 41
ANIXTER INTERNATIONAL INC.
SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF REGISTRANT
ANIXTER INTERNATIONAL INC. (PARENT COMPANY)
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Operating activities:
Income before extraordinary items........................ $ 39,100 $ 246,900 $ 14,800
Adjustments to reconcile income before extraordinary
items to net cash used by operating activities:
Depreciation.......................................... -- -- 400
Income tax benefit.................................... (6,500) (9,100) (3,300)
Gain on ANTEC common stock issuances.................. -- (59,000) (84,500)
Marketable equity securities losses, principally
write-downs......................................... 3,000 39,600 25,000
Equity in earnings of subsidiaries.................... (25,500) (231,800) (10,900)
Non-cash financing expense............................ (100) 1,900 4,200
Change in other operating items....................... (6,600) (18,100) (27,000)
--------- --------- ---------
Net cash provided (used) by operating
activities..................................... 3,400 (29,600) (81,300)
Investing activities:
Sales of securities...................................... 72,600 47,800 3,700
Proceeds from ANTEC Offerings............................ -- 82,800 67,000
Redemption of ANTEC preferred stock...................... -- -- 30,000
Net dividends from subsidiaries.......................... 8,200 219,700 150,300
Loans from subsidiaries, net............................. 37,300 108,000 95,200
Other, net............................................... (4,000) -- 13,700
--------- --------- ---------
Net cash provided by investing activities........ 114,100 458,300 359,900
--------- --------- ---------
Net cash provided before financing activities.............. 117,500 428,700 278,600
Financing activities:
Borrowings............................................... 50,000 200,000 93,400
Reductions in borrowings................................. (50,000) (496,600) (391,300)
Purchases of treasury stock.............................. (129,200) (138,900) (300)
Preferred stock dividend payments........................ -- -- (2,900)
Proceeds from issuance of common stock................... 10,100 8,600 21,100
Other, net............................................... -- -- (1,400)
--------- --------- ---------
Net cash used in financing activities............ (119,100) (426,900) (281,400)
--------- --------- ---------
Cash provided (used)....................................... (1,600) 1,800 (2,800)
Cash and equivalents at beginning of year.................. 2,600 800 3,600
--------- --------- ---------
Cash and equivalents at end of year........................ $ 1,000 $ 2,600 $ 800
========= ========= =========
</TABLE>
41
<PAGE> 42
ANIXTER INTERNATIONAL INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
------------------------
BALANCE AT CHARGED TO BALANCE AT
BEGINNING OF CHARGED TO OTHER END OF
DESCRIPTION THE PERIOD INCOME ACCOUNTS DEDUCTIONS THE PERIOD
- ----------------------------------------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995:
Allowance for doubtful accounts........ $ 6,000 $ 5,800 $ 1,200 $ (4,000) $ 9,000
Unrealized losses on marketable equity
securities available-for-sale(b).... $ 11,100 -- -- (11,100) $ --
Allowance for deferred tax asset....... $ 12,500 1,000 -- -- $ 13,500
Year ended December 31, 1994:
Allowance for doubtful accounts(a)..... $ 6,200 5,100 600 (5,900) $ 6,000
Unrealized losses on marketable equity
securities available-for-sale(c).... $ 36,600 -- 8,900 (34,400) $ 11,100
Allowance for deferred tax asset....... $ 30,100 (17,600) -- -- $ 12,500
Year ended December 31, 1993:
Allowance for doubtful accounts........ $ 4,600 5,500 2,300 (6,200) $ 6,200
Unrealized losses on marketable equity
securities available-for-sale(c).... $ 74,400 -- (12,800) (25,000) $ 36,600
Allowance for deferred tax asset....... $ 33,100 -- -- (3,000) $ 30,100
</TABLE>
- ---------------
(a) The deconsolidation of ANTEC resulted in a $1.4 million deduction in
allowance for doubtful accounts in 1994.
(b) In 1995 the Company sold its marketable equity securities resulting in a $3
million loss.
(c) In 1994 and 1993, the Company wrote down its investment in marketable equity
securities by $34.4 million and $25.0 million, respectively.
42
<PAGE> 43
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF
CHICAGO, STATE OF ILLINOIS, ON THE 14TH DAY OF MARCH, 1996.
ANIXTER INTERNATIONAL INC.
JAMES E. KNOX
----------------------------------------
James E. Knox
Senior Vice President, General Counsel
and Secretary
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
Chief Executive Officer
and President
ROD F. DAMMEYER (Principal Executive Officer) March 14, 1996
- ---------------------------------------------
Rod F. Dammeyer
Senior Vice President--Finance
DENNIS J. LETHAM (Chief Financial Officer) March 14, 1996
- ---------------------------------------------
Dennis J. Letham
Vice President--Controller
JAMES M. FROISLAND (Chief Accounting Officer) March 14, 1996
- ---------------------------------------------
James M. Froisland
LORD JAMES BLYTH* Director March 14, 1996
- ---------------------------------------------
Lord James Blyth
BERNARD F. BRENNAN* Director March 14, 1996
- ---------------------------------------------
Bernard F. Brennan
ROD F. DAMMEYER Director March 14, 1996
- ---------------------------------------------
Rod F. Dammeyer
ROBERT E. FOWLER, JR.* Director March 14, 1996
- ---------------------------------------------
Robert E. Fowler, Jr.
F. PHILIP HANDY* Director March 14, 1996
- ---------------------------------------------
F. Philip Handy
MELVYN N. KLEIN* Director March 14, 1996
- ---------------------------------------------
Melvyn N. Klein
JOHN R. PETTY* Director March 14, 1996
- ---------------------------------------------
John R. Petty
SHELI Z. ROSENBERG* Director March 14, 1996
- ---------------------------------------------
Sheli Rosenberg
STUART M. SLOAN* Director March 14, 1996
- ---------------------------------------------
Stuart M. Sloan
THOMAS C. THEOBALD* Director March 14, 1996
- ---------------------------------------------
Thomas C. Theobald
SAMUEL ZELL* Director March 14, 1996
- ---------------------------------------------
Samuel Zell
</TABLE>
*BY JAMES E. KNOX
------------------------------------------
James E. Knox (Attorney in fact)
James E. Knox, as attorney in fact for each person indicated.
43
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
ITEL CORPORATION
------------------------------------------------------
PURSUANT TO SECTION 242 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
------------------------------------------------------
ITEL Corporation, a Delaware corporation (hereinafter the "Corporation"),
does hereby certify as follows:
FIRST: The Corporation has capital stock.
SECOND: Article FIRST of the Corporation's Restated Certificate of
Incorporation is hereby amended to read in its entirety as set forth below:
FIRST: The name of the Corporation shall be Anixter International
Inc.
THIRD: The foregoing amendment was duly adopted in accordance with
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, ITEL Corporation has caused this Certificate to be
executed in its corporate name this 31st day of August, 1995.
ITEL CORPORATION
By: /s/ ROD DAMMEYER
----------------------------------
Name: Rod Dammeyer
Title: President
ATTEST:
By: /s/ JAMES E. KNOX
----------------------------------
Name: James E. Knox
Title: Secretary
<PAGE> 2
RESTATED CERTIFICATE OF INCORPORATION
OF
ITEL CORPORATION
ITEL Corporation, a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
1. The name of the corporation is ITEL Corporation. The date of the filing
of its original Certificate of Incorporation with the Secretary of State of
Delaware was December 6, 1967, and the name under which it was originally so
incorporated was SSI COMPUTER CORPORATION.
2. The test of the Restated Certificate of Incorporation as amended and
restated shall be and read in full as follows:
FIRST: The name of the Corporation shall be ITEL Corporation.
SECOND: The address of its registered office in the State of Delaware
is 1209 Orange Street, in the City of Wilmington, County of New Castle. The
name of its registered agent at such address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of stock of all classes which the
Corporation shall have the authority to issue shall be one hundred fifteen
million (115,000,000) consisting of one hundred million (100,000,000)
shares of Common Stock, par value $1.00 per share, and fifteen million
(15,000,000) shares of Class B Preferred Stock, par value $1.00 per share.
FIFTH: The board of directors of the Corporation may, by resolution,
from time to time issue in one or more series any unissued shares of Class
B Preferred Stock and may fix, or alter in one or more respects from time
to time before issuance of such shares, the number and designation of any
series, liquidation and dividend rights, preference rights, voting rights,
redemption rights, conversion rights, and any other rights and
qualifications, limitations or restrictions of, and the terms of any
purchase, retirement, or sinking fund which may be provided for, such
shares of Class B Preferred Stock.
SIXTH: The Corporation shall not issue any shares of stock of any
class or series without voting rights.
SEVENTH: The Corporation is to have perpetual existence.
EIGHTH: In furtherance and not in limitation of the powers conferred
by statute, the board of directors of the Corporation is expressly
authorized to make, alter or repeal the by-laws of the Corporation.
NINTH: No director shall be personally liable to the Corporation or
its stockholders for monetary damages for any breach of fiduciary duty by
such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for
breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to
Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit.
No amendment to or repeal of this Article Ninth shall apply to or have any
effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.
3. This Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said ITEL Corporation has caused this certificate to be
executed in its corporate name this 29th day of September, 1987.
ITEL CORPORATION
By /s/ ROD DAMMEYER
--------------------------------------
President
ITEL CORPORATION
CORPORATE SEAL
1967
DELAWARE
ATTEST:
By /s/ JAMES E. KNOX
- ----------------------------------------------------
Secretary
<PAGE> 1
EXHIBIT 3.2
REVISED NOVEMBER 9, 1995
ANIXTER INTERNATIONAL INC.
FORMERLY
ITEL CORPORATION
AMENDED AND RESTATED BY-LAWS
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.
Section. Other Offices. The corporation may also have office at such other
places both within and without the State of Delaware as the Board of Directors
may from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders for the
election of Directors shall be held in the City of San Francisco, State of
California, at such place as may be fixed from time to time by the Board of
Directors, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Board of Directors and stated in
the notice of the meeting. Meetings of stockholders for any other purpose may be
held at such time and place within or without the State of Delaware, as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Annual Meetings. Annual meetings of stockholders shall be held
on the third Thursday of April in each year if not a legal holiday and if a
legal holiday then on the next business day following at 2:30 P.M. or at such
other date and time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting. At such meeting the
stockholders shall elect by a plurality vote a Board of Directors and transact
such other business as may properly be brought before the meeting.
Section 3. Notice of Annual Meeting. Written notice of the annual meeting
stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
fifty days before the date of the meeting.
Section 4. List of Stockholders. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of meeting,
or if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
Section 5. Special Meetings. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the President and shall be called
by the President or Secretary at the request in writing of a majority of the
Board of Directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the
<PAGE> 2
corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting.
Section 6. Notice of Special Meeting. Written notice of a special meeting
stating the place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be given not less than ten nor more than
fifty days before the day of the meeting, to each stockholder entitled to vote
at such meeting.
Section 7. Business Transacted at Special Meeting. Business transacted at
any special meeting of stockholders shall be limited to the purposes stated in
the notice.
Section 8. Quorum. The holders of one-half of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. Vote Requirements. When a quorum is present at any meeting, the
vote of the holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought before such
meeting, unless the question is one upon which by express provision of the
statutes or of the Certificate of Incorporation, a different vote is required in
which case such express provision shall govern and control the decision of such
question.
Section 10. Vote in Person or by Proxy. Each stockholder shall at every
meeting of the stockholders be entitled to one vote in person or by proxy for
each share of the capital stock having voting power held by such stockholder,
but no proxy shall be voted on after three years from its date, unless the proxy
provides for a longer period.
Section 11. Action without Meeting. Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken for or in connection with
any corporate action, by any provision of the statutes, the meeting and vote of
stockholders may be dispensed with if all of the stockholders who would have
been entitled to vote upon the action if such meeting were held shall consent in
writing to such corporate action being taken; or if the Certificate of
Incorporation authorizes the action to be taken with the written consent of the
holders of less than all of the stockholders who would have been entitled to
vote upon the action if a meeting were held, then on the written consent of the
stockholders having not less than such percentage of the total number of votes
may be authorized in the Certificate of Incorporation; provided that in no case
shall the written consent be by the holders of stock having less than the
minimum percentage of the total vote required by statute for the proposed
corporate action, and provided that prompt notice must be given to all
stockholders of the taking of corporate action without a meeting and by less
than unanimous written consent.
ARTICLE III
DIRECTORS
Section 1. Number and Election. The number of Directors which shall
constitute the whole Board shall be the number at any given time determined by
the Board. The Directors shall be elected at the annual meeting of stockholders,
except as provided in Section 2 of this Article, and each Director elected shall
hold office until his successor is elected and qualified. Directors need not be
stockholders.
Section 2. Vacancies. Vacancies and newly created directorships resulting
from any increase in the authorized number of Directors may be filled by a
majority of the Directors then in office though less than a quorum, or by a sole
remaining Director, and the Directors so chosen shall hold office until the next
annual
2
<PAGE> 3
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no Directors in office, then an election of
Directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the Directors then in
office shall constitute less than a majority of the whole Board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten percent of
the total number of the shares at the time outstanding having the right to vote
for such Directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the Directors chosen by
the Directors then in office.
Section 3. Authority of Board of Directors. The business of the corporation
shall be managed by its Board of Directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the Certificate of Incorporation or by these By-laws directed or required to
be exercised or done by the stockholders.
Section 4. Meetings of the Board of Directors. The Board of Directors of
the corporation may hold meetings, both regular and special, either within or
without the State of Delaware. A meeting of the Board of Directors may be held
without notice immediately following the annual meeting of stockholders.
Section 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times as are fixed from time to time by resolution of the
Board but no less than quarterly, commencing in April, 1983, upon not less than
three days' prior notice, on the Thursday subsequent to the third Monday of each
month. Meetings will commence at 9:00 a.m. at the offices of the corporation or
at such other time and at such other place as shall be determined by the Board
of Directors.
Section 6. Special Meetings. Special meetings of the Board of Directors may
be called by the President on not less than three days' prior notice to each
Director, either personally or by mail or by telegram. Special meetings shall be
called by the President or Secretary in like manner and on like notice on the
written request of two Directors.
Section 7. Quorum. At all meetings of the Board of Directors six Directors
shall constitute a quorum for the transaction of business and the act of a
majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Certificate of Incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
Directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 8. Action without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these By-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any Committee thereof
may be taken without a meeting, if all members of the Board or Committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or Committee.
Section 9. Committee of Directors. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors, designate one
or more Committees, each Committee to consist of two or more of the Directors of
the corporation. The Board of Directors may designate one or more Directors as
alternated members of any Committee, who may replace any absent or disqualified
member at any meeting of the Committee. Any such Committee, to the extent
provided in the resolution, shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers which
may require it; provided, however, that in the absence or disqualification of
any member of such Committee or Committees, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. Such Committee or Committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
3
<PAGE> 4
Section 10. Meeting of Committees. Each Committee may hold meetings,
regular and/or special, either within or without the State of Delaware. Any
regular or special meeting of a Committee shall be held on not less than three
days' prior notices to each member of such Committee.
Section 11. Minutes of Committee Meetings. Each Committee shall keep
regular minutes of its meetings and report the same to the Board of Directors
when required.
Section 12. Compensation of Directors. The Directors may be paid such
compensation as the Board of Directors shall deem advisable.
ARTICLE IV
NOTICES
Section 1. Form of Notice. Whenever, under the provisions of the statutes
or of the Certificate of Incorporation or of these By-laws, notice is required
to be given to any Director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing by mail, addressed to
such Director or stockholder at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to Directors may also be given by telegram.
Section 2. Waiver of Notice. Whenever any notice is required to be given
under the provisions of the statutes or of the Certificate of Incorporation or
of these By-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. Officers. The officers of the corporation shall be chosen by the
Board of Directors and shall be a Chairman of the Board, President, one or more
Vice-Presidents, a Secretary, a Treasurer, a Controller, and a General Counsel.
The Board of Directors may designate certain Vice-Presidents as executive or
senior Vice-Presidents and may affix such functional designations to
Vice-Presidential titles as it shall deem appropriate. The Board of Directors
may also choose one or more Assistant Secretaries and Assistant Treasurers,
Assistant Controllers, and Associate General Counsels. Any number of officers
may be held by the same person unless the Certificate of Incorporation or these
By-laws otherwise provide. The Board of Directors may authorize and approve the
terms of employment contracts with officers covering the duties, term,
compensation, and other terms of the employment of officers.
Section 2. Appointment of Officers at First Meeting of Newly Elected Board
of Directors. The Board of Directors at its first meeting after each annual
meeting of stockholders shall choose a Chairman, President, one or more
Vice-Presidents, a Secretary, one or more Assistant Secretaries, a Treasurer,
one or more Assistant Treasurers, a Controller, one or more Assistant
Controllers, a General Counsel and one or more Associate General Counsels.
Section 3. Appointment of Officers from Time to Time. The Board of
Directors may appoint such other officers and agents as it shall deem necessary
who shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by the Board of
Directors.
Section 4. Compensation of Officers. The compensation of all officers of
the corporation shall be fixed by the Board of Directors.
Section 5. Terms of Office. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any other officer elected
or appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the Board of Directors. Any vacancy occurring
in any office of the corporation shall be filled by the Board of Directors.
4
<PAGE> 5
Section 6. The Chairman of the Board. The Chairman of the Board shall be
the Chairman of the Executive Committee, shall have all of the powers ordinarily
exercised by the Chairman of the Board of a corporation and such other powers
and duties as shall from time to time be assigned to him by the Board of
Directors.
Section 7. The President. The President shall be Chief Executive Officer of
the corporation and shall have all powers ordinarily exercised by the President
of the corporation and shall have all powers ordinarily exercised by the
President and Chief Executive Officer of a corporation and such other powers and
duties as shall from time to time be assigned to him by the Board of Directors.
The President may execute on behalf of the corporation stock certificates,
bonds, contracts, deeds, mortgages, or other instruments authorized by the Board
of Directors, except in cases where the signing or execution thereof shall be
expressly delegated by the Board or by these By-Laws to some other officer or
agent of the corporation or such documents or instruments shall be required by
law to be signed or executed otherwise, and the President may affix the seal of
the corporation to any instrument requiring the same. In the absence or
disability of the Chairman of the Board, or in the event that for any reason it
is impracticable for the Chairman to act personally, the President shall have
the powers and duties of the Chairman, including the responsibility to preside
at all meetings of stockholders and of the Board of Directors in the absence of
the Chairman of the Board. In the performance of all the duties hereunder, the
President shall be subject to the supervision of, and shall report to, the Board
of Directors.
Section 8. The Vice-Presidents. In the absence of the President or in the
event of the President's inability or refusal to act, the Vice-President (or in
the event there be more than one Vice-President, the Vice-Presidents in the
order designated, or in the absence of any designation, then in the order of
their election) shall perform the duties of the President, and when so acting,
shall have the powers of and be subject to all the restrictions upon the
President. The Vice-President shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
Section 9. The Secretary. The Secretary shall attend all meetings of the
Board of Directors and its Committees and all meetings of the stockholders and
record all the proceedings of all such meetings in a book to be kept for that
purpose. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the Board of Directors and its Committees, and shall
perform such other duties, and have such other powers as may be prescribed by
the Board of Directors or President, under whose supervision he shall be. The
Secretary shall have custody of the corporate seal of the corporation and the
Secretary or Assistant Secretary shall have the authority to affix the same to
any instrument requiring it and when so affixed, it may be attested by the
Secretary's signature or by the signature of such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix the seal
of the corporation and to attest the affixing by the signature of such officer.
Section 10. The Assistant Secretary. The Assistant Secretary, or if there
may be more than one, the Assistant Secretaries in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Secretary, or at the Secretary's
request, or in the event of the Secretary's inability or refusal to act, or if
the office of secretary is vacant, perform the duties and exercise the powers of
the Secretary and shall perform such other duties and have such other powers as
the Board of Directors may from time to time prescribe.
Section 11. The Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors or its Executive Committee. The Treasurer shall disburse the funds of
the corporation as may be ordered by the Board of Directors or its Executive
Committee, or as he may deem appropriate, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all transactions of the Treasurer.
Section 12. Bonding of Treasurer. If required by the Board of Directors,
the Treasurer shall give the corporation a bond (which shall be renewed every
six years) in such sum and with such surety or sureties as
5
<PAGE> 6
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of the Treasurer's office and for the restoration of the corporation,
in case of the Treasurer's death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in the possession or under the control of the Treasurer belonging to the
corporation.
Section 13. The Assistant Treasurer. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Treasurer, or at the Treasurer's
request, or, in the event of his inability or refusal to act, perform the duties
and exercise the powers of the Treasurer and shall perform such other duties and
have such other powers as the Board of Directors may from time to time
prescribe.
Section 14. The Controller. The Controller shall be the Chief Accounting
Officer of the corporation and shall perform such duties and exercise such
powers as are ordinarily performed or exercised by the Controller of a
corporation and shall perform such other duties and have such other powers as
the Board of Directors may from time to time prescribe.
Section 15. The Assistant Controller. The Assistant Controller, or if there
be more than one, the Assistant Controllers in the order determined by the Board
of Directors (or if there be no such determination, then in order of their
election), shall, in the absence of the Controller or at the Controller's
request, or in the event of his inability or refusal to act, perform the duties
and exercise the powers of the Controller and shall perform such other duties
and have such other powers as the Board of Directors may from time to time
prescribe.
Section 16. The General Counsel. The General Counsel shall be the Chief
Legal Officer of the corporation and shall act as legal advisor to the Board of
Directors and officers. The General Counsel shall perform such duties and
exercise such powers as are ordinarily performed or exercised by the General
Counsel of a corporation and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 17. The Associate General Counsel. The Associate General Counsel,
of if there be more than one, the Associate General Counsels either in the order
determined by the Board of Directors (or if there be no such determination, then
in the order of their election) or with such allocations of the duties and
powers to, between or among them as may be fixed in a manner authorized by the
Board of Directors, shall in the absence of the General Counsel, or at the
General Counsel's request, or in the event of his inability or refusal to act,
or if the office of General Counsel is vacant, perform the duties and exercise
the powers of the General Counsel and shall perform such other duties and have
such other powers as the Board of Directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Certificates. Every holder of stock in the corporation shall be
entitled to have a certificate, signed in the name of the corporation by the
Chairman of the Board of Directors, or the President or a Vice-President and the
Treasurer or an Assistant Treasurer, or the Secretary or Assistant Secretary of
the corporation, certifying the number of shares owned by him in the
corporation.
Section 2. Signatures on Stock Certificates. Where a certificate is
countersigned (i) by a transfer agent other than the corporation or its
employee, or (ii) by a registrar other than the corporation or its employee, the
signatures of the officers of the corporation may be facsimiles. In case any
officer who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such
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<PAGE> 7
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Section 4. Transfers of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 5. Fixing Record Date. In order that the corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 6. Registered Stockholders. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the corporation,
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the Certificate of Incorporation.
Section 2. Payment of Dividends. Before payment of any dividend, there may
be set aside out of any funds of the corporation available for dividends such
sum or sums as the Directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the Directors shall think conducive to the interest of
the corporation, and the Board of Directors may modify or abolish any such
reserve in the manner in which it was created.
Section 3. Annual Statement. The Board of Directors shall prepare and
furnish to each stockholder prior to each annual meeting an annual report, and
shall present at each annual meeting and at any special meeting of the
stockholders when called for by vote of the stockholders, a full and clear
statement of the business and condition of the corporation.
Section 4. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the Board of Directors.
Section 6. Seal. The corporate seal shall have inscribed thereon the name
of the corporation, the year of its organization and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced otherwise.
7
<PAGE> 8
ARTICLE VIII
AMENDMENTS
Section 1. Amendment of By-laws. These By-laws may be altered, amended or
repealed or new by-laws may be adopted by the stockholders or by the Board of
Directors at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal, or adoption of new
by-laws be contained in the notice of such special meeting.
ARTICLE IX
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings other Than
Those by or in the Right of the Corporation. Subject to Section 3 of this
Article IX, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that she or he is or was a director or officer, or is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by her or him in connection with such action,
suit or proceeding if she or he acted in good faith and in a manner she or he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe her or his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which she
or he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that her or his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the
Right of the Corporation. Subject to Section 3 of this Article IX, the
corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that she or he is or was a director or officer of the corporation, or is or
was serving at the request of the corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
her or him in connection with the defense or settlement of such action or suit
if she or he acted in good faith and in a manner she or he reasonably believed
to be in or not opposed to the best interests of the corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under this
Article IX (unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director or officer is proper in the circumstances because she or he has met the
applicable standard of conduct set forth in Section 1 or Section 2, of this
Article IX, as the case may be. Such determination shall be made (i) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such a quorum is
not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders. To the extent, however, that a director or officer of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue or
matter therein, she or he shall be indemnified against expenses (including
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<PAGE> 9
attorneys' fees) actually and reasonably incurred by her or him in connection
therewith, without the necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article IX, a person shall be deemed to have acted in good
faith and in a manner she or he reasonably believed to be in or not opposed to
the best interests of the corporation, or, with respect to any criminal action
or proceeding, to have had no reasonable cause to believe her or his conduct was
unlawful, if her or his action is based on the records or books of account of
the corporation or another enterprise, or on information supplied to her or him
by the officers of the corporation or another enterprise in the course of their
duties, or on the advice of legal counsel for the corporation or another
enterprise or on information or records given or reports made to the corporation
or another enterprise by an independent certified public accountant or by an
appraiser or other expert selected with reasonable care by the corporation or
another enterprise. The term "another enterprise" as used in this Section 4
shall mean any other corporation or any partnership, joint venture, trust or
other enterprise of which such person is or was serving at the request of the
corporation as a director or officer. The provisions of this Section 4 shall not
be deemed to be exclusive or to limit in any way the circumstances in which a
person may be deemed to have met the applicable standard of conduct set forth in
Section 1 or 2 of this Article IX, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article IX, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to any court of competent jurisdiction in the State of
Delaware for indemnification to the extent otherwise permissible under Sections
1 and 2 of this Article IX. The basis of such indemnification by a court shall
be a determination by such court that indemnification of the director or officer
is proper in the circumstances because she or he has met the applicable
standards of conduct set forth in Sections 1 and 2 of this Article IX, as the
case may be. Notice of any application for indemnification pursuant to this
Section 5 shall be given to the corporation promptly upon the filing of such
application.
Section 6. Expenses Payable in Advance. Expenses incurred in defending or
investigating a threatened or pending action, suit or proceeding may be paid by
the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that she or he
is not entitled to be indemnified by the corporation as authorized in this
Article IX.
Section 7. Non-exclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or granted
pursuant to this Article IX shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any by-law, agreement, contract, vote of stockholders or disinterested
directors or pursuant to the direction (howsoever embodied) of any court of
competent jurisdiction or otherwise, both as to action in her or his official
capacity and as to action in another capacity while holding such office, it
being the policy of the corporation that indemnification of the persons
specified in Sections 1 and 2 of this Article IX shall be made to the fullest
extent permitted by law. The provisions of this Article IX shall not be deemed
to preclude the indemnification of any person who is not specified in Sections 1
or 2 of this Article IX but whom the corporation has the power of obligation to
indemnify under the provisions of the General Corporation Law of the State of
Delaware, or otherwise.
Section 8. Insurance. The corporation may purchase and maintain insurance
on behalf of any person who is or was a director or officer of the corporation,
or is or was serving at the request of the corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against her or him and incurred by her or him in
any such capacity, or arising out of her or his status as such, whether or not
the corporation would have the power or the obligation to indemnify her or him
against such liability under the provisions of this Article IX.
Section 9. Meaning of "Corporation" for Purposes of Article IX. For
purposes of this Article IX, references to "the corporation" shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors or officers so
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<PAGE> 10
that any person who is or was a director or officer of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director or officer of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article IX with respect to the resulting or surviving corporation as she
or he would have with respect to such constituent corporation if its separate
existence had continued.
Section 10. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this section shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director or officer shall inure
to the benefit of the heirs, executors and administrators of such a person.
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<PAGE> 1
EXHIBIT 10.17(B)
AMENDED & RESTATED
AGREEMENT
Rod F. Dammeyer ("Executive") and Anixter International Inc. ("Company")
hereby agree as follows:
1. Company will employ Executive and Executive will be employed by Company
as an executive officer of Company and such of its subsidiaries as the Company
shall designate from time to time. Designation of a subsidiary of the Company as
an employer of Executive ("Designated Employer") shall not be affected by
whether that employer continues to be a subsidiary of the Company. Executive
shall be free to engage in other business activities as long as such activities
do not interfere with Executive's performance of his responsibilities under this
Agreement.
2. The term of employment under this Agreement shall begin on January 1,
1995 and shall end on the earlier of (a) the date specified in a written notice
by one party to the other, which date must be at least 2 years after the date
such notice is given, or (b) December 31, 2000.
3. Minimum compensation of Executive shall be as follows:
- Annual salary of $395,000 for 1995 and $325,000 thereafter.
- Annual bonus opportunity of 50% to 112.5% of salary with a target of
75% of salary.
- Such long-term incentive opportunities as the Compensation Committee of
the Board of Directors in its good faith judgment shall determine from
time to time to be appropriate.
- Medical, life insurance, disability, and financial planning benefits
equal to those currently provided by the Company or its subsidiary,
Anixter Inc., as those benefits may be modified from time to time,
provided that Executive's salary shall be deemed to be $625,000 per
year for purposes of determining the level of his life insurance and
disability benefits.
- A retirement benefit under the Company's Supplemental Executive
Retirement Plan provided that Executive's Final Average Compensation
shall be deemed to be $1,100,000 for purposes of determining the level
of his benefits under that plan.
4. Offset against the compensation otherwise payable to Executive by the
Company shall be the compensation payable to the Executive by any Designated
Employer.
5. Upon completion of his employment pursuant to this Agreement and the
concurrent or subsequent termination, by resignation or otherwise, of his
employment by the Company, but not otherwise not withstanding the provisions of
the Agreement between the parties, dated January 1, 1992, Executive (a) except
in the case of any option which expressly states it is not subject to this
Agreement, shall be fully vested in all options granted to him by the Company,
shall be protected by adjustment of exercise prices and number of covered shares
against dilution by any extraordinary cash dividends or other actions as
provided in the warrants previously granted directors of the Company, and shall
have until the earlier of the specific expiration date stated in each option
granted to him by the Company or the date two years after termination of his
employment to exercise that option; (b) shall receive a vested benefit in the
Company's Supplemental Executive Retirement Plan as if a "change of control"
shall have occurred at such time; and (c) shall receive the split dollar life
insurance policy on his life now owned by the Company if the policy has not
previously been delivered to him.
6. Performance of the obligations under this Agreement shall discharge the
Company and any Designated Employer from any other obligation they may have to
Executive in connection with any termination of his employment by the Company
and any Designated Employer.
7. If necessary, to avoid the limitation of Section 162(m) of the Internal
Revenue Code on the deductibility by the Company of the Executive's
compensation, a sufficient amount of the Executive's bonus
<PAGE> 2
may be deferred, with fair interest, to such time that the deduction for the
Executive's compensation is not so limited.
Initially executed as of February 9, 1995 and amended as of February 8, 1996.
ANIXTER INTERNATIONAL INC.
By /s/ JAMES E. KNOX /s/ ROD F. DAMMEYER
- ------------------------------------ ------------------------------------
James E. Knox Rod F. Dammeyer
<PAGE> 1
EXHIBIT 10.18
TERMS OF ARRANGEMENT
WITH JIM KNOX
1. Jim will serve as an officer and general counsel of Itel Corporation and
such of its subsidiaries as he shall be requested to so serve until such time as
the Company or the subsidiaries shall determine otherwise. It is contemplated
that approximately half of Jim's time will be required for these services and
that he will be free to perform legal work for others for the remainder of his
time.
2. His compensation and benefits will be determined from time to time by
the Company. It has initially been determined that his salary will be $300,000
per year, he will not participate in the Management Incentive Plan, he will
participate in future long-term incentives at 50% of the rate for executives at
his level and his other benefits will continue on their current terms except as
adjusted for the salary provided above and as otherwise modified herein.
3. Upon the termination of Jim's employment for any reason except by his
voluntary act
(a) he (or his estate) will be paid at his election in a lump sum or
in 24 equal monthly payments (or in any combination thereof) a total of
$990,000 plus an amount equal to interest thereon from the effective date
of this arrangement to the date of such termination, compounded at the end
of each calendar quarter, at a rate equal to the Company's average cost of
borrowed funds for each such quarter;
(b) he (or his surviving spouse, if he dies after his Early Retirement
Date) will be entitled to supplemental pension payments as provided below.
The amount and timing of such payments will be determined in accordance
with the present terms of the Itel Corporation Supplemental Executive
Retirement Plan (without regard to any subsequent changes in those terms or
the discontinuance of the plan) with the following modifications: It will
be assumed that Jim's Compensation for 1992 and the period thereafter was
at the annual rate of $600,000; that his period of Service for the period
after October 31, 1992 was two years plus the period of his employment
after October 31, 1992; that if the resulting period of Service, including
Service prior to November 1, 1992, is less than 15 years then Jim's payment
will be prorated based on a fraction the numerator of which is such period
of Service and the denominator of which is 15 years; and that he is
eligible for a reduced monthly benefit commencing any month after his Early
Retirement Date even if his Termination of Service shall occur prior
thereto;
(c) he (or his estate) will be fully vested in all stock options
granted to him by the Company previous to such termination and each such
option will be exercisable for a period after such termination equal to
four years less the number of months, if any, for which monthly payments
are not made pursuant to paragraph (a) above because a lump sum payment has
been made pursuant to that paragraph, but not to exceed the stated outside
expiration date of the option;
(d) for the period, if any, that he is electing to have the payment
provided by paragraph (a) above paid in monthly installments, he will be
entitled to medical coverage and life insurance to the extent such benefits
are then being made available to other executives of the Company; and
(e) he (or his estate) will receive the split dollar life insurance
policy (or the proceeds thereof) on his life now owned by the Company if
the policy has not previously been transferred to him.
The termination of Jim's employment shall not be considered to be by his
voluntary act if his employment is terminated by (a) his death, (b) his
disability, (c) his resignation following a reduction without his consent
in his compensation or benefits without a substantial reason therefor, such
as Jim not being required for approximately half his time over an extended
period of time, or (d) his retirement at any time after his 60th birthday.
<PAGE> 2
4. This arrangement shall be effective as of November 1, 1992.
ITEL CORPORATION
<TABLE>
<S> <C>
By /s/ ROD F. DAMMEYER /s/ JAMES E. KNOX
----------------------------------------- --------------------------------------------
Its President James E. Knox
</TABLE>
<PAGE> 1
EXHIBIT 10.24
INDEMNITY AGREEMENT
AGREEMENT, between Anixter International Inc., a Delaware corporation (the
"Company"), and (the "Indemnitee") effective as of October 15, 1986, or such
later date as Indemnitee became an officer or director of the Company.
WHEREAS, it is essential to the Company to retain and attract as directors
and officers the most capable persons available;
WHEREAS, Indemnitee is a director or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk of
litigation and other claims being asserted against directors and officers of
public companies in today's environment;
WHEREAS, the by-laws of the Company require the Company to indemnify and
advance expenses to its directors and officers as provided therein and the
Indemnitee has been serving and continues to serve as a director or officer of
the Company in part in reliance on such by-laws;
WHEREAS, in recognition of Indemnitee's need for substantial protection
against personal liability in order to enhance Indemnitee's continued service to
the Company in an effective manner, and Indemnitee's reliance on the aforesaid
by-laws, and in part to provide Indemnitee with specific contractual assurance
the protection promised by such by-laws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation of such
by-laws or any change in the composition of the Company's Board of Directors or
acquisition transaction relating to the Company), the Company wishes to provide
in this Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the full extent (whether partial or complete) permitted by law and
as set forth in this Agreement, and, to the extent insurance is maintained, for
the continued coverage of Indemnitee under the Company's directors' and
officers' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. Certain Definitions:
(a) Change in Control: shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
or a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power represented by the
Company's then outstanding Voting Securities, except, (A) a person who as
of October 15, 1986 owns 20% or more of the total voting power represented
by the Company's outstanding Voting Securities (a "20% Group") shall not be
deemed to have caused a change in control until such person becomes the
beneficial owner, directly or indirectly, of more than 50% of the then
outstanding Voting Securities, or (B) a person who becomes beneficial
owner, directly or indirectly, of securities of the Company representing
20% or more of the total voting represented by the Company's then
outstanding Voting Securities shall not be deemed to have caused a change
in control unless such person also owns more of the total voting power
represented by the Company's outstanding Voting Securities than is owned by
a 20% Group at the time such person becomes owner of such securities, or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors or nomination
for election by the Board of Directors or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
<PAGE> 2
previously so approved, cease for any reason to constitute a majority
thereof, or (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 80% of the total voting power
represented by the Voting Securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all
or substantially all the Company's assets.
(b) Claim: any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether conducted by the
Company or any other party, that Indemnitee in good faith believes might
lead to the institution of any such action, suit or proceeding, whether
civil, criminal, administrative, investigative or other.
(c) Expenses: include attorneys' fees and all other costs, expenses
and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Claim relating
to any Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence related to the fact
that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or is or was serving at the request of the Company as a
director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, or by reason of anything done or not done by Indemnitee
in any such capacity.
(e) Potential Change in Control: shall be deemed to have occurred if
(i) the Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control; (ii) any person (including
the Company) publicly announces an intention to take or to consider taking
actions which if consummated would constitute a Change in Control; (iii)
any person, other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company, who is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 9.5% or more of the combined voting power of the
Company's then outstanding Voting Securities, increases his beneficial
ownership of such securities by 5% or more over the percentage so owned by
such person on the date hereof, except, (A) a 20% Group which increases its
beneficial ownership of such securities by 5% or more over the percentage
so owned on the date hereof shall not be deemed to have caused a potential
change in control, unless such increase results in such person becoming the
beneficial owner, directly or indirectly, of more than 50% of the then
outstanding Voting Securities, or (B) a person who is or becomes the
beneficial owner, directly or indirectly, of the voting power representing
9.5% or more of the Company's Voting Securities increases his beneficial
ownership of such securities by 5% or more over the percentage so owned by
such person on the date hereof shall not be deemed to have caused a
potential change in control to have occurred unless, including such
increase in ownership, such person owns more of the voting power
represented by the Company's Voting Securities than is owned by a 20% Group
at the time such person increases his ownership; or (iv) the Board adopts a
resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control has occurred.
(f) Reviewing Party: any appropriate person or body consisting of a
member or members of the Company's Board of Directors or any other person
or body appointed by the Board (including the special, independent counsel
referred to in Section 3) who is not a party to the particular Claim for
which Indemnitee is seeking indemnification.
(g) Voting Securities: any securities of the Company which vote
generally in the election of directors.
<PAGE> 3
2. Basic Indemnification Arrangement. (a) In the event Indemnitee was, is
or becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, a Claim by reason of (or
arising in part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law as soon as practicable but in
any event no later than thirty days after written demand is presented to the
Company, against any and all Expenses, judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of such Expenses, judgements, fines,
penalties or amounts paid in settlement) of such Claim. Notwithstanding anything
in this Agreement to the contrary, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of the
Company unless the Company has joined in or consented to the initiation of such
Claim. If so requested by Indemnitee, the Company shall advance (within two
business days of such request) any and all Expenses to Indemnitee (an "Expense
Advance").
(b) Notwithstanding the foregoing, (i) the obligations of the Company under
Section 2(a) shall be subject to the condition that the Reviewing Party shall
not have determined (in written opinion, in any case in which the special,
independent counsel referred to in Section 3 hereof is involved) that Indemnitee
would not be permitted to be indemnified under applicable law, and (ii) the
obligation of the Company to make an Expense Advance pursuant to Section 2(a)
shall be subject to the condition that, if, when and to the extent that the
Reviewing Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed
by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided, however, that if Indemnitee has commenced legal
proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination made by
the Reviewing Party that Indemnitee would not be permitted to be indemnified
under applicable law shall not be binding and Indemnitee shall not be required
to reimburse the Company for Any Expense Advance until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). If there has not been a Change in
Control, the Reviewing Party shall be selected by the Board of Directors, and if
there has been such a Change in Control, the Reviewing Party shall be the
special, independent counsel referred to in Section 3 hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation in any court in the state of domicile or Delaware having subject
matter jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination by
the Reviewing Party otherwise shall be conclusive and binding on the Company and
Indemnitee.
3. Change in Control. The Company agrees that if there is a Change in
Control of the Company (other than a Change in Control which has been approved
by a majority of the Company's Board of Directors who were directors immediately
prior to such Change in Control) then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or Company by-law now or
hereafter in effect relating to Claims for Indemnifiable Events, the Company
shall seek legal advice only from special, independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld), and who has not otherwise performed services for the Company within
the last five years (other than in connection with such matters) or Indemnitee.
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law. The Company agrees to pay the
reasonable fees of the special, independent counsel referred to above and to
fully indemnify such counsel against any and all expenses (including attorney's
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
4. Establishment of Trust. In the event of a Potential Change in Control,
the Company shall, upon written request by Indemnitee, create a Trust for the
benefit of the Indemnitee and from time to time upon written request of
Indemnitee shall fund such Trust in an amount sufficient to satisfy any and all
Expenses
<PAGE> 4
reasonably anticipated at the time of each such request to be incurred in
connection with investigating, preparing for and defending any Claim relating to
an Indemnifiable Event, and any and all judgments, fines, penalties and
settlement amounts of any and all Claims relating to an Indemnifiable Event from
time to time actually paid or claimed, reasonably anticipated or proposed to be
paid. The amount or amounts to be deposited in the Trust pursuant to the
foregoing funding obligation shall be determined by the Reviewing Party, in any
case in which the special, independent counsel referred to above is involved.
The terms of the Trust shall provide that upon a Change in Control (i) the
Trustee shall advance, within two business days of a request by the Indemnitee,
any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to
reimburse the Trust under the circumstances under which the indemnitee would be
required to reimburse the Company under Section 2(b) of this Agreement), (ii)
the Trust shall continue to be funded by the Company in accordance with the
funding obligation set forth above, (iii) the Trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (iv) all unexpended
funds in such Trust shall revert to the Company upon a final determination by
the Reviewing Party or a court of competent jurisdiction, as the case may be,
that the Indemnitee has been fully indemnified under the terms of this
Agreement, or that it is no longer anticipated that expenses will be incurred or
amounts will be paid in connection with the Indemnifiable Event. The Trustee
shall be chosen by the Indemnitee. Nothing in this Section 4 shall relieve the
Company of any of its obligations under this Agreement.
5. Indemnification for Additional Expenses. The Company shall indemnify
against any and all expenses (including attorneys' fees) and, if requested by
Indemnitee, shall (within two business days of such request) advance such
expenses to Indemnitee, which are incurred by Indemnitee in connection with any
claim asserted against or action brought by Indemnitee for (i) indemnification
or advance payment of Expenses by the Company under this Agreement or any other
agreement or Company by-law now or hereafter in effect relating to Claims for
Indemnifiable Events and/or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.
7. No Presumption. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.
8. Non-exclusivity, Etc. The rights of the Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Company's by-laws or
the Delaware General Corporation Law or otherwise. To the extent that a change
in the Delaware General Corporation Law (whether by statute or judicial
decision) permits greater indemnification by agreement than would be afforded
currently under the Company's by-laws and this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.
9. Liability Insurance. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance,
Indemnitee shall be covered by such policy or policies, in accordance
<PAGE> 5
with its or their terms, to the maximum extent of the coverage provided under
such policy or policies in effect for any other Company director or officer.
10. Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.
11. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.
12. No Duplication of Payments. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, by-law or otherwise) of the amounts otherwise
indemnifiable hereunder.
13. Binding Effect, Etc. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or of any
other enterprise at the Company's request.
14. Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.
Executed as of the above stated effective date.
Anixter International Inc.
By
--------------------------------------
Name:
Title:
--------------------------------------
[Indemnitee]
<PAGE> 1
EXHIBIT 10.26
ANIXTER INTERNATIONAL INC.
1996 STOCK INCENTIVE PLAN
1. Purpose and Effective Date. Anixter International Inc. (the
"Company")has established this 1996 Stock Incentive Plan (the "Plan") to
facilitate the retention and continued motivation of key employees, consultants
and, if included, non-employee directors and to align more closely their
interests with those of the Company and its stockholders. The effective date of
the Plan shall be February 8, 1996 subject to approval of the Company's
shareholders at the 1996 Annual Meeting.
2. Administration. The Plan shall be administered by the Compensation
Committee of the Company's Board of Directors or such other Board committee as
the Board may designate (the "Committee"), provided that the Committee
administering the Plan shall be comprised of directors who are both
"disinterested" as provided by the regulations of the Securities and Exchange
Commission and "outside" as provided by Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). The Committee may delegate all or any
portion of its powers and responsibilities under the Plan to one or more
officers or directors of the Company to the extent that such powers and
responsibilities relate to participation in the Plan by persons who are not
subject to section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act"). The Committee has the authority and responsibility for the
interpretation, administration and application of the provisions of the Plan,
and the Committee's interpretations of the Plan and all actions taken by it and
determinations made by it shall be binding on all persons. No Board or Committee
member shall be liable for any determination, decision or action made in good
faith with respect to the Plan.
3. Shares Subject to Plan. A total of 2,500,000 shares of Common Stock of
the Company ("Shares"), par value $1 per share, may be issued pursuant to the
Plan. The Shares may be authorized but unissued Shares or Shares reacquired by
the Company and held in its treasury. Grants of incentive awards under the Plan
will reduce the number of Shares available thereunder by the maximum number of
Shares obtainable under such grants. If all or any portion of the Shares
otherwise subject to any grant under the Plan are not delivered for any reason
including, but not limited to, the cancellation, expiration or termination of
any option right or unit, the settlement of any award in cash, the forfeiture of
any restricted stock, or the repurchase of any Shares by the Company for the
cost of the employee's investment in the Shares, such number of Shares shall be
available again for issuance under the Plan. The number of Shares covered by or
specified in the Plan and the purchase price for shares under any outstanding
awards, may be adjusted proportionately by the Committee for any increase or
decrease in the number of issued Shares resulting from a subdivision or
consolidation of Shares, reorganization, recapitulation, spinoff, payment of
stock dividends on the Shares or any other increase or decrease in the number of
issued Shares made without regular receipt of consideration by the Company.
4. Eligibility. All key employees and active consultants of the Company and
its subsidiaries and its parents are eligible to be selected to receive a grant
under the Plan by the Committee. Non-employee directors of the Company will also
be eligible to receive grants under the Plan, if and when such eligibility will
not make them ineligible to serve on the Committee. The Committee may condition
eligibility under the Plan or participation under the Plan and any grant or
exercise of an incentive award under the Plan to such conditions, limitations or
restrictions as the Committee determines to be appropriate for any reason. No
person may be granted in any period of two consecutive calendar years, awards
covering more than 500,000 Shares.
5. Incentive Awards. The Committee may grant incentive awards to eligible
persons in the form of stock options (including incentive stock options within
the meaning of section 422 of the Code), stock grants, restricted stock, stock
appreciation rights, performance shares and units and dividend equivalent
rights, and reload options to purchase additional Shares if Shares are delivered
in payment of any other options, and shall establish the number of Shares
subject to each such grant and the terms thereof, including any adjustments for
reorganizations and dividends, subject to the following:
(a) All awards granted under the Plan shall be evidenced by agreements
in such form and containing such terms and conditions not inconsistent with
the Plan as the Committee shall prescribe.
<PAGE> 2
(b) Any grant under the Plan to any person who is subject to section
16(a) of the Exchange Act shall not be transferable other than by will or
the laws of descent and distribution and during such person's lifetime
shall be exercisable only by him or by his guardian or legal
representative, except if, when and to the extent the discretion of the
Committee to provide for transferability does not affect the "exempt"
status under section 16 of grants made pursuant to the Plan.
(c) The exercise price of any option or stock appreciation right shall
not be less than 85% of the fair market value of a corresponding number of
Shares as of the date of grant, except that such minimum option price may
be reduced (but not below par value) in the case of options granted in
consideration of a reduction in compensation by the amount of such
reduction.
6. Administration of the Plan. The Board of Directors or the Committee may
from time to time suspend, terminate, revise or amend the Plan or the terms of
any grant in any respect whatsoever, provided that, without the approval of the
stockholders of the Company, no such revision or amendment may increase the
number of Shares subject to the Plan, expand those eligible for grants under the
Plan or change the qualification for membership on the Committee.
<PAGE> 1
EXHIBIT 10.27
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
ANIXTER INTERNATIONAL INC.
STOCK OPTION TERMS
1. DEFINITIONS
(a) "Agreement" shall mean a stock option grant made subject to these
Terms.
(b) "Board" shall mean the Board of Directors of the Corporation, as
constituted from time to time, or any committee of that board authorized to act
on matters relating to stock options.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Corporation" shall mean Anixter International Inc., a Delaware
corporation.
(e) "Date of Grant" shall mean the date as of which an Agreement is
effective as stated in the Agreement.
(f) "Employee" shall mean an individual who is an employee (within the
meaning of Section 3401(c) of the Code and the regulations thereunder) of the
Corporation or of a Subsidiary or of a Parent.
(g) "Employment Termination" shall mean the termination of the Optionee's
status as an Employee for any reason.
(h) "Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified in the Agreement.
(i) "Nonstatutory Stock Option" shall mean an option not described in
Sections 422(b), 422A(b), 432(b), or 424(b) of the Code.
(j) "Option" shall mean a Nonstatutory Stock Option granted pursuant to an
Agreement.
(k) "Option Period" shall mean the term of an Option, as specified in an
Agreement.
(l) "Parent" shall mean any corporation which owns at least fifty percent
(50%) of the total combined voting power of all classes of stock in the
Corporation or in another Parent.
(m) "Partial Exercise" shall mean an exercise with respect to less than all
of the remaining Shares exercisable pursuant to an Option.
(n) "Terms" shall mean these Anixter International Inc. Stock Option Terms.
(o) "Purchase Price" shall mean the Exercise Price multiplied by the number
of Shares with respect to which an Option is exercised.
(p) "Securities Act" shall mean the Securities Act of 1933, as amended.
(q) "Share" shall mean one (1) share of Stock as adjusted in accordance
with Paragraph 4 of these Terms (if applicable).
(r) "Stock" shall mean the Common Stock of the Corporation.
(s) "Subsidiary" shall mean any corporation, if the Corporation and/or one
or more other Subsidiaries own at least fifty percent (50%) of the total
combined voting power of all classes of outstanding stock in such corporation.
<PAGE> 2
2. RIGHT TO EXERCISE
Subject to the conditions set forth below and the exceptions set forth in
Paragraphs 3 and 4 of these Terms, an Option shall become exercisable as
specified in the Agreement. No partial Exercise of an Option may be made for a
number of Shares having an aggregate value of less than $2,500.
3. TERM OF OPTION
An option shall expire on the date specified in the Agreement. In addition,
an Option shall expire upon the termination of the Optionee's service as an
Employee, if such termination occurs first, subject to the following provisions:
(a) If the Employment Termination is caused by the Optionee's death,
then the Option (to the extent not previously exercised) may be exercised
within twelve (12) months after the Optionee's death by the Optionee's
executors or administrators or by any person or persons who have acquired
the Option directly from the Optionee by bequest or inheritance
("Optionee's Representative"), but only to the extent that the Option was
exercisable under Paragraph 2 of these Terms on date of death.
(b) If Employment Termination is caused by any reason other than death
or for cause, then the Option (to the extent not previously exercised) may
be exercised within a period of ninety (90) days after the termination, or
if the Employment Termination is for cause, then the Option shall terminate
on the date of such Employment Termination, but in each case only to the
extent that the option was exercisable under Paragraph 2 of these Terms on
the date of the termination. If the Optionee dies within such period, the
Option (to the extent not previously exercised) may be exercised within
twelve (12) months after the Optionee's death by the Optionee's
Representative, but only to the extent that the option was exercisable
under Paragraph 2 of these Terms on the date of the termination.
Any other provision of an Agreement or these Terms to the contrary
notwithstanding, an Option shall not be exercisable after the expiration
date set forth in the Agreement.
For purposes of this Paragraph 3, the Employee relationship shall be
deemed to continue while the Optionee is on military leave, sick leave or
other bona fide leave of absence (to be determined in the sole discretion
of the Board).
4. SHARES AND ADJUSTMENT
The Exercise Price in effect at any time and the number and kind of
securities purchasable upon exercise of an Option shall be subject to adjustment
from time to time upon the happening of certain events, as follows:
(a) In case the Corporation shall (i) pay a dividend in Shares of
Stock or make a distribution in Shares of Stock to its Stockholders, (ii)
subdivide its outstanding Shares of Stock, (iii) combine its outstanding
Shares of Stock into a smaller number of Shares of Stock or (iv) issue by
reclassification of its Shares of Stock other securities of the Corporation
(including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing corporation), the number
of Shares purchasable upon exercise of an Option immediately prior thereto
shall be adjusted so that the Optionee shall be entitled to receive the
kind and number of Shares or other securities of the Corporation which the
Optionee would have owned or have been entitled to receive after the
happening of any of the events described above, had the Option been
exercised immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this Paragraph
(a) shall become effective immediately after the effective date of such
event retroactive to immediately after the record date, if any, for such
event.
(b) In case the Corporation shall issue rights, options, or warrants
to all holders of its Shares of Stock, without any charge to such holders,
entitling them (for a period expiring within 45 days after the record date
mentioned below in this Paragraph (b)) to subscribe for or purchase Shares
of Stock at a price per share which is lower at the record date mentioned
below than the then Current Market Price per Share of Stock (as defined in
Paragraph (d) below), the number of Shares thereafter purchasable upon
2
<PAGE> 3
the exercise of an Option shall be determined by multiplying the number of
Shares theretofore purchasable by a fraction, of which the numerator shall
be the number of Shares of Stock outstanding on such record date plus the
number of additional Shares of Stock offered for subscription or purchase,
and of which the denominator shall be the number of Shares of Stock
outstanding on such record date plus the number of shares which the
aggregate offering price of the total number of Shares of Stock so offered
would purchase at the then Current Market Price per Share of Stock. Such
adjustment shall be made whenever such rights, options or warrants are
issued, and shall become effective retroactively immediately after the
record date for the determination of shareholders entitled to receive such
rights, options or warrants.
(c) In case the Corporation shall distribute to all holders of Shares
of Stock (i) shares of stock other than Stock, (ii) evidences of its
indebtedness, (iii) assets or cash (excluding ordinary cash dividends
payable out of consolidated earnings or retained earnings and dividends or
distributions referred to in Paragraph (a) above), or (iv) rights, options
or warrants or convertible or exchangeable securities containing the right
to subscribe for or purchase Shares of Stock (excluding those referred to
in Paragraph (b) above), then in each case the number of Shares thereafter
purchasable upon the exercise of an Option shall be determined by
multiplying the number of Shares theretofore purchasable upon the exercise
of the Option, by a fraction, the numerator of which shall be the Current
Market Price per Share of Stock on the record date mentioned below in this
Paragraph (c), and the denominator of which shall be the Current Market
Price per Share of Stock on such record date, less the then fair value of
the portion of the shares of stock other than Stock or assets or evidences
of indebtedness so distributed or of such subscription rights, options or
warrants, or of such convertible or exchangeable securities applicable to
one Share of Stock. Such adjustment shall be made whenever any such
distribution is made, and shall become effective on the date of
distribution retroactive to immediately after the record date for the
determination of shareholders entitled to receive such distribution.
(d) For the purpose of any computation under Paragraphs (b) and (c)
above, the Current Market Price per Share of Stock at any date shall be the
average of the daily closing prices for 15 consecutive trading days
commencing 20 trading days before the date of such computation. The closing
price for each day shall be the last reported sale price or, in case no
such reported sale takes place on such day, the average of the closing bid
and asked prices for such day, in either case on the principal national
securities exchange on which the Shares are listed or admitted to trading,
or if they are not listed or admitted to trading on any national securities
exchange, but are traded in the over-the-counter market, the closing sale
price of the Stock, or in case no sale is publicly reported, the average of
the representative closing bid and asked quotations for the Stock on NASDAQ
or any comparable system, or if the Stock is not listed in NASDAQ or
comparable system, the closing sale price of the Stock, or in case no sale
is publicly reported, the average of the closing bid and asked prices as
furnished by two members of the National Association of Securities Dealers,
Inc. selected from time to time by the Corporation for that purpose, or if
there is no public market for the Stock, the fair market value of the Stock
as determined by Duff & Phelps Financial Consulting Company, or another
independent appraisal firm selected as a replacement therefore by the
Committee.
(e) No adjustment in the number of Shares purchasable hereunder shall
be required unless such adjustment would require an increase or decrease of
at least 1% in the number of Shares purchasable upon the exercise of an
Option; provided, however, that any adjustments which by reason of this
Paragraph (e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment, but not later than three
years after the happening of the specified event or events. All
calculations shall be made to the nearest one thousandth of a share.
Anything in these provisions to the contrary notwithstanding, the
Corporation shall be entitled, but shall not be required, to make such
changes in the number of Shares purchasable upon the exercise of an Option,
in addition to those required by this Paragraph 4, as it in its discretion
shall determine to be advisable in order that any dividend or distribution
in Shares of Stock, issuance of rights, warrants or options to purchase
Stock, or distribution of shares of stock other than Stock, evidences of
indebtedness or assets or cash (other than ordinary cash dividends out of
consolidated earnings or retained earnings) or convertible or exchangeable
3
<PAGE> 4
securities hereafter made by the Corporation to the holders of Stock shall
not result in any tax to the holders of Stock or securities convertible
into Stock.
(f) Whenever the number of Shares purchasable upon the exercise of an
Option is adjusted, as herein provided, the Exercise Price payable upon
exercise of the Option shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, of which the numerator
shall be the number of Shares purchasable upon the exercise of the Option
immediately prior to such adjustment, and of which the denominator shall be
the number of Shares so purchasable immediately thereafter.
(g) In the event that at any time, as a result of any adjustment made
pursuant to Paragraph (a) above, the Optionee shall become entitled to
purchase any shares of capital stock of the Corporation other than Shares
of Stock, thereafter the number of such other shares so purchasable upon
exercise of this Option and the Exercise Price of such shares shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Shares
contained in Paragraphs (a) through (f), inclusive, above, and Paragraphs
(h) through (k), inclusive, below, and the provisions of these Terms with
respect to Shares shall apply on like terms to such other shares.
(h) Upon the expiration of any rights, options, warrants or conversion
or exchange privileges, if any thereof shall not have been exercised, the
Exercise Price and the number of shares of Stock purchasable upon the
exercise of an Option shall, upon such expiration, be readjusted and shall
thereafter be such as it would have been had it been originally adjusted
(or had the original adjustment not been required, as the case may be) as
if (x) the only Shares of Stock so issued were the Shares of Stock, if any,
actually issued or sold upon the exercise of such rights, options, warrants
or conversion or exchange rights and (y) such Shares of Stock, if any, were
issued or sold for the consideration actually received by the Corporation
upon such exercise plus the aggregate consideration, if any, actually
received by the Corporation for the issuance, sale or grant of all such
rights, options, warrants or conversion or exchange rights whether or not
exercised; provided, however, that no such readjustment shall have the
effect of increasing the Exercise Price by an amount in excess of the
amount of adjustment initially made in respect of the issuance, sale or
grant of such rights, options, warrants or conversion or exchange rights.
(i) Whenever the number of Shares purchasable upon the exercise of an
Option or the Exercise Price of an Option is adjusted, as herein provided,
the Corporation shall promptly mail by first class mail, postage prepaid,
to the Optionee notice of such adjustment or adjustments. The Corporation
may retain a firm of independent public accountants (who may be the regular
accountants employed by the Corporation) to make any computation required
by these provisions and shall cause such accountants to prepare a
certificate setting forth the number of Shares purchasable upon the
exercise of the Option and the Exercise Price of such Shares after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was
made. Such certificate shall be conclusive of the correctness of such
adjustment and the Optionee shall have the right to inspect such
certificate during reasonable business hours.
(j) Except as provided in these provisions, no adjustment in respect
of any dividends shall be made during the term of an Option or upon the
exercise of an Option.
(k) In case of any consolidation of the Corporation with or merger of
the Corporation with or into another corporation or in case of any sale or
conveyance to another corporation of the property of the Corporation as an
entirety or substantially as an entirety, the Corporation or such successor
or purchasing corporation (or an affiliate of such successor or purchasing
corporation) as the case may be, agrees that the Optionee shall have the
right thereafter upon payment of the Exercise Price in effect immediately
prior to such action to purchase upon exercise of an Option the kind and
amount of shares and other securities and property (including cash) which
the Optionee would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale or conveyance had the option
been exercised immediately prior to such action. The provisions of this
Paragraph (k) shall similarly apply to successive consolidations, mergers,
sales or conveyances.
4
<PAGE> 5
5. EXERCISE OF OPTION
The Optionee or the Optionee's Representative may exercise an Option by
giving written notice to the Secretary of the Corporation. The notice shall
specify the election to exercise the Option, the number of Shares for which it
is being exercised and the form of payment. The notice shall be signed by the
person or persons exercising the option. In the event that the Option is being
exercised by the representative of the Optionee, the notice shall be accompanied
by proof satisfactory to the Corporation of the representative's right to
exercise the Option. The Optionee or the Optionee's Representative shall deliver
to the Secretary of the Corporation, at the time of giving the notice, payment
in the form which conforms to the applicable subparagraph of Paragraph 15 of
these Terms for the full amount of the Purchase Price.
The Corporation shall thereafter cause to be issued a certificate or
certificates for the Shares as to which an Option has been exercised, registered
in the name of the person exercising the Option (or in the names of such person
and his or her spouse as community property or as joint tenants with right of
survivorship).
6. WITHHOLDING TAXES
In the event that the Corporation determines that it is required to
withhold Federal, state or local tax as a result of the exercise of an Option,
the Optionee, as a condition to the exercise of the Option, shall make
arrangements satisfactory to the Corporation to enable it to satisfy such
withholding requirements. The Optionee shall also make arrangements satisfactory
to the Corporation to enable it to satisfy any withholding requirements that may
arise in connection with the disposition of Shares purchased by exercising an
Option.
7. RIGHTS AS A SHAREHOLDER
Neither the Optionee nor the Optionee's Representative shall have any
rights as a shareholder with respect to any shares subject to an Option until
the Option has been properly exercised and the Shares subject to the Option have
been issued in the name of the Optionee or the Optionee's Representative.
8. LEGALITY OF ISSUANCE
No Shares shall be issued upon the exercise of an Option unless and until
the Corporation has determined that:
(a) It and the Optionee have taken all actions required to register
the Shares under the Securities Act or to perfect an exemption from the
registration requirements thereof.
(b) Any applicable listing requirement of any stock exchange on which
stock is listed has been satisfied; and
(c) Any other applicable provision of state or Federal law has been
satisfied.
9. RESTRICTIONS ON TRANSFER OF SHARES
Regardless of whether the offering and sale of Shares have been registered
under the Securities Act or have been registered or qualified under the
securities laws of any state, the Corporation may impose restrictions upon the
sale, pledge or other transfer of such Shares (including the placement of
appropriate legends on stock certificates) if, in the judgment of the
Corporation and its counsel, such restrictions are necessary or desirable in
order to achieve compliance with the provisions of the Securities Act, the
securities laws of any state or any other law.
In the event that the sale of Shares is not registered under the Securities
Act but an exemption is available which requires an investment representation or
other representation, the Optionee shall represent and agree that the Shares to
be acquired pursuant to the exercise of an Option are being acquired for
investment, and not with a view to the sale or distribution thereof, and shall
make such other representations as are deemed necessary or appropriate by the
Corporation and its counsel.
5
<PAGE> 6
Stock certificates evidencing Shares acquired under an Agreement in an
unregistered transaction shall bear the following restrictive legend (and such
other restrictive legends as are required or deemed advisable under the
provision of any applicable law):
"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 ('ACT'). ANY TRANSFER OF SUCH
SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT
IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE
ISSUER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO
COMPLY WITH THE ACT."
Any determination by the Corporation and its counsel in connection with any
of the matters set forth in this Paragraph 9 shall be conclusive and binding on
the Optionee and all other persons.
10. REGISTRATION OF SECURITIES
The Corporation may, but shall not be obligated to, register or qualify the
sale of Shares under the Securities Act or any other applicable law. The
Corporation shall not be obligated to take any affirmative action in order to
cause the sale of Shares acquired under an Agreement to comply with any law.
11. REMOVAL OF LEGENDS
If, in the opinion of the Corporation and its counsel, any legend placed on
a stock certificate representing Shares sold under an Agreement is no longer
required, the holder of such certificate shall be entitled to exchange such
certificate for a certificate representing the same number of Shares but lacking
such legend.
12. NO TRANSFER OR ASSIGNMENT OF OPTION
Except as otherwise provided in Paragraph 3(a) of these Terms, an Option
and the rights and privileges conferred thereby shall not be transferred,
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to sale under execution, attachment or
similar process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of an Option, or of any right or privilege conferred hereby,
contrary to the provisions hereof, or upon any attempted sale under any
execution, attachment or similar process upon the rights and privileges
conferred hereby, the Option and the rights and privileges conferred hereby
shall immediately become null and void.
13. NO EMPLOYMENT RIGHTS
Nothing in these Terms or an Agreement shall be construed as giving the
Optionee the right to be retained as an Employee or as impairing the right of
the Corporation to terminate his or her service at any time, with or without
cause.
14. DESIGNATION OF OPTION
All Options shall be Nonstatutory Stock Options.
15. PAYMENT FOR STOCK
(a) Payment in Cash
The entire Purchase Price may be paid in U.S. dollars.
(b) Surrender of Stock
All or part of the Purchase Price may be paid by the surrender of
Shares in good form for transfer. Such Shares must have been owned by the
Optionee or the Optionee's Representative for six (6) months or more and
must have a value as determined pursuant to Paragraph 4(d) on the date of
exercise of an Option which, together with any amount paid in a form other
than Shares, is equal to the Purchase Price.
6
<PAGE> 7
16. CHANGES AND INTERPRETATION
These Terms and an Agreement may be modified only in writing authorized by
the Board and by either the Optionee to whom the modification is being applied
or by holders of a majority of options to purchase Stock issued to Employees by
the Corporation. Notwithstanding the foregoing, the Board shall have the
authority to interpret and administer the provisions of these Terms and such
actions by the Board shall be final and binding.
IN WITNESS WHEREOF, the Corporation has caused these Terms to be executed on its
behalf by its officer duly authorized to act on behalf of the Corporation as of
this 8th day of February, 1996.
Anixter International, Inc.
By:
----------------------------------
Title:
-------------------------------
7
<PAGE> 8
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
1996 STOCK OPTION GRANT
THIS GRANT is made as of the 8th day of February, 1996 by ANIXTER
INTERNATIONAL INC., a Delaware corporation (the "Corporation"), to
(the "Optionee").
1. INCORPORATION OF TERMS
This Grant shall be governed by the attached Anixter International Inc.
Stock Option Terms (the "Terms"), all of the provisions of which are hereby
incorporated herein.
2. GRANT OF OPTION
On the terms and conditions stated herein and in the Terms, the Corporation
hereby grants to the Optionee the option to purchase Shares as
defined in the Terms for an exercise price of and dollars ($ )
per Share. This grant is made pursuant to the provisions of the [1983 Stock
Incentive Plan/1987 Key Executive Equity Plan/1989 Employee Stock Incentive
Plan/1996 Stock Incentive Plan and is subject to the approval of that plan by
the stockholders of the Corporation].
3. RIGHT TO EXERCISE
Subject to the conditions and the exceptions set forth herein and in the
Terms, this Option shall become exercisable for one-fourth (1/4) of the Shares
on February 8, 1997, one-fourth (1/4) of the Shares on February 8, 1998,
one-fourth (1/4) of the Shares on February 8, 1999 and the remaining Shares on
February 8, 2000.
4. TERM OF OPTION
This Option shall in any event expire in its entirety February 8, 2006.
This Option shall further expire as set forth in the Terms.
5. EXERCISE CONSTITUTES AGREEMENT TO REFRAIN FROM COMPETITION
By exercising any portion of this Option, the Optionee will be signifying
the agreement of Optionee to refrain for a period of nine months from the
termination of Optionee's employment with the Corporation and its subsidiaries,
from participating in any activities which are competitive with any activities
of the Corporation or its subsidiaries in which the Optionee participated.
Participation shall not include the ownership of less than 1% of a publicly
traded security.
IN WITNESS WHEREOF, the Corporation has caused this Grant to be executed on
its behalf by its officer duly authorized to act on behalf of the Corporation.
ANIXTER INTERNATIONAL INC.
a Delaware corporation
By:
---------------------------------
Its:
8
<PAGE> 1
EXHIBIT 10.28
ANIXTER BROS., INC.
EXCESS BENEFIT PLAN
Anixter Bros., Inc., a Delaware corporation ("Company"), hereby establishes
the Anixter Bros., Inc. Excess Benefit Plan ("Excess Plan") effective as of
August 1, 1985.
1. Purposes: The purpose of the Excess Plan is to provide the benefits
which designated Participants in the Anixter Bros., Inc. Pension Plan ("Pension
Plan") would have received under such plan except for the maximum benefit
limitations ("Benefit Limitations") provided in the plan to conform the
Company's pension plans, which are qualified plans under Section 401(a) of the
Internal Revenue Code of 1954, as amended ("Code"), with the requirements of
Section 415 of the Code.
2. Eligibility and Participation: An employee shall be a Participant in and
entitled to benefits under the Excess Plan if:
(a) He is a participant in the Pension Plan, and
(b) He is designated as a participant in this Excess Plan by the Board
of Directors of the Company.
3. Amount of Benefit: The amount of the benefit under the Excess Plan shall
be the amount by which (a) below exceeds (b) below:
(a) The amount of the benefit which the Participant (or his surviving
spouse or other beneficiary) would have been entitled to receive under the
Pension Plan without regard to the Benefit Limitations contained herein.
(b) The amount of the benefit which the Participant (or his surviving
spouse or other beneficiary) is entitled to receive under the Pension Plan.
4. Time and Method of Payment: The benefits under paragraph 3 shall be
payable in the same manner and form and at the same time as the benefits under
the Pension Plan.
5. Funding: The benefits under the Excess Plan shall be paid from the
general assets of the Company. The Company shall not be required to segregate
any assets to be used for payment of benefits under the Excess Plan.
6. General Provisions:
(a) Employment Rights. The Excess Plan does not constitute a contract
of employment and participation in the Excess Plan will not give any
employee the right to be retained in the employ of the Company, nor any
right to claim to a benefit under the Excess Plan unless specifically
provided by the Excess Plan.
(b) Interests Not Transferable. The interest of persons entitled to
benefits under the Plan are not subject to their debts or other obligations
and, except as may be required by the tax withholding provision of the
Code, or any state's income tax act or pursuant to compliance with a
Qualified Domestic Relations Order pursuant to the Employee Retirement
Income Security Act of 1974, as amended, may not be voluntarily or
involuntarily transferred, assigned, alienated or encumbered.
(c) Controlling Law. The laws of Illinois shall be controlling in all
matters relating to the Plan except to the extent superseded by the laws of
the United States.
(d) Gender and Number. Where the context admits, words in the
masculine gender shall include the feminine and neuter genders, the
singular shall include the plural and the plural shall include the
singular.
(e) Action by Company. Any action required or permitted by the Company
under the Plan shall be by resolution of its Board of Directors or any
persons authorized by resolution of its Board of Directors.
<PAGE> 2
(f) Interpretation. This Excess Plan shall be administered and
interpreted by the Board of Directors and all Participants shall be bound
by the decision of the Board.
7. Amendment or Termination: The Company may amend or terminate the Excess
Plan at any time, except that, without the consent of any Participant in the
Plan, no such amendment or termination shall reduce his right to receive any
benefit accrued hereunder prior to the data of such amendment or termination.
2
<PAGE> 3
FIRST AMENDMENT TO THE ANIXTER BROS., INC.
EXCESS BENEFIT PLAN
WHEREAS, Anixter Bros., Inc., a Delaware corporation (the "Company"),
established the Anixter Bros., Inc. Excess Benefit Plan (the "Excess Plan")
effective as of August 1, 1985; and
WHEREAS, the Company reserved the right to amend the Excess Plan; and
WHEREAS, the Company now desires to amend the Excess Plan to provide the
benefits which designated Participants would have received under the Anixter
Bros., Inc. Pension Plan except for the cap on compensation required under
Section 401(a)(17) of the Code.
NOW, THEREFORE, the Excess Plan is hereby amended effective as of January
1, 1989.
Section 1 is amended by adding the following to the end thereof:
Effective as of January 1, 1989, Benefit Limitations shall also include the
maximum compensation limitation required under Section 401(a)(17) of the Code.
3
<PAGE> 4
ATTACHMENT 2
AMENDMENT NO. 2
TO THE
ANIXTER BROS., INC.
EXCESS BENEFIT PLAN
Effective as of January 1, 1993, the Anixter Bros., Inc. Excess Benefit
Plan is hereby amended as follows:
Section 2 is amended by adding the following proviso at the end of
paragraph (a) thereof:
; provided, however, that notwithstanding any other provision of the
Excess Plan, no benefit under the Excess Plan shall be payable to a
Participant (or a Participant's surviving spouse) if the Participant
also participates in the Anixter Bros., Inc. Supplemental Executive
Retirement Plan.
<PAGE> 1
EXHIBIT 10.29
1995
STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into to be effective as of the 1st day
of January, 1995, by and between ANIXTER INC., a Delaware corporation, and
("the Optionee").
1. Incorporation of Plan
The Agreement shall be governed by the Anixter Distribution Stock Option
Plan (the "Plan"), all of the provisions of which are hereby incorporated
herein.
2. Grant of Option
On the terms and conditions stated herein and in the Plan, the Corporation
hereby grants to the Optionee the option to purchase Shares as defined in the
Plan for an exercise price of fourteen dollars and 50 cents ($14.50) per Share.
3. Right to Exercise
Subject to the conditions and the exceptions set forth herein and in the
Plan, this Option shall become exercisable pursuant to Schedule A attached
hereto.
4. Term of Option
This Option shall in any event expire in its entirety January 1, 2002. This
Option shall further expire as set forth in the Plan.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed on
its behalf by its officer duly authorized to act on behalf of the Corporation,
and the Optionee has personally executed this Agreement.
ANIXTER INC. OPTIONEE
A Delaware Corporation
By:
----------------------------------- -----------------------------------
John Dul
Title: Secretary
1
<PAGE> 2
SCHEDULE A
1995 STOCK OPTION AGREEMENT
EMPLOYEE
<TABLE>
<CAPTION>
NUMBERS OF
DATE OF GRANT SHARES GRANTED DATE EXERCISABLE EXPIRATION DATE
- ------------- ---------------- ---------------- ---------------
<S> <C> <C> <C>
1/1/95 1/1/97 1/1/2002
1/1/95 1/1/98 1/1/2002
1/1/95 1/1/99 1/1/2002
</TABLE>
2
<PAGE> 3
OPTIONEE/STOCKHOLDER AGREEMENT
In consideration of the granting of stock options and other good and
valuable consideration, the parties hereby agree as follows:
1. All terms used in this Agreement shall have the same meaning as the
terms in the Anixter Distribution Stock Option Plan.
2. This Agreement shall apply to all Stock acquired pursuant to Options
granted at any time to an Optionee who is a party to this Agreement at any time.
3. Upon the written request of an Optionee or the Optionee's
Representative to the Secretary of the Corporation to register under the
Securities Act all Shares which had been held by the Optionee or Optionee's
Representative for more than six months at the time of such request, the
Corporation shall use its best efforts to cause such Shares to be so registered
as soon as reasonably practicable so as to permit promptly the sale thereof. The
party requesting the registration shall provide all information as may be in
that party's control and take all such action as may be reasonably required to
permit the Corporation to comply with applicable requirements for such
registration. Notwithstanding the foregoing, the Corporation (i) shall not be
obligated to file more than one registration statement during any four-month
period, (ii) shall not be obligated to cause any special audit to be undertaken
in connection with any such registration and (iii) shall be entitled to postpone
for a reasonable period of time, but not in excess of 60 days, the filing of any
registration statement otherwise required to be prepared and filed by the
Corporation if (A) the Corporation determines that the registration and
distribution of the Shares would interfere with any pending or imminent
financing, acquisition, corporate reorganization or other transaction involving
the Corporation or any of its affiliates or (B) the Corporation determines that
it is precluded, either due to circumstances beyond its control or because it is
unable or unwilling for valid corporate purposes to make any disclosures which
would be required to be made therein from filing any such registration
statement.
4. In lieu of complying with Paragraph 3, the Corporation may purchase
the Shares for which registration is requested at their Fair Market Value. "Fair
Market Value" shall be the value per Share as determined in accordance with
Paragraph 4(d) of the Anixter Distribution Stock Option Plan. Fair Market Value
shall be determined quarterly as of the end of each fiscal quarter. The Fair
Market Value used for any purchase shall be that which has been or will be
determined for the most recently completed quarter at the time of the
registration request. THE DETERMINATION PURSUANT TO THESE PROVISIONS SHALL BE
FINAL AND BINDING ON BOTH THE COMPANY AND THE OPTIONEE AND THE OPTIONEE'S
REPRESENTATIVE.
5. In the event of an Employment Termination for any reason (including
death), Shares purchased by the Optionee or the Optionee's Representative prior
or subsequent thereto may be purchased by the Company at its election pursuant
to the provisions of Paragraph 4 of this Agreement as if the Optionee or
Optionee's Representative had requested the registration under Paragraph 4 as of
the date of the Company's election to purchase such Shares. The Company may
elect to purchase such Shares not more than 10 days after being notified of the
Employment Termination.
6. Before selling any Shares, the Optionee or the Optionee's
Representative will first notify the Secretary of the Corporation in writing of
the identity of the proposed purchaser and the proposed purchase terms. The
Corporation by written notice to the Optionee within 10 days of its receipt of
such notification from the Optionee or the Optionee's Representative may
purchase such Shares, at the election of the Corporation, on the proposed terms
or pursuant to the provisions of Paragraph 4 of this Agreement as if the
Optionee or the Optionee's Representative had requested registration of the
Shares under Paragraph 4 as of the date of such notification by the Company.
7. As long as there is no public market for the Shares, upon the request
of an Optionee or the Optionee's Representative and simultaneous with the
exercise of an Option, the Corporation will loan the
1
<PAGE> 4
Optionee or the Optionee's Representative, an amount sufficient to exercise the
Option and to pay the taxes and withholding for taxes triggered by the exercise
when and as required. The loan shall be secured in a manner reasonably
satisfactory to the Corporation by any Shares held by the Optionee or the
Optionee's Representative and any amounts due the Optionee or the Optionee's
Representative under this Agreement or otherwise owed to the Optionee or the
Optionee's Representative by the Corporation. The maximum period of the loan
shall be 12 months and the interest rate for the loan shall be the higher of the
lowest commercial rate then available or the applicable federal rate specified
by Section 1274 (d) of the Code.
8. No rights under this Agreement shall accrue to or be exercisable by
anyone other than the parties to this Agreement, the Optionee's Representative,
the Corporation and any successor of the Corporation.
9. This Agreement may be modified only in writing authorized by the
Board and by either the Optionee or Optionee's Representative or Stockholder to
whom the modification is being applied or by holders of a majority of options to
purchase Stock issued to Employees by the Corporation and Shares issued pursuant
to such Options. Notwithstanding the foregoing, the Board shall have the
authority to interpret and administer the provisions of this Agreement and such
actions by the Board shall be final and binding.
10. This Agreement may be executed in counterparts and its validity shall
not be affected by the failure of any Optionee or Stockholder to execute this
Agreement.
Dated this 1st day of January, 1995.
ANIXTER INC.
OPTIONEE
<TABLE>
<S> <C>
By:
--------------------------------------------- ---------------------------------------------
John Dul [print name]
Secretary
---------------------------------------------
Signature
</TABLE>
2
<PAGE> 5
EMPLOYEE ACKNOWLEDGEMENT
I hereby acknowledge that (a) I have reviewed the following Plan, (b) I am aware
that this Plan governs all stock options I am being and will in the future be
granted and that the provisions of this Plan are being incorporated in all such
option agreements, and (c) I agree to the terms of this Plan.
Dated this day of , 1995
Employee
ANIXTER DISTRIBUTION
STOCK OPTION PLAN
1. DEFINITIONS
a) "Agreement" shall mean a stock option agreement granted pursuant to
this Plan.
b) "Board" shall mean the Board of Directors of the Corporation, as
constituted from time to time, or any committee of that Board authorized
to act on matters relating to stock options.
c) "Code" shall mean the Internal Revenue Code of 1954, as amended.
d) "Corporation" shall mean Anixter Inc., a Delaware corporation.
e) "Date of Grant" shall mean the date as of which an Agreement is
effective as stated in the Agreement.
f) "Employee" shall mean an individual who is an employee (within the
meaning of Section 3401 (c) of the Code and the regulations thereunder)
of the Corporation or of a Subsidiary, excluding any individual who is
an employee of the Antec Division of the Corporation (provided that this
exclusion from the definition of Employee shall not apply to any Option
granted to an individual on a date the individual was an Employee of the
Antec Division).
g) "Employment Termination" shall mean the termination of the Optionee's
status as an Employee for any reason.
h) "Exercise Price" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified in the Agreement.
i) "Nonstatutory Stock Option" shall mean an option not described in
sections 422(b), 422A(b), 423(b), or 424(b) of the Code.
j) "Option" shall mean a Nonstatutory Stock Option granted pursuant to
an Agreement.
k) "Option Period" shall mean the term of an Option, as specified in an
Agreement.
l) "Parent" shall mean any corporation which owns at least fifty percent
(50%) of the total combined voting power of all classes of stock in the
Corporation or in another Parent.
m) "Partial Exercise" shall mean an exercise with respect to less than all
of the remaining Shares exercisable pursuant to an Option.
n) "Plan" shall mean this Anixter Distribution Stock Option Plan.
o) "Purchase Price" shall mean the Exercise Price multiplied by the
number of Shares with respect to which an Option is exercised.
p) "Securities Act" shall mean the Securities Act of 1933, as amended.
1
<PAGE> 6
q) "Share" shall mean one (1) share of Stock as adjusted in accordance
with Paragraph 4 of this Plan (if applicable).
r) "Stock" shall mean the Common Stock of the Corporation or, in lieu
thereof, stock described in Paragraph 16 if such stock is designated
pursuant to the provisions of Paragraph 16 to be the "Stock".
s) "Subsidiary" shall mean any corporation, if the Corporation and/or
one or more other Subsidiaries own at least fifty percent (50%) of the
total combined voting power of all classes of outstanding stock in such
corporation.
2. RIGHT TO EXERCISE
Subject to the conditions set forth below and the exceptions set forth in
Paragraphs 3 and 4 of this Plan, an Option shall become exercisable as
specified in the Agreement. No Partial Exercise of an Option may be made
for a number of Shares other than 100 Shares or a multiple thereof.
Notwithstanding any other provision of an Agreement or this Plan, no Option
shall be exercisable in any part prior to January 1, 1994.
3. TERM OF OPTION
An Option shall expire on the date specified in the Agreement. In addition,
an Option shall expire upon the termination of the Optionee's service as an
Employee, if such termination occurs first, subject to the following
provisions:
a) If the Employment Termination is caused by the Optionee's death, then
the Option (to the extent not previously exercised) may be exercised
within twelve (12) months after the Optionee's death by the Optionee's
executors or administrators or by any person or persons who have
acquired the Option directly from the Optionee by bequest or inheritance
("Optionee's Representative"), but only to the extent that the Option
was exercisable under Paragraph 2 of this Plan on date of death.
b) If Employment Termination is caused by any reason other than death or
cause, then the Option (to the extent not previously exercised) may be
exercised within a period of seven months after the termination, but in
no event shall the period for exercise expire prior to January 4, 1994,
or if the Employment Termination is for cause, then the Option shall
terminate on the date of such Employment Termination, but in each case
only to the extent that the Option was exercisable under Paragraph 2 of
this Plan on the date of the termination. If the Optionee dies within
such period, the Option (to the extent not previously exercised) may be
exercised within twelve (12) months after the Optionee's death by the
Optionee's Representative, but only to the extent that the Option was
exercisable under Paragraph 2 of this Plan on the date of the
termination.
Any other provision of an Agreement or this Plan to the contrary
notwithstanding, an Option shall not be exercisable after the expiration
date set forth in the Agreement.
For purposes of this Paragraph 3, the Employee relationship shall be
deemed to continue while the Optionee is acting as a consultant, or is
on military leave, sick leave or other bona fide leave of absence (to be
determined in the sole discretion of the Board).
4. SHARES AND ADJUSTMENT
All of the provisions of this Paragraph 4 are subject to, and are
overridden by, the provisions of Paragraph 16 of this Agreement.
The Exercise Price in effect at any time and the number and kind of
securities purchasable upon exercise of an Option shall be subject to
adjustment from time to time upon the happening of certain events, as
follows:
2
<PAGE> 7
a) In case the Corporation shall (i) pay a dividend in Shares of Stock or
make a distribution in Shares of Stock to its Stockholders, (ii)
subdivide its outstanding Shares of Stock, (iii) combine its outstanding
Shares of stock into a smaller number of Shares of Stock or (iv) issue
by reclassification of its Shares of Stock other securities of the
Corporation (including any such reclassification in connection with a
consolidation or merger in which the Corporation is the continuing
corporation), the number of Shares purchasable upon exercise of an
Option immediately prior thereto shall be adjusted so that the Optionee
shall be entitled to receive the kind and number of Shares or other
securities of the Corporation which the Optionee would have owned or
have been entitled to receive after the happening of any of the events
described above, had the Option been exercised immediately prior to the
happening of such event or any record date with respect thereto. An
adjustment made pursuant to this Paragraph (a) shall become effective
immediately after the effective date of such event retroactive to
immediately after the record date, if any, for such event.
b) In case the Corporation shall issue rights, options, or warrants to
all holders of its Shares of Stock, without any charge to such holders,
entitling them (for a period expiring within 45 days after the record
date mentioned below in this Paragraph (b) to subscribe for or purchase
Shares of Stock at a price per share which is lower at the record date
mentioned below than the then Current Market Price per Share of Stock
(as defined in Paragraph (d) below), the number of Shares thereafter
purchasable upon the exercise of an Option shall be determined by
multiplying the number of Shares theretofore purchasable by a fraction,
of which the numerator shall be the number of Shares of Stock
outstanding on such record date plus the number of additional Shares of
Stock offered for subscription or purchase, and of which the denominator
shall be the number of Shares of Stock outstanding on such record date
plus the number of Shares which the aggregate offering price of the
total number of Shares of Stock so offered would purchase at the then
Current Market Price per Share of Stock. Such adjustment shall be made
whenever such rights, options or warrants are issued, and shall become
effective retroactively immediately after the record date for the
determination of shareholders entitled to receive such rights, options
or warrants.
c) In case the Corporation shall distribute to all holders of Shares of
Stock (i) shares of stock other than Stock, (ii) evidences of its
indebtedness, (iii) assets or cash (excluding ordinary cash dividends
payable out of consolidated earnings or retained earnings and dividends
or distributions referred to in Paragraph (a) above), or (iv) rights,
options or warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase Shares of Stock (excluding those
referred to in Paragraph (b) above), then in each case the number of
Shares thereafter purchasable upon the exercise of an Option shall be
determined by multiplying the number of shares theretofore purchasable
upon the exercise of the Option, by a fraction, the numerator of which
shall be the Current Market Price per Share of Stock on the record date
mentioned below in this Paragraph (c), and the denominator or which
shall be the Current Market Price per Share of Stock on such record
date, less the then fair value of the portion of the shares of stock
other than Stock or assets or evidences of indebtedness so distributed
or of such subscription rights, options or warrants, or of such
convertible or exchangeable securities applicable to one Share of Stock.
Such adjustment shall be made whenever any such distribution is made,
and shall become effective on the date of distribution retroactive to
immediately after the record date for the determination of shareholders
entitled to receive such distribution.
d) For the purpose of any computation under Paragraphs (b) and (c) above,
the Current Market Price per Share of Stock at any date shall be the
average of the daily closing prices for 15 consecutive trading days
commencing 20 trading days before the date of such computation. The
closing price for each day shall be the last reported sale price or, in
case no such reported sale takes place on such day, the average of the
closing bid and asked prices for such day, in either case on the
principal national securities exchange on which the Shares are listed or
admitted to trading, or if they are not listed or admitted to trading on
any national securities exchange, but are traded in the over-the-counter
market, the closing sale price of the Stock, or in case no sale is
publicly reported, the average of the representative closing bid and
asked quotations for the Stock on NASDAQ or
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<PAGE> 8
any comparable system, or if the Stock is not listed on NASDAQ or a
comparable system, the closing sale price of the Stock, or in case no
sale is publicly reported, the average of the closing bid and asked
prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Corporation
for that purpose, or if there is no public market for the Stock, the
fair-market value of the Stock as determined by Duff & Phelps Financial
Consulting Company, or another independent appraisal firm selected as a
replacement therefor by the Board.
e) No adjustment in the number of Shares purchasable hereunder shall be
required unless such adjustment would require an increase or decrease of
at least 1% in the number of Shares purchasable upon the exercise of an
Option; provided, however, that any adjustments which by reason of this
Paragraph (e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment, but not later than
three years after the happening of the specified event or events. All
calculations shall be made to the nearest one thousandth of a Share.
Anything in these provisions to the contrary notwithstanding, the
Corporation shall be entitled, but shall not be required, to make such
changes in the number of Shares purchasable upon the exercise of an
Option, in addition to those required by this Paragraph 4, as it in its
discretion shall determine to be advisable in order that any dividend or
distribution in Shares of Stock, issuance of rights, warrants or options
to purchase Stock, or distribution of shares of stock other than Stock,
evidences of indebtedness of assets or cash (other than ordinary cash
dividends out of consolidated earnings or retained earnings) or
convertible or exchangeable securities hereafter made by the Corporation
to the holders of Stock shall not result in any tax to the holders of
Stock or securities convertible into Stock.
f) Whenever the number of Shares purchasable upon the exercise of an
Option is adjusted, as herein provided, the Exercise Price payable upon
exercise of the Option shall be adjusted by multiplying such Exercise
Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Shares purchasable upon the exercise of
the Option immediately prior to such adjustment, and of which the
denominator shall be the number of Shares so purchasable immediately
thereafter.
g) In the event that at any time, as a result of any adjustment made
pursuant to Paragraph (a) above, the Optionee shall become entitled to
purchase any shares of capital stock of the Corporation other than
Shares of Stock, thereafter the number of such other shares so
purchasable upon exercise of this Option and the Exercise Price of such
shares shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with
respect to the Shares contained in Paragraphs (a) through (f),
inclusive, above, and Paragraphs (h) through (k), inclusive, below, and
the provisions of this Plan with respect to Shares shall apply on like
terms to such other shares.
h) Upon the expiration of any rights, options, warrants or conversion or
exchange privileges, if any thereof shall not have been exercised, the
Exercise Price and the number of shares of Stock purchasable upon the
exercise of an Option shall, upon such expiration, be readjusted and
shall thereafter be such as it would have been had it been originally
adjusted (or had the original adjustment not been required, as the case
may be) as if (x) the only Shares of Stock so issued were the Shares of
Stock, if any, actually issued or sold upon the exercise of such rights,
options, warrants or conversion or exchange rights and (y) such Shares
of Stock, if any, were issued or sold for the consideration actually
received by the Corporation upon such exercise plus the aggregate
consideration, if any, actually received by the Corporation for the
issuance, sale or grant of all such rights, options, warrants or
conversion or exchange rights whether or not exercised; provided,
however, that no such readjustment shall have the effect of increasing
the Exercise Price by an amount in excess of the amount of adjustment
initially made in respect of the issuance, sale or grant of such rights,
options, warrants, or conversion or exchange rights.
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<PAGE> 9
i) Whenever the number of Shares purchasable upon the exercise of an
Option or the Exercise Price of an Option is adjusted, as herein
provided, the Corporation shall promptly mail by first class mail,
postage prepaid, to the Optionee notice of such adjustment or
adjustments. The Corporation may retain a firm of independent public
accountants (who may be the regular accountants employed by the
Corporation) to make any computation required by these provisions and
shall cause such accountants to prepare a certificate setting forth the
number of Shares purchasable upon the exercise of the Option and the
Exercise Price of such Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth
the computation by which such adjustment was made. Such certificate
shall be conclusive of the correctness of such adjustment and the
Optionee shall have the right to inspect such certificate during
reasonable business hours.
j) Except as provided in these provisions, no adjustment in respect of
any dividends shall be made during the term of an Option or upon the
exercise of an Option.
k) In case of any consolidation of the Corporation with or merger of the
Corporation with or into another corporation or in case of any sale or
conveyance to another corporation of the property of the Corporation, as
an entirety or substantially as an entirety, the Corporation or such
successor or purchasing corporation (or an affiliate of such successor
or purchasing corporation), as the case may be, agrees that the Optionee
shall have the right thereafter upon payment of the Exercise Price in
effect immediately prior to such action to purchase upon exercise of an
Option the kind and amount of shares and other securities and property
(including cash) which the Optionee would have owned or have been
entitled to receive after the happening of such consolidation, merger,
sale or conveyance had the Option been exercised immediately prior to
such action. The provisions of this Paragraph (k) shall similarly apply
to successive consolidations, mergers, sales or conveyances.
5. EXERCISE OF OPTION
The Optionee or the Optionee's Representative may exercise an Option by
giving written notice to the Secretary of the Corporation. The notice shall
specify the election to exercise the Option, the number of Shares for which
it is being exercised and the form of payment. The notice shall be signed
by the person or persons exercising the Option. In the event that the
Option is being exercised by the representative of the Optionee, the notice
shall be accompanied by proof satisfactory to the Corporation of the
representative's right to exercise the Option. The Optionee or the
Optionee's Representative shall deliver to the Secretary of the
Corporation, at the time of giving the notice, payment in the form which
conforms to the applicable subparagraph of Paragraph 15 of this Plan for
the full amount of the Purchase Price.
The Corporation shall thereafter cause to be issued a certificate or
certificates for the Shares as to which an Option has been exercised,
registered in the name of the person exercising the Option (or in the names
of such person and his or her spouse as community property or as joint
tenants with right of survivorship).
6. WITHHOLDING TAXES
In the event that the Corporation determines that it is required to
withhold Federal, state or local tax as a result of the exercise of an
Option, the Optionee, as a condition to the exercise of the Option, shall
make arrangements satisfactory to the Corporation to enable it to satisfy
such withholding requirements. The Optionee shall also make arrangements
satisfactory to the Corporation to enable it to satisfy any withholding
requirements that may arise in connection with the disposition of Shares
purchased by exercising an Option.
7. RIGHTS AS A SHAREHOLDER
Neither the Optionee nor the Optionee's Representative shall have any
rights as a shareholder with respect to any shares subject to an Option
until the Option has been properly exercised and the Shares subject to the
Option have been issued in the name of the Optionee or the Optionee's
Representative.
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<PAGE> 10
8. LEGALITY OF ISSUANCE
No Shares shall be issued upon the exercise of an Option unless and until
the Corporation has determined that:
a) It and the Optionee have taken all actions required to register the
Shares under the Securities Act or to perfect an exemption from the
registration requirements thereof;
b) Any applicable listing requirement of any stock exchange on which
stock is listed has been satisfied; and
c) Any other applicable provision of state or Federal law has been
satisfied.
9. RESTRICTIONS ON TRANSFER OF SHARES
Regardless of whether the offering and sale of Shares under the Plan have
been registered under the Securities Act or have been registered or
qualified under the securities laws of any state, the Corporation may
impose restrictions on the sale, pledge or other transfer of such Shares
(including the placement of appropriate legends on stock certificates) if,
in the judgment of the Corporation and its counsel, such restrictions are
necessary or desirable in order to achieve compliance with the provisions
of the Securities Act, the securities laws of any state or any other law.
In the event that the sale of shares under the Plan is not registered under
the Securities Act but an exemption is available which requires an
investment representation or other representation, the Optionee shall
represent and agree that the Shares to be acquired pursuant to the exercise
of an Option are being acquired for investment, and not with a view to the
sale or distribution thereof, and shall make such other representations as
are deemed necessary or appropriate by the Corporation and its counsel.
Stock certificates evidencing Shares acquired under an Agreement in an
unregistered transaction shall bear the following restrictive legend (and
such other restrictive legends as are required or deemed advisable under
the provisions of any applicable law):
"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("ACT"). ANY TRANSFER OF SUCH
SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT
IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE
ISSUER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO
COMPLY WITH THE ACT."
Any determination by the Corporation and its counsel in connection with any
of the matters set forth in this Paragraph 9 shall be conclusive and
binding on the Optionee and all other persons.
10. REGISTRATION OF SECURITIES
The Corporation may, but shall not be obligated to, register or qualify the
sale of Shares under the Securities Act or any other applicable law. The
Corporation shall not be obligated to take any affirmative action in order
to cause the sale of Shares under an Agreement to comply with any law.
11. REMOVAL OF LEGENDS
If, in the opinion of the Corporation and its counsel, any legend placed on
a stock certificate representing Shares sold under an Agreement is no
longer required, the holder of such certificate shall be entitled to
exchange such certificate for a certificate representing the same number of
Shares but lacking such legend.
12. NO TRANSFER OR ASSIGNMENT OF OPTION
Except as otherwise provided in Paragraph 3 (a) this Plan, an Option and
the rights and privileges conferred thereby shall not be transferred,
assigned, pledged or hypothecated in any way (whether by
6
<PAGE> 11
operation of law or otherwise) and shall not be subject to sale under
execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of an Option, or of any
right or privilege conferred hereby, contrary to the provisions hereof, or
upon any attempted sale under any execution, attachment or similar process
upon the rights and privileges conferred hereby shall immediately become
null and void.
13. NO EMPLOYMENT RIGHTS
Nothing in this Plan or Agreement shall be construed as giving the Optionee
the right to be retained as an Employee or as impairing the right of the
Corporation to terminate his or her service at any time, with or without
cause.
14. DESIGNATION OF OPTION
All Options shall be Nonstatutory Stock Options.
15. PAYMENT FOR STOCK
a) Payment in Cash
The entire Purchase Price may be paid in U.S. dollars.
b) Surrender of Stock
All or part of the Purchase Price may be paid by the surrender of Shares
in good form for transfer. Such Shares must have been owned by the
Optionee or the Optionee's Representative for six (6) months or more and
must have a value (as determined pursuant to Paragraph 4 (d)) on the
date of exercise of an Option which, together with any amount paid in a
form other than Shares, is equal to the Purchase Price.
16. SPECIALLY PERMITTED DISTRIBUTIONS AND ALTERNATIVE STOCK
It is understood and agreed that before any Stock is purchased pursuant to
an Option, that the number of outstanding Shares will be increased to 29
million Shares and that the business of Antec, including, effective as of
January 1, 1993, debt of $58.6 million, preferred stock $33.5 million and
arrearages of $15.2 million on such stock, will be distributed from the
Corporation (the "Distribution") either directly or by the distribution of
a stock which tracks the value of this business without any adjustments
whatsoever to an Option. In the case of any changes in the amount of debt
or preferred stock to be transferred, the Board shall make such
adjustments, if any, in the Options which shall be determined by the Board
to be appropriate. If the Distribution does not occur, the Board will (if
it does occur by the distribution of an Antec tracking stock, the Board
may) designate as the Stock subject to an Option, a tracking stock (using
the USX stocks as a model) of the Corporation or its Parent (in which event
such Parent shall be substituted for the Corporation and shall thereafter
be the Corporation in this Agreement) which will have terms, reasonably
satisfactory to the tax counsel for the Corporation, which cause such stock
to track the value of the common stock of the Corporationas if the
Distribution has occurred.
17. CHANGES AND INTERPRETATION
This Plan and an Agreement may be modified only in writing authorized by
the Board and by either the Optionee to whom the modification is being
applied or by holders of a majority of options to purchase Stock issued to
Employees by the Corporation. Notwithstanding the foregoing, the Board
shall have the authority to interpret and administer the provisions of this
Plan and an Agreement and such actions by the Board shall be final and
binding.
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<PAGE> 12
IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed on its
behalf by its officer duly authorized to act on behalf of the Corporation as of
this 1st day of January, 1993.
ANIXTER INC.
a Delaware Corporation
By:
Title:
8
<PAGE> 1
EXHIBIT 10.30
ANIXTER INC.
DEFERRED COMPENSATION PLAN
Effective January 1, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE I -- PURPOSE; EFFECTIVE DATE
1.1 PURPOSE........................................................................ 1
1.2 EFFECTIVE DATE................................................................. 1
ARTICLE II -- DEFINITIONS
2.1 ACCOUNT........................................................................ 1
2.2 BENEFICIARY.................................................................... 1
2.3 BOARD.......................................................................... 1
2.4 BONUS.......................................................................... 1
2.5 CHANGE IN CONTROL.............................................................. 1
2.6 CODE........................................................................... 2
2.7 COMMITTEE...................................................................... 2
2.8 COMPANY........................................................................ 2
2.9 COMPENSATION................................................................... 2
2.10 DEFERRAL COMMITMENT............................................................ 2
2.11 DEFERRAL PERIOD................................................................ 3
2.12 DETERMINATION DATE............................................................. 3
2.13 DISABILITY..................................................................... 3
2.14 EARNINGS....................................................................... 3
2.15 EARNINGS RATE.................................................................. 3
2.16 EMPLOYER....................................................................... 3
2.17 FINANCIAL HARDSHIP............................................................. 3
2.18 PARENT COMPANY................................................................. 3
2.19 PARTICIPANT.................................................................... 3
2.20 PARTICIPATION AGREEMENT........................................................ 3
2.21 PLAN........................................................................... 3
2.22 QUALIFIED 401(K) PLAN.......................................................... 4
2.23 QUALIFIED PENSION PLAN......................................................... 4
2.24 RETIREMENT..................................................................... 4
2.25 SALARY......................................................................... 4
2.26 VALUATION DATE................................................................. 4
ARTICLE III -- ELIGIBILITY AND DEFERRAL COMMITMENTS
3.1 ELIGIBILITY AND PARTICIPATION.................................................. 4
3.2 DEFERRAL ELECTION.............................................................. 4
3.3 MODIFICATION OF DEFERRAL COMMITMENT............................................ 5
ARTICLE IV -- DEFERRED COMPENSATION ACCOUNTS AND INTEREST
4.1 ACCOUNTS....................................................................... 5
4.2 MATCHING CONTRIBUTION.......................................................... 5
4.3 PENSION MAKE-UP................................................................ 5
4.4 DETERMINATION OF ACCOUNTS...................................................... 5
4.5 VESTING OF ACCOUNTS............................................................ 5
4.6 TAX WITHHOLDING................................................................ 5
4.7 STATEMENT OF ACCOUNT........................................................... 5
ARTICLE V -- PLAN BENEFITS
5.1 RETIREMENT BENEFIT............................................................. 6
5.2 DISABILITY OR CHANGE IN CONTROL BENEFIT........................................ 6
5.3 TERMINATION BENEFIT............................................................ 7
5.4 DEATH BENEFIT.................................................................. 7
5.5 WITHHOLDING ON BENEFIT PAYMENTS................................................ 7
5.6 PAYMENT TO GUARDIAN............................................................ 7
</TABLE>
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<TABLE>
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ARTICLE VI -- OTHER DISTRIBUTIONS
6.1 EARLY WITHDRAWALS.............................................................. 8
6.2 FINANCIAL HARDSHIP DISTRIBUTIONS............................................... 8
6.3 ACCELERATED DISTRIBUTION....................................................... 8
ARTICLE VII -- BENEFICIARY DESIGNATION
7.1 BENEFICIARY DESIGNATION........................................................ 9
7.2 CHANGING BENEFICIARY........................................................... 9
7.3 NO BENEFICIARY DESIGNATION..................................................... 9
7.4 EFFECT OF PAYMENT.............................................................. 9
ARTICLE VIII -- ADMINISTRATION
8.1 COMMITTEE; DUTIES.............................................................. 9
8.2 AGENTS......................................................................... 9
8.3 BINDING EFFECT OF DECISIONS.................................................... 9
8.4 INDEMNITY OF COMMITTEE......................................................... 10
ARTICLE IX -- CLAIMS PROCEDURE
9.1 CLAIM.......................................................................... 10
9.2 DENIAL OF CLAIM................................................................ 10
9.3 REVIEW OF CLAIM................................................................ 10
9.4 FINAL DECISION................................................................. 10
ARTICLE X -- AMENDMENT AND TERMINATION OF THE PLAN
10.1 AMENDMENT...................................................................... 10
10.2 EMPLOYER'S RIGHT TO TERMINATE.................................................. 10
ARTICLE XI -- MISCELLANEOUS
11.1 UNFUNDED PLAN.................................................................. 11
11.2 UNSECURED GENERAL CREDITOR..................................................... 11
11.3 TRUST FUND..................................................................... 11
11.4 NONASSIGNABILITY............................................................... 11
11.5 NOT A CONTRACT OF EMPLOYMENT................................................... 12
11.6 PROTECTIVE PROVISIONS.......................................................... 12
11.7 GOVERNING LAW.................................................................. 12
11.8 VALIDITY....................................................................... 12
11.9 NOTICE......................................................................... 12
11.10 SUCCESSORS..................................................................... 12
APPENDIX A -- CALCULATION OF EARNINGS USING AVERAGE DAILY BALANCE
</TABLE>
<PAGE> 4
ANIXTER INC.
DEFERRED COMPENSATION PLAN
ARTICLE I -- PURPOSE; EFFECTIVE DATE
1.1 PURPOSE
Anixter Inc. (the "Company") adopts this Deferred Compensation Plan (the
"Plan") to provide, in a tax-efficient manner, supplemental funds for retirement
or death for certain employees of the Company. It is intended that the Plan will
aid in attracting and retaining employees of exceptional ability by providing
them with this benefit.
1.2 EFFECTIVE DATE
The Plan is effective as of January 1, 1995.
ARTICLE II -- DEFINITIONS
Whenever used in this document, the following terms shall have the meanings
indicated, unless a contrary or different meaning is expressly provided:
2.1 ACCOUNT
"Account" means the record or records maintained by Employer for each
Participant in accordance with Article IV with respect to any deferral of
Compensation pursuant to this Plan.
2.2 BENEFICIARY
"Beneficiary" means the person, persons or entity entitled under Article
VII to receive any Plan benefits payable after a Participant's death.
2.3 BOARD
"Board" means the Board of Directors of the Company.
2.4 BONUS
"Bonus" means the remuneration earned in a Deferral Period, including
amounts thereof deferred under an agreement entered into pursuant to either Code
Section 125 or Code Section 401(k), regular or special performance bonus amounts
and commissions, but excluding base and overtime pay, car allowances, cost of
living allowances, other extraordinary payments and any amounts received under a
stock option, phantom stock option or similar long-term incentive plan.
2.5 CHANGE IN CONTROL
"Change in Control" means:
(a) With respect to the Parent Company, a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 (the "Act"), as amended or any successor thereto; provided
that, without limitation, such a change in control shall be deemed to have
occurred if (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Act) other than the Parent Company controls more than
twenty-five percent (25%) of the Company's Voting Securities and the
securities so controlled are greater in number than those controlled by the
Parent Company; (ii) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Act) other than Samuel Zell, B. Ann Lurie and Sheli
Rosenberg controls more than twenty-five percent (25%) of the Parent
Company's Voting Securities and the securities so controlled are greater in
number than those controlled by Mr. Zell and Mmes. Lurie and
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<PAGE> 5
Rosenberg; (iii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Parent Company, together with any new directors whose
election, or nomination for election by the shareholders, was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
were either directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors of the Parent
Company; or (iv) the stockholders of the Parent Company approve a merger or
consolidation of the Parent Company with any other corporation, other than
a merger or consolidation which would result in the Voting Securities of
the Parent Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
Voting Securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the Voting Securities of the Parent
Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Parent Company approve a plan
of complete liquidation of the Parent Company or an agreement for the sale
or disposition by the Parent Company (in one (1) transaction or a series of
transactions) of all or substantially all of the Parent Company's assets to
a person or entity which is not a subsidiary of the Parent Company; unless,
with respect to clauses (i) and (ii) above, such person is a trustee or
other fiduciary holding securities under an employee benefit plan of either
the Company or the Parent Company. As used herein, "Voting Securities"
shall mean any securities which vote generally in the election of
directors.
(b) With respect to the Company, a change in control shall mean (i)
any acquisition of more than fifty percent (50%) of the outstanding capital
stock of the Company, but excludes (A) a "spin-off" distribution by the
Parent Company to its stockholders, pro rata, of any or all of its shares
of the capital stock of the Company prior to any such change in control; or
(B) a public stock offering of the Company's stock; or (C) a sale of the
Parent Company's equity interest in the Company to a group of investors
which includes members of management of the Company at the time of such
purchase; or (ii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company, together with any new directors whose election,
or nomination for election by the shareholders, was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who were
either directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board of Directors of the Company.
2.6 CODE
"Code" means the Internal Revenue Code, as amended from time to time.
2.7 COMMITTEE
"Committee" means the Anixter Employee Benefits Administrative Committee
which has been appointed by the Board to administer the Plan pursuant to Article
VIII.
2.8 COMPANY
"Company" means Anixter Inc., a Delaware corporation, and its successors
and assigns.
2.9 COMPENSATION
"Compensation" means the Salary and Bonuses payable by Employer to the
Participant, determined before reduction for amounts deferred under this Plan.
2.10 DEFERRAL COMMITMENT
"Deferral Commitment" means a commitment made by a Participant pursuant to
Article III and for which a Participation Agreement has been submitted by the
Participant to the Committee.
2
<PAGE> 6
2.11 DEFERRAL PERIOD
"Deferral Period" means the period during which a Participant has elected
to defer a portion of the Participant's Compensation earned during such period.
The Deferral Period shall be a calendar year.
2.12 DETERMINATION DATE
"Determination Date" means the last day of each calendar month.
2.13 DISABILITY
"Disability" means a physical or mental condition which, in the opinion of
the Committee, prevents the Participant from satisfactorily performing the
Participant's usual duties for Employer. The Committee shall determine the
existence of the Disability and may rely on advice from a medical examiner,
medical reports, and other evidence satisfactory to the Committee in making the
determination.
2.14 EARNINGS
"Earnings" means the amount of growth that is credited to an Account on
each Determination Date in a calendar year based on the Earnings Rate. Earnings
shall be calculated as set forth in Appendix A.
2.15 EARNINGS RATE
"Earnings Rate" means a rate equal to the nominal annual yield of the
average of the ten (10) year Treasury note yield for United States Government
securities for the three (3) months of the previous quarter, as published by the
Federal Reserve Board (or any substantially similar index selected by the
Board), times one hundred forty percent (140%).
2.16 EMPLOYER
"Employer" means the Company and any subsidiary or affiliate of the Company
designated by the Board.
2.17 FINANCIAL HARDSHIP
"Financial Hardship" means a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant or
of a dependent of the Participant, loss of the Participant's property due to
casualty, or other extraordinary and unforeseeable circumstances whether similar
or dissimilar to the foregoing. Financial Hardship shall be determined by the
Committee on the basis of information supplied by the Participant in accordance
with the standards set forth by the Committee.
2.18 PARENT COMPANY
"Parent Company" means Itel Corporation, a Delaware Corporation, and its
successors and assigns.
2.19 PARTICIPANT
"Participant" means an eligible executive under Article III who has elected
to defer Compensation during any Deferral Period under this Plan and who has not
yet received full benefits hereunder.
2.20 PARTICIPATION AGREEMENT
"Participation Agreement" means the agreement submitted by a Participant to
the Committee pursuant to Article III prior to the beginning of the Deferral
Period, specifying a Deferral Commitment made for such Deferral Period.
2.21 PLAN
"Plan" means this Deferred Compensation Plan as amended from time to time.
3
<PAGE> 7
2.22 QUALIFIED 401(K) PLAN
"Qualified 401(k) Plan" means the Anixter Employee Savings Plan, or any
successor defined contribution plan maintained by Employer that qualifies under
Code Section 401(a).
2.23 QUALIFIED PENSION PLAN
"Qualified Pension Plan" means the Anixter Inc. Pension Plan, or any
successor defined benefit plan maintained by Employer that qualifies under Code
Section 401(a).
2.24 RETIREMENT
"Retirement" means a Participant's voluntary termination of employment with
Employer on or after the Participant's attainment of age fifty-five (55).
2.25 SALARY
"Salary" means the base remuneration and overtime paid to a Participant
during a Deferral Period, including amounts thereof deferred under an agreement
entered into pursuant to either Code Section 125 or Code Section 401(k), but
excluding regular or special performance bonus amounts, commissions, car
allowances, cost of living allowances, other extraordinary payments and any
amounts received under a stock option, phantom stock option or similar long-term
incentive plan.
2.26 VALUATION DATE
"Valuation Date" means the last day of the month in which Retirement,
Disability, termination or death occurs.
ARTICLE III -- ELIGIBILITY AND DEFERRAL COMMITMENTS
3.1 ELIGIBILITY AND PARTICIPATION
(a) Eligibility. All executives designated by the Board shall be entitled
to participate.
(b) Participation. An eligible executive may elect to participate in the
Plan with respect to any Deferral Period by submitting a Participation Agreement
to the Committee by the last day of the month immediately preceding the
beginning of the Deferral Period.
(c) Part-Year Participation. If an executive first becomes eligible to
participate during a Deferral Period, a Participation Agreement may be submitted
to the Committee within thirty (30) days following notification to the executive
of eligibility to participate. The Participation Agreement shall be effective
only with regard to Compensation earned following such submission.
3.2 DEFERRAL ELECTION
(a) Election by Participant. A Participant may elect to defer receipt of a
certain percentage, not to exceed fifty percent (50%), of Salary payable to the
Participant and/or a certain percentage, not to exceed one hundred percent
(100%), of any Bonuses earned by the Participant during the Deferral Period but
before the Participant's termination of employment for any reason.
Notwithstanding any provision to the contrary contained in this Plan or in any
Participation Agreement, no deferral shall operate to reduce any amount payable
to the Company under any arrangement providing for or which would permit such
amounts to be withheld from Salary or Bonuses otherwise due to a Participant
(e.g., repayment of a loan at the rate of fifty percent (50%) of net annual
Bonuses would result in the Company withholding fifty percent (50%) of such
Bonus after tax but without regard to amounts deferred under this Plan or
otherwise deferred or committed).
(b) Minimum Deferral. The minimum deferral amount shall be two thousand
four hundred dollars ($2,400) per Deferral Period, which amount may consist of
Salary, Bonus or any combination thereof.
4
<PAGE> 8
3.3 MODIFICATION OF DEFERRAL COMMITMENT
Deferral Commitments shall be irrevocable except that the Committee may, in
its sole discretion, reduce the amount to be deferred or waive the remainder of
the Deferral Commitment upon a finding that the Participant has suffered a
Financial Hardship.
ARTICLE IV -- DEFERRED COMPENSATION ACCOUNTS AND INTEREST
4.1 ACCOUNTS
For record-keeping purposes only, Employer shall maintain an Account for
each Participant who elects to have the receipt of Compensation deferred under
this Plan. Deferrals made in each Deferral Period shall be maintained in
separate accounts. The existence of these accounts shall not require any
segregation of assets. The combined values of the separate accounts for each
Participant shall constitute an Account.
4.2 MATCHING CONTRIBUTION
If a Participant defers the maximum elective percentage into the Qualified
401(k) Plan, Employer shall credit a matching contribution to the Participant's
Account equal to any matching contribution which would have been credited to the
Participant's Qualified 401(k) Plan but for the Participant's participation in
this Plan.
4.3 PENSION MAKE-UP
Employer shall restore an amount equal to any reduction in a Participant's
Qualified Pension Plan benefits resulting from deferrals under this Plan to the
extent that the Qualified Pension Plan benefits are not restored by any other
Employer-provided plan or agreement.
4.4 DETERMINATION OF ACCOUNTS
Each Account shall be adjusted as of each Determination Date and shall
consist of:
(a) The balance of the Account as of the immediately preceding
Determination Date; and
(b) Any Compensation deferred and credited to the Account since the
immediately preceding Determination Date; and
(c) Earnings credited since the immediately preceding Determination
Date.
The total of (a), (b) and (c) shall be reduced by any distributions from
the Account since the immediately preceding Determination Date.
4.5 VESTING OF ACCOUNTS
Each Participant shall be one hundred percent (100%) vested at all times in
all amounts credited to the Participant's Account and all Earnings thereon.
4.6 TAX WITHHOLDING
Any withholding of taxes or other amounts with respect to deferred
Compensation that is required by state, federal, or local law shall be withheld
from the Participant's corresponding nondeferred compensation to the maximum
extent possible and any remaining amount required to be withheld shall reduce
the amount credited to the Participant's Account.
4.7 STATEMENT OF ACCOUNT
A statement shall be issued on a quarterly basis by Employer to each
Participant setting forth the Participant's Account balance under the Plan as of
the immediately preceding Determination Date.
5
<PAGE> 9
ARTICLE V -- PLAN BENEFITS
5.1 RETIREMENT BENEFIT
(a) Benefit Amount. If a Participant terminates employment with Employer
due to Retirement, Employer shall pay to the Participant a benefit equal to the
balance in the Participant's Account.
(b) Form of Benefit. The Retirement benefit attributable to the elective
deferrals for any Deferral Period shall be paid in one (1) of the forms set out
below, as elected by the Participant in the Participation Agreement for that
year. Forms of payment are:
(i) A lump sum payment;
(ii) Monthly installments, the number of such installments not to
exceed one hundred twenty (120); or
(iii) A combination of (i) and (ii) above.
(c) Commencement. The amount of the benefit shall be based on the value of
the Participant's Account on the Valuation Date and shall be paid on the
settlement date. The date on which lump sum payments are made and on which
installment payments commence shall be the settlement date. If a combination of
lump sum and installments is elected, the lump sum and the first installment
payment shall be paid on the settlement date. The settlement date shall be no
more than sixty-five (65) days after the Valuation Date. Earnings shall continue
to accrue on the Participant's Account to the settlement date, and Earnings on
any remaining Account balance after the settlement date shall continue to accrue
and be included in all payments made under this Section 5.1. All payments shall
be made as of the first day of the month.
(d) Small Accounts. On the Valuation Date, if the Participant's Account is
less than the Participant's Salary rate in effect at the Participant's
Retirement, the benefit may, at the Company's option, be paid in a lump sum.
(e) Installments. If payment is by installments, the amount of the
installments shall be redetermined each January 1 based upon the remaining
Account balance, the remaining number of installments and an Earnings Rate equal
to the rate in effect for the preceding quarter.
(f) Change in Form of Payment. Notwithstanding the above, a Participant may
elect to file a change of payment designation which shall supersede the prior
form of payment designation in the Participation Agreement for any one (1) or
more Deferral Periods. If the Participant's most recent change of payment
designation has not been filed two (2) calendar years prior to the year of
Retirement, the prior election shall be used to determine the form of payment
(e.g., if a Participant were to retire in 1998, the last day to file a change of
payment designation would be December 31, 1996).
5.2 DISABILITY OR CHANGE IN CONTROL BENEFIT
(a) Benefit Amount. If a Participant terminates employment with Employer
due to Disability or within twenty-four (24) months following a Change in
Control, Employer shall pay to the Participant a benefit equal to the balance in
the Participant's Account.
(b) Form of Benefit. The benefit payable under this Section 5.2 shall be
paid in a lump sum.
(c) Commencement. The amount of the lump sum shall be based on the value of
the Participant's Account on the Valuation Date. The date on which payment is
made shall be the settlement date. Earnings shall continue to accrue on the
Participant's Account to the settlement date. The settlement date shall be no
more than sixty-five (65) days after the Valuation Date. All payments shall be
made as of the first day of the month.
6
<PAGE> 10
5.3 TERMINATION BENEFIT
(a) Benefit Amount. If a Participant terminates employment with Employer
for any other reason, Employer shall pay to the Participant benefits equal to
the balance in the Participant's Account.
(b) Form of Benefit. The termination benefit payable under this Section 5.3
shall be paid in a lump sum.
(c) Commencement. The amount of the lump sum shall be based on the value of
the Participant's Account on the Valuation Date. The date on which payment is
made shall be the settlement date. Earnings shall accrue from the Valuation Date
to the settlement date at the Earnings Rate without the one hundred forty
percent (140%) multiplier. The settlement date shall be the first business day
in January of the calendar year two (2) years following the year of termination.
If Employer has not held the amounts deferred for a period of at least five (5)
years as of the settlement date, however, the settlement date shall be the first
business day in January following the date the amounts deferred were held by
Employer for five (5) years.
5.4 DEATH BENEFIT
(a) Preretirement.
(i) Benefit Amount. If a Participant terminates employment with
Employer due to death, Employer shall pay to the Participant's Beneficiary
a benefit equal to the balance in the Participant's Account.
(ii) Form of Benefit. The benefit payable under this subsection shall
be paid in a lump sum.
(iii) Commencement. The amount of the lump sum shall be based on the
value of the Participant's Account on the Valuation Date. The date on which
payment is made shall be the settlement date. Earnings shall continue to
accrue on the Participant's Account to the settlement date. The settlement
date shall be no more than sixty-five (65) days after the Valuation Date.
All payments shall be made as of the first day of the month.
(b) Postretirement. If a Participant dies following the Participant's
Retirement from the Company, Employer shall continue to pay benefits to the
Participant's Beneficiary in the form previously elected by the Participant for
Retirement benefits.
5.5 WITHHOLDING ON BENEFIT PAYMENTS
Employer shall withhold from payments made hereunder any taxes required to
be withheld from such payments under federal, state or local law. A Beneficiary,
however, may elect not to have withholding of federal income tax pursuant to
Section 3504(a)(2) of the Internal Revenue Code, or any successor provision
thereto.
5.6 PAYMENT TO GUARDIAN
If a Plan benefit is payable to a minor or a person declared incompetent or
to a person incapable of handling the disposition of property, the Committee may
direct payment of such Plan benefit to the guardian, legal representative or
person having the care and custody of such minor, incompetent or person. The
Committee may require proof of incompetency, minority, incapacity or
guardianship as it may deem appropriate prior to distribution of the Plan
benefit. Such distribution shall completely discharge the Committee and Employer
from all liability with respect to such benefit.
7
<PAGE> 11
ARTICLE VI -- OTHER DISTRIBUTIONS
6.1 EARLY WITHDRAWALS
A Participant's Account may be distributed to the Participant before
termination of employment as follows:
(a) Early Withdrawals. A Participant may elect in a Participation
Agreement to withdraw all or any portion of the amount deferred by that
Participation Agreement plus Earnings thereon as of a date specified in the
election. Such date shall not be sooner than five (5) years after the date
the Deferral Period commences.
(b) Form of Payment. Early withdrawals shall be paid in a lump sum and
shall be charged to the Participant's Account as a distribution.
If a Participant retires, dies or otherwise terminates employment with
Employer for any reason prior to the designated early withdrawal date in the
Participation Agreement, Employer shall disregard such early withdrawal date and
pay the Participant or the Participant's Beneficiary the benefit due under
Article V.
6.2 FINANCIAL HARDSHIP DISTRIBUTIONS
Notwithstanding any other provision of the Plan, payment from the
Participant's Account may be made to the Participant or the Participant's
Beneficiary in the sole discretion of the Committee by reason of Financial
Hardship. A payment based upon the Participant's, or the Participant's
Beneficiary's, Financial Hardship may not exceed the amount required to meet the
immediate financial need created by the hardship and not reasonably available
from other sources of the Participant or the Participant's Beneficiary. If such
a distribution is made, the Participant's deferrals into this Plan shall be
suspended for twelve (12) calendar months following the distribution. Resumption
of the Participant's deferrals into the Plan shall be made only at the election
of the Participant in accordance with Article III herein.
6.3 ACCELERATED DISTRIBUTION
Notwithstanding any other provision of the plan, a Participant may request
an accelerated distribution as follows:
(a) A Participant, at any time, shall be entitled to receive, upon
written request to the Committee, a lump sum distribution equal to ninety
percent (90%) of the Account balance as of the Determination Date
immediately preceding the date on which the Committee receives notice
pursuant to Section 11.9. The remaining balance of ten percent (10%) shall
be forfeited by the Participant. A Participant who receives a distribution
under this subsection shall be suspended from participation in the Plan for
twelve (12) months.
(b) If a Participant who is no longer employed by Employer is entitled
to a benefit under Section 4.3 of this Plan, the Participant shall be
entitled to receive, upon written request to the Committee, a lump sum
distribution equal to ninety percent (90%) of the actuarial equivalent
vested accrued pension make-up benefit under Section 4.3 as of the
Determination Date immediately preceding the date on which the Committee
receives notice pursuant to Section 11.9. The remaining balance of ten
percent (10%) shall be forfeited by the Participant.
(c) The amount payable under this section shall be paid in a lump sum
within forty-five (45) days following the Committee's receipt of notice by
the Participant. Following the death of a Participant, the Participant's
Beneficiary may, at any time, request an accelerated distribution under
this section.
8
<PAGE> 12
ARTICLE VII -- BENEFICIARY DESIGNATION
7.1 BENEFICIARY DESIGNATION
Each Participant shall have the right, at any time, to designate a
Beneficiary (both primary as well as contingent) to whom benefits under this
Plan shall be paid in the event of a Participant's death prior to complete
distribution to the Participant of the benefits due under the Plan. Each
Beneficiary designation shall be in a written form prescribed by the Committee
and will be effective only when filed with the Committee during the
Participant's lifetime.
7.2 CHANGING BENEFICIARY
Any Beneficiary designation may be changed by a Participant without the
consent of the previously named Beneficiary by the filing of a new designation
with the Committee. The filing of a new Beneficiary designation shall cancel all
designations previously filed.
7.3 NO BENEFICIARY DESIGNATION
If any Participant fails to designate a Beneficiary in the manner provided
above, if the designation is void, or if the Beneficiary designated by a
deceased Participant dies before the Participant or before complete distribution
of the Participant's benefits, the Participant's Beneficiary shall be the person
in the first of the following classes in which there is a survivor:
(a) The Participant's surviving spouse;
(b) The Participant's children in equal shares, except that if any of
the children predeceases the Participant but leave issue surviving, then
such issue shall take by right of representation the share the parent would
have taken if living;
(c) The Participant's estate.
7.4 EFFECT OF PAYMENT
Payment to the Beneficiary shall completely discharge Employer's
obligations under this Plan.
ARTICLE VIII -- ADMINISTRATION
8.1 COMMITTEE; DUTIES
This Plan shall be administered by the Committee. The Committee shall have
such powers and duties as may be necessary to discharge its responsibilities.
These powers shall include, but not be limited to, interpreting the Plan
provisions; determining amounts due to any Participant, the rights of any
Participant or Beneficiary under this Plan and the amounts credited to a
Participant's Account and the Earnings thereon; enforcing the right to require
any necessary information from any Participant; and any other activities deemed
necessary or helpful. Members of the Committee may be Participants under the
Plan.
8.2 AGENTS
The Committee may, from time to time, employ agents and delegate to them
such administrative duties as it sees fit, and may from time to time consult
with counsel who may be counsel to the Company.
8.3 BINDING EFFECT OF DECISIONS
The decision or action of the Committee with respect to any question
arising out of or in connection with the administration, interpretation and
application of the Plan and the rules and regulations promulgated hereunder
shall be final, conclusive and binding upon all persons having any interest in
the Plan.
9
<PAGE> 13
8.4 INDEMNITY OF COMMITTEE
To the extent permitted by applicable law, the Company shall indemnify,
hold harmless and defend the members of the Committee against any and all
claims, loss, damage, expense or liability arising from any action or failure to
act with respect to the Plan on account of such member's service on the
Committee.
ARTICLE IX -- CLAIMS PROCEDURE
9.1 CLAIM
Any person claiming a benefit, requesting an interpretation or ruling under
the Plan, or requesting information under the Plan shall present the request in
writing to the Committee or its delegatee, which shall respond in writing as
soon as practicable.
9.2 DENIAL OF CLAIM
If the claim or request is denied, the written notice of denial shall
state:
(a) The reasons for denial, with specific reference to the Plan
provisions on which the denial is based,
(b) A description of any additional material or information required
and an explanation of why it is necessary, and
(c) An explanation of the Plan's claims review procedure.
9.3 REVIEW OF CLAIM
Any person whose claim or request is denied or who has not received a
response within thirty (30) days may request review by notice given in writing
to the Committee. The claim or request shall be reviewed by the Committee which
may, but shall not be required to, grant the claimant a hearing. On review, the
claimant may have representation, examine pertinent documents, and submit issues
and comments in writing.
9.4 FINAL DECISION
The decision on review shall normally be made within sixty (60) days. If an
extension of time is required for a hearing or other special circumstances, the
claimant shall be notified and the time limit shall be one hundred twenty (120)
days. The decision shall be in writing and shall state the reasons and the
relevant Plan provisions. All decisions on review shall be final and bind all
parties concerned.
ARTICLE X -- AMENDMENT AND TERMINATION OF THE PLAN
10.1 AMENDMENT
The Board may, at any time, amend the Plan in whole or in part provided,
however, that no amendment shall be effective to decrease or restrict the amount
credited to any Account maintained under the Plan as of the date of amendment,
nor shall any amendment be effective to decrease the Earnings Rate at which
amounts are credited to any Account balance existing as of the date of
amendment. Changes in the definition of "Earnings Rate" shall not become
effective before the first day of the Deferral Period which follows the adoption
of the amendment and at least thirty (30) days written notice of the amendment
has been given to each Participant.
10.2 EMPLOYER'S RIGHT TO TERMINATE
The Board may at any time partially or completely terminate the Plan if, in
its judgment, the tax, accounting, or other effects of the continuance of the
Plan, or potential payments thereunder, would not be in the best interests of
Employer.
(a) Partial Termination. The Board may partially terminate the Plan by
instructing the Committee not to accept any additional Deferral
Commitments. If such a partial termination occurs, the Plan shall continue
to operate and be effective with regard to Deferral Commitments entered
into prior to the effective date of such partial termination.
(b) Complete Termination. The Board may completely terminate the Plan
by instructing the Committee not to accept any additional Deferral
Commitments, and to terminate all ongoing Deferral
10
<PAGE> 14
Commitments. If such a complete termination occurs, the Committee shall pay
out to each Participant the balance in the Participant's Account at such
time and in such manner as the Committee, in its sole discretion,
determines, except that the Participants' Accounts shall continue to accrue
Earnings at the Earnings Rate and all payments made under this section
shall include such Earnings. The Plan shall cease to operate when the
Account balances have been fully paid.
ARTICLE XI -- MISCELLANEOUS
11.1 UNFUNDED PLAN
This Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of "management or
highly-compensated employees" within the meaning of Sections 201, 301, and 401
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and therefore to be exempt from the provisions of Parts 2, 3 and 4 of Title I of
ERISA. Accordingly, the Board may terminate the Plan and no further benefits
shall accrue hereunder, or the Board may remove certain employees as
Participants, if it is determined by the United States Department of Labor, a
court of competent jurisdiction or an opinion of counsel that the Plan
constitutes an employee pension benefit plan within the meaning of Section 3(2)
of ERISA (as currently in effect or hereafter amended) which is not so exempt.
If the Plan is terminated under this Section 11.1, all ongoing Deferral
Commitments shall terminate, no additional Deferral Commitments will be accepted
by the Committee, and the amount of each Participant's Account balance shall be
distributed to such Participant at such time and in such manner as the
Committee, in its sole discretion, determines.
11.2 UNSECURED GENERAL CREDITOR
Participants and their Beneficiaries, heirs, successors and assigns shall
have no secured legal or equitable rights, interest or claims in any property or
assets of Employer, nor shall they be Beneficiaries of, or have any rights,
claims or interests in any life insurance policies, annuity contracts or the
proceeds therefrom owned or which may be acquired by Employer. Except as may be
provided in Section 11.3, such policies, annuity contracts or other assets of
Employer shall not be held under any trust for the benefit of the Participants,
their Beneficiaries, heirs, successors or assigns, or held in any way as
collateral security for the fulfilling of the obligations of Employer under this
Plan. Any and all of Employer's assets and policies shall be and remain
unrestricted by this Plan. Employer's obligation under the Plan shall be that of
an unfunded and unsecured promise to pay money in the future.
11.3 TRUST FUND
Employer shall be responsible for the payment of all benefits provided
under the Plan. At its discretion, Employer may establish one (1) or more
trusts, with such trustees as Employer may approve, for the purpose of providing
for the payment of such benefits. Although such trust or trusts may be
irrevocable, the assets thereof shall be subject to the claims of all Employer's
creditors in the event of insolvency. To the extent any benefits provided under
the Plan are paid from any such trust, Employer shall have no further obligation
to pay such benefits. If not paid from a trust, any benefits provided under the
Plan shall remain the obligation of, and shall be paid by, Employer.
11.4 NONASSIGNABILITY
Neither a Participant nor any other person shall have the right to commute,
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt the amounts, if
any, payable hereunder, or any part thereof, which are, and all rights to which
are, hereby expressly declared to be unassignable and nontransferable. No part
of the amounts payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant's or any other person's
bankruptcy or insolvency.
11
<PAGE> 15
11.5 NOT A CONTRACT OF EMPLOYMENT
The terms and conditions of this Plan shall not constitute a contract of
employment between Employer and the Participant, and the Participant (or the
Participant's Beneficiary) shall have no rights against Employer except as may
otherwise be specifically provided herein. Nothing in this Plan shall be deemed
to give a Participant the right to be retained in the service of Employer or to
interfere with the absolute and unrestricted right of Employer to discipline or
discharge a Participant at any time.
11.6 PROTECTIVE PROVISIONS
A Participant will cooperate with Employer by furnishing any and all
information requested by Employer in order to facilitate the payment of benefits
hereunder, by taking such physical examinations as Employer may deem necessary
and by taking such other actions as may be requested by Employer.
11.7 GOVERNING LAW
The provisions of this Plan shall be construed and interpreted according to
the laws of the State of Illinois, without reference to its conflicts of laws
provisions, except as preempted by federal law.
11.8 VALIDITY
If any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provisions had never been inserted herein.
11.9 NOTICE
Any notice or filing required or permitted under the Plan shall be
sufficient if in writing and hand delivered, or sent by registered or certified
mail, to any member of the Committee or the Secretary of Employer. Such notice
shall be deemed given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or
certification. Mailed notice to the Committee shall be directed to Employer's
corporate headquarters address. Mailed notice to a Participant or Beneficiary
shall be directed to the individual's last known address in Employer's records.
11.10 SUCCESSORS
The provisions of this Plan shall bind and inure to the benefit of Employer
and its successors and assigns. The term successors as used herein shall include
any corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise acquire all or substantially all of the
business and assets of Employer, and successors of any such corporation or other
business entity.
ANIXTER INC.
By:
----------------------------------
Its
----------------------------------
Dated:
12
<PAGE> 16
APPENDIX A--CALCULATION OF EARNINGS USING
AVERAGE DAILY BALANCE
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------
ADB FACTOR* = [Days in Month - Day of Month + 1]
---------------------------------
Days in Month
(Round to 10 Decimal Places)
- ------------------------------------------------------------------------------
EARNINGS FACTOR = (1 + Earnings Rate](1/12) - 1
(Round to 10 Decimal Places)
- ------------------------------------------------------------------------------
EARNINGS = Earnings Factor x
[Account Balance at Beginning of Month
+ Transaction 1 x ADB Factor 1
+Transaction 2 x ADB Factor 2
+Transaction 3 x ADB Factor 3]
(Round to 2 Decimal Places)
- ------------------------------------------------------------------------------
ACCOUNT BALANCE AT = Account Balance at Beginning of Month + Deferrals
END OF MONTH During Month + Earnings - Distributions
- ------------------------------------------------------------------------------
</TABLE>
* Separate ADB Factor for each transaction. The term "transaction" includes
Participant and Employer deferrals, benefit payments, withdrawals, and any other
type of distribution.
13
<PAGE> 17
APPENDIX A--CALCULATION OF EARNINGS USING
AVERAGE DAILY BALANCE
EXAMPLE
ASSUMPTIONS
- ------------------------------------------------------------------
MARCH 31 ACCOUNT BALANCE $10,000.
- ------------------------------------------------------------------
APRIL 14 DEFERRAL $1,000.
- ------------------------------------------------------------------
APRIL EARNINGS RATE 10.98%.
- ------------------------------------------------------------------
Step 1. Calculate Earnings for April on the most recent Account balance.
A. Calculate the monthly Earnings factor (Earnings Rate/12)
.1098/12 = .00915
B. Calculate the monthly Earnings (balance x factor)
10,000 X .00915 = 91.50
Step 2. Calculate Earnings during April on any deferrals.
A. Calculate the average daily balance (ADB) for the deferral
[deferral X(Days in the month - Deferral date + 1)]
Days in the month
1,000 x (30 - 14 + 1) = 566.67
30
B. Calculate the Earnings on the deferral (ADB X Earnings factor)
566.67 X .00915 = 5.19
Step 3. Calculate the Account balance as of April 30 (prior balance +
deferrals + Earnings)
10,000 + 1,000 + 91.50 + 5.19 = 11,096.69
14
<PAGE> 1
EXHIBIT 21.1
ITEL SCHEDULE 21
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
STATE OR JURISDICTION
COMPANY NAME OF INCORPORATION
- --------------------------------------------------------------------------- ---------------------
<S> <C>
Anixter Inc. .............................................................. Delaware
Anixter Canada Inc. ..................................................... Canada
Wirexpress Ltd. ......................................................... Canada
Anixter de Mexico, S.A. de C.V. ......................................... Mexico
Anixter Holdings, Inc. .................................................. Delaware
Anixter Venezuela Inc. .................................................. Delaware
Anixter Financial Inc. .................................................. Delaware
Anixter Europe Holdings B.V. ......................................... Netherlands
Anixter Netzwerke GmbH................................................ Austria
Anixter Belgium N.V. ................................................. Belgium
Anixter Deutschland GmbH.............................................. Germany
Anixter Espana S.A. .................................................. Spain
Anixter France S.A. .................................................. France
Anixter Greece Network Systems L.L.C. ................................ Greece
Anixter International N.V./S.A. ...................................... Belgium
Anixter Italia S.r.l. ................................................ Italy
Anixter International, Ltd. .......................................... England
Anixter U.K. Ltd. .................................................. England
Anixter Nederland B.V. ............................................... Netherlands
Anixter Norge A.S..................................................... Norway
Anixter Poland Sp.2.0.0. ............................................. Poland
Anixter Portugal S.A. ................................................ Portugal
Anixter Switzerland S.A./A.G. ........................................ Switzerland
Anixter Sverige AB.................................................... Sweden
Anixter Australia Pty. Ltd. .......................................... Australia
Anixter Singapore Pte. Ltd. .......................................... Singapore
Anixter Hong Kong Limited............................................. Hong Kong
Anixter Argentina S.A. ............................................... Argentina
Anixter Thailand Inc. ................................................ Delaware
Anixter Puerto Rico, Inc. ............................................... Delaware
Anixter Columbia S.A. ................................................... Columbia
Anixter de Brasil Ltda. ................................................. Brazil
Anixter Philippines Inc. ................................................ Delaware
Wirexpress, Inc. ........................................................ Illinois
Anixter Real Estate, Inc. ............................................... Illinois
Anixter -- Rotelcom...................................................... New York
Anixter -- Lincoln....................................................... Nebraska
B.E.L. Corporation......................................................... Delaware
Foreign Investments, Inc. ................................................. Delaware
GL Holding of Delaware, Inc. .............................................. Delaware
Itel Containers International Corporation............................. California
Itel Containers Corporation International........................... California
Itel Container Ventures, Inc. ............................................. Delaware
ICV GP Inc. ............................................................. Delaware
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
STATE OR JURISDICTION
COMPANY NAME OF INCORPORATION
- --------------------------------------------------------------------------- ---------------------
<S> <C>
ICV LP Inc. ............................................................. Delaware
Americontainer Limited Partnership
Container Concepts, Inc. ........................................... Delaware
Itel Distribution Systems, Inc. ........................................... Delaware
Itel Rail Holdings Corporation............................................. Delaware
ITL Funding, Inc. ....................................................... Br. Virgin Isl.
Itel Quadrum, Inc. ...................................................... Delaware
Fox River Valley Railroad Corporation.................................... Wisconsin
Green Bay and Western Railroad Company................................... Wisconsin
Michigan & Western Railroad Company...................................... Michigan
Hartford and Slocomb Railroad Company.................................... Wisconsin
McCloud River Railroad Company........................................... California
Rex Leasing, Inc. ....................................................... New Jersey
Rex Railways, Inc. ...................................................... New Jersey
Signal Capital Corporation............................................... Delaware
SC Arizona, Inc. ..................................................... Delaware
SC Florida, Inc. ..................................................... Delaware
SC Connecticut, Inc. ................................................. Delaware
Richdale, Ltd. ..................................................... Delaware
Signal Capital Projects, Inc. ........................................ Delaware
Signal Capital Norwalk, Inc. ....................................... Delaware
Sirena, Inc. ......................................................... Delaware
Seacoast Capital Corp. .................................................... Delaware
Seacoast Capital Corp. II.................................................. Delaware
Seacoast Capital Partners L.P. ............................................ Delaware
Plainsboro Holding Corporation............................................. Delaware
Railcar Services Corporation............................................... Delaware
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 2-93173) pertaining to the Anixter International Inc. 1983 Stock
Incentive Plan, the Registration Statement (Form S-8 No. 33-13486) pertaining to
the Anixter International Inc. Key Executive Equity Plan, the Registration
Statement (Form S-8 No. 33-21656) pertaining to the Anixter International Inc.
1988 Employee Stock Purchase Plan, the Registration Statement (Form S-8 No.
33-38364) pertaining to the Anixter International Inc. 1989 Employee Stock
Incentive Plan and the Registration Statement (Form S-8 No. 33-60676) pertaining
to the Anixter International Inc. 1993 Director Stock Option Plan and in the
related Prospectuses of our report dated February 5, 1996 with respect to the
consolidated financial statements and schedules of Anixter International Inc.
included in this Annual Report (Form 10-K) for the year ended December 31, 1995.
ERNST & YOUNG LLP
Chicago, Illinois
March 14, 1996
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or
director of Anixter International Inc., a Delaware corporation (the
"Corporation"), which is about to file an annual report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, on Form 10-K hereby
constitutes and appoints Dennis J. Letham, Rod F. Dammeyer, and James E. Knox,
and each of them, his or her true and lawful attorney-in-fact and agents, with
full power and all capacities, to sign the Corporation's Form 10-K and any or
all amendments thereto, and any other documents in connection therewith, to be
filed with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as she or he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned and hereunto set her or his hand and
seal as of the 8th day of February 1996.
<TABLE>
<S> <C>
/s/ JAMES BLYTH /s/ JOHN R. PETTY
- ------------------------------------- -------------------------------------
/s/ BERNARD F. BRENNAN /s/ SHELI Z. ROSENBERG
- ------------------------------------- -------------------------------------
/s/ ROD F. DAMMEYER /s/ STUART M. SLOAN
- ------------------------------------- -------------------------------------
/s/ ROBERT E. FOWLER, JR. /s/ THOMAS C. THEOBALD
- ------------------------------------- -------------------------------------
/s/ F. PHILIP HANDY /s/ SAMUEL ZELL
- ------------------------------------- -------------------------------------
/s/ MELVYN N. KLEIN
- -------------------------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM ANIXTER INTERNATIONAL
INC.'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 10,500
<SECURITIES> 0
<RECEIVABLES> 400,000
<ALLOWANCES> 9,000
<INVENTORY> 364,100
<CURRENT-ASSETS> 781,000
<PP&E> 97,400
<DEPRECIATION> 48,200
<TOTAL-ASSETS> 1,184,700
<CURRENT-LIABILITIES> 331,900
<BONDS> 0
<COMMON> 52,500
0
0
<OTHER-SE> 396,500
<TOTAL-LIABILITY-AND-EQUITY> 1,184,700
<SALES> 2,194,800
<TOTAL-REVENUES> 2,194,800
<CGS> 1,641,100
<TOTAL-COSTS> 2,095,200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,800
<INCOME-PRETAX> 74,400
<INCOME-TAX> 35,300
<INCOME-CONTINUING> 39,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,100
<EPS-PRIMARY> .71
<EPS-DILUTED> .71
</TABLE>
