<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report: December 11, 1998
Date of earliest event reported: November 27, 1998
ESSEX INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-10211 13-3496934
(Commission File No.) (IRS Employer Identification No.)
1601 WALL STREET
FORT WAYNE, IN 46802
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (219) 461-4000
<PAGE>
ITEM 1. CHANGE IN CONTROL OF REGISTRANT.
On November 27, 1998, Superior TeleCom Inc. ("Superior") announced that
it had accepted for purchase 22,562,135 shares of common stock, par value
$0.01 per share (the "Common Stock"), of Essex International Inc. (the
"Company") at a price of $32.00 per share (the "Purchased Shares") in
accordance with its tender offer (the "Offer") for up to 22,562,135 shares of
Common Stock. The Offer expired at 12:00 midnight, New York City time, on
Wednesday, November 25, 1998. The Purchased Shares represent approximately
81% of the Company's Common Stock outstanding on November 27, 1998. The
aggregate purchase price for the Purchased Shares is approximately
$721,988,320. According to Superior, the funds required by it to purchase
the Purchased Shares were obtained from a financing that was completed on
November 27, 1998. Terms of that financing are provided below.
According to Superior, Superior owns (through a wholly owned acquisition
subsidiary) an aggregate of 22,562,135 shares of the Company's Common Stock,
which represents approximately 81% of the Company's Common Stock outstanding
on November 27, 1998. Superior and the Company intend to proceed with the
consummation of a merger pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") dated as of October 21, 1998, pursuant to which SUT
Acquisition Corp. ("Merger Sub"), a Delaware corporation and a wholly owned
acquisition subsidiary of Superior, will merge with and into the Company with
the Company surviving as a wholly owned subsidiary of Superior (the
"Merger"). In the Merger, each remaining share of the Company's Common Stock
is expected to be converted into the right to receive 0.64 of a share of
8 1/2% trust convertible preferred securities of Superior Trust I, a business
trust formed by Superior, subject to the terms and conditions set forth in
the Merger Agreement.
Pursuant to the Merger Agreement, the Company intends to call a special
meeting of stockholders in early 1999 at which time the Merger Agreement will
be presented for consideration by the Company's stockholders. Because under
Delaware law the approval of the holders of a majority of all outstanding
shares of the Company's Common Stock is sufficient to approve and adopt the
Merger Agreement, Superior can cause the Merger to occur without the
affirmative vote of any other holders of the Company's Common Stock.
Superior and Merger Sub have agreed pursuant to the Merger Agreement to vote
all the shares of the Company's Common Stock held by them in favor of
approval and adoption of the Merger Agreement.
Pursuant to the Merger Agreement, concurrent with acceptance for
purchase of Common Stock pursuant to the Offer, (i) the number of directors
on the Company's board of directors was reduced to four, (ii) Steven R.
Abbott, W.L. Lyons Brown, Jr., Rodney A. Cohen, Edward O. Gaylord, Stuart S.
Janey, III and Ward W. Woods resigned from the Company's board of directors
and (iii) Steven S. Elbaum, Bragi F. Schut and David S. Aldridge, each a
designee of Superior, were appointed to the Company's board of directors.
A copy of the Merger Agreement is filed as Exhibit 99.2 hereto and is
incorporated by reference herein.
2.
<PAGE>
THE CREDIT FACILITY
GENERAL
Funds required to complete the Offer were obtained from loans available
pursuant to (i) an Amended and Restated Credit Agreement (the "Credit
Agreement") entered into on November 27, 1998 by Superior, as guarantor,
Superior/Essex Corp., a newly formed Delaware corporation and a wholly owned
subsidiary of Superior ("Superior Holding"), Essex Group Inc., a wholly owned
subsidiary of the Company ("Essex Group"), as borrowers, certain subsidiary
guarantors, various lenders, Merrill Lynch & Co., as documentation agent,
Fleet National Bank, as syndication agent, and Bankers Trust Company, as
administrative agent, and (ii) a $200,000,000 Senior Subordinated Credit
Agreement (the "Subordinated Credit Agreement") entered into on November 27,
1998 by Superior, as guarantor, Superior Holding, as borrower, certain
subsidiary guarantors (including the Company and Essex Group), various
lenders, Fleet Corporate Finance, Inc., as syndication agent, and Bankers
Trust, as administrative agent. The following summary of the material terms
of the Credit Agreement and the Subordinated Credit Agreement (collectively,
the "Credit Facility") does not purport to be complete and is subject to the
detailed provisions of the loan agreements and the various related documents
entered into in connection with the Credit Facility. Copies of the Credit
Agreement and the Subordinated Credit Agreement are filed as Exhibits 99.3
and 99.4, respectively, hereto and are incorporated by reference herein.
THE CREDIT AGREEMENT
The Credit Agreement provides for total borrowings of up to $1.15
billion. Proceeds of the Credit Agreement were used to finance the Offer
(including the refinancing of certain existing indebtedness of Superior and
Essex Group) and to pay related fees and expenses.
The Credit Agreement is comprised of two tranches of term loans and a
revolving credit facility. Interest on amounts outstanding under the Credit
Agreement is based upon either (i) the Federal Funds Rate, Bankers Trust's
prime lending rate or an adjusted certificate of deposit rate or (ii) the
rate in the Eurodollar market for deposits in dollars or the rate in the
London market for deposits in pounds sterling plus, in each case, an
applicable margin, a variable component that, in certain circumstances, is
subject to adjustment based on the leverage ratio maintained by Superior
Holding and its subsidiaries. Superior Holding and Essex Group also paid
Bankers Trust underwriting and administrative fees, reimbursed certain
expenses and provided certain indemnities. The two tranches of term loans
have five and one-half and seven year terms, and the revolving credit
facility has a five and one-half year term. Each of the term loans requires
periodic mandatory amortization payments.
The obligations of each of Superior Holding and Essex Group under the
Credit Agreement are unconditionally guaranteed by the other party and their
respective obligations are guaranteed by certain of their respective
subsidiaries as well as by Superior. The indebtedness incurred under the
Credit Agreement is secured by a first priority lien on substantially all the
assets of Superior, Superior Holding, Essex Group and their subsidiaries.
3.
<PAGE>
Superior, Superior Holding, Essex Group and certain of their respective
subsidiaries are subject to certain customary affirmative and negative
covenants under the Credit Agreement, including, without limitation,
covenants that restrict, subject to specified exceptions, (i) the incurrence
of additional indebtedness and other obligations, (ii) mergers and
acquisitions, (iii) asset sales, (iv) the granting of liens, (v) prepayment
or repurchase of other indebtedness, (vi) engaging in transactions with
affiliates, (vii) capital expenditures, (viii) the making of investments,
(ix) dividends and other payments with respect to equity interests and (x)
certain changes in the business in which they are engaged.
THE SUBORDINATED CREDIT AGREEMENT
Proceeds of the Subordinated Credit Agreement were used to finance the
Offer, to refinance certain existing indebtedness of Superior and the Company
and to pay related fees and expenses.
The Subordinated Credit Agreement is a general unsecured obligation of
Superior Holding that ranks pari passu in right of payment with all future
senior subordinated indebtedness and senior to all other subordinated
indebtedness. The Subordinated Credit Agreement is guaranteed by Superior
and certain subsidiaries of Superior (including Essex Group), on a joint and
several basis. The Subordinated Credit Agreement matures in 2006 and is
prepayable at the option of Superior Holding at any time. Upon a change of
control (as defined in the Subordinated Credit Agreement), Superior Holding
is required to offer to repay the loans then outstanding under the
Subordinated Credit Agreement for 101% of the principal amount thereof, plus
accrued interest thereon to the date of repayment. Mandatory prepayments are
required from: (i) the net proceeds from issuances of debt to the extent not
required to repay senior indebtedness (I.E. the Credit Agreement) and (ii)
the net proceeds from equity issuances with customary exceptions.
Interest on the Subordinated Credit Agreement is payable quarterly. For
the first six months after the borrowing date, interest is based upon LIBOR
plus 4.25% and if LIBOR rate loans are not available, the alternate base rate
(the higher of prime or 1/2 of 1% over the Federal Funds Rate) plus 3.25%.
Upon the six month anniversary of the borrowing date, interest is based upon
LIBOR plus 4.50% and, if LIBOR rate loans are not available, the alternate
base rate plus 3.50%. Upon the 12 month anniversary of the borrowing date,
interest is based upon LIBOR plus 5.00% and, if LIBOR rate loans are not
available, the alternate base rate plus 4.00%. After the 12 month
anniversary of the borrowing date, the interest rate will increase by 0.25%
per quarter, but the maximum interest rate will be LIBOR plus 5.50% and, if
LIBOR rate loans are not available, the alternate base rate plus 4.50%.
The Subordinated Credit Agreement provides for the acceleration of
payment thereunder in the event of the acceleration of the indebtedness under
the Credit Agreement. The Subordinated Credit Agreement also contains
covenants limiting the ability of Superior Holding and its subsidiaries
(including the Company), among other things, to pay dividends or make other
restricted payments, make investments, incur additional indebtedness, permit
liens, enter into any consolidation, merger, conveyance or lease
transactions, make asset sales, enter into transactions with affiliates or
engage in unrelated lines of business.
4.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
a. None.
b. None.
c. EXHIBITS
99.1 Press release of Superior TeleCom Inc. dated November 27, 1998,
incorporated by reference to Exhibit 10 to Amendment No. 2 to the
Company's Schedule 14D-9, filed with the Securities and Exchange
Commission (the "Commission") on November 27, 1998 (Commission
File No. 1-10211).
99.2 Agreement and Plan of Merger dated as of October 21, 1998, among
Superior TeleCom Inc., SUT Acquisition Corp. and Essex
International Inc., incorporated by reference to Exhibit 1 to the
Company's Schedule 14D-9, filed with the Commission on October
28, 1998 (Commission File No. 1-10211).
99.3 Amended and Restated Credit Agreement dated as of November 27,
1998, among Superior/Essex Corp., Essex Group, Inc., the
guarantors named therein, various lenders, Merrill Lynch & Co.,
as documentation agent, Fleet National Bank, as syndication
agent, and Bankers Trust Company, as administrative agent,
incorporated by reference to Exhibit 99.7 to Amendment No. 1 to
the Superior TeleCom Inc. Schedule 13D (the "Superior Schedule
13D/A"), filed with the Commission on December 7, 1998
(Commission File No. 1-10211).
99.4 Senior Subordinated Credit Agreement dated as of November 27,
1998, among Superior/Essex Corp., as borrower, Superior TeleCom
Inc., as parent, the subsidiary guarantors named therein, various
lenders, Fleet Corporate Finance, Inc., as syndication agent, and
Bankers Trust Company, as administrative agent, incorporated by
reference to Exhibit 99.8 to the Superior Schedule 13D/A
(Commission File No. 1-10211).
5.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ESSEX INTERNATIONAL INC.
Dated: December 11, 1998 By: /s/ Debra F. Minott
--------------------------------
Debra F. Minott
Senior Vice President,
General Counsel and Secretary
6.
