<PAGE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 15, 1997
REGISTRATION NO. 333-22961
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
GENERAL CABLE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
DELAWARE 3357 06-1398235
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
4 TESSENEER DRIVE
HIGHLAND HEIGHTS, KENTUCKY 41076
(606) 572-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
STEPHEN RABINOWITZ
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
GENERAL CABLE CORPORATION
4 TESSENEER DRIVE
HIGHLAND HEIGHTS, KENTUCKY 41076
(606) 572-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
ELLEN J. ODONER, ESQ. GEOFFREY E. LIEBMANN, ESQ.
WEIL, GOTSHAL & MANGES LLP CAHILL GORDON & REINDEL
767 FIFTH AVENUE 80 PINE STREET
NEW YORK, NEW YORK 10153 NEW YORK, NEW YORK 10005
(212) 310-8000 (212) 701-3000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
________________________________________________________________________________
<PAGE>
<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: one to be
used in connection with an underwritten public offering in the United States and
Canada of 13,520,000 shares (the 'U.S. Prospectus'), and one to be used in a
concurrent underwritten public offering outside the United States and Canada of
3,380,000 shares (the 'International Prospectus'). The two prospectuses are
identical except for the front and back cover pages. The form of U.S. Prospectus
is included herein and is followed by the alternate pages to be used in the
International Prospectus. Each of the alternate pages for the International
Prospectus included herein is labeled 'International Prospectus -- Alternate
Page.' Final forms of each Prospectus will be filed with the Securities and
Exchange Commission under Rule 424(b) under the Securities Act of 1933.
<PAGE>
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 15, 1997
16,900,000 SHARES
[LOGO]
COMMON STOCK
All of the 16,900,000 shares of common stock, par value $.01 per share (the
'Common Stock'), of General Cable Corporation ('General Cable' or the 'Company')
offered hereby are being sold by Wassall Netherlands Cable B.V., a Netherlands
corporation (the 'Selling Stockholder'), in concurrent offerings in the United
States and Canada and outside the United States and Canada (collectively, the
'Offerings'). Of such shares, 13,520,000 are initially being offered in the
United States and Canada by the U.S. Underwriters (the 'United States Offering')
and 3,380,000 are initially being offered outside the United States and Canada
by the International Underwriters (the 'International Offering'). The per share
price to the public and per share underwriting discounts and commissions for the
Offerings will be identical. See 'Underwriting.' The Company will not receive
any of the proceeds from the sale of the shares offered hereby.
Prior to the Offerings, the Company has been a wholly-owned subsidiary of
the Selling Stockholder. Following consummation of the Offerings, the Selling
Stockholder will own approximately 30% of the outstanding shares of Common Stock
(or approximately 20% of the outstanding shares of Common Stock if the U.S.
Underwriters' over-allotment option is exercised in full).
Prior to the Offerings there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price of the
Common Stock will be between $21.00 and $24.00 per share. See 'Underwriting' for
the factors to be considered in determining the initial public offering price.
The Common Stock has been approved for listing on the New York Stock Exchange
(the 'NYSE'), subject to official notice of issuance, under the symbol 'GCN'.
FOR A DISCUSSION OF CERTAIN RISKS OF AN INVESTMENT IN THE SHARES OF COMMON
STOCK OFFERED HEREBY, SEE 'RISK FACTORS' ON PAGES 7 - 11.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Discounts and Selling
Public Commissions* Stockholder`D'
<S> <C> <C> <C>
Per Share....................................... $ $ $
Total`DD'....................................... $ $ $
</TABLE>
- ------------------------
* The Company and the Selling Stockholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See 'Underwriting.'
`D' Before deducting expenses of the Offerings estimated to be $2,000,000, all
of which are payable by the Selling Stockholder.
`DD' The Selling Stockholder has granted the U.S. Underwriters a 30-day option
to purchase up to 2,535,000 additional shares of Common Stock on the same
terms per share solely to cover over-allotments, if any. If such option is
exercised in full, the total price to public will be $ , the total
underwriting discounts and commissions will be $ and the total
proceeds to the Selling Stockholder will be $ . See
'Underwriting.'
------------------------
The Common Stock is being offered by the Underwriters as set forth under
'Underwriting' herein. It is expected that delivery of the Common Stock offered
hereby will be made at the offices of Dillon, Read & Co. Inc., New York, New
York, or through the facilities of The Depository Trust Company on or about
, 1997, against payment therefor. The U.S. Underwriters include:
DILLON, READ & CO. INC. MERRILL LYNCH & CO.
The date of this Prospectus is , 1997.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
<PAGE>
[ART WORK]
------------------------
CERTAIN PERSONS PARTICIPATING IN THE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZATION, SYNDICATE COVERING TRANSACTIONS AND
IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
'UNDERWRITING.'
2
<PAGE>
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements (and
the notes related thereto) included elsewhere in this Prospectus. Unless the
context otherwise requires or as otherwise specified herein, (i) all references
in this Prospectus to 'General Cable' or the 'Company' are to General Cable
Corporation and its consolidated subsidiaries and the Related Companies (as
defined herein); (ii) all information in this Prospectus assumes that the U.S.
Underwriters' over-allotment option is not exercised; and (iii) the number of
shares of Common Stock outstanding after the Offerings assumes the issuance,
pursuant to the Company's 1997 Stock Incentive Plan (the 'Stock Incentive
Plan'), of $5.6 million of restricted stock (or 250,000 shares assuming an
initial public offering price of $22.50) expected to be issued to the Company's
executive officers and other key employees upon consummation of the Offerings
(the 'Restricted Stock Issuance').
THE COMPANY
General Cable is a leader in the development, design, manufacture,
marketing and distribution of copper wire and cable products for the
communications and electrical markets. Copper wire and cable is the most widely
used medium for the transmission of voice, data, video and control signals and
electrical current. The Company believes that several factors, including
technological innovations and the size of the installed base of copper cable,
will preserve copper's position as the medium of choice for these applications.
Based on publicly available data and internal estimates, the Company believes
that it has the most diversified product line and channels of distribution in
the U.S. wire and cable industry. General Cable's products for the
communications markets include plastic insulated cable ('PIC'), outside service
wire, high-bandwidth twisted pair data cable, multi-conductor/multi-pair
shielded and unshielded cable, coaxial cable and fiber optic cable. General
Cable's products for the electrical markets include building wire, portable cord
and cordsets for construction, industrial and consumer applications, and
automotive wire and cable. The Company sells to more than 8,500 customers,
including electrical, data communications and electronic distribution companies,
automotive, hardware and home center retail chains, and telecommunications
companies and other end users.
Since its acquisition by a subsidiary of Wassall PLC ('Wassall') in June
1994 (the 'Acquisition'), General Cable has benefitted from a significant
reorganization and capital investment program. Net sales have grown from $794.2
million in 1993 to $1,043.6 million in 1996, while operating profit has grown
from $2.3 million to $78.5 million over the same period. General Cable believes
that this program has improved the Company's market position and further
enhanced the following competitive strengths of the Company:
Breadth of product line. General Cable sells over 11,000 products, which it
believes represents the most diversified product line of any U.S. wire and cable
manufacturer. As a result, General Cable is able to offer its customers a single
source for most of their wire and cable requirements. In addition, the Company
believes that it benefits from certain economies of scale in purchasing,
manufacturing, sales, distribution, and engineering and development.
Brand recognition. General Cable has many well-established brand names,
including Carol'r', Romex'r' and Vutron'r'. According to the 1995-1996 brand
preference survey by Electrical Construction & Maintenance, an industry trade
publication, General Cable has the highest-ranked brands of building wire in the
U.S. among electrical contractors and operators of plants and facilities and the
highest ranked brands of heavy-duty portable cable and cord in the U.S. among
electrical contractors, operators of plants and facilities and engineering
firms.
Distribution strength. General Cable's network of 17 U.S. manufacturing
facilities and five regional distribution centers allows the Company to serve
customers efficiently throughout the U.S. General Cable's products are sold by
its direct sales force and commissioned agents through multiple channels,
including electrical, data communications and electronic distribution companies,
and automotive, hardware and home center retail chains, and directly to end
users in the industrial, entertainment and communications markets. The Company
believes that its combination of retail and wholesale channels has enabled it to
develop broad-based technical and marketing expertise, which contributes to
additional sales volume and market penetration.
Customer selection, sales and service. General Cable has developed supply
relationships with preferred customers who have a favorable combination of
volume, product mix, business strategy and industry position. For example, the
Company believes it is a leading supplier of wire and cable to AutoZone, the
largest retailer of automotive aftermarket parts in the United States; Graybar
Electric, one of the largest electrical and communications distributors in the
United States; W.W. Grainger, a
3
<PAGE>
<PAGE>
leading distributor of maintenance, repair and operating (MRO) supplies and
related information; U S WEST, Inc. ('U S WEST'), a Regional Bell Operating
Company ('RBOC'); ACE Hardware, a leading retail cooperative; Milwaukee Electric
Tool Corporation, a leading manufacturer of power tools; and AMP, a leading
supplier of data networking systems. The Company serves these and other
customers with a number of service and support programs, including Electronic
Data Interchange ('EDI') with over 60 of the Company's largest customers and
innovative point-of-sale merchandising display systems.
Improved operating efficiency. Since the Acquisition, General Cable has
taken a number of initiatives designed to improve its profitability and
productivity, including investment in new production equipment and information
systems; rationalization of manufacturing facilities and product lines;
consolidation of distribution locations; product redesign; improved materials
procurement and usage; and the establishment of business teams and other
organizational changes. The Company believes that these initiatives have
generated significant productivity improvements since the Acquisition and that
further productivity improvements can be achieved.
THE REFINANCING
Concurrently with consummation of the Offerings, General Cable intends to
make an initial borrowing of approximately $271.8 million under a new $350.0
million credit facility to be entered into with a syndicate of banks (the 'New
Credit Facility'). The Company intends to use the proceeds of such borrowing to
(i) repay all of its revolving bank debt (which is anticipated to be
approximately $26.1 million on the date of the consummation of the Offerings);
(ii) repay all intercompany debt and advances owed to Wassall and its
subsidiaries (which, together with accrued interest, are anticipated to amount
to approximately $200.7 million on the date of the consummation of the
Offerings); (iii) pay $42.6 million as a dividend to the Selling Stockholder
(the 'Selling Stockholder Dividend'); (iv) pay $2.0 million for the purchase of
two related companies, Carol Cable Europe Ltd. and Carol Cable Ltd. (the
'Related Companies'), from Wassall; and (v) pay estimated expenses of the
Refinancing of $0.4 million. The refinancing of bank debt and intercompany debt
and advances, Selling Stockholder Dividend and purchase of the Related Companies
are referred to herein collectively as the 'Refinancing.' See 'Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources' and 'Certain Relationships and
Related Transactions.'
THE OFFERINGS
<TABLE>
<S> <C>
Common Stock offered by the Selling Stockholder:
United States Offering..................... 13,520,000 shares
International Offering..................... 3,380,000 shares
-----------------
Total................................. 16,900,000 shares
-----------------
-----------------
Common Stock to be outstanding after the
Offerings..................................... 24,500,000 shares(1)
Use of Proceeds................................. The Company will not receive any proceeds from the sale of the
shares of Common Stock offered hereby.
NYSE symbol..................................... GCN
</TABLE>
- ------------
(1) Reflects the Restricted Stock Issuance. Excludes an aggregate of 1,103,750
shares of Common Stock to be reserved for issuance upon the exercise of
options expected to be granted at the initial public offering price to the
Company's executive officers and key employees upon consummation of the
Offerings pursuant to the Stock Incentive Plan. See 'Executive
Compensation -- Stock Incentive Plan.'
RISK FACTORS
Prospective purchasers of the Common Stock offered hereby should carefully
consider all information set forth in this Prospectus, including the information
set forth in 'Risk Factors' on pages 7-11, prior to making an investment
decision.
4
<PAGE>
<PAGE>
SUMMARY FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE AND CERTAIN OTHER DATA)
The summary financial data set forth in the following table have been
derived from the combined financial statements of the Company and the
consolidated financial statements of the Predecessor (as defined herein). As a
result of the Acquisition, which was accounted for as a purchase, the Company's
results of operations, cash flows and financial position for periods after June
8, 1994 are not comparable to prior periods. Certain reclassifications have been
made to the financial data of the Predecessor to conform to the presentation of
such data by the Company.
The pro forma statement of operations data give pro forma effect to the
Refinancing as if it had occurred on January 1, 1996. The pro forma balance
sheet data give pro forma effect to the Refinancing and the Restricted Stock
Issuance as if they had occurred on March 31, 1997. The pro forma financial
adjustments are based upon available information and certain assumptions that
the Company believes are reasonable. Such pro forma data are for informational
purposes only and may not be indicative of the results of operations or
financial position of the Company had the Refinancing and the Restricted Stock
Issuance actually occurred on such dates.
The following summary financial data should be read in conjunction with
'Selected Financial Data,' 'Unaudited Pro Forma Financial Data,' 'Management's
Discussion and Analysis of Financial Condition and Results of Operations,' the
combined financial statements of the Company and related notes thereto and the
consolidated financial statements of the Predecessor and related notes thereto
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
THE COMPANY
PREDECESSOR ---------------------------------------------------------
------------ YEAR ENDED THREE MONTHS ENDED
JANUARY 1 TO JUNE 9 TO DECEMBER 31, MARCH 31,
JUNE 8, DECEMBER 31, ------------------- --------------------
1994 1994 1995 1996 1996 1997
------------ ------------ -------- -------- ------ --------
STATEMENT OF OPERATIONS DATA:
Net sales............................. $355.0 $543.3 $1,061.3 $1,043.6 $258.0 $251.0
Gross profit.......................... 44.2 73.4 138.7 188.3 36.0 48.8
Operating income...................... 1.1 20.3 44.5 78.5 8.9 19.2
Interest expense, net................. (12.1) (11.0) (20.7) (19.6) (5.2) (4.9)
Earnings (loss) before income taxes... (11.0) 9.3 23.8 58.9 3.7 14.3
Income tax benefit (provision)........ .1 (6.5) 1.5(1) (19.7) (1.2) (5.7)
Net income (loss)..................... (10.9) 2.8 25.3 39.2 2.5 8.6
Earnings per share(2)................. $ .12 $ 1.04 $ 1.62 $ .10 $ .35
Weighted average number of shares
outstanding(2)...................... 24.3 24.3 24.3 24.3 24.3
PRO FORMA STATEMENT OF OPERATIONS DATA:
Operating income...................... $ 78.5 $ 19.2
Interest expense, net(3).............. (14.1) (3.4)
Net income............................ 42.5 9.5
Earnings per share(2)................. $ 1.75 $ .39
OTHER DATA:
Average daily New York Commodity
Exchange ('COMEX') price per pound
of copper cathode................... $ 0.91 $ 1.20(4) $ 1.35 $ 1.06 $ 1.18 $ 1.11
Capital expenditures.................. $ 6.2 $ 9.1 $ 26.2 $ 30.0 $ 5.6 $ 4.0
Depreciation and amortization of fixed
assets.............................. 7.5 6.7 11.7 12.1 3.0 3.3
Number of employees (end of period)... 4,200 4,100 3,900 4,100 3,800
<CAPTION>
DECEMBER 31, MARCH 31,
---------------------------------- --------------------
1994 1995 1996 1997
------------ -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital....................... $224.8 $ 234.4 $ 205.6 $214.9
Total assets.......................... 518.7 535.6 513.6 540.3
Long-term debt........................ 206.5 205.9 205.1 204.9
Shareholders' equity.................. 97.6 122.9 107.4(5) 115.8
PRO FORMA BALANCE SHEET DATA:
Working capital....................... $214.9
Total assets(6)....................... 540.7
Long-term debt(7)..................... 251.6
Shareholders' equity(8)............... 78.8
</TABLE>
(footnotes on following page)
5
<PAGE>
<PAGE>
(footnotes from previous page)
(1) At December 31, 1995, the Company recognized the full value of its net
deferred tax assets; accordingly, goodwill recorded in the Acquisition was
eliminated and the Company recognized a tax benefit of $1.7 million. See
Note 11 to combined financial statements.
(2) Earnings per share was computed based on the weighted average common shares
outstanding for each period, adjusted for a 121,250-for-1 stock split.
(3) Adjusted to reflect a net decrease in interest expense resulting from
consummation of the Refinancing. The adjustments include: (i) elimination of
interest expense to related parties of $19.6 million for 1996 and $4.8
million for the three months ended March 31, 1997 resulting from the
expected repayment of $195.8 million of intercompany long-term debt with a
weighted average interest rate of 9.9% per annum; (ii) interest expense on
the New Credit Facility of $13.7 million for 1996 and $3.3 million for the
three months ended March 31, 1997 reflecting an interest rate of 5.75% per
annum (representing a 37.5 basis point spread over the one month London
interbank offered rate ('LIBOR')) and $242.1 million of average borrowings
assumed to be outstanding during 1996 and $245.1 million of average
borrowings assumed to be outstanding during the three months ended March 31,
1997 (based upon the estimated initial borrowing of $242.4 million as of
January 1, 1996) and General Cable's actual borrowing and repayment
experience in 1996 and the three months ended March 31, 1997; and (iii)
amortization of deferred financing costs. Historical interest income in 1996
included $0.4 million of earnings on excess cash, which were assumed to have
been eliminated as a result of the Refinancing.
(4) The average daily COMEX price per pound for the full year 1994 was $1.07.
(5) After the payment of dividends totaling $55.1 million.
(6) Adjusted to reflect capitalization of estimated deferred financing costs
related to the Refinancing.
(7) Adjusted to reflect an initial borrowing under the New Credit Facility of
$267.7 million at March 31, 1997 and the use of the proceeds as follows: (i)
repayment of intercompany indebtedness of $195.8 million; (ii) repayment of
$25.2 million of outstanding bank debt; (iii) payment of $42.6 million as
the Selling Stockholder Dividend; (iv) payment of $2.0 million for the
purchase of the Related Companies; (v) repayment of $1.7 million of
intercompany advances owed by the Related Companies to Wassall; and (vi)
payment of $0.4 million of estimated expenses of the Refinancing.
(8) Adjusted to reflect (i) the Selling Stockholder Dividend of $42.6 million
and (ii) the Restricted Stock Issuance.
6
<PAGE>
<PAGE>
RISK FACTORS
In addition to the other information set forth in this Prospectus,
prospective purchasers of the Common Stock offered hereby should carefully
consider the following factors before making an investment in the Common Stock.
PRICE AND OTHER COMPETITIVE FACTORS
Price competition for many of the Company's products is intense,
particularly in certain segments of the building wire and cordset markets, and
many of the Company's products are essentially functionally interchangeable with
those of competitors. A substantial portion of General Cable's sales of building
wire, including its thermoplastic-insulated temperature-resistant nylon ('THHN')
and Romex'r' products, which collectively accounted for approximately one-third
of the Company's 1996 net sales, are made to customers who purchase their
requirements on an as-needed basis. These customers typically contact several
potential suppliers and make their purchases based, at least in part, upon the
lowest quoted price. Although a favorable pricing environment for these products
existed in the second half of 1996 and the first quarter of 1997, there can be
no assurance that this pricing environment will continue.
The markets for all of General Cable's product categories are highly
competitive. Certain of the Company's competitors may have greater financial and
other resources than the Company and, among other things, may be less affected
by reductions in margins resulting from price competition. These competitors can
also be expected to continue to improve the design and performance of their
products and to introduce new products with competitive price and performance
characteristics. The Company expects that it will be required to continue to
invest in product development, productivity improvements and customer service
and support in order to compete in its markets. See ' -- Dependence on New
Products and Product Improvements; Vulnerability to Technological Change' below.
ECONOMIC CONSIDERATIONS
Many of General Cable's customers use the Company's products as components
in their own products or in projects undertaken for their customers.
Accordingly, a downturn in the business of a particular group of customers,
particularly those engaged in non-residential construction, could adversely
affect the Company's results of operations, cash flows and financial position.
Furthermore, an overall softening in the U.S. economy could adversely affect
generally all the markets General Cable serves.
CUSTOMER CONCENTRATION AND RELIANCE ON INDEPENDENT NON-EXCLUSIVE DISTRIBUTION
SYSTEM
Although General Cable sold products to approximately 8,500 customers
during 1996, approximately 60% of its net sales were generated by its 50 largest
customers, approximately 38% of its net sales were generated by its ten largest
customers and approximately 10% of its net sales were generated by its largest
customer, U S WEST, one of the RBOCs. The loss of one or more of these customers
could have a material adverse effect on the Company's results of operations,
cash flows and financial position. The Company expects that its customer
concentration will continue to increase as the Company pursues its strategy of
developing supply relationships with preferred customers.
Sales to U S WEST were made pursuant to a ten-year supply agreement that
took effect on November 1, 1994. This agreement does not guarantee a minimum
level of sales, and is terminable by U S WEST prior to its scheduled expiration
date if the Company does not meet certain performance criteria. The Company
experienced a decline in the volume of sales to U S WEST in the first quarter of
1997 compared to the first quarter of 1996 due to an expected decline in U S
WEST's requirements for the year 1997 compared to 1996 and a delay in the timing
of expected orders.
In 1996, approximately 55% of General Cable's net sales were generated by
independent distributors and six of its ten largest customers were independent
distributors. These distributors are not contractually obligated to carry the
Company's product lines exclusively or for any significant period of time.
Therefore, these distributors may purchase products that compete with the
Company's products or cease purchasing the Company's products at any time. The
loss of one or more large distributors could have a material adverse effect on
the Company's results of operations, cash flows and financial position.
7
<PAGE>
<PAGE>
IMPACT OF COPPER PRICES
The principal raw material used by General Cable to manufacture wire and
cable products is copper. Copper accounted for approximately 43%, 50%, 44% and
45% of the Company's cost of goods sold in 1994, 1995, 1996 and the first
quarter of 1997, respectively, and the Company expects that copper will continue
to account for a significant portion of these costs in the future. The cost of
copper has been subject to considerable volatility over the past several years,
ranging between $0.78 and $1.40 per pound in 1994, between $1.21 and $1.46 per
pound in 1995, between $0.87 and $1.30 per pound in 1996 and between $1.02 and
$1.20 per pound in the first quarter of 1997. There can be no assurance that the
Company will be able to maintain a satisfactory differential between finished
product prices and copper costs or achieve acceptable gross profit margins in
the future and, if it is unable to do so, its operating results will be
adversely affected. In addition, certain of the Company's variable selling
expenses are based on a percentage of gross sales and, therefore, increase with
increases in the price of copper. Sharp increases in the price of copper could
temporarily reduce demand for the Company's products if customers decide to
defer their purchases of wire and cable products until copper prices decline.
Increases in copper prices may also have an adverse effect on the Company's
working capital position. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations' and 'Business -- Raw Materials.'
DEPENDENCE ON NEW PRODUCTS AND PRODUCT IMPROVEMENTS; VULNERABILITY TO
TECHNOLOGICAL CHANGE
Many of the communications markets that General Cable serves are affected
by advances in information processing and communications capabilities which
require increased data transmission speeds and greater bandwidth. These trends
require ongoing improvements in the capabilities of wire and cable products. The
Company believes that its future success will depend in part upon its ability to
enhance existing products and to develop and manufacture new products that meet
or anticipate such changes. The failure to introduce successfully new or
enhanced products on a timely and cost-competitive basis could have an adverse
impact on the Company's results of operations, cash flows and financial
position.
The communications industry is undergoing rapid and intense technological
change and participants in this industry, including telephone companies, are
evaluating alternative technologies, such as coaxial and fiber optic cable and
wireless technologies, for certain applications. Cable television companies are
exploring opportunities to enter the telephone market through existing coaxial
cable networks. Fiber optic technology represents a potential substitute for
certain of the copper-based communications products that contributed
approximately 17% of General Cable's 1996 net sales. Although fiber optic cables
have not, to date, significantly penetrated the primary markets served by the
Company due to the high relative cost required to interface electronic and light
signals and the high cost of fiber termination and connection, a significant
decrease in the cost of fiber optic systems could make such systems superior on
a price/performance basis to copper systems. Such a significant decrease in the
cost of fiber optic systems would likely have an adverse effect on the Company.
In addition, wireless communications technology could reduce the demand for both
copper and fiber optic-based systems by reducing the need for communications
wiring.
MANUFACTURING CAPACITY
General Cable is currently operating its manufacturing facilities at high
utilization rates. In order to meet growing customer demand, the Company will
need to invest in additional manufacturing equipment. Failure to have new
equipment operational in a timely manner or shut-downs of existing capacity due
to breakdowns or other reasons could adversely affect the Company's results of
operations, cash flows and financial position.
CHANGES IN INDUSTRY STANDARDS AND REGULATORY ENVIRONMENT
General Cable, as a manufacturer and distributor of wire and cable
products, is subject to a number of industry standard-setting authorities, such
as Underwriters Laboratories ('UL'), the Telecommunications Industry Association
and the Electronics Industries Association. In addition, many of the markets
8
<PAGE>
<PAGE>
served by General Cable's products are subject to standard-setting authorities
as well as the requirements of federal, state and local regulatory authorities.
Changes in the standards and requirements imposed by such authorities could have
an adverse affect on the Company. In addition, changes in the legislative
environment, such as the recently enacted Telecommunications Reform Act of 1996,
could affect the growth and other aspects of important markets served by the
Company. It is not possible at this time to predict the impact that this
legislation, or other changes in laws or industry standards that may be adopted
in the future, could have on the Company's results of operations, cash flows or
financial position.
ENVIRONMENTAL, LEGAL AND OTHER MATTERS
General Cable is subject to federal, state, local and foreign environmental
protection laws and regulations governing its operations and the use, handling,
disposal and remediation of hazardous substances currently or formerly used by
the Company or its predecessors. Under certain environmental laws, including but
not limited to the Comprehensive Environmental Response & Liability Act
('CERCLA'), the Company or its subsidiaries could be held jointly and severally
responsible for the remediation of any hazardous substance contamination at its
or its predecessors' past or present facilities and at third party waste
disposal sites and could also be held liable for any consequences arising out of
human exposure to such substances or other environmental damage. Subsidiaries of
the Company have been named as potentially responsible parties ('PRPs') in
certain proceedings that involve environmental remediation. In addition,
subsidiaries of the Company have been named as defendants in lawsuits alleging
exposure to asbestos in certain of their products. On May 13, 1997,
the Company notified the Consumer Products Safety Commission (the 'CPSC') that
it had initiated a product recall of certain outdoor power center units
manufactured at one of its facilities during a one-month period. See 'Business--
Environmental Matters' and 'Business -- Legal and Other Matters.' There can be
no assurance that the costs of complying with environmental and health and
safety laws in current operations or the liabilities arising from past releases
of, or exposure to, hazardous substances or from product liability, will not
result in future expenditures by the Company that could materially adversely
affect the Company's results of operations, cash flows and financial position.
BENEFITS ACCRUING TO AND CONTINUING RELATIONSHIPS WITH THE SELLING STOCKHOLDER
AND ITS AFFILIATES
The entire net proceeds of the Offerings will be received by the Selling
Stockholder, which is a wholly-owned subsidiary of Wassall. The Company intends
to use a portion of the proceeds of the initial borrowing under the New Credit
Facility to (i) repay all intercompany debt and advances owed to Wassall and its
subsidiaries (which, together with accrued interest, are anticipated to amount
to approximately $200.7 million on the date of the consummation of the
Offerings); (ii) pay $42.6 million as the Selling Stockholder Dividend; and
(iii) pay $2.0 million for the purchase of the Related Companies from Wassall.
Since the Acquisition, the Company has been controlled by Wassall.
Following the consummation of the Offerings, the Company will no longer be able
to rely on Wassall for financial, management or other support.
Following consummation of the Offerings, the Selling Stockholder will own
approximately 30% of the outstanding shares of Common Stock (or approximately
20% of the outstanding shares of Common Stock if the U.S. Underwriters'
over-allotment option is exercised in full). At least one director designated by
the Selling Stockholder initially will serve as a director of General Cable. In
addition, the Selling Stockholder will have the right to (i) approve the
directors to be appointed to the Company's Board of Directors prior to the first
annual meeting of stockholders following consummation of the Offerings and (ii)
designate one individual (or, if the Board of Directors of the Company shall
consist of more than eight members, two individuals) for nomination to the
Company's Board of Directors for so long as the Selling Stockholder and its
affiliates continue to own at least 10% of the outstanding Common Stock of the
Company (excluding any shares of Common Stock issued pursuant to the Stock
Incentive Plan or any other employee benefit plan of the Company). As a result,
the Selling Stockholder may be in a position to exercise influence over General
Cable after the consummation of the Offerings.
In connection with the Offerings, the Company, the Selling Stockholder and
certain of its affiliates are entering into agreements providing certain rights
in favor of the Selling Stockholder and such
9
<PAGE>
<PAGE>
affiliates including (i) the right to require the Company to register for public
offering all or a portion of the Common Stock held by the Selling Stockholder
following consummation of the Offerings, (ii) certain indemnification rights
with respect to the business and assets of the Company, its subsidiaries, the
Related Companies and their respective predecessors and with respect to the
offering or sale of securities of the Company (including, without limitation,
liabilities under the federal securities laws in connection with the Offerings),
(iii) the Selling Stockholder's rights, referred to above, to approve the
Company's additional directors appointed following consummation of the Offerings
and to designate one individual (or, in the circumstances described above, two
individuals) for nomination to the Company's Board of Directors and (iv) the
right to receive certain information. See 'Certain Relationships and Related
Transactions.'
NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE
Prior to the Offerings, there has been no public market for the Common
Stock. Although the Common Stock has been approved for listing on the NYSE,
subject to official notice of issuance, there can be no assurance that an active
public market for the Common Stock will develop or, if such market develops,
that it will continue. The initial public offering price of the Common Stock
will be determined through negotiations between the Selling Stockholder and the
U.S. Managing Underwriters and the International Managing Underwriters, and may
not be indicative of the market price for the Common Stock after consummation of
the Offerings. The market price of the Common Stock could be subject to
significant fluctuations in response to variations in quarterly operating
results and various other factors such as announcements of new contracts,
technological innovations or new products by the Company or its competitors,
changes in government regulations, developments in patent or other proprietary
rights and developments in the Company's relationships with its customers. In
addition, the stock markets have in recent years experienced significant price
fluctuations. Those fluctuations often have been unrelated to the operating
performance of the specific companies whose stock is traded. Market
fluctuations, as well as economic conditions, may adversely affect the market
price of the Common Stock.
DILUTION
The initial public offering price per share of Common Stock will exceed the
net tangible book value per share of the Common Stock. In addition, the net
tangible book value per share of the Common Stock will decrease as a result of
the Refinancing and the Restricted Stock Issuance. Accordingly, purchasers of
the Common Stock offered hereby will incur an immediate and substantial
dilution. See 'Dilution.'
CERTAIN ANTI-TAKEOVER EFFECTS
The Company's Certificate of Incorporation and By-Laws and the Delaware
General Corporation Law (the 'DGCL') contain several provisions that could have
the effect of delaying or preventing a change of control of the Company in a
transaction not approved by the Company's Board of Directors. Accordingly,
stockholders of the Company could be prevented from realizing a premium on their
shares in a transaction not approved by the Company's Board of Directors. See
'Description of Capital Stock -- Certain Anti-Takeover Matters.' The Company's
agreements with certain of its executive officers may have the effect of making
such a change of control more expensive. See 'Executive Compensation.' In
addition, a change of control will constitute an event of default under the New
Credit Facility.
SHARES ELIGIBLE FOR FUTURE SALE
Upon consummation of the Offerings, the Selling Stockholder will
beneficially own 7,350,000 shares or approximately 30% (4,815,000 shares, or
approximately 20%, if the U.S. Underwriters exercise their over-allotment option
in full) of the outstanding shares of Common Stock of the Company. No prediction
can be made as to the effect, if any, that future sales of Common Stock, or the
availability of Common Stock for future sale, will have on the market price of
the Common Stock prevailing from time to time. Sales of substantial amounts of
Common Stock or the perception that sales could occur
10
<PAGE>
<PAGE>
could adversely affect prevailing market prices for the Common Stock. The
Company and the Selling Stockholder have agreed, subject to certain limited
exceptions, not to offer, sell, contract to sell, grant any option to purchase,
transfer or otherwise dispose of, directly or indirectly, any shares of Common
Stock (or securities convertible into or exercisable or exchangeable for Common
Stock or any warrants or other rights to purchase or acquire Common Stock) for a
period of 180 days after the date of this Prospectus, without the prior written
consent of Dillon, Read & Co. Inc. Following such time period, the shares of
Common Stock owned by the Selling Stockholder may be sold (i) in accordance with
Rule 144 promulgated under the Securities Act of 1933, as amended (the
'Securities Act'), (ii) in private offerings or (iii) upon registration under
the Securities Act without regard to the volume limitations of Rule 144. In
connection with the Offerings, the Company and the Selling Stockholder will
enter into an agreement that provides the Selling Stockholder with certain
rights to have the shares of Common Stock owned by it after the Offerings
registered by the Company under the Securities Act in order to permit the public
sale of such shares. See 'Certain Relationships and Related Transactions' and
'Shares Eligible For Future Sale.'
THE COMPANY
General Cable is a leader in the development, design, manufacture,
marketing and distribution of copper wire and cable products for the
communications and electrical markets. Copper wire and cable is the most widely
used medium for the transmission of voice, data, video and control signals and
electrical current. The Company believes that several factors, including
technological innovations and the size of the installed base of copper cable,
will preserve copper's position as the medium of choice for these applications.
Based on publicly available data and internal estimates, the Company believes
that it has the most diversified product line and channels of distribution in
the U.S. wire and cable industry. General Cable's products for the
communications markets include PIC, outside service wire, high-bandwidth twisted
pair data cable, multi-conductor/multi-pair shielded and unshielded cable,
coaxial cable and fiber optic cable. General Cable's products for the electrical
markets include building wire, portable cord and cordsets for construction,
industrial and consumer applications, and automotive wire and cable. The Company
sells to more than 8,500 customers, including electrical, data communications
and electronic distribution companies, automotive, hardware and home center
retail chains, and telecommunications companies and other end users.
General Cable and its predecessors have served the communications and
electrical markets for over 150 years. Predecessors of the Company supplied wire
and cable for such notable projects as Samuel Morse's telegraph link-up between
Washington and Baltimore, the Hoover Dam and the Statue of Liberty.
The Company's immediate predecessor (the 'Predecessor'), a subsidiary of
the Company now known as GCC Corporation ('GCC'), was formed in April 1992 to
hold the wire and cable and heavy equipment businesses of American Premier
Underwriters, Inc. ('American Premier'), then known as The Penn Central
Corporation ('PCC'). American Premier entered the wire and cable business in
1981, when it acquired the successor to the original General Cable Corporation,
and significantly expanded the business between 1988 and 1991 by acquiring Carol
Cable Company and other wire and cable businesses and facilities. In July 1992,
American Premier distributed 88% of the outstanding common stock of GCC to
American Premier's stockholders, retaining the balance of GCC's common stock. As
a result, GCC became a public company with its common stock traded on the Nasdaq
National Market. In June 1994, the Company and its affiliates acquired GCC by
means of a tender offer for the publicly-held GCC common stock and private
purchases of a $169.8 million GCC subordinated promissory note and the GCC
common stock held by American Premier and its affiliate.
Since the Acquisition, General Cable has benefitted from a significant
reorganization and capital investment program. Net sales have grown from $794.2
million in 1993 to $1,043.6 million in 1996, while operating profit has
increased from $2.3 million to $78.5 million over the same period. Factors
contributing to this improved performance include investment in new production
equipment and information systems; rationalization of manufacturing facilities
and product lines; consolidation of distribution locations; product redesign;
improved materials procurement and usage; and the establishment of business
teams and other organizational changes. The Company believes that these
11
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<PAGE>
initiatives have generated significant productivity improvements since the
Acquisition and that further productivity improvements can be achieved.
The Company, a Delaware corporation, was organized in April 1994 to effect
the Acquisition. Its principal executive offices are located at 4 Tesseneer
Drive, Highland Heights, Kentucky 41076 and its telephone number is (606)
572-8000.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of shares of
Common Stock offered hereby, all of which will be received by the Selling
Stockholder.
DIVIDEND POLICY
The Company currently intends to pay quarterly cash dividends on its Common
Stock, beginning with an initial quarterly dividend of $.05 per share payable in
the fourth calendar quarter of 1997, subject to the declaration by the Company's
Board of Directors. The payment of dividends (including the initial dividend) is
subject to the discretion of the Board of Directors and the requirements of
Delaware law and will depend upon general business conditions, the financial
performance of the Company and other factors the Board of Directors may deem
relevant. The New Credit Facility will contain certain provisions that will
restrict the ability of the Company to pay dividends on or to repurchase its
Common Stock. In the fourth quarter of 1996, the Company paid dividends totaling
$55.1 million and, concurrently with consummation of the Offerings, it intends
to pay the Selling Stockholder Dividend. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources.'
DILUTION
The Company's net tangible book value as of March 31, 1997 was $115.8
million, or $4.78 per share of Common Stock. After giving effect to (i) the
Refinancing (including the payment of the Selling Stockholder Dividend) and (ii)
the Restricted Stock Issuance, the Company's pro forma net tangible book value
at March 31, 1997 would have been $78.8 million, or $3.22 per share of Common
Stock. Based upon an assumed initial public offering price of $22.50 per share
(the mid-point of the price range set forth on the cover page of this
Prospectus), new investors purchasing Common Stock in the Offerings ('New
Investors') will experience immediate dilution of $19.28 per share, which is
equal to the difference between the assumed initial public offering price of
$22.50 and such pro forma net tangible book value per share of Common Stock of
$3.22.
The following table illustrates the calculation of the per share dilution
described above.
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share....................................... $22.50
------
Actual net tangible book value per share at March 31, 1997....................... $4.78
-----
Decrease in net tangible book value per share attributable to the Refinancing
(including the payment of the Selling Stockholder Dividend) and the Restricted
Stock Issuance.................................................................. 1.56
-----
Pro forma net tangible book value per share........................................... 3.22
------
Dilution per share to New Investors................................................... $19.28
------
------
</TABLE>
12
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<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
March 31, 1997 and as adjusted to give effect to the Refinancing and the
Offerings. This table should be read in conjunction with 'Unaudited Pro Forma
Financial Data,' 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and the combined financial statements of the Company
and related notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1997
------------------------
ACTUAL AS ADJUSTED(1)
------ --------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
Short-term debt............................................................... $ 25.2 $ 25.2
------ -------
------ -------
Long-term debt:
Notes payable to related parties......................................... $195.8 $ --
Other.................................................................... 9.1 9.1
New Credit Facility...................................................... -- 242.5
------ -------
Total long-term debt................................................ 204.9 251.6
------ -------
Shareholders' equity:
Common Stock, par value $.01, 75,000,000 shares authorized, 24,250,000
shares issued and outstanding, actual, 24,500,000 shares issued and
outstanding, as adjusted............................................... .2 .2
Additional paid-in capital............................................... 94.7 78.6
Retained earnings........................................................ 20.9 --
------ -------
Total shareholders' equity.......................................... 115.8 78.8
------ -------
Total capitalization...................................... $320.7 $330.4
------ -------
------ -------
</TABLE>
- ------------
(1) Reflects the Selling Stockholder Dividend and the Restricted Stock Issuance.
Excludes an aggregate of 1,103,750 shares of Common Stock to be reserved for
issuance upon the exercise of options expected to be granted at the initial
public offering price to the Company's executive officers and key employees
upon consummation of the Offerings pursuant to the Stock Incentive Plan. See
'Executive Compensation -- Stock Incentive Plan.'
13
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<PAGE>
SELECTED FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE AND CERTAIN OTHER DATA)
The selected financial data set forth in the following table for the years
ended December 31, 1992 and 1993, the periods January 1, 1994 to June 8, 1994
and June 9, 1994 to December 31, 1994, and the years ended December 31, 1995 and
1996 and at December 31, 1992, 1993, 1994, 1995 and 1996 have been derived from
the audited combined financial statements of the Company and the audited
consolidated financial statements of the Predecessor. The data presented for the
three months ended March 31, 1996 and 1997 and at March 31, 1997 are derived
from the unaudited combined financial statements of the Company and include, in
the opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the data for such periods.
Results of operations for the period ended March 31, 1997 are not necessarily
indicative of results that may be expected for the full year. As a result of the
Acquisition, which was accounted for as a purchase, the Company's results of
operations, cash flows and financial position for the periods after June 8, 1994
are not comparable to prior periods.
The pro forma statement of operations data give pro forma effect to the
Refinancing as if it had occurred on January 1, 1996. The pro forma balance
sheet data give pro forma effect to the Refinancing and the Restricted Stock
Issuance as if they had occurred on March 31, 1997. The pro forma financial
adjustments are based upon available information and certain assumptions that
the Company believes are reasonable. Such pro forma data are for informational
purposes only and may not be indicative of the results of operations or
financial position of the Company had the Refinancing and the Restricted Stock
Issuance actually occurred on such dates.
The following selected financial data should be read in conjunction with
'Unaudited Pro Forma Financial Data,' 'Management's Discussion and Analysis of
Financial Condition and Results of Operations,' the combined financial
statements of the Company and related notes thereto and the audited consolidated
financial statements of the Predecessor and related notes thereto included
elsewhere in this Prospectus. Certain reclassifications have been made to the
financial data of the Predecessor to conform to the presentation of such data by
the Company.
<TABLE>
<CAPTION>
PREDECESSOR THE COMPANY
-------------------------------- --------------------------------------------------------
YEAR ENDED YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, JANUARY 1 TO JUNE 9 TO DECEMBER 31, MARCH 31,
---------------- JUNE 8, DECEMBER 31, --------------------- ------------------
1992 1993 1994 1994 1995 1996 1996 1997
------ ------ ------------ ------------ -------- --------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................... $834.4 $794.2 $355.0 $543.3 $1,061.3 $ 1,043.6 $258.0 $ 251.0
Gross profit....................... 81.7 97.7 44.2 73.4 138.7 188.3 36.0 48.8
Operating income (loss)............ (44.4)(1) 2.3 1.1 20.3 44.5 78.5 8.9 19.2
Interest expense, net(6)........... (14.4) (29.0) (12.1) (11.0) (20.7) (19.6) (5.2) (4.9)
Earnings (loss) before income
taxes............................ (69.2) (26.3) (11.0) 9.3 23.8 58.9 3.7 14.3
Loss from discontinued
operations(2).................... (2.7) (31.3) -- -- -- -- -- --
Cumulative effect of accounting
change(3)........................ 7.5 -- -- -- -- -- -- --
Income tax benefit (provision)..... -- -- .1 (6.5) 1.5(4) (19.7) (1.2) (5.7)
Net income (loss).................. (64.4) (57.6) (10.9) 2.8 25.3 39.2 2.5 8.6
Earnings per share(5).............. $ .12 $ 1.04 $ 1.62 $ .10 $ .35
Weighted average number of shares
outstanding(5)................... 24.3 24.3 24.3 24.3 24.3
PRO FORMA STATEMENT OF OPERATIONS DATA:
Operating income................... $ 78.5 $ 19.2
Interest expense, net(6)........... (14.1) (3.4)
Net income......................... 42.5 9.5
Earnings per share(5).............. $ 1.75 $ .39
OTHER DATA:
Average daily COMEX price per pound
of copper cathode................ $ 1.03 $ 0.85 $ 0.91 $ 1.20(7) $ 1.35 $ 1.06 $ 1.18 $ 1.11
Capital expenditures............... $ 15.5 $ 11.7 $ 6.2 $ 9.1 $ 26.2 $ 30.0 $ 5.6 $ 4.0
Depreciation and amortization of
fixed assets..................... 19.8 17.4 7.5 6.7 11.7 12.1 3.0 3.3
Number of employees (at end of
period).......................... 4,400 4,500 4,200 4,100 3,900 4,100 3,800
<CAPTION>
DECEMBER 31 DECEMBER 31,
-------------------- ----------------------------------- MARCH 31,
1992 1993 1994 1995 1996 1997
------ ------------ ------------ -------- --------- ------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital.................... $206.8 $227.7 $224.8 $ 234.4 $ 205.6 $214.9
Net assets of discontinued
operations(2).................... 82.8 48.4 -- -- -- --
Total assets....................... 710.7 620.4 518.7 535.6 513.6 540.3
Long-term debt..................... 262.2 293.4 206.5 205.9 205.1 204.9
Other long-term liabilities........ 70.8 76.7 94.1 71.9 71.0 72.1
Shareholders' equity............... 218.7 139.9 97.6 122.9 107.4(8) 115.8
PRO FORMA BALANCE SHEET DATA:
Working capital.................... $214.9
Total assets(9).................... 540.7
Long-term debt(10)................. 251.6
Shareholders' equity(11)........... 78.8
(footnotes on following page)
</TABLE>
14
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<PAGE>
(footnotes from previous page)
(1) Includes (i) an $11.5 million restructuring provision for the consolidation
of general and administrative functions and the reconfiguration of certain
manufacturing plants and (ii) a $10.0 million loss on the sale of the
Predecessor's Indiana Steel & Wire Company subsidiary.
(2) Represents the Predecessor's loss from operations and loss on the sale of
the assets of its Marathon LeTourneau Company heavy equipment manufacturing
subsidiary. The net assets sold are reflected as net assets of discontinued
operations.
(3) Reflects the benefit of the cumulative effect of implementing Statement of
Financial Accounting Standards ('SFAS') No. 109, 'Accounting for Income
Taxes'.
(4) At December 31, 1995, the Company recognized the full value of its net
deferred tax assets; accordingly, goodwill recorded in the Acquisition was
eliminated and the Company recognized a tax benefit of $1.7 million. See
Note 11 to combined financial statements.
(5) Earnings per share was computed based on the weighted average common shares
outstanding for each period, adjusted for a 121,250-for-1 stock split.
(6) See footnote (2) to 'Unaudited Pro Forma Financial Data'.
(7) The average daily COMEX price per pound for the full year 1994 was $1.07.
(8) After the payment of dividends totaling $55.1 million.
(9) Adjusted to reflect capitalization of estimated deferred financing costs
related to the Refinancing.
(10) Adjusted to reflect an initial borrowing under the New Credit Facility of
$267.7 million at March 31, 1997 and the use of the proceeds as follows:
(i) repayment of intercompany indebtedness of $195.8 million; (ii)
repayment of $25.2 million of outstanding bank debt; (iii) payment of $42.6
million as the Selling Stockholder Dividend; (iv) payment of $2.0 million
for the purchase of the Related Companies; (v) repayment of $1.7 million of
intercompany advances owed by the Related Companies to Wassall; and (vi)
payment of $0.4 million of estimated expenses of the Refinancing.
(11) Adjusted to reflect (i) the Selling Stockholder Dividend of $42.6 million
and (ii) the Restricted Stock Issuance.
15
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<PAGE>
UNAUDITED PRO FORMA FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE DATA)
The unaudited pro forma statement of operations data set forth below give
effect to the Refinancing as if it had occurred on January 1, 1996. The
unaudited pro forma balance sheet data give pro forma effect to the Refinancing
and the Restricted Stock Issuance as if they had occurred on March 31, 1997. The
pro forma financial adjustments are based upon available information and certain
assumptions that the Company believes are reasonable. The pro forma financial
data are for informational purposes only and may not necessarily be indicative
of the results of operations or financial position of the Company had the
Refinancing and the Restricted Stock Issuance actually occurred on such dates.
The following pro forma financial data should be read in conjunction with
'Capitalization,' 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and the audited combined financial statements of the
Company and related notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, 1996 MARCH 31, 1997
-------------------------------------- --------------------------------------
HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales............ $1,043.6 $1,043.6 $251.0 $ 251.0
Cost of sales........ 855.3 855.3 202.2 202.2
---------- --------- ---------- ---------
Gross profit......... 188.3 188.3 48.8 48.8
Selling, general and
administrative
expenses........... 109.8 -- (1) 109.8 29.6 -- (1) 29.6
---------- ----------- --------- ---------- ----------- ---------
Operating income..... 78.5 -- 78.5 19.2 -- 19.2
Interest expense to
related parties.... (19.6) $ 19.6(2) -- (4.8) $ 4.8(2) --
Other interest
expense............ (1.1) (13.7)(2) (14.8 ) (.3) (3.3)(2) (3.6)
Interest income...... 1.1 (.4)(2) .7 .2 .2
---------- ----------- --------- ---------- ----------- ---------
Earnings before
income taxes....... 58.9 5.5 64.4 14.3 1.5 15.8
Income tax
provision.......... (19.7) (2.2)(3) (21.9 ) (5.7) (.6)(3) (6.3)
---------- ----------- --------- ---------- ----------- ---------
Net income........... $ 39.2 $ 3.3 $ 42.5 $ 8.6 $ .9 $ 9.5
---------- ----------- --------- ---------- ----------- ---------
---------- ----------- --------- ---------- ----------- ---------
Earnings per
share(4)........... $ 1.62 $ .13 $ 1.75 $ .35 $ .04 $ .39
Weighted average
number of shares
outstanding(4)..... 24.3 24.3 24.3 24.3 24.3 24.3
BALANCE SHEET DATA (AT
MARCH 31):
Working capital...... $214.9 $ 214.9
Total assets......... 540.3 $ .4(5) 540.7
Long-term debt....... 204.9 46.7(6) 251.6
Shareholders'
equity............. 115.8 (37.0)(7) 78.8
</TABLE>
- ------------
(1) Prior to the Offerings, selling, general and administrative expenses
included fees of $1.6 million for 1996 and $0.6 million for the three months
ended March 31, 1997 for financial, management and other services provided
by a U.S. affiliate of the Selling Stockholder. Following the Offerings,
these fees will be eliminated and selling, general and administrative
expenses will include certain legal, insurance and other corporate expenses,
which the Company believes will approximate these fees.
(2) Adjustments to reflect a net decrease in interest expense resulting from
consummation of the Refinancing. The adjustments include: (i) elimination of
interest expense to related parties of $19.6 million for 1996 and $4.8
million for the three months ended March 31, 1997 resulting from the
expected repayment of $195.8 million of intercompany long-term debt with a
weighted average interest rate of 9.9% per annum; (ii) interest expense on
the New Credit Facility of $13.7 million for 1996 and $3.3 million for the
three months ended March 31, 1997 reflecting an interest rate of 5.75% per
annum (representing a 37.5 basis point spread over the one month London
interbank offered rate ('LIBOR')) and $242.1 million of average borrowings
assumed to be outstanding during 1996 and $245.1 million of average
borrowings assumed to be outstanding during the three months ended March 31,
1997 (based upon an initial borrowing of $242.4 million as of January 1,
1996) and General Cable's actual borrowing and repayment experience in 1996
and the three months ended March 31, 1997; and (iii) amortization of
deferred financing costs. Historical interest income in 1996 included $0.4
million of earnings on excess cash, which were assumed to have been
eliminated as a result of the Refinancing.
(3) Represents the income tax effect of the adjustments described in (1) and (2)
above at a 40% effective tax rate.
(4) Earnings per share was computed based on the weighted average common shares
outstanding for each period, adjusted for a 121,250-for-1 stock split.
(5) Represents capitalization of estimated deferred financing costs related to
the Refinancing.
(6) Represents adjustments to reflect an initial borrowing under the New Credit
Facility of $267.7 million at March 31, 1997 and the use of the proceeds as
follows: (i) repayment of intercompany indebtedness of $195.8 million; (ii)
repayment of $25.2 million of outstanding bank debt; (iii) payment of $42.6
million as the Selling Stockholder Dividend; (iv) payment of $2.0 million
for the purchase of the Related Companies; (v) repayment of $1.7 million of
intercompany advances to the Related Companies; and (vi) payment of $0.4
million of estimated expenses of the Refinancing.
(7) Represents adjustments to reflect (i) the Selling Stockholder Dividend of
$42.6 million and (ii) the Restricted Stock Issuance.
16
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following discussion of General Cable's historical results of
operations and financial condition should be read in conjunction with the
combined financial statements of General Cable, the consolidated financial
statements of the Predecessor and the respective notes thereto included
elsewhere in this Prospectus. General Cable acquired the Predecessor in a
transaction accounted for as a purchase effective June 9, 1994. Solely for
purposes of comparing results of operations in 1995 and 1994, the Predecessor's
operating results for the 1994 pre-Acquisition period have been combined with
the Company's operating results for the 1994 post-Acquisition period. The
combined results of operations for 1994 may not be indicative of the results
that would have been achieved if the Acquisition had not occurred, primarily due
to the difference in accounting basis resulting from the Acquisition.
The combined financial statements include the results of operations and
assets and liabilities of the Related Companies, which were transferred from the
Company to Wassall subsequent to the Acquisition. Wassall will sell the Related
Companies to General Cable following completion of the Offerings for $2.0
million. See 'Certain Relationships and Related Transactions.'
Since the Acquisition, General Cable has taken a number of initiatives
designed to improve its profitability and productivity, including investment in
new production equipment and information systems; rationalization of
manufacturing facilities and product lines; consolidation of distribution
locations; product redesign; improved materials procurement and usage; and the
establishment of business teams and other organizational changes.
General Cable's reported net sales are directly influenced by the price of
copper. The cost of copper has been subject to considerable volatility over the
past several years, with the daily copper cathode selling price on the COMEX
averaging $1.07 per pound in 1994, $1.35 per pound in 1995, $1.06 per pound in
1996 and $1.11 per pound in the first quarter of 1997. However, as a result of a
number of practices intended to match copper purchases with sales, the Company's
profitability has generally not been significantly affected by changes in copper
prices. For certain of the Company's products (primarily building wire and
portable cord), which are priced on a daily basis, the Company purchases copper
at prices based on the average of the daily closing selling prices of copper on
the COMEX for the month in which the purchase occurs, plus a negotiated premium
(principally representing transportation costs and processing charges). For a
portion of its other sales, the Company purchases copper cathode from its
existing vendor base at a firm price for future delivery against orders or, with
respect to a contract that is fixed as to price but not as to volume, for a
portion of the estimated volume. Finally, the Company's arrangements with
certain customers provide for the pass-through of changes in copper costs
through price revisions. As a result of these practices, the Company generally
passes changes in copper prices along to its customers, although there are
timing delays of varying lengths depending upon the type of product, competitive
conditions and particular customer arrangements. Generally, the Company does not
engage in speculative metals trading or other speculative activities, nor does
it engage in activities to hedge the underlying value of its copper inventory.
In addition, the New Credit Facility will contain a provision restricting
General Cable from engaging in hedging activities other than in the ordinary
course of business. See 'Risk Factors -- Impact of Copper Prices' and
'Business -- Raw Materials.'
General Cable generally experiences certain seasonal trends in sales and
cash flow. Relatively significant amounts of cash are generally required during
the first and second quarters of the year to build inventories in anticipation
of higher demand during the spring and summer months, when construction activity
increases. In general, receivables related to higher sales activity during the
spring and summer months are collected during the third and fourth quarters of
the year.
17
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<PAGE>
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, statement of
operations data in millions of dollars and as a percentage of net sales.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
--------------------------------------------------------- ----------------------------------
1994(1) 1995(2) 1996(2) 1996(2) 1997(2)
--------------- ----------------- ----------------- --------------- ---------------
$ % $ % $ % $ % $ %
------ ----- -------- ----- -------- ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales................ $898.3 100.0% $1,061.3 100.0% $1,043.6 100.0% $258.0 100.0% $251.0 100.0%
Cost of sales............ 780.7 86.9 922.6 86.9 855.3 82.0 222.0 86.0 202.2 80.6
------ ----- -------- ----- -------- ----- ------ ----- ------ -----
Gross profit............. 127.6 13.1 138.7 13.1 188.3 18.0 36.0 14.0 48.8 19.4
Selling, general and
administrative
expenses............... 96.2 10.7 94.2 8.9 109.8 10.5 27.1 10.5 29.6 11.8
------ ----- -------- ----- -------- ----- ------ ----- ------ -----
Operating income......... 21.4 2.4 44.5 4.2 78.5 7.5 8.9 3.4 19.2 7.6
Interest expense, net.... (23.1) (2.6) (20.7) (2.0) (19.6) (1.9) (5.2) (2.0) (4.9) (2.0)
------ ----- -------- ----- -------- ----- ------ ----- ------ -----
Earnings (loss) before
taxes.................. (1.7) (.2) 23.8 2.2 58.9 5.6 3.7 1.4 14.3 5.7
Income tax (expense)
benefit................ (6.4) (.7) 1.5 .1 (19.7) (1.9) (1.2) (.5) (5.7) (2.3)
------ ----- -------- ----- -------- ----- ------ ----- ------ -----
Net income (loss)........ $ (8.1) (.9)% $ 25.3 2.4% $ 39.2 3.8% $ 2.5 1.0% $ 8.6 3.4%
------ ----- -------- ----- -------- ----- ------ ----- ------ -----
------ ----- -------- ----- -------- ----- ------ ----- ------ -----
</TABLE>
- ------------
(1) As discussed under 'General' above, the dollar amounts and percentages for
1994 combine the operating results of the Predecessor for the
pre-Acquisition period with those of the Company for the post-Acquisition
period.
(2) Percentages do not add due to rounding.
THREE MONTHS ENDED MARCH 31, 1997 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1996
Net sales for the three months ended March 31, 1997 decreased $7.0 million,
or 2.7%, to $251.0 million from net sales of $258.0 million for the same period
in 1996. The decrease reflects a decrease of $8.4 million, or 9.7%, in the net
sales of the Communications Group and an increase of $1.4 million, or 0.9%, in
the net sales of the Electrical Group. Such amounts reflect a $0.07 decrease in
the weighted average monthly COMEX price per pound of copper in the first three
months of 1997 and other factors as discussed in the following paragraph.
After adjusting the net sales for the first three months of 1996 to reflect
the $0.07 lower weighted average monthly COMEX price per pound of copper sold by
the Company in the first three months of 1997, net sales were $0.9 million, or
0.4%, lower than the first three months of 1996. The decrease in copper-adjusted
net sales reflected an 8.2% decrease in the copper-adjusted net sales of the
Communications Group and a 3.7% increase in the copper-adjusted net sales of the
Electrical Group. The decrease in Communications Group net sales primarily
reflected a decline in the volume of sales of PIC to U S WEST due to an expected
decline in U S WEST's requirements for the year 1997 and a delay in the timing
of expected orders. This decline, along with a decrease in pricing for certain
datacom products, was partially offset by increased sales of PIC to other
customers and increased datacom unit volume. The growth in Electrical Group net
sales was primarily due to more favorable building wire pricing and increased
copper-adjusted net sales of OEM assemblies, portable cord and automotive
products in the first three months of 1997 compared to the same period in 1996.
Gross profit increased $12.8 million, or 35.6% to $48.8 million in the
first three months of 1997 from $36.0 million in the first three months of 1996.
General Cable's gross margin increased to 19.4% in the first three months of
1997 from 14.0% in the first three months of 1996. The improvement in the 1997
period was primarily attributable to manufacturing cost reductions and improved
building wire pricing, partially offset by a decrease in pricing for certain
datacom products. On a copper-adjusted basis (to the first three months of
1997), the Company's gross margin was 14.3% in the first three months of 1996.
The reduction in manufacturing costs in the first three months of 1997
compared to the same period in 1996 reflected (i) the effects of continued
rationalization of production facilities; (ii) improvement of capacity
utilization, including the conversion of certain facilities from five day to
seven day per week continuous
18
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production schedules; (iii) product redesigns to lower material costs; and (iv)
capital investment and other improvements in manufacturing processes to improve
materials usage and reduce waste.
Selling, general and administrative expenses increased $2.5 million, or
9.2%, to $29.6 million in the first three months of 1997 from $27.1 million in
the first three months of 1996. Selling, general and administrative expenses as
a percentage of sales were 11.8% in the first three months of 1997, compared to
10.8% of copper-adjusted (to 1997) sales in the first three months of 1996. The
increase primarily reflected higher transportation costs, higher advertising and
marketing expenses and increased incentive compensation expense.
The Company incurred net interest expense of $4.9 million in the first
three months of 1997 compared to $5.2 million in the first three months of 1996.
The reduction in 1997 reflects the repayment of an $8.0 million related party
note during 1996.
The effective income tax rate for the three months ended March 31, 1997 was
39.9% compared to approximately 32.4% for the three months ended March 31, 1996.
The lower 1996 effective tax rate reflected the impact of certain tax return
reconciliation adjustments.
YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31, 1995
Net sales for 1996 decreased $17.7 million, or 1.7%, to $1,043.6 million in
1996 from 1995 net sales of $1,061.3 million. The decrease reflects a decrease
of $36.1 million, or 5.1%, in the net sales of the Electrical Group, partially
offset by an increase of $18.4 million, or 5.2%, in the net sales of the
Communications Group. Such amounts reflect a $0.29 decrease in the weighted
average monthly COMEX price per pound of copper in 1996, partially offset by
increased volume and other factors as discussed in the following paragraph.
After adjusting 1995 net sales to reflect the $0.29 lower weighted average
monthly COMEX price per pound of copper sold by the Company in 1996, net sales
for 1996 represented an $80.6 million, or 8.4%, increase over 1995. The increase
in copper-adjusted net sales reflected a 13.1% increase in copper-adjusted net
sales of the Communications Group and a 5.8% increase in copper-adjusted net
sales of the Electrical Group. The growth in Communication Group sales was
primarily due to increased volume of sales of PIC to RBOCs and increased demand
for high-bandwidth twisted pair data cables. The growth in Electrical Group
sales reflected a 5.0% increase in copper-adjusted net sales of building wire
primarily due to more favorable pricing as market conditions improved in the
second half of 1996, and a 9.7% increase in copper-adjusted net sales of
portable cord principally due to increased volume.
Gross profit increased $49.6 million, or 35.8%, to $188.3 million in 1996
from $138.7 million in 1995. General Cable's gross margin increased to 18.0% in
1996 from 13.1% in 1995. On a copper-adjusted basis (to 1996), the Company's
gross margin was 14.4% in 1995. The improvement in 1996 was primarily
attributable to manufacturing cost reductions and the increases in selling
prices and sales volumes discussed above.
The reduction in manufacturing costs in 1996 reflected (i) continued
rationalization of production facilities through the closing of two plants; (ii)
improvement of capacity utilization at remaining facilities, including the
conversion of four facilities from five day to seven day per week continuous
production schedules; (iii) improved production efficiencies resulting from
higher production levels; (iv) raw material cost reductions reflecting decreased
prices for resins and other non-copper raw materials and product redesigns to
lower material costs; and (v) capital investment and other improvements in
manufacturing processes to improve materials usage and reduce waste.
Selling, general and administrative expenses increased $15.6 million, or
16.6%, to $109.8 million in 1996 from $94.2 million in 1995. Selling, general
and administrative expenses as a percentage of sales were 10.5% in 1996,
compared to 9.8% of copper-adjusted (to 1996) sales in 1995. The increase
primarily reflected higher sales volume-related expenses such as transportation
and higher salary and related expenses attributable to increases in staff to
support expansion of the Company's direct sales force and marketing function,
the restructuring of its distribution processes and new product development
efforts. In addition, expenses in 1996 included increases in incentive
compensation and advertising expenses.
The Company incurred net interest expense of $19.6 million in 1996 compared
to $20.7 million in 1995. The reduction in 1996 expense reflects the repayment
of an $8.0 million related party note.
19
<PAGE>
<PAGE>
The provision for income taxes was $19.7 million in 1996 compared to a
benefit of $1.5 million in 1995. Prior to 1995, General Cable recorded a full
valuation allowance against its net deferred tax asset because of uncertainties
as to the amount of taxable income that would be generated in future years. In
1995, the Company determined that it was more likely than not that future
taxable income would be sufficient to enable General Cable to realize all of its
deferred tax assets. In accordance with the provisions of SFAS No. 109,
'Accounting for Income Taxes', the reversal of the valuation allowance resulted
in a $63.0 million reduction of goodwill and a deferred tax benefit of $1.7
million in 1995.
YEAR ENDED DECEMBER 31, 1995 COMPARED WITH YEAR ENDED DECEMBER 31, 1994
Net sales for 1995 increased $163.0 million, or 18.1%, to $1,061.3 million
in 1995 from $898.3 million in 1994. The increase reflects an increase of $88.8
million, or 33.1%, in the net sales of the Communications Group and an increase
of $74.2 million, or 11.8%, in the net sales of the Electrical Group. Such
amounts reflect a $0.28 increase in the weighted average monthly COMEX price per
pound of copper in 1995, increased volume and other factors discussed in the
following paragraph.
After adjusting 1994 net sales to reflect the $0.28 higher weighted average
monthly COMEX price per pound of copper sold by the Company in 1995, net sales
for 1995 represented a $74.4 million, or 7.5%, increase over 1994. The increase
in copper-adjusted net sales primarily reflected a 24.1% increase in
copper-adjusted net sales of the Communications Group, primarily due to the full
year impact of a long-term supply contract with U S WEST entered into in
November 1994.
Gross profit increased $21.1 million, or 17.9%, to $138.7 million from
$117.6 million in 1994. The increase reflected reductions in product cost and
increased sales volume. Results for 1994 benefitted from a $10.3 million
reduction (compared to a $0.2 million reduction in 1995) in cost of sales
resulting from the liquidation of inventory quantities accounted for on a
last-in-first-out basis. The Company's gross margin was 13.1% in both 1995 and
1994. On a copper-adjusted basis (to 1995), the Company's gross margin was 11.9%
in 1994.
Reductions in manufacturing costs in 1995 resulted from (i) rationalization
of production facilities through the closing of three plants; (ii) improvement
of capacity utilization at other facilities; (iii) improved production
efficiencies resulting from higher production levels; and (iv) capital
investment and other improvements in manufacturing processes to improve
materials usage and reduce waste. These improvements were partially offset by
higher raw material prices and the additional cost of purchasing finished goods
from outside vendors to meet an increase in customer demand for PIC while the
Company was adding capacity.
Selling, general and administrative expenses decreased $2.0 million, or
2.1%, to $94.2 million in 1995 from $96.2 million in 1994 primarily due to the
restructuring of the Company's sales, marketing and administrative functions
following the Acquisition. Selling, general and administrative expenses as a
percentage of sales were 8.9% in 1995 compared to 9.7% of copper-adjusted (to
1995) sales in 1994.
The Company incurred net interest expense of $20.7 million in 1995 compared
to $23.1 million in 1994, principally due to lower average outstanding
borrowings.
Income taxes in 1995 reflected a benefit of $1.5 million compared to a
provision of $6.4 million in 1994. The Company's income tax provision in 1994
principally reflected alternative minimum tax for which no deferred tax benefit
was realized for the related tax credit due to a full valuation allowance on the
Company's deferred tax assets at December 31, 1994.
LIQUIDITY AND CAPITAL RESOURCES
In general, the Company requires cash for working capital, capital
expenditures, debt repayment, interest and taxes. The Company's working capital
requirements increase when it experiences strong incremental demand for products
and/or significant copper price increases. Since the Acquisition, the Company
has satisfied its cash requirements through a combination of funds generated
from operations, related party borrowings and external borrowings. At March 31,
1997, the Company had outstanding long-term borrowings due Wassall and its
subsidiaries of $195.8 million, intercompany advances due Wassall and its
subsidiaries of $1.7 million and borrowings of $25.2 million under existing bank
lines of credit, all of which will be repaid in the Refinancing. After
completion of the Offerings, the Company will be required to meet all its cash
requirements through funds generated from operations and external borrowings,
without any support from Wassall. Based upon historical experience and the
expected availability of funds under the New Credit Facility, the Company
expects that its sources of liquidity will
20
<PAGE>
<PAGE>
be sufficient to enable it to meet its cash requirements for working capital,
capital expenditures, debt repayment, interest and taxes through 1998.
Cash flow used by operating activities in the first three months of 1997
was $18.2 million. This principally reflected net income before depreciation and
deferred taxes of $12.6 million, offset by a $20.7 million increase in accounts
receivable, a $4.6 million increase in inventories and a $4.2 million reduction
in accounts payable, accrued liabilities and other long-term liabilities.
Accounts receivable increased due to an increase in selling prices resulting
from a $0.12 per pound increase in copper prices in the first quarter of 1997
and higher sales volume in the first quarter of 1997 compared to the fourth
quarter of 1996. Inventories increased during the first quarter of 1997 to
support anticipated seasonal product demand during the second and third
quarters. The reduction in accounts payable, accrued and other long-term
liabilities principally reflected a decrease in accounts payable.
Cash flow provided by operating activities in 1996 was $80.8 million. This
principally reflected net income before depreciation and deferred taxes of $60.6
million, a $17.6 million reduction in inventory levels and a $12.1 million
reduction in accounts receivable partially offset by an $11.6 million reduction
in accounts payable, accrued liabilities and other long-term liabilities.
Inventory was reduced as General Cable consolidated several inventory stocking
locations into regional distribution centers and instituted new processes for
forecasting, scheduling and inventory management. Accounts receivable decreased
due to a decline in selling prices resulting from a $0.33 per pound decrease in
copper prices in the fourth quarter of 1996, partially offset by higher sales
volume in that quarter. The reduction in accounts payable, accrued liabilities
and other long-term liabilities primarily reflected expenditures related to the
closure of two manufacturing facilities.
Cash flow used in investing activities was $35.5 million in 1996 and $3.8
million in the first three months of 1997, principally reflecting, in both
periods, capital expenditures. The 1996 amount also reflected a $6.4 million
investment in the Company's fiber optic cable joint venture with SpecTran
Corporation ('SpecTran').
General Cable expended $15.3 million, $26.2 million and $30.0 million for
capital projects during 1994, 1995 and 1996, respectively, and $4.0 million in
the first three months of 1997. Capital expenditures in 1996 consisted of
projects to reduce product costs, increase capacity and modernize machinery and
equipment. Although it has no material commitments for capital expenditures in
1997, General Cable expects to spend approximately $38.0 million for capital
projects in 1997 in order to further increase manufacturing productivity and to
selectively add production capacity.
Cash flow provided by financing activities in the first three months of
1997 was $23.0 million, reflecting the proceeds of borrowings under the
Company's revolving credit line. Cash flow used in financing activities in 1996
was $57.1 million, consisting primarily of dividends totaling $55.1 million.
ENVIRONMENTAL AND ASBESTOS-RELATED LITIGATION MATTERS
General Cable's expenditures for environmental compliance and remediation
amounted to approximately $0.3 million, $2.0 million and $1.0 million in 1994,
1995 and 1996, respectively, and $0.1 million for the first three months of
1997, and the Company expects to spend approximately an additional $0.9 million
for these purposes in the remainder of 1997. In addition, subsidiaries of the
Company have been named as PRPs in certain proceedings that involve
environmental remediation. General Cable had accrued $7.2 million at March 31,
1997 for all environmental liabilities. In connection with the Acquisition,
American Premier has agreed to indemnify General Cable against certain
environmental liabilities arising out of General Cable's or its predecessor's
ownership or operation of properties and assets. While it is difficult to
estimate future environmental liabilities, General Cable does not currently
anticipate any material adverse effect on its results of operations, cash flows
or financial position as a result of compliance with federal, state, local or
foreign environmental laws or regulations or remediation costs. See
'Business -- Environmental Matters.'
General Cable's expenditures for asbestos litigation amounted to
approximately $0.5 million, $0.5 million and $0.6 million in 1994, 1995 and
1996, respectively, and $0.1 million for the first three months of 1997 (before
reimbursement of a substantial portion thereof under the settlement agreement
described below), all of which were for defense costs. General Cable had accrued
approximately $2.2 million for this litigation at March 31, 1997. General Cable
has entered into a settlement agreement with certain principal primary insurers
concerning liability for the costs of defense, judgments and settlements, if
any, in the asbestos litigation. Subject to the terms and conditions of the
settlement
21
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<PAGE>
agreement, the insurers are responsible for a substantial portion of the costs
and expenses incurred in the defense or resolution of such litigation. The
Company does not believe that the outcome of the litigation will have a material
adverse effect on its results of operations, cash flows or financial position.
See 'Business -- Legal and Other Matters.'
THE NEW CREDIT FACILITY
Prior to consummation of the Offerings, General Cable intends to enter into
the New Credit Facility with The Chase Manhattan Bank, as administrative agent
(the 'Agent'), and a syndicate of banks. The following summary of the principal
terms of the New Credit Facility does not purport to be complete and is subject
to the detailed provisions of the agreement governing the New Credit Facility, a
copy of the form of which has been filed as an exhibit to the Registration
Statement (as defined herein) of which this Prospectus is a part. The Company
and the Agent have entered into a commitment letter pursuant to which the Agent
has committed to provide the full amount of the facility.
The New Credit Facility will consist of a five-year senior unsecured
revolving credit and competitive advance facility in an aggregate principal
amount of $350.0 million. Borrowings will be guaranteed by General Cable's
principal operating subsidiaries. General Cable intends to make an initial
borrowing of approximately $271.8 million under the New Credit Facility
concurrently with consummation of the Offerings and to use the proceeds thereof
to (i) repay all of its outstanding revolving bank debt (which is anticipated to
be approximately $26.1 million on the date of the consummation of the
Offerings), (ii) repay all intercompany debt and advances owed to Wassall and
its subsidiaries (which, together with accrued interest, are anticipated to
amount to approximately $200.7 million on the date of the consummation of the
Offerings), (iii) pay $42.6 million as the Selling Stockholder Dividend; (iv)
pay $2.0 million for the purchase of the Related Companies from Wassall and (v)
pay estimated expenses of the Refinancing of $0.4 million. Future borrowings
will be available for general corporate purposes, including acquisitions.
Revolving Credit loans will bear interest, at General Cable's option, at
(i) a spread over LIBOR or (ii) the 'Alternate Base Rate', which will be defined
as the higher of (a) the Agent's Prime Rate, (b) the secondary market rate for
certificates of deposit (adjusted for reserve requirements) plus 1% and (c) the
Federal Funds Effective Rate (i.e., for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers). The spread over LIBOR will
range between 17.0 and 42.5 basis points per annum, depending upon the Company's
Leverage Ratio (as defined below), and will initially be 25.0 basis points per
annum until the date by which the Company is required to furnish financial
statements with respect to the fiscal year ending December 31, 1997.
A facility fee will accrue on the full amount of the New Credit Facility,
regardless of usage. The facility fee will range between 8.0 and 20.0 basis
points per annum, depending upon the Company's Leverage Ratio, and will
initially be 12.5 basis points per annum until the date by which the Company is
required to furnish financial statements with respect to the fiscal year ending
December 31, 1997.
The New Credit Facility will require General Cable to maintain an Interest
Coverage Ratio (defined as the ratio of earnings before interest, taxes,
depreciation and amortization ('EBITDA') to Cash Interest Expense (as defined in
the New Credit Facility)) for any period of four consecutive fiscal quarters of
not less than 2.50 to 1.00 through June 30, 1998, 3.00 to 1.00 for any period
ending on or prior to June 30, 1999, and 3.50 to 1.00 thereafter and a Leverage
Ratio (defined as the ratio of Total Debt (as defined in the New Credit
Facility) to EBITDA) at any date and for the period of the four most recently
ended consecutive fiscal quarters of not more than 3.75 to 1.00. The New Credit
Facility will also contain limitations on (i) mergers, consolidations and
certain asset sales and dispositions; (ii) subsidiary indebtedness and
guarantees; (iii) liens and sale-leaseback transactions; (iv) transactions with
affiliates; (v) dividends on, and redemptions and repurchases of, capital stock;
(vi) covenants restricting dividends and advances by subsidiaries; (vii) loans
and investments; (viii) issuance of capital stock by subsidiaries; (ix) hedging
activities other than in the ordinary course of business; and (x) changes in
business.
22
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BUSINESS
General Cable is a leader in the development, design, manufacture,
marketing and distribution of copper wire and cable products for the
communications and electrical markets. Communications wire and cable transmits
low voltage signals for voice, data, video and control applications. Electrical
wire and cable conducts electrical current for power and control applications.
General Cable believes that its principal competitive strengths include its
breadth of product line; brand recognition; distribution strength; customer
selection, sales and service; and improved operating efficiency.
The principal markets, products, distribution channels and end-users of
each of General Cable's seven principal product categories are summarized below:
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL DISTRIBUTION PRINCIPAL
PRODUCT CATEGORY MARKETS PRINCIPAL PRODUCTS CHANNELS END-USERS
<S> <C> <C> <C> <C>
COMMUNICATIONS GROUP:
Outside Voice and Telecom Local Loop PIC; Outside Service Direct; Telecommunications
Data Wire Distributors System Operators
Datacom Computer Networking Multi- Distributors; Contractors;
and Multimedia Conductor/Multi-pair; Direct Original Equipment
Applications Fiber Optic Cable Manufacturers
('OEMs');
Systems Integrators
Industrial Building Management; Multi-Conductor; Distributors; Contractors;
Instrumentation and Entertainment; Coaxial Cable Retailers; Consumers;
Control Equipment Control Direct Industrial
ELECTRICAL GROUP:
Building Wire Non-Residential and THHN; Romex'r' Products Distributors; Contractors;
Residential Retailers Consumers
Construction
Portable Cord Industrial Power and Rubber and Plastic- Distributors; Industrial;
Control Jacketed Wire and Cable Retailers; Consumers;
Direct Contractors;
OEMs
Cordsets & OEM Consumer; Consumer Cordsets; Retailers; Consumers;
Assemblies Industrial Power OEM Cordsets; Direct; Contractors;
Assemblies Distributors OEMs
Automotive Parts Aftermarket Ignition Wire Sets; Retailers; Consumers
Booster Cables Distributors
</TABLE>
INDUSTRY OVERVIEW
Total shipments of insulated wire and cable (which excludes magnet wire and
fiber optic products) in the U.S. during 1995 (the last year for which data are
presently available) were estimated by the U.S. Department of Commerce to be
approximately $11 billion. The Company estimates that shipments of such products
outside of the U.S. during 1995 exceeded $40 billion. U.S. Department of
Commerce statistics indicate that during the period from 1992 through 1995, the
value of insulated wire and cable shipments increased an average of
approximately 9% per annum. The Company believes that factors contributing to
this growth include the development of an increasingly complex data and
communication infrastructure, industrial expansion and increased construction
outlays.
General Cable believes that there are approximately 350 participants in the
U.S. insulated wire and cable market. In recent years, there has been
significant consolidation of U.S. wire and cable manufacturers. General Cable
believes that the ten largest manufacturers currently account for approximately
50% of the U.S. insulated wire and cable market. The industry is serviced
primarily by U.S. production facilities due to high transportation costs.
Insulated wire and cable is used in a wide array of products. Its principal
applications can be divided among four general end-user markets: communications,
construction, durable goods and electrical power transmission. The largest
product category within the insulated wire and cable industry
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is building wire, which accounted for approximately 26% of the total U.S. wire
and cable market in 1995 according to the U.S. Department of Commerce. Other
principal product categories and their share of the total U.S. wire and cable
market include power cable (15%), electronic and data wire (13%), telephone and
telegraph wire (17%), coaxial and antennae cable (12%) and other, including
cord, cordsets and appliance wire (17%). General Cable competes in segments of
each of these product categories, except for power cable, and estimates that its
served market in the U.S. exceeds $7.0 billion.
GROWTH STRATEGY
The following are the principal elements of General Cable's growth
strategy:
'One Company' approach. General Cable seeks to enhance its market share and
operating performance by offering its diversified product line to customers who
previously purchased wire and cable from multiple vendors but prefer to deal
with a smaller number of broader-based suppliers. The Company also seeks to
develop supply relationships with preferred customers who have a favorable
combination of volume, product mix, business strategy and industry position. The
Company believes its 'One Company' strategy will become increasingly important
as the electrical, data communications, industrial and electronic distribution
industries continue to consolidate into a smaller number of larger regional and
national participants with broader product lines. The Company also expects that
successful execution of its 'One Company Strategy' will provide more efficient
purchasing, manufacturing, marketing and distribution for its products. As part
of this strategy, the Company has established cross-functional business teams
with profit and loss responsibility for its seven product categories. These
teams seek opportunities to increase sales to existing customers and to new
customers inside and outside of traditional market channels.
Participation in growth markets. General Cable expects the markets for
certain wire and cable products to increase significantly, and believes it is
well positioned to participate in such growth. According to industry studies,
demand for high-performance datacom and electronic wire is expected to increase.
The Company believes that this increase will be driven by the development of
computer networks, more powerful workstations, and imaging and multimedia
applications. To increase its penetration of these markets, the Company has
recently established a joint venture to design, develop, manufacture and market
fiber optic premise cable for computer networking and multimedia applications in
commercial and industrial markets. The Company believes that demand for copper
wire and cable for outside voice and data applications in certain
telecommunications markets will increase as a result of greater demand from
residential customers for multiple access lines for fax machines and computer
modems, and from business customers for greater bandwidth for data distribution
and networking applications. Finally, the Company expects that demand for
portable cord, cordsets and assemblies will grow as a result of increased demand
for home office and communications equipment, expansion and maintenance of
industrial equipment and the development of higher specification products for
more environmentally demanding industrial applications.
Further improvements in productivity. Since the Acquisition, General Cable
has invested over $65 million in capital projects primarily to increase capacity
and productivity; closed five manufacturing facilities representing 20% of total
manufacturing floor space; consolidated its distribution operations through the
closing of 60 inventory stocking locations and the establishment of three
regional distribution centers; reduced salaried headcount by approximately 20%;
and upgraded its information systems. The Company believes that these actions
have generated significant productivity improvements. For example, on a constant
copper-adjusted basis, sales per employee (based on average monthly employment)
increased approximately 34% from 1994 to 1996. The Company plans to continue
similar programs in the future, including the planned capital investment of
$38.0 million in 1997 and the consolidation of several additional inventory
stocking locations into the Company's regional distribution centers.
The Company will also seek to achieve additional efficiencies in materials
procurement and usage by working with suppliers to jointly develop programs to
improve productivity. Currently, suppliers accounting for approximately 80% of
the Company's purchased raw materials participate in such continuous
productivity programs.
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New products. General Cable continues to develop new and enhanced products
to meet changing customer needs and to improve operating results. Examples of
newly introduced products include DreamLan'tm', an enhanced Category 5 data and
video cable for office use; multimedia aerial service wire which provides voice,
data and video in a single wire that can be easily installed through existing
hardware; FrogHide'tm', a 'contractor-duty' extension cord; the Plug-It'tm'
family of portable lighting and accessories; VuTron'r' III super-flexible
premium portable cord; and the MinuteMan'tm' family of armored cable. In
addition, the Company has introduced new packaging and merchandising for both
the retail and wholesale markets.
Joint ventures, strategic alliances and acquisitions. General Cable intends
to seek joint venture partners and strategic alliances both domestically and
internationally to enhance its manufacturing, distribution and sales
capabilities. Current arrangements include: (i) a joint venture with SpecTran
for the design, development, manufacture and marketing of communications-grade
fiber optic cable for the customer premises market in the United States, Canada
and Mexico; (ii) a strategic sourcing agreement with ALFLEX, a leading
manufacturer of armored cable; and (iii) a strategic sourcing agreement for
large rubber cord with Elektrim, a leading Polish power and electrical equipment
manufacturer. In addition, the Company believes that complementary acquisition
opportunities exist that would allow the Company to capitalize on its strong
brand names, broad customer base, cost-efficient manufacturing capabilities and
superior distribution processes.
International expansion. General Cable currently derives less than 5% of
its net sales outside of the U.S. The Company believes that opportunities exist
for increased export and international sales, especially as its customers
establish international operations and seek global capabilities from their
suppliers. The Predecessor had manufacturing facilities in South America and
Europe, most of which were divested in the 1980s. However, the Company believes
that its brands have retained name-recognition that will assist the Company if
it determines to re-enter these markets. Currently, the Company has sales and
distribution activities in Canada and Europe and manufacturing facilities in
Mexico and the United Kingdom.
PRODUCTS AND MARKETS
COMMUNICATIONS GROUP
The Communications Group manufactures and sells wire and cable products for
voice, data and video transmission applications ('Outside Voice and Data
Products'), multi-conductor/multi-pair cables used for computer and telephone
interconnections in telephone company central offices and customer premises
('Datacom Products') and specialty products for use in machinery and instrument
interconnection, audio, computer, security and other applications ('Industrial
Instrumentation and Control Products'). In 1994, 1995 and 1996, the
Communications Group contributed approximately 30%, 34% and 35%, respectively,
of the Company's net sales and approximately 7%, 62% and 65%, respectively, of
its operating income; in the first three months of 1997, it contributed
approximately 30% of the Company's net sales and approximately 50% of the
Company's operating income.
Outside Voice and Data Products
General Cable's principal Outside Voice and Data Products are PIC and
outside service wire. PIC is short haul trunk, feeder or distribution cable from
a telephone company central office to the subscriber premises. It consists of
multiple paired conductors (ranging from six pairs to 4,200 pairs) and various
types of sheathing, water-proofing, foil wraps and metal jacketing. Outside
service wire is used to connect telephone subscriber premises to curbside
distribution cable.
Copper wire and cable is the most widely used medium for transmission in
the local loop portion of the telecommunications infrastructure. The local loop
is the segment of the telecommunications network that connects the customer's
premises to the nearest telephone company central office. The Company believes
that copper will continue to be the transmission medium of choice in the local
loop due to factors such as the investment of over $200 billion in the local
exchange copper telecommunications infrastructure that must be maintained; the
lower installation costs of copper compared to optical fiber and other media;
and technological advancements that expand the bandwidth
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of the installed local loop copper network, which allow the continued use of
copper as the transmission medium for the new voice, data, video and multi-media
uses demanded by customers. In addition, the Company expects that demand for
Outside Voice and Data Products will increase as a result of greater demand from
residential customers for multiple access lines for fax machines and computer
modems, and the demand for new services that can be supported by a copper-based
local loop.
Technological advances supporting continued copper dominance in the local
loop include the Integrated Services Digital Network ('ISDN') and digital
subscriber line ('xDSL') variations. ISDN is a digital service that enables
voice, data and video to be carried over a single connection. ISDN applications
include remote office connectivity, internet connections, high speed computing
and videoconferencing. xDSL technologies, including HDSL (High-speed Digital
Subscriber Line), ADSL (Asymmetric Digital Subscriber Line), SDSL (Symmetric
Digital Subscriber Line) and VDSL (Very-high Data Rate Digital Subscriber Line),
employ advanced digital signal processing and advanced data compression
techniques to allow ordinary copper wires to transmit large amounts of
high-speed digital information with greatly enhanced performance. A significant
feature of xDSL technology is that both 'plain old telephone service' and
digital data can be carried on existing wires. This allows xDSL systems to be
compatible with current analog phones and upgradeable for digital systems.
Individual customers can also be added without a significant technology
investment to upgrade an entire network.
General Cable sells its Outside Voice and Data Products primarily to
telecommunications system operators through its direct sales force under supply
contracts of varying lengths, and also to telecommunications distributors. In
1995 and 1996, approximately 8.9% and 10.4%, respectively, of the Company's net
sales were generated by sales of Outside Voice and Data and (to a lesser extent)
Datacom products to its largest customer, U S WEST, pursuant to a ten-year
supply agreement that took effect on November 1, 1994. The agreement does not
guarantee a minimum level of sales. Product prices are subject to periodic
adjustment based upon changes in the cost of copper and other factors. The
agreement is terminable by U S WEST prior to its scheduled expiration date if
the Company does not meet certain performance criteria.
Outside Voice and Data Products face competition from other PIC
manufacturers and potentially from alternative products such as fiber optic
cable. Based on U.S. Department of Commerce reports, the Company believes that
its share of the U.S. outside voice and data market increased from approximately
13% in 1994 to approximately 21% in 1995. In 1994, 1995 and 1996, sales of
Outside Voice and Data Products accounted for approximately 16%, 21% and 24%,
respectively, of the Company's net sales.
Datacom Products
The Company's Datacom Products are high-bandwidth twisted pair copper and
fiber optic cable for the customer premises, central office and OEM
telecommunications equipment markets. Customer premises products are used for
wiring at subscriber premises, and include computer, riser and plenum wire and
cable. Riser cable runs between floors and plenum cable runs in air spaces,
primarily above ceilings in non-residential structures. Central office products
interconnect components within central office switching systems and public
branch exchanges.
Rapid technological advances in computers and software, including the
increased use of more powerful computers and distributed data processing, have
created the need for sophisticated local area network ('LAN') and wide area
network ('WAN') technologies. Such technologies demand advanced data
transmission cable that enables increased volumes of data to be transmitted at
faster speeds without diminishing data integrity. Because of continuing
technological advances and new network applications, the Company expects that
demand for such high-performance data cable will continue to increase. The
Company is a leading supplier of a broad family of cables for LAN and WAN
applications, which are often specified for large, complex installations with
demanding data processing applications such as a new Motorola Inc. plant in
Boynton Beach, Florida and the Mirage Resorts, Inc. Bellagio Hotel and Casino
currently under construction in Las Vegas, Nevada.
The Company's strategy has been to focus its marketing, engineering and
development efforts on introducing new products in response to the growing
demand for higher-performance data transmission
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cable. For example, in 1996 the Company introduced DreamLan'tm', an enhanced
performance Category 5 video and data cable for office use, as well as high
pair-count Category 3 and Category 5 plenum products and indoor/outdoor rated
Category 3 products. The Company will continue to invest in manufacturing
technology and to focus on new product development and product improvements to
serve this market.
The growth and evolution of LAN and WAN networks have also resulted in new
and distinct processes for specifying, selecting, installing and guaranteeing
the performance of data transmission cable required to support such networks.
General Cable engineers coordinate with end users and installers to determine
the specifications of the cable required for a particular network. The Company's
product development, manufacturing and product testing and verification
capabilities, as well as its established relationships and reputation in the
industry, have enabled it to become an integral participant in this process. For
example, the Company works with a number of connector manufacturers to further
sales in this market by offering joint warranty programs to assure system
performance.
In December 1996, subsidiaries of the Company and SpecTran formed General
Photonics LLC ('General Photonics'), an equally-owned joint venture, for the
design, development, manufacture and marketing of communications-grade fiber
optic cable for the customer premises market in the United States, Canada and
Mexico. SpecTran is a developer, manufacturer and marketer of glass optical
fiber and specialty value-added fiber optic components and assemblies. Based on
the most recent U.S. Department of Commerce data, the premise fiber optic market
grew at an annual rate of approximately 23% over the five-year period ended in
1995. Under the joint venture arrangement, fiber optic cable and other products
manufactured by General Photonics will be marketed primarily through General
Cable's sales force with some direct sales and customer support provided by
General Photonics personnel. General Cable believes that the addition of premise
fiber optic cable to the Company's product line will enable it to better serve
its major communications customers, nearly all of whom currently purchase fiber
optic cables. In connection with the joint venture, General Photonics entered
into a contract with SpecTran's fiber optic manufacturing subsidiary. The
contract, which is co-terminous with the joint venture, provides the joint
venture with an available supply of optical fiber. GCC and SpecTran also have
entered into a non-compete arrangement as part of the joint venture.
General Cable sells Datacom Products primarily through distributors and
agents under the General Cable'r' brand name. The Company believes, based on
U.S. Department of Commerce reports, that it has approximately a 12% share of
the U.S. market for copper datacom products based on 1995 sales. In 1994, 1995
and 1996, sales of Datacom Products accounted for approximately 10%, 9% and
10%, respectively, of the Company's net sales.
Industrial Instrumentation and Control Products
The Company's Industrial Instrumentation and Control Products include
multi-conductor, multi-pair, coaxial, hook-up, audio and microphone cables,
speaker and television lead wire, high temperature and shielded electronic wire,
and harness assemblies. Primary uses for these products are various applications
within the commercial, industrial instrumentation and control, and residential
markets.
These markets require a broad range of multi-conductor products for
applications involving programmable controllers, robotics, process control and
computer integrated manufacturing, sensors and test equipment, as well as cable
for fire alarm, smoke detection, sprinkler control, entertainment and security
systems. Many industrial and commercial environments require cables with
exterior armor and/or jacketing materials that can endure exposure to chemicals,
extreme temperatures and outside elements. The Company offers products that are
specially designed for these applications.
Harness assemblies are used in communications switching systems and
industrial control applications. These assemblies are used in such products as
data processing equipment, telecommunications network switches, office machines
and industrial machinery.
The Company's Industrial Instrumentation and Control Products are sold
primarily through distributors and agents under the Carol'r' brand name. The
Company believes, based on U.S. Department of Commerce reports, that it has
approximately a 7% share of the U.S. market for
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industrial instrumentation and control products (excluding harness assemblies
and coaxial products for cable television and other applications) based on 1995
sales.
ELECTRICAL GROUP
The Electrical Group manufactures and sells wire and cable products
(typically for applications at 600 volts or less) for use in non-residential and
residential structures and in a wide variety of capital goods and consumer uses.
General Cable has four principal Electrical product categories: building wire,
portable cord, cordsets and OEM assemblies, and automotive products. In 1994,
1995 and 1996, the Electrical Group contributed approximately 70%, 66% and 65%,
respectively, of the Company's net sales and approximately 93%, 38% and 35%,
respectively, of its operating income; in the first three months of 1997, it
contributed approximately 70% of the Company's net sales and approximately 50%
of the Company's operating income. The Company intends to seek continued
improvements in productivity, new product developments and customer
relationships to increase the profits derived from these product lines.
Building Wire
General Cable manufactures and sells a broad line of thermosetting,
thermoplastic and elastomeric insulated wire and cable products for the
distribution of electrical power to and within non-residential and residential
structures. The Company's principal building wire products are THHN, a copper
conductor used in non-residential construction and industrial applications,
Romex'r' brand residential circuit, intermediate and feeder sized cables, and
value-added specialty cables for industrial applications. According to the most
recent brand preference survey by Electrical Construction & Maintenance, General
Cable has the highest-ranked brand of building wire in the U.S. among electrical
contractors and operators of plants and facilities.
Based on data compiled by the Copper Development Association, from 1980
through 1995 new non-residential and residential construction square footage has
been generally flat, while copper cable usage has almost doubled. The Company
believes that demand for building wire has increased as a result of greater
wiring density required in new construction and renovation projects to provide
for the electrical needs of such appliances as trash compactors, microwave
ovens, air conditioners, entertainment centers, lighting and climate controls,
specialty and task lighting, electric garages and outdoor lighting systems.
An increasing portion of the Company's building wire sales consists of
sales of high value-added niche products that meet more demanding service
requirements or reduce installation costs. These products include tray cable,
armored cable, aluminum utility service cable and control cable used in the
operation and interconnection of protective and signalling devices in electrical
distribution systems.
General Cable has entered into a strategic sourcing agreement with ALFLEX,
a subsidiary of Commonwealth Industries, to expand the Company's position in the
armored cable market. Armored cable is armor sheathed electrical cable that
features excellent mechanical protection and has become a cost effective
alternative to traditional conduit and wire installations.
General Cable sells its building wire products primarily to electrical
distributors for resale to electrical contractors, industrial customers and
OEMs. Sales are also made through hardware and home center retail chains and
other retail stores. The Company believes, based on U.S. Department of Commerce
reports, that it has approximately a 17% share of the U.S. building wire and
cable market based on 1995 sales. In addition, based on published industry
information, the Company believes that it is one of the three largest
competitors in the U.S. building wire market. In 1994, 1995 and 1996, sales of
Building Wire accounted for approximately 42%, 43% and 40%, respectively, of the
Company's net sales.
Portable Cord
The Company manufactures and sells a wide variety of rubber and plastic
insulated portable cord products for power and control applications serving
industrial, mining, entertainment, OEM, farming
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and other markets. Portable cord products have electrical characteristics
similar to building wire, but are designed and constructed to be used in more
dynamic and severe environmental conditions where a flexible but durable power
supply is required. Portable cord products include both standard commercial cord
and cord products designed to customer specifications. Portable rubber-jacketed
power cord, the Company's largest selling cord product line, is typically
manufactured without a connection device at either end and is sold in standard
and customer-specified lengths. Portable cord is also sold to OEMs for use as
power cords on their products and in other applications, in which case the cord
is made to the OEMs' specifications. The Company also manufactures portable cord
for use with moveable heavy equipment and machinery. According to the most
recent brand preference survey by Electrical Construction & Maintenance, General
Cable has the highest-ranked brand of portable cord in the U.S. among electrical
contractors, operators of plants and facilities and engineering firms.
General Cable's portable cords are used in the installation of new
industrial equipment and the maintenance of existing equipment, and to supply
electrical power at temporary venues such as festivals, sporting events,
concerts and construction sites. For example, General Cable supplied portable
cord for the 1996 Summer Olympics. The Company expects demand for portable cord
to grow in response to general economic activity and the development of higher
specification products for more environmentally demanding industrial
applications.
General Cable's portable cord products are sold under the Carol'r' brand
name, primarily through electrical distributors and electrical retailers to
industrial customers, OEMs, contractors and consumers. The Company believes,
based on U.S. Department of Commerce reports, that it has approximately a 16%
share of the U.S. portable cord market based on 1995 sales.
Cordsets and OEM Assemblies
General Cable focuses primarily on high-performance, value-added cordsets,
including extension cords and multiple outlet power centers, appliance cords for
ranges and dryers, portable lights, and cordsets with surge protection and
ground fault interruption devices for use by consumers, contractors and OEMs.
Cordsets are manufactured with connection devices at one or both ends, with
standard indoor and outdoor, single or multiple outlet extension cords being the
most common example. Jackets for cordset products are typically thermoplastic.
The Company has developed many high-performance plastic and premium rubber
cordsets for use in a wide variety of demanding applications, such as outdoor
locations or rugged job sites.
OEM assemblies are used in a variety of demanding applications such as
power delivery to office modules and for such products as power hand tools,
floor care products and other appliances. The Company targets customers who
require premium cordsets or assemblies that require innovative engineering and
for whom the Company's vertical integration in high-performance wire and cable
provides a competitive cost advantage.
The Company sells its cordsets and cable harness assemblies primarily to
OEMs and to hardware and home center retail chains, hardware distributors and
mass merchants for resale to consumers and contractors. In addition, an
increasing portion of the Company's cordset sales are to electrical distributors
for resale to retail outlets, electrical contractors, industrial companies and
OEMs.
The Company faces competition for these products from both U.S. and foreign
(particularly, Mexican and Asian) cordset manufacturers and suppliers. The
Company believes that it is a leading domestic supplier of cordsets.
Automotive Products
General Cable's principal automotive products are ignition wire sets and
booster cables for sale to the automotive aftermarket. The Company believes that
it offers one of the broadest ranges of ignition wire sets for the U.S.
automotive aftermarket. Many of the Company's automotive products are built to
OEM specifications, and the Company utilizes the expertise of its automotive and
materials engineers in the design and manufacture of these products.
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Booster cable sales are affected by the severity of weather conditions and
related promotional activity by retailers. As a result, a majority of booster
cable sales occur between September and December.
General Cable sells its automotive wire and cable primarily to automotive
parts retailers and distributors, mass merchants, hardware and home center
retail chains and hardware distributors. The Company's automotive products are
also sold on a private label basis to retailers and other automotive parts
manufacturers. The Company believes that it is one of the leading suppliers of
ignition wire to the U.S. automotive aftermarket.
Other Operations
Genca, a subsidiary of the Company, designs, manufactures and sells
extruders, extrusion tooling and equipment and synthetic and carbide wire
drawing dies for sale to third parties and for use by General Cable. Genca's
product line of extrusion tooling and equipment includes generic and specialty
crossheads, extrusion and mixing screws, small tools and complete extrusion
equipment systems, including components and related technical services. These
products are used principally for the manufacture of insulated wire and cable,
and the fabrication of plastic tubing and various hoses and pipes. General Cable
has been focusing on expanding the applications for these products outside of
the traditional wire and cable markets. Among the growing technologies utilizing
the Company's extrusion equipment and tooling are the medical tubing and
automotive fuel line industries. Genca's products are primarily sold through
Genca's agents and direct sales force to end users. Although these products
represent a relatively small portion of the Company's sales, the Company
believes that its other operations benefit from the technology and equipment
provided by this business.
MARKETING, DISTRIBUTION AND CUSTOMER SERVICE
General Cable sells its products primarily through electrical, data
communications and electronic distribution companies, and automotive, hardware
and home center retail chains, and directly to end users in the industrial,
entertainment and communications markets. General Cable has developed supply
relationships with preferred customers who have a favorable combination of
volume, product mix, business strategy and industry position, and has
implemented a number of initiatives designed to enable the Company to better
serve these customers.
Since the Acquisition, General Cable has been implementing a comprehensive
restructuring of its marketing and distribution processes, which has contributed
to the Company's improved profitability and customer service. As a principal
part of this initiative, the Company has focused on creating an organizational
structure and putting in place the facilities and processes necessary to enable
the Company to execute its 'One Company' strategy. In this regard, the Company
has restructured both its direct sales force and its commissioned agents and has
redesigned its sales force, agent and customer incentives.
The Company is currently implementing several operational and service
enhancements, including electronic locator systems for materials and finished
products, bar coding, Advance Shipping Notifications, EDI and Vendor Managed
Inventory ('VMI'). Company-wide electronic product locator systems for raw and
in-process materials and finished products and comprehensive bar coding at the
point of manufacture are being put in place in all of the Company's plants and
regional distribution centers to allow the Company to better monitor, control
and make effective use of its inventories. Advance Shipping Notifications are
being introduced company-wide so that in-transit product is identifiable and can
be allocated against orders while moving toward a regional distribution center
or to a customer. EDI has enabled the Company to reduce transaction costs and
improve communications with its customers. VMI allows the Company to monitor and
replenish customer inventory, thereby reducing customer purchasing and inventory
costs and improving the Company's production and inventory planning and customer
service. The Company believes that these services enable its customers to
improve service to their own customers.
General Cable has also implemented a number of initiatives designed to
reduce operating costs and improve the Company's inventory management
capabilities to support increased sales and improved
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order fill rates. Since 1994, the Company has closed approximately 60 inventory
stocking locations and established three new regional distribution centers. The
Company's distribution centers enable General Cable to ship all of its products
to a customer on one order with one set of shipping documents and to bill on one
invoice. As a result of these increased efficiencies, the Company has been able
to achieve significant inventory reductions, decreased operating costs and
improved delivery times and fill rates. The Company intends to open two new
regional distribution centers in 1997, and to consolidate several additional
inventory stocking locations into its regional distribution centers.
COMPETITION
The markets for all of General Cable's products are highly competitive, and
the Company experiences competition from at least one major competitor within
each market. Due to the diversity of its product lines, however, the Company
believes that no single competitor competes with the Company across the entire
spectrum of the Company's product lines. General Cable believes that it has
developed strong customer relations as a result of its ability to supply
customer needs across a broad range of products, its commitment to quality
control and continuous improvement, its continuing investment in information
technology, its emphasis on customer service, and its substantial production and
distribution resources.
Although the primary competitive factors for General Cable's products vary
somewhat across the different product categories, the principal factors
influencing competition are generally breadth of product line, inventory
availability and delivery time, price, quality and customer service. Price is a
highly significant factor for certain lines within the Company's Electrical
product categories. Many of the Company's products are made to industry
specifications, and are therefore essentially functionally interchangeable with
those of competitors. See 'Risk Factors -- Price and Other Competitive Factors.'
However, the Company believes that significant opportunities exist to
differentiate all of its products on the basis of quality, consistent
availability, conformance to customer specifications and customer service.
Within the communications market, conformance to manufacturer's specifications
and technological superiority are also important competitive factors. Brand
recognition is also a primary differentiating factor in the portable cord market
and, to a lesser extent, in the Company's other product groups.
MANUFACTURING AND TECHNOLOGY
General Cable's manufacturing strategy is primarily focused on product
quality and production efficiency. The Company seeks to optimize its cost
structure through vertical integration, where appropriate, to lower its
production costs while maintaining high quality standards in the finished
products. For example, General Cable internally produces a substantial portion
of its copper rod requirements. General Cable also develops and produces certain
proprietary thermoplastic, thermosetting and elastomeric compounds, which are
used as insulation and jacketing for many of its products.
General Cable has invested and expects to continue to invest in new
equipment and production processes, process controls, automation, material
handling and packaging to further improve its production efficiency. Since the
Acquisition, General Cable has spent an aggregate of $65.3 million for capital
projects, and expects to spend $38.0 million in 1997. In addition, since the
Acquisition, General Cable has closed five manufacturing facilities, reducing
overall manufacturing floor space by 20% without reducing production output.
General Cable's manufacturing operations involve a broad variety of
manufacturing processes which reflect the breadth of the Company's product
lines. All of the Company's copper wire and cable products require that copper
rod be drawn and insulated. The Company draws most of its wire requirements at
its manufacturing facilities, and purchases the rest of its needs from third
parties. Wire drawing is the process of reducing the conductor diameter by
pulling it through a converging set of dies until the specified product size is
attained. For certain of the Company's products, the drawn wire is then bundled.
Most wire products, including the bundled wire, are insulated with
thermoplastic, thermosetting, elastomeric or fluoropolymer compounds through an
extrusion process. Extrusion involves the melting, feeding and pumping of a
polymeric compound through a die to shape it into its final form on the wire.
The Company has the capability to manufacture thermoplastic, thermosetting
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and elastomeric compounds in a wide variety of proprietary formulations and
colors which are then extruded onto wire. General Cable also supplies its
competitors with certain of these proprietary compounds. The insulated wires are
then combined, or cabled, in a number of configurations to achieve the desired
performance characteristics. A final extrusion process applies an overall
covering, or 'jacket,' to the cable.
General Cable maintains advanced manufacturing, quality assurance and
testing equipment geared to the specific products which it manufactures, and
which enable the Company to achieve the critical tolerances in insulating,
cabling, jacketing, pairing and other processes required for many of the
Company's high-performance products. The Company believes that meeting industry
standards and codes is critical to its success, and its products are designed to
satisfy the safety and performance standards set by various industrial groups
and testing laboratories. UL, a nonprofit, independent organization, operates a
listing service for electrical and electronic materials and equipment. UL
listing is required by national and most local electrical codes in the United
States. UL conformity assessment includes testing, evaluation, certification and
periodic inspections by UL of the Company's manufacturing facilities.
In addition to standards organizations, the Company's electrical products
are designed to comply with electrical code requirements, particularly the
National Electric Code, federal specifications and various local and municipal
codes. As part of the Company's focus on meeting and exceeding customer
expectations and industry standards, 11 of the Company's 17 U.S. manufacturing
facilities are ISO 9002 certified, and the Company is working to certify all of
its manufacturing and distribution facilities. ISO 9002 is an internationally
recognized verification system for quality management. The Company believes that
such registration is an important factor in its ability to maintain and expand
its participation in international markets.
RAW MATERIALS
The principal raw material used by General Cable in the manufacture of its
wire and cable products is copper. General Cable purchases copper in either
cathode, rod or wire form from a number of major domestic and foreign producers,
generally through annual supply contracts. In 1996, the Company produced
approximately 37% of the copper rod used in its manufacturing operations at its
cast copper rod mill, which uses both cathode and recycled copper. Copper is
available from many sources, and General Cable believes that it is not dependent
on any single supplier of copper. In 1996, the Company's largest supplier of
copper accounted for approximately 30% of the Company's copper purchases.
General Cable has centralized its copper purchasing to capitalize on
economies of scale and to facilitate the negotiation of favorable purchase terms
from suppliers. The cost of copper has been subject to considerable volatility
over the past several years. However, as a result of a number of practices
intended to match copper purchases with sales, the Company's profitability has
generally not been significantly affected by changes in copper prices. For
certain of the Company's products (primarily building wire and portable cord),
which are priced on a daily basis, the Company purchases copper at prices based
on the average of the daily closing selling prices of copper on the COMEX for
the month in which the purchase occurs, plus a negotiated premium (principally
representing transportation costs and processing charges). For a portion of its
other sales, the Company purchases copper cathode from its existing vendor base
at a firm price for future delivery against orders or, with respect to a
contract that is fixed as to price but not as to volume, for a portion of the
estimated volume. Finally, the Company's arrangements with certain customers
provide for the pass-through of changes in copper costs through price revisions.
As a result of these practices, the Company generally passes changes in copper
prices along to its customers, although there are timing delays of varying
lengths depending upon the type of product, competitive conditions and
particular customer arrangements. Generally, the Company does not engage in
speculative metals trading or other speculative activities, nor does it engage
in activities to hedge the underlying value of its copper inventory. In
addition, the New Credit Facility is expected to contain a provision restricting
General Cable from engaging in hedging activities other than in the ordinary
course of business. See 'Risk Factors -- Impact of Copper Prices' and
'Management's Discussion and Analysis of Financial Condition and Results of
Operations.'
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<PAGE>
Other raw materials utilized by the Company include nylon, PVC resin and
compounds, polyethylene and plasticizers, fluoropolymer compounds, a variety of
filling, binding and sheathing materials, and aluminum wire. The Company
believes that all of these materials are available in sufficient quantities
through purchases in the open market.
In connection with the Company's joint venture with SpecTran, General
Photonics has entered into a contract with a wholly-owned subsidiary of SpecTran
for the purchase of optical fiber. See ' -- Products and Markets --
Communications Group -- Datacom Products.'
PATENTS AND TRADEMARKS
General Cable believes that the success of its business depends more on the
technical competence, creativity and marketing abilities of its employees than
on any individual patent, trademark or copyright. Nevertheless, General Cable
has a policy of seeking patents when appropriate on inventions concerning new
products and product improvements as part of its ongoing research, development
and manufacturing activities. The Company owns 35 U.S. patents, which expire in
1999 through 2017, and has four patent applications pending in the U.S. In
addition, the Company owns 25 foreign patents, which expire in 1998 through
2015. The Company also owns 73 registered trademarks and 29 trademarks for which
application for registration is pending.
Although in the aggregate these patents and trademarks are of considerable
importance to the manufacturing and marketing of many of the Company's products,
the Company does not consider any single patent or trademark or group of patents
or trademarks to be material to its business as a whole. While General Cable
occasionally obtains patent licenses from third parties, none are deemed to be
significant. Trademarks which are deemed to be important are Carol'r', Genca'r',
General Cable'r', Romex'r', Vutron'r' and DreamLan'tm', and the General Cable
triangle symbol. General Cable believes that the Company's products bearing
these trademarks have achieved significant brand recognition within the
industry.
General Cable also relies on trade secret protection for its confidential
and proprietary information. The Company routinely enters into confidentiality
agreements with its employees. There can be no assurance, however, that others
will not independently obtain similar information and techniques or otherwise
gain access to the Company's trade secrets or that the Company will be able to
effectively protect its trade secrets.
ENGINEERING AND DEVELOPMENT
General Cable actively engages in a continuing engineering and development
program and employs over 75 engineers and technicians. The Company maintains a
central research, development and product testing laboratory in Highland
Heights, Kentucky. In addition, each of the Company's manufacturing locations
has process and manufacturing engineering facilities and, in certain cases,
product engineering facilities. The engineering and development activities
conducted by the Company at these facilities include new product development,
testing and analysis, process and equipment development and testing, and
compound materials development and testing.
The Company's products are designed to satisfy the safety and performance
standards set by various industrial groups and testing laboratories, and care is
exercised throughout the manufacturing process to ensure that the products
conform to industry, government and customer specifications. The characteristics
of insulating compounds are designed to satisfy safety and other technical
requirements.
General Cable's personnel take an active role in the establishment of
industry standards, codes and specifications. The Company has representatives on
committees of the National Electrical Manufacturers Association, the Institute
of Electrical & Electronics Engineers, the Electronic Industries Association and
other organizations.
EMPLOYEES
At March 31, 1997, approximately 3,800 persons were employed by General
Cable, and collective bargaining agreements covered approximately 2,200
employees at 14 locations. A union representation election is scheduled to be
held by the National Labor Relations Board on May 23, 1997 at the Company's
Dallas regional distribution center with respect to 20 employees. During the
last five
33
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<PAGE>
years, the Company has experienced two strikes affecting a total of three
facilities; both preceded the Acquisition and were settled on satisfactory
terms. Union contracts will expire at three facilities in 1997, six facilities
in 1998 and two facilities in 1999. The Company believes that its relationships
with employees are good.
PROPERTIES
General Cable operates 17 manufacturing facilities in the U.S., of which
14, totaling approximately 3.5 million square feet, are owned. The remaining
three facilities, totaling approximately 216,000 square feet, are leased under
agreements with expiration dates ranging from 1997 to 2000. In addition, General
Cable operates two manufacturing facilities outside the U.S., totaling
approximately 27,500 square feet. The Company also leases three regional
distribution centers, totaling approximately 717,240 square feet, located in
Anaheim, Dallas and Atlanta, and a 64,000 square foot warehouse in Des Plaines,
Illinois. These leases expire in 2001 and 2002. Company agents manage two
additional regional distribution centers in Chicago and Bridgeton, New Jersey.
The Company's principal properties are listed below. The Company believes
that its properties are generally well maintained and are adequate for the
Company's current level of operations.
<TABLE>
<CAPTION>
SQUARE USE/PRODUCT OWNED
LOCATION FEET LINE(S) OR LEASED
- ------------------------------ ------- --------------------------------------- ---------
<S> <C> <C> <C>
MANUFACTURING FACILITIES:
Manchester, NH................ 533,000 Electronic and Datacom Products Owned
Plano, TX..................... 404,000 Electrical Products and Rod Mill Owned
Lincoln, RI................... 398,000 Electrical Products and Automotive Owned
Bonham, TX.................... 330,000 Outside Voice and Data Products Owned
Mountoursville, PA............ 318,000 Cordsets and Electrical Products Owned
Monticello, IL................ 250,000 Outside Voice and Data Products Owned
Kingman, AZ................... 243,000 Electrical Products Owned
Watkinsville, GA.............. 224,000 Electrical Products Owned
Altoona, PA................... 195,000 Automotive Products Owned
Lawrenceburg, KY.............. 190,000 Outside Voice and Data Products and Owned
Datacom Products
Williamstown, MA.............. 167,000 Electrical Products and Cordsets Owned
Taunton, MA................... 138,000 Wire Fabricating Leased
Sanger, CA.................... 105,000 Datacom Products Owned
Cass City, MI................. 100,000 Datacom Products Owned
Clearwater, FL................ 72,300 Extrusion Systems and Tooling Owned
Kenly, NC..................... 50,000 Electrical OEM Products Leased
Ft. Wayne, IN................. 28,000 Wire Drawing Dies Leased
Piedras Negras, Mexico........ 16,540 Communications Assemblies Leased
Wellingborough, UK............ 11,000 Automotive and Electrical OEM Products Leased
DISTRIBUTION AND OTHER FACILITIES:
Atlanta, GA................... 328,260 Distribution Center Leased
Dallas, TX.................... 200,000 Distribution Center Leased
Anaheim, CA................... 188,980 Distribution Center Leased
Highland Heights, KY.......... 166,000 Corporate Headquarters and Laboratory Owned
Des Plaines, IL............... 64,000 Warehouse Leased
Toronto, Ontario Canada....... 24,000 Sales Office and Warehouse Leased
</TABLE>
ENVIRONMENTAL MATTERS
The Company is subject to numerous federal, state, local and foreign laws
and regulations relating to the storage, handling, emission and discharge of
materials into the environment, including CERCLA, the Clean Water Act, the Clean
Air Act (including the 1990 amendments) and the Resource Conservation and
Recovery Act.
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<PAGE>
Subsidiaries of the Company have been identified as PRPs with respect to
several sites designated for cleanup under CERCLA or similar state laws, which
impose liability for cleanup of certain waste sites and for related natural
resource damages without regard to fault or the legality of waste generation or
disposal. Persons liable for such costs and damages generally include the site
owner or operator and persons that disposed or arranged for the disposal of
hazardous substances found at those sites. Although CERCLA imposes joint and
several liability on all PRPs, in application, the PRPs typically allocate the
investigation and cleanup costs based, among other things, upon the volume of
waste contributed by each PRP. Settlements can often be achieved through
negotiations with the appropriate environmental agency or the other PRPs. PRPs
that contributed small amounts of waste (typically less than 1% of the waste)
are often given the opportunity to settle as 'de minimis' parties, resolving
their liability for a particular site. The Company does not own or operate any
of the waste sites with respect to which it has been named as a PRP by the
government. Based on its review and other factors, the Company believes that
costs to the Company relating to environmental clean-up at these sites will not
have a material adverse effect on its results of operations, cash flows or
financial position.
American Premier, in connection with the Acquisition, agreed to indemnify
General Cable against liabilities (including all environmental liabilities)
arising out of General Cable's or its predecessors' ownership or operation of
the Indiana Steel & Wire Company and Marathon Manufacturing Holdings, Inc.
businesses (which were divested by the Predecessor prior to the Acquisition),
without limitation as to time or amount. American Premier also agreed to
indemnify General Cable against 66 2/3% of all other environmental liabilities
arising out of General Cable's or its predecessors' ownership or operation of
other properties and assets in excess of $10 million but not in excess of $33
million which are identified during the seven year period ending June 2001.
General Cable also has claims against third parties with respect to some of
these liabilities. While it is difficult to estimate future environmental
liabilities accurately, the Company does not currently anticipate any material
adverse effect on its results of operations, financial condition or cash flows
as a result of compliance with federal, state, local or foreign environmental
laws or regulations or cleanup costs of the sites discussed above.
At March 31, 1997, the Company had accrued approximately $7.2 million
(exclusive of an additional accrual of approximately $2.2 million for the
asbestos-related litigation described below under ' -- Legal and Other Matters')
for various environmental related liabilities of which the Company is aware.
The Company cannot predict whether future developments in laws and regulations
concerning environmental protection or unanticipated enforcement or other legal
actions, particularly with respect to environmental standards, will require
material capital expenditures or otherwise affect its financial condition,
results of operation or cash flow in a materially adverse manner or whether it
will be successful in meeting future demands of regulatory agencies in a manner
which will not have a material adverse effect on the Company's results of
operations, cash flows or financial position. See 'Risk Factors --
Environmental, Legal and Other Matters.'
LEGAL AND OTHER MATTERS
There are approximately 4,900 pending non-maritime asbestos cases involving
subsidiaries of the Company. The overwhelming majority of these cases involve
employees in shipyards alleging exposure to asbestos-contaminated shipboard
cable manufactured by General Cable's predecessors. In addition to the Company's
subsidiaries, numerous other wire and cable manufacturers have been named as
defendants. Most cases previously filed have been dismissed with prejudice and
without imposition of liability against the Company. In some instances,
individual cases have been settled on a de minimis basis. In addition,
subsidiaries of the Company have been named, together with numerous other wire
and cable manufacturers, as defendants in approximately 14,000 suits brought by
plaintiffs alleging asbestos-related injury from the maritime industry ('MARDOC'
cases), under the supervision of the U.S. District Court for the District of
Eastern Pennsylvania (the 'District Court'). On May 1, 1996 the District Court
ordered that 9,373 of such MARDOC cases be dismissed without prejudice for
failure to plead sufficient facts. Pursuant to that order of dismissal,
plaintiffs' attorney was permitted to bring future MARDOC cases only if the
cases were brought in admiralty under the Merchant Marine Act of 1920 (commonly
known as the Jones Act) and if counsel paid a filing fee for each new complaint
and
35
<PAGE>
<PAGE>
pleaded sufficient facts showing an asbestos-related injury as well as product
identification specific as to each defendant. Subsequently, plaintiffs' counsel
filed additional cases, and defendants filed a motion seeking dismissal of all
MARDOC cases and an injunction against any new suits on essentially the same
grounds as the prior motion that was granted in May 1996. On March 17, 1997, the
District Court ordered that all MARDOC cases, including any cases not covered by
the May 1, 1996 order, all actions filed after May 1, 1996 and all future cases,
be administratively dismissed and placed on an inactive docket. These cases were
dismissed without prejudice, but can be refiled only if the cases are brought in
admiralty under the Jones Act and plaintiff's counsel pays a filing fee for each
such complaint and pleads sufficient facts showing both an asbestos-related
injury and product identification specific as to each defendant. Based upon its
experience to date, the Company does not believe that the outcome of the pending
non-maritime and MARDOC asbestos cases will have a material adverse effect on
its results of operations, cash flows or financial position.
In January 1994, General Cable entered into a settlement agreement with
certain principal primary insurers concerning liability for the costs of
defense, judgments and settlements, if any, in all of the asbestos litigation
described above. Subject to the terms and conditions of the settlement
agreement, the insurers are responsible for a substantial portion of the costs
and expenses incurred in the defense or resolution of such litigation.
Accordingly, based on (i) the terms of the insurance settlement agreement; (ii)
the relative costs and expenses incurred in the disposition of past asbestos
cases; (iii) reserves established on the books of the Company which are believed
to be reasonable; and (iv) defenses available to the Company in the litigation,
the Company believes that the resolution of the present asbestos litigation will
not have a material adverse effect on its results of operations, cash flows or
financial position. Liabilities incurred in connection with asbestos litigation
are not covered by the American Premier indemnification referred to under
' -- Environmental Matters' above.
On May 13, 1997, the Company notified the CPSC pursuant to Section 15(b)
of the Consumer Product Safety Act that it had initiated a product recall of
certain outdoor power center units manufactured at one of its facilities between
April 7, 1997 and May 5, 1997 because of potential problems with the electrical
insulation for such units. As of the date hereof, the Company has recovered or
located the substantial majority of the units and is not aware of any claim or
incident of personal injury or property damage involving the units. However,
there can be no assurance that there will be no such claims or incidents.
General Cable is involved in various legal proceedings and administrative
actions in addition to the matters discussed above and under ' -- Environmental
Matters.' In the opinion of the Company's management, such proceedings and
actions should not, individually or in the aggregate, have a material adverse
effect on its results of operations, cash flows or financial position.
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<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS
Upon consummation of the Offerings, the executive officers of General Cable
will be as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION(S) WITH THE COMPANY
- -------------------------------- --- ---------------------------------------------------------------
<S> <C> <C>
Stephen Rabinowitz.............. 54 Chairman, President, Chief Executive Officer
and Director
Gregory B. Kenny................ 44 Executive Vice President, Chief Operating Officer
and Director
Christopher F. Virgulak......... 42 Executive Vice President, Chief
Financial Officer and Treasurer
Robert J. Siverd................ 48 Executive Vice President,
General Counsel and Secretary
</TABLE>
Mr. Rabinowitz has served as President and Chief Executive Officer of GCC
since joining it in September 1994 and became Chairman, President and Chief
Executive Officer of the Company in March 1997. From March 1992 until August
1994, Mr. Rabinowitz served as President and Group Executive for AlliedSignal
Friction Materials and as President of AlliedSignal Braking Systems Business.
For the ten years prior thereto, he held various executive positions at General
Electric Company, including President and Chief Executive Officer of GE
Electrical Distribution and Control and Vice President and General Manager of GE
Lighting Technology Division. Mr. Rabinowitz is a director of JLG Industries,
Inc.
Mr. Kenny has served as Executive Vice President of GCC since June 1994. He
also became Chief Operating Officer of GCC in February 1997 and Executive Vice
President, Chief Operating Officer and a director of the Company in March 1997.
Mr. Kenny was Senior Vice President of GCC from April 1992 until June 1994. He
joined PCC in 1982 and served in various executive positions with PCC and GCC
thereafter.
Mr. Virgulak has served as Executive Vice President, Chief Financial
Officer and Treasurer of GCC since October 1994 and became Executive Vice
President, Chief Financial Officer and Treasurer of the Company in March 1997.
From January 1993 to October 1994, Mr. Virgulak was Chief Financial Officer of
Wassall USA, Inc., an affiliate of Wassall. From November 1990 to September
1992, he served as Chief Financial Officer of Carol Cable Company, Inc., then a
subsidiary of PCC.
Mr. Siverd has served as Executive Vice President, General Counsel and
Secretary of GCC since August 1994 and became Executive Vice President, General
Counsel and Secretary of the Company in March 1997. He was Senior Vice
President, General Counsel and Secretary of GCC from April 1992 until July 1994
and Vice President and Associate General Counsel of PCC from September 1987
through June 1992.
OTHER KEY EMPLOYEES
General Cable's other key management employees are as follows:
<TABLE>
<CAPTION>
YEARS OF
NAME AGE POSITION(S) SERVICE
- --------------------------------- --- ------------------------------------------------- ------------
<S> <C> <C> <C>
Harold C. Bevis.................. 37 Senior Vice President and General Manager for 2
Building Wire Products
Richard D. Foster................ 57 Senior Vice President, Human Resources 1
Joseph Ewing-Chow................ 51 Vice President, Information Systems 16
R. David Corey................... 48 Vice President and General Manager for Outside 26
Voice and Data Products
Kenneth A. McAllister............ 52 Vice President and General Manager for 11
Datacom/Electronic Products
Elizabeth W. Taliaferro.......... 41 Vice President, Sales Systems 15
Bryan Kelln...................... 31 Vice President, Supply Chain Management 2
Larry L. Davis................... 55 Vice President, Operations 34
</TABLE>
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<PAGE>
BOARD OF DIRECTORS
General
The Board of Directors of the Company currently consists of the Company's
Chief Executive and Chief Operating Officers, Stephen Rabinowitz and Gregory B.
Kenny, who were elected as directors in March 1997 and two designees of Wassall,
Kevin J. Doyle and David A. Roper, who have served as directors since the
Acquisition. Mr. Doyle, 41, has been Chief Executive Officer of Wassall USA,
Inc., an affiliate of Wassall, since 1991 and has been a director of Wassall
since January 1993. He served as President of the Company and Chairman of GCC
from the Acquisition until March 1997. Mr. Roper, 46, has been an executive
director of Wassall since September 1988 and Deputy Chief Executive of Wassall
since March 1994.
The directors are divided into three classes of directors serving staggered
three-year terms. The initial term of office of the first class of directors
(the 'Class I Directors') will expire at the 1998 annual meeting of
stockholders, the initial term of office of the second class of directors (the
'Class II Directors') will expire at the 1999 annual meeting of stockholders,
and the initial term of office of the third class of directors (the 'Class III
Directors') will expire at the 2000 annual meeting of stockholders. The Class I
Directors will initially consist of Mr. Roper, the Class II Directors will
initially consist of Mr. Kenny, and the Class III Directors will initially
consist of Messrs. Doyle and Rabinowitz. Commencing with the 1998 annual meeting
of stockholders, directors elected to succeed those directors whose terms have
thereupon expired will be elected to a term of office to expire at the third
succeeding annual meeting of stockholders after their election. See 'Description
of Capital Stock -- Certain Anti-Takeover Effects -- Certain Charter and By-Law
Provisions.'
The Company anticipates that the Board of Directors will be expanded to add
four directors (to be divided among the three classes) who are not employees of
either the Company or Wassall as soon as practicable after consummation of the
Offerings, and that at least one non-employee director will be added no later
than 90 days after completion of the Offerings. It is anticipated that Mr. Roper
will resign from the Board of Directors upon the appointment of one or more of
such additional directors.
Committees
Upon appointment of the additional directors, the Company's Board of
Directors will establish an Audit Committee and a Compensation Committee, each
consisting entirely of directors who are not employees of the Company. The
functions of these standing committees will be as follows:
Audit Committee. The Audit Committee will be responsible for matters
relating to accounting policies and practices, financial reporting, and internal
controls. It will recommend to the Board of Directors the appointment of a firm
of independent accountants to audit the Company's financial statements and
review with representatives of the independent accountants the scope of the
audit of the Company's financial statements, results of audits, audit costs and
recommendations with respect to internal controls and financial matters. It will
also review non-audit services rendered by the Company's independent accountants
and periodically meet with or receive reports from the Company's principal
financial and accounting officers.
Compensation Committee. The Compensation Committee will set the
compensation of all executive officers and administer the Stock Incentive Plan
and Company's other executive compensation plans and programs (including setting
performance targets and making awards under such plans). It will also review the
competitiveness of the Company's management and director compensation and
benefit programs and review principal employee relations policies and
procedures. It is intended that all members of the Compensation Committee will
be 'Non-Employee Directors' within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and 'outside
directors' within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended (the 'Code') and, in any event, will not include any Wassall
designee.
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<PAGE>
Compensation of Directors
It is anticipated that, following consummation of the Offerings, the
Company will establish a compensation program for directors who are not
employees of the Company, including annual retainer and meeting fees. It is
anticipated that a portion of such fees may be payable in awards under the Stock
Incentive Plan and the balance will be paid in cash.
Compensation Committee Interlocks and Insider Participation
During 1996, neither the Company's nor GCC's Board of Directors had a
compensation committee or other committee performing similar functions. The
directors of the Company (Messrs. Doyle and Roper) and the directors of GCC
(Messrs. Doyle, Roper and Rabinowitz) participated in deliberations concerning
executive compensation.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
awarded or paid to or earned by the chief executive officer and the four other
most highly compensated executive officers of the Company for services rendered
in all capacities to the Company (including its subsidiaries) for 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
---------------------------------------------------------------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) COMPENSATION(2)
- ---------------------------------------------- ---- --------- -------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
Stephen Rabinowitz ........................... 1996 $ 354,423 $830,921 $ 12,387 $ 42,433
Chairman, President and Chief Executive
Officer
Gregory B. Kenny ............................. 1996 235,000 250,000 9,293 27,557
Executive Vice President and Chief Operating
Officer
Robert J. Siverd ............................. 1996 215,045 207,000 3,461 21,732
Executive Vice President, General Counsel
and Secretary
Christopher F. Virgulak ...................... 1996 191,539 200,000 5,463 20,701
Executive Vice President, Chief Financial
Officer and Treasurer
Harold C. Bevis .............................. 1996 155,481 180,000 4,167 10,153
Senior Vice President
</TABLE>
- ------------
(1) Represents the amount reimbursed during the fiscal year for payment of
insurance premiums and related taxes thereon.
(2) Includes (a) imputed income from life insurance in the amounts of $3,168 for
Mr. Rabinowitz, $857 for Mr. Kenny, $1,329 for Mr. Siverd, $683 for Mr.
Virgulak and $345 for Mr. Bevis and (b) employer matching and additional
contributions pursuant to the Company's retirement and excess benefit plans
in the amounts of $39,265 for Mr. Rabinowitz, $26,700 for Mr. Kenny, $20,403
for Mr. Siverd, $20,018 for Mr. Virgulak and $9,808 for Mr. Bevis.
1997 ANNUAL INCENTIVE PLAN
The following is a description of the 1997 Annual Incentive Plan of the
Company (the '1997 Plan'), which will be adopted by the Selling Stockholder
prior to consummation of the Offerings. This description is intended only as a
summary and is qualified in its entirety by reference to the 1997 Plan, which
has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.
The 1997 Plan is designed to attract, retain and motivate key employees of
the Company and the Company's subsidiaries by providing a cash incentive award
for 1997 to approximately 110 employees of the Company and the Company's
subsidiaries who have been selected to participate by the Board of
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<PAGE>
<PAGE>
Directors (or the compensation committee, once it is established), subject to
consummation of the Offerings. Upon attainment by the Company of specified
performance goals (the 'Performance Goal'), the Company shall pay participants
their respective bonus payout based on the participants' base salaries
multiplied by the applicable multiplier factor under the Performance Goal.
The maximum bonus payout attainable under the 1997 Plan by any participant
(other than the Company's chief executive officer and chief operating officer)
shall not exceed 90% of such participant's annual base salary. The maximum
bonus payout attainable under the 1997 Plan by each of the individuals named in
the Summary Compensation Table (as a percentage of their respective base
salaries) is 120% for Mr. Rabinowitz, 120% for Mr. Kenny, 90% for Mr. Siverd and
90% for Mr. Virgulak.
It is expected that compensation paid under the 1997 Plan to participants
who are 'covered employees' as defined in Section 162(m) of the Code and the
applicable regulations thereunder will be deductible by the Company for federal
income tax purposes based upon a special transition rule contained in the
Treasury regulations for private corporations that complete an initial public
offering.
STOCK INCENTIVE PLAN
The following is a description of the Stock Incentive Plan, which will be
adopted by the Selling Stockholder prior to consummation of the Offerings. This
description is intended only as a summary and is qualified in its entirety by
reference to the Stock Incentive Plan, which has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
The Stock Incentive Plan is designed to attract, retain and motivate key
employees and non-employee directors of the Company and the Company's
subsidiaries and to align the interests of the Company's key employees and
non-employee directors with those of its stockholders by providing opportunities
to receive Common Stock or monetary payments. Awards under the Stock Incentive
Plan may be granted in any one or a combination of (a) stock options, which may
be 'incentive stock options,' within the meaning of Section 422 of the Code, or
stock options which do not constitute incentive stock options, (b) stock
appreciation rights ('SARs'), (c) stock awards, (d) performance awards and (e)
stock units. A maximum of 2,450,000 shares of Common Stock may be issued or used
for reference purposes pursuant to the Stock Incentive Plan. The maximum number
of shares of Common Stock with respect to which Awards may be granted or
measured to any individual participant under the Stock Incentive Plan during the
term of the Stock Incentive Plan will not exceed 1,000,000 shares and the
maximum number of shares with respect to which stock options and SARs may be
granted to any individual participant under the Stock Incentive Plan during the
term of the Stock Incentive Plan shall not exceed 750,000 shares. The Stock
Incentive Plan shall terminate on the tenth anniversary of the date of adoption
(unless sooner terminated by the Board).
The Stock Incentive Plan will be administered by the Company's Board of
Directors, and by the Compensation Committee once it is established. The
composition of the Compensation Committee is intended to satisfy the requirement
contained in Rule 16b-3 under the Exchange Act that the Stock Incentive Plan be
administered by 'Non-Employee Directors' (as defined in Rule 16b-3) so that
awards granted under the Stock Incentive Plan are exempt from Section 16(b) of
the Exchange Act and 'outside directors' within the meaning of Section 162(m) of
the Code. The Compensation Committee will have the authority, subject to the
terms of the Stock Incentive Plan, to determine when and to whom to make grants
or awards under the plan, the number of shares to be covered by the grants or
awards, the types and terms of performance awards, stock options, SARs, stock
grants and stock units, and the exercise price of stock options and SARs, and to
prescribe, amend and rescind rules and regulations relating to the Stock
Incentive Plan. The Compensation Committee's determinations under the Stock
Incentive Plan need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, grants and awards under the
Stock Incentive Plan.
Participants will consist of such key employees and non-employee directors
of the Company and the Company's subsidiaries as the Compensation Committee in
its sole discretion determines to be significantly responsible for the success
and future growth and profitability of the Company and whom the Compensation
Committee may designate from time to time to receive awards under the Stock
Incentive Plan. The terms of any grants under the Stock Incentive Plan will be
governed by the award agreements issued in connection with awards under the
Stock Incentive Plan. Approximately 110 employees currently are eligible to
participate in the Stock Incentive Plan.
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The Company's Board of Directors may amend, suspend or terminate the Stock
Incentive Plan at any time except that, unless approved by stockholders of the
Company, no such amendment may (i) increase the total number of shares which may
be issued under the Stock Incentive Plan or the maximum number of shares with
respect to which Awards may be granted to any individual participant under the
Stock Incentive Plan, except for adjustments to reflect stock dividends or other
recapitalizations affecting the number or kind of outstanding shares, or (ii)
modify the requirements as to eligibility for awards under the Stock Incentive
Plan. In addition, no amendment to the Plan may be made without approval of the
stockholders if the amendment would disqualify any incentive stock options
granted under the Stock Incentive Plan. By mutual agreement between the Company
and a participant, awards may be made under the Stock Incentive Plan in
substitution and cancellation of awards previously granted to the participant
under the Stock Incentive Plan or under any other plan of the Company. Awards
granted under the Stock Incentive Plan are subject to adjustment in the event of
certain changes affecting the Common Stock.
The Compensation Committee may grant 'incentive stock options' within the
meaning of Section 422 of the Code, 'non-qualified stock options' or SARs in
respect of shares of Common Stock to participating employees alone or in tandem
with other awards under the Stock Incentive Plan. The exercise price of a stock
option or base price of an SAR may not be less than the fair market value of the
underlying shares of the Common Stock on the date of grant. The exercise period
for stock options and SARs will be determined by the Compensation Committee and
may not exceed ten years from the date of grant. Stock options and SARs will be
exercisable at such times, in such amounts, in accordance with such terms and
conditions, and subject to such restrictions, as are set forth in the agreement
evidencing the grant of such options or SARs. In the event of a change of
control (as defined in the Stock Incentive Plan) of the Company, outstanding
stock options and SARs may become exercisable immediately and, in the discretion
of the Compensation Committee, the excess of the fair market value of the Common
Stock subject to such stock options or SARs over the exercise price or base
price thereof will be paid out in cash.
Stock options and SARs may be transferred by an optionee only by will or by
the laws of descent and distribution, and may be exercised only by the optionee
or grantee during his lifetime. If a participant dies and the applicable award
agreement so provides, all outstanding options and SARs will become immediately
vested and may be exercised by the person or persons to whom the optionee's or
grantee's rights pass within one year after the optionee's or grantee's death.
In no case (other than in the event of the participant's death) may options or
SARs be exercised later than the expiration date of the stock options or SARs
specified in the grant.
Upon exercise of an SAR, a holder generally is entitled, without payment to
the Company, to receive cash, shares of Common Stock or any combination thereof,
as determined by the Compensation Committee, in an amount equal to the excess of
the fair market value of one share of Common Stock on the exercise date over the
base price, multiplied by the number of shares in respect of which the SAR is
exercised.
The Compensation Committee may grant performance awards, in the form of
shares or units, to participating employees alone or in tandem with other awards
under the Stock Incentive Plan. In the event that the Compensation Committee
grants such awards, it will establish performance goals which, depending on the
extent to which they are met, will determine the number and/or value of
performance awards that will be paid out. Payouts may be in shares of Common
Stock (with or without restrictions) and/or cash. Performance goals may be based
upon Company-wide, divisional and/or individual performance.
The Compensation Committee may grant stock awards, in such amounts and
subject to such terms and conditions as the Compensation Committee will
determine. The vesting of a stock award granted under the Stock Incentive Plan
may be conditioned upon the completion of a specified period of service, upon
the attainment of specified performance goals and/or upon such other criteria,
if any, as the Compensation Committee may determine. In addition, the right to
vote and receive dividends on the shares of Common Stock subject to the stock
award will be determined by the Compensation Committee.
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The Compensation Committee also may grant stock units, each of which is a
notional account representing one share of Common Stock. Stock units granted
under the Stock Incentive Plan are payable in shares of Common Stock at such
time as is set forth in an award agreement and are accompanied by such
restrictions on vesting, if any, as may be determined by the Compensation
Committee. While stock units do not confer voting rights on the participant, the
Compensation Committee may provide that a stock unit be accompanied by dividend
equivalent rights payable in cash or in the form of additional stock units.
All stock options and SARs, and certain stock awards, performance awards
and stock units, granted under the Stock Incentive Plan, and the compensation
attributable to such awards, are intended to (i) qualify as 'performance-based
compensation' (as such term is used in Section 162(m) of the Code) and thus be
exempt from the deduction limitation imposed by Section 162(m) of the Code or
(ii) be otherwise exempt from the deduction limitation imposed by Section 162(m)
of the Code. Certain awards granted under the Stock Incentive Plan may be
granted in a manner such that the awards qualify as 'performance-based
compensation' if either the granting or vesting of such award is subject to the
achievement of a performance target or targets based on one or more of the
following performance measures: net sales; pretax income before allocation of
corporate overhead and bonus; budget; earnings per share; net income; division,
group or corporate financial goals; return on stockholders' equity; return on
assets; attainment of strategic and operational initiatives; appreciation in
and/or maintenance of the price of the Common Stock or any other publicly-traded
securities of the Company; market share; gross profits; earnings before interest
and taxes; earnings before interest, taxes, depreciation and amortization;
economic value-added models; comparisons with various stock market indices;
and/or reductions in costs.
Following consummation of the Offerings, the Board of Directors is expected
to award Restricted Stock having a potential maximum undiscounted aggregate fair
market value on the date of grant (based upon the initial public offering price)
of approximately $5,600,000 to approximately 100 executive officers and other
key employees. The individuals named in the Summary Compensation Table are
expected to receive awards of restricted stock having the following potential
maximum undiscounted fair market values: Mr. Rabinowitz -- $2,000,000; Mr.
Kenny -- $500,000; Mr. Siverd -- $140,000; Mr. Virgulak -- $125,000; and Mr.
Bevis -- $100,000. The restrictions on the initial grants of the restricted
stock shall lapse (subject to acceleration under certain circumstances) 36
months after consummation of the Offerings in the case of Messrs. Rabinowitz and
Kenny and December 31, 1998 in the case of all other recipients. The awards of
Restricted Stock will be made in settlement of all obligations of the Company
under existing long-term incentive arrangements with employees of the Company
other than with respect to Mr. Rabinowitz, who will be paid, in addition to the
restricted stock to be granted to him under the Stock Incentive Plan, a separate
cash payment of $1,788,000 in settlement of all obligations of the Company under
Mr. Rabinowitz's existing long-term incentive arrangements. These arrangements,
which provide for cash payments upon the Company's achievement of certain
performance targets, will be terminated upon consummation of the Offerings.
Upon consummation of the Offerings, the Board of Directors is also expected
to grant options to purchase a total of approximately 1,103,750 shares of Common
Stock to approximately 110 employees. The individuals named in the Summary
Compensation Table are expected to receive options to purchase the following
number of shares of Common Stock: Mr. Rabinowitz -- 286,000 shares; Mr.
Kenny -- 86,000 shares; Mr. Siverd -- 33,000 shares; Mr. Virgulak -- 33,000
shares; and Mr. Bevis -- 28,000 shares. The exercise price of these options,
which are not intended to be incentive stock options, shall be equal to the
initial public offering price and the options shall become exercisable on the
third anniversary of the date of grant (subject to acceleration under certain
circumstances) for a period of seven years thereafter.
It is expected that awards granted from 1997 through 2000 under the Stock
Incentive Plan to participants who are 'covered employees' (as defined in
Section 162(m) of the Code and the applicable regulations thereunder) will be
deductible by the Company for federal income tax purposes based upon a special
transition rule contained in the Treasury regulations for private corporations
that complete an initial public offering.
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EMPLOYMENT AGREEMENTS
The following descriptions of the employment agreements between the Company
and each of Messrs. Rabinowitz, Kenny, Virgulak and Siverd (each an 'Employment
Agreement') are intended only as a summary and are qualified in their entirety
by reference to the respective Employment Agreements, which have been filed as
exhibits to the Registration Statement of which this Prospectus forms a part.
Each of the Employment Agreements will become effective upon the consummation of
the Offerings.
Mr. Rabinowitz will serve as Chief Executive Officer and President of the
Company pursuant to a three-year employment agreement (subject to automatic
one-year extensions unless the Company or Mr. Rabinowitz elects not to so
extend). Under his Employment Agreement, Mr. Rabinowitz will receive an annual
base salary of $600,000, retroactive to January 1, 1997. Mr. Rabinowitz will
also have an opportunity to earn a bonus under the 1997 Plan of up to 120% of
his base salary upon the attainment of specified performance goals and will not
be precluded from being awarded an additional bonus outside the 1997 Plan in
respect of 1997 in the discretion of the Compensation Committee. In addition, he
will have an opportunity (not less favorable than that under the 1997 Plan) to
earn a bonus under a performance-based annual bonus program for senior
executives to be established by the Compensation Committee for years after 1997
(the 'Future Bonus Plan'). Mr. Rabinowitz's Employment Agreement also provides
that the Company will recommend to the Board of Directors that, upon
consummation of the Offerings, Mr. Rabinowitz receive the awards of restricted
stock and options described above under ' -- Stock Incentive Plan'. Upon
termination of his employment, Mr. Rabinowitz's Employment Agreement provides
for the payment of accrued and unpaid base salary and benefits under then
existing plans (other than severance benefits). In addition, in the event of a
termination due to death or Disability, by the Company other than for Cause or
by Mr. Rabinowitz for Good Reason (all as defined in his Employment Agreement),
his Employment Agreement provides for immediate vesting of and lapsing of
restrictions on all unvested restricted stock and options held by Mr.
Rabinowitz. In the event of a termination by the Company other than for Cause or
by Mr. Rabinowitz for Good Reason, his Employment Agreement also provides for a
payment equal to a multiple (the 'Multiplier') of the sum of his base salary and
the target bonus under the 1997 Plan or Future Bonus Plan for the year in which
termination occurs, as well as his continuation as a participant in the
Company's executive health and welfare benefit plans for the number of years
represented by the Multiplier. The Multiplier for Mr. Rabinowitz will be two.
The terms and conditions of the Employment Agreements between the Company
and each of Messrs. Kenny, Virgulak and Siverd are substantially the same as
those contained in Mr. Rabinowitz's Employment Agreement, except that the
Employment Agreements of each of the foregoing will not provide for the
opportunity to be awarded an additional bonus outside of the 1997 Plan, and
except as follows: Mr. Kenny will serve as Executive Vice President and Chief
Operating Officer of the Company, receive an annual base salary of $300,000,
have an opportunity to earn a bonus of up to 120% of his base salary under the
1997 Plan and the Future Bonus Plan, and have a Multiplier of 1.5. Mr. Siverd
will serve as Executive Vice President, General Counsel and Secretary pursuant
to a two-year employment agreement (subject to automatic one-year extensions
unless the Company or Mr. Siverd elects not to so extend), receive an annual
base salary of $225,000, and have a Multiplier of one. Mr. Virgulak will serve
as Executive Vice President, Treasurer and Chief Financial Officer pursuant to a
two-year employment agreement (subject to automatic one-year extensions unless
the Company or Mr. Virgulak elects not to so extend), receive an annual base
salary of $204,000, and have a Multiplier of one. In addition, Mr. Virgulak and
Mr. Siverd's agreements will provide that they will be entitled to participate
in the 1997 Plan and the Future Bonus Plan on such terms as may be determined by
the Compensation Committee. In addition, each of their Employment Agreements
will provide that the Company will recommend to the Board of Directors that,
upon consummation of the Offerings, they receive the respective awards of
options (and, with respect to Mr. Kenny, restricted stock) described under
' -- Stock Incentive Plan' above.
CHANGE IN CONTROL AGREEMENTS
Prior to consummation of the Offerings, the Company will enter into
agreements with each of Messrs. Rabinowitz, Kenny, Siverd and Virgulak (the
'Change-in-Control Agreements') providing for
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certain benefits if the executive's employment is terminated by the Company or
the Company's subsidiaries or by the Company's successor without Cause (as
defined in the Change-in-Control Agreements), or the executive terminates his
employment with the Company or the Company's subsidiaries or with the Company's
successor for Good Reason (as defined below) and such termination occurs within
six months preceding, or within two years following, a Change-in-Control (as
defined below). In such event, the executive shall receive a payment equal to a
specified multiple of the sum of (x) the executive's annual base salary at the
time of the termination of the executive's employment (or, in the case of a
termination of employment for Good Reason based on a reduction of his annual
base salary, the annual base salary in effect immediately prior to such
reduction) plus (y) the executive's target annual incentive bonus in effect for
the year in which his employment is terminated or the year in which the
Change-in-Control occurs, whichever is greater. In addition, the Company or its
successor shall continue the executive's participation in the Company-sponsored
executive health and welfare benefit plans until the earlier of the same
specified multiple of 12 months following the date of the executive's
termination of employment or the date the executive receives equivalent coverage
and benefits under the plans of a subsequent employer. The multiples shall be as
follows: Mr. Rabinowitz -- three times; Mr. Kenny -- two and a half times; Mr.
Siverd -- one and a half times; and Mr. Virgulak -- one and a half times. Upon a
Change-in-Control, the restrictions on any restricted stock will lapse and any
unexercisable stock options held will become fully vested and immediately
exercisable in accordance with the terms of the Stock Incentive Plan and the
award agreements issued thereunder.
Provided that Mr. Rabinowitz has not deferred compensation otherwise
includible in income for any year commencing with 1997, if the payments received
by Mr. Rabinowitz (pursuant to the Change-in-Control Agreement or otherwise)
exceed a certain threshold amount and result from a 'change in ownership' as
defined in Section 280G of the Code, the Company will pay him an additional
amount (a 'Gross-Up Payment') to reimburse him for the federal excise tax (and
any interest, penalties or additions to tax) with respect thereto on a
'grossed-up' basis. However, if Mr. Rabinowitz has deferred compensation, he
will not be entitled to a Gross-Up Payment, and further, if the net payments he
would retain in connection with a 'change in ownership' (after deducting any
excise tax and applicable income tax) would be less than the amount he would
have netted, after applicable income taxes, had the present value of such
payments equalled $1 less than three times his threshold amount (the 'Maximum
Payments'), then his total payments will not exceed the Maximum Payments. Any
payments to Messrs. Kenny, Siverd and Virgulak pursuant to the Change-in-Control
Agreements shall be subject to the limitations of Section 280G(b)(2) of the
Code.
For purposes of the Change-in-Control Agreements, 'Change-in-Control' means
that any of the following has occurred: (a) any person or other entity (other
than any of the Company's subsidiaries or any employee benefit plan sponsored by
the Company or any of its subsidiaries) including any person as defined in
Section 13(d)(3) of the Exchange Act, becomes the beneficial owner, as defined
in Rule 13d-3 under the Exchange Act, directly or indirectly, of more than fifty
percent (50%) of the total combined voting power of all classes of capital stock
of the Company normally entitled to vote for the election of directors of the
Company (the 'Voting Stock'); (b) the stockholders of the Company approve the
sale of all or substantially all of the property or assets of the Company and
such sale occurs; (c) the stockholders of the Company approve a consolidation or
merger of the Company with another corporation (other than with any of the
Company's subsidiaries), the consummation of which would result in the
shareholders of the Company immediately before the occurrence of the
consolidation or merger owning, in the aggregate, less than 60% of the Voting
Stock of the surviving entity, and such consolidation or merger occurs; or (d) a
change in the Company's Board of Directors occurs with the result that the
members of the Board on the effective date of the Registration Statement of
which this Prospectus is a part (the 'Incumbent Directors') no longer constitute
a majority of such Board of Directors, provided that any person becoming a
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest or the settlement
thereof, including but not limited to a consent solicitation, relating to the
election of directors of the Company) whose election or nomination for election
was supported by two-thirds (2/3) of the then Incumbent Directors shall be
considered an Incumbent Director for these purposes. A Change-in-Control shall
not include the Offerings.
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For purposes of the Change-in-Control Agreements, 'Good Reason' means the
occurrence of any of the following without the prior written consent of the
Executive: (i) removal from any of the positions held by the executive with
respect to the Company or any of its significant subsidiaries (as defined in
Regulation S-X under the Exchange Act) on the 181st day prior to the
Change-in-Control or any senior position that the executive subsequently
achieves; (ii) the assignment of duties or responsibilities materially
inconsistent with those customarily associated with the position held by the
executive on the 181st day prior to the Change-in-Control or any senior position
that the executive subsequently achieves, or any other action by the Company or
a successor that results in a diminution of the executive's position, authority,
duties or responsibilities other than an isolated action that is not taken in
bad faith and is remedied by the Company or a successor promptly after receipt
of written notice thereof from the executive; (iii) a reduction in the
executive's annual base salary or executive's annual bonus opportunity set forth
in the Employment Agreement from that in effect on the 181st day prior to the
Change-in-Control (or any greater salary or bonus that the executive is
subsequently entitled to) or a material reduction in any other material benefit
provided the executive by the Company; (iv) notice by the Company not to extend
the Employment Agreement; (v) the relocation of the executive's principal place
of employment to a location more than fifty (50) miles from the executive's
principal place of employment (unless such relocation does not increase the
executive's commute by more than twenty (20) miles) on the 181st day prior to
the Change-in-Control, except for required travel on the Company's business to
an extent substantially consistent with the executive's business travel
obligations as of such day; or (vi) the failure by the Company to obtain an
agreement from any successor to assume and agree to perform the
Change-in-Control Agreement.
SELLING STOCKHOLDER
As of the date hereof, the Selling Stockholder owns all of the outstanding
shares of the Company's Common Stock. Upon consummation of the Offerings, the
Selling Stockholder will own 7,350,000 shares of Common Stock, or approximately
30% of the outstanding Common Stock. If the U.S. Underwriters' over-allotment
option is exercised in full, after consummation of Offerings the Selling
Stockholder will own 4,815,000 shares of Common Stock, or approximately 20% of
the outstanding Common Stock.
The address of the Selling Stockholder is P.O. Box 21153, 3001 AD
Rotterdam, The Netherlands.
In connection with the Offerings, the Selling Stockholder and Wassall are
entering into agreements with the Company providing certain rights in favor of
the Selling Stockholder and Wassall and certain obligations and restrictions on
the Company after consummation of the Offerings. See 'Certain Relationships and
Related Transactions.'
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pursuant to an agreement (the 'Management Agreement'), the Company paid
management fees to an affiliate of the Selling Stockholder aggregating
approximately $1.1 million, $1.4 million and $1.6 million for the period June 9,
1994 to December 31, 1994 and the years ended December 31, 1995 and 1996,
respectively. From January 1, 1997 through the consummation of the Offerings,
the Company will pay management fees to such affiliate of the Selling
Stockholder aggregating approximately $1.0 million. Upon consummation of the
Offerings, the Management Agreement will be terminated.
Wassall has from time to time arranged for letters of credit on behalf of
General Cable under its credit facility. At December 31, 1995 and 1996, letters
of credit aggregating $12.6 million and $11.9 million, respectively, were issued
under Wassall's credit facility on behalf of the Company. At December 31, 1994,
no such letters of credit were issued. Pursuant to the Intercompany Agreement
(as defined below), the Company will agree to use its best efforts to obtain
letters of credit to replace all outstanding Wassall letters of credit, and to
indemnify Wassall against all expenses incurred by it with respect to such
Wassall letters of credit.
Concurrently with consummation of the Offerings, General Cable intends to
make an initial borrowing of approximately $271.8 million under the New Credit
Facility and use a portion of the proceeds thereof to (i) repay all intercompany
debt and advances owed to Wassall and its subsidiaries
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(which, together with accrued interest, are anticipated to amount to
approximately $200.7 on the date of the consummation of the Offerings), (ii) pay
$42.6 million as the Selling Stockholder Dividend and (iii) pay $2.0 million for
the purchase of the Related Companies from Wassall.
Following consummation of the Offerings, the Selling Stockholder will own
approximately 30% of the outstanding shares of Common Stock (or approximately
20% of the outstanding shares of Common Stock if the U.S. Underwriters'
over-allotment option is exercised in full). At least one director designated by
the Selling Stockholder initially will serve as a director of General Cable. In
addition, the Selling Stockholder will have the right to (i) approve the
directors to be appointed to the Company's Board of Directors prior to the first
annual meeting of stockholders following consummation of the Offerings and (ii)
designate one individual (or, if the Board of Directors of the Company shall
consist of more than eight members, two individuals) for nomination to the
Company's Board of Directors for so long as the Selling Stockholder and its
affiliates continue to own at least 10% of the outstanding Common Stock of the
Company (excluding any shares of Common Stock issued pursuant to the Stock
Incentive Plan or any other employee benefit plan of the Company). As a result,
the Selling Stockholder may be in a position to exercise influence over General
Cable after the consummation of the Offerings.
Concurrently with consummation of the Offerings, the Company and the
Selling Stockholder intend to enter into an agreement (the 'Registration Rights
Agreement') pursuant to which the Selling Stockholder will be granted the right
to require the Company, subject to certain limitations, to register for public
offering and sale all or a portion of the Common Stock held by the Selling
Stockholder following consummation of the Offerings (each, a 'demand
registration'). The Selling Stockholder will be entitled to three demand
registrations, one of which may, at the request of the Selling Stockholder, be a
shelf registration which the Company shall maintain effective for a period of up
to three years. In addition, the Selling Stockholder will have the right to have
its shares of Common Stock included in future registration statements of the
Company. The Selling Stockholder has agreed not to offer, sell, contract to
sell, pledge, grant any option to purchase, transfer or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock or warrants or other rights
to purchase or acquire shares of Common Stock for a period of 180 days following
the date of this Prospectus, without prior written consent of Dillon, Read & Co.
Inc. See 'Underwriting.' The Company will be obligated to pay all registration
expenses (other than underwriting discounts and commissions) incurred in
connection with such registrations, and will indemnify the Selling Stockholder
and its officers and directors against certain liabilities, including
liabilities under the federal securities laws, in connection therewith. All such
registration rights are subject to customary terms and conditions.
In addition, concurrently with consummation of the Offerings, the Company,
Wassall and the Selling Stockholder intend to enter an agreement (the
'Intercompany Agreement') pursuant to which, among other things, (i) the
Company, on the one hand, and Wassall and its subsidiaries (other than the
Company and its subsidiaries), on the other hand, will (A) agree not to solicit
employees of the other for a period of two years following the Offerings and (B)
indemnify each other with respect to certain insurance expenses; (ii) the
Company will, subject to certain exceptions, indemnify Wassall and its
subsidiaries against (A) liabilities relating to the business and assets of the
Company, its subsidiaries and the Related Companies and their respective
predecessors and (B) liabilities relating to the offering or sale of securities
of the Company, including, without limitation, liabilities under the federal
securities laws in connection with the Offerings; (iii) the Selling Stockholder
will be granted the rights, referred to above, to approve the Company's
additional directors appointed following consummation of the Offerings and to
designate one individual (or, in the circumstances described above, two
individuals) for nomination to the Company's Board of Directors; and (iv) the
Company and Wassall will provide each other with certain information.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 75,000,000 shares
of Common Stock, par value $0.01 per share, and 25,000,000 shares of preferred
stock, par value $0.01 per share (the 'Preferred Stock').
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The following statements relating to the capital stock of the Company are
summaries and do not purport to be complete. Reference is made to the more
detailed provisions of, and such statements are qualified in their entirety by
reference to, the Amended and Restated Certificate of Incorporation (the
'Certificate of Incorporation') and the Amended and Restated By-Laws (the
'By-Laws') of the Company, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share on all
matters voted on by stockholders. Holders of Common Stock do not have cumulative
voting rights in the election of directors. The first annual meeting of
shareholders is expected to be held during the second quarter of 1998.
Holders of Common Stock do not have subscription, redemption or conversion
privileges. Subject to the preferences or other rights of any Preferred Stock
that may be issued from time to time, holders of Common Stock are entitled to
participate ratably in dividends on the Common Stock as declared by the
Company's Board of Directors. Holders of Common Stock are entitled to share
ratably in all assets available for distribution to stockholders in the event of
the liquidation or dissolution of the Company, subject to distribution of the
preferential amount, if any, to be distributed to holders of Preferred Stock.
PREFERRED STOCK
The Certificate of Incorporation authorizes the Company's Board of
Directors, without any vote or action by the holders of Common Stock, to issue
up to 25,000,000 shares of Preferred Stock from time to time in one or more
series. The Company's Board of Directors is authorized to determine the number
of shares and designation of any series of Preferred Stock and the dividend
rights, dividend rate, conversion rights and terms, voting rights (full or
limited, if any), redemption rights and terms, liquidation preferences and
sinking fund terms of any series of Preferred Stock. Issuances of Preferred
Stock would be subject to the applicable rules of the NYSE or other
organizations whose systems the stock of the Company may then be quoted or
listed. Depending upon the terms of Preferred Stock established by the Company's
Board of Directors, any or all series of Preferred Stock could have preferences
over the Common Stock with respect to dividends and other distributions and upon
liquidation of the Company. Issuance of any such shares with voting powers, or
issuance of additional shares of Common Stock, would dilute the voting power of
the outstanding Common Stock. The Company has no present plans to issue any
Preferred Stock.
TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services L.L.C. will be the transfer agent and
registrar for the Common Stock.
CERTAIN ANTI-TAKEOVER MATTERS
CERTAIN CHARTER AND BY-LAW PROVISIONS
The provisions of the Certificate of Incorporation and the Company's
By-Laws described in this section may delay or make more difficult acquisitions
or changes of control of the Company not approved by the Company's Board of
Directors. Such provisions could have the effect of discouraging third parties
from making proposals involving an acquisition or change of control of the
Company, although such proposals, if made, might be considered desirable by a
majority of the Company's stockholders. Such provisions may also have the effect
of making it more difficult for third parties to cause the replacement of the
current management of the Company without the concurrence of the Company's Board
of Directors.
Copies of the Certificate of Incorporation and the By-Laws have been filed
with the Commission as exhibits to the Registration Statement. The following
description of certain provisions of the Certificate
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of Incorporation and the By-Laws does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Certificate of
Incorporation and the By-Laws.
Classified Board of Directors
The Certificate of Incorporation divides the Company's Board of Directors
into three classes of directors serving staggered three-year terms. As a result,
approximately one-third of the Company's Board of Directors will be elected each
year. See 'Management -- Board of Directors.'
The Company believes that a classified board will help to assure the
continuity and stability of the Company's Board of Directors, and its business
strategies and policies as determined by the Company's Board of Directors,
because a majority of the directors at any given time will have prior experience
as directors of the Company. This provision should also help to ensure that the
Company's Board of Directors, if confronted with an unsolicited proposal from a
third party that has acquired a block of the Company's Common Stock, will have
sufficient time to review the proposal, to consider appropriate alternatives and
to seek the best available result for all stockholders.
This provision could prevent a party who acquires control of a majority of
the outstanding Common Stock from obtaining control of the Company's Board of
Directors until the second annual stockholders' meeting following the date the
acquiror obtains the controlling stock interest, could have the effect of
discouraging a potential acquiror from making a tender offer or otherwise
attempting to obtain control of the Company and could thus increase the
likelihood that incumbent directors will retain their positions.
Number of Directors; Removal; Vacancies
The Certificate of Incorporation and the By-Laws provide that the number of
directors shall not be less than three nor more than nine and shall be
determined from time to time exclusively by a vote of a majority of the
Company's Board of Directors then in office. The Certificate of Incorporation
also provides that the Company's Board of Directors shall have the exclusive
right to fill vacancies, including vacancies created by expansion of the
Company's Board of Directors. Furthermore, except as may be provided in a
resolution or resolutions of the Company's Board of Directors providing for any
class or series of Preferred Stock with respect to any directors elected by the
holders of such class or series, directors may be removed by shareholders only
for cause and only by the affirmative vote of at least 66 2/3% of the voting
power of all of the shares of the Company's capital stock then entitled to vote
generally in the election of directors, voting together as a single class. These
provisions, in conjunction with the provision of the Certificate of
Incorporation authorizing the Company's Board of Directors to fill vacant
directorships, could prevent stockholders from removing incumbent directors
without cause and filling the resulting vacancies with their own nominees.
No Stockholder Action by Written Consent; Special Meetings
The Certificate of Incorporation provides that, except as may be provided
in a resolution or resolutions of the Company's Board of Directors providing for
any class or series of Preferred Stock, stockholder action can be taken only at
an annual or special meeting of stockholders and cannot be taken by written
consent in lieu of a meeting. The Certificate of Incorporation also provides
that special meetings of the stockholders can only be called pursuant to a
resolution approved by a majority of the Company's Board of Directors then in
office. Stockholders are not permitted to call a special meeting of
stockholders.
Advance Notice for Raising Business or Making Nominations at Meetings
The By-Laws establish an advance notice procedure for stockholder proposals
to be brought before a meeting of stockholders of the Company and for
nominations by stockholders of candidates for election as directors at an annual
meeting or a special meeting at which directors are to be elected. Subject to
any other applicable requirements, including, without limitation, Rule 14a-8
under the Exchange Act, only such business may be conducted at a meeting of
stockholders as has been brought
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before the meeting by, or at the direction of, the Company's Board of Directors,
or by a stockholder who has given to the Secretary of the Company timely written
notice, in proper form, of the stockholder's intention to bring that business
before the meeting. The presiding officer at such meeting has the authority to
make such determinations. Only persons who are nominated by, or at the direction
of, the Company's Board of Directors, or who are nominated by a stockholder who
has given timely written notice, in proper form, to the Secretary prior to a
meeting at which directors are to be elected will be eligible for election as
directors of the Company.
To be timely, notice of nominations or other business to be brought before
an annual meeting must be received by the Secretary of the Company at the
principal executive office of the Company no later than 60 days prior to the
date of such annual meeting. Similarly, notice of nominations or other business
to be brought before a special meeting must be delivered to the Secretary at the
principal executive office of the Company no later than the close of business on
the 15th day following the day on which notice of the date of a special meeting
of stockholders was given.
The notice of any nomination for election as a director must set forth the
name, date of birth, business and residence address of the person or persons to
be nominated; the business experience during the past five years of such person
or persons; whether such person or persons are or have ever been at any time
directors, officers or owners of 5% or more of any class of capital stock,
partnership interest or other equity interest of any corporation, partnership or
other entity; any directorships held by such person or persons in any company
with a class of securities registered pursuant to Section 12 of the Exchange Act
or subject to the requirements of Section 15(d) of such Act or any company
registered as an investment company under the Investment Company Act of 1940, as
amended; and whether, in the last five years, such person or persons are or have
been convicted in a criminal proceeding or have been subject to a judgment,
order, finding or decree of any federal, state or other governmental entity,
concerning any violation of federal, state or other law, or any proceeding in
bankruptcy, which conviction, order, finding, decree or proceeding may be
material to an evaluation of the ability or integrity of the nominee; and, the
consent of each such person to serve as a director if elected. The person
submitting the notice of nomination, and any person acting in concert with such
person, must provide their names and business addresses, the name and address
under which they appear on the Company's books (if they so appear), and the
class and number of shares of the Company's capital stock that are beneficially
owned by them.
Amendments to By-Laws
The Certificate of Incorporation provides that the Company's Board of
Directors or the holders of at least 66 2/3% of the voting power of all shares
of the Company's capital stock then entitled to vote generally in the election
of directors, voting together as a single class, have the power to amend or
repeal the Company's By-Laws.
Amendment of the Certificate of Incorporation
Any proposal to amend, alter, change or repeal any provision of the
Certificate of Incorporation, except as may be provided in a resolution or
resolutions of the Company's Board of Directors providing for any class or
series of Preferred Stock and which relate to such class or series of Preferred
Stock, requires approval by the affirmative vote of both a majority of the
members of the Company's Board of Directors then in office and a majority vote
of the voting power of all of the shares of the Company's capital stock entitled
to vote generally in the election of directors, voting together as a single
class. Notwithstanding the foregoing, any proposal to amend, alter, change or
repeal the provisions of the Certificate of Incorporation relating to (i) the
classification of the Company's Board of Directors, (ii) removal of Directors,
(iii) the prohibition of stockholder action by written consent or stockholder
calls for special meetings, (iv) amendment of By-Laws, or (v) amendment of the
Certificate of Incorporation requires approval by the affirmative vote of
66 2/3% of the voting power of all of the shares of the Company's capital stock
entitled to vote generally in the election of directors, voting together as a
single class.
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Preferred Stock and Additional Common Stock
Under the Certificate of Incorporation, the Company's Board of Directors
will have the authority to provide by Board resolution for the issuance of
shares of one or more series of Preferred Stock. The Company's Board of
Directors is authorized to fix by resolution the terms and conditions of each
such other series. See 'Description of Capital Stock -- Preferred Stock.'
The Company believes that the availability of the Company's Preferred
Stock, in each case issuable in series, and additional shares of Common Stock
could facilitate certain financings and acquisitions and provide a means for
meeting other corporate needs which might arise. The authorized shares of the
Company's Preferred Stock, as well as authorized but unissued shares of Common
Stock will be available for issuance without further action by the Company's
stockholders, unless stockholder action is required by applicable law or the
rules of any stock exchange on which any series of the Company's capital stock
may then be listed.
These provisions give the Company's Board of Directors the power to approve
the issuance of a series of Preferred Stock, or an additional series of Common
Stock, of the Company that could, depending on its terms, either impede or
facilitate the completion of a merger, tender offer or other takeover attempt.
For example, the issuance of new shares of Preferred Stock might impede a
business combination if the terms of those shares include voting rights which
would enable a holder to block business combinations; the issuance of new shares
might facilitate a business combination if those shares have general voting
rights sufficient to cause an applicable percentage vote requirement to be
satisfied.
DELAWARE BUSINESS COMBINATION STATUTE
Section 203 of the DGCL ('Section 203') provides that, subject to certain
exceptions specified therein, an 'interested stockholder' of a Delaware
corporation shall not engage in any business combination with the corporation
for a three-year period following the date that such stockholder becomes an
'interested stockholder' unless (i) prior to such date, the board of directors
of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an 'interested stockholder,' (ii)
upon consummation of the transaction which resulted in the stockholder becoming
an 'interested stockholder,' the interested stockholder owned at least 85% of
the voting stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares) or (iii) on or subsequent to such date, the
business combination is approved by the board of directors of the corporation
and authorized at an annual or special meeting of stockholders by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the 'interested stockholder.' Except as otherwise specified in
Section 203, an 'interested stockholder' is defined to include (x) any person
that is the owner of 15% or more of the outstanding voting stock of the
corporation, or is an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within three years immediately prior to the relevant date and (y) the
affiliates and associates of any such person.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an 'interested stockholder' to effect various business
combinations with a corporation for a three-year period, although the
stockholders may elect to exclude a corporation from the restrictions imposed
thereunder. The Certificate of Incorporation does not exclude the Company from
the restrictions imposed under Section 203. The provisions of Section 203 may
encourage companies interested in acquiring the Company to negotiate in advance
with the Company's Board of Directors, since the stockholder approval
requirement would be avoided if a majority of the directors then in office
approve either the business combination or the transaction which results in the
stockholder becoming an 'interested stockholder.' Such provisions also may have
the effect of preventing changes in the management of the Company. It is
possible that such provisions could make it more difficult to accomplish
transactions which stockholders may otherwise deem to be in their best
interests.
SHARES ELIGIBLE FOR FUTURE SALE
The Company will have 24,500,000 shares of Common Stock outstanding upon
consummation of the Offerings. Of those shares, the 16,900,000 shares of Common
Stock offered hereby will be available
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<PAGE>
for immediate sale as of the date of this Prospectus in the public market
without restriction by persons other than 'affiliates' of the Company, as that
term is defined in the regulations promulgated under the Securities Act.
Upon consummation of the Offerings, the Selling Stockholder will
beneficially own approximately 30% of the outstanding shares of Common Stock (or
approximately 20% if the over-allotment option is exercised in full). The
Company and the Selling Stockholder have agreed, subject to certain limited
exceptions, not to offer, sell, contract to sell, pledge, grant any option to
purchase, transfer or otherwise dispose of, directly or indirectly, any shares
of Common Stock or warrants or other rights to purchase or acquire shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for shares of Common Stock for a period of 180 days following the date of this
Prospectus without the prior written consent of Dillon, Read & Co. Inc. After
expiration of such 180-day period, such shares may be sold (i) in accordance
with Rule 144 promulgated under the Securities Act, (ii) in private offerings or
(iii) upon registration under the Securities Act without regard to the volume
limitations of Rule 144.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned 'restricted securities'
(defined generally in Rule 144 as securities issued in transactions not
involving a public offering) for at least one year, including persons who may be
deemed to be affiliates of the Company, is entitled to sell within any
three-month period a number of shares that does not exceed the greater of 1% of
the then outstanding shares of Common Stock (which number, immediately following
the Offerings, will be 245,000 shares) and the average weekly trading volume in
the Common Stock during the four calendar weeks preceding the filing of a Form
144 with respect to such sale, provided that the Company has been subject to and
complied with certain reporting requirements under the Exchange Act, and the
sale is made in a 'broker's transaction' or in a transaction directly with a
'market-maker,' as those terms are used in Rule 144, without the solicitation of
buy orders by the broker or such person and without such person making any
payment to any person other than the broker who executes the order to sell the
shares of Common Stock. A person (or persons whose shares are aggregated) who is
not deemed to have been an affiliate of the Company at any time during the 90
days preceding a sale of restricted securities by such person, and who has
beneficially owned the restricted securities for at least two years (including
the holding period of any prior owner except an affiliate), is entitled to sell
such shares under Rule 144 without regard to the volume limitations and public
information and manner of sale requirements described above. Restricted
securities properly sold in reliance upon Rule 144 are thereafter freely
tradeable without restrictions or registration under the Securities Act, unless
thereafter held by an affiliate of the Company.
Shares held by the Selling Stockholder may be freely sold if registered
under the Securities Act. The Company has agreed to use its best efforts, upon
request by the Selling Stockholder, to register under the Securities Act any or
all shares of Common Stock held by the Selling Stockholder and, under certain
conditions, when shares of Common Stock are registered by the Company. See
'Certain Relationships and Related Transactions.'
The Company may file a registration statement on Form S-8 under the
Securities Act to register all of the shares of Common Stock issued or reserved
for future issuance under the Stock Incentive Plan. After the effective date of
that registration statement, shares purchased upon exercise of options granted
pursuant to the plan generally would be available for resale in the public
market.
Prior to the Offerings, there has been no public market for the Common
Stock of the Company. No predictions can be made of the effect, if any, that the
sale or availability for sale of shares of additional Common Stock will have on
the market price of the Common Stock. Nevertheless, sales of a substantial
amount of such shares by the Selling Stockholder or by stockholders purchasing
in the Offerings or the perception that sales could occur could adversely affect
prevailing market prices for the Common Stock.
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CERTAIN U.S. FEDERAL TAX CONSEQUENCES TO
NON-U.S. HOLDERS OF COMMMON STOCK
GENERAL
The following general discussion summarizes certain of the material U.S.
federal income and estate tax consequences of the ownership and disposition of
Common Stock by a Non-U.S. Holder (as defined below). This discussion does not
address all aspects of U.S. federal income tax that may be relevant to the
ownership or disposition of the Common Stock by a prospective investor in light
of such investor's personal circumstances and does not address any state, local
or foreign tax consequences. This discussion also does not address the U.S.
federal income tax consequences of ownership of Common Stock not held as a
capital asset within the meaning of Section 1221 of the Code, or the U.S.
federal income tax consequences to investors subject to special treatment under
the U.S. federal income tax laws, such as dealers in securities or foreign
currency, tax-exempt entities, banks, thrifts, insurance companies or other
financial institutions, persons that hold the Common Stock as part of a
'straddle', a 'hedge' against currency risk or a 'conversion transaction',
persons that have a 'functional currency' other than the U.S. dollar, and
investors in pass-through entities.
This discussion is based upon the Code, existing and proposed regulations
thereunder, and current administrative rulings and court decisions. All of the
foregoing is subject to change, possibly on a retroactive basis, and any such
change could affect the continuing validity of this discussion.
For purposes of the following discussion, a Non-U.S. Holder of Common Stock
is a holder who is not (i) an individual who is a citizen or resident of the
United States, (ii) a corporation organized under the laws of the United States
or any political subdivision thereof or therein or (iii) an estate or trust the
income of which is subject to U.S. federal income tax regardless of its source.
For taxable years after December 31, 1996, a trust holding Common Stock is a
U.S. Holder if a court within the U.S. is able to exercise primary jurisdiction
over the trust and one or more U.S. fiduciaries have the authority to control
all substantial decisions of the trust. For purposes of withholding tax on
dividends discussed below, a non-resident alien or non-resident fiduciary of an
estate or trust will be considered a Non-U.S. Holder.
Dividends and gain on the sale, exchange or other disposition of Common
Stock will be considered to be 'U.S. trade or business income' if such income or
gain is (i) effectively connected with the conduct of a U.S. trade or business
or (ii) in the case of a treaty country resident, attributable to a permanent
establishment (or, in the case of an individual, a fixed base) in the United
States.
DIVIDENDS
In general, dividends paid to a Non-U.S. Holder of Common Stock will be
subject to withholding of U.S. federal income tax at a 30% rate, unless such
rate is reduced by an applicable income tax treaty. Dividends which represent
U.S. trade or business income are generally subject to U.S. federal income tax
at regular rates, but are not generally subject to the 30% withholding tax if
the Non-U.S. Holder files the appropriate form with the payor. Any U.S. trade or
business income received by a Non-U.S. Holder that is a corporation may also,
under certain circumstances, be subject to an additional 'branch profits tax' at
a 30% rate or such lower rate as may be applicable under an income tax treaty.
Dividends paid to an address in a foreign country generally are presumed (absent
actual knowledge to the contrary) to be paid to a resident of such country for
purposes of the withholding tax discussed above and for purposes of determining
the applicability of a tax treaty rate. Under proposed U.S. Treasury
regulations, not currently in effect, however, a Non-U.S. Holder of Common Stock
who wishes to claim the benefit of an applicable treaty rate would be required
to satisfy applicable certification and other requirements, which would include
the requirement that the Non-U.S. Holder file a form which contains the holder's
name and address or provides certain documentary evidence issued by foreign
governmental authorities to prove residence in the foreign country.
A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
U.S. withholding tax pursuant to an income treaty may obtain a refund of any
excess amounts currently withheld by filing an appropriate claim for a refund
with the Service.
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SALE, EXCHANGE OR REDEMPTION OF COMMON STOCK
Except as described below and subject to the discussion concerning backup
withholding, any gain realized by a Non-U.S. Holder on the sale, exchange or
redemption of Common Stock generally will not be subject to U.S. federal income
tax, unless (i) such gain is U.S. trade or business income, (ii) subject to
certain exceptions, the Non-U.S. Holder is an individual who holds the Common
Stock as a capital asset and is present in the United States for 183 days or
more in the taxable year of the disposition, (iii) the Non-U.S. Holder is
subject to tax pursuant to the provisions of U.S. tax law applicable to certain
U.S. expatriates (including certain former citizens or residents of the United
States) or (iv) the Company is a U.S. real property holding company (which the
Company is not, has not been and does not believe it is likely to become).
FEDERAL ESTATE TAX
Common Stock owned or treated as owned by an individual who is not a
citizen or resident of the United States (for federal estate tax purposes) will
be included in such individual's estate for U.S. federal income tax purposes
unless an applicable estate tax treaty otherwise applies.
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company must report annually to the Service and to each Non-U.S. Holder
any dividend that is subject to withholding. Copies of these information returns
may also be made available under the provisions of a specific treaty or
agreement to the tax authorities of the country in which the Non-U.S. Holder
resides.
The payment of the proceeds from the disposition of Common Stock to or
through the United States office of any broker, U.S. or foreign, will be subject
to information reporting and possible backup withholding unless the owner
certifies as to its non-U.S. status under penalty of perjury or otherwise
establishes an exemption, provided that the broker does not have actual
knowledge that the Holder is a U.S. person or that the conditions of any other
exemption are not, in fact, satisfied. The payment of the proceeds from the
disposition of Common Stock to or through a non-U.S. office of a non-U.S. broker
that is not a U.S. related person will not be subject to information reporting
or backup withholding. For this purpose, a 'U.S. related person' is (i) a
'controlled foreign corporation' for U.S. federal income tax purposes or (ii) a
foreign person 50% or more of whose gross income from all sources for the three-
year period ending with the close of its taxable year preceding the payment (or
for such part of the period that the broker has been in existence) is derived
from activities that are effectively connected with the conduct of a United
States trade or business.
In the case of the payment of proceeds from the disposition of Common Stock
to or through a non-U.S. office of a broker that is either a U.S. person or a
U.S. related person, the regulations require information reporting on the
payment unless the broker has documentary evidence in its files that the owner
is a Non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding will not apply to payments made through foreign offices of a broker
that is not a U.S. person or a U.S. related person (absent actual knowledge that
the payee is a U.S. person).
Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a refund or a credit against such Non-U.S.
Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
THE PRECEDING DISCUSSION OF CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY,
EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISER AS TO PARTICULAR TAX
CONSEQUENCES TO IT OF PURCHASING, HOLDING AND DISPOSING OF THE COMMON STOCK OF
THE COMPANY, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR
FOREIGN TAX LAWS, AND OF ANY PROPOSED CHANGES IN APPLICABLE LAWS.
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UNDERWRITING
The names of the U.S. Underwriters for the United States Offering and the
aggregate number of shares of Common Stock that each has severally agreed to
purchase from the Selling Stockholder, subject to the terms and conditions
specified in the U.S. Underwriting Agreement, are as follows:
<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
- ------------------------------------------------------------------------------------------ ----------
<S> <C>
Dillon, Read & Co. Inc....................................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................................
----------
Total................................................................................ 13,520,000
----------
----------
</TABLE>
The U.S. Managing Underwriters are Dillon, Read & Co. Inc. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
The names of the International Underwriters for the International Offering
and the aggregate number of shares of Common Stock which each has severally
agreed to purchase from the Selling Stockholder, subject to the terms and
conditions specified in the International Underwriting Agreement, are as
follows:
<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL UNDERWRITERS SHARES
- ------------------------------------------------------------------------------------------- ---------
<S> <C>
Dillon, Read & Co. Inc.....................................................................
Merrill Lynch International................................................................
Swiss Bank Corporation, acting through its division, SBC Warburg...........................
---------
Total................................................................................. 3,380,000
---------
---------
</TABLE>
The International Managing Underwriters are Dillon, Read & Co. Inc.,
Merrill Lynch International and Swiss Bank Corporation, acting through its
division, SBC Warburg.
The U.S. Underwriters and the International Underwriters are collectively
referred to as the 'Underwriters,' and the U.S. Underwriting Agreement and the
International Underwriting Agreement are collectively referred to as the
'Underwriting Agreements.' The per share price to the public and the per share
underwriting discounts and commissions for the Offerings will be identical. The
closing of the United States Offering is a condition to the closing of the
International Offering, and vice versa.
If any shares of Common Stock offered are purchased by the Underwriters,
all such shares will be so purchased. The Underwriting Agreements contain
certain provisions whereby if any U.S. Underwriter or International Underwriter
defaults in its obligation to purchase the shares to be purchased by it and if
the aggregate obligations of the U.S. Underwriters or International Underwriters
so defaulting do not exceed 10% of the shares offered in the United States
Offering or the International Offering, respectively, the remaining U.S.
Underwriters, or some of them, or the remaining International Underwriters, or
some of them, as the case may be, must assume such obligations.
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The shares of Common Stock offered hereby are being initially offered
severally by the Underwriters for sale at the price set forth on the cover page
hereof, or at such price less a concession not to exceed $ per share on
sales to certain dealers. The Underwriters may allow, and such dealers may
reallow, a concession not to exceed $ per share to other Underwriters or
certain other dealers. The offering of the shares of Common Stock is made for
delivery when, as and if accepted by the Underwriters and subject to prior sale
and to withdrawal, cancellation or modification of the offer without notice. The
Underwriters reserve the right to reject any order for the purchase of the
shares of Common Stock offered hereby. After the initial public offering of the
Common Stock, the price to the public, the concession and the reallowance may be
changed by the U.S. Managing Underwriters or the International Managing
Underwriters.
Pursuant to the Agreement Between the U.S. Underwriters and International
Underwriters (the 'Agreement Between Underwriters'), each U.S. Underwriter has
represented and agreed that, with certain exceptions, (i) it is not purchasing
any U.S. Shares (as defined below) for the account of anyone other than a United
States or Canadian Person (as defined below) and (ii) it has not offered or
sold, and will not offer or sell, direct or indirectly, any U.S. Shares or
distribute any prospectus relating to the U.S. Shares outside the United States
or Canada or to anyone other than a United States or Canadian Person. Pursuant
to the Agreement Between Underwriters, each International Underwriter has
represented and agreed that, with certain exceptions, (i) it is not purchasing
any International Shares (as defined below) for the account of any United States
or Canadian Person and (ii) it has not offered or sold, and will not offer or
sell, directly or indirectly, any International Shares or distribute any
prospectus relating to the International Shares within the United States or
Canada or to any United States or Canadian Person. The foregoing limitations do
not apply to stabilization transactions or to certain other transactions
specified in the Agreement Between Underwriters. As used herein 'United States
or Canadian Person' means any national or resident of the United States or
Canada, or any corporation, pension, profit-sharing or other trust or other
entity organized under the laws of the United States or Canada or of any
political subdivision thereof (other than a branch located outside the United
States and Canada of any United States or Canadian Person) and includes any
United States or Canadian branch of a person who is otherwise not a United
States or Canadian Person. All shares of Common Stock to be purchased by the
U.S. Underwriters and the International Underwriters are referred to herein as
the 'U.S. Shares' and the 'International Shares,' respectively.
Pursuant to the Agreement Between Underwriters, sales may be made between
the U.S. Underwriters and the International Underwriters of such number of
shares of Common Stock as may be mutually agreed. As a result, shares of Common
Stock originally purchased pursuant to the U.S. Underwriting Agreement may be
sold outside the United States and Canada, and shares of Common Stock originally
purchased pursuant to the International Underwriting Agreement may be sold in
the United States or Canada. The price of any shares so sold will, unless
otherwise agreed, be the price to the public, less an amount not greater than
the selling concession.
Pursuant to the Agreement Between Underwriters, each U.S. Underwriter has
represented that it has not offered or sold, and has agreed not to offer or
sell, any shares of Common Stock, directly or indirectly, in Canada in
contravention of the securities laws of Canada or any province or territory
thereof and has represented that any offer of Common Stock in Canada will be
made only pursuant to an exemption from the requirement to file a prospectus in
the province or territory of Canada in which such offer is made. Each U.S.
Underwriter has further agreed to send to any dealer who purchases from it any
shares of Common Stock a notice stating in substance that, by purchasing such
Common Stock, such dealer represents and agrees that it has not offered or sold,
and will not offer or sell, directly or indirectly, any of such Common Stock in
Canada or to, or for the benefit of, any resident of Canada in contravention of
the securities laws of Canada or any province or territory thereof and that any
offer of Common Stock in Canada will be made only pursuant to an exemption from
the requirement to file a prospectus in the province of Canada in which such
offer is made, and that such dealer will deliver to any other dealer to whom it
sells any of such Common Stock a notice to the foregoing effect.
Pursuant to the Agreement Between Underwriters, each International
Underwriter has represented and agreed that: (i) it has not offered or sold and
during the period of six months from the date hereof will not offer or sell any
shares of Common Stock to persons in the United Kingdom except to
55
<PAGE>
<PAGE>
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations of 1995 (the 'Regulations'); (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 and the Regulations with respect to anything done by it in
relation to the Common Stock in, from or otherwise involving the United Kingdom;
and (iii) it has only issued or passed on and will only issue or pass on to any
person in the United Kingdom any document received by it in connection with the
offer of the Common Stock if that person is of a kind described in Article 11(3)
of the Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996 or is a person to whom such document may otherwise lawfully be issued
or passed on.
Pursuant to the Agreement Between Underwriters, each International
Underwriter has represented and agreed that it has not, directly or indirectly,
offered, sold or transferred and will not, directly or indirectly, offer, sell
or transfer any of the shares of Common Stock in The Netherlands to any person
other than to individuals or legal entities who trade or invest in securities in
the conduct of a business or profession (which include banks, investment
institutions, securities brokers, pension funds, insurance companies, central
governments, large international and supranational organizations, finance
companies and large enterprises with a separate treasury department).
In any jurisdiction this Prospectus is for distribution only to persons to
whom it may lawfully be issued and only in accordance with the laws and
regulations of such jurisdiction. The distribution of this Prospectus and the
offer and the sale of the Common Stock offered hereby may be restricted by law
in certain jurisdictions. Persons who receive this Prospectus must inform
themselves about and observe such restrictions.
In Belgium, this Prospectus is being distributed only to banks, subscribers
and other persons, distribution to whom will not contravene any relevant laws or
restrictions regarding the public offering of securities.
Neither this Prospectus, which has not been approved by, nor registered nor
filed with the Commission des Operations de Bourse, nor any other offering
material relating to the Common Stock may be used in connection with any offer
for subscription or sale of the Common Stock to the public in France or be
distributed to the public in France other than to a limited number of
institutional investors (excluding investment trusts or funds) acting for their
own account. Persons into whose possession this material comes must inform
themselves about and observe any such restrictions. This material does not
constitute and may not be used for or in connection with either an offer to any
person to whom it is unlawful to make such an offer or a solicitation by anyone
not authorized so to act.
The Selling Stockholder has granted to the U.S. Underwriters an option to
purchase an aggregate of up to an aggregate of 2,535,000 additional shares of
Common Stock on the same terms per share. If the U.S. Underwriters exercise this
option, each of the U.S. Underwriters will have a firm commitment, subject to
certain conditions, to purchase approximately the same proportion of the
aggregate shares so purchased as the number of shares to be purchased by it
shown in the above tables bears to 13,520,000. The U.S. Underwriters may
exercise such option on or before the thirtieth day from the date of the U.S.
Underwriting Agreement and only to cover over-allotments, if any, in connection
with the United States Offering.
The Company and the Selling Stockholder have agreed, subject to certain
limited exceptions, not to offer, sell, contract to sell, pledge, grant any
option to purchase, transfer, or otherwise dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or warrants or other rights to purchase or acquire
shares of Common Stock or permit the registration of shares of Common Stock for
a period of 180 days after the date of this Prospectus without the prior written
consent of Dillon, Read & Co. Inc.
The Company and the Selling Stockholder have agreed in the Underwriting
Agreements to indemnify the Underwriters against certain civil liabilities,
including liabilities under the Securities Act, or to contribute to payments
that the Underwriters may be required to make in respect thereof. Wassall has
guaranteed the obligations of the Selling Stockholder under the Underwriting
Agreements.
56
<PAGE>
<PAGE>
Dillon, Read & Co. Inc. has rendered certain financial advisory and
investment banking services to Wassall and its affiliates for which it has
received customary fees. SBC Warburg is stockbroker to Wassall and has from time
to time performed certain investment banking services for Wassall, for which it
has received customary fees.
The U.S. Managing Underwriters and the International Managing Underwriters
have advised the Company and the Selling Stockholder that they do not expect
sales to discretionary accounts by the Underwriters to exceed 5% of the total
number of shares in the Offerings.
At the request of the Company, the Underwriters have reserved up to
of the shares of Common Stock offered hereby for sale to employees and
officers of the Company at the public offering price set forth on the cover page
of this Prospectus.
In connection with the Offerings, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock, including over-allotment, stabilization, syndicate covering
transactions and imposition of penalty bids. In an over-allotment, the
Underwriters would allot more shares of Common Stock to their customers in the
aggregate than are available for purchase by the Underwriters under the
Underwriting Agreements. Stabilizing means the placing of any bid, or the
effecting of any purchase, for the purpose of pegging, fixing or maintaining the
price of a security. In a syndicate covering transaction, the Underwriters would
place a bid or effect a purchase to reduce a short position created in
connection with the Offerings. Pursuant to a penalty bid, Dillon, Read & Co.
Inc., on behalf of the Underwriters, would be able to reclaim a selling
concession from an Underwriter if shares of Common Stock originally sold by such
Underwriter are purchased in syndicate covering transactions. These transactions
may result in the price of the Common Stock being higher than the price that
might otherwise prevail in the open market. These transactions may be effected
on the NYSE, in the over-the-counter market or otherwise, and, if commenced, may
be discontinued at any time.
Prior to the Offerings, there will be no public market for the Common
Stock. Consequently, the offering price will be determined by negotiations among
the Selling Stockholder, the U.S. Managing Underwriters and the International
Managing Underwriters. Among the principal factors to be considered in such
negotiations are the prevailing market and general economic conditions, the
price-to-earnings ratios of other publicly traded companies, the revenues and
earnings of the Company in recent periods, the current financial position of the
Company, estimates of the business potential of the Company and the present
state of the Company's development. Additionally, consideration will be given to
the general state of the securities market, the market conditions for new issues
of securities and the demand for securities of comparable companies at the time
the Offerings are made.
The Common Stock has been approved for listing on the NYSE, subject to
official notice of issuance.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Weil, Gotshal & Manges LLP, New York, New York. Certain
legal matters will be passed on for the Underwriters by Cahill Gordon & Reindel
(a partnership including a professional corporation), New York, New York.
EXPERTS
The combined financial statements of General Cable and related companies as
of December 31, 1995 and 1996 and for the period June 9, 1994 to December 31,
1994 and the years ended December 31, 1995 and 1996 and the consolidated
financial statements of General Cable Corporation and subsidiaries for the
period January 1, 1994 to June 8, 1994 included in this Prospectus and the
related financial statement schedule included elsewhere in the Registration
Statement have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports appearing herein and elsewhere in the Registration
Statement, and are included in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
57
<PAGE>
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-1 (together with all amendments, exhibits, schedules and supplements thereto,
the 'Registration Statement') under the Securities Act, with respect to the
Common Stock offered hereby. This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information about the
Company and the Common Stock, reference is hereby made to the Registration
Statement and to the schedules and exhibits filed therewith. Statements
contained in this Prospectus concerning the provisions of any document filed as
an exhibit to the Registration Statement are not necessarily complete, and in
each instance, reference is made to the copy of such document so filed. Each
such statement is qualified in its entirety by such reference. The Registration
Statement can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and also will be available for inspection and
copying at the following regional offices of the Commission: New York Regional
Office, 7 World Trade Center, New York, New York 10048, and Chicago Regional
Office, Suite 1400, Northwest Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661-2511 and at the Commission website located at
(http://www.sec.gov). Copies of such material also can be obtained from the
Commission at prescribed rates through its Public Reference Section at 450 Fifth
Street, N.W., Washington, D.C. 20549.
The Company is not currently subject to the informational requirements of
the Exchange Act. Upon consummation of the Offerings, the Company will be
subject to the informational requirements of the Exchange Act and, in accordance
therewith, will file periodic reports and other information with the Commission.
Such reports and other information will be available for inspection and copying
at the public reference section and regional Commission offices, at the
addresses set forth above.
58
<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GENERAL CABLE CORPORATION AND RELATED COMPANIES:
Independent Auditors' Report............................................................................... F-2
Combined Statements of Income for the period June 9, 1994 to December 31, 1994 and the years ended December
31, 1995 and 1996 and the three months ended March 31, 1996 and 1997 (unaudited)......................... F-3
Combined Balance Sheets at December 31, 1995 and 1996 and at March 31, 1997 (unaudited).................... F-4
Combined Statements of Cash Flows for the period June 9, 1994 to December 31, 1994 and the years ended
December 31, 1995 and 1996 and the three months ended March 31, 1996 and 1997 (unaudited)................ F-5
Notes to Combined Financial Statements..................................................................... F-6
GENERAL CABLE CORPORATION AND SUBSIDIARIES ('PREDECESSOR'):
Independent Auditors' Report............................................................................... F-16
Consolidated Statement of Operations for the period January 1, 1994 to June 8, 1994........................ F-17
Consolidated Statement of Cash Flows for the period January 1, 1994 to June 8, 1994........................ F-18
Consolidated Statement of Stockholders' Equity for the period January 1, 1994 to June 8, 1994.............. F-19
Notes to Consolidated Financial Statements................................................................. F-20
</TABLE>
F-1
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
GENERAL CABLE CORPORATION:
We have audited the accompanying combined balance sheets of General Cable
Corporation and related companies as of December 31, 1996 and 1995, and the
related combined statements of income and cash flows for the years ended
December 31, 1996 and 1995 and the period June 9, 1994 (acquisition date) to
December 31, 1994. The combined financial statements include the accounts of
General Cable Corporation and two related companies, Carol Cable Europe Ltd and
Carol Cable, Ltd. These companies are under common ownership and common
management. These combined financial statements are the responsibility of the
Companies' management. Our responsibility is to express an opinion on these
combined financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such combined financial statements present fairly, in all
material respects, the combined financial position of General Cable Corporation
and related companies as of December 31, 1996 and 1995, and the combined results
of their operations and their cash flows for the years ended December 31, 1996
and 1995 and the period from June 9, 1994 (acquisition date) to December 31,
1994 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Cincinnati, Ohio
February 7, 1997, except for
note 19, for which the
date is April 18, 1997.
F-2
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
COMBINED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
JUNE 9, 1994 1996
(ACQUISITION DATE) YEAR ENDED DECEMBER 31, ------------------
TO DECEMBER 31, ---------------------------
1994 1995 1996 (UNAUDITED)
------------------ ------------ -----------
<S> <C> <C> <C> <C>
Net sales.............................. $543.3 $1,061.3 $ 1,043.6 $258.0
Cost of sales.......................... 469.9 922.6 855.3 222.0
------- ------------ ----------- -------
Gross profit................. 73.4 138.7 188.3 36.0
Selling, general and administrative
expenses............................. 53.1 94.2 109.8 27.1
------- ------------ ----------- -------
Operating income............. 20.3 44.5 78.5 8.9
------- ------------ ----------- -------
Interest income (expense):
Interest expense to related
parties......................... (10.9) (20.1) (19.6) (5.0)
Other interest expense............ (.5) (1.3) (1.1) (.4)
Interest income................... .4 .7 1.1 .2
------- ------------ ----------- -------
(11.0) (20.7) (19.6) (5.2)
------- ------------ ----------- -------
Earnings before income
taxes...................... 9.3 23.8 58.9 3.7
Income tax benefit (provision)......... (6.5) 1.5 (19.7) (1.2)
------- ------------ ----------- -------
Net income................... $ 2.8 $ 25.3 $ 39.2 $ 2.5
------- ------------ ----------- -------
------- ------------ ----------- -------
Earnings per common share.............. $ .12 $ 1.04 $ 1.62 $ .10
------- ------------ ----------- -------
------- ------------ ----------- -------
Weighted average common shares......... 24.3 24.3 24.3 24.3
------- ------------ ----------- -------
------- ------------ ----------- -------
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997
---------------------------
(UNAUDITED)
<S> <C>
Net sales.............................. $251.0
Cost of sales.......................... 202.2
-------
Gross profit................. 48.8
Selling, general and administrative
expenses............................. 29.6
-------
Operating income............. 19.2
-------
Interest income (expense):
Interest expense to related
parties......................... (4.8)
Other interest expense............ (.3)
Interest income................... .2
-------
(4.9)
-------
Earnings before income
taxes...................... 14.3
Income tax benefit (provision)......... (5.7)
-------
Net income................... $ 8.6
-------
-------
Earnings per common share.............. $ .35
-------
-------
Weighted average common shares......... 24.3
-------
-------
</TABLE>
See accompanying Notes to Combined Financial Statements.
F-3
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
COMBINED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------ MARCH 31,
1995 1996 1997
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash.................................................................. $ 13.7 $ 1.9 $ 2.9
Receivables, net...................................................... 147.6 135.5 156.2
Inventories........................................................... 178.6 161.0 165.6
Deferred income taxes................................................. 23.0 23.7 23.4
Prepaid expenses and other............................................ 6.4 13.6 14.3
------ ------ -----------
Total current assets............................................. 369.3 335.7 362.4
Property, plant and equipment, net......................................... 116.4 128.8 128.5
Deferred income taxes...................................................... 41.7 31.8 31.3
Other non-current assets................................................... 8.2 17.3 18.1
------ ------ -----------
Total assets..................................................... $535.6 $513.6 $ 540.3
------ ------ -----------
------ ------ -----------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable...................................................... $ 66.5 $ 69.3 $ 60.8
Accrued liabilities................................................... 60.4 58.8 61.5
Short-term debt....................................................... -- 2.0 25.2
Note payable to related party......................................... 8.0 -- --
------ ------ -----------
Total current liabilities........................................ 134.9 130.1 147.5
Long-term Debt:
Notes payable to related parties...................................... 195.8 195.8 195.8
Other................................................................. 10.1 9.3 9.1
------ ------ -----------
Total long-term debt............................................. 205.9 205.1 204.9
------ ------ -----------
Other long-term liabilities................................................ 71.9 71.0 72.1
------ ------ -----------
Total liabilities................................................ 412.7 406.2 424.5
------ ------ -----------
Shareholder's Equity:
Common stock, $0.01 par value, 75,000,000 shares authorized,
24,250,000 shares issued and outstanding............................ .2 .2 .2
Additional paid-in capital............................................ 94.7 94.7 94.7
Retained earnings..................................................... 28.0 12.5 20.9
------ ------ -----------
Total shareholder's equity....................................... 122.9 107.4 115.8
------ ------ -----------
Total liabilities and shareholder's equity....................... $535.6 $513.6 $ 540.3
------ ------ -----------
------ ------ -----------
Pro Forma (unaudited):
Historical shareholder's equity.................................. $ 115.8
Dividend to shareholder.......................................... 42.6
-----------
Shareholder's equity............................................. $ 73.2
-----------
-----------
</TABLE>
See accompanying Notes to Combined Financial Statements.
F-4
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
COMBINED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
JUNE 9, 1994
(ACQUISITION DATE) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ----------------------------
1994 1995 1996
------------------ ---------------------- ----------------------
<S> <C> <C> <C>
Cash flows of operating activities:
Net income................................. $ 2.8 $ 25.3 $ 39.2
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization......... 7.7 12.9 12.1
Deferred income taxes................. -- (1.7) 9.3
Changes in operating assets and
liabilities:
(Increase) decrease in
receivables..................... (10.1) (4.9) 12.1
(Increase) decrease in
inventories..................... 32.7 9.1 17.6
(Increase) decrease in other
assets.......................... 1.3 (3.4) 2.1
Decrease in accounts payable,
accrued and other long-term
liabilities..................... (14.0) (16.1) (11.6)
------- ------- -------
Net cash flows of operating
activities................. 20.4 21.2 80.8
------- ------- -------
Cash flows of investing activities:
Capital expenditures....................... (9.1) (26.2) (30.0)
Investment in joint venture................ -- -- (6.4)
Other, net................................. 1.6 (.5) .9
------- ------- -------
Net cash flows of investing
activities................. (7.5) (26.7) (35.5)
------- ------- -------
Cash flows of financing activities:
Dividends paid............................. -- -- (55.1)
Proceeds from related party advance........ 26.0 8.0 4.8
Proceeds from issuance of other debt....... 4.5 -- 2.0
Repayment of related party advance......... -- -- (8.0)
Repayment of other long-term debt.......... (35.9) (.7) (.8)
------- ------- -------
Net cash flows of financing
activities................. (5.4) 7.3 (57.1)
------- ------- -------
Increase (decrease) in cash.................... 7.5 1.8 (11.8)
Cash -- beginning of period.................... 4.4 11.9 13.7
------- ------- -------
Cash -- end of period.......................... $ 11.9 $ 13.7 $ 1.9
------- ------- -------
------- ------- -------
SUPPLEMENTAL INFORMATION
Income taxes paid (refunded)............... $ 4.5 $ 4.2 $ (1.1)
------- ------- -------
------- ------- -------
Interest paid.............................. $ 11.3 $ 21.3 $ 20.1
------- ------- -------
------- ------- -------
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------------------------
1996 1997
------------------ ------------------
<S> <C> <C>
Cash flows of operating activities:
Net income................................. $ 2.5 $ 8.6
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization......... 3.0 3.3
Deferred income taxes................. .6 .7
Changes in operating assets and
liabilities:
(Increase) decrease in
receivables..................... (14.0) (20.7)
(Increase) decrease in
inventories..................... (4.2) (4.6)
(Increase) decrease in other
assets.......................... -- (1.3)
Decrease in accounts payable,
accrued and other long-term
liabilities..................... (10.6) (4.2)
------ ------
Net cash flows of operating
activities................. (22.7) (18.2)
------ ------
Cash flows of investing activities:
Capital expenditures....................... (5.6) (4.0)
Investment in joint venture................ -- --
Other, net................................. (.2) .2
------ ------
Net cash flows of investing
activities................. (5.8) (3.8)
------ ------
Cash flows of financing activities:
Dividends paid............................. -- --
Proceeds from related party advance........ -- --
Proceeds from issuance of other debt....... 22.0 23.2
Repayment of related party advance......... -- --
Repayment of other long-term debt.......... (.1) (.2)
------ ------
Net cash flows of financing
activities................. 21.9 23.0
------ ------
Increase (decrease) in cash.................... (6.6) 1.0
Cash -- beginning of period.................... 13.7 1.9
------ ------
Cash -- end of period.......................... $ 7.1 $ 2.9
------ ------
------ ------
SUPPLEMENTAL INFORMATION
Income taxes paid (refunded)............... $ -- $ 1.9
------ ------
------ ------
Interest paid.............................. $ 4.3 $ .1
------ ------
------ ------
</TABLE>
See accompanying Notes to Combined Financial Statements.
F-5
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS
1. GENERAL AND ACQUISITION
General. General Cable Corporation (formerly General Cable Acquisition
Holdings Corporation, see note 19) and related companies ('General Cable') are
engaged in the development, design, manufacture, marketing and distribution of
copper wire and cable products for the communications and electrical markets. As
of December 31, 1996, General Cable operated seventeen manufacturing facilities
within the United States in addition to the corporate headquarters in Highland
Heights, Kentucky.
Acquisition. In June 1994, a subsidiary of Wassall PLC acquired all of the
outstanding common stock of General Cable for $94.9 million including
acquisition related expenses. Wassall PLC also purchased a subordinated
promissory note payable to American Premier Underwriters, Inc. ('American
Premier') for $169.8 million. This transaction is referred to as the
'Acquisition'. The Acquisition was accounted for as a purchase and accordingly
the purchase price was allocated to the assets acquired and liabilities assumed
based upon their fair market values.
The fair values of assets acquired and liabilities assumed were as follows
(in millions):
<TABLE>
<S> <C>
Cash................................................................................ $ 4.4
Receivables......................................................................... 132.6
Inventories......................................................................... 220.3
Property, plant and equipment....................................................... 101.3
Goodwill............................................................................ 64.4
Other assets........................................................................ 12.7
-------
Total.......................................................................... 535.7
Accounts payable and accrued liabilities............................................ (141.8)
Long-term debt...................................................................... (211.8)
Other liabilities................................................................... (87.2)
-------
Total, net..................................................................... $ 94.9
-------
-------
</TABLE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Combination. The combined financial statements include the
accounts of General Cable and its wholly owned subsidiaries and two related
companies, Carol Cable Ltd. and Carol Cable Europe Ltd. The companies, the
ownership of which was transferred to Wassall PLC subsequent to the Acquisition,
are under common ownership and common management. See Note 19. All transactions
and balances among the combined companies have been eliminated. Certain
reclassifications have been made to the prior years to conform to the current
year's presentation.
Basis of Presentation of Unaudited Interim Financial Information. The
interim financial information included herein is unaudited. In the opinion of
management, the interim financial information reflects all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
such unaudited interim financial information. Results of operations for the
three months ended March 31, 1997 are not necessarily indicative of results that
may be expected for the full year.
Revenue Recognition. Revenue is recognized when shipments are made to
customers.
Earnings Per Share. Earnings per share was computed based on the weighted
average shares outstanding for each period adjusted for a 121,250-for-1 stock
split effected April 18, 1997. See Note 19. General Cable is required to
implement SFAS No. 128, 'Earnings Per Share' ('SFAS No. 128'), which was issued
in February 1997, in the fourth quarter of 1997. The effect of implementing SFAS
No. 128 is not expected to be material.
Inventories. Inventories are stated at the lower of cost or market value.
General Cable values the copper component of its inventories using the
last-in/first-out ('LIFO') method and values all remaining inventories using the
first-in/first-out ('FIFO') method.
F-6
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Goodwill. Goodwill recorded in the Acquisition was amortized using the
straight line method over 40 years. In accordance with SFAS No. 109, 'Accounting
for Income Taxes' ('SFAS No. 109'), the recognition in 1995 of the tax benefits
of acquired deductible temporary differences and carryforwards served to reduce
goodwill to zero.
Property, Plant and Equipment. Property, plant and equipment are stated at
cost. Costs assigned to property, plant and equipment relating to the
Acquisition were based on estimated fair values at that date. Depreciation is
provided using the straight-line method over the estimated useful lives of the
assets. General Cable implemented SFAS No. 121, 'Accounting for the Impairment
of Long-Lived Assets and Long-Lived Assets to Be Disposed Of,' on January 1,
1996. SFAS No. 121 requires that long-lived assets be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
the asset in question may not be recoverable. Management believes that amounts
recorded as assets are recoverable through normal operations. The implementation
of SFAS No. 121 did not have a material effect on the combined financial
statements.
Fair Value of Financial Instruments. Financial instruments are defined as
cash or contracts relating to the receipt, delivery or exchange of financial
instruments. Except as otherwise noted, fair value approximates the carrying
value of such instruments.
Forward Pricing Agreements For Purchases of Copper. In the normal course of
business, General Cable enters into forward pricing agreements for purchases of
copper to match certain sales transactions. At December 31, 1995 and 1996,
General Cable had $21.3 million and $16.9 million, respectively, of future
copper purchases that were under forward pricing agreements and such amounts
approximated fair value.
Use of Estimates. The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk. General Cable sells a broad range of products
throughout the United States, Canada and Europe. Concentrations of credit risk
with respect to trade receivables are limited due to the large number of
customers, including members of buying groups, comprising General Cable's
customer base. Ongoing credit evaluations of customers' financial condition are
performed and, generally, no collateral is required. General Cable maintains
reserves for potential credit losses and such losses, in the aggregate, have not
exceeded management's estimates. General Cable has one customer that accounted
for 10.4% of its net sales in 1996. Sales to a single customer did not exceed
10% in 1995 or the period June 9, 1994 to December 31, 1994.
3. RECEIVABLES
Receivables were net of allowances of $8.1 million and $8.4 million at
December 31, 1995 and 1996, respectively.
F-7
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
4. INVENTORIES
Inventories consisted of the following (in millions):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------ ------ MARCH 31,
1997
-----------
(UNAUDITED)
<S> <C> <C> <C>
Raw materials................................................ $ 32.9 $ 20.8 $ 20.7
Work-in-progress............................................. 35.7 28.6 24.4
Finished goods............................................... 110.0 111.6 120.5
------ ------ -----------
Total................................................... $178.6 $161.0 $ 165.6
------ ------ -----------
------ ------ -----------
</TABLE>
At December 31, 1995 and 1996, $80.2 million and $67.8 million,
respectively, of inventories were valued using the LIFO method. Approximate
replacement cost of inventories valued using the LIFO method totaled $114.5
million at December 31, 1995 and $76.2 million at December 31, 1996. A reduction
in inventory quantities during 1994, 1995 and 1996 resulted in a liquidation of
LIFO inventory quantities carried at a lower cost as compared with the cost of
current purchases. The effect of this liquidation was to decrease cost of goods
sold by $10.3 million, $.2 million and $1.6 million for the period June 9, 1994
to December 31, 1994 and the years ended December 31, 1995 and 1996,
respectively.
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following (in millions):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------ ------
<S> <C> <C>
Land....................................................................... $ 9.7 $ 6.9
Buildings and leasehold improvements....................................... 35.2 38.5
Machinery, equipment and office furnishings................................ 76.4 94.1
Construction in progress................................................... 12.3 18.1
------ ------
133.6 157.6
Less -- Accumulated depreciation and amortization.......................... (17.2) (28.8)
------ ------
Total................................................................. $116.4 $128.8
------ ------
------ ------
</TABLE>
Depreciation expense totaled $6.7 million, $11.7 million and $12.1 million
for the period June 9, 1994 to December 31, 1994 and the years ended December
31, 1995 and 1996, respectively.
6. INVESTMENT IN JOINT VENTURE
In December 1996, General Cable and SpecTran Corporation formed General
Photonics LLC, a joint venture fiber optic cable company. General Cable and
SpecTran each own 50% of General Photonics. General Cable accounts for its
investment in General Photonics under the equity method of accounting. At
December 31, 1996, the investment balance of $6.4 million is included in other
assets in the accompanying combined balance sheet.
F-8
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
7. ACCRUED LIABILITIES
Accrued liabilities consisted of the following (in millions):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1995 1996
----- -----
<S> <C> <C>
Insurance claims and related expenses.............................. $10.3 $10.1
Payroll related accruals........................................... 8.0 9.4
Customer rebates................................................... 9.2 7.1
Accrued restructuring costs........................................ 15.0 6.4
Payable to related party........................................... -- 4.8
Other accrued liabilities.......................................... 17.9 21.0
----- -----
Total.................................................... $60.4 $58.8
----- -----
----- -----
</TABLE>
8. SHORT-TERM DEBT
General Cable has an unsecured Demand Revolving Credit Note ('Revolver')
for $30.0 million, of which no amounts were outstanding at December 31, 1995 and
$2.0 million was outstanding at December 31, 1996. The Revolver is due December
31, 1997. Interest on borrowings under the Revolver is paid on the last day of
the selected interest period and is based on either (i) the prime rate, (ii) the
LIBOR rate plus 30 basis points or (iii) a quoted rate, as such rate is selected
by General Cable. The approximate weighted average interest rate paid was 6.1%,
6.6% and 5.9% for the period June 9, 1994 to December 31, 1994 and the years
ended December 31, 1995 and 1996, respectively.
In March 1995, a subsidiary of General Cable issued an $8.0 million note
payable on demand to a Wassall PLC subsidiary. The note bore annual interest at
the one year LIBOR rate plus 1% and was payable semi-annually. The note was
repaid in July 1996.
9. RESTRUCTURING PLAN
In connection with the Acquisition, accruals of approximately $46.5 million
were established for restructuring activities related to the reduction of excess
manufacturing and warehouse capacity and the reduction of excess administrative
overhead costs. These costs principally represented employee separation costs
and costs related to facility closings, including lease payments for closed
facilities and other premise costs. Facilities closed include two manufacturing
plants during 1996 and three manufacturing plants and one warehouse in 1995. The
restructuring plan is expected to be completed during 1998. The total cost of
these actions is expected to approximate the original estimate.
Changes in accrued restructuring costs were as follows (in millions):
<TABLE>
<CAPTION>
FACILITY
SEPARATION CLOSING
COSTS COSTS TOTAL
---------- -------- -----
<S> <C> <C> <C>
Original balance................................................ $ 18.4 $ 28.1 $46.5
Utilization................................................ (2.8) -- (2.8)
---------- -------- -----
Balance, December 31, 1994...................................... 15.6 28.1 43.7
Utilization................................................ (7.9) (8.7) (16.6)
---------- -------- -----
Balance, December 31, 1995...................................... 7.7 19.4 27.1
Utilization................................................ (4.7) (9.1) (13.8)
---------- -------- -----
Balance, December 31, 1996...................................... $ 3.0 $ 10.3 $13.3
---------- -------- -----
---------- -------- -----
</TABLE>
F-9
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
10. LONG-TERM DEBT
Notes payable to related parties consisted of the following (in millions):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------ ------
<S> <C> <C>
Subordinated Note, 9.98%............................... $169.8 $169.8
Note payable, prime rate plus 3/4%..................... 26.0 26.0
------ ------
Total........................................ $195.8 $195.8
------ ------
------ ------
</TABLE>
On June 9, 1994, Wassall PLC purchased a $169.8 million 9.98% Subordinated
Note due 2005 from American Premier (the 'Subordinated Note'). The principal of
the Subordinated Note is scheduled to be repaid as follows: $12.75 million in
each of 1998 and 1999; $25.5 million in each of 2000 through 2004; and the
remaining unpaid balance in 2005. The terms of the Subordinated Note limit
General Cable's other indebtedness to $100 million in borrowings from banks or
other financial institutions.
In July 1994, a subsidiary of General Cable issued a $26.0 million note
payable on demand to a Wassall PLC subsidiary. Interest on the note is payable
semi-annually. The holder of the note has agreed that repayment will not be
demanded during 1997 unless other funding is obtained to refinance the note on a
long-term basis.
At December 31, 1996, the fair value of General Cable's notes to related
parties was $220.3 million compared to the carrying value of $195.8 million. The
fair value was estimated by discounting the future cash flows using an interest
rate currently available to General Cable.
At December 31, 1996, other long-term debt of $9.3 million, primarily
Industrial Development Revenue Bonds, had a weighted average annual interest
rate of 5.7%. Maturities of such notes are as follows: 1997 -- $0.7 million,
1998 -- $0.6 million, 1999 -- $2.8 million, 2000 -- $0.1 million, 2001 -- $0.1
million and thereafter -- $5.0 million.
11. INCOME TAXES
The provision (benefit) for income taxes consisted of the following (in
millions):
<TABLE>
<CAPTION>
PERIOD
JUNE 9 TO YEAR ENDED DECEMBER 31,
DECEMBER 31, --------------------------
1994 1995 1996
------------ ---------- ------------
<S> <C> <C> <C>
Current:
Federal tax expense.......................... $6.3 $-- $ 6.8
State tax expense............................ .2 -- 2.9
Foreign tax expense.......................... -- .2 .7
Deferred:
Federal tax expense (benefit)................ -- (1.7) 8.4
State tax expense............................ -- -- .9
----- ---------- ------
$6.5 $ (1.5) $ 19.7
----- ---------- ------
----- ---------- ------
</TABLE>
F-10
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The reconciliation of reported income tax expense to the amount of income
tax expense that would result from applying domestic federal statutory tax rates
to pretax income is as follows (in millions):
<TABLE>
<CAPTION>
PERIOD
JUNE 9 TO YEAR ENDED DECEMBER 31,
DECEMBER 31, --------------------------
1994 1995 1996
------------ ---------- ------------
<S> <C> <C> <C>
Statutory federal income tax...................... $3.3 $ 8.3 $ 20.6
State income tax-net of federal benefit........... .1 -- 1.7
Valuation allowance change........................ 2.0 (10.1) --
Other (net)....................................... 1.1 .3 (2.6)
----- ---------- ------
$6.5 $ (1.5) $ 19.7
----- ---------- ------
----- ---------- ------
</TABLE>
The components of deferred tax assets and liabilities were as follows (in
millions):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1995 1996
---------- ------------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforward............................. $ 28.3 $ 27.4
Pension and retiree benefits accruals....................... 8.5 7.9
Asset and rationalization reserves.......................... 11.7 7.8
Inventory reserves.......................................... 5.3 5.1
Alternative minimum tax credit.............................. 7.5 4.7
Other liabilities and reserves.............................. 13.5 14.4
---------- ------
Total deferred tax assets................................... $ 74.8 $ 67.3
---------- ------
---------- ------
Deferred tax liabilities:
Depreciation and fixed assets............................... $ 10.1 $ 11.8
---------- ------
---------- ------
Net deferred tax assets.......................................... $ 64.7 $ 55.5
---------- ------
---------- ------
</TABLE>
SFAS No. 109 requires a valuation allowance to be recorded when it is more
likely than not that some or all of the deferred tax assets will not be
realized. At December 31, 1994, a valuation allowance for the full amount of the
net deferred tax asset was recorded because of pre-1994 losses and uncertainties
as to the amount of taxable income that would be generated in future years. Due
in large part to productivity improvements and cost reduction programs, General
Cable's operating profits have increased substantially. In 1995, management
determined that it was more likely than not that future taxable income would be
sufficient to enable General Cable to realize all of its deferred tax assets.
Accordingly, no valuation allowance has been recorded at December 31, 1995 and
1996. Goodwill recorded in the Acquisition was amortized using the straight line
method over 40 years. In accordance with SFAS No. 109, the recognition in 1995
of the tax benefits of acquired deductible temporary differences and
carryforwards served to reduce goodwill to zero.
In accordance with the provisions of Internal Revenue Code Section 382,
utilization of the Company's net operating loss carryforward is estimated to be
limited to approximately $5.4 million per year. The net operating loss
carryforward expires in varying amounts from 2007 through 2011. Because of the
Section 382 limitation, the portion of the Company's total net operating loss
carryforward that may be utilized through expiration is estimated to be
approximately $78.2 million. General Cable also has $4.7 million of alternative
minimum tax ('AMT') credit carryforwards that have no expiration date. The
utilization of the AMT credit carryforwards is also subject to Section 382
limitations.
12. PENSION PLANS
General Cable provides retirement benefits through contributory and
noncontributory pension plans for the majority of its regular full-time
employees.
F-11
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Pension expense under the defined contribution plans sponsored by General
Cable equaled four percent of each eligible employee's covered compensation. In
addition, General Cable sponsors employee savings plans under which General
Cable may match a specified portion of contributions made by eligible employees.
Benefits provided under defined benefit pension plans sponsored by General
Cable are generally based on years of service multiplied by a specific fixed
dollar amount. Contributions to these pension plans are based on generally
accepted actuarial methods which may differ from the methods used to determine
pension expense. The amounts funded for any plan year are neither less than the
minimum required under federal law nor more than the maximum amount deductible
for federal income tax purposes.
Net pension expense for plans included the following components (in
millions):
<TABLE>
<CAPTION>
PERIOD JUNE YEAR ENDED
9 TO DECEMBER 31,
DECEMBER 31, -----------------
1994 1995 1996
------------ ------ ------
<S> <C> <C> <C>
Service cost........................................................ $ .6 $ 1.1 $ 1.4
Interest cost....................................................... 2.9 6.1 6.0
Return on plan assets............................................... (1.1) (14.3) (10.5)
Net amortization and deferral....................................... (2.3) 7.7 3.2
------ ------ ------
Net defined benefit pension expense............................ .1 .6 .1
Net defined contribution pension expense....................... 1.4 2.3 2.1
------ ------ ------
Total pension expense..................................... $ 1.5 $ 2.9 $ 2.2
------ ------ ------
------ ------ ------
</TABLE>
The table below sets forth the funded status of General Cable's defined
benefit plans and the amounts recognized in General Cable's balance sheet at
December 31, 1995 and 1996 related to those plans (in millions):
<TABLE>
<CAPTION>
ASSETS EXCEED
ACCUMULATED
BENEFITS
----------------- ACCUMULATED
BENEFITS
DECEMBER 31, EXCEED ASSETS
----------------- -------------
1995 1996 1995
------ ------ -------------
<S> <C> <C> <C>
Actuarial present value of benefit obligation:
Vested benefit obligation..................................... $ (8.0) $(75.9) $ (69.7)
------ ------ -------------
------ ------ -------------
Accumulated benefit obligation................................ $ (9.0) $(82.7) $ (74.9)
------ ------ -------------
------ ------ -------------
Projected benefit obligation....................................... $(10.0) $(84.0) $ (74.9)
Plan assets at fair value.......................................... 12.8 87.8 68.7
------ ------ -------------
Excess assets (obligations)........................................ 2.8 3.8 (6.2)
Unrecognized net gain.............................................. (1.6) (9.1) (2.0)
Unrecognized prior service cost.................................... .4 2.8 1.0
------ ------ -------------
Accrued pension asset (liability)............................. $ 1.6 $ (2.5) $ (7.2)
------ ------ -------------
------ ------ -------------
</TABLE>
The weighted average discount rate used in determining the actuarial
present value of the projected benefit obligation was 8.5% for the period June
9, 1994 to December 31, 1994 and 7.5% for the years ended December 31, 1995 and
1996, respectively. The rate of compensation increase was 4.5% and the assumed
long-term rate of return on plan assets was 9.5% for each period presented.
Pension plan assets consist of equity securities and various fixed income
investments.
F-12
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
13. POST-RETIREMENT BENEFITS OTHER THAN PENSIONS
General Cable has post-retirement benefit plans that provide medical and
life insurance for certain retirees and eligible dependents. General Cable funds
the plans as claims or insurance premiums are incurred. Net post-retirement
benefit expense included the following components (in millions):
<TABLE>
<CAPTION>
PERIOD JUNE YEAR ENDED
9 TO DECEMBER 31,
DECEMBER 31, -------------
1994 1995 1996
------------ ---- ----
<S> <C> <C> <C>
Service cost........................................................... $ .1 $ .3 $ .4
Interest cost.......................................................... .5 1.1 1.1
--- ---- ----
Net post-retirement benefit expense............................... $ .6 $1.4 $1.5
--- ---- ----
--- ---- ----
</TABLE>
The funded status of the plans and amounts recognized in General Cable's
balance sheet was as follows (in millions):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1996
------ ------
<S> <C> <C>
Accumulated post-retirement benefit obligation:
Retirees........................................................................ $ (5.9) $ (5.3)
Fully eligible active plan participants......................................... (3.0) (3.0)
Other active plan participants.................................................. (6.3) (7.2)
Unrecognized net loss........................................................... .4 --
------ ------
Accrued post-retirement benefit liability.................................. $(14.8) $(15.5)
------ ------
------ ------
</TABLE>
The discount rate used in determining the accumulated post-retirement
benefit obligation was 8.5% for the period June 9, 1994 to December 31, 1994 and
7.5% for the years ended December 31, 1995 and 1996, respectively. The assumed
health care cost trend rate used in measuring the accumulated post-retirement
benefit obligation was 11.9% decreasing gradually to 5.5% in year 2005 and
thereafter. Increasing the assumed health care cost trend rate by 1% would
result in an increase of the accumulated post-retirement benefit obligation of
$1.3 million for 1996. The effect of this change would increase net
post-retirement benefit expense by $.1 million.
14. SHAREHOLDER'S EQUITY
Changes in shareholder's equity were as follows (in millions):
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
------ ----------- --------- ------
<S> <C> <C> <C> <C>
Balance, June 9, 1994..................................... $ .2 $94.7 $ -- $ 94.9
Net income........................................... -- -- 2.8 2.8
Other................................................ -- -- (.1) (.1)
------ ----------- --------- ------
Balance, December 31, 1994................................ .2 94.7 2.7 97.6
Net income........................................... -- -- 25.3 25.3
------ ----------- --------- ------
Balance, December 31, 1995................................ .2 94.7 28.0 122.9
Net income........................................... -- -- 39.2 39.2
Dividends............................................ -- -- (55.1) (55.1)
Other................................................ -- -- .4 .4
------ ----------- --------- ------
Balance, December 31, 1996................................ $ .2 $94.7 $ 12.5 $107.4
------ ----------- --------- ------
------ ----------- --------- ------
</TABLE>
F-13
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Pro forma shareholder's equity (unaudited) reflects a $42.6 million
dividend anticipated to be paid to a Wassall subsidiary in May 1997 in
connection with the refinancing and the initial public offering described in
Note 19.
15. CONTINGENCIES
Certain present and former operating sites, or portions thereof, currently
or previously owned and/or leased by current or former operating units of
General Cable are the subject of investigations, monitoring or remediation under
the Federal Comprehensive Environmental Response, Compensation and Liability Act
('CERCLA' or 'superfund'), the Federal Resource Conservation and Recovery Act or
comparable state statutes or agreements with third parties. These proceedings
are in various stages ranging from initial investigations to active settlement
negotiations to implementation of the clean-up or remediation of sites.
Certain present and former operating units of General Cable have been named
as Potentially Responsible Parties ('PRPs') at several off-site disposal sites
under CERCLA or comparable state statutes in federal court proceedings. In each
of these matters, the operating unit of General Cable is working with the
governmental agencies involved and other PRPs to address environmental claims in
a responsible and appropriate manner.
At December 31, 1996, General Cable had accrued approximately $7.3 million
for various environmental related liabilities of which General Cable is aware.
In connection with the Acquisition, American Premier agreed to indemnify General
Cable against all environmental liabilities arising out of General Cable's or
its predecessors' ownership or operation of the Indiana Steel & Wire Company and
Marathon Manufacturing Holdings, Inc. businesses (which were divested by General
Cable prior to the Acquisition), without limitation as to time or amount.
American Premier also agreed to indemnify General Cable against 66 2/3% of all
other environmental liabilities arising out of General Cable's or its
predecessors' ownership or operation of other properties and assets in excess of
$10 million but not in excess of $33 million which are identified during the
seven year period ending June 2001. While it is difficult to estimate future
environmental liabilities accurately, General Cable does not currently
anticipate any material adverse impact on its results of operations, financial
position or cash flows as a result of compliance with federal, state, local or
foreign environmental laws or regulations or cleanup costs of the sites
discussed above.
In addition, subsidiaries of the Company have been named as defendants in
lawsuits alleging exposure to asbestos in products manufactured by the Company.
At December 31, 1996, General Cable had accrued approximately $2.3 million for
these lawsuits. The Company does not believe that the outcome of the litigation
will have a material adverse effect on its results of operations, cash flows or
financial position.
16. COMMITMENTS
General Cable has entered into various operating lease agreements related
principally to certain administrative, manufacturing and distribution facilities
and transportation equipment. Future minimum rental payments required under
noncancelable lease agreements at December 31, 1996 were as follows:
1997 -- $5.8 million, 1998 -- $5.0 million, 1999 -- $4.7 million, 2000 -- $3.0
million, 2001 -- $2.1 million, and $0.5 million thereafter. Rental expense
recorded under operating leases was $2.1 million, $3.8 million and $4.2 million
for the period June 9, 1994 to December 31, 1994, and the years ended December
31, 1995, 1996, respectively.
17. RELATED PARTY TRANSACTIONS
A subsidiary of Wassall charged General Cable a fee for management services
of $1.1 million for the period June 9, 1994 to December 31, 1994, $1.4 million
for 1995 and $1.6 million for 1996 which are
F-14
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND RELATED COMPANIES
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
included in selling, general and administrative expenses in the accompanying
combined statements of income.
18. QUARTERLY OPERATING RESULTS (UNAUDITED)
The interim financial information is unaudited. In the opinion of
management, the interim financial information reflects all adjustments necessary
for a fair presentation of quarterly financial information. Quarterly results
have been influenced by seasonal factors inherent in General Cable's businesses.
Summarized historical quarterly financial data for 1995 and 1996 are set forth
below (in millions, except per share data):
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH TOTAL
QUARTER QUARTER QUARTER QUARTER YEAR
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
1995
Net sales................................................. $249.3 $270.8 $273.6 $267.6 $1,061.3
Gross profit.............................................. 27.0 38.2 35.9 37.6 138.7
Net income(loss).......................................... (3.2 ) 8.2 9.1 11.2 25.3
Earnings (loss) per share................................. (.13 ) .34 .37 .46 1.04
1996
Net sales................................................. $258.0 $270.7 $272.2 $242.7 $1,043.6
Gross profit.............................................. 36.0 47.6 55.7 49.0 188.3
Net income................................................ 2.5 10.0 15.2 11.5 39.2
Earnings per share........................................ .10 .41 .63 .48 1.62
</TABLE>
19. SUBSEQUENT EVENTS
On March 5, 1997 the name of General Cable Acquisition Holdings Corporation
was changed to General Cable Corporation. In addition, on March 7, 1997 General
Cable's Board of Directors approved the filing of a Registration Statement under
the Securities Act of 1933 for an initial public offering of General Cable's
common stock.
In connection with the initial public offering, the Board of Directors of
General Cable approved an increase in the number of authorized shares of common
stock to 75,000,000, authorized 25,000,000 shares of preferred stock and
authorized a 121,250-for-1 common stock split effective April 18, 1997. All
references to common stock and per share data have been restated to give
retroactive effect to the stock split.
Prior to consummation of the initial public offering, General Cable intends
to enter into a new credit facility with a syndicate of banks. The facility will
consist of a five-year unsecured revolving credit and competitive advance
facility in an aggregate principal amount of $350.0 million. Concurrently with
the consummation of the initial public offering, General Cable intends to make
an initial borrowing under the new facility, and to use the proceeds of such
borrowing, to (i) repay all outstanding revolving bank debt, (ii) repay all
intercompany debt and advances to Wassall and its subsidiaries, (iii) pay a
$42.6 million dividend to Wassall and (iv) purchase Carol Cable Ltd. and Carol
Cable Europe Ltd. from Wassall for $2.0 million, which approximates the net book
value of such companies.
F-15
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
GENERAL CABLE CORPORATION:
We have audited the accompanying consolidated statement of operations, cash
flows, and shareholders' equity of the General Cable Corporation and
subsidiaries for the period January 1, 1994 to June 8, 1994. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit 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 statements of operations, cash flows, and
shareholders' equity. 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 audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the consolidated results of operations and cash flows of General Cable
Corporation and subsidiaries for the period from January 1, 1994 to June 8, 1994
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Cincinnati, Ohio
February 3, 1997
F-16
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 1994 TO JUNE 8, 1994
(IN MILLIONS)
<TABLE>
<S> <C>
Net sales....................................................................... $ 355.0
Cost of sales................................................................... 310.8
-------------
Gross profit.......................................................... 44.2
Selling, general and administrative expenses.................................... 43.1
-------------
Operating income...................................................... 1.1
Interest expense:
Interest expense related parties........................................... (11.5)
Other interest............................................................. (.6)
-------------
Loss before income taxes.............................................. (11.0)
Income tax benefit.............................................................. .1
-------------
Net loss.............................................................. $ (10.9)
-------------
-------------
</TABLE>
See Notes to Consolidated Financial Statements.
F-17
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD JANUARY 1, 1994 TO JUNE 8, 1994
(IN MILLIONS)
<TABLE>
<S> <C>
Cash flows of operating activities:
Net loss............................................................................. $ (10.9)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization................................................... 7.8
Non-cash interest expense....................................................... 11.5
Changes in operating assets and liabilities:
Increase in receivables.................................................... (13.1)
Increase in inventories.................................................... (22.9)
Increase in other assets................................................... (3.0)
Decrease in accounts payable, accrued and other long-term liabilities...... (7.8)
-------------
Net cash flows of operating activities................................ (38.4)
-------------
Cash flows of investing activities:
Proceeds from sale of discontinued operations........................................ 10.4
Capital expenditures................................................................. (6.2)
-------------
Net cash flows of investing activities................................ 4.2
-------------
Cash flows of financing activities:
Net proceeds from Revolving Credit Facility.......................................... 35.9
Repayment of debt.................................................................... (11.3)
-------------
Net cash flows of financing activities................................ 24.6
-------------
Decrease in cash.......................................................................... (9.6)
Cash -- beginning of period............................................................... 14.0
-------------
Cash -- end of period..................................................................... $ 4.4
-------------
-------------
</TABLE>
Non-cash Items
General Cable issued an Interest Note to American Premier Underwriters Inc.
('American Premier') for $12.0 million on March 31, 1994.
General Cable transferred promissory notes received in connection with the
sale of assets and liabilities of MLTC Company (formerly Marathon LeTourneau
Company) to American Premier in payment of $37.7 million of subordinated debt.
See Notes to Consolidated Financial Statements
F-18
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD JANUARY 1, 1994 TO JUNE 8, 1994
(IN MILLIONS)
<TABLE>
<CAPTION>
COMMON CAPITAL ACCUMULATED
STOCK SURPLUS DEFICIT TOTAL
------ -------- ----------- ------
<S> <C> <C> <C> <C>
Balance, December 31, 1993........................................... $13.0 $245.1 $(118.2) $139.9
Net loss........................................................ -- -- (10.9) (10.9)
Common stock retired............................................ (.1 ) (.5) -- (.6)
Other........................................................... -- .2 .3 .5
------ -------- ----------- ------
Balance, June 8, 1994................................................ $12.9 $244.8 $(128.8) $128.9
------ -------- ----------- ------
------ -------- ----------- ------
</TABLE>
See Notes to Consolidated Financial Statements
F-19
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES AND BASIS OF PRESENTATION
Business. General Cable Corporation ('General Cable') manufacturers a broad
array of wire and cable products for use in the telecommunications, electronic,
electrical, consumer and automotive markets. The Common Stock of General Cable
was distributed to the shareholders of American Premier, a subsidiary of
American Financial Corporation, on July 1, 1992. American Financial Corporation
and its subsidiaries owned approximately 45% of General Cable Common Stock at
December 31, 1993.
General Cable had $286.8 million in 9.98% Subordinated Notes payable to
American Premier at December 31, 1993. Interest expense relating to the
Subordinated Notes payable to American Premier was $11.5 million for the period
January 1, 1994 to June 8, 1994.
Basis of Presentation. The consolidated financial statements present the
results of operations and cash flows of General Cable and its subsidiaries for
the period from January 1, 1994 to June 8, 1994 prior to the acquisition of
General Cable by Wassall PLC on June 9, 1994 and do not include any adjustments
resulting from the acquisition.
Principles of Consolidation. All significant majority-owned subsidiaries
are consolidated. Intercompany transactions and balances are eliminated.
Inventories. Inventories are stated at the lower of cost or market value.
General Cable values the copper component of its inventories using the
last-in/first-out ('LIFO') method and values all remaining inventories using the
first-in/first-out ('FIFO') method.
Property, Plant and Equipment. Property, plant and equipment are stated at
cost. Depreciation is provided using the straight-line method over the expected
useful lives of the assets.
Goodwill. The excess of the acquisition cost over the net assets of
businesses acquired is being amortized using the straight-line method over 40
years.
Use of Estimates. The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Revenue Recognition. Product sales are recorded when such products are
shipped to customers.
Postretirement Benefits Other than Pensions. General Cable implemented SFAS
No. 106, 'Employers Accounting for Postretirement Benefits Other than Pensions,'
on January 1, 1993 and elected prospective recognition of the transition
obligation. The expense related to health care and life insurance for retired
employees was not material for January 1, 1994 through June 8, 1994.
2. DIVESTITURES
In November 1993, General Cable entered into a definitive agreement with
Rowan Companies, Inc. for the sale of substantially all the assets and
assumption of certain liabilities of MLTC Company as of September 30, 1993. In
February 1994, General Cable completed the sale and subsequently transferred all
proceeds of the transaction, approximately $48.1 million, consisting of cash and
promissory notes, to American Premier in partial payment of subordinated debt
due to American Premier.
3. PENSION PLANS
General Cable provides retirement benefits through contributory and
noncontributory pension plans for the majority of its regular full-time
employees except those covered by certain labor contracts.
Pension expense under the defined contribution plans sponsored by General
Cable equaled four percent of each eligible employee's covered compensation. In
addition, General Cable sponsors
F-20
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
employee savings plans under which General Cable may match a specified portion
of contributions made by eligible employees.
Benefits provided under defined benefit plans sponsored by General Cable
are generally based on years of service multiplied by a specific fixed dollar
amount. Contributions to these pension plans are based on generally accepted
actuarial methods which may differ from the methods used to determine pension
expense. The amounts funded for any plan year are neither less than the minimum
required under federal law nor more than the maximum amount deductible for
federal income tax purposes.
Net pension expense for the period January 1, 1994 to June 8, 1994 was $1.3
million.
4. INCOME TAXES
In accordance with Statement of Financial Accounting Standards No. 109, the
benefit of future deductible temporary differences as well as tax loss and
credit carryforwards was offset by a full valuation allowance due to the
uncertainties with respect to the amount of taxable income which will be
generated in future years. No provision for federal income taxes and a $0.1
million benefit for state income taxes were recorded for the period January 1,
1994 to June 8, 1994 due to an operating loss.
5. COMMITMENTS
General Cable has entered into various operating lease agreements related
principally to certain administrative and manufacturing facilities and
transportation equipment. Rental expense charged to operations for all operating
leases amounted to $1.9 million for the period January 1, 1994 to June 8, 1994.
6. SUBSEQUENT EVENTS
Effective June 9, 1994, a subsidiary of Wassall PLC acquired 96% of the
outstanding common stock of General Cable. The subsidiary subsequently acquired
the remaining 4% of the common stock of General Cable.
F-21
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<PAGE>
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<PAGE>
<PAGE>
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<PAGE>
<PAGE>
[LOGO GENERAL CABLE]
[ART WORK]
<PAGE>
<PAGE>
______________________________ ______________________________
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR
SOLICITATION OF AN OFFER TO BUY, ANY SECURITY OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY SHARES OF COMMON STOCK IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary......................... 3
Risk Factors............................... 7
The Company................................ 11
Use of Proceeds............................ 12
Dividends.................................. 12
Dilution................................... 12
Capitalization............................. 13
Selected Financial Data.................... 14
Unaudited Pro Forma Financial Data......... 16
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 17
Business................................... 23
Management................................. 37
Selling Stockholder........................ 45
Certain Relationships and Related
Transactions............................. 45
Description of Capital Stock............... 46
Shares Eligible for Future Sale............ 50
Certain U.S. Federal Tax Consequences
to Non-U.S. Holders of Common
Stock.................................... 52
Underwriting............................... 54
Legal Matters.............................. 57
Experts.................................... 57
Available Information...................... 58
Index to Financial Statements.............. F-1
------------------------
UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS),
ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
______________________________ ______________________________
[LOGO]
------------------------
16,900,000 SHARES
COMMON STOCK
PROSPECTUS
, 1997
------------------------
DILLON, READ & CO. INC.
MERRILL LYNCH & CO.
______________________________ ______________________________
<PAGE>
<PAGE>
[INTERNATIONAL PROSPECTUS -- ALTERNATE PAGE]
SUBJECT TO COMPLETION, DATED MAY 15, 1997
16,900,000 SHARES
[LOGO]
COMMON STOCK
All of the 16,900,000 shares of common stock, par value $.01 per share (the
'Common Stock'), of General Cable Corporation ('General Cable' or the 'Company')
offered hereby are being sold by Wassall Netherlands Cable B.V., a Netherlands
corporation (the 'Selling Stockholder'), in concurrent offerings in the United
States and Canada and outside the United States and Canada (the 'Offerings'). Of
such shares, 3,380,000 are initially being offered outside the United States and
Canada by the International Underwriters (the 'International Offering') and
13,520,000 are initially being offered in the United States and Canada by the
U.S. Underwriters (the 'United States Offering'). The per share price to the
public and per share underwriting discounts and commissions for the Offerings
will be identical. See 'Underwriting.' The Company will not receive any of the
proceeds from the sale of the shares offered hereby.
Prior to the Offerings, the Company has been a wholly-owned subsidiary of
the Selling Stockholder. Following consummation of the Offerings, the Selling
Stockholder will own approximately 30% of the outstanding shares of Common Stock
(or approximately 20% of the outstanding shares of Common Stock if the U.S.
Underwriters' over-allotment option is exercised in full).
Prior to the Offerings, there has been no public market for the Common
Stock. It is currently estimated that the initial public offering price of the
Common Stock will be between $21.00 and $24.00. See 'Underwriting' for the
factors to be considered in determining the initial public offering price. The
Common Stock has been approved for listing on the New York Stock Exchange (the
'NYSE'), subject to official notice of issuance, under the symbol 'GCN'.
FOR A DISCUSSION OF CERTAIN RISKS OF AN INVESTMENT IN THE SHARES OF COMMON
STOCK OFFERED HEREBY, SEE 'RISK FACTORS' ON PAGES 7 - 11.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------------
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Discounts and Selling
Public Commissions* Stockholder`D'
<S> <C> <C> <C>
Per Share....................................... $ $ $
Total`DD'....................................... $ $ $
</TABLE>
- ------------------------
* The Company and the Selling Stockholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See 'Underwriting.'
`D' Before deducting expenses of the Offerings estimated to be $2,000,000, all
of which are payable by the Selling Stockholder.
`DD' The Selling Stockholder has granted the U.S. Underwriters a 30-day option
to purchase up to 2,535,000 additional shares of Common Stock on the same
terms per share solely to cover over-allotments, if any. If such option is
exercised in full, the total price to public will be $ , the total
underwriting discounts and commissions will be $ and the total
proceeds to the Selling Stockholder will be $ . See
'Underwriting.'
------------------------
The Common Stock is being offered by the Underwriters as set forth under
'Underwriting' herein. It is expected that delivery of the Common Stock offered
hereby will be made at the offices of Dillon, Read & Co. Inc., New York, New
York or through the facilities of The Depository Trust Company on or about
, 1997 against payment therefor. The International Underwriters
include:
DILLON, READ & CO. INC.
MERRILL LYNCH INTERNATIONAL
SBC WARBURG
A DIVISION OF SWISS BANK CORPORATION
The date of this Prospectus is , 1997.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
<PAGE>
______________________________ ______________________________
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MAY NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDER OR ANY
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR
SOLICITATION OF AN OFFER TO BUY, ANY SECURITY OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY SHARES OF COMMON STOCK IN ANY JURISDICTION IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary......................... 3
Risk Factors............................... 7
The Company................................ 11
Use of Proceeds............................ 12
Dividends.................................. 12
Dilution................................... 12
Capitalization............................. 13
Selected Financial Data.................... 14
Unaudited Pro Forma Financial Data......... 16
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 17
Business................................... 23
Management................................. 37
Selling Stockholder........................ 45
Certain Relationships and Related
Transactions............................. 45
Description of Capital Stock............... 46
Shares Eligible for Future Sale............ 50
Certain U.S. Federal Tax Consequences to
Non-U.S. Holders of Common Stock......... 52
Underwriting............................... 54
Legal Matters.............................. 57
Experts.................................... 57
Available Information...................... 58
Index to Financial Statements.............. F-1
------------------------
UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS),
ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
[INTERNATIONAL PROSPECTUS -- ALTERNATE PAGE]
______________________________ ______________________________
[LOGO]
------------------------
16,900,000 SHARES
COMMON STOCK
PROSPECTUS
, 1997
------------------------
DILLON, READ & CO. INC.
MERRILL LYNCH INTERNATIONAL
SBC WARBURG
A DIVISION OF SWISS BANK CORPORATION
______________________________ ______________________________
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemization of the expenses to be borne by the Selling
Stockholder in connection with the distribution of the securities being
registered hereunder. All such expenses (other than the registration, NASD and
NYSE fees) are estimated.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............................. $ 141,346
NASD fee........................................................................ 30,500
NYSE listing fee................................................................ 151,100
Legal fees and expenses......................................................... 775,000
Accounting fees................................................................. 350,000
Printing costs and expenses..................................................... 350,000
Miscellaneous................................................................... 202,054
----------
Total...................................................................... $2,000,000
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Section 145 of the Delaware General Corporation Law (the 'DGCL')
provides that a corporation may 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 he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent 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 him in connection with such action, suit, or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon 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 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, that he had reasonable cause to believe that his conduct was
unlawful.
Section 145 of the DGCL also provides that a corporation may 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 he is
or was a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and 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 adjudication 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.
II-1
<PAGE>
<PAGE>
Any such indemnification (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, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct set
forth above. Such determination shall be made:
(1) 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
(2) 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
(3) by the stockholders.
Section 145 of the DGCL permits a Delaware business corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by him in any such capacity,
or arising out of his status as such, whether or not the corporation would have
the power to indemnify such person.
(b) Article XIV of the Company's By-laws, as amended, provides that the
Company shall, to the fullest extent permitted under the DGCL or any other
applicable law, as may from time to time be in effect, 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, by reason of the fact that such person is or was a member of
the board of directors or an officer of the Company or controller of the
Company, or is or was serving at the request of the Company as a member of the
board of directors or an officer of another corporation, partnership, joint
venture, trust or other enterprise, against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding.
Article XIV also provides that expenses incurred by an officer or director or
controller of the Company in defending a civil or criminal action, suit or
proceeding shall be paid by the Company in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such director, officer or controller to repay such amount if it shall be
ultimately determined that he or she is not entitled to be indemnified as
authorized by the DGCL. Persons who are not officers, directors or the
controller of the Company and who are or were employees or agents of the
Company, or are or were serving at the request of the Company as employees or
agents of another corporation, partnership, joint venture, trust or other
enterprise, may be indemnified to the extent authorized at any time or from time
to time by the board of directors. The right to indemnification provided by
Article XIV of the Company's By-laws is not exclusive of any other rights to
which those indemnified may be entitled by law or otherwise, and shall continue
as to a person who has ceased to be a director, officer, controller, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such person.
(c) The Underwriting Agreements among the Underwriters, the Selling
Stockholder, Wassall and the Company relating to the Common Stock contain
provisions with respect to indemnification of directors and certain officers of
the Company by the Underwriters under certain circumstances.
(d) The directors and officers of the Company are covered by Wassall's
global directors' and officers' insurance policy, which coverage will terminate
upon consummation of the Offerings. The Company intends to purchase a directors'
and officers' insurance policy which will provide coverage for certain
liabilities that directors and officers of the Company may incur in their
capacity as such.
II-2
<PAGE>
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
None.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -------------------------------------------------------------------------------------------------------
<C> <S>
**1.1 Form of U.S. Underwriting Agreement.
**1.2 Form of International Underwriting Agreement.
*3.1 Amended and Restated Certificate of Incorporation of the Registrant.
*3.2 Amended and Restated By-Laws of the Registrant.
**4.1 Specimen Common Stock Certificate.
**5.1 Opinion of Weil, Gotshal & Manges LLP as to the legality of the Common Stock.
10.1 Stock and Note Purchase Agreement, dated as of May 5, 1994 (filed as Exhibit (c)(2) to the Schedule
14D-1 of Wassall PLC and the Registrant filed with the Commission on May 11, 1994 and incorporated
herein by reference).
**10.2 Form of Credit Agreement between the Registrant, Chase Manhattan Bank, as Administrative Agent, and the
lenders signatory thereto.
**10.3 General Cable Corporation 1997 Annual Incentive Plan.
**10.4 General Cable Corporation 1997 Stock Incentive Plan.
**10.5 Employment Agreement, dated May 13, 1997, between Stephen Rabinowitz and the Registrant.
**10.6 Employment Agreement, dated May 13, 1997, between Gregory B. Kenny and the Registrant.
**10.7 Employment Agreement, dated May 13, 1997, between Christopher F. Virgulak and the Registrant.
**10.8 Employment Agreement, dated May 13, 1997, between Robert J. Siverd and the Registrant.
**10.9 Change-in-Control Agreement, dated May 13, 1997, between Stephen Rabinowitz and the Registrant.
**10.10 Change-in-Control Agreement, dated May 13, 1997, between Gregory B. Kenny and the Registrant.
**10.11 Change-in-Control Agreement, dated May 13, 1997, between Christopher F. Virgulak and the Registrant.
**10.12 Change-in-Control Agreement, dated May 13, 1997, between Robert J. Siverd and the Registrant.
**10.13 Registration Rights Agreement, dated May 13, 1997, between Wassall Netherlands Cable B.V. and the
Registrant.
**10.14 Form of Intercompany Agreement among Wassall PLC, Wassall Netherlands Cable B.V. and the Registrant.
**10.15 Stock Purchase Agreement, dated May 13, 1997, between Wassall PLC and General Cable Industries, Inc.
and the Registrant.
*21.1 List of subsidiaries of the Registrant.
**23.1 Consent of Deloitte & Touche LLP.
**23.2 Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5.1).
*24.1 Powers of Attorney.
*27.1 Financial Data Schedule.
</TABLE>
- ------------
* Previously filed.
** Filed herewith.
(b) Financial Statement Schedule
The following financial statement schedule of the Company is filed
herewith:
<TABLE>
<CAPTION>
SCHEDULE DESCRIPTION
- --------- -----------------------------------------------------------------------------------------------------
<S> <C>
II. Valuation and Qualifying Accounts
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that:
(1) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification
II-3
<PAGE>
<PAGE>
is against public policy as expressed in the Exchange Act 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 Exchange Act and will be governed by the final
adjudication of such issue.
(2) For purposes of determining any liability under the Securities Act, the
information omitted from the Prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in the Prospectus filed by
the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed part of the Registration Statement as of the time it was
declared effective.
(3) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(4) The undersigned registrant hereby undertakes to provide to the
Underwriters at the closing specified in the underwriting agreements
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.
II-4
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York on May 14, 1997.
GENERAL CABLE CORPORATION
By: /s/ STEPHEN RABINOWITZ
...................................
STEPHEN RABINOWITZ
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by or on behalf of the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------- ---------------------------------------------- -------------------
<C> <S> <C>
/S/ STEPHEN RABINOWITZ Chairman, President, Chief Executive Officer May 14, 1997
........................................ and Director (Principal Executive Officer)
(STEPHEN RABINOWITZ)
** Executive Vice President, Chief Operating May 14, 1997
........................................ Officer and Director
(GREGORY B. KENNY)
* Director May 14, 1997
........................................
(KEVIN J. DOYLE)
* Director May 14, 1997
........................................
(DAVID A. ROPER)
** Chief Financial Officer (Principal Financial May 14, 1997
........................................ and Accounting Officer)
(CHRISTOPHER F. VIRGULAK)
*By: /s/ MARSHALL D. GRINGAUZ
........................................
MARSHALL D. GRINGAUZ,
ATTORNEY-IN-FACT
**By: /s/ ROBERT J. SIVERD
........................................
ROBERT J. SIVERD
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
<PAGE>
SCHEDULE II
GENERAL CABLE CORPORATION AND RELATED COMPANIES
VALUATION AND QUALIFYING ACCOUNTS
ACCOUNTS RECEIVABLE ALLOWANCES
(IN MILLIONS)
<TABLE>
<CAPTION>
PREDECESSOR
--------------- FOR THE YEARS
FOR THE PERIOD FOR THE PERIOD ENDED DECEMBER 31,
JANUARY 1, 1994 JUNE 9, 1994 TO ----------------------------------------
TO JUNE 8, 1994 DECEMBER 31, 1994 1995 1996
--------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Accounts Receivable Allowances:
Beginning balance..................... $10.2 $10.2 $ 10.7 $8.1
Provision........................ .6 .9 .7 1.3
Write-offs....................... (.6) (.4) (3.3) (1.0)
------ ------ ------ -----
Ending balance........................ $10.2 $10.7 $ 8.1 $8.4
------ ------ ------ -----
------ ------ ------ -----
</TABLE>
S-1
STATEMENT OF DIFFERENCES
The trademark symbol shall be expressed as................................ 'tm'
The registered trademark symbol shall be expressed as..................... 'r'
The dagger symbol shall be expressed as................................... 'D'
The double dagger symbol shall be expressed as............................ 'DD'
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION
16,900,000 Shares
COMMON STOCK
($.01 Par Value)
U.S. UNDERWRITING AGREEMENT
, 1997
<PAGE>
<PAGE>
U.S. UNDERWRITING AGREEMENT
, 1997
DILLON, READ & CO. INC.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
as Managing Underwriters
c/o DILLON, READ & CO. INC.
535 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Wassall Netherlands Cable B.V., a Netherlands corporation (the
"Selling Stockholder"), proposes to sell to the U.S. Underwriters named in
Schedule A annexed hereto (the "Underwriters"), for whom Dillon, Read & Co. Inc.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as Managing
Underwriters (collectively, the "Managing Underwriters"), an aggregate of
13,520,000 shares (the "U.S. Firm Shares") of Common Stock, par value $.01 per
share (the "Common Stock"), of General Cable Corporation, a Delaware corporation
(the "Company").
It is understood and agreed to by all parties that the Company
and the Selling Stockholder are concurrently entering into an agreement (the
"International Underwriting Agreement", and together with this Agreement, the
"Underwriting Agreements") providing for the sale by the Selling Stockholder of
an aggregate of 3,380,000 shares of Common Stock (the "International Firm
Shares"), through arrangements with certain underwriters outside the United
States (the "International Underwriters") for whom Dillon, Read & Co. Inc.,
Merrill Lynch International and Swiss Bank Corporation (through its division
SBC Warburg) are acting as International Managing Underwriters (collectively,
the "International Managing Underwriters"). Anything herein or therein to the
contrary notwithstanding, the respective closings under this Agreement and the
International Underwriting Agreement are hereby expressly made conditional on
one another. The Underwriters and the International Underwriters are
simultaneously entering into an Agreement Between the U.S. Underwriters and
the International Underwriters (the "Agreement Between Underwriters") which
provides, among other things, for the transfer of shares of Common Stock
between the two syndicates and for consultation by the International Managing
Underwriters with the Managing Underwriters. Two forms of prospectus are to be
used in connection with the offering and sale of shares of Common Stock
contemplated by the foregoing, one relating to the U.S. Shares (as defined
below) and the other relating to the International Shares (as defined below).
The latter form of prospectus will be identical to the former except for certain
alternate pages as included in the registration statement and amendments
thereto as mentioned below.
In addition, solely for purposes of covering over-allotments, the
Selling Stockholder proposes to grant to the Underwriters an option to purchase
from the Selling Stockholder up to an ag-
<PAGE>
<PAGE>
gregate of 2,535,000 additional shares of Common Stock (the "Additional
Shares"). The U.S. Firm Shares and the International Shares are hereinafter
sometimes collectively referred to as the "Firm Shares"; the U.S. Firm Shares
and the Additional Shares are hereinafter sometimes collectively referred to as
the "U.S. Shares"; and the U.S. Shares and the International Shares are
hereinafter sometimes collectively referred to as the "Shares." References
herein to any prospectus, whether in preliminary or final form, and whether
amended or supplemented, shall include both the international and U.S. versions
thereof.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (Registration No. 333-22961),
including a prospectus, relating to the Shares. The Company has furnished to the
Managing Underwriters, for use by the Underwriters and by dealers, copies of one
or more preliminary prospectuses (each thereof being herein called a
"Preliminary Prospectus") relating to the Shares. Except as specified, the
registration statement as in effect at the time of execution of this Agreement
or, if the registration statement is not yet effective, as amended when it
becomes effective, including all financial schedules and exhibits thereto filed
as a part thereof, together with any registration statement filed pursuant to
Rule 462(b) under the Act, and including any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 424(b) under
the Act and deemed to be part of such registration statements at the time of
effectiveness pursuant to Rule 430A under the Act, is herein called the
"Registration Statement," and the prospectus, in the form filed by the Company
with the Commission pursuant to Rule 424(b) under the Act (or, if no such filing
is required, the form of final prospectus included in the Registration Statement
at the time it became effective), is herein called the "Prospectus."
The Company, the Selling Stockholder and the Underwriters agree
as follows:
1. Sale and Purchase. The Selling Stockholder agrees to sell to
the several Underwriters and, upon the basis of the representations and
warranties and the other terms and conditions herein set forth, each of the
Underwriters, severally and not jointly, agrees to purchase from the Selling
Stockholder the respective number of U.S. Firm Shares set forth opposite the
name of such Underwriter in Schedule A hereto, at a purchase price of $[ ] per
Share. The Managing Underwriters may release the U.S. Firm Shares for public
sale promptly after this Agreement becomes effective. The Managing Underwriters
may from time to time increase or decrease the public offering price after the
initial public offering to such extent as the Managing Underwriters may
determine.
In addition, the Selling Stockholder hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and the other terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Selling Stockholder all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
U.S. Firm Shares, at the same purchase price per share to be paid by the several
Underwriters and the International Underwriters to the Selling Stockholder for
the Firm Shares. This option may be exercised in whole or in part (but not more
than once) on or before the thirtieth day following the date hereof, by written
notice to the Selling Stockholder, with a copy to the Company. Any such notice
shall set forth the aggregate number of
-2-
<PAGE>
<PAGE>
Additional Shares as to which the option is being exercised, and the date and
time when the Additional Shares are to be delivered (any such date and time
being herein referred to as the "additional time of purchase"); provided,
however, that the additional time of purchase shall not occur earlier than the
time of purchase (as defined below) nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
eighth business day after the date on which the option shall have been
exercised. The number of Additional Shares to be sold to each Underwriter at the
additional time of purchase shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased at the additional
time of purchase as the respective number of U.S. Firm Shares set forth opposite
the name of such Underwriter on Schedule A hereto bears to the total number of
U.S. Firm Shares (subject, in each case, to such adjustment as the Managing
Underwriters may determine to eliminate fractional shares). As used herein,
"business day" shall mean a day on which the New York Stock Exchange is open for
trading.
2. Payment and Delivery. Payment of the purchase price for the
U.S. Firm Shares shall be made to the Selling Stockholder by wire transfer of
immediately available funds, at the office of Dillon, Read & Co. Inc. in New
York City, or at such other place as may be agreed to by the Managing
Underwriters, the Company and the Selling Stockholder, against delivery of the
certificates for the U.S. Firm Shares to the Managing Underwriters for the
respective accounts of the Underwriters. Such payment and delivery shall be made
at 9:30 A.M., New York City time, on May , 1997 (unless another time shall be
agreed to by the Managing Underwriters, the Company and the Selling Stockholder
or unless postponed in accordance with the provisions of Section 9(e)). The time
at which such payment and delivery are actually made is hereinafter sometimes
called the "time of purchase." Certificates for the U.S. Firm Shares shall be
delivered to the Managing Underwriters in definitive form in such names and in
such denominations as the Managing Underwriters shall specify on the second
business day preceding the time of purchase. For the purpose of expediting the
checking of the certificates for the U.S. Firm Shares by the Managing
Underwriters, the Selling Stockholder and the Company agree to make such
certificates available to the Managing Underwriters for such purpose at least
one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares to be
purchased by the Underwriters shall be made at the additional time of purchase
in the same manner and at the same office as the payment for the U.S. Firm
Shares unless otherwise agreed to by the Managing Underwriters and the Company.
Certificates for the Additional Shares shall be delivered to the Managing
Underwriters in definitive form in such names and in such denominations as the
Managing Underwriters shall specify on the second business day preceding the
additional time of purchase. For the purpose of expediting the checking of the
certificates for such Additional Shares by the Managing Underwriters, the
Selling Stockholder and the Company agree to make such certificates available to
the Managing Underwriters for such purpose at least one full business day
preceding the additional time of purchase.
3. Representations and Warranties of the Company. The Company
represents and warrants to each of the Underwriters that:
(a) Each Preliminary Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the
-3-
<PAGE>
<PAGE>
Act, complied as to form when so filed in all material respects with the
Act; when the Registration Statement or any amendment or supplement
thereto was or is declared effective by the Commission (the "Effective
Time"), at the time of purchase and at the additional time of purchase,
the Registration Statement and the Prospectus, and any supplements or
amendments thereto, complied and will comply as to form in all material
respects with the provisions of the Act; and neither the Registration
Statement nor any supplement or amendment thereto, at any such time,
contained or will contain an untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
neither the Prospectus nor any supplement or amendment thereto, at any
such time, contained or will contain an untrue statement of a material
fact or omitted or will omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representation or warranty
with respect to any statement contained in the Registration Statement or
the Prospectus in reliance upon and in conformity with information
concerning the Underwriters furnished in writing by or on behalf of any
Underwriter through the Managing Underwriters to the Company expressly
for use in the Registration Statement or the Prospectus and set forth in
the seventh and twentieth paragraphs of the section of the Registration
Statement and the Prospectus entitled "Underwriting."
(b) As of the date of this Agreement, the Company has an
authorized capitalization as set forth under the column entitled "March
31, 1997 Actual" in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and, as of the time of purchase,
the capitalization of the Company will be as set forth under the column
entitled "March 31, 1997 As Adjusted" in the section of the Registration
Statement and the Prospectus entitled "Capitalization." All of the
issued and outstanding shares of capital stock of the Company (including
the Shares) have been duly authorized and validly issued, are fully paid
and nonassessable and are free of statutory and contractual preemptive
rights and are free and clear of any pledge, lien, encumbrance, security
interest or other claim. As of the date of this Agreement, there are
24,250,000 shares of Common Stock outstanding, all of which are owned by
the Selling Stockholder. The capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus under the
caption "Description of Capital Stock"; and the certificates for the
Shares are in due and proper form and the holders of the Shares after
making payment therefor will not be subject to personal liability by
reason of being such holders.
(c) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware with all requisite power and authority to (i) own its
properties and conduct its business as described in the Registration
Statement and the Prospectus and (ii) execute and deliver this
Agreement.
(d) All of the issued and outstanding shares of capital stock of
each of the subsidiaries of the Company (the "Subsidiaries") other than
General Photonics LLC are owned directly by the Company or another
subsidiary of the Company; all of such shares have been
-4-
<PAGE>
<PAGE>
duly authorized and validly issued and are fully paid and nonassessable
and, except as described in the Prospectus, are owned free and clear of
any pledge, lien, encumbrance, security interest or other claim; there
are no outstanding rights, subscriptions, warrants, calls, preemptive
rights, options or other agreements of any kind with respect to the
capital stock of any of the Subsidiaries.
(e) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation, with all requisite power and
authority to own its respective properties and to conduct its respective
businesses.
(f) Each of the Company and each of the Subsidiaries is duly
qualified or licensed by, and is in good standing in, each jurisdiction
in which it owns or leases property or conducts its business and in each
other jurisdiction in which the failure, individually or in the
aggregate, to be so qualified or licensed could, singly or in the
aggregate, reasonably be expected to have a material adverse effect on
the properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries taken
as a whole (a "Material Adverse Effect"). Each of the Company and each
of the Subsidiaries is in compliance with the laws, orders, rules,
regulations and directives of any federal, state, local or foreign
government or regulatory authority, agency or commission, including
courts of competent jurisdiction (collectively, "Governmental
Authority"), applicable to the Company, except for such failure to be in
compliance as could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(g) Neither the Company nor any of the Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice,
lapse of time or both would constitute a breach of, or default under),
(x) its charter or bylaws, or (y) in the performance or observance of
any obligation, agreement, covenant or condition contained in any
license, indenture, lease, mortgage, deed of trust, bank loan or credit
agreement, material supply or distribution agreement or other agreement
or instrument to which the Company or any of the Subsidiaries is a party
or by which any of them may be bound or affected, which, in the case of
clause (y), breach or default could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. None of the
execution, delivery and performance of this Agreement or the
International Agreement or the consummation of the transactions
contemplated hereby or thereby will conflict with, or result in any
breach of or constitute a default under (nor constitute any event which
with notice, lapse of time or both would constitute a breach of, or
default under), (i) the charter or bylaws of the Company or any of the
Subsidiaries, (ii) any provision of any license, indenture, lease,
mortgage, deed of trust, bank loan or credit agreement, material supply
or distribution agreement or any other agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which any of
them or their properties may be bound or affected, (iii) any federal,
state, local or foreign law, regulation or rule or (iv) any decree,
judgment or order applicable to the Company or any of the Subsidiaries
except, with respect to clauses (ii), (iii) and (iv), for such
conflicts, breaches or defaults
-5-
<PAGE>
<PAGE>
that could not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(h) Each of this Agreement and the International Underwriting
Agreement has been duly authorized, executed and delivered by the
Company.
(i) No approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the sale of the Shares as contemplated hereby, other than
registration of the Shares under the Act and the registration of the
Common Stock under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), clearance of the offering of the Shares with the
National Association of Securities Dealers, Inc. (the "NASD") and any
necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters or by the International Underwriters.
(j) No person has the right, contractual or otherwise, to cause
the Company to issue to it, or register pursuant to the Act, any
securities of the Company by reason of the sale of the Shares to the
Underwriters hereunder or to the International Underwriters under the
International Underwriting Agreement.
(k) Deloitte & Touche LLP, whose reports on the combined and
consolidated financial statements of the Company and the Subsidiaries
are included in the Registration Statement and the Prospectus, are
independent public accountants with respect to the Company as required
by the Act and the applicable published rules and regulations
thereunder.
(l) All legal or governmental proceedings, contracts or documents
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed as required.
(m) There is no action, suit or proceeding (collectively, the
"Legal Proceedings") pending or, to the Company's knowledge, threatened
against the Company or any of the Subsidiaries or any of their
properties, at law or in equity, or before or by any Governmental
Authority, other than Legal Proceedings disclosed in the Prospectus and
Legal Proceeding that could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(n) The audited and unaudited financial statements (including the
notes thereto) included in the Registration Statement and the Prospectus
present fairly the combined or consolidated financial position of the
Company and the Related Companies (as defined therein) as of the dates
indicated and the combined or consolidated results of operations and
cash flows of the Company and the Related Companies or the Company's
predecessor and subsidiaries, as the case may be, and the consolidated
stockholders' equity of the Company's predecessor and subsidiaries, in
each case for the periods specified; such financial statements have
-6-
<PAGE>
<PAGE>
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved,
except as disclosed therein.
(o) The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in the
Registration Statement and the Prospectus have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly computed on the
bases described therein. The assumptions used in the preparation of the
pro forma financial statements and other pro forma information in the
Registration Statement and the Prospectus are set forth therein and are
reasonable, and the adjustments used therein are appropriate to give pro
forma effect to the transactions or circumstances referred to therein.
The other financial and statistical information and data relating to the
Company set forth in the Registration Statement and the Prospectus have
been prepared on a basis consistent with the financial statements and
books and records of the Company. The other statistical and
market-related data set forth in the Registration Statement and the
Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
may be otherwise stated in the Registration Statement and the
Prospectus, there has not been: (A) any material adverse change in the
properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries taken
as a whole; (B) any transaction that is material to the Company and the
Subsidiaries taken as a whole, entered into by the Company or any of the
Subsidiaries; or (C) any obligation, contingent or otherwise, directly
or indirectly incurred by the Company or any of the Subsidiaries that is
material to the Company and the Subsidiaries taken as a whole.
(q) Neither the Company nor any of the Subsidiaries has violated
any foreign, federal, state or local law, regulation, decree, order,
directive, requirement or judgment applicable to the Company or any of
the Subsidiaries relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), nor any federal or state law
relating to discrimination in the hiring, promotion or pay of employees
nor any applicable federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act or the rules
and regulations promulgated thereunder, and neither the Company nor any
of the Subsidiaries has received any notice which is pending alleging
any violation thereof or liability thereunder, which in any case could,
singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(r) The Company and each of the Subsidiaries has such permits,
licenses, consents, approvals, franchises and authorizations required by
governmental or regulatory authorities ("Permits"), and has made all
filings required, including without limitation under any applicable
Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its business, except for such
Permits the failure to so hold could not,
-7-
<PAGE>
<PAGE>
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect ("Material Permits"). The Company and each of the
Subsidiaries is not in material violation of, and has fulfilled and
performed all of its material obligations with respect to, its Material
Permits and the Company has not received notice from any Governmental
Authority of the revocation or termination, or threatened revocation or
termination, of any Material Permits or any other material impairment of
the rights of the holder of any Material Permit; and, except as
described in the Prospectus, the Material Permits contain no
restrictions that are materially burdensome to the Company or any of the
Subsidiaries.
(s) Compliance by the Company and the Subsidiaries with
Environmental Laws (as currently in effect), including any capital or
operating expenditure required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities, singly or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(t) Neither the Company nor any of the Subsidiaries, nor, to the
Company's knowledge, any employee of the Company or any of the
Subsidiaries, has made any payment of funds of the Company or any of the
Subsidiaries prohibited by applicable law, and no funds of the Company
or any of the Subsidiaries have been set aside to be used for any
payment prohibited by applicable law.
(u) The Company and the Subsidiaries have filed all federal or
state income or franchise tax returns required to be filed and have paid
all taxes shown thereon as due and required to have been paid except for
tax assessments, if any, as to which adequate reserves have been
provided in accordance with generally accepted accounting principles.
There is no material tax deficiency which has been asserted against the
Company or any of the Subsidiaries. All material tax liabilities are
adequately provided for on the books of the Company and the
Subsidiaries.
(v) Each of the Company and the Subsidiaries owns or possesses
sufficient licenses or other rights to use all patents, patent
applications, trademarks, trademark applications, service marks, service
mark applications, trade names, copyrights, inventions, trade secrets,
technology and know-how (collectively, "Intellectual Property Rights")
required in the conduct of its business as described in the Prospectus.
To the Company's knowledge, there are no rights of third parties to, or
any infringement by others of, any such Intellectual Property Rights,
and there is not pending or, to the Company's knowledge, threatened any
action, suit, proceeding or claim by others that the Company or any
Subsidiary is infringing or otherwise violating Intellectual Property
Rights of others or challenging the validity or scope of the rights of
the Company or any Subsidiary in or to any such Intellectual Property
Rights other than infringements or claims that could not, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(w) The Company has not incurred, and will not incur, any
liability for any finder's fees or similar payments in connection with
the transactions herein contemplated.
-8-
<PAGE>
<PAGE>
(x) The Company and the Subsidiaries have good title to all
properties and assets owned or leased by them, in each case free and
clear of all liens, security interests, pledges, charges, encumbrances,
mortgages and defects, except such as are described or referred to in
the Registration Statement and the Prospectus or such as could not,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(y) Neither the Company nor any of the Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or is subject to regulation under such act.
(z) Neither the Company nor any of its officers, directors or
affiliates (within the meaning of the Act) has taken, directly or
indirectly, any action designed to stabilize or manipulate the price of
the Common Stock, or which has constituted or which might in the future
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock, to facilitate the sale or
resale of the Shares or otherwise.
(aa) The Company and each of the Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as the
Company reasonably believes is adequate for the conduct of their
respective businesses and the value of their respective properties.
(bb) No labor disturbance by the employees of the Company or any
of the Subsidiaries exists or, to the Company's knowledge, is threatened
which could, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
4. Representations and Warranties of the Selling Stockholder. The
Selling Stockholder represents and warrants to each Underwriter that:
(a) The Selling Stockholder is and at the time of delivery of the
Shares as contemplated by the Underwriting Agreements will be the lawful
owner of the Shares and, at the time of delivery thereof, will have good
and marketable title to the Shares, and upon delivery of and payment for
the Shares in accordance with the Underwriting Agreements, the
Underwriters will acquire good and marketable title to the Shares, free
and clear of any claim, lien, encumbrance, security interest,
restriction on transfer or other defect in title.
(b) The Selling Stockholder has and at the time of delivery of
the Shares will have all requisite power and authority to sell, assign,
transfer and deliver the Shares in the manner provided in the
Underwriting Agreements.
(c) Each of the Underwriting Agreements has been duly authorized,
executed and delivered by the Selling Stockholder and Wassall PLC
("Wassall").
(d) The sale of the Shares by the Selling Stockholder pursuant
hereto is not prompted by any material and adverse information
concerning the Company that is not described in the Prospectus; to the
Selling Stockholder's knowledge, neither the Registration Statement nor
any supplement or amendment thereto, at
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<PAGE>
<PAGE>
the Effective Time, at the time of purchase or at the additional time of
purchase, contained or will contain any untrue statement of material
fact or omitted or will omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and neither the Prospectus nor any supplement or amendment
thereto, at the Effective Time, at the time of purchase or at the
additional time of purchase, contained or will contain any untrue
statement of material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Selling Stockholder makes no
representation or warranty with respect to any statement contained in
the Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning the Underwriters furnished in
writing by or on behalf of any Underwriter through the Managing
Underwriters to the Company expressly for use in the Registration
Statement or the Prospectus and set forth in the seventh and twentieth
paragraphs of the section of the Registration Statement and the
Prospectus entitled "Underwriting."
(e) The consummation of the transactions contemplated hereby and
by the International Underwriting Agreement and the fulfillment of the
terms hereof and thereof will not conflict with, or result in any breach
of or constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of or default
under), (i) the Articles of the Selling Stockholder, (ii) any provision
of any license, indenture, lease, mortgage, deed of trust, bank loan or
credit agreement or any other material agreement or instrument to which
the Selling Stockholder is a party or by which the Selling Stockholder
or any of its properties may be bound or affected, (iii) any federal,
state, local or foreign law or regulation or (iv) any decree, judgment
or order binding on the Selling Stockholder except, with respect to
clauses (ii), (iii) and (iv), for such conflicts, breaches or defaults
that would not materially impair or delay the ability of the Selling
Stockholder to consummate the transactions contemplated by the
Underwriting Agreements.
(f) Neither the Selling Stockholder nor any of its officers,
directors or affiliates (within the meaning of the Act) has taken,
directly or indirectly, any action designed to stabilize or manipulate
the price of the Common Stock, or which has constituted or which might
in the future reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Stock, to facilitate the sale
or resale of the Shares or otherwise.
(g) The Shares do not constitute a "United States real property
interest" as defined in U.S. Internal Revenue Code section 897(c)(1).
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as the Managing Underwriters
may designate and to maintain such qualifications in effect as long as
required for the distribution of the Shares; provided, however, that the
Company shall not be required to qualify as a foreign corporation or to
consent to the service of process un-
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der the laws of any such state (except service of process with respect
to the offering and sale of the Shares); promptly to advise the Managing
Underwriters of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to obtain the withdrawal of
any order of suspension at the earliest practicable time;
(b) to make available to the Managing Underwriters in New York
City, as soon as practicable after the Registration Statement becomes
effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendment or
supplement thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes contemplated
by the Act;
(c) to advise the Managing Underwriters promptly and if requested
by the Managing Underwriters to confirm such advice in writing, (i) when
the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective and (ii) when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act, if required under the Act (which the Company agrees to file in
a timely manner under such Rule);
(d) to advise the Managing Underwriters promptly, confirming such
advice in writing, of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information with respect thereto, or of notice of institution
of proceedings for or the entry of a stop order suspending the
effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the lifting or
removal of such order as soon as possible; to advise the Managing
Underwriters promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus and to file no such amendment
or supplement to which the Managing Underwriters shall reasonably object
in writing;
(e) to furnish to the Managing Underwriters and, upon request to
each of the other Underwriters, for a period of five years from the date
of this Agreement (i) copies of all reports or other communications that
the Company shall send to its stockholders and (ii) copies of all
annual, quarterly and current reports filed with the Commission on Forms
10-K, 10-Q and 8-K, or such other similar form as may be designated by
the Commission, and any other document filed by the Company pursuant to
Section 12, 13, 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(f) to advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a prospectus
relating to the Shares is required to be delivered under the Act that,
in the reasonable judgment of the Company, would require the making of
any change in the Prospectus then being used, so that the Prospectus, as
then
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supplemented, would not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading and, during such time, promptly to prepare and furnish,
at the Company's expense, to the Underwriters such amendments or
supplements to such Prospectus as may be necessary to reflect any such
change, in such quantities as requested by the Underwriters, and to
furnish to the Managing Underwriters a copy of such proposed amendment
or supplement before filing any such amendment or supplement with the
Commission;
(g) to make generally available to its security holders, and to
deliver to the Managing Underwriters, an earnings statement of the
Company (which need not be audited and which will satisfy the provisions
of Section 11(a) of the Act including, at the option of the Company,
Rule 158) covering a period of 12 months beginning after the effective
date of the Registration Statement but ending not later than 15 months
after the date of the Registration Statement, as soon as is reasonably
practicable after the termination of such 12-month period;
(h) to furnish to each of the Managing Underwriters and their
counsel copies of the Registration Statement, as initially filed with
the Commission, and of all amendments thereto (including all exhibits
thereto) and sufficient copies of the foregoing (other than exhibits)
for distribution of a copy to each of the other Underwriters;
(i) to furnish to the Managing Underwriters as early as
practicable prior to the time of purchase and the additional time of
purchase, as the case may be, but not later than two business days prior
thereto, a copy of the latest available unaudited interim consolidated
financial statements, if any, of the Company and the Subsidiaries that
have been read by the Company's independent certified public accountants
as stated in their letter to be furnished pursuant to Section 8(b);
(j) to use its best efforts to cause the Shares to be listed on
the New York Stock Exchange;
(k) not to offer, sell, contract to sell, pledge, grant any
option to purchase, transfer or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or warrants or other rights
to purchase or acquire Common Stock or permit the registration under the
Act of any shares of Common Stock, except for the registration of the
Shares, for a period commencing on the date hereof and continuing for
180 days after the date of the Prospectus, without the prior written
consent of Dillon, Read & Co. Inc.; provided, however, that the
foregoing shall not prohibit the grant or issuances of options and
restricted shares (and shares in the care of directors) of Common Stock,
in each case, to officers, directors and employees of the Company
pursuant to director and employee stock plans described in the
Prospectus.
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6. Certain Covenants of the Selling Stockholder. The Selling
Stockholder agrees:
(a) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement otherwise becomes effective
or is terminated, to pay all expenses, fees and taxes (other than (x)
any transfer taxes and (y) fees and disbursements of counsel for the
Underwriters except as set forth under Section 7 and clauses (ii) and
(iii) below) in connection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospectus, the Prospectus and
any amendment or supplement thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including
costs of mailing and shipment), (ii) the word processing or printing of
this Agreement, the Agreement Between Underwriters, any dealer
agreements, and the reproduction or printing and furnishing of copies of
each thereof to the Managing Underwriters and to dealers (including
costs of mailing and shipment), (iii) the qualification of the Shares
for offering and sale under state laws as aforesaid (including
reasonable legal fees and filing fees and other disbursements of counsel
for the Underwriters) and the printing and furnishing of copies of any
blue sky surveys to the Managing Underwriters and to dealers, (iv) any
listing of the Shares on any securities exchange or qualification of the
Shares for inclusion in the Nasdaq National Market and any registration
thereof under the Exchange Act, (v) any filing for review of the public
offering of the Shares by the NASD and (vi) the performance of the
Company's and the Selling Stockholder's other obligations hereunder; and
(b) the Selling Stockholder will not offer, sell, contract to
sell, pledge, grant any option to purchase, transfer or otherwise
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or warrants or other rights to purchase or acquire Common Stock,
except for the sale of the Shares pursuant to this Agreement and the
International Underwriting Agreement, for a period commencing on the
date hereof and continuing for 180 days after the date of the
Prospectus, without the prior written consent of Dillon, Read & Co. Inc.
7. Reimbursement of Underwriters' Expenses. If the Firm Shares or
the Additional Shares are not delivered for any reason, other than the failure
of the Underwriters to purchase the Firm Shares or the Additional Shares (unless
such failure is permitted under the provisions of Section 9(b) of this
Agreement), the Selling Stockholder will reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
their counsel.
8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholder on the date hereof and at the time of purchase or the additional
time of purchase, as the case may be, the performance in all material respects
by each of the Company and the Selling Stockholder of its obligations hereunder
to be performed at or prior to the time of purchase or the additional time of
purchase, as the case may be, and to the following additional conditions:
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(a) The Company shall furnish to the Managing Underwriters at the
time of purchase and at the additional time of purchase, as the case may
be, an opinion of Weil, Gotshal & Manges LLP, special counsel for the
Company and the Selling Stockholder, addressed to the Underwriters and
dated the time of purchase or the additional time of purchase, as the
case may be, with reproduced copies for each of the other Underwriters
and in form reasonably satisfactory to Cahill Gordon & Reindel, counsel
for the Underwriters, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with all requisite corporate power and
authority (A) to own its properties and conduct its business as
described in the Registration Statement and the Prospectus and
(B) to execute and deliver this Agreement and the International
Underwriting Agreement;
(ii) each of the Underwriting Agreements has been duly
authorized, executed and delivered by the Company and Wassall;
(iii) the certificates for the Shares are in due and proper
form and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(iv) (a) the Company has an authorized capitalization as
set forth under the heading "Capitalization" in the Registration
Statement and the Prospectus, and (b) the outstanding shares of
capital stock of the Company (including the Shares) have been
duly authorized and validly issued and are fully paid and
nonassessable and have not been issued in violation of any
preemptive rights under the Company's certificate of
incorporation or under the Delaware General Corporation Law;
(v) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus under
the caption "Description of Capital Stock";
(vi) the Registration Statement and the Prospectus (except
as to the financial statements and schedules and other financial,
statistical and accounting data contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act;
(vii) the Registration Statement has become effective under
the Act and no stop order proceedings with respect thereto are
pending or, to the best of such counsel's knowledge, threatened
under the Act;
(viii) no approval, authorization, consent or order of or
filing with any New York, Delaware corporate or federal
Governmental Authority is required in connection with the sale of
the Shares as contemplated hereby or by the International
Underwriting Agreement other than filings and other actions
required pursuant to federal
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<PAGE>
and state securities and blue sky laws, as to which we express no
opinion, and the Act or the Exchange Act and the rules and
regulations promulgated thereunder;
(ix) the execution, delivery and performance of the
Underwriting Agreements by the Company and the consummation by
the Company of the transactions contemplated hereby do not and
will not conflict with, or result in any breach of, or constitute
a default under (nor constitute any event which with notice,
lapse of time or both would constitute a breach of or default
under), (i) the charter or bylaws of the Company, (ii) any
provision of any agreement or instrument evidencing or governing
indebtedness for borrowed money or any other material agreement
or instrument known to such counsel to which the Company is a
party or by which the Company or any of its properties is bound,
or (iii) any New York, Delaware corporate or federal law or
regulation or (iv) any decree, judgment or order applicable to
the Company of which such counsel is aware;
(x) the statements in the Registration Statement and the
Prospectus under the captions "Description of Capital Stock,"
"Shares Eligible For Future Sale" and "Certain U.S. Federal Tax
Consequences to Non-U.S. Holders of Common Stock," insofar as
they are descriptions of laws, regulations and rules, or of
contracts, agreements and other legal documents, or refer to
statements of law or legal conclusions, have been reviewed by
such counsel and are accurate in all material respects;
(xi) neither the Company nor any of the Subsidiaries is an
"investment company" within the meaning of Investment Company Act
of 1940, as amended;
(xii) upon transfer and delivery of the Shares and payment
therefor in accordance with the Underwriting Agreements, the
Underwriters will acquire good and marketable title to the
Shares, free and clear of any claim, lien, encumbrance, security
interest, community property right, restriction on transfer or
other defect in title, assuming that the several Underwriters and
the several International Underwriters are good faith purchasers
and do not have notice of any adverse claim;
(xiii) no approval, authorization, consent or order of or
filing with any Governmental Authority of the United Kingdom and
no corporate action of Wassall is required, in each case, in
connection with the sale of the Shares by the Selling Stockholder
to the Underwriters as contemplated hereby or by the
International Underwriting Agreement, except such as have been
obtained and are in full force and effect and filings and other
actions that may be required pursuant to the securities laws of
the United Kingdom, as to which we express no opinion; and
(xiv) the execution, delivery and performance of the
Underwriting Agreements and the consummation of the transactions
contemplated hereby do not and will not conflict with, or result
in any breach of, or constitute a default under, (x) the
memorandum or articles of association of Wassall, (y) any decree,
judgment or order applicable to Wassall of which such counsel is
aware or (z) any United Kingdom law or regulation.
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<PAGE>
In addition, such counsel shall state that although they have not
independently verified and are not passing upon the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus (except to the extent specified in paragraphs
(v) and (x)), no facts have come to the attention of such counsel that
cause them to believe that the Registration Statement or any amendment
thereto at the time such Registration Statement or amendment became
effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus or any
supplement thereto, on the date thereof or on the date of such opinion,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express
no opinion with respect to the financial statements and related notes,
the financial statement schedules and the other financial, statistical
and accounting data included in the Registration Statement or
Prospectus).
(b) The Company shall furnish to the Managing Underwriters at the
time of purchase and at the additional time of purchase, as the case may
be, an opinion of Robert J. Siverd, Esq., General Counsel of the
Company, addressed to the Underwriters and dated the time of purchase or
the additional time of purchase, as the case may be, with reproduced
copies for each of the other Underwriters and in form reasonably
satisfactory to Cahill Gordon & Reindel, counsel for the Underwriters,
to the effect that:
(i) each of the Company and each of the Subsidiaries is
duly qualified or licensed to do business and is in good standing
as a foreign corporation in each jurisdiction in which it
conducts business or owns property and in which the failure,
singly or in the aggregate, to be so licensed or qualified could
reasonably be expected to have a Material Adverse Effect;
(ii) each of the Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under
the laws of the state in which such Subsidiary is incorporated,
with all requisite corporate power and authority to own its
properties and to conduct its business as described in the
Registration Statement and the Prospectus;
(iii) the outstanding shares of capital stock of the
Company (including the Shares) have not been issued in violation
of any preemptive rights under any agreement or arrangement known
to such counsel; all of the issued and outstanding shares of
capital stock of each Subsidiary have been duly authorized and
validly issued and are fully paid and nonassessable and, except
as described in the Prospectus, are owned, directly or
indirectly, by the Company free and clear of any pledge, lien,
encumbrance, security interest, preemptive right or other claim,
and there are no rights, warrants, options or other agreements to
acquire or instruments convertible into or exchangeable for any
shares of capital stock or other equity interest of any
Subsidiary;
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(iv) the execution, delivery and performance of the
Underwriting Agreements by the Company and the consummation by
the Company of the transactions contemplated hereby do not and
will not conflict with, or result in any breach of, or constitute
a default under (nor constitute any event which with notice,
lapse of time or both would constitute a breach of or default
under), the charter or bylaws of the Company or any of the
Subsidiaries, or any provision of any material license or any
indenture, lease, mortgage, deed of trust, bank loan or credit
agreement or any other material agreement or instrument known to
such counsel to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries or any
of their properties is bound, or under any Kentucky, Delaware
corporate or federal law, regulation or rule or any decree,
judgment or order applicable to the Company or any of the
Subsidiaries;
(v) the Company and each of the Subsidiaries has all
Material Permits, including without limitation under any
applicable Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its business in
the manner described in the Prospectus;
(vi) all contracts or documents of a character required to
be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement have been
so described or filed;
(vii) to such counsel's knowledge, no person has the right,
contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any securities of the Company in
consequence of the sale of the U.S. Shares to the Underwriters
hereunder or to the International Underwriters under the
International Underwriting Agreement;
(viii) except as described in the Registration Statement
and the Prospectus, there are no actions, suits or proceedings of
which such counsel has knowledge pending or threatened against
the Company or any of the Subsidiaries, or any of their
respective properties, at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency that individually or
in the aggregate could reasonably be expected to result in a
judgment, decree or order having a Material Adverse Effect; and
(ix) the statements in the Registration Statement and the
Prospectus under the captions "Business -- Environmental Matters"
and "Business -- Legal Proceedings," insofar as they are
descriptions of laws, regulations and rules, of legal or
governmental proceedings or of contracts, agreements and other
legal documents, or refer to statements of law or legal
conclusions, have been reviewed by such counsel and are accurate
in all material respects.
In addition, such counsel shall state that, although he has not
independently verified and is not passing upon the accuracy,
completeness or fairness of the statements contained in
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the Registration Statement or Prospectus (except to the extent specified
in paragraph (ix)), no facts have come to the attention of such counsel
that cause him to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto, on the date thereof or on the date
of such opinion, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that
such counsel need express no opinion with respect to the financial
statements and related notes, the financial statement schedules and the
other financial, statistical and accounting data included in the
Registration Statement or Prospectus).
(c) The Company shall furnish to the Managing Underwriters at the
time of purchase and at the additional time of purchase, as the case may
be, an opinion of Loeff Claeys Verbeke, special Netherlands counsel for
the Selling Stockholder, addressed to the Underwriters and dated the
time of purchase or the additional time of purchase, as the case may be,
with reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to Cahill Gordon & Reindel, counsel for the
Underwriters, to the effect that:
(i) each of the Underwriting Agreements has been duly
authorized by all requisite corporate action on the part of, and
has been duly executed and delivered by, the Selling Stockholder;
(ii) the Selling Stockholder has the corporate power to
sell, assign, transfer and deliver the Shares to be sold by the
Selling Stockholder in the manner provided in this Agreement and
the International Underwriting Agreement and to perform its
obligations thereunder;
(iii) the consummation of the transactions contemplated
hereby and by the International Underwriting Agreement and the
fulfillment of the terms hereof and of the International
Underwriting Agreement will not conflict with, or result in any
breach of, or constitute a default under (nor constitute any
event which with notice, lapse of time or both would constitute a
breach of or default under), (a) the Articles of the Selling
Stockholder, or (b) any law or regulation of The Netherlands; and
(iv) no approval, authorization, consent or order of or
filing with any governmental authority of The Netherlands, other
than pursuant to any securities law applicable in The Netherlands
and the notice requirements to the Netherlands Central Bank
pursuant to the Act on Foreign Financial Relations (Wet
Financiele Betrekkingen Buitenland) and regulations promulgated
thereunder, is required in connection with the offering and sale
of the Shares by the Selling Stockholder as contemplated by the
Underwriting Agreements.
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(d) The Company shall furnish to the Managing Underwriters at the
date of this Agreement, at the time of purchase and at the additional
time of purchase, letters from Deloitte & Touche LLP dated,
respectively, the date of this Agreement and the time of purchase and
the additional time of purchase, as the case may be, and addressed to
the Underwriters (with reproduced copies for each of the Underwriters)
in form and substance satisfactory to the Managing Underwriters.
(e) The Managing Underwriters shall have received at the time of
purchase and at the additional time of purchase, as the case may be, an
opinion from Cahill Gordon & Reindel in form and substance satisfactory
to the Managing Underwriters.
(f) No amendment or supplement to the Registration Statement or
the Prospectus shall be filed prior to the time the Registration
Statement becomes effective to which the Managing Underwriters shall
have objected in writing.
(g) The Registration Statement shall become effective at or
before 5:00 P.M., New York City time, on the date of this Agreement and,
if Rule 430A under the Act is used, the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) under the Act at or before
5:00 P.M., New York City time, on the second full business day after the
date of this Agreement; provided, however, that the Company, the Selling
Stockholder and the Managing Underwriters and any group of Underwriters,
including the Managing Underwriters, who have agreed hereunder to
purchase in the aggregate at least 50% of the Firm Shares from time to
time may agree in writing or by telephone, confirmed in writing, on a
later date.
(h) Prior to the time of purchase or the additional time of
purchase, as the case may be: (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings initiated for such purpose under Section 8(d) or
8(e) of the Act; (ii) the Registration Statement and all amendments
thereto, if any, shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto, if any, shall not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(i) Between the time of execution of this Agreement and the time
of purchase or the additional time of purchase, as the case may be,
there has not been: (i) any material and adverse change in the
properties, assets, operations, business, business prospects or
condition (financial or other) of the Company and the Subsidiaries taken
as a whole, other than as described in the Registration Statement and
the Prospectus; or (ii) any transaction that is material to the Company
and the Subsidiaries taken as a whole entered into by the Company or any
of the Subsidiaries, other than as described in the Registration
Statement and the Prospectus; or (iii) any obligation, contingent or
otherwise, directly or indirectly, incurred by the
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Company or any of the Subsidiaries that is material to the Company and
the Subsidiaries taken as a whole, other than as described in the
Registration Statement and the Prospectus.
(j) The Company, at the time of purchase or additional time of
purchase, as the case may be, shall have delivered to the Managing
Underwriters a certificate of two of its executive officers to the
effect that the representations and warranties of the Company as set
forth in this Agreement are true and correct as of each such date and
the conditions set forth in Section 8(h) and Section 8(i) have been met.
(k) The Selling Stockholder, at the time of purchase or
additional time of purchase, as the case may be, shall have delivered to
the Managing Underwriters a certificate to the effect that the
representations and warranties of the Selling Stockholder as set forth
in this Agreement are true and correct as of each such date.
(l) The Shares shall have been approved for listing on the New
York Stock Exchange.
(m) The closing of the purchase and sale of the Shares pursuant
to the International Underwriting Agreement shall occur concurrently
with the purchase and sale of the Shares hereunder.
(n) The Company shall have furnished to the Selling Stockholder
and the Managing Underwriters a certificate dated the time of purchase
(x) pursuant to U.S. Treasury Regulation section 1.897-2(g) stating that
the Shares do not constitute a United States real property interest and
(y) stating that the Company has complied with the requirements of U.S.
Treasury Regulation section 1.897-2(h)(2) or 1.897-2(h)(4) in relation
to the statement referred to in clause (x) of this paragraph.
(o) The Company and the Selling Stockholder shall have furnished
to the Managing Underwriters such other documents and certificates as
the Managing Underwriters reasonably may request.
(p) The Company and the Selling Stockholder shall have performed
such of their respective obligations under this Agreement and under the
International Underwriting Agreement as are to be performed by the terms
hereof at or before the time of purchase and at or before the additional
time of purchase, as the case may be.
9. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective (i) if Rule 430A under
the Act is not used, when the Managing Underwriters shall have received
notification of the effectiveness of the Registration Statement, or (ii)
if Rule 430A under the Act is used, when the parties hereto have
executed and delivered this Agreement.
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(b) The obligations of the several Underwriters hereunder shall
be subject to termination in the absolute discretion of the Managing
Underwriters or any group of Underwriters (which may include the
Managing Underwriters) which has agreed to purchase in the aggregate at
least 50% of the U.S. Firm Shares if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase of such Additional Shares, as the case may
be, trading in securities on the New York Stock Exchange shall have been
suspended or minimum prices shall have been established on the New York
Stock Exchange or if a banking moratorium shall have been declared
either by the United States or New York State authorities, or if the
United States shall have declared war in accordance with its
constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the
judgment of the Managing Underwriters or in the judgment of such group
of Underwriters, makes it impracticable to proceed with the offering of
the Shares as contemplated hereby. If the Managing Underwriters or any
group of Underwriters elect to terminate this Agreement as provided in
this Section 9(b), the Company and each other Underwriter shall be
notified promptly by letter or telegram.
(c) If any Underwriter shall default in its obligation to take up
and pay for the U.S. Firm Shares to be purchased by it hereunder and if
the number of U.S. Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10%
of the total number of U.S. Firm Shares, the non-defaulting Underwriters
shall take up and pay for (in addition to the aggregate principal amount
of U.S. Firm Shares they are obligated to purchase pursuant to Section
1) the number of U.S. Firm Shares agreed to be purchased by all such
defaulting Underwriters as hereinafter provided. Such Shares shall be
taken up and paid for by such non-defaulting Underwriter or Underwriters
in such amount or amounts as the Managing Underwriters may designate
with the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be taken up and paid for by
all non-defaulting Underwriters pro rata in proportion to the aggregate
number of U.S. Firm Shares set opposite the names of such non-defaulting
Underwriters in Schedule A.
(d) If any Underwriter shall default in its obligation to take up
and pay for the U.S. Firm Shares to be purchased by it hereunder and if
the number of U.S. Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for exceeds 10% of the
total number of U.S. Firm Shares, and arrangements satisfactory to the
Managing Underwriters, the Company and the Selling Stockholder are not
made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter.
(e) Without relieving any defaulting Underwriter from its
obligations hereunder, the Selling Stockholder agrees with the
non-defaulting Underwriters that it will not sell any U.S. Firm Shares
hereunder unless all of the Firm Shares are purchased by the
Underwriters and the International Underwriters (or by substituted
underwriters selected by the Managing
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<PAGE>
<PAGE>
Underwriters with the approval of the Selling Stockholder or selected by
the Selling Stockholder with the approval of the Managing Underwriters
pursuant to Section 9(d)). If a new Underwriter or Underwriters are
substituted for a defaulting Underwriter or Underwriters in accordance
with Section 9(d) hereof or Section 7(d) of the International
Underwriting Agreement, the Selling Stockholder or the Managing
Underwriters shall have the right to postpone the time of purchase for a
period not exceeding five business days in order that any necessary
change in the Registration Statement and the Prospectus and other
documents may be effected. The term Underwriter as used in this
Agreement shall refer to and include any Underwriter substituted under
this Section 9 with like effect as if such substituted Underwriter had
originally been named in Schedule A.
(f) If the purchase of the Shares by the Underwriters, as
contemplated by this Agreement or the International Underwriting
Agreement, is not consummated for any reason permitted under this
Agreement or if such purchase is not consummated because the Company or
the Selling Stockholder shall be unable to comply with any of the terms
of this Agreement or the International Underwriting Agreement, the
Company and the Selling Stockholder shall not be under any obligation or
liability under this Agreement (except to the extent provided in
Sections 6(a), 7 and 10), and the Underwriters shall be under no
obligation or liability to the Company or the Selling Stockholder under
this Agreement (except to the extent provided in Section 10).
10. Indemnity by the Company, the Selling Stockholder and the
Underwriters.
(a) The Company and the Selling Stockholder, jointly and
severally, agree to indemnify, defend and hold harmless each
Underwriter, each person that controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
each Underwriter's agents, employees, officers and directors and the
agents, employees, officers and directors of any such controlling person
(collectively, the "Underwriter indemnified parties") from and against
any and all losses, claims, damages, judgments, liabilities and expenses
(including the reasonable cost of investigation) which, jointly or
severally, any Underwriter indemnified party may incur as they are
incurred (and regardless of whether such Underwriter indemnified party
is a party to the litigation, if any) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
contained in the registration statement relating to the Shares or the
Prospectus or any Preliminary Prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
judgments, liabilities or expenses arise out of, or are based upon, any
such untrue statement or omission or alleged untrue statement or
omission based upon and in conformity with information with respect to
any Underwriter furnished in writing by any Underwriter through the
Managing Underwriters to the Company expressly for use therein with
reference to such Underwriter; provided, however, that the Selling
Stockholder shall not be liable under this Section 10 in an amount
exceeding the net proceeds to be received by such Selling Stockholder
(before deducting expenses) from the sale of Shares hereunder.
Notwithstanding the foregoing, the indemnification contained in this
paragraph
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<PAGE>
<PAGE>
with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter indemnified party for any liability arising
from or based upon an untrue statement or omission made in a Preliminary
Prospectus if (i) it is established in the related proceeding that such
Underwriter failed to send or give a copy of the Prospectus (as amended
or supplemented if the Company shall have furnished such amendments or
supplements thereto to such Underwriter reasonably prior to the written
confirmation of such sale) to such person with or prior to the written
confirmation of such sale, if required by applicable law, and (ii) such
untrue statement or omission of a material fact in or from such
Preliminary Prospectus was corrected in the Prospectus (as amended or
supplemented if amended or supplemented as aforesaid). This indemnity
agreement will be in addition to any liability the Company or the
Selling Stockholder otherwise may have.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter indemnified party, with respect to which
indemnity may be sought against the Company or the Selling Stockholder
pursuant to this Section 10, such Underwriter indemnified party shall
promptly notify the Company and the Selling Stockholder in writing, and
the Company and/or the Selling Stockholder (as they determine between
themselves in their discretion) shall assume the defense thereof
(individually or collectively, the "Defending Party"), including the
employment of counsel reasonably satisfactory to the Underwriter
indemnified party and payment of all fees and expenses; provided,
however, at the omission so to notify the Company and the Selling
Stockholder shall not relieve them from any liability that they may have
to any Underwriter indemnified party except to the extent that the
indemnifying party is materially prejudiced thereby. An Underwriter
indemnified party shall have the right to employ separate counsel in any
such action or proceeding and to assume the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Underwriter indemnified party unless (i) the employment of such counsel
has been authorized in writing by the Defending Party, (ii) the
Defending Party has failed promptly to assume the defense and employ
counsel reasonably satisfactory to the Underwriter indemnified party or
(iii) the named parties to any such action or proceeding (including any
impleaded parties) include both the Underwriter indemnified party and
the Defending Party and such Underwriter indemnified party shall have
reasonably concluded that there may be one or more legal defenses
available to it that are different from or additional to those available
to the Defending Party (in which case the Defending Party shall not have
the right to assume the defense of such action on behalf of such
Underwriter indemnified party), in any of which events such fees and
expenses shall be borne by the Defending Party and reimbursed as they
are incurred. It is understood, however, that the Defending Party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for all such Underwriter
indemnified parties, which firm shall be designated in writing by
Dillon, Read & Co. Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. The Company and the Selling Stockholder
shall not be liable for any settlement of any such action effected
without the written consent of the Defending Party (which consent shall
not be unreasonably
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<PAGE>
<PAGE>
withheld or delayed), but if settled with the written consent of the
Defending Party, or if there is a final judgment with respect thereto,
the Company and the Selling Stockholder agree to indemnify and hold
harmless each Underwriter indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the
Registration Statement, and any person that controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, the "Company indemnified parties") and the Selling
Stockholder, its directors and any person that controls the Selling
Stockholder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act (collectively, the "Selling Stockholder indemnified
parties") to the same extent as the foregoing indemnity from the Company
and the Selling Stockholder to the Underwriter indemnified parties, but
only with respect to information concerning such Underwriter furnished
in writing by or on behalf of such Underwriter through the Managing
Underwriters to the Company expressly for use with respect to such
Underwriter in the Registration Statement, any Preliminary Prospectus or
the Prospectus. In case any action shall be brought against any Company
indemnified party or the Selling Stockholder based on the Registration
Statement, any Preliminary Prospectus or the Prospectus and in respect
of which indemnity may be sought against any Underwriter pursuant to
this Section 10(c), such Underwriter shall have the rights and duties
given to the Company and the Selling Stockholder by Section 10(b)
(except that if the Company and/or the Selling Stockholder shall have
assumed the defense thereof such Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the
defense thereof, provided, however, that the fees and expenses of such
separate counsel shall be at the expense of such Underwriter), and the
Company indemnified parties and the Selling Stockholder indemnified
parties shall have the rights and duties given to the Underwriter
indemnified parties by Section 10(b).
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless any Underwriter
indemnified party or any Company indemnified party or the Selling
Stockholder, then the party required to indemnify such indemnified party
under this Section 10, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, judgments, liabilities and
expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder on
the one hand and the Underwriters on the other hand from the offering of
the Shares, or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company and the Selling Stockholder
on the one hand and the Underwriters on the other hand in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Selling Stockholder on the one hand and the Underwriters on the
other hand shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and
commis-
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<PAGE>
<PAGE>
sions but before deducting expenses) received by the Company and the
Selling Stockholder bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault of the
Company and the Selling Stockholder on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company, by the Selling
Stockholder or by the Underwriters, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, judgments, liabilities and
expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any claim or action.
The Company, the Selling Stockholder and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 10(d) were determined by pro rata allocation or by any other
method of allocation (even if the Underwriters were treated as one
entity for such purpose) that does not take account of the equitable
considerations referred to in this Section 10(d). Notwithstanding the
provisions of this Section 10(d), no Underwriter indemnified party shall
be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by such Underwriter
indemnified party and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter
indemnified party otherwise has been required to pay by reason of such
untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute pursuant to this Section 10
are several in proportion to their respective underwriting commitments
and are not joint.
(e) The statements in the seventh and twentieth paragraphs under
the caption "Underwriting" in the Prospectus (to the extent such
statements relate to an Underwriter) and the last paragraph on the cover
page of the Prospectus constitute the only information furnished to the
Company in writing by such Underwriter expressly for use in the
Registration Statement, any Preliminary Prospectus or the Prospectus.
(f) The indemnity and contribution agreements contained in this
Section 10 and the representations, warranties and covenants of the
Company and the Selling Stockholder contained in this Agreement shall
remain in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter indemnified party or by or on behalf of
any Company indemnified party or any Selling Stockholder indemnified
party, and shall survive any termination of this Agreement or the
delivery of the Shares. Subject to the provisions of Section 10(b) and
Section 10(c), the Company, the Selling Stockholder and each Underwriter
agree promptly to notify the others of the commencement of any
litigation or proceeding
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<PAGE>
<PAGE>
against it in connection with the sale of the Shares or in connection
with the Registration Statement or the Prospectus.
(g) The Company and the Selling Stockholder may agree, as between
themselves, as to their respective amounts of liability under this
Section 10 for which they each shall be responsible and as to which of
them shall control the defense of any proceeding, but no such agreement
shall limit the rights of the Underwriters or any Underwriter
indemnified party against either the Company or the Selling Stockholder.
11. Guarantee by Wassall. Wassall unconditionally and irrevocably
guarantees to the Underwriters the performance of the Selling Stockholder's
obligations under the Underwriting Agreements.
12. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Dillon, Read & Co. Inc., 535 Madison Avenue, New York, New York 10022,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
General Cable Corporation, 4 Tesseneer Drive, Highland Heights, Kentucky 41076,
Attention: General Counsel; if to the Selling Stockholder, shall be sufficient
in all respects, if delivered or sent to Wassall Netherlands Cable B.V., c/o
Wassall PLC, 39 Victoria Street, London 5W1H OEE, Attention: Company Secretary;
and it to Wassall, shall be sufficient in all respects if delivered or sent to
Wassall PLC, 39 Victoria Street, London 5W1H OEE, Attention: Company Secretary.
13. Construction. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW THEREOF. THE SECTION HEADINGS IN THIS
AGREEMENT HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT
A PART OF THIS AGREEMENT.
14. Parties at Interest. The Agreement herein set forth has been
and is made solely for the benefit of the Underwriters, the Company, the Selling
Stockholder, the Underwriter indemnified parties, the Company indemnified
parties and the Selling Stockholder indemnified parties, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
15. Counterparts. This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
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<PAGE>
<PAGE>
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholder, Wassall and the Underwriters, please so
indicate in the space provided below for such purpose, whereupon this letter and
your acceptance shall constitute a binding agreement among the Company, the
Selling Stockholder, Wassall and the Underwriters, severally.
Very truly yours,
GENERAL CABLE CORPORATION
By:
-----------------------------
Name:
Title:
WASSALL NETHERLANDS CABLE B.V.
By:
-----------------------------
Name:
Title:
WASSALL PLC
By:
-----------------------------
Name:
Title:
Accepted and agreed to as of the date first
above written, on behalf of themselves
and the other several Underwriters
named in Schedule A
DILLON, READ & CO. INC.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED.
By: DILLON, READ & CO. INC.
By:
--------------------------------------
Name:
Title:
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<PAGE>
<PAGE>
SCHEDULE A
----------
Number of U.S.
Underwriter Firm Shares
Dillon, Read & Co. Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION
COMMON STOCK
($.01 PAR VALUE)
INTERNATIONAL UNDERWRITING AGREEMENT
, 1997
<PAGE>
<PAGE>
INTERNATIONAL UNDERWRITING AGREEMENT
, 1997
DILLON READ & CO. INC.
MERRILL LYNCH INTERNATIONAL
SWISS BANK CORPORATION (acting
through its division SBC Warburg)
as Managing Underwriters
c/o Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
Wassall Netherlands Cable B.V., a Netherlands corporation
(hereinafter referred to as the "Selling Stockholder"), proposes to sell to the
international underwriters named in Schedule A annexed hereto (the
"Underwriters"), for whom Dillon, Read & Co. Inc., Merrill Lynch International
and Swiss Bank Corporation (acting through its division SBC Warburg) are acting
as Managing Underwriters, an aggregate of 3,380,000 shares (the "Shares") of
Common Stock, $.01 par value (the "Common Stock"), of General Cable Corporation,
a Delaware corporation (the "Company"). The Shares are described in the
Prospectus which is referred to below.
It is understood and agreed to by all parties that the Company
and the Selling Stockholder are concurrently entering into an agreement (the
"U.S. Underwriting Agreement") providing for the sale by the Selling Stockholder
of an aggregate of 13,520,000 shares of Common Stock, and the granting of an
over-allotment option with respect to up to an aggregate of 2,535,000 additional
shares by the Selling Stockholder thereunder (together, the "U.S. Shares"),
through arrangements with certain underwriters in the United States and Canada
(the "U.S. Underwriters"), for whom Dillon, Read & Co. Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated are acting as U.S. Managing Underwriters.
Anything herein or therein to the contrary notwithstanding, the respective
closings under this Agreement and the U.S. Underwriting Agreement are hereby
expressly made conditional on one another. The Underwriters hereunder and the
U.S. Underwriters are simultaneously entering into an Agreement between U.S. and
International Underwriters (the "Agreement Between Underwriters") which
provides, among other things, for the transfer of shares of Common Stock between
the two syndicates and for consultation by the Managing Underwriters with the
U.S. Managing Underwriters. Two forms of prospectus are to be used in connection
with the offering and sale of shares of Common Stock contemplated by the
foregoing, one relating to the Shares hereunder and the other relating to the
U.S. Shares. The latter form of prospectus will be identical to the former
except for certain substitute pages as included in the registration statement
and amendments thereto as mentioned below. References herein to any prospectus,
whether in preliminary or final form, and whether amended or supplemented, shall
include both the international and U.S. versions thereof.
<PAGE>
<PAGE>
In addition, this Agreement incorporates by reference certain
provisions from the U.S. Underwriting Agreement (including related definitions
of terms, which are also used elsewhere herein) and, for purposes of applying
the same, references (whether in these precise words or their equivalent) in the
incorporated provisions to the "Underwriters" shall be to the Underwriters
hereunder, to the "Shares" shall be to the Shares hereunder as defined above, to
"this Agreement" (meaning therein the U.S. Underwriting Agreement) shall be to
this Agreement (except where this Agreement is already referred to or as the
context otherwise may require) and to the "Managing Underwriters" shall be to
the addressees of this Agreement and, in general, all such provisions and
defined terms shall be applied mutatis mutandis as if the incorporated
provisions were set forth in full herein having regard to their context in this
Agreement as opposed to the U.S. Underwriting Agreement.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (Registration No.
333-22961), including a prospectus, relating to the Shares. The Company has
furnished to you, for use by the Underwriters and by dealers, copies of one or
more preliminary prospectuses (each thereof being herein called a "Preliminary
Prospectus") relating to the Shares. Except as specified, the registration
statement as in effect at the time of execution of this Agreement or, if the
registration statement is not yet effective, as amended when it becomes
effective, including all financial schedules and exhibits thereto filed as a
part thereof, together with any registration statement filed pursuant to Rule
462(b) under the Act, and including any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) under the Act and
deemed to be part of such registration statements at the time of effectiveness
pursuant to Rule 430A under the Act, is herein called the "Registration
Statement", and the prospectus, in the form filed by the Company with the
Commission pursuant to Rule 424(b) under the Act or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the time it became effective, is herein called the "Prospectus".
The Company, the Selling Stockholder and the Underwriters agree
as follows:
1. Sale and Purchase. The Selling Stockholder agrees to sell to
the respective Underwriters and, upon the basis of the warranties and
representations and the other terms and conditions herein set forth, each of the
Underwriters, severally and not jointly, agrees to purchase from the Selling
Stockholder, the aggregate number of Shares set forth opposite the name of such
Underwriter in Schedule A annexed hereto, in each case at a purchase price of
$[ ] per Share. The Managing Underwriters shall release the Shares for public
sale at the public offering price set forth on the cover page of the Prospectus
promptly after this Agreement becomes effective. The Managing Underwriters may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as the Managing Underwriters may
determine.
2. Payment and Delivery. Payment of the purchase price for the
Shares shall be made to the Selling Stockholder by wire transfer of immediately
available funds, at the office of Dillon, Read & Co. Inc. in New York City, or
at such other place as may be agreed to by the Managing Underwriters, the
Company and the Selling Stockholder, against delivery of the certificates for
the
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<PAGE>
<PAGE>
Shares to you for the respective accounts of the Underwriters. Such payment and
delivery shall be made at 9:30 A.M., New York City time, on May , 1997 (unless
another time shall be agreed to by the Managing Underwriters, the Company and
the Selling Stockholder or unless postponed in accordance with the provisions of
Section 7(e) hereof). The time at which such payment and delivery are actually
made is hereinafter sometimes called the "time of purchase." Certificates for
the Shares shall be delivered to the Managing Underwriters in definitive form in
such names and in such denominations as the Managing Underwriters shall specify
on the second business day preceding the time of purchase. For the purpose of
expediting the checking of the certificates for the Shares by the Managing
Underwriters, the Selling Stockholder agrees to make such certificates available
to the Managing Underwriters for such purpose at least one full business day
preceding the time of purchase. As used herein, "business day" shall mean a day
on which the New York Stock Exchange is open for trading.
3. Representations and Warranties of the Company. The Company
hereby makes to the Underwriters the same representations and warranties made by
it in Section 3 of the U.S. Underwriting Agreement, which Section is
incorporated herein by this reference.
4. Representations and Warranties of the Selling Stockholder.
The Selling Stockholder hereby makes to the Underwriters the same covenants made
by it in Section 6 of the U.S. Underwriting Agreement, which Section is
incorporated herein by this reference.
5. Reimbursement of Underwriters' Expenses. If the Shares are
not delivered for any reason, other than the failure of the Underwriters to
purchase the Shares (unless such failure is permitted under the provisions of
Section 7(b)), the Selling Stockholder will reimburse the Underwriters for all
of their out-of-pocket expenses, including the reasonable fees and disbursements
of their counsel.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholder on the date hereof and at the time of purchase, the performance in
all material respects by each of the Company and the Selling Stockholder of
their respective obligations hereunder to be performed at or prior to the time
of purchase, the conditions identical to those set forth in Section 8 of the
U.S. Underwriting Agreement, which Section is incorporated herein by this
reference, and the additional condition that the closing of the purchase and
sale of the U.S. Shares pursuant to the U.S. Underwriting Agreement shall occur
concurrently with the closing of the purchase and sale of the Shares hereunder.
7. Effective Date of Agreement; Termination. (a) This Agreement
shall become effective (i) if Rule 430A under the Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
(b) The obligations of the several Underwriters hereunder shall
be subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Shares if, at any time prior to the time of
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<PAGE>
<PAGE>
purchase, trading in securities on the New York Stock Exchange shall have been
suspended or minimum prices shall have been established on the New York Stock
Exchange or if a banking moratorium shall have been declared either by the
United States or New York State authorities, or if the United States shall have
declared war in accordance with its constitutional processes or there shall have
occurred any material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on, or any
material adverse change in, any financial market which, in each case, in your
judgment or in the judgment of such group of Underwriters, makes it
impracticable to proceed with the offering of the Shares as contemplated hereby.
If you or any group of Underwriters elect to terminate this Agreement as
provided in this Section 7(b), the Company and each other Underwriter shall be
notified promptly by letter or telegram.
(c) If any Underwriter shall default in its obligation to take up
and pay for the Shares to be purchased by it hereunder and if the number of
Shares which all Underwriters so defaulting shall have agreed but failed to take
up and pay for does not exceed 10% of the total number of Shares, the
non-defaulting Underwriters shall take up and pay for (in addition to the
aggregate principal amount of Shares they are obligated to purchase pursuant to
Section 1) the number of Shares agreed to be purchased by all such defaulting
Underwriters as hereinafter provided. Such Shares shall be taken up and paid for
by such non-defaulting Underwriter or Underwriters in such amount or amounts as
you may designate with the consent of each Underwriter so designated or, in the
event no such designation is made, such Shares shall be taken up and paid for by
all non-defaulting Underwriters pro rata in proportion to the aggregate number
of Shares set opposite the names of such non-defaulting Underwriters in Schedule
A.
(d) If any Underwriter shall default in its obligation to take up
and pay for the Shares to be purchased by it hereunder and if the number of
Shares which all Underwriters so defaulting shall have agreed but failed to take
up and pay for exceeds 10% of the total number of Shares, and arrangements
satisfactory to you, the Company and the Selling Stockholder are not made within
48 hours after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter.
(e) Without relieving any defaulting Underwriter from its
obligations hereunder, the Selling Stockholder agrees with the non-defaulting
Underwriters that it will not sell any Shares hereunder unless all of the Shares
are purchased by the Underwriters and the International Underwriters (or by
substituted underwriters selected by you with the approval of the Selling
Stockholder or selected by the Selling Stockholder with your approval pursuant
to Section 7(d)). If a new Underwriter or Underwriters are substituted for a
defaulting Underwriter or Underwriters in accordance with Section 7(d) of this
Agreement or Section 9(d) of the U.S. Underwriting Agreement, the Selling
Stockholder or you shall have the right to postpone the time of purchase for a
period not exceeding five business days in order that any necessary change in
the Registration Statement and the Prospectus and other documents may be
effected. The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 7 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
-4-
<PAGE>
<PAGE>
(f) If the purchase of the Shares by the Underwriters, as
contemplated by this Agreement or the U.S. Underwriting Agreement, is not
consummated for any reason permitted under this Agreement or if such purchase is
not consummated because the Company or the Selling Stockholder shall be unable
to comply with any of the terms of this Agreement or the U.S. Underwriting
Agreement, the Company and the Selling Stockholder shall not be under any
obligation or liability under this Agreement (except to the extent provided in
Section 6(a) of the U.S. Underwriting Agreement or Section 8 of this Agreement),
and the Underwriters shall be under no obligation or liability to the Company
under this Agreement (except to the extent provided in Section 8).
8. Indemnity by the Company, the Selling Stockholder and the
Underwriters. (a) The Company and the Selling Stockholder, jointly and
severally, agree to indemnify, defend and hold harmless each Underwriter, each
person that controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, and each Underwriter's agents, employees,
officers and directors and the agents, employees, officers and directors of any
such controlling person (collectively, the "Underwriter indemnified parties")
from and against any and all losses, claims, damages, judgments, liabilities and
expenses (including the reasonable cost of investigation) which, jointly or
severally, any Underwriter indemnified party may incur as they are incurred (and
regardless of whether such Underwriter indemnified party is a party to the
litigation, if any) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration statement
relating to the Shares or the Prospectus or any Preliminary Prospectus, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
judgments, liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or alleged untrue statement or omission based upon
and in conformity with information with respect to any Underwriter furnished in
writing by any Underwriter through the Managing Underwriters to the Company
expressly for use therein with reference to such Underwriter; provided, however,
that no Selling Stockholder shall be liable under this Section 10 in an amount
exceeding the net proceeds to be received by such Selling Stockholder (before
deducting expenses) from the sale of Shares hereunder. Notwithstanding the
foregoing, the indemnification contained in this paragraph with respect to any
Preliminary Prospectus shall not inure to the benefit of the Underwriter
indemnified parties for any liability arising from or based upon an untrue
statement or omission made in a Preliminary Prospectus if (i) it is established
in the related proceeding that such Underwriter failed to send or give a copy of
the Prospectus (as amended or supplemented if any amendments or supplements
thereto shall have been furnished to such Underwriter prior to the written
confirmation of such sale) to such person with or prior to the written
confirmation of such sale, if required by applicable law, and (ii) such untrue
statement or omission or alleged untrue statement or omission was completely
corrected in the Prospectus (as amended or supplemented if amended or
supplemented as aforesaid) and such Prospectus does not contain any other untrue
statement or omission or alleged untrue statement or omission that was the
subject matter of the related proceeding. This indemnity agreement will be in
addition to any liability the Company or the Selling Stockholder otherwise may
have.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
Underwriter indemnified party, with re-
-5-
<PAGE>
<PAGE>
spect to which indemnity may be sought against the Company or the Selling
Stockholder pursuant to this Section 8, such Underwriter indemnified party shall
promptly notify the Company and the Selling Stockholder in writing, and the
Company and/or the Selling Stockholder (as they determine between themselves in
their discretion) shall assume the defense thereof (individually or
collectively, the "Defending Party") including the employment of counsel
reasonably satisfactory to the Underwriter indemnified party and
payment of all fees and expenses; provided, however, at the omission
so to notify the Company and the Selling Stockholder shall not
relieve them from any liability that they may have to any Underwriter
indemnified party except to the extent that the indemnifying party
is materially prejudiced thereby. An Underwriter indemnified party shall have
the right to employ separate counsel in any such action or proceeding and to
assume the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Underwriter indemnified party unless (i) the employment
of such counsel has been authorized in writing by the Defending Party, (ii) the
Defending Party has failed promptly to assume the defense and employ counsel
reasonably satisfactory to the Underwriter indemnified party or (iii) the named
parties to any such action or proceeding (including any impleaded parties)
include both the Underwriter indemnified party and the Defending Party and such
Underwriter indemnified party shall have reasonably concluded that there may be
one or more legal defenses available to it that are different from or additional
to those available to the Defending Party (in which case the Defending Party
shall not have the right to assume the defense of such action on behalf of such
Underwriter indemnified party), in any of which events such fees and expenses
shall be borne by the Defending Party and reimbursed as they are incurred. It is
understood, however, that the Defending Party shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) at any time for all such Underwriter
indemnified parties, which firm shall be designated in writing by Dillon, Read &
Co. Inc., and that all such fees and expenses shall be reimbursed as they are
incurred. The Company and the Selling Stockholder shall not be liable for any
settlement of any such action effected without the written consent of the
Defending Party (which consent shall not be unreasonably withheld or delayed),
but if settled with the written consent of the Defending Party, or if there is a
final judgment with respect thereto, the Company and the Selling Stockholder
agree to indemnify and hold harmless each Underwriter indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, and any person that controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (collectively, the
"Company indemnified parties") and the Selling Stockholder, its directors and
any person that controls the Selling Stockholder within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, the "Selling Stockholder indemnified parties"), to
the same extent as the foregoing indemnity from the Company and the
Selling Stockholder to the Underwriter indemnified parties, but
only with respect to information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company expressly
for use with respect to such Underwriter in the Registration Statement, any
Preliminary Prospectus or the Prospectus. In case any action shall be brought
against any Company indemnified party or the Selling Stockholder based on the
Registration Statement, any Preliminary Prospectus or the Prospectus and in
respect of which in-
-6-
<PAGE>
<PAGE>
demnity may be sought against any Underwriter pursuant to this Section 8(c),
such Underwriter shall have the rights and duties given to the Company and the
Selling Stockholder by Section 8(b) (except that if the Company and/or the
Selling Stockholder shall have assumed the defense thereof such Underwriter
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, provided that the fees and expenses of such
separate counsel shall be at the expense of such Underwriter), and the Company
indemnified parties and the Selling Stockholder shall have the rights and duties
given to the Underwriter indemnified parties by Section 8(b).
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless any Underwriter indemnified
party or any Company indemnified party or the Selling Stockholder, then the
party required to indemnify such indemnified party under this Section 8, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
judgments, liabilities and expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand from the
offering of the Shares, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Selling Stockholder on the one hand
and the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
Selling Stockholder bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company, by the
Selling Stockholder or by the Underwriters, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, judgments, liabilities and expenses referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any claim
or action.
The Company, the Selling Stockholder and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
8(d) were determined by pro rata allocation or by any other method of allocation
(even if the Underwriters were treated as one entity for such purpose) that does
not take account of the equitable considerations referred to in this Section
8(d). Notwithstanding the provisions of this Section 9(d), no Underwriter
indemnified party shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by such
Underwriter indemnified party and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter indemnified
party otherwise has been required to pay by reason of such untrue statement or
alleged untrue statement or omission or
-7-
<PAGE>
<PAGE>
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to their respective underwriting commitments and are not joint.
(e) The statements in the seventh and twentieth paragraphs under
the caption "Underwriting" in the Prospectus (to the extent such statements
relate to an Underwriter) and the last paragraph on the cover page of the
Prospectus constitute the only information furnished to the Company in writing
by such Underwriter expressly for use in the Registration Statement, any
Preliminary Prospectus or the Prospectus.
(f) The indemnity and contribution agreements contained in this
Section 8 and the representations, warranties and covenants of the Company and
the Selling Stockholder contained in this Agreement shall remain in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter indemnified party or by or on behalf of any Company indemnified
party or any Selling Stockholder indemnified party, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares.
Subject to the provisions of Section 8(b) and Section 8(c), the Company, the
Selling Stockholder and each Underwriter agree promptly to notify the other of
the commencement of any litigation or proceeding against it in connection with
the issuance and sale of the Shares or in connection with the Registration
Statement or the Prospectus.
(g) The Company and the Selling Stockholder may agree, as
between themselves, as to their respective amounts of liability under this
Section 8 for which they each shall be responsible and as to which of them shall
control the defense of any proceeding, but no such agreement shall limit the
rights of the Underwriters or any Underwriter indemnified party against either
the Company of the Selling Stockholder.
9. Guarantee by Wassall. Wassall unconditionally and irrevocably
guarantees to the Underwriters the performance of the Selling Stockholder's
obligations under the Underwriting Agreements.
10. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Dillon, Read & Co. Inc., 535 Madison Avenue, New York, New York 10022,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
General Cable Corporation, 4 Tesseneer Drive, Highland Heights, Kentucky 41076,
Attention: General Counsel; and if to the Selling Stockholder, shall be
sufficient in all respects, if delivered or sent to Wassall Netherlands Cable
B.V., c/o Wassall PLC, 39 Victoria Street, London 5W1H OEE, Attention: Company
Secretary; and if to Wassall, shall be sufficient in all respects if delivered
or sent to Wassall PLC, 39 Victoria Street, London 5W1H OEE, Attention: Company
Secretary.
11. Construction. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW THEREOF. THE SECTION
-8-
<PAGE>
<PAGE>
HEADINGS IN THIS AGREEMENT HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF
REFERENCE AND ARE NOT A PART OF THIS AGREEMENT.
12. Parties at Interest. The Agreement herein set forth has been
and is made solely for the benefit of the Underwriters, the Company, the Selling
Stockholder, the Underwriter indemnified parties, the Company indemnified
parties and the Selling Stockholder indemnified parties, and their respective
successors, assigns, executors and administrators. No other person, partnership,
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
13. Counterparts. This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
-9
<PAGE>
<PAGE>
If the foregoing correctly sets forth the understanding among
the Company, the Selling Stockholder, Wassall and the Underwriters, please so
indicate in the space provided below for such purpose, whereupon this letter and
your acceptance shall constitute a binding agreement among the Company, the
Selling Stockholder, Wassall and the Underwriters, severally.
Very truly yours,
GENERAL CABLE CORPORATION
By: __________________________________
Name:
Title:
WASSALL NETHERLANDS CABLE B.V.
By: __________________________________
Name:
Title:
WASSALL PLC
By: __________________________________
Name:
Title:
Accepted and agreed to as of the date first above writ-
ten, on behalf of themselves and the other several
Underwriters named in Schedule A
DILLON, READ & CO. INC.
MERRILL LYNCH INTERNATIONAL
SWISS BANK CORPORATION (acting
through its division SBC Warburg)
By: DILLON, READ & CO. INC.
By: __________________________________
Name:
Title:
-10-
<PAGE>
<PAGE>
SCHEDULE A
Number of
Underwriter Shares
Dillon Read & Co. Inc.................................................[ ]
Merrill Lynch International...........................................[ ]
Swiss Bank Corporation (acting through its division SBC Warburg)......[ ]
<PAGE>
<PAGE>
NUMBER SHARES
CC
Common Stock
Par Value $.01 Per Share
General Cable Corporation
[LOGO]
Incorporated under the Laws
of the State of Delaware
THIS CERTIFIES THAT CUSIP 369300 10 8
is the owner of See Reverse For Certain Definitions
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, PAR VALUE
$.01 PER SHARE, OF General Cable Corporation transfer of which is registrable on
the share register of the Corporation, upon the surrender of this Certificate
properly endorsed. This Certificate is by the Transfer Agent and registered by
the Registrar.
Witness the facsimile seal of the Corporation and the
facsimile signatures of its duly authorized officers.
Dated:
President and Chief
Executive Officer
Executive Vice President
General Counsel and Secretary
Countersigned and Registered:
ChaseMellon Shareholder Services, L.L.C.
By: Transfer Agent
and Registrar
Authorized Signature
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO ANY SHAREHOLDER
WHO SO REQUESTS A FULL STATEMENT OF THE AUTHORIZED CAPITAL STOCK AND OF ALL
DESIGNATIONS, VOTING RIGHTS, PREFERENCES, LIMITATIONS AND SPECIAL RIGHTS OF THE
SHARES OF EACH CLASS OR SERIES OF THE CAPITAL STOCK AUTHORIZED TO BE ISSUED SO
FAR AS THEY HAVE BEEN FIXED AND DETERMINED, AND OF THE AUTHORITY OF THE BOARD OF
DIRECTORS TO FIX AND DETERMINE THE DESIGNATIONS, VOTING RIGHTS, PREFERENCES,
LIMITATIONS AND SPECIAL RIGHTS OF EACH CLASS OR SERIES OF SHARES OF THE
CORPORATION.
The following abbreviation, when used in the inscription on
the face of this certificate, shall be construed as though they were written out
in full according to applicable laws or regulations:
JT TEN - as joint tenants UNIF GIFT MIN ACT-_____Custodian______
with rights of (Cust) (Minor)
survivorship and under Uniform Gifts to Minors
not as tenants in Act ___________________________
common (State)
TEN COM - as tenants in
common
TEN ENT - as tenants by the
entireties
Additional abbreviations may also be used
though not in the above list.
For value received, ________________________ hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
-----------------------------------------------
- --------------------------------------------------------------------------------
Please Print or Typewrite Name and Address of Assignee
- --------------------------------------------------------------------------------
shares of the capital stock
- ----------------------------------------------
represented by the within certificate, and do hereby irrevocably constitute
and appoint
- -------------------------------------------------------------------------------
- -------------------------------------------------------------Attorney to
2
<PAGE>
<PAGE>
transfer the said stock on the books of the within named Corporation with full
power of substitution in the premises.
Date
----------------------------------
--------------------------------
Notice: The signature to this
assignment must correspond with the
name as written upon the face of the
certificate in every particular,
without alteration or enlargement or
any change whatsoever.
3
<PAGE>
<PAGE>
[Weil, Gotshal & Manges LLP letterhead]
May 14, 1997
General Cable Corporation
4 Tennessee Drive
Highland Heights, Kentucky 41076
Gentlemen:
We have acted as counsel to General Cable Corporation (the
"Company") in connection with the preparation and filing with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"), of a Registration Statement on Form S-1, Registration No.
333-22961 (the "Registration Statement"), pertaining to the registration of a
proposed offering of up to 19,435,000 shares of the common stock, $0.01 par
value (the "Common Stock") of the Company (including 2,535,000 shares subject to
an underwriters' over-allotment option), all of which are currently outstanding
and which are proposed to be offered by the stockholder of the Company
(collectively, the "Shares"). Capitalized terms defined in the Registration
Statement and used but not otherwise defined herein are used herein as so
defined.
In so acting, we have participated in the preparation of the
Registration Statement, and we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such corporate records and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such inquiries
of such officers and representatives, as we have deemed relevant and necessary
as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents.
<PAGE>
<PAGE>
As to all questions of fact material to this opinion that have not been
independently established,we have relied upon certificates or comparable
documents of officers and representatives of the Company.
Based on the foregoing, and subject to the qualifications
stated herein, we are of the opinion that the Shares have been validly issued
and are fully paid and non-assessable.
The opinions expressed herein are limited to the corporate
laws of the State of Delaware, and we express no opinion as to the effect on the
matters covered by this letter of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to this firm under the
section entitled "Legal Matters" in the prospectus included in the Registration
Statement.
Very truly yours,
2
<PAGE>
<PAGE>
3
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Contents, p.b
Page
================================================================================
CREDIT AGREEMENT
dated as of
May [ ], 1997
among
GENERAL CABLE CORPORATION
The Borrowing Subsidiaries
Party Hereto
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK
as Administrative Agent
---------------------------
CHASE SECURITIES INC.
as Arranger
================================================================================
<PAGE>
<PAGE>
Contents, p. c
Page
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<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE I
Definitions
SECTION 1.01. Defined Terms......................................................... 1
SECTION 1.02. Classification of Loans and 21
Borrowings..........................................................
SECTION 1.03. Terms Generally....................................................... 21
SECTION 1.04. Accounting Terms; GAAP................................................ 22
ARTICLE II
The Credits
SECTION 2.01. Commitments........................................................... 23
SECTION 2.02. Loans and Borrowings.................................................. 23
SECTION 2.03. Requests for Revolving Borrowings..................................... 24
SECTION 2.04. Competitive Bid Procedure............................................. 25
SECTION 2.05. Swingline Loans....................................................... 28
SECTION 2.06. Letters of Credit..................................................... 29
SECTION 2.07. Funding of Borrowings................................................. 35
SECTION 2.08. Interest Elections.................................................... 35
SECTION 2.09. Termination and Reduction of
Commitments......................................................... 37
SECTION 2.10. Repayment of Loans; Evidence of
Debt.............................................................. 38
SECTION 2.11. Prepayment of Loans................................................... 39
SECTION 2.12. Fees.................................................................. 40
SECTION 2.13. Interest.............................................................. 41
SECTION 2.14. Alternate Rate of Interest............................................ 42
SECTION 2.15. Increased Costs....................................................... 43
SECTION 2.16. Break Funding Payments................................................ 45
SECTION 2.17. Taxes................................................................. 45
SECTION 2.18. Payments Generally; Pro Rata Treatment;
Sharing of Setoffs.................................................. 46
SECTION 2.19. Mitigation Obligations; Replacement of
Lenders............................................................. 49
SECTION 2.20. Borrowing Subsidiaries................................................ 50
</TABLE>
<PAGE>
<PAGE>
Contents, p. ii
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers.................................................. 50
SECTION 3.02. Authorization; Enforceability......................................... 51
SECTION 3.03. Governmental Approvals; No Conflicts.................................. 51
SECTION 3.04. Financial Condition; No Material Adverse Change....................... 51
SECTION 3.05. Properties............................................................ 52
SECTION 3.06. Litigation and Environmental Matters.................................. 52
SECTION 3.07. Compliance with Laws and
Agreements.......................................................... 53
SECTION 3.08. Investment and Holding Company Status................................. 53
SECTION 3.09. Taxes................................................................. 53
SECTION 3.10. ERISA................................................................. 53
SECTION 3.11. Disclosure............................................................ 54
SECTION 3.12. Subsidiaries.......................................................... 54
SECTION 3.13. Solvency.............................................................. 54
SECTION 3.14. Federal Reserve Regulations........................................... 55
ARTICLE IV
Conditions
SECTION 4.01. Effective Date........................................................ 55
SECTION 4.02. Each Credit Event..................................................... 57
SECTION 4.03. Each Borrowing Subsidiary Credit Event................................ 58
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information............................ 59
SECTION 5.02. Notices of Material Events............................................ 60
SECTION 5.03. Existence; Conduct of Business........................................ 61
SECTION 5.04. Payment of Obligations................................................ 61
SECTION 5.05. Maintenance of Properties; Insurance.................................. 61
</TABLE>
<PAGE>
<PAGE>
Contents, p. iii
<TABLE>
<CAPTION>
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<S> <C> <C>
SECTION 5.06. Books and Records; Inspection Rights.................................. 62
SECTION 5.07. Compliance with Laws.................................................. 62
SECTION 5.08. Use of Proceeds and Letters of Credit................................. 62
SECTION 5.09. Further Assurances.................................................... 62
ARTICLE VI
Negative Covenants
SECTION 6.01. Subsidiary Indebtedness............................................... 63
SECTION 6.02. Liens................................................................. 64
SECTION 6.03. Fundamental Changes................................................... 65
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions............. 66
SECTION 6.05. Hedging Agreements.................................................... 67
SECTION 6.06. Restricted Payments................................................... 67
SECTION 6.07. Transactions with Affiliates.......................................... 68
SECTION 6.08. Restrictive Agreements................................................ 68
SECTION 6.09. Sale and Lease-Back Transactions...................................... 69
SECTION 6.10. Leverage Ratio........................................................ 69
SECTION 6.11. Interest Coverage Ratio............................................... 69
ARTICLE VII
Events of Default...................................................................... 70
ARTICLE VIII
The Administrative Agent............................................................... 73
ARTICLE IX
Guarantee.............................................................................. 76
</TABLE>
<PAGE>
<PAGE>
Contents, p. iv
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE X
Miscellaneous
SECTION 10.01. Notices............................................................... 78
SECTION 10.02. Waivers; Amendments................................................... 78
SECTION 10.03. Expenses; Indemnity; Damage Waiver.................................... 80
SECTION 10.04. Successors and Assigns................................................ 81
SECTION 10.05. Survival.............................................................. 85
SECTION 10.06. Counterparts; Integration; Effectiveness.............................. 85
SECTION 10.07. Severability.......................................................... 86
SECTION 10.08. Right of Setoff....................................................... 86
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process............ 86
SECTION 10.10. WAIVER OF JURY TRIAL.................................................. 87
SECTION 10.11. Headings.............................................................. 87
SECTION 10.12. Confidentiality....................................................... 87
SECTION 10.13. Conversion of Currencies.............................................. 88
SCHEDULES:
Schedule 1.01 -- Subsidiary Guarantors and Material Subsidiaries
Schedule 2.01 -- Commitments
Schedule 3.12 -- Subsidiaries
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Borrower's Counsel
Exhibit C -- Form of Opinion of Borrowing Subsidiary's Counsel
Exhibit D -- Form of Borrowing Subsidiary Agreement
Exhibit E -- Form of Borrowing Subsidiary Termination
Exhibit F -- Form of Subsidiary Guarantee Agreement
Exhibit G -- Form of Indemnity, Subrogation and Contribution Agreement
</TABLE>
<PAGE>
<PAGE>
CREDIT AGREEMENT dated as of May [ ], 1997,
among GENERAL CABLE CORPORATION, the BORROWING
SUBSIDIARIES party hereto, the LENDERS party hereto,
and THE CHASE MANHATTAN BANK, as Administrative
Agent.
Wassall Cable Netherlands B.V., a Netherlands corporation,
proposes to sell shares representing approximately 70% of the issued and
outstanding common stock of the Company (such term and each other capitalized
term used but not otherwise defined herein having the meaning assigned to it in
Article I) in a public offering registered with the United States Securities and
Exchange Commission. The Company has requested the Lenders to establish the
credit facilities provided for herein to be used to repay certain existing
intercompany and bank debt, to distribute dividends to Wassall Netherlands Cable
B.V. and to acquire Carol Cable Europe Ltd. and Carol Cable Company Ltd. and for
the general corporate purposes of the Borrowers, including to finance future
acquisitions. The Lenders are willing to establish such credit facilities upon
the terms and subject to the conditions set forth herein. Accordingly, the
parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
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2
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to any
Eurodollar Revolving Loan, or with respect to the facility fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "Eurodollar Spread" or "Facility Fee Rate", as the case may
be, based upon the Leverage Ratio as set forth below:
Eurodollar Facility Fee
Leverage Ratio: Spread Rate
- --------------------------------------------------------------------------------
Category 1 .425% .200%
- ----------
Greater than 3.50 to 1.00
- --------------------------------------------------------------------------------
Category 2
- ----------
Less than or equal to 3.50 to 1.00
and greater than 3.00 to 1.00 .300% .150%
- --------------------------------------------------------------------------------
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Eurodollar Facility Fee
Leverage Ratio: Spread Rate
- --------------------------------------------------------------------------------
Category 3
- -----------
Less than or equal to 3.00 to 1.00
but greater than 2.50 to 1.00 .250% .125%
- --------------------------------------------------------------------------------
Category 4
- ----------
Less than or equal to 2.50 to 1.00
but greater than 2.00 to 1.00 .200% 0.100%
- --------------------------------------------------------------------------------
Category 5
- ----------
Less than or equal to 2.00 to 1.00 .170% 0.080%
- --------------------------------------------------------------------------------
Except as set forth below, the Leverage Ratio used on any date to determine the
Applicable Rate shall be that in effect at the fiscal quarter end next preceding
the Financial Statement Delivery Date occurring on or most recently prior to
such date; provided that from the date hereof until the Financial Statement
Delivery Date next following December 31, 1997, the Eurodollar Spread and
Facility Fee Rate will be determined by reference to Category 3; provided
further, that if any Financial Statement Delivery Date shall have occurred and
the financial statements required to have been delivered under Section 5.01(a)
or (b) by such date have not yet been delivered, the Applicable Rate shall,
until such financial statements shall have been delivered, be determined by
reference to Category 1. For purposes of this definition, "Financial Statement
Delivery Date" means the 90th Day following the end of each fiscal year of the
Company, and the 60th day following the end of each of the first three fiscal
quarters in each fiscal year of the Company.
"Assessment Rate" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the
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4
Federal Deposit Insurance Corporation for insurance by such Corporation of
time deposits made in dollars at the offices of such member in the United
States; provided that if, as a result of any change in any law, rule or
regulation, it is no longer possible to determine the Assessment Rate as
aforesaid, then the Assessment Rate shall be such annual rate as shall be
determined by the Administrative Agent to be representative of the cost of such
insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Base CD Rate" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means the Company or any Borrowing Subsidiary.
"Borrowing" means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, (b) a Competitive Loan or group
of Competitive Loans of the same Type made on the same date and as to which a
single Interest Period is in effect or (c) a Swingline Loan.
"Borrowing Request" means a request by a Borrower for a
Revolving Borrowing in accordance with Section 2.03.
"Borrowing Subsidiary" means, at any time, any wholly owned
Subsidiary of the Company designated as a Borrowing Subsidiary by the Company
pursuant to Section 2.20 that has not ceased to be a Borrowing Subsidiary
pursuant to such Section or Article VII.
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5
"Borrowing Subsidiary Agreement" means a Borrowing Subsidiary
Agreement substantially in the form of Exhibit D.
"Borrowing Subsidiary Termination" means a Borrowing
Subsidiary Termination substantially in the form of Exhibit E.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Interest Expense" means, for any period, Interest
Expense paid in cash during such period.
"Change in Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
other than Wassall PLC or its subsidiaries, of shares representing more than 30%
of the aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Company; (b) occupation of a majority of the seats (other
than vacant seats) on the board of directors of the Company by Persons who were
neither (i) nominated by the board of directors of the Company nor (ii)
appointed by directors so nominated; or (c) the acquisition of direct or
indirect Control of the Company by any Person or group other than Wassall PLC or
its subsidiaries; provided, however, that the IPO Transactions shall not
constitute a Change in Control.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any
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6
change in any law, rule or regulation or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Bank (or, for purposes of Section
2.15(b), by any lending office of such Lender or by such Lender's or the Issuing
Bank's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Competitive Loans or Swingline Loans.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans and to acquire participations
in Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 10.04. The initial
amount of each Lender's Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable. The initial aggregate amount of the Lenders'
Commitments is $350,000,000.
"Company" means General Cable Corporation, a Delaware
corporation.
"Competitive Bid" means an offer by a Lender to make a
Competitive Loan in accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive
Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making
such Competitive Bid.
"Competitive Bid Request" means a request by the Borrower for
Competitive Bids in accordance with Section 2.04.
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7
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Confidential Information Memorandum" means the Confidential
Information Memorandum dated March 1997 distributed to the Lenders, together
with the appendices thereto, as amended through the date hereof.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"dollars" or "$" refers to lawful money of the United States
of America.
"EBITDA" means, for any period, the consolidated net income of
the Company and its consolidated Subsidiaries for such period plus, to the
extent deducted in computing such consolidated net income for such period, the
sum (without duplication) of (a) income tax expense, (b) Interest Expense, (c)
depreciation and amortization expense, (d) non-recurring restructuring charges
and (e) extraordinary losses, minus, to the extent added in computing such
consolidated net income for such period, (a) consolidated interest income and
(b) extraordinary gains.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
10.02).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
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8
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Borrower or any subsidiary
thereof directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with a Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by a Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by a Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by a Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by a Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from a Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a
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9
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate (or, in the
case of a Competitive Loan, the LIBO Rate).
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of any Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) the branch
profits tax imposed by the United States of America pursuant to Section 884 of
the Code or any similar tax imposed by any other jurisdiction in which any
Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by a Borrower under Section 2.19(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement or designates a new
lending office (it being understood and agreed that any withholding tax
attributable to the designation of a Borrowing Subsidiary, or the making of any
payment from a location outside the United States of America, after such time
shall not be an Excluded Tax) or is attributable to such Foreign Lender's
failure to comply with Section 2.17(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
applicable Borrower with respect to such withholding tax pursuant to Section
2.17(a).
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day
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10
that is a Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Company.
"Fixed Rate" means, with respect to any Competitive Loan
(other than a Eurodollar Competitive Loan), the fixed rate of interest per annum
specified by the Lender making such Competitive Loan in its related Competitive
Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at
a Fixed Rate.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the applicable Borrower is
located. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.
"Foreign Subsidiary" means any subsidiary that is not
organized under the laws of any jurisdiction in the United States.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such
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11
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all
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12
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement substantially in the form of
Exhibit G, made by the Company and one or more of the Subsidiary Guarantors in
favor of the Administrative Agent for the benefit of the Lenders.
"Interest Coverage Ratio" means, for any period, the ratio of
(a) EBITDA for such period to (b) Cash Interest Expense for such period.
"Interest Election Request" means a request by the relevant
Borrower to convert or continue a Revolving Borrowing in accordance with Section
2.08.
"Interest Expense" means, for any period, the interest expense
of the Company and its consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, including (i) the amortization of
debt discounts to the extent included in interest expense in accordance with
GAAP, (ii) the amortization of all fees (including fees with respect to interest
rate protection agreements or other interest rate hedging arrangements) payable
in connection with the incurrence of Indebtedness to the extent included in
interest expense in accordance with GAAP and (iii) the portion of any rents
payable under capital leases allocable to interest expense in accordance with
GAAP.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period
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13
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
(c) with respect to any Fixed Rate Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Fixed Rate Borrowing with an Interest Period of more than 90 days' duration
(unless otherwise specified in the applicable Competitive Bid Request), each day
prior to the last day of such Interest Period that occurs at intervals of 90
days' duration after the first day of such Interest Period, and any other dates
that are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing and (d) with respect to any Swingline Loan,
the day that such Loan is required to be repaid.
"Interest Period" means (a) with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of each Lender, nine or twelve months)
thereafter, as the relevant Borrower may elect, and (b) with respect to any
Fixed Rate Borrowing, the period (which shall not be less than seven days or
more than 270 days) commencing on the date of such Borrowing and ending on the
date specified in the applicable Competitive Bid Request; provided that (i) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.
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14
"IPO Transactions" means the initial public offering and sale
by Wassall Netherlands Cable B.V. of shares representing approximately 70% of
all outstanding shares of common stock of the Company, and all related
transactions, including (i) the repayment of approximately $200,700,000 of the
Company's existing intercompany debt and advances owed to Wassall PLC and its
subsidiaries and approximately $26,100,000 of the Company's existing bank debt,
(ii) the distribution of $42,600,000 to Wassall Netherlands Cable, B.V. as a
dividend, (iii) the purchase of Carol Cable Europe Ltd. and Carol Cable Company
Ltd. for $2,000,000, (iv) the payment of related estimated expenses of $400,000;
provided that the aggregate of the amounts referred to in clauses (i), (ii),
(iii) and (iv) of this definition shall not exceed $280,000,000, (v) the
execution and delivery of the Intercompany Agreement between Wassall PLC or any
of its subsidiaries on the one hand, and the Company or any Subsidiary on the
other hand and (vi) any Borrowing hereunder in connection with the transactions
described in clauses (i), (ii), (iii) and (iv) above.
"IPO Information" means the Registration Statement and the pro
forma financial statements and financial projections of the Company contained
therein or in the Confidential Information Memorandum or otherwise delivered
to the Lenders prior to the date hereof.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.06(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term "Issuing Bank" shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
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15
"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement.
"Leverage Ratio" means, at any time, the ratio of (a) Total
Debt at such time to (b) EBITDA for the most recent period of four consecutive
fiscal quarters of the Company ended at or prior to such time.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase
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16
option, call or similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, each Borrowing
Subsidiary Agreement, each Borrowing Subsidiary Termination, the Subsidiary
Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement and
each Letter of Credit and promissory note delivered pursuant to this Agreement.
"Loan Parties" means the Borrowers and the Subsidiary
Guarantors.
"Loans" means the loans made by the Lenders to the Borrowers
pursuant to this Agreement.
"Margin" means, with respect to any Competitive Loan bearing
interest at a rate based on the LIBO Rate, the marginal rate of interest, if
any, to be added to or subtracted from the LIBO Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender making such Loan in
its related Competitive Bid.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations or condition, financial or otherwise, of
the Company and the Subsidiaries taken as a whole, (b) the ability of any
Borrower to perform any of its obligations under any Loan Document or (c) the
rights of or benefits available to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of any Borrower and its subsidiaries in an
aggregate principal amount exceeding $5,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of any Borrower
or any subsidiary thereof in respect of any Hedging Agreement at any time shall
be the maximum aggregate amount (giving effect to any netting agreements) that
such Borrower or such subsidiary would be required to pay if such Hedging
Agreement were terminated at such time.
"Material Subsidiary" means (a) any Borrowing Subsidiary, (b)
any subsidiary that directly or indirectly owns or Controls any Borrowing
Subsidiary or other Material Subsidiary and (c) any other subsidiary (i) the
consolidated
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17
net revenues of which for the most recent fiscal year of the Company for which
audited financial statements have been delivered pursuant to Section 5.01 were
greater than 5% of the Company's consolidated net revenues for such fiscal year
or (ii) the consolidated tangible assets of which as of the end of such fiscal
year were greater than 5% of the Company's consolidated tangible assets as of
such date; provided that, if at any time the aggregate amount of the
consolidated net revenues or consolidated tangible assets of all Subsidiaries
that are not Material Subsidiaries exceeds 10% of the Company's consolidated net
revenues for any such fiscal year or 10% of the Company's consolidated tangible
assets as of the end of any such fiscal year, the Company (or, in the event the
Company has failed to do so within 10 days, the Administrative Agent) shall
designate sufficient Subsidiaries as "Material Subsidiaries" to eliminate such
excess, and such designated Subsidiaries shall for all purposes of this
Agreement constitute Material Subsidiaries. For purposes of making the
determinations required by this definition, revenues and assets of Foreign
Subsidiaries shall be converted into dollars at the rates used in preparing the
consolidated balance sheet of the Company included in the applicable financial
statements. The Material Subsidiaries on the date hereof are identified in
Schedule 1.01 hereto.
"Maturity Date" means May [ ], 2002.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Obligations" means the obligations (whether primary,
secondary, direct, contingent, fixed or otherwise) of each of the Borrowing
Subsidiaries under this Agreement or any other Loan Document with respect to the
payment of (i) the principal of and interest on the Loans to each such Borrowing
Subsidiary when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations of each of the Borrowing Subsidiaries hereunder and thereunder.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or
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18
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not
yet due or are being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business; and
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Company or any
Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
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19
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which any Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Register" has the meaning set forth in Section 10.04.
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20
"Registration Statement" means the Registration Statement
draft of the Company, on Form S-1, filed with the Securities and Exchange
Commission on March 7, 1997.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing more than 50% of
the sum of the total Revolving Credit Exposures and unused Commitments at such
time; provided that, for purposes of declaring the Loans to be due and payable
pursuant to Article VII, and for all purposes after the Loans become due and
payable pursuant to Article VII or the Commitments expire or terminate, the
outstanding Competitive Loans of the Lenders shall be included in their
respective Revolving Credit Exposures in determining the Required Lenders.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Company or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or termination of any such shares of capital stock of
any Borrower or any option, warrant or other right to acquire any such shares of
capital stock of any Borrower.
"Revolving Credit Exposure" means, with respect to any Lender
at any time, the sum of the outstanding principal amount of such Lender's
Revolving Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"S&P" means Standard & Poor's Ratings Service.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to
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21
which the Administrative Agent is subject (a) with respect to the Base CD Rate,
for new negotiable nonpersonal time deposits in dollars of over $100,000 with
maturities approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Company.
"Subsidiary Guarantee Agreement" means the Subsidiary
Guarantee Agreement substantially in the form of Exhibit F, made by one or more
of the Subsidiary Guarantors in favor of the Administrative Agent for the
benefit of the Lenders.
"Subsidiary Guarantors" means each Person listed on Schedule
1.01 and each other party that becomes party to a Subsidiary Guarantee Agreement
as a Subsidiary Guarantor, and the permitted successors and assigns of each such
Person.
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22
"Swingline Exposure" means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"Swingline Lender" means The Chase Manhattan Bank, in its
capacity as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.05.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Total Debt" means, at any date, all indebtedness (including
all Capital Lease Obligations) of the Company and its consolidated Subsidiaries
at such date to the extent such indebtedness should be reflected on the
consolidated balance sheet of the Company at such date in accordance with GAAP.
"Transactions" means the execution, delivery and performance
by the Loan Parties of the Loan Documents, the borrowing of Loans, the use of
the proceeds thereof, the issuance of Letters of Credit hereunder and the IPO
Transactions.
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23
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate, the
Alternate Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO
Rate or a Fixed Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
mascu line, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
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24
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Revolving Loans to any Borrower
from time to time during the Availability Period in an aggregate principal
amount that will not result in (a) such Lender's Revolving Credit Exposure
exceeding such Lender's Commitment or (b) the sum of the total Revolving Credit
Exposures plus the aggregate principal amount of outstanding Competitive Loans
exceeding the total Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrowers may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan
shall be made as part of a Borrowing consisting of Revolving Loans made by the
Lenders ratably in accordance with their respective Commitments. Each
Competitive Loan shall be made in accordance with the procedures set forth in
Section 2.04. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments and Competitive Bids of the
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25
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) Subject to Section 2.14, (i) each Revolving Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the applicable
Borrower may request in accordance herewith, and (ii) each Competitive Borrowing
shall be comprised entirely of Eurodollar Loans or Fixed Rate Loans as the
applicable Borrower may request in accordance herewith. Each Swingline Loan
shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the applicable Borrower to repay such Loan in accordance with the terms of
this Agreement or any other Loan Document.
(c) At the commencement of each Interest Period for any
Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $5,000,000. At the
time that each ABR Revolving Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000; provided that an ABR Revolving Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total Commitments or
that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(e). Each Competitive Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than
$10,000,000. Each Swingline Loan shall be in an amount that is an integral
multiple of $100,000 and not less than $1,000,000. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall
not at any time be more than a total of ten Eurodollar Revolving Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, no
Borrower shall be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a
Revolving Borrowing, a Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the
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26
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.06(e) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the applicable Borrower. Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the relevant Borrower's account
to which funds are to be disbursed, which shall comply with the
requirements of Section 2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the relevant Borrower shall be deemed to have selected an Interest Period of one
month's duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender's Loan to be made as
part of the requested Borrowing.
SECTION 2.04. Competitive Bid Procedure. (a) Subject to the
terms and conditions set forth herein, from time to time during the Availability
Period the Company may
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request Competitive Bids and may (but shall not have any obligation to) accept
Competitive Bids and borrow Competitive Loans; provided that the sum of the
total Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans at any time shall not exceed the aggregate amount
of the Lenders' Commitments. To request Competitive Bids, the Company shall
notify the Administrative Agent of such request by telephone, in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, four
Business Days before the date of the proposed Borrowing and, in the case of a
Fixed Rate Borrowing, not later than 10:00 a.m., New York City time, one
Business Day before the date of the proposed Borrowing; provided that the
Company may submit up to (but not more than) three Competitive Bid Requests on
the same day, but a Competitive Bid Request shall not be made within five
Business Days after the date of any previous Competitive Bid Request, unless any
and all such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each such telephonic
Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy
to the Administrative Agent of a written Competitive Bid Request in a form
approved by the Administrative Agent and signed by the Company. Each such
telephonic and written Competitive Bid Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be a Eurodollar Borrowing
or a Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing,
which shall be a period contemplated by the definition of the term
"Interest Period"; and
(v) the location and number of the Company's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.07.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.
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(b) Each Lender may (but shall not have any obligation to)
make one or more Competitive Bids to the Company in response to a Competitive
Bid Request. Each Competitive Bid by a Lender must be in a form approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurodollar Competitive Borrowing, not later than 9:30
a.m., New York City time, three Business Days before the proposed date of such
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
9:30 a.m., New York City time, on the proposed date of such Competitive Borrow
ing. Competitive Bids that do not conform substantially to the form approved by
the Administrative Agent may be rejected by the Administrative Agent, and the
Administrative Agent shall notify the applicable Lender as promptly as
practicable. Each Competitive Bid shall specify (i) the principal amount (which
shall be a minimum of $10,000,000 and an integral multiple of $1,000,000 and
which may equal the entire principal amount of the Competitive Borrowing re
quested by the Company) of the Competitive Loan or Loans that the Lender is
willing to make, (ii) the Competitive Bid Rate or Rates at which the Lender is
prepared to make such Loan or Loans (expressed as a percentage rate per annum in
the form of a decimal to no more than four decimal places) and (iii) the
Interest Period applicable to each such Loan and the last day thereof.
(c) The Administrative Agent shall promptly notify the Company
by telecopy of the Competitive Bid Rate and the principal amount specified in
each Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, the
Company may accept or reject any Competitive Bid. The Company shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, in the case of a Eurodollar Competitive Borrowing,
not later than 10:30 a.m., New York City time, three Business Days before the
date of the proposed Competitive Borrowing, and in the case of a Fixed Rate
Borrowing, not later than 10:30 a.m., New York City time, on the proposed date
of the Competitive Borrowing; provided that (i) the failure of the Company to
give such notice shall be deemed to be a rejection of each Competitive Bid, (ii)
the Company shall not accept a Competitive Bid made at a particular Competitive
Bid Rate if
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the Company rejects a Competitive Bid made at a lower Competitive Bid Rate,
(iii) the aggregate amount of the Competitive Bids accepted by the Company shall
not exceed the aggregate amount of the requested Competitive Borrowing specified
in the related Competitive Bid Request, (iv) to the extent necessary to comply
with clause (iii) above, the Company may accept Competitive Bids at the same
Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such Competitive Bid, and (v) except pursuant
to clause (iv) above, no Competitive Bid shall be accepted for a Compet itive
Loan unless such Competitive Loan is in a minimum principal amount of
$10,000,000 and an integral multiple of $1,000,000; provided further that if a
Competitive Loan must be in an amount less than $10,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may be for a minimum of
$1,000,000 or any integral multiple thereof, and in calculating the pro rata
allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by the
Company. A notice given by the Company pursuant to this paragraph shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each
bidding Lender by telecopy whether or not its Competitive Bid has been accepted
(and, if so, the amount and Competitive Bid Rate so accepted), and each
successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such Competitive
Bid directly to the Company at least one quarter of an hour earlier than the
time by which the other Lenders are required to submit their Competitive Bids to
the Administrative Agent pursuant to paragraph (b) of this Section.
SECTION 2.05. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Company from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $25,000,000
or (ii) the sum of the
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30
total Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans exceeding the aggregate amount of the Lenders'
Commitments; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Company may
borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Company shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Company. The Swingline Lender shall make each Swingline
Loan available to the Company by means of a credit to the general deposit
account of the Company with the Swingline Lender (or, in the case of a Swingline
Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City
time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender
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shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Lenders. The Administrative Agent shall notify the Company of any
participations in any Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Company (or other party on behalf of the Company)
in respect of a Swingline Loan after receipt by the Swingline Lender of the
proceeds of a sale of participations therein shall be promptly remitted to the
Administrative Agent; any such amounts received by the Administrative Agent
shall be promptly remitted by the Administrative Agent to the Lenders that shall
have made their payments pursuant to this paragraph and to the Swingline Lender,
as their interests may appear. The purchase of participations in a Swingline
Loan pursuant to this paragraph shall not relieve the Company of any default in
the payment thereof.
SECTION 2.06. Letters of Credit. (a) General. Subject to the
terms and conditions set forth herein, the Company may request the issuance of
Letters of Credit for its own account or the account of any Borrowing
Subsidiary, in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Availability Period.
In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Company to, or entered into by
the Company with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Company shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice
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32
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Company also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Company shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $25,000,000 and (ii) the sum of
the total Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans shall not exceed the total Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage
of each LC Disbursement made by the Issuing Bank and not reimbursed by the
Company on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Company for any reason.
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this
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33
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance
of a Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Company shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Company shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Company prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Company receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Company receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $ 1,000,000, the Company may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.05 that such payment be financed with an ABR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Company's reimbursement obligation shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Company fails to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the Company in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice but subject to the time limitations
set forth in the immediately preceding sentence, each Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Company, in the same manner as provided in Section 2.07 with respect to Loans
made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Company
pursuant to this paragraph, the
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34
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Company of its obligation to
reimburse such LC Disbursement.
(f) Obligations Absolute. The Company's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement or any other Loan Document, or any term or
provision herein or therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect, (iii) payment
by the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit, or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section, constitute
a legal or equitable discharge of, or provide a right of setoff against, the
Company's obligations hereunder. Neither the Administrative Agent, the Lenders
nor the Issuing Bank, nor any of their Related Parties, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Company to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Company to the extent permitted by
applicable law) suffered by the
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35
Company that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Company by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Company of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Company shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Company reimburses such LC Disbursement,
at the rate per annum then applicable to ABR Revolving Loans; provided that, if
the Company fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(d) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
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36
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Company, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Company shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Company receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Company shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Company described in clause (h) or (i) of Article VII. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Company under this Agreement. The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made
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37
at the option and sole discretion of the Administrative Agent and at the
Company's risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Company for the LC Exposure at such time or, if
the maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Company under this
Agreement. If the Company is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Company within
three Business Days after all Events of Default have been cured or waived.
SECTION 2.07. Funding of Borrowings. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.05. The Administrative Agent will make such Loans
available to the relevant Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Company maintained with the
Administrative Agent in New York City and designated by such Borrower in the
applicable Borrowing Request or Competitive Bid Request; provided that ABR
Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.06(e) shall be remitted by the Administrative Agent to the
Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the
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38
applicable Lender and each Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
relevant Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of
such Borrower, the interest rate applicable to ABR Loans. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the relevant
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. A Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Competitive Borrowings or Swingline Borrowings, which may not be converted or
continued.
(b) To make an election pursuant to this Section, a Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if such Borrower
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
relevant Borrower.
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(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the relevant Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar Revolving Borrowing prior
to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Company, then, so long as an Event of Default is continuing (i) no outstanding
Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Revolving
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Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.09. Termination and Reduction of Commitments. (a)
Unless previously terminated, the Commitments shall terminate on the Maturity
Date.
(b) The Company may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than $5,000,000 and (ii) the Company shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.11, the sum of the Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans would exceed the
total Commitments.
(c) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) Each
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan of such Borrower on the Maturity Date, (ii) to the Administrative
Agent for the account of each Lender the then unpaid principal amount of each
Competitive Loan of such Lender made to such Borrower on the last day of the
Interest Period applicable to such Loan and (iii) to the Swingline Lender the
then unpaid principal amount of each Swingline Loan on the earlier of the
Maturity Date and the fifth day
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41
after such Swingline Loan is made; provided that on each date that a Revolving
Borrowing or Competitive Borrowing is made, the Company shall repay all
Swingline Loans then outstanding.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of any Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, each Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by each such promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 10.04) be represented by one or more
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.11. Prepayment of Loans. (a) Any Borrower shall have
the right at any time and from time to time to prepay any Borrowing of such
Borrower in whole or in part, subject to prior notice in accordance with
paragraph
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(b) of this Section; provided that no Borrower shall have the right to prepay
any Competitive Loan without the prior consent of the Lender thereof.
(b) The relevant Borrower shall notify the Administrative
Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender)
by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of prepayment, (ii) in
the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m.,
New York City time, one Business Day before the date of prepayment or (iii) in
the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York
City time, on the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given
in connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.09, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.09. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the same Type
as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by (i) accrued interest to the extent required by Section
2.13 and (ii) break funding payments pursuant to Section 2.16.
SECTION 2.12. Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Rate on the daily amount of the Commitment of such
Lender (whether used or unused) during the period from and including the date
hereof to but excluding the date on which such Commitment terminates; provided
that, if such Lender continues to have any Revolving Credit Exposure after its
Commitment terminates, then such facility fee shall continue to accrue on the
daily amount of such Lender's Revolving Credit Exposure from and including the
date on which its Commitment terminates to but excluding the date on which such
Lender ceases to have any Revolving Credit Exposure.
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Accrued facility fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date
hereof; provided that any facility fees accruing after the date on which the
Commitments terminate shall be payable on demand. All facility fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(b) The Company agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the Applicable Rate
used to determine the interest rate applicable to Eurodollar Revolving Loans on
the average daily amount of such Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date on which
such Lender's Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of .10% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure, as well as the Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
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(c) The Company agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Company and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees and participation fees, to the Lenders. Fees paid shall not be
refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest (i) in the case of a Eurodollar Revolving Loan, at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate, or (ii) in the case of a Eurodollar Competitive Loan, at the LIBO Rate for
the Interest Period in effect for such Borrowing plus (or minus, as applicable)
the Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at the Fixed Rate
applicable to such Loan.
(d) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by any Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Loans as provided in paragraph (a) of this
Section.
(e) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Commitments; provided that (i) interest accrued pursuant
to paragraph (d) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued
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45
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
(f) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders (or, in the case of a Eurodollar Competitive Loan, the Lender
that is required to make such Loan) that the Adjusted LIBO Rate or the
LIBO Rate, as applicable, for such Interest Period will not adequately
and fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, (ii) if any Borrowing Request requests a
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Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing
and (iii) any request by any Borrower for a Eurodollar Competitive Borrowing
shall be ineffective; provided that (A) if the circumstances giving rise to such
notice do not affect all the Lenders, then requests for Eurodollar Competitive
Borrowings may be made to Lenders that are not affected thereby and (B) if the
circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans or Fixed Rate Loans made by such Lender or any Letter
of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Company will pay to such Lender or the Issuing Bank, as the
case may be, such additional amount or amounts as will compensate such Lender or
the Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or on
the capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or
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47
the Letters of Credit issued by the Issuing Bank, to a level below that which
such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's or the Issuing Bank's policies and the policies of
such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Company will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section shall be delivered to the Company and shall be conclusive
absent manifest error. The Company shall pay such Lender or the Issuing Bank, as
the case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided that no Borrower shall be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
(e) Notwithstanding the foregoing provisions of this Section,
a Lender shall not be entitled to compensation pursuant to this Section in
respect of any Competitive Loan if the Change in Law that would otherwise
entitle it to such compensation shall have been publicly announced prior to
submission of the Competitive Bid pursuant to which such Loan was made.
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SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan or Fixed Rate Loan other than on
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Revolving Loan on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(b) and is revoked in accordance therewith), (d) the
failure to borrow any Competitive Loan after accepting the Competitive Bid to
make such Loan, or (e) the assignment of any Eurodollar Loan or Fixed Rate Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Company pursuant to Section 2.19, then, in any such event,
the Company shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Company and shall be
conclusive absent manifest error. The Company shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or an account
of any obligation of any Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if any
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
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49
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) The relevant Borrower shall indemnify the Administrative
Agent, each Lender and the Issuing Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of any
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Company by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by any Borrower to a Governmental Authority, such Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
relevant Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Company (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
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50
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing
of Setoffs. (a) Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its
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51
Revolving Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in LC Disbursements
and Swingline Loans and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to any Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Borrower rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the relevant Borrower will not make such payment, the
Administrative Agent may assume that such Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if such Borrower has not in fact made such payment, then
each of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so
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52
distributed to such Lender or Issuing Bank with interest thereon, for each day
from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b) or 2.18(d),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if any Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or
if any Loan Party is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under the Loan
Documents (other than any outstanding Competitive Loans held by it) to
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53
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Company
shall have received the prior written consent of the Administrative Agent (and,
if a Commitment is being assigned, the Issuing Bank and Swingline Lender), which
consent shall not unrea sonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
(other than Competitive Loans) and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Company (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling such Borrower to require such
assignment and delegation cease to apply.
SECTION 2.20. Borrowing Subsidiaries. On or after the
Effective Date, the Company may designate any wholly owned Subsidiary of the
Company as a Borrowing Subsidiary by delivery to the Administrative Agent of a
Borrowing Subsidiary Agreement executed by such Subsidiary and the Company, and
upon such delivery such Subsidiary shall for all purposes of this Agreement be a
Borrowing Subsidiary and a party to this Agreement until the Company shall have
executed and delivered to the Administrative Agent a Borrowing Subsidiary
Termination with respect to such Subsidiary, whereupon such Subsidiary shall
cease to be a Borrowing Subsidiary and a party to this Agreement.
Notwithstanding the preceding sentence, no Borrowing Subsidiary Termination will
become effective as to any Borrowing Subsidiary at a time when any principal of
or interest on any Loan to such Borrowing Subsidiary shall be outstanding
hereunder, provided that such Borrowing Subsidiary Termination shall be
effective to terminate such Borrowing Subsidiary's right to make further
Borrowings under this Agreement. As soon as practicable upon receipt of a
Borrowing Subsidiary Agreement, the Administrative Agent shall send a copy
thereof to each Lender.
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ARTICLE III
Representations and Warranties
The Company represents and warrants as to itself and the
Subsidiaries (and each other Borrower represents and warrants as to itself and
its subsidiaries, as applicable) to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Company and
its Subsidiaries (including each Borrower) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, has
all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions
are within each Loan Party's corporate powers and have been duly authorized by
all necessary corporate and, if required, stockholder action. Each Loan Document
has been duly executed and delivered by each Loan Party to which it is a party
and constitutes a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any Loan Party or any of its subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon any Loan Party
or any of its subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by any Loan Party or any of its subsidiaries, and
(d) will not result in the creation or
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imposition of any Lien on any asset of any Loan Party or any of its
subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Company has heretofore furnished to the Lenders its combined balance
sheet and statements of income, stockholders' equity and cash flows (i) as of
and for the fiscal year ended December 31, 1996, reported on by Deloitte &
Touche LLP, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended March 31, 1997, certified by
its chief financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries and related companies as
of such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
(b) The Company has heretofore furnished to the Lenders (i)
its unaudited pro forma combined balance sheet data and statement of operations
data, as set forth in the Registration Statement, for the fiscal year ended
December 31, 1996, prepared giving effect to the IPO Transactions as if they had
occurred on such date and at the beginning of such fiscal year, and (ii) its
projections (including income statements, balance sheets and cash flow
projections of the Company and Subsidiaries for fiscal years 1997-2001, in each
case included in the Confidential Information Memorandum). Such pro forma
financial data have been prepared in good faith by the Company, based on
assumptions believed by the management of the Company to be reasonable at the
time made, and present fairly on a pro forma basis the estimated financial
position and operations of the Company and Subsidiaries as of the date and for
the period ended December 31, 1996, assuming that the IPO Transactions had
actually occurred on such date and at the beginning of such period. Such
projections have been prepared in good faith by the Company, based on
assumptions believed by the management of the Company to be reasonable at the
time made.
(c) Since December 31, 1996, there has been no material
adverse change in the business, assets, operations or condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a whole.
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SECTION 3.05. Properties. (a) Each of the Borrowers and its
subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of the Borrowers and its subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrowers and their subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Borrower, threatened
against or affecting any Borrower or any of its subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect or (ii) that involve this
Agreement, any other Loan Document or the Transactions.
(b) Except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither the Company, any other Borrower nor any of
their respective subsidiaries (i) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become liable for any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrowers and its subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be
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expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
any Borrower nor any of its subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regula tion under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrowers and its
subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which such Borrower or such subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $5,000,000 the fair market value of the assets of such Plan,
and the present value of all accumulated benefit obligations of all underfunded
Plans (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $5,000,000 the
fair market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Company has made available to
the Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial statements,
certificates or other written information furnished by or on behalf of the
Company or any Subsidiary to the Administrative Agent or any Lender
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in connection with the negotiation of the Loan Documents or delivered hereunder
or thereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Company represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth as of the
Effective Date a list of all Subsidiaries and the percentage ownership interest
of the Company therein. As of the Effective Date, the shares of capital stock of
such Subsidiaries will be fully paid and non-assessable and such shares and
other ownership interests so indicated by Schedule 3.12 will be owned by the
Company, directly or indirectly, free and clear of all Liens other than as
permitted under Section 6.02. The Subsidiaries executing and delivering the
Subsidiary Guarantee Agreement and the Indemnity, Subrogation and Contribution
Agreement on the date hereof constitute all the Material Subsidiaries as of the
date hereof, other than Foreign Subsidiaries.
SECTION 3.13. Solvency. On the Effective Date and after the
consummation of the IPO Transactions, (a) the fair value of the assets of the
Company and the Subsidiaries will exceed their debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of the Company and the Subsidiaries will be greater than the amount
that will be required to satisfy their probable liability on their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) the Company and the
Subsidiaries will be able to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) the Company and the Subsidiaries will not have unreasonably
small capital with which to conduct the businesses in which they are engaged as
such businesses are now conducted and are proposed to be conducted following the
Effective Date.
SECTION 3.14. Federal Reserve Regulations. (a) Neither the
Company nor any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
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purchasing or carrying Margin Stock (as defined in Regulations G, U and X of the
Board).
(b) No part of the proceeds of the Loans or the Letters of
Credit has been or will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any purpose which entails a
violation of the provisions of the Regulations of the Board, including, without
limitation, Regulation G, U or X thereof. Not more than 25% of the assets
subject to the restrictions of Sections 6.02 and 6.09 will at any time consist
of Margin Stock (as defined in Regulations G, U and X of the Board).
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of Weil, Gotshal & Manges LLP, counsel
for the Loan Parties, substantially in the form of Exhibit B, and
covering such other matters relating to the Loan Parties, this
Agreement, any other Loan Document or the Transactions as the Required
Lenders shall reasonably request. Each Loan Party hereby requests such
counsel to deliver such opinion.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of the Loan Parties, the authorization of the Transactions and
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any other legal matters relating to the Loan Parties, this Agreement,
any other Loan Document or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received (1) a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Company, confirming (i)
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02, (ii) that all governmental and third-party approvals
necessary or advisable in connection with the IPO Transactions
contemplated hereby have been obtained and are in full force and effect
and (iii) the Company's existing credit agreements and intercompany
debt have been terminated and all related loans and obligations have
been paid in full and no other Indebtedness (other than Indebtedness
set forth in Schedule 6.01) is outstanding, and (2) a certificate in
form and substance satisfactory to the Administrative Agent, dated the
date of such Borrowing or issuance of a Letter of Credit and signed by
a Financial Officer of the Company confirming that (i) the IPO
Transactions have been consummated in all respects in accordance with
the IPO Information and all applicable laws, (ii) immediately prior to
the IPO Transactions, no material adverse change in the business,
assets, operations, prospects or condition, financial or otherwise, of
the Company and its Subsidiaries, taken as a whole, shall have occurred
and (iii) immediately after giving effect to the IPO Transactions, no
Default shall have occurred and be continuing.
(e) The Administrative Agent shall have received the
Subsidiary Guarantee Agreement duly executed by each Subsidiary
Guarantor.
(f) The Administrative Agent shall have received the
Indemnity, Subrogation and Contribution Agreement duly executed by the
Company and each Subsidiary that shall be a party to the Subsidiary
Guarantee Agreement.
(g) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by a Financial Officer
of the Company, in form and substance reasonably satisfactory to the
Lenders, confirming the solvency of the Company and its Subsidiaries
after giving effect to the initial Loans and issuance of Letters of
Credit hereunder and the use of proceeds thereof.
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(h) The Lenders shall be reasonably satisfied that there are
no environmental and employee health and safety exposures to which the
Company or the Subsidiaries may be subject other than any such
exposures that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
(i) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder.
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 10.02)
at or prior to 3:00 p.m., New York City time, on July 1, 1997 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of each Loan Party set
forth in each Loan Document shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on
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the date thereof as to the matters specified in paragraphs (a) and (b) of this
Section.
SECTION 4.03. Each Borrowing Subsidiary Credit Event. The
obligation of each Lender to make Loans hereunder to any Borrowing Subsidiary is
subject to the satisfaction of the following conditions:
(a) The Administrative Agent (or its counsel) shall have
received such Borrowing Subsidiary's Borrowing Subsidiary Agreement
duly executed by all parties thereto.
(b) The Administrative Agent shall have received a favorable
written opinion of counsel for such Borrowing Subsidiary, substantially
in the form of Exhibit C, and covering such other matters relating to
such Borrowing Subsidiary or its Borrowing Subsidiary Agreement as the
Required Lenders shall reasonably request.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of such Borrowing Subsidiary, the authorization of the
Transactions insofar as they relate to such Borrowing Subsidiary and
any other legal matters relating to such Borrowing Subsidiary, its
Borrowing Subsidiary Agreement or such Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
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SECTION 5.01. Financial Statements and Other Information. The
Company will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Company, its audited consolidated balance sheet and related statements
of operations, stockholders' equity and cash flows as of the end of and
for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by Deloitte &
Touche LLP or other independent public accountants of recognized
national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope of
such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and
results of operations of the Company and its consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Company, its consolidated
balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year, setting forth in each case
in comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and
results of operations of the Company and its consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Company (i) certifying as to whether a Default has occurred and, if
a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections
6.10 and 6.11 and (iii) stating whether any change in GAAP or in the
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application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04 and, if any such
change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Company or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities
exchange, or distributed by the Company to its shareholders generally,
as the case may be; and
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Company or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. Notices of Material Events. The Company will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Company or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in
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65
liability of the Company and its Subsidiaries in an aggregate amount
exceeding $5,000,000; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Company
will, and will cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
SECTION 5.04. Payment of Obligations. The Company will, and
will cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The
Company will, and will cause each of its Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection Rights. The
Company will, and will cause each of its
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66
Subsidiaries to, keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its
business and activities. The Company will, and will cause each of its
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Company will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds and Letters of Credit. The
proceeds of the Loans will be used only for general corporate purposes of the
Borrowers, including (i) to repay the existing intercompany and bank debt
referred in clause (i) of the definition of IPO Transactions, (ii) to distribute
the dividend referred to in clause (ii) of the definition of IPO Transactions,
(iii) to acquire the entities referred to in clause (iii) of the definition of
IPO Transactions and (iv) to finance future acquisitions. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations G, U and X. Letters of Credit will be issued only to
support obligations incurred by the Company and the Subsidiaries in the ordinary
course of their businesses.
SECTION 5.09. Further Assurances. The Company will cause each
Subsidiary that on the date of the initial Borrowing or issuance of a Letter of
Credit is a Material Subsidiary (other than any Foreign Subsidiary) to execute
and deliver to the Administrative Agent, prior to such Borrowing or issuance, a
Subsidiary Guarantee Agreement under which it shall become and assume the
obligations of a Subsidiary Guarantor hereunder and the Indemnity, Subrogation
and Contribution Agreement. Promptly upon (i) the acquisition or formation of
any Material Subsidiary (other than a Foreign Subsidiary), or (ii) any transfer
of
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assets by the Company or one or more Subsidiaries to any existing Subsidiary
(other than a Foreign Subsidiary) that results in such Subsidiary becoming a
Material Subsidiary, and not later than 30 days after the next date on which
financial statements are delivered pursuant to Section 5.01(a) or (b) after any
existing Subsidiary (other than a Foreign Subsidiary) becomes a Material
Subsidiary other than as provided in clause (ii) above, the Company will (i)
cause such Subsidiary to execute and deliver to the Administrative Agent a
Subsidiary Guarantee Agreement under which such Subsidiary shall become and
assume the obligations of a Subsidiary Guarantor hereunder and the Indemnity,
Subrogation and Contribution Agreement and (ii) deliver an opinion of counsel,
reasonably satisfactory to the Administrative Agent, substantially in the form
of Exhibit B.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Company covenants and agrees with
the Lenders that:
SECTION 6.01. Subsidiary Indebtedness. The Company will not
permit any Subsidiary to create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof or shorten the term thereof;
(c) Indebtedness of any Subsidiary to the Company or any other
Subsidiary;
(d) Guarantees by any Subsidiary of Indebtedness of the
Company or any other Subsidiary;
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(e) Indebtedness of any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or
secured by a Lien on any such assets prior to the acquisition thereof,
and extensions, renewals and replacements of any such Indebtedness that
do not increase the outstanding principal amount thereof; provided that
(i) such Indebtedness is incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement and
(ii) the aggregate principal amount of Indebtedness permitted by this
clause (e) shall not exceed $25,000,000 at any time outstanding;
(f) Indebtedness of any Person that becomes a Subsidiary after
the date hereof; provided that (i) such Indebtedness exists at the time
such Person becomes a Subsidiary and is not created in contemplation of
or in connection with such Person becoming a Subsidiary and (ii) the
aggregate principal amount of Indebtedness permitted by this clause (f)
shall not exceed $30,000,000 at any time outstanding;
(g) other secured Indebtedness in an aggregate principal
amount not exceeding $10,000,000 at any time outstanding for all the
Subsidiaries; and
(h) other unsecured Indebtedness in an aggregate principal
amount not exceeding, together with the aggregate principal amount of
all Indebtedness permitted by clause (g) of this Section and the
aggregate sale price of all arrangements permitted by Section 6.09,
$40,000,000 at any time outstanding for the Company and all the
Subsidiaries.
SECTION 6.02. Liens. The Company will not, and will not permit
any Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned
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or hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or
asset of the Company or any Subsidiary and (ii) such Lien shall secure
only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof or shorten the term thereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the
date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary,
as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Company or any Subsidiary and (iii) such Lien
shall secure only those obligations which it secures on the date of
such acquisition or the date such Person becomes a Subsidiary, as the
case may be, and extensions, renewals and replacements thereof that do
not increase the outstanding principal amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Company or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by clause (e) of
Section 6.01, (ii) such security interests and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 90% of the cost of
acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or
assets of the Company or any Subsidiary;
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(e) Liens on property or assets of any Subsidiary securing
Indebtedness of such Subsidiary owing to the Company or any Subsidiary;
provided that the aggregate principal amount of Indebtedness permitted
by this clause (e), together with the aggregate principal amount of
Indebtedness permitted by clauses (e) and (g) of Section 6.01, shall
not exceed $35,000,000; and
(f) Liens arising by way of retention of title of goods by the
supplier of goods where such goods are supplied subject to retention of
title and are acquired in the ordinary course of business of the
Company or any Subsidiary.
SECTION 6.03. Fundamental Changes. (a) The Company will not,
and will not permit any Material Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired), or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Person may merge into the Company in a
transaction in which the Company is the surviving corporation, (ii) any Person
(other than the Company) may merge into any Material Subsidiary in a transaction
in which the surviving entity is a Subsidiary, (iii) any Material Subsidiary may
sell, transfer, lease or otherwise dispose of its assets to the Company or to
another Material Subsidiary and (iv) any Material Subsidiary may liquidate or
dissolve if the Company determines in good faith that such liquidation or
dissolution is in the best interests of the Company and is not materially
disadvantageous to the Lenders; provided that any such merger involving a Person
that is not a wholly owned Material Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 6.04. For purposes of
this paragraph only, the "5%" referred to in the definition of Material
Subsidiary shall be replaced by "7.5%."
(b) The Company will not permit any Subsidiary to issue shares
of capital stock of such Subsidiary, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
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continuing, any Subsidiary may issue shares of its capital stock to the Company
or to any Material Subsidiary.
(c) The Company will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Company and its Subsidiaries on the date
of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Company will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments by the Company in the capital stock of its
Subsidiaries;
(c) loans or advances made by the Company to any wholly-owned
Subsidiary and made by any Subsidiary to the Company or any other
Subsidiary;
(d) Guarantees constituting Indebtedness permitted
by Section 6.01;
(e) investments by the Company or its Subsidiaries in any
Person (other than a Subsidiary) in an aggregate amount for all Persons
not exceeding $25,000,000;
(f) any acquisition of the capital stock or substantially all
of the assets of any Person by the Company or any of its Subsidiaries;
provided that (i) at the time thereof and after giving effect thereto
no Default shall have occurred and be continuing, (ii) the Company
would be in compliance with Sections 6.10 and 6.11 for the most recent
calculation period and as of the last day thereof as if such
acquisition had been consummated at the beginning of
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such calculation period, (iii) any acquired business shall be of the
type conducted by the Company and its Subsidiaries on the date of
execution of this Agreement and businesses reasonably related thereto
and (iv) in the case of any such acquisition of any capital stock of or
other ownership interest in any Person which is not then a Subsidiary,
such acquisition will result in such Person becoming a Subsidiary; and
(g) investments by General Cable Industries, Inc. after the
date hereof in an aggregate amount not exceeding $10,000,000 in a joint
venture known as General Photonics LLC.
SECTION 6.05. Hedging Agreements. The Company will not, and
will not permit any of its Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Company or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities.
SECTION 6.06. Restricted Payments. The Company will not, and
will not permit any of its Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except (a) the Company may
(i) declare and pay dividends with respect to its capital stock payable solely
in additional shares of its common stock or in cash and (ii) repurchase or
redeem shares of its capital stock; provided that (1) such cash dividends,
repurchases and redemptions for fiscal year 1997 shall be limited to the
dividend of $42,600,000 to Wassall Netherlands Cable B.V. plus $2,500,000 to be
paid to the Borrower's public stockholders; (2) for fiscal year 1998 and
thereafter, the aggregate amount of cash dividends, repurchases and redemptions
in any such fiscal year shall not exceed the greater of (x) 50% of the Company's
consolidated net income for the immediately preceding fiscal year plus, without
duplication, 50% of the Company's cumulative consolidated net income for the
period commencing on January 1, 1997, through December 31 of the immediately
preceding fiscal year minus the cumulative cash dividends, repurchases and
redemptions actually made during such period (and excluding the dividend paid to
Wassall Netherlands Cable B.V. in 1997) (collectively, the "Restricted
Availability"); provided, that in no event shall any cash dividends, repurchases
or redemptions payable under this clause (x) exceed the greater of $0.20 per
fiscal year per
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share of the Borrower's common stock outstanding at the end of the immediately
preceding fiscal year and the cash dividends, repurchases and redemptions made
in the immediately preceding fiscal year; and (y) 70% of the Company's
consolidated net income for the immediately preceding fiscal year not to exceed
the Restricted Availability, (b) Subsidiaries may declare and pay dividends
ratably with respect to their capital stock and (c) the Company may make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Company and its
Subsidiaries.
SECTION 6.07. Transactions with Affiliates. The Company will
not, and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) in the ordinary course of business at prices and
on terms and conditions not less favorable to the Company or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Company and its Subsidiaries not involving
any other Affiliate and (c) any Restricted Payment permitted by Section 6.06.
SECTION 6.08. Restrictive Agreements. The Company will not,
and will not permit any of its Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Company or any Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets, or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its capital stock or to
make or repay loans or advances to the Company or any other Subsidiary or to
Guarantee Indebtedness of the Company or any other Subsidiary; provided that (i)
the foregoing shall not apply to restrictions and conditions imposed by law or
by this Agreement, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.08 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such
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restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
SECTION 6.09. Sale and Lease-Back Transactions. The Company
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, enter into any arrangement with any Person (other than a
wholly-owned Subsidiary) whereby it shall sell or transfer any property used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property which it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred, except for any such arrangement or arrangements with an aggregate
sale price not exceeding in any fiscal year $5,000,000, subject to clause (h) of
Section 6.01.
SECTION 6.10. Leverage Ratio. The Leverage Ratio will not
exceed 3.75 to 1.00 at any time; provided that (i) the Leverage Ratio at
September 30, 1997 shall be based on EBITDA for the Company and its Subsidiaries
on a consolidated basis for the one-fiscal quarter period then ended times four,
(ii) the Leverage Ratio at December 31, 1997 shall be based on EBITDA for the
Company and its Subsidiaries on a consolidated basis for the two-fiscal quarter
period then ended times two and (iii) the Leverage Ratio at March 31, 1998 shall
be based on EBITDA for the Company and its Subsidiaries on a consolidated basis
for the three-fiscal quarter period then ended times 1.34.
SECTION 6.11. Interest Coverage Ratio. The Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Company will not
be less than (i) 2.50 to 1.00 through June 30, 1998, (ii) 3.00 to 1.00 for any
period ending on or prior to June 30, 1999 or (iii) 3.50 to 1.00 thereafter;
provided that (i) the ratio for the period ended September 30, 1997 shall be
based on Cash Interest Expense and EBITDA for the Company and its Subsidiaries
on a consolidated basis for the one-fiscal quarter period then ended times four,
(ii) the ratio for the period ended December 31, 1997 shall be based on Cash
Interest Expense and EBITDA for the Company and its Subsidiaries on a
consolidated basis for the two-fiscal
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quarter period then ended times two and (iii) the ratio for the period ended
March 31, 1998 shall be based on Cash Interest Expense and EBITDA for the
Company and its Subsidiaries on a consolidated basis for the three-fiscal
quarter period then ended times 1.34.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) any Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement, when and as the same
shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of the Loan Party or any subsidiary thereof in or in
connection with any Loan Document or any amendment or modification
hereof or thereof or waiver hereunder or thereunder, or in any report,
certificate, financial statement or other document furnished pursuant
to or in connection with any Loan Document or any amendment or
modification hereof or thereof or waiver hereunder or thereunder, shall
prove to have been incorrect when made or deemed made;
(d) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.03 (with respect to
any Borrower's existence) or 5.08 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained
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in any Loan Document (other than those specified in clause (a), (b) or
(d) of this Article), and such failure shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent to
the Company (which notice will be given at the request of any Lender);
(f) the Company or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of any Borrower or any
Material Subsidiary thereof or its debts, or of a substantial part of
its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Borrower or any Material
Subsidiary thereof or for a substantial part of its assets, and, in any
such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(i) any Borrower or any Material Subsidiary thereof shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or
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77
similar law now or hereafter in effect, (ii) consent to the institution
of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii)
apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any
Borrower or any subsidiary thereof or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) any Borrower or any Material Subsidiary thereof shall
become unable, admit in writing or fail generally to pay its debts as
they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against any
Borrower, any subsidiary thereof or any combination thereof and the
same shall remain undischarged for a period of 45 consecutive days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon
any assets of any Borrower or any subsidiary thereof to enforce any
such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability
of the Company and its Subsidiaries in an aggregate amount exceeding
(i) $5,000,000 in any year or (ii) $10,000,000 for all periods;
(m) the Company or any Subsidiary Guarantor shall fail to
observe or perform any covenant, condition or agreement contained in
Article IX or the Subsidiary Guarantee Agreement, as the case may be,
or the guarantee of the Company hereunder or of any Subsidiary
Guarantor under the Subsidiary Guarantee Agreement shall not be (or
shall be claimed by the Company or any Subsidiary Guarantor not to be)
valid or in full force and effect; or
(n) a Change in Control shall occur;
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then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Company, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrowers accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by each Borrower; and in case of any
event with respect to any Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrowers accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof, together with such
actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Company or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
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The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise upon receipt of notice in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 10.02), and
(c) except as expressly set forth herein, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Company or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 10.02) or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by a Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or
therein, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be
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genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for any Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign, and shall resign at the request of the Required Banks, at any time by
notifying the Lenders, the Issuing Bank and the Company. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Company, to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Company to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Company and such successor. After the Administrative
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81
Agent's resignation hereunder, the provisions of this Article and Section 10.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
Guarantee
In order to induce the Lenders to extend credit hereunder, the
Company hereby irrevocably and unconditionally guarantees, as a primary obligor
and not merely as a surety, the Obligations. The Company further agrees that the
due and punctual payment of the Obligations may be extended or renewed, in whole
or in part, without notice to or further assent from it, and that it will remain
bound upon its Guarantee hereunder notwithstanding any such extension or renewal
of any Obligation.
The Company waives presentment to, demand of payment from and
protest to any Borrowing Subsidiary of any of the Obligations, and also waives
notice of acceptance of its obligations and notice of protest for nonpayment.
The obligations of the Company hereunder shall not be affected by (a) the
failure of any Lender or the Administrative Agent to assert any claim or demand
or to enforce any right or remedy against any Borrowing Subsidiary under the
provisions of this Agreement, any other Loan Document or otherwise; (b) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Agreement, any Borrowing Subsidiary Agreement or any other Loan Document
or
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agreement; or (c) the failure of any Lender to exercise any right or remedy
against any Borrowing Subsidiary.
The Company further agrees that its agreement hereunder
constitutes a promise of payment when due (whether or not any bankruptcy or
similar proceeding shall have stayed the accrual or collection of any of the
Obligations or operated as a discharge thereof) and not merely of collection,
and waives any right to require that any resort be had by any Lender to any
balance of any deposit account or credit on the books of any Lender in favor of
any Borrower or any other person.
The obligations of the Company hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever, by reason of the invalidity, illegality or
unenforceability of the Obligations, any impossibility in the performance of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of the Company hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent or any Lender to
assert any claim or demand or to enforce any remedy under this Agreement or any
other Loan Document or agreement, by any waiver or modification in respect of
any thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Obligations, or by any other act or omission which may or
might in any manner or to any extent vary the risk of the Company or otherwise
operate as a discharge of the Company or any other Borrower as a matter of law
or equity.
The Company further agrees that its obligations hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by the Administrative Agent or any Lender upon the
bankruptcy or reorganization of any Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which the Administrative Agent or any Lender may have at law or in
equity against the Company by virtue hereof, upon the failure of any Borrowing
Subsidiary to pay any Obligation when and as the same shall become due, whether
at maturity, by acceleration, after notice of prepayment or otherwise, the
Company hereby promises to and will, upon receipt of written demand by the
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Administrative Agent, forthwith pay, or cause to be paid, in cash the amount of
such unpaid Obligation.
Upon payment in full by the Company of all Obligations, each
Lender shall, in a reasonable manner, assign the amount of such Obligations owed
to it and so paid to the Company, or make such disposition thereof as the
Company shall direct (all without recourse to any Lender and without any
representation or warranty by any Lender).
Upon payment by the Company of any sums as provided above, all
rights of Company against any Borrowing Subsidiary arising as a result thereof
by way of right of subrogation or otherwise shall in all respects be
subordinated and junior in right of payment to the prior indefeasible payment in
full of all the Obligations owed by such Borrowing Subsidiary to the Lenders.
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Borrower, to it in care of the Company at 4
Tesseneer Drive, Highland Heights, KY 41076-9753, Attention of the
Chief Financial Officer (Telecopy No. (606) 572-8011);
(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
Floor, New York, New York 10081, Attention of Janet Belden (Telecopy
No. (212) 552-5658, with a copy to The Chase Manhattan Bank, 10 South
LaSalle Street, Chicago, IL 60603, Attention of Jon Hinard (Telecopy
No. (312) 807-4077);
(c) if to the Issuing Bank, to it at The Chase Manhattan Bank,
Attention of Janet Belden (Telecopy No. (212) 552-5658);
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(d) if to the Swingline Lender, to it at The Chase Manhattan
Bank, Attention of Janet Belden (Telecopy No. (212) 552-5658); and
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. Waivers; Amendments. (a) No failure or delay by
the Administrative Agent, the Issuing Bank or any Lender in exercising any right
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agree ment or
consent to any departure by any Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any Borrowing Subsidiary
Agreement nor any provision hereof or thereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Company and the Required Lenders or by the Company and the Administrative Agent
with the consent of the Required Lenders (and, in the case of a Borrowing
Subsidiary Agreement, the applicable Borrowing Subsidiary); provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii)
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reduce the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender or (vi) release any Loan Party from, or limit or condition its
obligations under, Article IX or the Subsidiary Guarantee Agreement, without the
written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Issuing Bank or the Swingline Lender hereunder without the prior
written consent of the Administrative Agent, the Issuing Bank or the Swingline
Lender, as the case may be.
SECTION 10.03. Expenses; Indemnity; Damage Waiver. (a) The
Company shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or
waivers of the provisions hereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel (including the allocated costs of
internal counsel, if any) for the Administrative Agent, the Issuing Bank or any
Lender, in connection with the enforcement or protection of its rights in
connection with any Loan Document, including its rights under this
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Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Company shall indemnify the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
(including the allocated costs of internal counsel, if any) for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the Transactions or
any other transactions contemplated hereby or thereby, (ii) any Loan or Letter
of Credit or the use of the proceeds therefrom (including any refusal by the
Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by the
Company or any of its Subsidiaries, or any Environmental Liability related in
any way to the Company or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are deter mined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount
required to be paid by it to the Administrative Agent, the Issuing Bank or the
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the
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87
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent, the Issuing Bank or the Swingline
Lender in its capacity as such.
(d) To the extent permitted by applicable law, no Borrower
shall assert, and each Borrower hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 10.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto (including any Borrowing Subsidiaries) and their respective successors
and assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that no Borrower may assign or otherwise
transfer any of its rights or obligations hereunder or under any Borrowing
Subsidiary Agreement without the prior written consent of each Lender (and any
attempted assignment or transfer by any Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Company and the
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88
Administrative Agent (and, in the case of an assignment of all or a portion of a
Commitment or any Lender's obligations in respect of its LC Exposure or
Swingline Exposure, the Issuing Bank and the Swingline Lender) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
an Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Company and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that this
clause (iii) shall not apply to rights in respect of outstanding Competitive
Loans, (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Company otherwise
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 10.03). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
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89
(c) The Administrative Agent, acting for this purpose as an
agent of each Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
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90
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, each Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and
2.17 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 10.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties herein or in any other
Loan Document or in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto or thereto
and shall survive the execution and delivery of this Agreement and any other
Loan
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91
Document and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17, 10.03 and 10.13 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any other Loan Document or
any provision hereof or thereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality
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92
and enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of any Borrower against any of and all the obligations of such Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Borrower or its properties in
the courts of any jurisdiction.
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92
(c) Each Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to this Agreement (including any Borrowing
Subsidiaries) irrevocably consents to service of process in the manner provided
for notices in Section 10.01. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by
law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREE MENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12. Confidentiality. Each of the Administrative
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to
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94
keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Company
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
from a source other than the Company. For the purposes of this Section,
"Information" means all information received from the Company relating to the
Company or its business, other than any such information that is available to
the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Company; provided that, in the case of
information received from the Company after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 10.13. Conversion of Currencies. (a) If, for the
purpose of obtaining judgment in any court, it is necessary to convert a sum
owing hereunder in one currency into another currency, each party hereto
(including any Borrowing Subsidiary) agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures in the relevant jurisdiction the first
currency could be purchased with such other currency on the Business Day
immediately preceding the day on which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due
to any party hereto or any holder of the obligations owing hereunder (the
"Applicable Creditor") shall, notwithstanding any judgment in a currency (the
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95
"Judgment Currency") other than the currency in which such sum is stated to be
due hereunder (the "Agreement Currency"), be discharged only to the extent that,
on the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 10.13 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
GENERAL CABLE CORPORATION,
by
-------------------------
Name:
Title:
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96
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by
-------------------------
Name:
Title:
THE ASAHI BANK, LTD.,
by
-------------------------
Name:
Title:
THE BANK OF NEW YORK,
by
-----------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
by
-----------------------
Name:
Title:
CREDIT AGRICOLE,
by
----------------------
Name:
Title:
CREDIT LYONNAIS CHICAGO
BRANCH,
by
-----------------------
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97
Name:
Title:
FIFTH THIRD BANK OF NORTHERN
KENTUCKY,
by
-----------------------
Name:
Title:
FIRST CHICAGO NBD CORPORATION,
by
------------------------
Name:
Title:
THE FUJI BANK, LIMITED,
by
-------------------------
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
by
------------------------
Name:
Title:
MELLON BANK, N.A.,
by
-----------------------
Name:
Title:
NATIONAL CITY BANK OF DAYTON,
by
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98
-----------------------
Name:
Title:
PNC BANK, OHIO, NATIONAL
ASSOCIATION,
by
-----------------------
Name:
Title:
STAR BANK,
by
-----------------------
Name:
Title:
<PAGE>
<PAGE>
GENERAL CABLE CORPORATION
1997 ANNUAL INCENTIVE PLAN
1. PURPOSE AND TERM OF PLAN.
The purpose of the General Cable Corporation 1997 Annual
Incentive Plan (the "Plan") is to provide a cash annual incentive award with
respect to the period commencing on January 1, 1997 and ending on December 31,
1997 (the "Performance Period") in order to motivate certain executive officers
and key employees of General Cable Corporation, a Delaware corporation (the
"Company"), and its subsidiaries to put forth maximum efforts toward the growth,
profitability and success of the Company and its subsidiaries and to encourage
such individuals to remain in the employ of the Company or the applicable
subsidiary.
The Plan shall become effective as of January 1, 1997 and
shall terminate upon the payout of all annual incentive awards under the Plan.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee (the
"Committee"), which shall be the Board of Directors of the Company (the "Board")
or, once established, a committee or a subcommittee of the Board of Directors
appointed by the Board from among its members. The Committee shall have all the
powers vested in it by the terms of the Plan, such powers to include authority
(within the limitations described herein) to select the persons to be granted
awards under the Plan, to determine the time when awards will be granted, to
determine whether objectives and conditions for earning awards have been met, to
determine whether awards will be paid at the end of the Performance Period or
deferred, and to determine whether an award or payment of an award should be
reduced or eliminated.
The Committee shall have full power and authority to
administer and interpret the Plan and to adopt such rules, regulations,
agreements, guidelines and instruments for the administration of the Plan and
for the conduct of its business as the Committee deems necessary or advisable.
The Committee's interpretations of the Plan, and all actions taken and
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determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
the Company, its stockholders and any person receiving an award under the Plan.
The Committee may delegate all or a portion of its power and
authority under the Plan to such officers (including, without limitation, the
Company's chief executive officer) or other employees of the Company as it shall
determine; provided, however, that no delegation shall be made regarding the
selection of executive officers of the Company who shall be granted awards under
the Plan, the amount and timing thereof, or the objectives and conditions
pertaining thereto.
3. ELIGIBILITY.
The Committee, in its discretion, may grant awards to such
executive officers and, based upon the recommendation of the chief executive
officer, other key employees as it shall determine from time to time. Executive
officers and other key employees who are granted awards under the Plan are
referred to herein as "participants."
4. AWARDS.
(a) GRANTING OF AWARDS. Participants shall be granted awards
under the Plan not earlier than the date of the consummation of the initial
public offering contemplated by the Company's Registration Statement on Form S-1
filed with the Securities and Exchange Commission on March 6, 1997 and
subsequently amended. The grant of awards under the Plan shall be evidenced by
"award letters" (which need not be identical) in such form as the Committee may
from time to time approve and which shall contain the terms and conditions, as
determined by the Committee, of a participant's award; provided, however, that
in the event of any conflict between the provisions of the Plan and any such
award letters, the provisions of the Plan shall prevail. An award shall be
determined by multiplying the participant's base salary (including all
deferrals) earned with respect to 1997 by applicable percentages based on the
achievement of specified performance targets. The maximum award that may be paid
out under the Plan to any participant (other than the Company's chief executive
officer and chief operating officer) shall not exceed 90 percent of such
participant's annual base salary on the date of the award; the maximum award
that may be paid out under the Plan to each of the Company's chief executive
officer and chief operating officer shall not exceed 120 percent of such
participant's annual base salary on the date of the award.
(b) PERFORMANCE TARGETS. Annual performance targets shall be
based on the performance of the Company, one or more of its subsidiaries or
affiliates, one or more of its business units or divisions, and/or the
individual for the fiscal year ending on December 31, 1997. For participants who
are executive officers of the Company, such targets shall be established by the
Committee. For other participants, the Company performance targets shall be
established by the Company's chief executive officer. Individual performance
targets shall be established by the manager of the applicable unit or division
of the Company (including subsidiaries and affiliates). Performance targets may
include provisions for graduated performance standards.
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(c) PAYMENT OF AWARDS. Awards shall be payable in cash to
participants who are employed at the time of payout upon certification by the
Committee that the Company has achieved the specified performance targets for
the Performance Period.
(d) DISCRETION. Subject to the maximum award that may be paid
out pursuant to Section 4(a) above, the Company's chief executive officer may
reduce or increase the award payouts for any participant (other than the
Company's chief executive officer, chief operating officer, chief financial
officer and general counsel), subject to the approval of the Committee.
5. TERMINATION OF EMPLOYMENT.
Subject to any written agreement between the Company and a
participant (other than any award letter under the Plan), if the participant's
employment with the Company or any of its subsidiaries is terminated for any
reason, either by the Company or the subsidiary, or by the participant, before
the participant receives his or her award payout as determined in accordance
with Section 4 above, the participant shall immediately forfeit such award;
provided, however, that the Committee, in its sole discretion, may pay to such
participant all or part of the award payout with respect to the Performance
Period that the participant would have received had the participant's employment
not been terminated.
6. MISCELLANEOUS PROVISIONS.
(a) GUIDELINES. The Committee may adopt from time to time
written policies for its implementation of the Plan.
(b) WITHHOLDING TAXES. The Company (or the relevant subsidiary
or affiliate) shall have the right to deduct from all awards or payouts
hereunder any federal, state, local or foreign taxes required by law to be
withheld with respect to such awards or payouts.
(c) NO RIGHTS TO AWARDS. Except as set forth herein, no
executive officer, key employee or other person shall have any claim or right to
be granted an award under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained in
the employ of the Company or any of its subsidiaries, divisions or affiliates.
3
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<PAGE>
(d) COSTS AND EXPENSES. The cost and expenses of administering
the Plan shall be borne by the Company and shall not be charged to any award nor
to any employee receiving an award.
(e) FUNDING OF PLAN. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the payment of any award under the Plan.
(f) PLAN SUPERSEDES OTHER PLANS OR ARRANGEMENTS. The Plan and
the award letters evidencing the grant of the awards contain the entire
understanding and agreement between the Company and each participant concerning
the subject matter hereof and supersedes all prior plans, award letters,
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the Company and any employee of the Company or any of
its subsidiaries with respect thereto.
7. AMENDMENT AND TERMINATION.
The Committee may at any time terminate the Plan, or may from
time to time amend the Plan in whole or in part, but no such action shall
adversely affect any rights or obligations with respect to any awards or payouts
theretofore made under the Plan.
4
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<PAGE>
GENERAL CABLE CORPORATION
1997 STOCK INCENTIVE PLAN
1. PURPOSE.
The General Cable Corporation 1997 Stock Incentive Plan (the
"Plan") is intended to provide incentives which will attract, retain and
motivate highly competent persons as non-employee directors and key employees of
General Cable Corporation (the "Company") and of any of its subsidiary
corporations now existing or hereafter formed or acquired, by providing them
opportunities to acquire shares of the common stock, par value $.01 per share,
of the Company ("Common Stock") or to receive monetary payments based on the
value of such shares pursuant to the Awards (as defined in Section 4 below)
described herein. Furthermore, the Plan is intended to assist in aligning the
interests of the Company's non-employee directors and key employees with those
of its stockholders.
2. ADMINISTRATION.
(a) The Plan shall be administered by a committee (the
"Committee"), which shall be the Board of Directors of the Company (the
"Board"), or, once established, a committee or subcommittee of the Board of
Directors appointed by the Board from among its members. The Committee may be
the Board's Compensation Committee. Unless the Board determines otherwise, the
Committee shall be comprised solely of not less than two members who each shall
qualify as a (i) "Non-Employee Director" within the meaning of Rule 16b-3(b)(3)
(or any successor rule) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and (ii) an "outside director" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
and the regulations thereunder. The Committee is authorized, subject to the
provisions of the Plan, to establish such rules and regulations as it deems
necessary for the proper administration of the Plan and to make such
determinations and interpretations and to take such action in connection with
the Plan and any Awards granted hereunder as it deems necessary or advisable.
All determinations and interpretations made by the Committee shall be binding
and conclusive on all participants and their legal representatives. No member
of the Board, no member of the Committee and no employee of the Company shall
be liable for any act or failure to act hereunder, except in circumstances
involving his or her bad faith, gross negligence or willful misconduct, or
for any act or failure to act hereunder by any other member or employee or by
any agent to whom duties in connection with the administration of this Plan have
been delegated. The Company shall indemnify members of the Committee and
any agent of the Committee who is an employee of the Company, against any and
all liabilities or expenses to which they may be subjected by reason of any
act or failure to act with respect to their duties on behalf of the Plan,
except in circumstances involving such person's bad faith, gross negligence or
willful misconduct.
(b) The Committee may delegate to one or more of its members,
or to one or more agents, such administrative duties as it may deem advisable,
and the Committee, or any person to whom it has delegated duties as aforesaid,
may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. The
Committee may employ such legal or other counsel, consultants and agents as it
may deem desirable for the administration of the
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Plan and may rely upon any opinion or computation received from any such
counsel, consultant or agent. Expenses incurred by the Committee in the
engagement of such counsel, consultant or agent shall be paid by the Company, or
the subsidiary or affiliate whose employees have benefitted from the Plan, as
determined by the Committee.
3. PARTICIPANTS.
Participants shall consist of such non-employee directors and
such key employees of the Company and any of its subsidiaries as the Committee
in its sole discretion determines to be significantly responsible for the
success and future growth and profitability of the Company and whom the
Committee may designate from time to time to receive Awards under the Plan.
Designation of a participant in any year shall not require the Committee to
designate such person to receive an Award in any other year or, once designated,
to receive the same type or amount of Award as granted to the participant in any
other year. The Committee shall consider such factors as it deems pertinent in
selecting participants and in determining the type and amount of their
respective Awards.
4. TYPE OF AWARDS.
Awards under the Plan may be granted in any one or a
combination of (1) Stock Options, (2) Stock Appreciation Rights, (3) Stock
Awards, (4) Performance Awards and (5) Stock Units (each as described below, and
collectively, the "Awards"). Stock Awards, Performance Awards and Stock Units
may, as determined by the Committee in its discretion, constitute
Performance-Based Awards, as described in Section 11 below. Awards shall be
evidenced by agreements (which need not be identical) in such forms as the
Committee may from time to time approve; provided, however, that in the event of
any conflict between the provisions of the Plan and any such agreements, the
provisions of the Plan shall prevail.
5. COMMON STOCK AVAILABLE UNDER THE PLAN.
(a) Shares Available. The aggregate number of shares of Common
Stock that may be subject to Awards, including Stock Options, granted under this
Plan shall be 2,450,000 shares of Common Stock, which may be authorized and
unissued or treasury shares, subject to any adjustments made in accordance with
Section 12 below.
(b) Maximum Individual Limit. The maximum number of shares of
Common Stock with respect to which Awards may be granted or measured to any
individual participant under the Plan during the term of the Plan shall not
exceed 1,000,000 shares, provided, however, that the maximum number of shares of
Common Stock with respect to which Stock Options and Stock Appreciation Rights
may be granted to an individual participant under the Plan during the term of
the Plan shall not exceed 750,000 shares (in each case, subject to adjustments
made in accordance with Section 12 below).
(c) Shares Underlying Awards That Again Become Available. Any
shares of Common Stock subject to a Stock Option, Stock Appreciation Right,
Stock Award, Performance Award, or Stock Unit which for any reason are
cancelled, terminated without having been exercised, forfeited, settled in cash
or delivered to the Company as part or full payment for the exercise of a Stock
Option, shall again be available for Awards under the Plan. The preceding
sentence shall apply only for purposes of determining the aggregate number of
shares of Common Stock subject to Awards but shall not apply for purposes of
determining the maximum number of shares of Common Stock subject to Awards
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(including the maximum number of shares of Common Stock subject to Stock Options
and Stock Appreciation Rights) that any individual participant may receive.
6. STOCK OPTIONS.
(a) In General. The Committee is authorized to grant Stock
Options to non-employee directors and key employees of the Company and any of
its subsidiaries and shall, in its sole discretion, determine the non-employee
directors and key employees who will receive Stock Options and the number of
shares of Common Stock underlying each Stock Option. Stock Options may be (i)
"incentive stock options" ("Incentive Stock Options"), within the meaning of
Section 422 of the Code, or (ii) Stock Options which do not qualify as Incentive
Stock Options ("Nonqualified Stock Options"). The Committee may grant to any
participant one or more Incentive Stock Options, Nonqualified Stock Options, or
both types of Stock Options. Each Stock Option shall be subject to such terms
and conditions consistent with the Plan as the Committee may impose from time to
time. In addition, each Stock Option shall be subject to the following
limitations set forth in this Section 6.
(b) Exercise Price. Each Stock Option granted hereunder shall
have such per-share exercise price as the Committee may determine on the date of
grant; provided, however, subject to Section 6(e) below, that the per-share
exercise price shall not be less than 100 percent of the Fair Market Value (as
defined in Section 17 below) of the Common Stock on the date the option is
granted.
(c) Payment of Exercise Price. The Stock Option exercise price
may be paid in cash or, in the discretion of the Committee, by the delivery of
shares of Common Stock then owned by the participant, by the withholding of
shares of Common Stock for which a Stock Option is exercisable, or by a
combination of these methods. In the discretion of the Committee, payment may
also be made by delivering a properly executed exercise notice to the Company
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds to pay the exercise price. To
facilitate the foregoing, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms. The Committee may prescribe any
other method of paying the exercise price that it determines to be consistent
with applicable law and the purpose of the Plan, including, without limitation,
in lieu of the exercise of a Stock Option by delivery of shares of Common Stock
then owned by a participant, providing the Company with a notarized statement
attesting to the number of shares owned, where upon verification by the Company,
the Company would issue to the participant only the number of incremental shares
to which the participant is entitled upon exercise of the Stock Option. In
determining which methods a participant may utilize to pay the exercise price,
the Committee may consider such factors as it determines are appropriate;
provided, however, that with respect to Incentive Stock Options, all such
discretionary determinations by the Committee shall be made at the time of grant
and specified in the Stock Option agreement.
(d) Exercise Period. Stock Options granted under the Plan
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee; provided, however, that no
Stock Option shall be exercisable later than ten years after the date it is
granted. All Stock Options shall terminate at such earlier times and upon such
conditions or circumstances as the Committee shall in its discretion set forth
in such option agreement on the date of grant.
(e) Limitations on Incentive Stock Options. Incentive Stock
Options may be granted only to participants who are key employees of the Company
or any of its subsidiaries on the date of
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grant. The aggregate market value (determined as of the time the Stock Option is
granted) of the Common Stock with respect to which Incentive Stock Options
(under all option plans of the Company) are exercisable for the first time by a
participant during any calendar year shall not exceed $100,000. For purposes of
the preceding sentence, (i) Incentive Stock Options shall be taken into account
in the order in which they are granted and (ii) Incentive Stock Options granted
before 1987 shall not be taken into account. Incentive Stock Options may not be
granted to any participant who, at the time of grant, owns stock possessing
(after the application of the attribution rules of Section 424(d) of the Code)
more than 10 percent of the total combined voting power of all outstanding
classes of stock of the Company or any of its subsidiaries, unless the option
price is fixed at not less than 110 percent of the Fair Market Value of the
Common Stock on the date of grant and the exercise of such option is prohibited
by its terms after the expiration of 5 years from the date of grant of such
option. In addition, no Incentive Stock Option shall be issued to a participant
in tandem with a Nonqualified Stock Option.
7. STOCK APPRECIATION RIGHTS.
The Committee is authorized to grant Stock Appreciation Rights
to key employees of the Company and any of its subsidiaries and shall, in its
sole discretion, determine the key employees who will receive Stock
Appreciations and the number of shares of Common Stock with respect to each
Stock Appreciation Right. A "Stock Appreciation Right" shall mean a right to
receive a payment, in cash, Common Stock or a combination thereof, in an amount
equal to the excess of (x) the Fair Market Value, or other specified valuation,
of a specified number of shares of Common Stock on the date the right is
exercised over (y) the Fair Market Value, or other specified valuation (which
shall be no less than the Fair Market Value), of such shares of Common Stock on
the date the right is granted, all as determined by the Committee; provided,
however, that if a Stock Appreciation Right is granted retroactively in tandem
with or in substitution for a Stock Option, the designated Fair Market Value in
the Stock Appreciation Right agreement may be the Fair Market Value on the date
such Stock Option was granted. Each Stock Appreciation Right shall be subject to
such terms and conditions as the Committee shall impose from time to time.
8. STOCK AWARDS.
The Committee is authorized to grant Stock Awards to
non-employee directors and key employees of the Company and any of its
subsidiaries and shall, in its sole discretion, determine the non-employee
directors and key employees who will receive Stock Awards and the number of
shares of Common Stock underlying each Stock Award. Stock Awards may be subject
to such terms and conditions as the Committee determines appropriate, including,
without limitation, restrictions on the sale or other disposition of such
shares, and the right of the Company to reacquire such shares for no
consideration upon termination of the participant's employment within specified
periods. The Committee may require the participant to deliver a duly signed
stock power, endorsed in blank, relating to the Common Stock covered by such
Stock Award and/or that the stock certificates evidencing such shares be held in
custody or bear restrictive legends until the restrictions thereon shall have
lapsed. The Stock Award agreement shall specify whether the participant shall
have, with respect to the shares of Common Stock subject to a Stock Award, all
of the rights of a holder of shares of Common Stock, including the right to
receive dividends and to vote the shares.
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9. PERFORMANCE AWARDS.
(a) In General. The Committee is authorized to grant
Performance Awards to key employees of the Company and any of its subsidiaries
and shall, in its sole discretion, determine the key employees who will receive
Performance Awards and the number of shares of Common Stock or Stock Units (as
described in Section 10 below) that may be subject to each Performance Award.
Each Performance Award shall be subject to such terms and conditions consistent
with the Plan as the Committee may impose from time to time. The Committee shall
set performance targets at its discretion which, depending on the extent to
which they are met, will determine the number and/or value of Performance Awards
that will be paid out to the participants, and may attach to such Performance
Awards one or more restrictions. Performance targets may be based upon, without
limitation, Company-wide, divisional and/or individual performance.
(b) Adjustment of Performance Targets. With respect to those
Performance Awards that are not intended to qualify as Performance-Based Awards
(as described in Section 11 below), the Committee shall have the authority at
any time to make adjustments to performance targets for any outstanding
Performance Awards which the Committee deems necessary or desirable unless at
the time of establishment of goals the Committee shall have precluded its
authority to make such adjustments.
(c) Payout. Payment of earned Performance Awards may be made
in shares of Common Stock or in cash and shall be made in accordance with the
terms and conditions prescribed or authorized by the Committee. The participant
may elect to defer, or the Committee may require or permit the deferral of, the
receipt of Performance Awards upon such terms as the Committee deems
appropriate.
10. STOCK UNITS.
(a) In General. The Committee is authorized to grant Stock
Units to key employees of the Company and any of its subsidiaries and shall, in
its sole discretion, determine the key employees who will receive Stock Units
and the number of shares of Common Stock with respect to each Stock Unit. The
Committee shall determine the criteria for the vesting of Stock Units. A Stock
Unit granted by the Committee shall provide payment in shares of Common Stock at
such time as the award agreement shall specify. Shares of Common Stock issued
pursuant to this Section 10 may be issued with or without other payments
therefor as may be required by applicable law or such other consideration as may
be determined by the Committee. The Committee shall determine whether a
participant granted a Stock Unit shall be entitled to a Dividend Equivalent
Right (as defined below).
(b) Payout. Upon vesting of a Stock Unit, unless the Committee
has determined to defer payment with respect to such unit or a Participant has
elected to defer payment under Section 10(c) below, shares of Common Stock
representing the Stock Units shall be distributed to the participant unless the
Committee, with the consent of the participant, provides for the payment of the
Stock Units in cash or partly in cash and partly in shares of Common Stock equal
to the value of the shares of Common Stock which would otherwise be distributed
to the participant.
(c) Deferral. Prior to the year with respect to which a Stock
Unit may vest, the participant may elect not to receive Common Stock upon the
vesting of such Stock Unit and for the Company to continue to maintain the Stock
Unit on its books of account. In such event, the value of a Stock Unit shall be
payable in shares of Common Stock pursuant to the agreement of deferral.
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(d) Definitions. A "Stock Unit" shall mean a notional account
representing one share of Common Stock. A "Dividend Equivalent Right" shall mean
the right to receive the amount of any dividend paid on the share of Common
Stock underlying a Stock Unit, which shall be payable in cash or in the form of
additional Stock Units.
11. PERFORMANCE-BASED AWARDS.
(a) In General. All Stock Options and Stock Appreciation
Rights granted under the Plan, and certain Stock Awards, Performance Awards, and
Stock Units granted under the Plan, and the compensation attributable to such
Awards, are intended to (i) qualify as Performance-Based Awards (as described in
the next sentence) or (ii) be otherwise exempt from the deduction limitation
imposed by Section 162(m) of the Code. Certain Awards granted under the Plan may
be granted in a manner such that the Awards qualify as "performance-based
compensation" (as such term is used in Section 162(m) of the Code and the
regulations thereunder) and thus be exempt from the deduction limitation imposed
by Section 162(m) of the Code ("Performance-Based Awards"). Awards shall only
qualify as Performance-Based Awards if at the time of grant the Committee is
comprised solely of two or more "outside directors" (as such term is used in
Section 162(m) of the Code and the regulations thereunder).
(b) Stock Options and Stock Appreciation Rights. Stock Options
and Stock Appreciation Rights granted under the Plan with an exercise price at
or above the Fair Market Value of the Common Stock on the date of grant should
qualify as Performance-Based Awards.
(c) Other Awards. Stock Awards, Performance Awards, and Stock
Units granted under the Plan should qualify as Performance-Based Awards if, as
determined by the Committee in its sole discretion, either the granting or
vesting of such Award is subject to the achievement of a performance target or
targets based on one or more of the performance measures specified in Section
11(d) below. With respect to such Awards intended to qualify as
Performance-Based Awards:
(1) the Committee shall establish in writing (x)
the objective performance-based goals
applicable to a given period and (y) the
individual employees or class of employees
to which such performance-based goals apply
no later than 90 days after the commencement
of such period (but in no event after 25
percent of such period has elapsed);
(2) no Performance-Based Awards shall be payable
to or vest with respect to, as the case may
be, any participant for a given period until
the Committee certifies in writing that the
objective performance goals (and any other
material terms) applicable to such period
have been satisfied; and
(3) after the establishment of a performance
goal, the Committee shall not revise such
performance goal or increase the amount of
compensation payable thereunder (as
determined in accordance with Section 162(m)
of the Code) upon the attainment of such
performance goal.
(d) Performance Measures. The Committee may use the
following performance measures (either individually or in any combination) to
set performance targets with respect to Awards intended to qualify as
Performance-Based Awards: net sales; pretax income before allocation of
corporate
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overhead and bonus; budget; earnings per share; net income; division, group or
corporate financial goals; return on stockholders' equity; return on assets;
attainment of strategic and operational initiatives; appreciation in and/or
maintenance of the price of the Common Stock or any other publicly-traded
securities of the Company; market share; gross profits; earnings before interest
and taxes; earnings before interest, taxes, depreciation and amortization;
economic value-added models; comparisons with various stock market indices;
and/or reductions in costs.
12. ADJUSTMENT PROVISIONS.
If there shall be any change in the Common Stock of the
Company, through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, reverse stock split, split up, spinoff, combination of
shares, exchange of shares, dividend in kind or other like change in capital
structure or distribution (other than normal cash dividends) to stockholders of
the Company, an adjustment shall be made to each outstanding Stock Option and
Stock Appreciation Right such that each such Stock Option and Stock Appreciation
Right shall thereafter be exercisable for such securities, cash and/or other
property as would have been received in respect of the Common Stock subject to
such Stock Option or Stock Appreciation Right had such Stock Option or Stock
Appreciation Right been exercised in full immediately prior to such change or
distribution, and such an adjustment shall be made successively each time any
such change shall occur. In addition, in the event of any such change or
distribution, in order to prevent dilution or enlargement of participants'
rights under the Plan, the Committee shall have the authority to adjust, in an
equitable manner, the number and kind of shares that may be issued under the
Plan, the number and kind of shares subject to outstanding Awards, the exercise
price applicable to outstanding Awards, and the Fair Market Value of the Common
Stock and other value determinations applicable to outstanding Awards.
Appropriate adjustments may also be made by the Committee in the terms of any
Awards under the Plan to reflect such changes or distributions and to modify any
other terms of outstanding Awards on an equitable basis, including modifications
of performance targets and changes in the length of performance periods. In
addition, other than with respect to Stock Options, Stock Appreciation Rights
and other awards intended to constitute Performance-Based Awards, the Committee
is authorized to make adjustments to the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring events
affecting the Company or the financial statements of the Company, or in response
to changes in applicable laws, regulations, or accounting principles.
Notwithstanding the foregoing, (i) any adjustment with respect to an Incentive
Stock Option shall comply with the rules of Section 424(a) of the Code, and (ii)
in no event shall any adjustment be made which would render any Incentive Stock
Option granted hereunder other than an incentive stock option for purposes of
Section 422 of the Code.
13. CHANGE IN CONTROL.
(a) Accelerated Vesting. Notwithstanding any other provision
of this Plan, if there is a Change in Control of the Company (as defined in
Section 13(b) below), the Committee, in its discretion, may take such actions as
it deems appropriate with respect to outstanding Awards, including, without
limitation, accelerating the exercisability, vesting and/or payout of such
Awards.
(b) Definition. For purposes of this Section 13, (i) if there
is an employment agreement or a change-in-control agreement between the
participant and the Company or any of its subsidiaries in effect, "Change in
Control" shall have the same definition as the definition of "change in control"
contained in such employment agreement or change-in-control agreement, or
(ii) if "Change in Control" is not defined in such employment agreement or
change-in-control agreement, or if there is no
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employment agreement or change-in-control agreement between the participant and
the Company or any of its subsidiaries in effect, a "Change in Control" of the
Company shall be deemed to have occurred upon any of the following events:
(1) any person or other entity (other than any
of the Company's subsidiaries or any
employee benefit plan sponsored by the
Company or any of its subsidiaries)
including any person as defined in Section
13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"),
becomes the beneficial owner, as defined in
Rule 13d-3 under the Exchange Act, directly
or indirectly, of more than 35 percent of
the total combined voting power of all
classes of capital stock of the Company
normally entitled to vote for the election
of directors of the Company (the "Voting
Stock");
(2) the stockholders of the Company approve the
sale of all or substantially all of the
property or assets of the Company and such
sale occurs;
(3) the Company's Common Stock shall cease to be
publicly traded (other than a suspension of
trading that lasts for a short period of
time);
(4) the stockholders of the Company approve a
consolidation or merger of the Company with
another corporation (other than with any of
the Company's subsidiaries), the
consummation of which would result in the
shareholders of the Company immediately
before the occurrence of the consolidation
or merger owning, in the aggregate, less
than 60 percent of the Voting Stock of the
surviving entity, and such consolidation or
merger occurs; or
(5) a change in the Company's Board occurs with
the result that the members of the Board on
the Effective Date (as defined in Section
24(a) below) of the Plan (the "Incumbent
Directors") no longer constitute a majority
of such Board, provided that any person
becoming a director (other than a director
whose initial assumption of office is in
connection with an actual or threatened
election contest or the settlement thereof,
including but not limited to a consent
solicitation, relating to the election of
directors of the Company) whose election or
nomination for election was supported by
two-thirds (2/3) of the then Incumbent
Directors shall be considered an Incumbent
Director for purposes hereof.
Notwithstanding anything contained in the Plan to the contrary, a Change in
Control of the Company shall not include an initial public offering of the
Company.
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(c) Cashout. The Committee, in its discretion, may determine
that, upon the occurrence of a Change in Control of the Company, each Stock
Option and Stock Appreciation Right outstanding hereunder shall terminate within
a specified number of days after notice to the holder, and such holder shall
receive, with respect to each share of Common Stock subject to such Stock Option
or Stock Appreciation Right, an amount equal to the excess of the Fair Market
Value of such shares of Common Stock immediately prior to the occurrence of such
Change in Control over the exercise price per share of such Stock Option or
Stock Appreciation Right; such amount to be payable in cash, in one or more
kinds of property (including the property, if any, payable in the transaction)
or in a combination thereof, as the Committee, in its discretion, shall
determine.
14. TERMINATION OF EMPLOYMENT.
(a) Subject to any written agreement between the participant
and the Company or any of its subsidiaries, if a participant's employment is
terminated due to death or disability:
(1) all unvested Stock Awards and all unvested
Stock Units held by the participant on the
date of the participant's death or the date
of the termination of his or her employment,
as the case may be, shall immediately become
vested as of such date;
(2) all unexercisable Stock Options and all
unexercisable Stock Appreciation Rights held
by the participant on the date of the
participant's death or the date of the
termination of his or her employment, as the
case may be, shall immediately become
exercisable as of such date and shall remain
exercisable until the earlier of (i) the end
of the one-year period following the date of
the participant's death or the date of the
termination of his or her employment, as the
case may be, or (ii) the date the Stock
Option or Stock Appreciation Right would
otherwise expire;
(3) all exercisable Stock Options and all
exercisable Stock Appreciation Rights held
by the participant on the date of the
participant's death or the date of the
termination of his or her employment, as the
case may be, shall remain exercisable until
the earlier of (i) the end of the one-year
period following the date of the
participant's death or the date of the
termination of his or her employment, as the
case may be, or (ii) the date the Stock
Option or Stock Appreciation Right would
otherwise expire; and
(4) all unearned and/or unvested Performance
Awards held by the participant on the date
of the participant's death or the date of
the termination of his or her employment, as
the case may be, shall immediately be
forfeited by such participant as of such
date.
(b) Subject to any written agreement between the participant
and the Company or any of its subsidiaries, if a participant's employment is
terminated by the Company for Cause (as defined in Section 14(f) below), all
exercisable and all unexercisable Stock Options, all exercisable and all
unexercisable Stock Appreciation Rights, all unvested Stock Awards, all unearned
and/or unvested
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Performance Units, and all unvested Stock Units held by the participant on the
date of the termination of his or her employment for Cause shall immediately be
forfeited by such participant as of such date.
(c) Subject any written agreement between the participant and
the Company or any of its subsidiaries, if a participant's employment is
terminated for any reason other than for Cause or other than due to death or
disability:
(1) all unexercisable Stock Options, all
unexercisable Stock Appreciation Rights, all
unvested Stock Awards, all unearned and/or
unvested Performance Units, and all unvested
Stock Units held by the participant on the
date of the termination of his or her
employment shall immediately be forfeited by
such participant as of such date; and
(2) all exercisable Stock Options and all
exercisable Stock Appreciation Rights held
by the participant on the date of the
termination of his or her employment shall
remain exercisable until the earlier of (i)
the end of the 90-day period following the
date of the termination of the participant's
employment or (ii) the date the Stock Option
or Stock Appreciation Right would otherwise
expire.
(d) Notwithstanding anything contained in the Plan to the
contrary, the Committee may, in its sole discretion, provide that:
(1) any or all unvested Stock Awards and/or any
or all unvested Stock Units held by the
participant on the date of the participant's
death and/or the date of the termination of
the participant's employment shall
immediately become vested as of such date;
(2) any or all unexercisable Stock Options
and/or any or all unexercisable Stock
Appreciation Rights held by the participant
on the date of the participant's death
and/or the date of the termination of his or
her employment shall immediately become
exercisable as of such date and shall remain
exercisable until a date that occurs on or
prior to the date the Stock Option or Stock
Appreciation Right is scheduled to expire,
provided, however, that Incentive Stock
Options shall remain exercisable not longer
than the end of the 90-day period following
the date of the termination of the
participant's employment;
(3) any or all exercisable Stock Options and/or
any or all exercisable Stock Appreciation
Rights held by the participant on the date
of the participant's death and/or the date
of the termination of his or her employment
shall remain exercisable until a date that
occurs on or prior to the date the Stock
Option or Stock Appreciation Right is
scheduled to expire, provided, however, that
Incentive Stock Options shall remain
exercisable not longer than the end of the
90-day period following the date of the
termination of the participant's employment;
and/or
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(4) a participant shall immediately become
vested in all or a portion of any earned
Performance Unit held by such participant on
the date of the termination of the
participant's employment, and such vested
Performance Unit (or portion thereof) and/or
any unearned Performance Unit (or portion
thereof) held by such participant on the
date of the termination of his or her
employment shall immediately become payable
to such participant as if all performance
goals had been met as of the date of the
termination of his or her employment.
(e) Notwithstanding anything contained in the Plan to the
contrary, (i) the provisions contained in this Section 14 shall be applied to an
Incentive Stock Option only if the application of such provision maintains the
treatment of such Incentive Stock Option as an Incentive Stock Option and (ii)
the exercise period of an Incentive Stock Option in the event of a termination
due to disability provided in Section 14(a)(3) above shall only apply if the
participant's disability satisfies the requirement of "permanent and total
disability" as defined in Section 22(e)(3) of the Code.
(f) For purposes of this Section 14, (i) if there is an
employment agreement between the participant and the Company or any of its
subsidiaries in effect, "Cause" shall have the same definition as the definition
of "cause" contained in such employment agreement, or (ii) if "Cause" is not
defined in such employment agreement or if there is no employment agreement
between the participant and the Company or any of its subsidiaries in effect,
"Cause" shall include, but is not limited to:
(1) any willful and continuous neglect of or
refusal to perform the employee's duties or
responsibilities with respect to the Company
or any of its subsidiaries, insubordination,
dishonesty, gross neglect or willful
malfeasance by the participant in the
performance of such duties and
responsibilities, or the willful taking of
actions which materially impair the
participant's ability to perform such duties
and responsibilities, or any serious
violation of the rules or regulations of the
Company;
(2) the violation of any local, state or federal
criminal statute, including, without
limitation, an act of dishonesty such as
embezzlement, theft or larceny;
(3) intentional provision of services in
competition with the Company or any of its
subsidiaries, or intentional disclosure to a
competitor of the Company or any of its
subsidiaries of any confidential or
proprietary information of the Company or
any of its subsidiaries; or
(4) any similar conduct by the participant with
respect to which the Company determines in
its discretion that the participant has
terminated employment under circumstances
such that the payment of any compensation
attributable to any Award granted under the
Plan would not be in the best interest of
the Company or any of its subsidiaries.
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15. TRANSFERABILITY.
Each Award granted under the Plan to a participant which is
subject to restrictions on transferability and/or exercisability shall not be
transferable otherwise than by will or the laws of descent and distribution,
and/or shall be exercisable, during the participant's lifetime, only by the
participant. In the event of the death of a participant, each Stock Option or
Stock Appreciation Right theretofore granted to him or her shall be exercisable
during such period after his or her death as the Committee shall in its
discretion set forth in such option or right on the date of grant and then only
by the executor or administrator of the estate of the deceased participant or
the person or persons to whom the deceased participant's rights under the Stock
Option or Stock Appreciation Right shall pass by will or the laws of descent and
distribution. Notwithstanding the foregoing, at the discretion of the Committee,
an Award (other than an Incentive Stock Option) may permit the transferability
of such Award by a participant solely to members of the participant's immediate
family or trusts or family partnerships for the benefit of such persons, subject
to any restriction included in the Award agreement.
16. OTHER PROVISIONS.
Awards granted under the Plan may also be subject to such
other provisions (whether or not applicable to the Award granted to any other
participant) as the Committee determines on the date of grant to be appropriate,
including, without limitation, for the installment purchase of Common Stock
under Stock Options, for the installment exercise of Stock Appreciation Rights,
to assist the participant in financing the acquisition of Common Stock, for the
forfeiture of, or restrictions on resale or other disposition of, Common Stock
acquired under any form of Award, for the acceleration of exercisability or
vesting of Awards in the event of a change in control of the Company, for the
payment of the value of Awards to participants in the event of a change in
control of the Company, or to comply with federal and state securities laws, or
understandings or conditions as to the participant's employment in addition to
those specifically provided for under the Plan.
17. FAIR MARKET VALUE.
For purposes of this Plan and any Awards granted hereunder,
Fair Market Value shall be (i) the closing price of the Common Stock on the date
of calculation (or on the last preceding trading date if Common Stock was not
traded on such date) if the Common Stock is readily tradeable on a national
securities exchange or other market system or (ii) if the Common Stock is not
readily tradeable, the amount determined in good faith by the Committee as the
fair market value of the Common Stock.
18. WITHHOLDING.
All payments or distributions of Awards made pursuant to the
Plan shall be net of any amounts required to be withheld pursuant to applicable
federal, state and local tax withholding requirements. If the Company proposes
or is required to distribute Common Stock pursuant to the Plan, it may require
the recipient to remit to it or to the corporation that employs such recipient
an amount sufficient to satisfy such tax withholding requirements prior to the
delivery of any certificates for such Common Stock. In lieu thereof, the Company
or the employing corporation shall have the right to withhold the amount of such
taxes from any other sums due or to become due from such corporation to the
recipient as the Committee shall prescribe. The Committee may, in its discretion
and subject to such rules as it may adopt (including any as may be required to
satisfy applicable tax and/or non-tax regulatory requirements), permit an
optionee or award or right holder to pay all or a portion of the federal, state
and
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local withholding taxes arising in connection with any Award consisting of
shares of Common Stock by electing to have the Company withhold shares of Common
Stock having a Fair Market Value equal to the amount of tax to be withheld, such
tax calculated at rates required by statute or regulation.
19. TENURE.
A participant's right, if any, to continue to serve the
Company as a director, officer, employee, or otherwise, shall not be enlarged or
otherwise affected by his or her designation as a participant under the Plan.
20. UNFUNDED PLAN.
Participants shall have no right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations under the Plan. Nothing contained in the Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
participant, beneficiary, legal representative or any other person. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall be paid
from the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan. The Plan is not intended to
be subject to the Employee Retirement Income Security Act of 1974, as amended.
21. NO FRACTIONAL SHARES.
No fractional shares of Common Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, or Awards, or other property shall be issued or paid in lieu of
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
22. DURATION, AMENDMENT AND TERMINATION.
No Award shall be granted more than ten years after the
Effective Date; provided, however, that the terms and conditions applicable to
any Award granted prior to such date may thereafter be amended or modified by
mutual agreement between the Company and the participant or such other persons
as may then have an interest therein. Also, by mutual agreement between the
Company and a participant hereunder, under this Plan or under any other present
or future plan of the Company, Awards may be granted to such participant in
substitution and exchange for, and in cancellation of, any Awards previously
granted such participant under this Plan, or any other present or future plan of
the Company. The Board may amend the Plan from time to time or suspend or
terminate the Plan at any time. However, no action authorized by this Section 22
shall reduce the amount of any existing Award or change the terms and conditions
thereof without the participant's consent. No amendment of the Plan shall,
without approval of the stockholders of the Company, (i) increase the total
number of shares which may be issued under the Plan or the maximum number of
shares with respect to Stock Options, Stock Appreciation Rights and other Awards
that may be granted to any individual under the Plan or (ii) modify the
requirements as to eligibility for Awards under the Plan; provided, however,
that no amendment may be made without approval of the stockholders of the
Company if the amendment will disqualify any Incentive Stock Options granted
hereunder.
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23. GOVERNING LAW.
This Plan, Awards granted hereunder and actions taken in
connection herewith shall be governed and construed in accordance with the laws
of the Commonwealth of Kentucky (regardless of the law that might otherwise
govern under applicable Kentucky principles of conflict of laws).
24. EFFECTIVE DATE.
(a) The Plan shall be effective as of the date on which the
Plan is adopted by the Board (the "Effective Date"); provided, however, that the
Plan shall be approved by the stockholders of the Company at an annual meeting
or any special meeting of stockholders of the Company within 12 months before or
after the Effective Date, and such approval of stockholders shall be a condition
to the right of each participant to receive Awards hereunder. Any Award granted
under the Plan prior to such approval of stockholders shall be effective as of
the date of grant (unless, with respect to any Award, the Committee specifies
otherwise at the time of grant), but no such Award may be exercised or settled
and no restrictions relating to any Award may lapse prior to such stockholder
approval, and if stockholders fail to approve the Plan as specified hereunder,
any such Award shall be cancelled.
(b) This Plan shall terminate on the 10th anniversary of the
Effective Date (unless sooner terminated by the Board).
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EMPLOYMENT AGREEMENT
Agreement made and entered into this 13th day of May, 1997, by and
between General Cable Corporation, a Delaware corporation (the "Company"), GCC
Corporation, a Delaware corporation and a wholly owned subsidiary of the Company
("GCC"), and Stephen Rabinowitz (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive and GCC are parties to an employment agreement
effective as of September 9, 1994, as amended through the date of this
Agreement, which is currently in effect (the "Existing Agreement"); and
WHEREAS, it is proposed that shares of the Company's Common Stock,
$.01 par value per share (the "Common Stock"), will be sold by the Company's
parent, Wassall Netherlands Cable B.V., in a public offering (the "Public
Offering"); and
WHEREAS, effective upon consummation of the Public Offering (the
"Effective Date") it is intended that the Existing Agreement be terminated and
that this Agreement become effective;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties hereto agree as follows:
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1. Term of Employment.
(a) Commencing on the Effective Date, the Company shall employ the
Executive, and the Executive shall accept employment and shall serve the
Company, in such capacities, with such duties and authority, for such period, at
such level of compensation and with such benefits, and upon such other terms and
subject to such other conditions, as are hereinafter set forth. The term of the
Executive's employment hereunder shall commence on the Effective Date and,
unless previously terminated as provided herein, shall continue until the third
anniversary of the Effective Date (the "Employment Period"); provided, however,
that commencing on the third anniversary of the Effective Date and each
anniversary thereafter, the Employment Period shall automatically be extended
for one additional year unless not later than one hundred twenty (120) days
prior to such anniversary, the Company or the Executive shall have given written
notice to the other not to extend the Employment Period.
(b) If the consummation of the Public Offering does not occur on or
before October 31, 1997, this Agreement shall terminate and the Existing
Agreement shall remain in full force and effect in accordance with its terms.
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2. Capacities, Duties and Authority.
(a) Effective on the Effective Date, the Executive shall be elected,
and throughout the Employment Period the Executive shall be entitled to serve
as, Chief Executive Officer and President of the Company, GCC, GK Technologies,
Incorporated, a New Jersey corporation ("GK"), General Cable Industries, Inc., a
Delaware corporation ("Industries"), and such other affiliates of the Company,
GCC, GK or Industries as the Board of Directors of the Company (the "Company's
Board") shall request. The Company, GCC, GK, Industries and such other
affiliates are hereinafter referred to collectively as the "Group". Commencing
on the Effective Date, the Executive shall be elected and serve as a member and
Chairman of the Company's Board, and the Company shall use its best efforts to
ensure that the Executive continues to so serve during the Employment Period.
(b) In his capacity as Chief Executive Officer and President of each
of the members of the Group, the Executive shall have such authority, perform
such duties, discharge such responsibilities and render such services as are
customary to and consistent with such positions, subject to the authority and
direction of the relevant board of directors.
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(c) The Executive shall render his services diligently, faithfully and
to the best of his ability, devoting thereto his entire business time, energy
and skills on an exclusive basis and, without the prior written consent of the
Company's Board, the Executive shall not render services to or for the account
of any person, firm or corporation other than a member of the Group; provided,
however, that, subject to his fiduciary obligations to the Company, the
Executive may continue to serve as a director of JLG Industries; and provided,
further, however, that nothing herein shall preclude the Executive from making
and managing personal investments or serving in any capacity with any civic,
educational or charitable organization, so long as such activities do not
interfere with the performance of his duties hereunder.
3. Compensation.
(a) The Executive shall be paid a base salary during the Employment
Period at the annual rate of Six Hundred Thousand Dollars ($600,000)
(retroactive to January 1, 1997), payable in accordance with the regular payroll
practices of the Company (except that payment of such retroactive base salary
shall be made in a lump sum on the Effective Date). The Compensation Committee
of the Company's Board (the "Compensation Committee") shall
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annually review the Executive's performance and determine, in its sole
discretion, whether or not to increase the Executive's base salary and, if so,
the amount of such increase. Once increased, the Executive's base salary
hereunder may not thereafter be decreased except if the Compensation Committee
or the Board determine to address adverse economic circumstances by making an
across-the-board reduction in compensation affecting all executives of the
Company. The Executive's base salary as in effect from time to time is
hereinafter referred to as the "Base Salary."
(b) The Company has adopted, and the stockholder of the Company has
approved the adoption of, the General Cable Corporation 1997 Incentive Bonus
Program annexed hereto as Annex I (the "1997 Bonus Plan"). As soon as
practicable after the Effective Date, the Company agrees to recommend to the
Company's Board that the Executive be awarded the opportunity to earn, in
respect of the fiscal year ending December 31, 1997, a bonus (the "1997
Incentive Bonus") of up to one hundred twenty percent (120%) of his Base Salary
targeted upon the attainment of the performance goals specified therein;
provided, however, that the foregoing shall not preclude the Executive from
being awarded a bonus in respect of such fiscal year which is in addition to the
1997 Incentive Bonus, such award to be in
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the discretion of the Compensation Committee. The Compensation Committee shall
establish a performance-based annual bonus program for senior executives of the
Company including the Executive for fiscal years after 1997 (a "Future Bonus
Plan") and award the Executive an annual bonus opportunity thereunder which is
not less favorable than the opportunity provided pursuant to the 1997 Incentive
Bonus without restricting the discretion of the Compensation Committee to set
targets and criteria for such incentive compensation.
(c) The Executive shall be entitled, annually during the Employment
Period, to vacation, without loss or diminution of compensation, of four (4)
weeks, such vacation to be taken at such time or times, and as a whole or in
increments, as the Executive shall elect, consistent with the reasonable needs
of the Group's business and such vacation policies as reasonably may be
established for senior executives by the Compensation Committee.
4. Employee Benefit Programs.
(a) During the Employment Period, the Executive shall be entitled to
participate in and shall have the benefit of all group life, disability,
hospital, surgical and major medical insurance plans and programs and other
employee benefit plans and programs as generally are made
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available to executive personnel of the Group, as such benefit plans or programs
may be amended in the sole discretion of the Group members and with the
concurrence of the Compensation Committee, from time to time.
(b) During the Employment Period, the Executive shall be entitled to
continue to receive executive fringe benefits consistent with those he is
currently receiving (including any inflationary adjustments approved by the
Compensation Committee in its sole discretion) and shall receive or participate
in any other fringe benefits provided to the member of the Group's senior-level
executives in accordance with the terms and conditions of such arrangements as
may be in effect from time to time.
5. Stock Option and Restricted Stock
(a) The Company has adopted, and the stockholder of the Company has
approved the adoption of, the General Cable Corporation Long-Term Stock
Incentive Plan (the "Stock Incentive Plan") annexed hereto as Annex II. As soon
as practicable after the Effective Date, the Company agrees to recommend to the
Company's Board that the Executive be granted under the Stock Incentive Plan a
ten-year non-qualified option to purchase 286,000 shares of Common Stock at the
initial Public Offering price of the Common Stock (the "Option"). The exercise
price of the Option shall be
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equal to the initial Public Offering price. The Option shall vest and (subject
to acceleration as provided herein or in the Change-in-Control Agreement
referred to below) be fully exercisable on the third anniversary of the
Effective Date in accordance with the terms of the Stock Incentive Plan.
(b) As soon as practicable after the Effective Date, the Company shall
recommend that the Executive be awarded under the Stock Incentive Plan the
number of shares of restricted Common Stock having a value of Two Million
Dollars ($2,000,000) at the initial Public Offering price of the Common Stock
(the "Restricted Stock"). The restrictions on the Restricted Stock shall lapse
(subject to acceleration as provided herein or in the Change-in-Control
Agreement) on the third anniversary of the Effective Date in accordance with the
terms of the Stock Incentive Plan.
6. Termination of Employment.
(a) The Executive's employment hereunder shall terminate:
(i) upon the death of the Executive;
(ii) upon the Disability of the Executive, which for the purposes
of this Agreement shall mean his inability because of physical or
mental illness or incapacity, whether partial or total,
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with or without accommodation, to perform his duties under this
Agreement, as determined by the Company's Board, after review of such
reports of physicians of recognized standing in the medical community
in the Cincinnati, Ohio metropolitan area as the Company's Board (or a
special committee thereof) selects, for a continuous period of at
least four (4) months or for an aggregate of one hundred fifty (150)
days within any twelve (12) month period); or
(iii) at the option of the Company, exercisable by or upon the
authority of the Company's Board and effective immediately upon the
giving by the Company to the Executive of written notice of such
exercise, for "Cause", which, for purposes of this Agreement, shall
mean:
(A) the gross neglect or willful failure by the Executive to perform
his duties and responsibilities in all material respects as set
forth in Paragraph 2 hereof, after a written demand for
substantial performance is delivered to the Executive by the
Company's Board, which demand specifically identifies the manner
in which the Company's Board
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believes that the Executive has not so performed his duties;
(B) any act of fraud by the Executive, whether relating to the Group
or otherwise;
(C) the conviction or entry into a plea of nolo contendere by the
Executive with respect to any felony or misdemeanor (other than a
traffic offense which does not result in imprisonment);
(D) the commission by the Executive of any willful or intentional act
(including any violation of law) which materially injures the
reputation or materially adversely affects the business or
business relationships of the Group; or
(E) any willful failure or willful breach (not covered by any of
clauses (A) through (D) above) of any of the material obligations
of this Agreement, if such breach is not cured within 10 days
after written notice thereof to the Executive by the Company's
Board;
For purposes of clauses (A), (D) and (E) of this definition, no act, or failure
to act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the
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Executive not in good faith and without reasonable belief that the Executive's
act, or failure to act, was in the best interest of the Group. Notwithstanding
the foregoing, the Executive shall not be terminated for Cause unless and until
there shall have been delivered to the Executive a certified copy of a
resolution, duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Company's Board, at a meeting of the Company's
Board called and held for the purpose (after reasonable notice to the Executive,
and an opportunity for him, together with his counsel, to be heard before the
Company's Board), finding that the Executive's conduct met the definition of
"Cause" set forth herein, specifying the particulars thereof in detail.
(iv) at the option of the Company, for a reason other than
Disability or Cause, effective immediately upon the giving of written
notice of such exercise;
(v) at the option of the Executive, effective ten (10) business
days after the giving of written notice of such exercise by the
Executive to the Company (or such shorter period as the Company's
Board may elect by giving written notice to the Executive), in the
event that the Executive has
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Good Reason, which for purposes of this Agreement shall mean the
occurrence at any time of any of the following without the Executive's
prior written consent:
(A) removal from any of the positions held by the Executive with
respect to the Company or any of its significant subsidiaries (as
defined in Regulation S-X under the Securities Exchange Act of
1934);
(B) the assignment of duties or responsibilities materially
inconsistent with those customarily associated with the positions
held by the Executive or a diminution of the Executive's
position, authority, duties or responsibilities (other than an
isolated action that is not taken in bad faith and is remedied by
the Company promptly after receipt of written notice thereof from
the Executive);
(C) except as provided in Paragraph 6(d), a reduction in the
Executive's Base Salary payable pursuant to Paragraph 3(a) hereof
or Executive's bonus opportunity set forth in Paragraph 3(b)
hereof or a material reduction
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in any other material benefit provided the Executive hereunder;
or
(D) notice by the Company, as set forth in Paragraph 1(a) hereof, not
to extend the Employment Period; or
(E) the failure by the Company to obtain an agreement from any
successor to assume and agree to perform this Agreement; or
(F) any willful failure or willful breach by the Company (not covered
by any of clauses (A) through (E) above) of any of the material
obligations of this Agreement, if such breach is not cured within
10 days after written notice thereof by the Executive to the
Company's Board;
For purpose of clause (F) of this definition, no act, or failure to act, on the
Company's part shall be deemed "willful" unless done, or omitted to be done, by
the Company not in good faith and without reasonable belief that the Company's
act, or failure to act, was in the best interest of the Group.
(vi) at the option of the Executive, for a reason other than Good
Reason, effective upon 30
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days of the giving of written notice of such exercise.
(b) Obligations of the Company upon Termination of Employment.
(i) Death. In the event of the Executive's death during the
Employment Period, the Employment Period shall end as of the date
of the Executive's death and his estate and/or beneficiaries, as
the case may be, shall be entitled to the following, as soon as
practicable following the date of Executive's death:
(A) Base Salary earned but not paid prior to the date of
his death;
(B) payment for all accrued but unused vacation time up to
the date of his death;
(C) the 1997 Incentive Bonus (or any discretionary
additional bonus for 1997) or any bonus payable
pursuant to any Future Bonus Programs, to the extent
earned but not paid with respect to any year prior to
the year in which the Executive's death occurs;
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(D) a pro rata portion (based on the number of days worked)
of the bonus payable under the 1997 Incentive Bonus
Plan or any Future Bonus Plan in effect for the year in
which the Executive's death occurs; provided, however,
that the performance goals established under the
applicable program with respect to the entire year in
which the Executive's death occurs are met;
(E) immediate vesting of and lapsing of restrictions on all
unvested Restricted Stock and any other shares of
restricted Common Stock held by the Executive on the
date of his death;
(F) immediate vesting of the Option and all other Company
stock options held by the Executive on the date of his
death, with such options remaining exercisable for
eighteen months from the date of the Executive's death;
and
(G) such additional benefits as may be provided by the then
existing plans,
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programs and/or arrangements of the Company.
(ii) Disability. If the Executive's employment is terminated
due to Disability during the Employment Period, either by the
Company or by the Executive, the Employment Period shall end as
of the date of the termination of the Executive's employment and
the Executive shall be entitled to the following, as soon as
practicable following the date of termination:
(A) Base Salary earned but not paid prior to the date of
the termination of the Executive's employment;
(B) payment for all accrued but unused vacation time up to
the date of the termination of the Executive's
employment;
(C) the 1997 Incentive Bonus (or any discretionary
additional bonus for 1997) or any bonus payable
pursuant to any Future Bonus Plans, to the extent
earned but not paid with respect to any year prior to
the year in which the
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Executive's termination of employment occurs;
(D) a pro rata portion (based on the number of days worked)
of the bonus payable under the 1997 Incentive Bonus
Plan or any Future Bonus Plan in effect for the year in
which the Executive's termination of employment occurs;
provided, however, that the performance goals
established under the applicable program with respect
to the entire year in which the Executive's termination
of employment occurs are met;
(E) immediate vesting of and lapsing of restrictions on all
unvested Restricted Stock and any other shares of
restricted Common Stock held by the Executive on the
date of his Disability;
(F) immediate vesting of the Option and all other Company
stock options held by the Executive on the date of his
Disability, with such options remaining exercisable for
eighteen months from the date of the Executive's
Disability; and
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(G) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the
Company.
(iii) Cause. If the Company terminates the Executive's
employment for Cause, the Executive shall be entitled to the
following, within 60 days following the date of termination:
(A) Base Salary earned but not paid prior to the date of
the termination of his employment;
(B) payment for all accrued but unused vacation time up to
the date of the termination of the Executive's
employment; and
(C) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the
Company.
(iv) Without Cause or With Good Reason. If the Executive's
employment is terminated by the Company (other than for Cause or
Disability) or if the Executive terminates his employment with
Good Reason, the Employment Period shall end as of the
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effective date of termination and the Executive shall be entitled
to the following, within 10 business days following the date of
termination or such earlier date as may be required by law:
(A) Base Salary earned but not paid prior to the date of
the termination of his employment;
(B) payment for all accrued but unused vacation time up to
the date of the termination of the Executive's
employment;
(C) the 1997 Incentive Bonus (or any discretionary
additional bonus for 1997) or any bonus payable
pursuant to any Future Bonus Plans, to the extent
earned but not paid with respect to any year prior to
the year in which the Executive's termination of
employment occurs;
(D) a lump sum amount equal to two times the sum of (x) the
Base Salary (based on the Base Salary in effect on the
date of the termination of the Executive's employment,
and in the case of a
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termination of employment by the Executive for Good
Reason due to a reduction in Base Salary under
Paragraph 6(a)(v)(C), based on the Base Salary in
effect immediately prior to such reduction) plus (y)
the target annual bonus under the 1997 Incentive Bonus
Plan or any Future Bonus Plan, as the case may be, for
the year of termination;
(E) immediate vesting of and lapsing of restrictions on all
unvested Restricted Stock and any other shares of
restricted Common Stock held by the Executive on the
date of the termination of his employment;
(F) immediate vesting of the Option and all other Company
stock options held by the Executive on the date of the
termination of his employment, with all stock options
remaining exercisable until their expiration pursuant
to the Stock Incentive Plan;
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(G) continued participation, as if he were still an
employee, in the Company's medical, dental,
hospitalization and life insurance plans, programs
and/or arrangements in which he was participating on
the date of the termination of his employment on the
same terms and conditions as other executives under
such plans, programs and/or arrangements until the
earlier of two years from the date of the Executive's
termination or the date, or dates, he receives
equivalent coverage and benefits under the plans,
programs and/or arrangements of a subsequent employer
(such coverage and benefits to be determined on a
coverage-by-coverage or benefit-by-benefit basis); and
(H) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the
Company (other than any severance payments payable
under the terms of any benefit plan).
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(v) Without Good Reason. If the Executive's employment is
terminated by the Executive without Good Reason, the Executive
shall be entitled to the following, within 60 days following the
date of termination or such earlier date as may be required by
law:
(A) Base Salary earned but not paid prior to the date of
the termination of his employment;
(B) payment for all accrued but unused vacation time up to
the date of the termination of the Executive's
employment; and
(C) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the
Company.
(c) Any payment under Paragraph 6(b) hereof shall be in lieu of
any other severance, bonus or other payments to which the Executive might then
be entitled pursuant to this Agreement or any statutory or common law claim,
subject, in each case, to the execution by the Executive and delivery to the
Company of a customary release of all claims related to his employment or
termination thereof in a form
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to be provided by the Company. The Company's obligations to make the payments
under Paragraph 6(b) hereof, except in the case of a termination for Cause,
shall not otherwise be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company or any member of the Group may have against the Executive. The
Executive acknowledges and agrees that in the event the parties dispute whether
the Executive shall be entitled to the payment hereunder, such payment shall not
be deemed to be earned or otherwise vest hereunder until such time as the
dispute is resolved in accordance with Paragraph 11(c) hereof.
(d) Notwithstanding anything to the contrary herein, if the
Company's Board has reason to believe that there are circumstances which, if
substantiated, would constitute Cause as defined herein, the Company may suspend
the Executive from employment without notice for such period of time as shall be
reasonably necessary for the Company's Board to ascertain whether such
circumstances are substantiated. During such suspension, the Executive shall
continue to be paid all compensation and provided all benefits hereunder;
provided, however, that if the Executive has been indicted or otherwise formally
charged by governmental authorities with any felony, the Company's
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Board may in its sole discretion, and without limiting the Company's Board's
discretion to terminate the Executive's employment for Cause, suspend the
Executive without continuation of any compensation or benefits hereunder,
pending final disposition of such criminal charge(s). Upon receiving notice of
any such suspension, the Executive shall promptly leave the premises of the
Company and remain off such premises and the premises of all other Group members
until further notice from the Company's Board.
7. Negative Covenants of the Executive.
(a) During the Employment Period and for a period of two (2) years
thereafter, the Executive will not, directly or indirectly:
(i) solicit, entice, persuade or induce any employee, director,
officer, associate, consultant, agent or independent contractor of the
Group to terminate his or her employment or engagement by the Group to
become employed or engaged by any person, firm, corporation or other
business enterprise other than a member of the Group, except in
furtherance of his responsibility during the Employment Period; or
(ii) authorize or assist in the taking of such action by any
third party.
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For purposes of this Paragraph 7(a), the terms "employee," "director,"
"officer," "associate," "consultant," "agent," and "independent contractor"
shall include any person with such status at any time during the twelve (12)
months prior to the termination of the Executive's employment and for two (2)
years following the Executive's termination of employment. The Executive shall
not be deemed to have violated the provisions of this Paragraph 7(a) by reason
of an isolated act, or failure to act, not taken in bad faith.
(b) During the Employment Period and for a period of one (1) year
thereafter, the Executive will not, directly or indirectly, engage, participate,
make any financial investment in, or become employed by or render advisory or
other services to or for any person, firm, corporation or other business
enterprise (the "Competing Enterprise") which is engaged, directly or
indirectly, during the Employment Period or at the time of Executive's
termination of employment, as the case may be, in competition with the Group in
(i) the development, design, manufacture, marketing or distribution of wire and
cable or (ii) any other business activities of the Group accounting for more
than 10% of its net sales in the most recently completed fiscal year or
reasonably expected to do so in the current fiscal year, in the United States
and in any foreign jurisdiction in which
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the Group operates or, at the end of Employment Period, proposes to operate;
provided, in either case, that the competitive businesses of the Competing
Enterprise account for more than 10% of the net sales of the Competing
Enterprise for its most recently completed fiscal year and the Executive does
not work or consult in such competitive business. The foregoing covenant shall
not be construed to preclude the Executive from making any investments in the
securities of any company, whether or not engaged in competition with the Group,
to the extent that such securities are actively traded on a national securities
exchange or in the over-the-counter market in the United States or any foreign
securities exchange and, after giving effect to such investment, the Executive
does not beneficially own securities representing more than 1% of the combined
voting power of the voting securities of such company.
(c) During the Employment Period and thereafter without limit as to
time, the Executive will not (other than in the regular course and in
furtherance of the Group's business) divulge, furnish or make available to any
person any knowledge or information with respect to the business or affairs of
the Group which is confidential, including, without limitation, "know-how",
trade secrets, customer and
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supplier lists, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, business acquisition or
disposition plans, new personnel employment plans, methods of manufacture,
technical processes, designs and design projects, inventions and research
projects and financial budgets and forecasts of the Group except (1) information
which at the time is available to others in the business or generally known to
the public other than as a result of disclosure by the Executive not permitted
hereunder, and (2) when required to do so by a court of competent jurisdiction,
by any governmental agency or by any administrative body or legislative body
(including a committee thereof) with purported or apparent jurisdiction to order
the Executive to divulge, disclose or make accessible such information. All
memoranda, notes, lists, records, electronically stored data, recordings or
videotapes and other documents (and all copies thereof) made or compiled by the
Executive or made available to the Executive (whether during his employment by
the Group or by any predecessor thereof) concerning the business of the Group or
any predecessor thereof shall be the property of the Company or such other
member of the Group and shall be delivered to the Company or such other
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member of the Group promptly upon the termination of the Employment Period.
(d) The Executive acknowledges that all developments, including,
without limitation, inventions, patentable or otherwise, trade secrets,
discoveries, improvements, ideas and writings that alone or jointly with others
the Executive may conceive, make, develop or acquire during the period of his
employment by the Group and any predecessor thereof (collectively, the
"Developments"), are and shall remain the sole and exclusive property of the
Group and the Executive hereby assigns to the Group all of his right, title and
interest in all such Developments. The Executive shall promptly and fully
disclose all future Developments to the Company's Board, and, at any time upon
request and at the expense of the Company, shall execute, acknowledge and
deliver to the Group all instruments that the Group shall prepare, give
evidence, and take all other actions that are necessary or desirable in the
reasonable opinion of the Company's counsel, to enable the Group to file and
prosecute applications for and to acquire, maintain and enforce all letters
patent, trademark registrations or copyrights covering the Developments in all
countries in which the same are deemed necessary.
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(e) The Executive acknowledges that the services to be rendered by the
Executive are of a special, unique and extraordinary character and, in
connection with such services, the Executive will have access to confidential
information vital to the Group's business and that irreparable injury would be
sustained by the Group in the event of his breach of any of the covenants
contained in this Paragraph 7, which injury could not be remedied adequately by
the recovery of damages in an action at law. Accordingly, the Executive agrees
that, upon a breach or threatened breach by him of any of such covenants, the
Company and, to the extent appropriate, any other member of the Group shall be
entitled, in addition to and not in lieu of any and all other remedies, to an
injunction to be issued by any court of competent jurisdiction restraining the
commission or continuance of any such breach or threatened breach upon minimal
bond, with or without surety, and that such an injunction will not work an undue
hardship on him.
(f) The provisions of this Paragraph 7 shall survive the termination
of this Agreement, irrespective of the reasons therefor.
(g) If any court determines that any of the provisions of this
Paragraph 7 is invalid or unenforceable, the remainder of such provisions shall
not thereby be
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affected and shall be given full effect without regard to the invalid
provisions. If any court construes any of the provisions of this Paragraph 7, or
any part thereof, to be unreasonable because of the duration of such provision
or the geographic scope thereof, such court shall have the power to reduce the
duration or restrict the geographic scope of such provision and to enforce such
provision as so reduced or restricted.
8. Reimbursement of Business Expense.
During the Employment Period, the Executive is authorized to incur
reasonable business expenses in carrying out his duties and responsibilities
under the Agreement, and the Company or the relevant member of the Group shall
promptly reimburse him for all such reasonable business expenses incurred in
connection with carrying out the business of such member of the Group, subject
to documentation in accordance with such member of the Group's policy. The
Company shall promptly pay or reimburse the Executive for reasonable legal fees
(based on hours charged) and expenses through the period ending February 27,
1997 incurred by the Executive in connection with the negotiation of this
Agreement. The Company also shall pay or reimburse the Executive for all
reasonable legal fees and expenses incurred by the Executive in disputing in
good faith any
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issue hereunder relating to the Executive's employment or the termination
thereof or in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement in which the dispute is resolved in the Executive's
favor. Such payments shall be made within five (5) business days after delivery
of the Executive's written request for payment accompanied with such evidence of
fees and expenses incurred as the Company reasonably may require.
9. Termination of Existing Agreement; Release.
The Existing Agreement shall automatically terminate, and be of no
further force or effect, upon the Effective Date. Effective upon the Executive's
receipt of the payment in the amount of One Million Seven Hundred Eighty-eight
Thousand Dollars ($1,788,000) specified in Section 4(g) of the Existing
Agreement (the "Termination Payment"), which the Executive agrees to confirm to
GCC and the Company in writing, the Executive releases GCC, the Company, Wassall
PLC, and any of their respective past and present officers, directors,
shareholders, subsidiaries, employees, agents and affiliates from any and all
claims, demands and causes of action whatsoever related to the Executive's
employment prior to the Effective Date by GCC and its affiliates, in law or
equity, known or unknown, accrued or unaccrued, past, present or future,
relating to
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any acts or omissions during all periods ending prior to the Effective Date,
whether arising out of the Existing Agreement or any other arrangements or
understandings, or otherwise; provided, however, that neither this release nor
the provisions of Paragraph 11(b) hereof shall adversely affect (i) the
Executive's rights under the Existing Agreement with respect to the Termination
Payment or to any Base Salary (net of withholding taxes) or vacation provided
for therein that is accrued but unpaid as of the Effective Date; (ii) the
Executive's rights with respect to Wassall PLC options previously granted to the
Executive, which shall remain exercisable in accordance with the terms of the
Wassall PLC (No. 3) U.S. Executive Share Option Scheme; (iii) the Executive's
rights under existing plans, programs and/or arrangements of the Company which
are accrued but unpaid as of the Effective Date; (iv) the Executive's rights to
indemnification under the Existing Agreement, any indemnification agreement,
applicable law and the certificates of incorporation and by-laws of the Company
and other members of the Group, or the Executive's rights under any director's
and officers' liability insurance policy covering the Executive, in each case
arising out of or relating the Executive's employment prior to the Effective
Date; or (v) the Executive rights under this Agreement.
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10. Indemnification.
To the fullest extent permitted by law and the Company's certificate
of incorporate and by-laws, the Company shall promptly indemnify the Executive
for all amounts (including, without limitation, judgments, fines, settlement
payments, losses, damages, costs and expenses (including reasonable attorneys'
fees)) incurred or paid by the Executive in connection with any action,
proceeding, suit or investigation arising out of or relating to the performance
by the Executive of services for (or acting as a fiduciary of any employee
benefit plans, programs or arrangements of) the Company or other member of the
Group, including as a director, officer or employee of the Company or other
member of the Group. The Company also agrees to maintain a director's and
officers' liability insurance policy covering the Executive to the extent the
Company provides such coverage for its other executive officers. Notwithstanding
any other provision of this Agreement, the provisions of this Paragraph 10 shall
survive any termination or expiration of this Agreement.
11. Miscellaneous.
(a) This Agreement is intended to be performed in, and shall be
construed and enforced in accordance with
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the laws of, the State of Kentucky without reference to principles of conflict
of laws.
(b) Upon the Effective Date, this Agreement shall incorporate the
complete understanding and agreement between the parties with respect to the
subject matter hereof and (subject to Paragraph 9 hereof) supersede any and all
other prior or contemporaneous agreements, written or oral, between the
Executive and any member of the Group or any predecessor thereof, including the
Existing Agreement, with respect to such subject matter, other than the
Change-in-Control Agreement, of even date herewith, between the Company, GCC and
the Executive (the "Change-in-Control Agreement"); provided, however, that no
payment or benefit shall be made or provided hereunder if and to the extent such
payment or benefit would be duplicative of a payment or benefit to which the
Executive is then entitled under the Change-in-Control Agreement. No provision
hereof may be modified or waived except by a written instrument duly executed by
the Executive and the Company with the express approval of the Compensation
Committee.
(c) All differences, claims or matters in dispute arising out of this
Agreement, the breach hereof or otherwise arising between the Company or any of
its affiliates and the Executive shall, at the election of
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either party, by notice to the other, be submitted to arbitration by the
American Arbitration Association or its successor, in Cincinnati, Ohio. Such
arbitration shall be governed by the then existing rules of the American
Arbitration Association and the laws of the State of Kentucky as then in effect.
Any arbitration conducted pursuant to the provisions of this Agreement shall be
conducted by a recognized independent and impartial arbitrator mutually agreed
to by the parties or, if they cannot agree within thirty (30) days after the
initial demand for arbitration, by three arbitrators, one chosen by the Company,
one chosen by the Executive and the third (who shall be a recognized independent
and impartial arbitrator and who shall act as chairperson and will be
compensated at a rate generally equivalent to his or her normal billing rate or
compensation) selected by the two so chosen; provided, that if either party
fails to appoint an arbitrator within 20 days of written notice by the other
that it has appointed an arbitrator, then the arbitration shall be conducted by
an arbitrator selected by the American Arbitration Association in accordance
with its then existing rules. If the arbitrators selected by the parties fail to
agree on the third arbitrator within thirty (30) days of the appointment of the
second arbitrator, the third arbitrator
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shall be selected by the American Arbitration Association in accordance with its
then existing rules. The impartial arbitrator shall set a time for hearing
within sixty (60) days of his/her selection. Each party shall have an
opportunity to present evidence on the issues in dispute before the arbitrator
and each party may be represented by legal counsel. The decision of the
arbitrator(s) shall be rendered within thirty (30) days of the close of the
hearing. The fees and expenses of the impartial arbitrator shall be shared
equally by the parties and each party shall bear the cost of any arbitrator
chosen unilaterally by that party. Any determination reached or award granted
pursuant to arbitration shall be final, non-appealable and binding on the
parties. The judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction. The parties acknowledge that their agreement
pursuant to the terms of this Paragraph 11(c) to submit the resolution of all
disputes arising out of this Agreement to arbitration by the American
Arbitration Association is the result of their mutual and voluntary negotiation
and agreement, and is not intended to and does not constitute a "condition or
precondition of employment" within the meaning or interpretation of that phrase
as used in Kentucky Revised Statutes 336.700(2).
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(d) The Executive acknowledges that before entering into this
Agreement and agreeing to terminate the Existing Agreement he has received a
reasonable period of time to consider this Agreement and has had sufficient time
and an opportunity to consult with any attorney or other advisor of his choice
in connection with this Agreement and all matters contained herein, and that he
has been advised to do so if he so chooses. The Executive further acknowledges
that this Agreement and all terms hereof (including the terms of termination of
the Existing Agreement) are fair, reasonable and are not the result of any
fraud, duress, coercion, pressure or undue influence exercised by the Company,
that he has approved and entered into this Agreement and all of the terms hereof
and agreed to the termination of the Existing Agreement on his own free will,
and that no promises or representations have been made to him by any person to
induce him to enter into this Agreement or terminate the Existing Agreement
other than the express terms set forth herein.
(e) The Company shall be entitled to deduct and withhold from all
compensation payable to the Executive pursuant to this Agreement all amounts
required to be deducted and withheld therefrom pursuant to any present or future
law, regulation or ordinance of the United States of
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America or any state or local jurisdiction therein or any foreign taxing
jurisdiction.
(f) Paragraph headings are included in this Agreement for convenience
of reference only and shall not affect the interpretation of the text hereof.
(g) Any and all notices, demands or other communications to be given
or made hereunder shall be in writing and shall be deemed to have been fully
given or made when personally delivered, or on the third business day after
mailing from within the continental United States by registered mail, postage
prepaid, addressed as follows:
If to the Company:
General Cable Acquisition Holding Corp.
4 Tesseneer Drive
Highland Heights, KY 41076
Attention: General Counsel
If to the Executive:
900 Adams Crossing
Cincinnati, Ohio 45202
Either party may change the address to which any notices to it shall be sent by
giving to the other party written notice of such change in conformity with the
foregoing.
(h) This Agreement may be executed in two or more counterparts, each
of which shall constitute an original but
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all of which together shall constitute one and the same
instrument.
(i) This Agreement may be assigned by the Company to, and shall inure
to the benefit of, any successor to substantially all the assets and business of
the Company as a going concern, whether by merger, consolidation or purchase of
substantially all of the assets of the Company or otherwise, provided that such
successor shall assume the Company's obligations under this Agreement. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
(j) The Company shall be deemed to have performed its obligations to
make payments or provide benefits to the
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Executive under this Agreement if it has caused a member of the Group to make
such payments or provide such benefits.
IN WITNESS WHEREOF, each of the Company and the Executive has executed
this Agreement this _________ day of May, 1997, to become effective on the
Effective Date.
GENERAL CABLE CORPORATION
By:_______________________________
Robert J. Siverd
Executive Vice President,
General Counsel and
Secretary
GCC CORPORATION
By:______________________________
Robert J. Siverd
Executive Vice President,
General Counsel and
Secretary
__________________________________
Stephen Rabinowitz
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ANNEX I
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ANNEX II
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EMPLOYMENT AGREEMENT
Agreement made and entered into this 13th day of May, 1997, by and
between General Cable Corporation, a Delaware corporation (the "Company"), and
Gregory B. Kenny (the "Executive").
W I T N E S S E T H:
WHEREAS, it is proposed that shares of the Company's Common Stock, $.01
par value per share (the "Common Stock"), will be sold by the Company's parent,
Wassall Netherlands Cable B.V., in a public offering (the "Public Offering");
and
WHEREAS, effective upon consummation of the Public Offering (the
"Effective Date") it is intended that this Agreement become effective;
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Term of Employment.
(a) Commencing on the Effective Date, the Company shall employ the
Executive, and the Executive shall accept employment and shall serve the
Company, in such capacities, with such duties and authority, for such period, at
such level of compensation and with such benefits, and upon such other terms and
subject to such other conditions, as are
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hereinafter set forth. The term of the Executive's employment hereunder shall
commence on the Effective Date and, unless previously terminated as provided
herein, shall continue until the third anniversary of the Effective Date (the
"Employment Period"); provided, however, that commencing on the third
anniversary of the Effective Date and each anniversary thereafter, the
Employment Period shall automatically be extended for one additional year unless
not later than one hundred twenty (120) days prior to such anniversary, the
Company or the Executive shall have given written notice to the other not to
extend the Employment Period.
(b) If the consummation of the Public Offering does not occur on or
before October 31, 1997, this Agreement shall terminate.
2. Capacities, Duties and Authority.
(a) Effective on the Effective Date, the Executive shall be elected,
and throughout the Employment Period the Executive shall be entitled to serve
as, Executive Vice President and Chief Operating Officer of the Company, GCC
Corporation, a Delaware corporation and a wholly owned subsidiary of the Company
("GCC"), GK Technologies, Incorporated, a New Jersey corporation ("GK"), General
Cable Industries, Inc., a Delaware corporation
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("Industries"), and such other affiliates of the Company, GCC, GK or Industries
as the Board of Directors of the Company (the "Company's Board") shall request.
The Company, GCC, GK, Industries and such other affiliates are hereinafter
referred to collectively as the "Group". Commencing on the Effective Date, the
Executive shall be elected and serve as a member of the Company's Board.
(b) In his capacity as Executive Vice President and Chief Operating
Officer of each of the members of the Group, the Executive shall have such
authority, perform such duties, discharge such responsibilities and render such
services as are customary to and consistent with such positions, subject to the
authority and direction of the relevant board of directors.
(c) The Executive shall render his services diligently, faithfully and
to the best of his ability, devoting thereto his entire business time, energy
and skills on an exclusive basis and, without the prior written consent of the
Company's Board, the Executive shall not render services to or for the account
of any person, firm or corporation other than a member of the Group.
3. Compensation.
(a) The Executive shall be paid a base salary during the Employment
Period at the annual rate of Three
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Hundred Thousand Dollars ($300,000), payable in accordance with the regular
payroll practices of the Company. The Compensation Committee of the Company's
Board (the "Compensation Committee") shall annually review the Executive's
performance and determine, in its sole discretion, whether or not to increase
the Executive's base salary and, if so, the amount of such increase. The
Executive's base salary as in effect from time to time is hereinafter referred
to as the "Base Salary."
(b) The Company has adopted, and the stockholder of the Company has
approved the adoption of, the General Cable Corporation 1997 Incentive Bonus
Program annexed hereto as Annex I (the "1997 Bonus Plan"). As soon as
practicable after the Effective Date, the Company agrees to recommend to the
Company's Board that the Executive be awarded the opportunity to earn, in
respect of the fiscal year ending December 31, 1997, a bonus (the "1997
Incentive Bonus") of up to one hundred twenty percent (120%) of his Base Salary
targeted upon the attainment of the performance goals specified therein. The
Compensation Committee shall establish a performance-based annual bonus program
for senior executives of the Company including the Executive for fiscal years
after 1997 (a "Future Bonus Plan") and award the Executive an annual bonus
opportunity thereunder which
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is not less favorable than the opportunity provided pursuant to the 1997
Incentive Bonus without restricting the discretion of the Compensation Committee
to set targets and criteria for such incentive compensation.
4. Employee Benefit Programs.
(a) During the Employment Period, the Executive shall be entitled to
participate in and shall have the benefit of all vacation, group life,
disability, hospital, surgical and major medical insurance plans and programs
and other employee benefit plans and programs as generally are made available to
executive personnel of the Group, as such benefit plans or programs may be
amended in the sole discretion of the Group members and with the concurrence of
the Compensation Committee, from time to time.
(b) During the Employment Period, the Executive shall receive or
participate in any fringe benefits provided to the member of the Group's
senior-level executives in accordance with the terms and conditions of such
arrangements as may be in effect from time to time.
5. Stock Option and Restricted Stock
(a) The Company has adopted, and the stockholder of the Company has
approved the adoption of, the General Cable Corporation Long-Term Stock
Incentive Plan (the "Stock Incentive Plan") annexed hereto as Annex II. As soon
as
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practicable after the Effective Date, the Company agrees to recommend to the
Company's Board that the Executive be granted under the Stock Incentive Plan a
ten-year non-qualified option to purchase 86,000 shares of Common Stock at the
initial Public Offering price of the Common Stock (the "Option"). The exercise
price of the Option shall be equal to the initial Public Offering price. The
Option shall vest and (subject to acceleration as provided herein or in the
Change-in-Control Agreement referred to below) be fully exercisable on the third
anniversary of the Effective Date in accordance with the terms of the Stock
Incentive Plan.
(b) As soon as practicable after the Effective Date, the Company shall
recommend that the Executive be awarded under the Stock Incentive Plan the
number of shares of restricted Common Stock having a value of Five Hundred
Thousand Dollars ($500,000) at the initial Public Offering price of the Common
Stock (the "Restricted Stock"). The restrictions on the Restricted Stock shall
lapse (subject to acceleration as provided herein or in the Change-in-Control
Agreement) on the third anniversary of the Effective Date in accordance with the
terms of the Stock Incentive Plan.
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6. Termination of Employment.
(a) The Executive's employment hereunder shall terminate:
(i) upon the death of the Executive;
(ii) upon the Disability of the Executive, which for the purposes
of this Agreement shall mean his inability because of physical or
mental illness or incapacity, whether partial or total, with or without
accommodation, to perform his duties under this Agreement, as
determined by the Company's Board, after review of such reports of
physicians of recognized standing in the medical community in the
Cincinnati, Ohio metropolitan area as the Company's Board (or a special
committee thereof) selects, for a continuous period of at least four
(4) months or for an aggregate of one hundred fifty (150) days within
any twelve (12) month period); or
(iii) at the option of the Company, exercisable by or upon the
authority of the Company's Board and effective immediately upon the
giving by the Company to the Executive of written notice of such
exercise, for "Cause", which, for purposes of this Agreement, shall
mean:
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(A) the gross neglect or willful failure by the Executive to perform
his duties and responsibilities in all material respects as set
forth in Paragraph 2 hereof, after a written demand for substantial
performance is delivered to the Executive by the Company's Board,
which demand specifically identifies the manner in which the
Company's Board believes that the Executive has not so performed
his duties;
(B) any act of fraud by the Executive, whether relating to the Group or
otherwise;
(C) the conviction or entry into a plea of nolo contendere by the
Executive with respect to any felony or misdemeanor (other than a
traffic offense which does not result in imprisonment);
(D) the commission by the Executive of any willful or intentional act
(including any violation of law) which materially injures the
reputation or materially adversely affects the business or business
relationships of the Group; or
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(E) any willful failure or willful breach (not covered by any of
clauses (A) through (D) above) of any of the material obligations
of this Agreement, if such breach is not cured within 10 days after
written notice thereof to the Executive by the Company's Board;
For purposes of clauses (A), (D) and (E) of this definition, no act, or failure
to act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest of
the Group. Notwithstanding the foregoing, the Executive shall not be terminated
for Cause unless and until there shall have been delivered to the Executive a
certified copy of a resolution, duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Company's Board, at a
meeting of the Company's Board called and held for the purpose (after reasonable
notice to the Executive, and an opportunity for him, together with his counsel,
to be heard before the Company's Board), finding that the Executive's conduct
met the definition of "Cause" set forth herein, specifying the particulars
thereof in detail.
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(iv) at the option of the Company, for a reason other than
Disability or Cause, effective immediately upon the giving of written
notice of such exercise;
(v) at the option of the Executive, effective ten (10) business
days after the giving of written notice of such exercise by the
Executive to the Company (or such shorter period as the Company's Board
may elect by giving written notice to the Executive), in the event that
the Executive has Good Reason, which for purposes of this Agreement
shall mean the occurrence at any time of any of the following without
the Executive's prior written consent:
(A) removal from any of the positions (other than as a member of the
Company's Board) held by the Executive with respect to the Company
or any of its significant subsidiaries (as defined in Regulation
S-X under the Securities Exchange Act of 1934);
(B) the assignment of duties or responsibilities materially
inconsistent with those customarily associated with the positions
held by the Executive or a diminution of the
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Executive's position, authority, duties or responsibilities (other
than an isolated action that is not taken in bad faith and is
remedied by the Company promptly after receipt of written notice
thereof from the Executive);
(C) except as provided in Paragraph 6(d), a reduction in the
Executive's Base Salary payable pursuant to Paragraph 3(a) hereof
or a material reduction in any other material benefit provided the
Executive hereunder; or
(D) notice by the Company, as set forth in Paragraph 1(a) hereof, not
to extend the Employment Period; or
(E) the failure by the Company to obtain an agreement from any
successor to assume and agree to perform this Agreement; or
(F) any willful failure or willful breach by the Company (not covered
by any of clauses (A) through (E) above) of any of the material
obligations of this Agreement, if such breach is not cured within
10 days after written notice thereof by the Executive to the
Company's Board;
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For purpose of clause (F) of this definition, no act, or failure to act, on the
Company's part shall be deemed "willful" unless done, or omitted to be done, by
the Company not in good faith and without reasonable belief that the Company's
act, or failure to act, was in the best interest of the Group.
(vi) at the option of the Executive, for a reason other than Good
Reason, effective upon 30 days of the giving of written notice of such
exercise.
(b) Obligations of the Company upon Termination of Employment.
(i) Death. In the event of the Executive's death during the
Employment Period, the Employment Period shall end as of the date of
the Executive's death and his estate and/or beneficiaries, as the case
may be, shall be entitled to the following, as soon as practicable
following the date of Executive's death:
(A) Base Salary earned but not paid prior to the date of his death;
(B) payment for all accrued but unused vacation time up to the date
of his death;
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(C) the 1997 Incentive Bonus or any bonus payable pursuant to any
Future Bonus Plan, to the extent earned but not paid with
respect to any year prior to the year in which the Executive's
death occurs;
(D) a pro rata portion (based on the number of days worked) of the
bonus payable under the 1997 Incentive Bonus Plan or any
Future Bonus Plan in effect for the year in which the
Executive's death occurs; provided, however, that the
performance goals established under the applicable program
with respect to the entire year in which the Executive's death
occurs are met;
(E) immediate vesting of and lapsing of restrictions on all
unvested Restricted Stock and any other shares of restricted
Common Stock held by the Executive on the date of his death;
(F) immediate vesting of the Option and all other Company stock
options held by the Executive on the date of his death, with
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such options remaining exercisable for twelve months from the
date of the Executive's death; and
(G) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the Company.
(ii) Disability. If the Executive's employment is terminated due to
Disability during the Employment Period, either by the Company or by
the Executive, the Employment Period shall end as of the date of the
termination of the Executive's employment and the Executive shall be
entitled to the following, as soon as practicable following the date of
termination:
(A) Base Salary earned but not paid prior to the date of the
termination of the Executive's employment;
(B) payment for all accrued but unused vacation time up to the
date of the termination of the Executive's employment;
(C) the 1997 Incentive Bonus or any bonus payable pursuant to any
Future Bonus
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Plan, to the extent earned but not paid with respect to any
year prior to the year in which the Executive's termination of
employment occurs;
(D) a pro rata portion (based on the number of days worked) of the
bonus payable under the 1997 Incentive Bonus Plan or any
Future Bonus Plan in effect for the year in which the
Executive's termination of employment occurs; provided,
however, that the performance goals established under the
applicable program with respect to the entire year in which
the Executive's termination of employment occurs are met;
(E) immediate vesting of and lapsing of restrictions on all
unvested Restricted Stock and any other shares of restricted
Common Stock held by the Executive on the date of his
Disability;
(F) immediate vesting of the Option and all other Company stock
options held by the Executive on the date of his Disability,
with such options remaining exercisable
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for twelve months from the date of the Executive's Disability;
and
(G) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the Company.
(iii) Cause. If the Company terminates the Executive's employment
for Cause, the Executive shall be entitled to the following, within 60
days following the date of termination:
(A) Base Salary earned but not paid prior to the date of the
termination of his employment;
(B) payment for all accrued but unused vacation time up to the
date of the termination of the Executive's employment; and
(C) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the Company.
(iv) Without Cause or With Good Reason. If the Executive's
employment is terminated by the Company (other than for Cause or
Disability) or if
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the Executive terminates his employment with Good Reason, the
Employment Period shall end as of the effective date of termination and
the Executive shall be entitled to the following, within 10 business
days following the date of termination or such earlier date as may be
required by law:
(A) Base Salary earned but not paid prior to the date of the
termination of his employment;
(B) payment for all accrued but unused vacation time up to the
date of the termination of the Executive's employment;
(C) the 1997 Incentive Bonus or any bonus payable pursuant to any
Future Bonus Plan, to the extent earned but not paid with
respect to any year prior to the year in which the Executive's
termination of employment occurs;
(D) a lump sum amount equal to 1.5 times the sum of (x) the Base
Salary (based on the Base Salary in effect on the date of the
termination of the Executive's employment, and in the case of
a
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termination of employment by the Executive for Good Reason due
to a reduction in Base Salary under Paragraph 6(a)(v)(C),
based on the Base Salary in effect immediately prior to such
reduction) plus (y) the target annual bonus under the 1997
Incentive Bonus Plan or any future bonus plan, as the case may
be, for the year of termination;
(E) immediate vesting of and lapsing of restrictions on all
unvested Restricted Stock and any other shares of restricted
Common Stock held by the Executive on the date of the
termination of his employment;
(F) immediate vesting of the Option and all other Company stock
options held by the Executive on the date of the termination
of his employment, with all stock options remaining
exercisable until their expiration pursuant to the Stock
Incentive Plan;
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(G) continued participation, as if he were still an employee, in
the Company's medical, dental, hospitalization and life
insurance plans, programs and/or arrangements in which he was
participating on the date of the termination of his employment
on the same terms and conditions as other executives under
such plans, programs and/or arrangements until the earlier of
eighteen months from the date of the Executive's termination
or the date, or dates, he receives equivalent coverage and
benefits under the plans, programs and/or arrangements of a
subsequent employer (such coverage and benefits to be
determined on a coverage-by-coverage or benefit-by-benefit
basis); and
(H) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the Company
(other than any severance payments payable under the terms of
any benefit plan), including outplacement
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services consistent with the Company's then existing practice
for senior executives or, if there is no such then existing
practice, consistent with the Company's past practice for
senior executives.
(v) Without Good Reason. If the Executive's employment is
terminated by the Executive without Good Reason, the Executive shall be
entitled to the following, within 60 days following the date of
termination or such earlier date as may be required by law:
(A) Base Salary earned but not paid prior to the date of the
termination of his employment;
(B) payment for all accrued but unused vacation time up to the
date of the termination of the Executive's employment; and
(C) such additional benefits as may be provided by the then
existing plans, programs and/or arrangements of the Company.
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(c) Any payment under Paragraph 6(b) hereof shall be in lieu of any
other severance, bonus or other payments to which the Executive might then be
entitled pursuant to this Agreement or any statutory or common law claim,
subject, in each case, to the execution by the Executive and delivery to the
Company of a customary release of all claims related to his employment or
termination thereof in a form to be provided by the Company. The Company's
obligations to make the payments under Paragraph 6(b) hereof, except in the case
of a termination for Cause, shall not otherwise be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company or any member of the Group
may have against the Executive. The Executive acknowledges and agrees that in
the event the parties dispute whether the Executive shall be entitled to the
payment hereunder, such payment shall not be deemed to be earned or otherwise
vest hereunder until such time as the dispute is resolved in accordance with
Paragraph 11(c) hereof.
(d) Notwithstanding anything to the contrary herein, if the Company's
Board has reason to believe that there are circumstances which, if
substantiated, would constitute Cause as defined herein, the Company may suspend
the Executive from employment without notice for such period
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of time as shall be reasonably necessary for the Company's Board to ascertain
whether such circumstances are substantiated. During such suspension, the
Executive shall continue to be paid all compensation and provided all benefits
hereunder; provided, however, that if the Executive has been indicted or
otherwise formally charged by governmental authorities with any felony, the
Company's Board may in its sole discretion, and without limiting the Company's
Board's discretion to terminate the Executive's employment for Cause, suspend
the Executive without continuation of any compensation or benefits hereunder,
pending final disposition of such criminal charge(s). Upon receiving notice of
any such suspension, the Executive shall promptly leave the premises of the
Company and remain off such premises and the premises of all other Group members
until further notice from the Company's Board.
7. Negative Covenants of the Executive.
(a) During the Employment Period and for a period of two (2) years
thereafter, the Executive will not, directly or indirectly:
(i) solicit, entice, persuade or induce any employee, director,
officer, associate, consultant, agent or independent contractor of the
Group to terminate his or her employment or
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engagement by the Group to become employed or engaged by any person,
firm, corporation or other business enterprise other than a member of
the Group, except in furtherance of his responsibility during the
Employment Period; or
(ii) authorize or assist in the taking of such action by any third
party.
For purposes of this Paragraph 7(a), the terms "employee," "director,"
"officer," "associate," "consultant," "agent," and "independent contractor"
shall include any person with such status at any time during the twelve (12)
months prior to the termination of the Executive's employment and for two (2)
years following the Executive's termination of employment. The Executive shall
not be deemed to have violated the provisions of this Paragraph 7(a) by reason
of an isolated act, or failure to act, not taken in bad faith.
(b) During the Employment Period and for a period of one (1) year
thereafter, the Executive will not, directly or indirectly, engage, participate,
make any financial investment in, or become employed by or render advisory or
other services to or for any person, firm, corporation or other business
enterprise (the "Competing Enterprise") which is engaged, directly or
indirectly, during the Employment Period or at the time of Executive's
termination of
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employment, as the case may be, in competition with the Group in (i) the
development, design, manufacture, marketing or distribution of wire and cable or
(ii) any other business activities of the Group accounting for more than 10% of
its net sales in the most recently completed fiscal year or reasonably expected
to do so in the current fiscal year, in the United States and in any foreign
jurisdiction in which the Group operates or, at the end of Employment Period,
proposes to operate; provided, in either case, that the competitive businesses
of the Competing Enterprise account for more than 10% of the net sales of the
Competing Enterprise for its most recently completed fiscal year and the
Executive does not work or consult in such competitive business. The foregoing
covenant shall not be construed to preclude the Executive from making any
investments in the securities of any company, whether or not engaged in
competition with the Group, to the extent that such securities are actively
traded on a national securities exchange or in the over-the-counter market in
the United States or any foreign securities exchange and, after giving effect to
such investment, the Executive does not beneficially own securities representing
more than 1% of the combined voting power of the voting securities of such
company.
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(c) During the Employment Period and thereafter without limit as to
time, the Executive will not (other than in the regular course and in
furtherance of the Group's business) divulge, furnish or make available to any
person any knowledge or information with respect to the business or affairs of
the Group which is confidential, including, without limitation, "know-how",
trade secrets, customer and supplier lists, pricing policies, operational
methods, marketing plans or strategies, product development techniques or plans,
business acquisition or disposition plans, new personnel employment plans,
methods of manufacture, technical processes, designs and design projects,
inventions and research projects and financial budgets and forecasts of the
Group except (1) information which at the time is available to others in the
business or generally known to the public other than as a result of disclosure
by the Executive not permitted hereunder, and (2) when required to do so by a
court of competent jurisdiction, by any governmental agency or by any
administrative body or legislative body (including a committee thereof) with
purported or apparent jurisdiction to order the Executive to divulge, disclose
or make accessible such information. All memoranda, notes, lists, records,
electronically stored data, recordings or videotapes and other documents (and
all
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copies thereof) made or compiled by the Executive or made available to the
Executive (whether during his employment by the Group or by any predecessor
thereof) concerning the business of the Group or any predecessor thereof shall
be the property of the Company or such other member of the Group and shall be
delivered to the Company or such other member of the Group promptly upon the
termination of the Employment Period.
(d) The Executive acknowledges that all developments, including,
without limitation, inventions, patentable or otherwise, trade secrets,
discoveries, improvements, ideas and writings that alone or jointly with others
the Executive may conceive, make, develop or acquire during the period of his
employment by the Group and any predecessor thereof (collectively, the
"Developments"), are and shall remain the sole and exclusive property of the
Group and the Executive hereby assigns to the Group all of his right, title and
interest in all such Developments. The Executive shall promptly and fully
disclose all future Developments to the Company's Board, and, at any time upon
request and at the expense of the Company, shall execute, acknowledge and
deliver to the Group all instruments that the Group shall prepare, give
evidence, and take all other actions that are necessary or desirable in the
reasonable
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opinion of the Company's counsel, to enable the Group to file and prosecute
applications for and to acquire, maintain and enforce all letters patent,
trademark registrations or copyrights covering the Developments in all countries
in which the same are deemed necessary.
(e) The Executive acknowledges that the services to be rendered by
the Executive are of a special, unique and extraordinary character and, in
connection with such services, the Executive will have access to confidential
information vital to the Group's business and that irreparable injury would be
sustained by the Group in the event of his breach of any of the covenants
contained in this Paragraph 7, which injury could not be remedied adequately by
the recovery of damages in an action at law. Accordingly, the Executive agrees
that, upon a breach or threatened breach by him of any of such covenants, the
Company and, to the extent appropriate, any other member of the Group shall be
entitled, in addition to and not in lieu of any and all other remedies, to an
injunction to be issued by any court of competent jurisdiction restraining the
commission or continuance of any such breach or threatened breach upon minimal
bond, with or without surety, and that such an injunction will not work an undue
hardship on him.
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(f) The provisions of this Paragraph 7 shall survive the
termination of this Agreement, irrespective of the reasons therefor.
(g) If any court determines that any of the provisions of this
Paragraph 7 is invalid or unenforceable, the remainder of such provisions shall
not thereby be affected and shall be given full effect without regard to the
invalid provisions. If any court construes any of the provisions of this
Paragraph 7, or any part thereof, to be unreasonable because of the duration of
such provision or the geographic scope thereof, such court shall have the power
to reduce the duration or restrict the geographic scope of such provision and to
enforce such provision as so reduced or restricted.
8. Reimbursement of Business Expense.
During the Employment Period, the Executive is authorized to incur
reasonable business expenses in carrying out his duties and responsibilities
under the Agreement, and the Company or the relevant member of the Group shall
promptly reimburse him for all such reasonable business expenses incurred in
connection with carrying out the business of such member of the Group, subject
to documentation in accordance with such member of the Group's policy.
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9. Release.
In consideration of the Company's granting of the Option, the
Executive releases GCC, the Company, Wassall PLC, and any of their respective
past and present officers, directors, shareholders, subsidiaries, employees,
agents and affiliates from any and all claims, demands and causes of action
whatsoever related to the Executive's employment prior to the Effective Date by
GCC and its affiliates, in law or equity, known or unknown, accrued or
unaccrued, past, present or future, relating to any acts or omissions during all
periods ending prior to the Effective Date, whether arising out of any other
arrangements or understandings, or otherwise; provided, however, that neither
this release nor the provisions of Paragraph 11(b) hereof shall adversely affect
(i) the Executive's rights to any Base Salary (net of withholding taxes) or
vacation provided for therein that is accrued but unpaid as of the Effective
Date; (ii) the Executive's rights with respect to Wassall PLC options previously
granted to the Executive, which shall remain exercisable in accordance with the
terms of the Wassall PLC (No. 3) U.S. Executive Share Option Scheme, if any;
(iii) the Executive's rights under existing plans, programs and/or arrangements
of the Company which are accrued but unpaid as of the Effective Date; (iv) the
Executive's rights to
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indemnification under any indemnification agreement, applicable law and the
certificates of incorporation and by-laws of the Company and other members of
the Group, or the Executive's rights under any director's and officers'
liability insurance policy covering the Executive, in each case arising out of
or relating the Executive's employment prior to the Effective Date; or (v) the
Executive rights under this Agreement.
10. Indemnification.
To the fullest extent permitted by law and the Company's
certificate of incorporate and by-laws, the Company shall promptly indemnify the
Executive for all amounts (including, without limitation, judgments, fines,
settlement payments, losses, damages, costs and expenses (including reasonable
attorneys' fees)) incurred or paid by the Executive in connection with any
action, proceeding, suit or investigation arising out of or relating to the
performance by the Executive of services for (or acting as a fiduciary of any
employee benefit plans, programs or arrangements of) the Company or other member
of the Group, including as a director, officer or employee of the Company or
other member of the Group. The Company also agrees to maintain a director's and
officers' liability insurance policy covering the Executive to the extent the
Company
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provides such coverage for its other executive officers. Notwithstanding any
other provision of this Agreement, the provisions of this Paragraph 10 shall
survive any termination or expiration of this Agreement.
11. Miscellaneous.
(a) This Agreement is intended to be performed in, and shall be
construed and enforced in accordance with the laws of, the State of Kentucky
without reference to principles of conflict of laws.
(b) Upon the Effective Date, this Agreement shall incorporate the
complete understanding and agreement between the parties with respect to the
subject matter hereof and (subject to Paragraph 9 hereof) supersede any and all
other prior or contemporaneous agreements, written or oral, between the
Executive and any member of the Group or any predecessor thereof with respect to
such subject matter, other than the Change-in-Control Agreement, of even date
herewith, between the Company, GCC and the Executive (the "Change-in-Control
Agreement"); provided, however, that no payment or benefit shall be made or
provided hereunder if and to the extent such payment or benefit would be
duplicative of a payment or benefit to which the Executive is then entitled
under the Change-in-Control Agreement. No provision hereof may be modified or
waived except by a
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written instrument duly executed by the Executive and the Company with the
express approval of the Compensation Committee.
(c) All differences, claims or matters in dispute arising out of
this Agreement, the breach hereof or otherwise arising between the Company or
any of its affiliates and the Executive shall, at the election of either party,
by notice to the other, be submitted to arbitration by the American Arbitration
Association or its successor, in Cincinnati, Ohio. Such arbitration shall be
governed by the then existing rules of the American Arbitration Association and
the laws of the State of Kentucky as then in effect. Any arbitration conducted
pursuant to the provisions of this Agreement shall be conducted by a recognized
independent and impartial arbitrator mutually agreed to by the parties or, if
they cannot agree within thirty (30) days after the initial demand for
arbitration, by three arbitrators, one chosen by the Company, one chosen by the
Executive and the third (who shall be a recognized independent and impartial
arbitrator and who shall act as chairperson and will be compensated at a rate
generally equivalent to his or her normal billing rate or compensation) selected
by the two so chosen; provided, that if either party fails to appoint an
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arbitrator within 20 days of written notice by the other that it has appointed
an arbitrator, then the arbitration shall be conducted by an arbitrator selected
by the American Arbitration Association in accordance with its then existing
rules. If the arbitrators selected by the parties fail to agree on the third
arbitrator within thirty (30) days of the appointment of the second arbitrator,
the third arbitrator shall be selected by the American Arbitration Association
in accordance with its then existing rules. The impartial arbitrator shall set a
time for hearing within sixty (60) days of his/her selection. Each party shall
have an opportunity to present evidence on the issues in dispute before the
arbitrator and each party may be represented by legal counsel. The decision of
the arbitrator(s) shall be rendered within thirty (30) days of the close of the
hearing. The fees and expenses of the impartial arbitrator shall be shared
equally by the parties and each party shall bear the cost of any arbitrator
chosen unilaterally by that party. Any determination reached or award granted
pursuant to arbitration shall be final, non-appealable and binding on the
parties. The judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction. The parties acknowledge that their agreement
pursuant to the terms of this Paragraph 11(c) to submit the resolution of
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all disputes arising out of this Agreement to arbitration by the American
Arbitration Association is the result of their mutual and voluntary negotiation
and agreement, and is not intended to and does not constitute a "condition or
precondition of employment" within the meaning or interpretation of that phrase
as used in Kentucky Revised Statutes 336.700(2).
(d) The Executive acknowledges that before entering into this
Agreement he has received a reasonable period of time to consider this Agreement
and has had sufficient time and an opportunity to consult with any attorney or
other advisor of his choice in connection with this Agreement and all matters
contained herein, and that he has been advised to do so if he so chooses. The
Executive further acknowledges that this Agreement and all terms hereof are
fair, reasonable and are not the result of any fraud, duress, coercion, pressure
or undue influence exercised by the Company, that he has approved and entered
into this Agreement and all of the terms hereof on his own free will, and that
no promises or representations have been made to him by any person to induce him
to enter into this Agreement other than the express terms set forth herein.
(e) The Company shall be entitled to deduct and withhold from all
compensation payable to the Executive
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pursuant to this Agreement all amounts required to be deducted and withheld
therefrom pursuant to any present or future law, regulation or ordinance of the
United States of America or any state or local jurisdiction therein or any
foreign taxing jurisdiction.
(f) Paragraph headings are included in this Agreement for
convenience of reference only and shall not affect the interpretation of the
text hereof.
(g) Any and all notices, demands or other communications to be
given or made hereunder shall be in writing and shall be deemed to have been
fully given or made when personally delivered, or on the third business day
after mailing from within the continental United States by registered mail,
postage prepaid, addressed as follows:
If to the Company:
General Cable Corporation
4 Tesseneer Drive
Highland Heights, KY 41076
Attention: General Counsel
If to the Executive:
Gregory B. Kenny
6622 Pleasant Street
Cincinnati, OH 45227
Either party may change the address to which any notices to it shall be sent by
giving to the other party written notice of such change in conformity with the
foregoing.
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(h) This Agreement may be executed in two or more counterparts,
each of which shall constitute an original but all of which together shall
constitute one and the same instrument.
(i) This Agreement may be assigned by the Company to, and shall
inure to the benefit of, any successor to substantially all the assets and
business of the Company as a going concern, whether by merger, consolidation or
purchase of substantially all of the assets of the Company or otherwise,
provided that such successor shall assume the Company's obligations under this
Agreement. This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
(j) The Company shall be deemed to have performed its obligations
to make payments or provide benefits to the
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Executive under this Agreement if it has caused a member of the Group to make
such payments or provide such benefits.
IN WITNESS WHEREOF, each of the Company and the Executive has
executed this Agreement this_____day of May, 1997, to become effective on the
Effective Date.
GENERAL CABLE CORPORATION
By:______________________________
Stephen Rabinowitz
Chairman, Chief Executive
Officer and President
______________________________
Gregory B. Kenny
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ANNEX I
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ANNEX II
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EMPLOYMENT AGREEMENT
Agreement made and entered into this 13th day of May, 1997, by
and among General Cable Corporation, a Delaware corporation (the "Company"),
GCC Corporation, a Delaware corporation and a wholly owned subsidiary of the
Company ("GCC"), and Christopher F. Virgulak (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive and GCC are parties to an employment
agreement effective as of November 7, 1994, as amended through the date of this
Agreement, which is currently in effect (the "Existing Agreement"); and
WHEREAS, it is proposed that shares of the Company's Common
Stock, $.01 par value per share (the "Common Stock"), will be sold by the
Company's parent, Wassall Netherlands Cable B.V., in a public offering (the
"Public Offering"); and
WHEREAS, effective upon consummation of the Public Offering
(the "Effective Date") it is intended that the Existing Agreement be terminated
and that this Agreement become effective;
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NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Term of Employment.
(a) Commencing on the Effective Date, the Company shall employ
the Executive, and the Executive shall accept employment and shall serve the
Company, in such capacities, with such duties and authority, for such period, at
such level of compensation and with such benefits, and upon such other terms and
subject to such other conditions, as are hereinafter set forth. The term of the
Executive's employment hereunder shall commence on the Effective Date and,
unless previously terminated as provided herein, shall continue until the second
anniversary of the Effective Date (the "Employment Period"); provided, however,
that commencing on the second anniversary of the Effective Date and each
anniversary thereafter, the Employment Period shall automatically be extended
for one additional year unless not later than one hundred twenty (120) days
prior to such anniversary, the Company or the Executive shall have given written
notice to the other not to extend the Employment Period.
(b) If the consummation of the Public Offering
does not occur on or before October 31, 1997, this Agreement
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shall terminate and the Existing Agreement shall remain in full force and effect
in accordance with its terms.
2. Capacities, Duties and Authority.
(a) Effective on the Effective Date, the Executive shall
be elected, and throughout the Employment Period the Executive shall be entitled
to serve as, Executive Vice President, Chief Financial Officer and Treasurer of
the Company, GCC, GK Technologies, Incorporated, a New Jersey corporation
("GK"), General Cable Industries, Inc., a Delaware corporation ("Industries"),
and such other affiliates of the Company, GCC, GK or Industries as the Board of
Directors of the Company (the "Company's Board") shall request. The Company,
GCC, GK, Industries and such other affiliates are hereinafter referred to
collectively as the "Group".
(b) In his capacity as Executive Vice President, Chief
Financial Officer and Treasurer of each of the members of the Group, the
Executive shall have such authority, perform such duties, discharge such
responsibilities and render such services as are customary to and consistent
with such positions, subject to the authority and direction of the relevant
board of directors.
(c) The Executive shall render his services
diligently, faithfully and to the best of his ability,
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devoting thereto his entire business time, energy and skills on an exclusive
basis and, without the prior written consent of the Company's President, the
Executive shall not render services to or for the account of any person, firm or
corporation other than a member of the Group.
3. Compensation.
(a) The Executive shall be paid a base salary during the
Employment Period at the annual rate of Two Hundred and Four Thousand Dollars
($204,000), payable in accordance with the regular payroll practices of the
Company. The Compensation Committee of the Company's Board (the "Compensation
Committee") shall annually review the Executive's performance and determine, in
its sole discretion, whether or not to increase the Executive's base salary and,
if so, the amount of such increase. The Executive's base salary as in effect
from time to time is hereinafter referred to as the "Base Salary."
(b) The Executive shall be entitled to participate in the
General Cable Corporation 1997 Incentive Bonus Program and any performance-based
annual bonus program for senior executives of the Company for fiscal years after
1997 (a "Future Bonus Plan") on such terms and conditions as determined in the
discretion of the Compensation Committee.
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4. Employee Benefit Programs.
(a) During the Employment Period, the Executive shall be
entitled to participate in and shall have the benefit of all vacation, group
life, disability, hospital, surgical and major medical insurance plans and
programs and other employee benefit plans and programs as generally are made
available to executive personnel of the Group, as such benefit plans or programs
may be amended in the sole discretion of the Group members and with the
concurrence of the Compensation Committee, from time to time.
(b) During the Employment Period, the Executive shall be
entitled to receive or participate in any fringe benefits provided to the member
of the Group's senior-level executives in accordance with the terms and
conditions of such arrangements as may be in effect from time to time.
5. Stock Options
The Company has adopted, and the stockholder of the Company
has approved the adoption of, the General Cable Corporation Long-Term Stock
Incentive Plan (the "Stock Incentive Plan"). As soon as practicable after the
Effective Date, the Company agrees to recommend to the Company's Board that the
Executive be granted under the Stock Incentive Plan a ten-year non-qualified
option to purchase 33,000 shares of Common Stock at the initial Public
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Offering price of the Common Stock (the "Option"). The exercise price of the
Option shall be equal to the initial Public Offering price. The Option shall
vest and (subject to acceleration as provided herein or in the Change-in-Control
Agreement referred to below) be fully exercisable on the third anniversary of
the Effective Date in accordance with the terms of the Stock Incentive Plan.
6. Termination of Employment.
(a) The Executive's employment hereunder shall terminate:
(i) upon the death of the Executive;
(ii) upon the Disability of the Executive,
which for the purposes of this Agreement shall mean his
inability because of physical or mental illness or incapacity,
whether partial or total, with or without accommodation, to
perform his duties under this Agreement, as determined by the
Company's Board, after review of such reports of physicians of
recognized standing in the medical community in the
Cincinnati, Ohio metropolitan area as the Company's Board (or
a special committee thereof) selects, for a continuous period
of at least four (4) months or for an
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aggregate of one hundred fifty (150) days within
any twelve (12) month period); or
(iii) at the option of the Company, exercisable by or
upon the authority of the Company's President and effective
immediately upon the giving by the Company to the Executive of
written notice of such exercise, for "Cause", which, for
purposes of this Agreement, shall mean:
(A) the gross neglect or willful failure by the Executive
to perform his duties and responsibilities in all
material respects as set forth in Paragraph 2
hereof, after a written demand for substantial
performance is delivered to the Executive by the
Company's President, which demand specifically
identifies the manner in which the Company's
President believes that the Executive has not so
performed his duties;
(B) any act of fraud by the Executive, whether
relating to the Group or otherwise;
(C) the conviction or entry into a plea of nolo
contendere by the Executive with respect to
any felony or misdemeanor (other than a
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traffic offense which does not result in
imprisonment);
(D) the commission by the Executive of any willful or
intentional act (including any violation of law)
which materially injures the reputation or materially
adversely affects the business or business
relationships of the Group; or
(E) any willful failure or willful breach (not covered by
any of clauses (A) through (D) above) of any of the
material obligations of this Agreement, if such
breach is not cured within 10 days after written
notice thereof to the Executive by the Company's
President;
For purposes of clauses (A), (D) and (E) of this definition, no act, or failure
to act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest of
the Group.
(iv) at the option of the Company, for a
reason other than Disability or Cause, effective
immediately upon the giving of written notice of
such exercise;
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(v) at the option of the Executive, effective ten
(10) business days after the giving of written notice of such
exercise by the Executive to the Company (or such shorter
period as the Company's President may elect by giving written
notice to the Executive), in the event that the Executive has
Good Reason, which for purposes of this Agreement shall mean
the occurrence at any time of any of the following without the
Executive's prior written consent:
(A) removal from the position of Executive Vice
President or Chief Financial Officer held by the
Executive with respect to the Company or any of its
significant subsidiaries (as defined in Regulation
S-X under the Securities Exchange Act of 1934);
(B) the assignment of duties or responsibilities
materially inconsistent with those
customarily associated with the positions
held by the Executive or a diminution of the
Executive's position, authority, duties or
responsibilities (other than an isolated
action that is not taken in bad faith and is
remedied by the Company promptly after
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receipt of written notice thereof from the
Executive);
(C) except as provided in Paragraph 6(d), a reduction in
the Executive's Base Salary payable pursuant to
Paragraph 3(a) hereof or a material reduction in any
other material benefit provided the Executive
hereunder; or
(D) notice by the Company, as set forth in
Paragraph 1(a) hereof, not to extend the
Employment Period; or
(E) the failure by the Company to obtain an
agreement from any successor to assume and
agree to perform this Agreement; or
(F) any willful failure or willful breach by the Company
(not covered by any of clauses (A) through (E) above)
of any of the material obligations of this Agreement,
if such breach is not cured within 10 days after
written notice thereof by the Executive to the
Company's President;
For purpose of clause (F) of this definition, no act, or failure to act, on the
Company's part shall be deemed "willful" unless done, or omitted to be done, by
the Company not in good faith and without reasonable belief that the
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Company's act, or failure to act, was in the best interest of the Group.
(vi) at the option of the Executive, for a
reason other than Good Reason, effective upon 30
days of the giving of written notice of such
exercise.
(b) Obligations of the Company upon Termination
of Employment.
(i) Death. In the event of the Executive's death
during the Employment Period, the Employment Period shall end
as of the date of the Executive's death and his estate and/or
beneficiaries, as the case may be, shall be entitled to the
following, as soon as practicable following the date of
Executive's death:
(A) Base Salary earned but not paid prior to
the date of his death;
(B) payment for all accrued but unused
vacation time up to the date of his
death;
(C) the 1997 Incentive Bonus or any bonus
payable pursuant to any Future Bonus Plan,
to the extent earned but not paid with
respect to any year prior to the
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year in which the Executive's death
occurs;
(D) a pro rata portion (based on the number
of days worked) of the bonus payable
under the 1997 Incentive Bonus Plan or
any Future Bonus Plan in effect for the
year in which the Executive's death
occurs; provided, however, that the
performance goals established under the
applicable program with respect to the
entire year in which the Executive's
death occurs are met;
(E) immediate vesting of and lapsing of
restrictions on all unvested Restricted
Stock and any other shares of restricted
Common Stock held by the Executive on the
date of his death;
(F) immediate vesting of the Option and all
other Company stock options held by the
Executive on the date of his death, with
such options remaining exercisable for
twelve months from the date of the
Executive's death; and
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(G) such additional benefits as may be provided
by the then existing plans, programs and/or
arrangements of the Company.
(ii) Disability. If the Executive's employment is
terminated due to Disability during the Employment Period,
either by the Company or by the Executive, the Employment
Period shall end as of the date of the termination of the
Executive's employment and the Executive shall be entitled to
the following, as soon as practicable following the date of
termination:
(A) Base Salary earned but not paid prior to
the date of the termination of the
Executive's employment;
(B) payment for all accrued but unused
vacation time up to the date of the
termination of the Executive's
employment;
(C) the 1997 Incentive Bonus or any bonus
payable pursuant to any Future Bonus Plan,
to the extent earned but not paid with
respect to any year prior to the
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year in which the Executive's
termination of employment occurs;
(D) a pro rata portion (based on the number
of days worked) of the bonus payable
under the 1997 Incentive Bonus Plan or
any Future Bonus Plan in effect for the
year in which the Executive's
termination of employment occurs;
provided, however, that the performance
goals established under the applicable
program with respect to the entire year
in which the Executive's termination of
employment occurs are met;
(E) immediate vesting of and lapsing of
restrictions on all unvested Restricted
Stock and any other shares of restricted
Common Stock held by the Executive on the
date of his Disability;
(F) immediate vesting of the Option and all
other Company stock options held by the
Executive on the date of his Disability,
with such options remaining exercisable for
twelve months from the date of the
Executive's Disability; and
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(G) such additional benefits as may be provided
by the then existing plans, programs and/or
arrangements of the Company.
(iii) Cause. If the Company terminates the
Executive's employment for Cause, the Executive shall be
entitled to the following, within 60 days following the date
of termination:
(A) Base Salary earned but not paid prior to
the date of the termination of his
employment;
(B) payment for all accrued but unused
vacation time up to the date of the
termination of the Executive's
employment; and
(C) such additional benefits as may be provided
by the then existing plans, programs and/or
arrangements of the Company.
(iv) Without Cause or With Good Reason. If
the Executive's employment is terminated by the
Company (other than for Cause or Disability) or if
the Executive terminates his employment with Good
Reason, the Employment Period shall end as of the
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effective date of termination and the Executive shall be
entitled to the following, within 10 business days following
the date of termination or such earlier date as may be
required by law:
(A) Base Salary earned but not paid prior to
the date of the termination of his
employment;
(B) payment for all accrued but unused
vacation time up to the date of the
termination of the Executive's
employment;
(C) the 1997 Incentive Bonus or any bonus
payable pursuant to any Future Bonus Plan,
to the extent earned but not paid with
respect to any year prior to the year in
which the Executive's termination of
employment occurs;
(D) a lump sum amount equal to one times the sum
of (x) the Base Salary (based on the Base
Salary in effect on the date of the
termination of the Executive's employment,
and in the case of a termination of
employment by the Executive for Good Reason
due to a
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reduction in Base Salary under Paragraph
6(a)(v)(C), based on the Base Salary in
effect immediately prior to such reduction)
plus (y) the target annual bonus under the
1997 Incentive Bonus Plan or any Future
Bonus Plan, as the case may be, for the year
of termination;
(E) immediate vesting of and lapsing of
restrictions on all unvested Restricted
Stock and any other shares of restricted
Common Stock held by the Executive on the
date of the termination of his employment;
(F) immediate vesting of the Option and all
other Company stock options held by the
Executive on the date of the termination of
his employment, with all stock options
remaining exercisable until their expiration
pursuant to the Stock Incentive Plan;
(G) continued participation, as if he were
still an employee, in the Company's
medical, dental, hospitalization and
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life insurance plans, programs and/or
arrangements in which he was participating
on the date of the termination of his
employment on the same terms and conditions
as other executives under such plans,
programs and/or arrangements until the
earlier of one year from the date of the
Executive's termination or the date, or
dates, he receives equivalent coverage and
benefits under the plans, programs and/or
arrangements of a subsequent employer (such
coverage and benefits to be determined on a
coverage-by-coverage or benefit-by-benefit
basis); and
(H) such additional benefits as may be
provided by the then existing plans,
programs and/or arrangements of the
Company (other than any severance
payments payable under the terms of any
benefit plan), including outplacement
services consistent with the Company's
then existing practice for senior
executives or, if there is no such then
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existing practice, consistent with the
Company's past practice for senior
executives.
(v) Without Good Reason. If the Executive's
employment is terminated by the Executive without Good Reason,
the Executive shall be entitled to the following, within 60
days following the date of termination or such earlier date as
may be required by law:
(A) Base Salary earned but not paid prior to
the date of the termination of his
employment;
(B) payment for all accrued but unused
vacation time up to the date of the
termination of the Executive's
employment; and
(C) such additional benefits as may be provided
by the then existing plans, programs and/or
arrangements of the Company.
(c) Any payment under Paragraph 6(b) hereof shall be in lieu
of any other severance, bonus or other payments to which the Executive might
then be entitled pursuant to this Agreement or any statutory or common law
claim,
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subject, in each case, to the execution by the Executive and delivery to the
Company of a customary release of all claims related to his employment or
termination thereof in a form to be provided by the Company. The Company's
obligations to make the payments under Paragraph 6(b) hereof, except in the case
of a termination for Cause, shall not otherwise be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company or any member of the Group
may have against the Executive. The Executive acknowledges and agrees that in
the event the parties dispute whether the Executive shall be entitled to the
payment hereunder, such payment shall not be deemed to be earned or otherwise
vest hereunder until such time as the dispute is resolved in accordance with
Paragraph 11(c) hereof.
(d) Notwithstanding anything to the contrary herein, if the
Company's President has reason to believe that there are circumstances which, if
substantiated, would constitute Cause as defined herein, the Company may suspend
the Executive from employment without notice for such period of time as shall be
reasonably necessary for the Company's President to ascertain whether such
circumstances are substantiated. During such suspension, the Executive shall
continue to be paid all compensation and provided all
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benefits hereunder; provided, however, that if the Executive has been indicted
or otherwise formally charged by governmental authorities with any felony, the
Company's President may in its sole discretion, and without limiting the
Company's President's discretion to terminate the Executive's employment for
Cause, suspend the Executive without continuation of any compensation or
benefits hereunder, pending final disposition of such criminal charge(s). Upon
receiving notice of any such suspension, the Executive shall promptly leave the
premises of the Company and remain off such premises and the premises of all
other Group members until further notice from the Company's President.
7. Negative Covenants of the Executive.
(a) During the Employment Period and for a period of two
(2) years thereafter, the Executive will not, directly or indirectly:
(i) solicit, entice, persuade or induce any employee,
director, officer, associate, consultant, agent or independent
contractor of the Group to terminate his or her employment or
engagement by the Group to become employed or engaged by any
person, firm, corporation or other business enterprise other
than a member of the
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Group, except in furtherance of his responsibility
during the Employment Period; or
(ii) authorize or assist in the taking of
such action by any third party.
For purposes of this Paragraph 7(a), the terms "employee," "director,"
"officer," "associate," "consultant," "agent," and "independent contractor"
shall include any person with such status at any time during the twelve (12)
months prior to the termination of the Executive's employment and for two (2)
years following the Executive's termination of employment. The Executive shall
not be deemed to have violated the provisions of this Paragraph 7(a) by reason
of an isolated act, or failure to act, not taken in bad faith.
(b) During the Employment Period and for a period of one (1)
year thereafter, the Executive will not, directly or indirectly, engage,
participate, make any financial investment in, or become employed by or render
advisory or other services to or for any person, firm, corporation or other
business enterprise (the "Competing Enterprise") which is engaged, directly or
indirectly, during the Employment Period or at the time of Executive's
termination of employment, as the case may be, in competition with the Group in
(i) the development, design, manufacture, marketing or distribution of wire and
cable or (ii) any other business
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activities of the Group accounting for more than 10% of its net sales in the
most recently completed fiscal year or reasonably expected to do so in the
current fiscal year, in the United States and in any foreign jurisdiction in
which the Group operates or, at the end of Employment Period, proposes to
operate; provided, in either case, that the competitive businesses of the
Competing Enterprise account for more than 10% of the net sales of the Competing
Enterprise for its most recently completed fiscal year and the Executive does
not work or consult in such competitive business. The foregoing covenant shall
not be construed to preclude the Executive from making any investments in the
securities of any company, whether or not engaged in competition with the Group,
to the extent that such securities are actively traded on a national securities
exchange or in the over-the-counter market in the United States or any foreign
securities exchange and, after giving effect to such investment, the Executive
does not beneficially own securities representing more than 1% of the combined
voting power of the voting securities of such company.
(c) During the Employment Period and thereafter without
limit as to time, the Executive will not (other than in the regular course and
in furtherance of the Group's
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business) divulge, furnish or make available to any person any knowledge or
information with respect to the business or affairs of the Group which is
confidential, including, without limitation, "know-how", trade secrets, customer
and supplier lists, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, business acquisition or
disposition plans, new personnel employment plans, methods of manufacture,
technical processes, designs and design projects, inventions and research
projects and financial budgets and forecasts of the Group except (1) information
which at the time is available to others in the business or generally known to
the public other than as a result of disclosure by the Executive not permitted
hereunder, and (2) when required to do so by a court of competent jurisdiction,
by any governmental agency or by any administrative body or legislative body
(including a committee thereof) with purported or apparent jurisdiction to order
the Executive to divulge, disclose or make accessible such information. All
memoranda, notes, lists, records, electronically stored data, recordings or
videotapes and other documents (and all copies thereof) made or compiled by the
Executive or made available to the Executive (whether during his employment by
the Group or by any predecessor thereof) concerning the
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business of the Group or any predecessor thereof shall be the property of the
Company or such other member of the Group and shall be delivered to the Company
or such other member of the Group promptly upon the termination of the
Employment Period.
(d) The Executive acknowledges that all developments,
including, without limitation, inventions, patentable or otherwise, trade
secrets, discoveries, improvements, ideas and writings that alone or jointly
with others the Executive may conceive, make, develop or acquire during the
period of his employment by the Group and any predecessor thereof (collectively,
the "Developments"), are and shall remain the sole and exclusive property of the
Group and the Executive hereby assigns to the Group all of his right, title and
interest in all such Developments. The Executive shall promptly and fully
disclose all future Developments to the Company's Board, and, at any time upon
request and at the expense of the Company, shall execute, acknowledge and
deliver to the Group all instruments that the Group shall prepare, give
evidence, and take all other actions that are necessary or desirable in the
reasonable opinion of the Company's counsel, to enable the Group to file and
prosecute applications for and to acquire, maintain and enforce all letters
patent, trademark registrations or
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copyrights covering the Developments in all countries in which the same are
deemed necessary.
(e) The Executive acknowledges that the services to be
rendered by the Executive are of a special, unique and extraordinary character
and, in connection with such services, the Executive will have access to
confidential information vital to the Group's business and that irreparable
injury would be sustained by the Group in the event of his breach of any of the
covenants contained in this Paragraph 7, which injury could not be remedied
adequately by the recovery of damages in an action at law. Accordingly, the
Executive agrees that, upon a breach or threatened breach by him of any of such
covenants, the Company and, to the extent appropriate, any other member of the
Group shall be entitled, in addition to and not in lieu of any and all other
remedies, to an injunction to be issued by any court of competent jurisdiction
restraining the commission or continuance of any such breach or threatened
breach upon minimal bond, with or without surety, and that such an injunction
will not work an undue hardship on him.
(f) The provisions of this Paragraph 7 shall survive the
termination of this Agreement, irrespective of the reasons therefor.
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(g) If any court determines that any of the provisions of this
Paragraph 7 is invalid or unenforceable, the remainder of such provisions shall
not thereby be affected and shall be given full effect without regard to the
invalid provisions. If any court construes any of the provisions of this
Paragraph 7, or any part thereof, to be unreasonable because of the duration of
such provision or the geographic scope thereof, such court shall have the power
to reduce the duration or restrict the geographic scope of such provision and to
enforce such provision as so reduced or restricted.
8. Reimbursement of Business Expense.
During the Employment Period, the Executive is
authorized to incur reasonable business expenses in carrying out his duties and
responsibilities under the Agreement, and the Company or the relevant member of
the Group shall promptly reimburse him for all such reasonable business expenses
incurred in connection with carrying out the business of such member of the
Group, subject to documentation in accordance with such member of the Group's
policy.
9. Release.
In consideration of the Company's granting of the Option, the
Executive releases GCC, the Company, Wassall
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PLC, and any of their respective past and present officers, directors,
shareholders, subsidiaries, employees, agents and affiliates from any and all
claims, demands and causes of action whatsoever related to the Executive's
employment prior to the Effective Date by GCC and its affiliates, in law or
equity, known or unknown, accrued or unaccrued, past, present or future,
relating to any acts or omissions during all periods ending prior to the
Effective Date, whether arising out of any other arrangements or understandings,
or otherwise; provided, however, that neither this release nor the provisions of
Paragraph 11(b) hereof shall adversely affect (i) the Executive's rights to any
Base Salary (net of withholding taxes) or vacation provided for therein that is
accrued but unpaid as of the Effective Date; (ii) the Executive's rights with
respect to Wassall PLC options previously granted to the Executive, which shall
remain exercisable in accordance with the terms of the Wassall PLC (No. 3) U.S.
Executive Share Option Scheme and the Wassall PLC (No. 2) Share Option Scheme,
if any; (iii) the Executive's rights under existing plans, programs and/or
arrangements of the Company which are accrued but unpaid as of the Effective
Date; (iv) the Executive's rights to indemnification under any indemnification
agreement, applicable law and the certificates of incorporation and by-
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laws of the Company and other members of the Group, or the Executive's rights
under any director's and officers' liability insurance policy covering the
Executive, in each case arising out of or relating the Executive's employment
prior to the Effective Date; or (v) the Executive rights under this Agreement.
10. Indemnification.
To the fullest extent permitted by law and the Company's
certificate of incorporate and by-laws, the Company shall promptly indemnify the
Executive for all amounts (including, without limitation, judgments, fines,
settlement payments, losses, damages, costs and expenses (including reasonable
attorneys' fees)) incurred or paid by the Executive in connection with any
action, proceeding, suit or investigation arising out of or relating to the
performance by the Executive of services for (or acting as a fiduciary of any
employee benefit plans, programs or arrangements of) the Company or other member
of the Group, including as a director, officer or employee of the Company or
other member of the Group. The Company also agrees to maintain a director's and
officers' liability insurance policy covering the Executive to the extent the
Company provides such coverage for its other executive officers. Notwithstanding
any other provision of this Agreement, the
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provisions of this Paragraph 10 shall survive any termination or expiration of
this Agreement.
11. Miscellaneous.
(a) This Agreement is intended to be performed in, and shall
be construed and enforced in accordance with the laws of, the State of Kentucky
without reference to principles of conflict of laws.
(b) Upon the Effective Date, this Agreement shall incorporate
the complete understanding and agreement between the parties with respect to the
subject matter hereof and (subject to Paragraph 9 hereof) supersede any and all
other prior or contemporaneous agreements, written or oral, between the
Executive and any member of the Group or any predecessor thereof with respect to
such subject matter including the Existing Agreement, other than the
Change-in-Control Agreement, of even date herewith, between the Company, GCC and
the Executive (the "Change-in-Control Agreement"); provided, however, that no
payment or benefit shall be made or provided hereunder if and to the extent such
payment or benefit would be duplicative of a payment or benefit to which the
Executive is then entitled under the Change-in-Control Agreement. No provision
hereof may be modified or waived except by a written instrument duly
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executed by the Executive and the Company with the express approval of the
Compensation Committee.
(c) All differences, claims or matters in dispute arising out
of this Agreement, the breach hereof or otherwise arising between the Company or
any of its affiliates and the Executive shall, at the election of either party,
by notice to the other, be submitted to arbitration by the American Arbitration
Association or its successor, in Cincinnati, Ohio. Such arbitration shall be
governed by the then existing rules of the American Arbitration Association and
the laws of the State of Kentucky as then in effect. Any arbitration conducted
pursuant to the provisions of this Agreement shall be conducted by a recognized
independent and impartial arbitrator mutually agreed to by the parties or, if
they cannot agree within thirty (30) days after the initial demand for
arbitration, by three arbitrators, one chosen by the Company, one chosen by the
Executive and the third (who shall be a recognized independent and impartial
arbitrator and who shall act as chairperson and will be compensated at a rate
generally equivalent to his or her normal billing rate or compensation) selected
by the two so chosen; provided, that if either party fails to appoint an
arbitrator within 20 days of written notice by the other
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that it has appointed an arbitrator, then the arbitration shall be conducted by
an arbitrator selected by the American Arbitration Association in accordance
with its then existing rules. If the arbitrators selected by the parties fail to
agree on the third arbitrator within thirty (30) days of the appointment of the
second arbitrator, the third arbitrator shall be selected by the American
Arbitration Association in accordance with its then existing rules. The
impartial arbitrator shall set a time for hearing within sixty (60) days of
his/her selection. Each party shall have an opportunity to present evidence on
the issues in dispute before the arbitrator and each party may be represented by
legal counsel. The decision of the arbitrator(s) shall be rendered within thirty
(30) days of the close of the hearing. The fees and expenses of the impartial
arbitrator shall be shared equally by the parties and each party shall bear the
cost of any arbitrator chosen unilaterally by that party. Any determination
reached or award granted pursuant to arbitration shall be final, non-appealable
and binding on the parties. The judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction. The parties
acknowledge that their agreement pursuant to the terms of this Paragraph 11(c)
to submit the resolution of all disputes arising out of this Agreement to
arbitration by
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the American Arbitration Association is the result of their mutual and voluntary
negotiation and agreement, and is not intended to and does not constitute a
"condition or precondition of employment" within the meaning or interpretation
of that phrase as used in Kentucky Revised Statutes 336.700(2).
(d) The Executive acknowledges that before entering into this
Agreement he has received a reasonable period of time to consider this Agreement
and has had sufficient time and an opportunity to consult with any attorney or
other advisor of his choice in connection with this Agreement and all matters
contained herein, and that he has been advised to do so if he so chooses. The
Executive further acknowledges that this Agreement and all terms hereof are
fair, reasonable and are not the result of any fraud, duress, coercion, pressure
or undue influence exercised by the Company, that he has approved and entered
into this Agreement and all of the terms hereof on his own free will, and that
no promises or representations have been made to him by any person to induce him
to enter into this Agreement other than the express terms set forth herein.
(e) The Company shall be entitled to deduct and withhold from
all compensation payable to the Executive pursuant to this Agreement all amounts
required to be
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deducted and withheld therefrom pursuant to any present or future law,
regulation or ordinance of the United States of America or any state or local
jurisdiction therein or any foreign taxing jurisdiction.
(f) Paragraph headings are included in this Agreement for
convenience of reference only and shall not affect the interpretation of the
text hereof.
(g) Any and all notices, demands or other communications
to be given or made hereunder shall be in writing and shall be deemed to have
been fully given or made when personally delivered, or on the third business day
after mailing from within the continental United States by registered mail,
postage prepaid, addressed as follows:
If to the Company:
General Cable Corporation
4 Tesseneer Drive
Highland Heights, KY 41076
Attention: General Counsel
If to the Executive:
Christopher F. Virgulak
8124 Starting Gate Lane
Cincinnati, OH 45249
Either party may change the address to which any notices to it shall be sent by
giving to the other party written notice of such change in conformity with the
foregoing.
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(h) This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which
together shall constitute one and the same instrument.
(i) This Agreement may be assigned by the Company to, and
shall inure to the benefit of, any successor to substantially all the assets and
business of the Company as a going concern, whether by merger, consolidation or
purchase of substantially all of the assets of the Company or otherwise,
provided that such successor shall assume the Company's obligations under this
Agreement. This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
(j) The Company shall be deemed to have performed its
obligations to make payments or provide benefits to the
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Executive under this Agreement if it has caused a member of the Group to make
such payments or provide such benefits.
IN WITNESS WHEREOF, each of the Company and the Executive has
executed this Agreement this ____ day of May, 1997, to become effective on the
Effective Date.
GENERAL CABLE CORPORATION
By:______________________________
Stephen Rabinowitz
Chairman, Chief Executive
Officer and President
GCC CORPORATION
By:______________________________
Stephen Rabinowitz
Chairman, Chief Executive
Officer and President
______________________________
Christopher F. Virgulak
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EMPLOYMENT AGREEMENT
Agreement made and entered into this 13th day of May, 1997, by
and among General Cable Corporation, a Delaware corporation (the "Company"),
GCC Corporation, a Delaware corporation and a wholly owned subsidiary of the
Company ("GCC"), and Robert J. Siverd (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive and GCC are parties to a severance
arrangement effective as of June 30, 1992, which is currently in effect (the
"Severance Arrangement"); and
WHEREAS, it is proposed that shares of the Company's Common
Stock, $.01 par value per share (the "Common Stock"), will be sold by the
Company's parent, Wassall Netherlands Cable B.V., in a public offering (the
"Public Offering"); and
WHEREAS, effective upon consummation of the Public Offering
(the "Effective Date") it is intended that the Severance Arrangement be
terminated and that this Agreement become effective;
NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
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1. Term of Employment.
(a) Commencing on the Effective Date, the Company shall employ
the Executive, and the Executive shall accept employment and shall serve the
Company, in such capacities, with such duties and authority, for such period, at
such level of compensation and with such benefits, and upon such other terms and
subject to such other conditions, as are hereinafter set forth. The term of the
Executive's employment hereunder shall commence on the Effective Date and,
unless previously terminated as provided herein, shall continue until the second
anniversary of the Effective Date (the "Employment Period"); provided, however,
that commencing on the second anniversary of the Effective Date and each
anniversary thereafter, the Employment Period shall automatically be extended
for one additional year unless not later than one hundred twenty (120) days
prior to such anniversary, the Company or the Executive shall have given written
notice to the other not to extend the Employment Period.
(b) If the consummation of the Public Offering does not occur
on or before October 31, 1997, this Agreement shall terminate and the Severance
Arrangement shall remain in full force and effect in accordance with its terms.
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2. Capacities, Duties and Authority.
(a) Effective on the Effective Date, the Executive shall be
elected, and throughout the Employment Period the Executive shall be entitled to
serve as, Executive Vice President, General Counsel and Secretary of the
Company, GCC, GK Technologies, Incorporated, a New Jersey corporation ("GK"),
General Cable Industries, Inc., a Delaware corporation ("Industries"), and such
other affiliates of the Company, GCC, GK or Industries as the Board of Directors
of the Company (the "Company's Board") shall request. The Company, GCC, GK,
Industries and such other affiliates are hereinafter referred to collectively as
the "Group".
(b) In his capacity as Executive Vice President, General
Counsel and Secretary of each of the members of the Group, the Executive shall
have such authority, perform such duties, discharge such responsibilities and
render such services as are customary to and consistent with such positions,
subject to the authority and direction of the relevant board of directors.
(c) The Executive shall render his services diligently,
faithfully and to the best of his ability, devoting thereto his entire business
time, energy and skills on an exclusive basis and, without the prior written
consent
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of the Company's President, the Executive shall not render services to or for
the account of any person, firm or corporation other than a member of the Group.
3. Compensation.
(a) The Executive shall be paid a base salary during the
Employment Period at the annual rate of Two Hundred and Twenty-Five Thousand
Dollars ($225,000), payable in accordance with the regular payroll practices of
the Company. The Compensation Committee of the Company's Board (the
"Compensation Committee") shall annually review the Executive's performance and
determine, in its sole discretion, whether or not to increase the Executive's
base salary and, if so, the amount of such increase. The Executive's base salary
as in effect from time to time is hereinafter referred to as the "Base Salary."
(b) The Executive shall be entitled to participate in the
General Cable Corporation 1997 Incentive Bonus Program and any performance-based
annual bonus program for senior executives of the Company for fiscal years after
1997 (a "Future Bonus Plan") on such terms and conditions as determined in the
discretion of the Compensation Committee.
4. Employee Benefit Programs.
(a) During the Employment Period, the Executive shall be
entitled to participate in and shall have the
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benefit of all vacation, group life, disability, hospital, surgical and major
medical insurance plans and programs and other employee benefit plans and
programs as generally are made available to executive personnel of the Group, as
such benefit plans or programs may be amended in the sole discretion of the
Group members and with the concurrence of the Compensation Committee, from time
to time.
(b) During the Employment Period, the Executive shall be
entitled to receive or participate in any fringe benefits provided to the member
of the Group's senior-level executives in accordance with the terms and
conditions of such arrangements as may be in effect from time to time.
5. Stock Options
The Company has adopted, and the stockholder of the Company
has approved the adoption of, the General Cable Corporation Long-Term Stock
Incentive Plan (the "Stock Incentive Plan"). As soon as practicable after the
Effective Date, the Company agrees to recommend to the Company's Board that the
Executive be granted under the Stock Incentive Plan a ten-year non-qualified
option to purchase 33,000 shares of Common Stock at the initial Public Offering
price of the Common Stock (the "Option"). The exercise price of the Option shall
be equal to the initial Public Offering price. The Option shall vest and
(subject
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to acceleration as provided herein or in the Change-in-Control Agreement
referred to below) be fully exercisable on the third anniversary of the
Effective Date in accordance with the terms of the Stock Incentive Plan.
6. Termination of Employment.
(a) The Executive's employment hereunder shall terminate:
(i) upon the death of the Executive;
(ii) upon the Disability of the Executive, which for
the purposes of this Agreement shall mean his inability
because of physical or mental illness or incapacity, whether
partial or total, with or without accommodation, to perform
his duties under this Agreement, as determined by the
Company's Board, after review of such reports of physicians of
recognized standing in the medical community in the
Cincinnati, Ohio metropolitan area as the Company's Board (or
a special committee thereof) selects, for a continuous period
of at least four (4) months or for an aggregate of one hundred
fifty (150) days within any twelve (12) month period); or
(iii) at the option of the Company, exercisable by or
upon the authority of the
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Company's President and effective immediately upon the giving
by the Company to the Executive of written notice of such
exercise, for "Cause", which, for purposes of this Agreement,
shall mean:
(A) the gross neglect or willful failure by the Executive
to perform his duties and responsibilities in all
material respects as set forth in Paragraph 2 hereof,
after a written demand for substantial performance is
delivered to the Executive by the Company's
President, which demand specifically identifies the
manner in which the Company's President believes that
the Executive has not so performed his duties;
(B) any act of fraud by the Executive, whether
relating to the Group or otherwise;
(C) the conviction or entry into a plea of nolo
contendere by the Executive with respect to any
felony or misdemeanor (other than a traffic offense
which does not result in imprisonment);
(D) the commission by the Executive of any willful or
intentional act (including any violation of law)
which materially injures
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the reputation or materially adversely
affects the business or business
relationships of the Group; or
(E) any willful failure or willful breach (not covered by
any of clauses (A) through (D) above) of any of the
material obligations of this Agreement, if such
breach is not cured within 10 days after written
notice thereof to the Executive by the Company's
President;
For purposes of clauses (A), (D) and (E) of this definition, no act, or failure
to act, on the Executive's part shall be deemed "willful" unless done, or
omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest of
the Group.
(iv) at the option of the Company, for a reason other
than Disability or Cause, effective immediately upon the
giving of written notice of such exercise;
(v) at the option of the Executive, effective ten
(10) business days after the giving of written notice of such
exercise by the Executive to the Company (or such shorter
period as the Company's President may elect by giving written
notice to
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the Executive), in the event that the Executive has Good
Reason, which for purposes of this Agreement shall mean the
occurrence at any time of any of the following without the
Executive's prior written consent:
(A) removal from the position of Executive Vice President
or General Counsel with respect to the Company or any
of its significant subsidiaries (as defined in
Regulation S-X under the Securities Exchange Act of
1934);
(B) the assignment of duties or responsibilities
materially inconsistent with those customarily
associated with the positions held by the Executive
or a diminution of the Executive's position,
authority, duties or responsibilities (other than an
isolated action that is not taken in bad faith and is
remedied by the Company promptly after receipt of
written notice thereof from the Executive);
(C) except as provided in Paragraph 6(d), a reduction in
the Executive's Base Salary payable pursuant to
Paragraph 3(a) hereof or
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a material reduction in any other material benefit
provided the Executive hereunder; or
(D) notice by the Company, as set forth in Paragraph 1(a)
hereof, not to extend the Employment Period; or
(E) the failure by the Company to obtain an agreement
from any successor to assume and agree to perform
this Agreement; or
(F) any willful failure or willful breach by the Company
(not covered by any of clauses (A) through (E) above)
of any of the material obligations of this Agreement,
if such breach is not cured within 10 days after
written notice thereof by the Executive to the
Company's President;
For purpose of clause (F) of this definition, no act, or failure to act, on the
Company's part shall be deemed "willful" unless done, or omitted to be done, by
the Company not in good faith and without reasonable belief that the Company's
act, or failure to act, was in the best interest of the Group.
(vi) at the option of the Executive, for a reason
other than Good Reason, effective upon 30
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days of the giving of written notice of such
exercise.
(b) Obligations of the Company upon Termination of Employment.
(i) Death. In the event of the Executive's death
during the Employment Period, the Employment Period shall end
as of the date of the Executive's death and his estate and/or
beneficiaries, as the case may be, shall be entitled to the
following, as soon as practicable following the date of
Executive's death:
(A) Base Salary earned but not paid prior to
the date of his death;
(B) payment for all accrued but unused
vacation time up to the date of his
death;
(C) the 1997 Incentive Bonus or any bonus
payable pursuant to any Future Bonus Plan,
to the extent earned but not paid with
respect to any year prior to the year in
which the Executive's death occurs;
(D) a pro rata portion (based on the number
of days worked) of the bonus payable
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under the 1997 Incentive Bonus Plan or any
Future Bonus Plan in effect for the year in
which the Executive's death occurs;
provided, however, that the performance
goals established under the applicable
program with respect to the entire year in
which the Executive's death occurs are met;
(E) immediate vesting of and lapsing of
restrictions on all unvested Restricted
Stock and any other shares of restricted
Common Stock held by the Executive on the
date of his death;
(F) immediate vesting of the Option and all
other Company stock options held by the
Executive on the date of his death, with
such options remaining exercisable for
twelve months from the date of the
Executive's death; and
(G) such additional benefits as may be provided
by the then existing plans, programs and/or
arrangements of the Company.
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(ii) Disability. If the Executive's employment is
terminated due to Disability during the Employment Period,
either by the Company or by the Executive, the Employment
Period shall end as of the date of the termination of the
Executive's employment and the Executive shall be entitled to
the following, as soon as practicable following the date of
termination:
(A) Base Salary earned but not paid prior to
the date of the termination of the
Executive's employment;
(B) payment for all accrued but unused
vacation time up to the date of the
termination of the Executive's
employment;
(C) the 1997 Incentive Bonus or any bonus
payable pursuant to any Future Bonus Plans,
to the extent earned but not paid with
respect to any year prior to the year in
which the Executive's termination of
employment occurs;
(D) a pro rata portion (based on the number
of days worked) of the bonus payable
under the 1997 Incentive Bonus Plan or
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any Future Bonus Plan in effect for the year
in which the Executive's termination of
employment occurs; provided, however, that
the performance goals established under the
applicable program with respect to the
entire year in which the Executive's
termination of employment occurs are met;
(E) immediate vesting of and lapsing of
restrictions on all unvested Restricted
Stock and any other shares of restricted
Common Stock held by the Executive on the
date of his Disability;
(F) immediate vesting of the Option and all
other Company stock options held by the
Executive on the date of his Disability,
with such options remaining exercisable for
twelve months from the date of the
Executive's Disability; and
(G) such additional benefits as may be provided
by the then existing plans, programs and/or
arrangements of the Company.
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(iii) Cause. If the Company terminates the
Executive's employment for Cause, the Executive shall be
entitled to the following, within 60 days following the date
of termination:
(A) Base Salary earned but not paid prior to
the date of the termination of his
employment;
(B) payment for all accrued but unused
vacation time up to the date of the
termination of the Executive's
employment; and
(C) such additional benefits as may be provided
by the then existing plans, programs and/or
arrangements of the Company.
(iv) Without Cause or With Good Reason. If the
Executive's employment is terminated by the Company (other
than for Cause or Disability) or if the Executive terminates
his employment with Good Reason, the Employment Period shall
end as of the effective date of termination and the Executive
shall be entitled to the following, within 10 business days
following the date of termination or such earlier date as may
be required by law:
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(A) Base Salary earned but not paid prior to
the date of the termination of his
employment;
(B) payment for all accrued but unused
vacation time up to the date of the
termination of the Executive's
employment;
(C) the 1997 Incentive Bonus or any bonus
payable pursuant to any Future Bonus Plan,
to the extent earned but not paid with
respect to any year prior to the year in
which the Executive's termination of
employment occurs;
(D) a lump sum amount equal to one times the
sum of (x) the Base Salary (based on the
Base Salary in effect on the date of the
termination of the Executive's
employment, and in the case of a
termination of employment by the
Executive for Good Reason due to a
reduction in Base Salary under Paragraph
6(a)(v)(C), based on the Base Salary in
effect immediately prior to such
reduction) plus (y) the target annual
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bonus under the 1997 Incentive Bonus
Plan or any Future Bonus Plan, as the
case may be, for the year of
termination;
(E) immediate vesting of and lapsing of
restrictions on all unvested Restricted
Stock and any other shares of restricted
Common Stock held by the Executive on the
date of the termination of his employment;
(F) immediate vesting of the Option and all
other Company stock options held by the
Executive on the date of the termination of
his employment, with all stock options
remaining exercisable until their expiration
pursuant to the Stock Incentive Plan;
(G) continued participation, as if he were still
an employee, in the Company's medical,
dental, hospitalization and life insurance
plans, programs and/or arrangements in which
he was participating on the date of the
termination of his employment on the
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same terms and conditions as other
executives under such plans, programs and/or
arrangements until the earlier of one year
from the date of the Executive's termination
or the date, or dates, he receives
equivalent coverage and benefits under the
plans, programs and/or arrangements of a
subsequent employer (such coverage and
benefits to be determined on a
coverage-by-coverage or benefit-by-benefit
basis); and
(H) such additional benefits as may be
provided by the then existing plans,
programs and/or arrangements of the
Company (other than any severance
payments payable under the terms of any
benefit plan), including outplacement
services consistent with the Company's
then existing practice for senior
executives or, if there is no such then
existing practice, consistent with the
Company's past practice for senior
executives.
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(v) Without Good Reason. If the Executive's
employment is terminated by the Executive without Good Reason,
the Executive shall be entitled to the following, within 60
days following the date of termination or such earlier date as
may be required by law:
(A) Base Salary earned but not paid prior to
the date of the termination of his
employment;
(B) payment for all accrued but unused
vacation time up to the date of the
termination of the Executive's
employment; and
(C) such additional benefits as may be provided
by the then existing plans, programs and/or
arrangements of the Company.
(c) Any payment under Paragraph 6(b) hereof shall be in lieu
of any other severance, bonus or other payments to which the Executive might
then be entitled pursuant to this Agreement or any statutory or common law
claim, subject, in each case, to the execution by the Executive and delivery to
the Company of a customary release of all claims related to his employment or
termination thereof in a form
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to be provided by the Company. The Company's obligations to make the payments
under Paragraph 6(b) hereof, except in the case of a termination for Cause,
shall not otherwise be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company or any member of the Group may have against the Executive. The
Executive acknowledges and agrees that in the event the parties dispute whether
the Executive shall be entitled to the payment hereunder, such payment shall not
be deemed to be earned or otherwise vest hereunder until such time as the
dispute is resolved in accordance with Paragraph 11(c) hereof.
(d) Notwithstanding anything to the contrary herein, if the
Company's President has reason to believe that there are circumstances which, if
substantiated, would constitute Cause as defined herein, the Company may suspend
the Executive from employment without notice for such period of time as shall be
reasonably necessary for the Company's President to ascertain whether such
circumstances are substantiated. During such suspension, the Executive shall
continue to be paid all compensation and provided all benefits hereunder;
provided, however, that if the Executive has been indicted or otherwise formally
charged by governmental authorities with any felony, the Company's
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President may in its sole discretion, and without limiting the Company's
President's discretion to terminate the Executive's employment for Cause,
suspend the Executive without continuation of any compensation or benefits
hereunder, pending final disposition of such criminal charge(s). Upon receiving
notice of any such suspension, the Executive shall promptly leave the premises
of the Company and remain off such premises and the premises of all other Group
members until further notice from the Company's President.
7. Negative Covenants of the Executive.
(a) During the Employment Period and for a period of two (2)
years thereafter, the Executive will not, directly or indirectly:
(i) solicit, entice, persuade or induce any employee,
director, officer, associate, consultant, agent or independent
contractor of the Group to terminate his or her employment or
engagement by the Group to become employed or engaged by any
person, firm, corporation or other business enterprise other
than a member of the Group, except in furtherance of his
responsibility during the Employment Period; or
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(ii) authorize or assist in the taking of such action
by any third party.
For purposes of this Paragraph 7(a), the terms "employee," "director,"
"officer," "associate," "consultant," "agent," and "independent contractor"
shall include any person with such status at any time during the twelve (12)
months prior to the termination of the Executive's employment and for two (2)
years following the Executive's termination of employment. The Executive shall
not be deemed to have violated the provisions of this Paragraph 7(a) by reason
of an isolated act, or failure to act, not taken in bad faith.
(b) During the Employment Period and for a period of one (1)
year thereafter, the Executive will not, directly or indirectly, engage,
participate, make any financial investment in, or become employed by or render
advisory or other services to or for any person, firm, corporation or other
business enterprise (the "Competing Enterprise") which is engaged, directly or
indirectly, during the Employment Period or at the time of Executive's
termination of employment, as the case may be, in competition with the Group in
(i) the development, design, manufacture, marketing or distribution of wire and
cable or (ii) any other business activities of the Group accounting for more
than 10% of its net sales in the most recently completed fiscal year or
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reasonably expected to do so in the current fiscal year, in the United States
and in any foreign jurisdiction in which the Group operates or, at the end of
Employment Period, proposes to operate; provided, in either case, that the
competitive businesses of the Competing Enterprise account for more than 10% of
the net sales of the Competing Enterprise for its most recently completed fiscal
year and the Executive does not work or consult in such competitive business.
The foregoing covenant shall not be construed to preclude the Executive from
making any investments in the securities of any company, whether or not engaged
in competition with the Group, to the extent that such securities are actively
traded on a national securities exchange or in the over-the-counter market in
the United States or any foreign securities exchange and, after giving effect to
such investment, the Executive does not beneficially own securities representing
more than 1% of the combined voting power of the voting securities of such
company.
(c) During the Employment Period and thereafter without limit
as to time, the Executive will not (other than in the regular course and in
furtherance of the Group's business) divulge, furnish or make available to any
person any knowledge or information with respect to the business or
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affairs of the Group which is confidential, including, without limitation,
"know-how", trade secrets, customer and supplier lists, pricing policies,
operational methods, marketing plans or strategies, product development
techniques or plans, business acquisition or disposition plans, new personnel
employment plans, methods of manufacture, technical processes, designs and
design projects, inventions and research projects and financial budgets and
forecasts of the Group except (1) information which at the time is available to
others in the business or generally known to the public other than as a result
of disclosure by the Executive not permitted hereunder, and (2) when required to
do so by a court of competent jurisdiction, by any governmental agency or by any
administrative body or legislative body (including a committee thereof) with
purported or apparent jurisdiction to order the Executive to divulge, disclose
or make accessible such information. All memoranda, notes, lists, records,
electronically stored data, recordings or videotapes and other documents (and
all copies thereof) made or compiled by the Executive or made available to the
Executive (whether during his employment by the Group or by any predecessor
thereof) concerning the business of the Group or any predecessor thereof shall
be the property of the Company or such other member of the
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Group and shall be delivered to the Company or such other member of the Group
promptly upon the termination of the Employment Period.
(d) The Executive acknowledges that all developments,
including, without limitation, inventions, patentable or otherwise, trade
secrets, discoveries, improvements, ideas and writings that alone or jointly
with others the Executive may conceive, make, develop or acquire during the
period of his employment by the Group and any predecessor thereof (collectively,
the "Developments"), are and shall remain the sole and exclusive property of the
Group and the Executive hereby assigns to the Group all of his right, title and
interest in all such Developments. The Executive shall promptly and fully
disclose all future Developments to the Company's Board, and, at any time upon
request and at the expense of the Company, shall execute, acknowledge and
deliver to the Group all instruments that the Group shall prepare, give
evidence, and take all other actions that are necessary or desirable in the
reasonable opinion of the Company's counsel, to enable the Group to file and
prosecute applications for and to acquire, maintain and enforce all letters
patent, trademark registrations or copyrights covering the Developments in all
countries in which the same are deemed necessary.
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(e) The Executive acknowledges that the services to be
rendered by the Executive are of a special, unique and extraordinary character
and, in connection with such services, the Executive will have access to
confidential information vital to the Group's business and that irreparable
injury would be sustained by the Group in the event of his breach of any of the
covenants contained in this Paragraph 7, which injury could not be remedied
adequately by the recovery of damages in an action at law. Accordingly, the
Executive agrees that, upon a breach or threatened breach by him of any of such
covenants, the Company and, to the extent appropriate, any other member of the
Group shall be entitled, in addition to and not in lieu of any and all other
remedies, to an injunction to be issued by any court of competent jurisdiction
restraining the commission or continuance of any such breach or threatened
breach upon minimal bond, with or without surety, and that such an injunction
will not work an undue hardship on him.
(f) The provisions of this Paragraph 7 shall survive the
termination of this Agreement, irrespective of the reasons therefor.
(g) If any court determines that any of the provisions of this
Paragraph 7 is invalid or unenforceable, the remainder of such provisions shall
not thereby be
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affected and shall be given full effect without regard to the invalid
provisions. If any court construes any of the provisions of this Paragraph 7, or
any part thereof, to be unreasonable because of the duration of such provision
or the geographic scope thereof, such court shall have the power to reduce the
duration or restrict the geographic scope of such provision and to enforce such
provision as so reduced or restricted.
8. Reimbursement of Business Expense.
During the Employment Period, the Executive is authorized
to incur reasonable business expenses in carrying out his duties and
responsibilities under the Agreement, and the Company or the relevant member
of the Group shall promptly reimburse him for all such reasonable business
expenses incurred in connection with carrying out the business of such member of
the Group, subject to documentation in accordance with such member of the
Group's policy.
9. Release.
In consideration of the Company's granting of the Option, the
Executive releases GCC, the Company, Wassall PLC, and any of their respective
past and present officers, directors, shareholders, subsidiaries, employees,
agents and affiliates from any and all claims, demands and causes of
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action whatsoever related to the Executive's employment prior to the Effective
Date by GCC and its affiliates, in law or equity, known or unknown, accrued or
unaccrued, past, present or future, relating to any acts or omissions during all
periods ending prior to the Effective Date, whether arising out of any other
arrangements or understandings, or otherwise; provided, however, that neither
this release nor the provisions of Paragraph 11(b) hereof shall adversely affect
(i) the Executive's rights to any Base Salary (net of withholding taxes) or
vacation provided for therein that is accrued but unpaid as of the Effective
Date; (ii) the Executive's rights with respect to Wassall PLC options previously
granted to the Executive, which shall remain exercisable in accordance with the
terms of the Wassall PLC (No. 3) U.S. Executive Share Option Scheme, if any;
(iii) the Executive's rights under existing plans, programs and/or arrangements
of the Company which are accrued but unpaid as of the Effective Date; (iv) the
Executive's rights to indemnification under any indemnification agreement,
applicable law and the certificates of incorporation and by-laws of the Company
and other members of the Group, or the Executive's rights under any director's
and officers' liability insurance policy covering the Executive, in each case
arising out of or relating the Executive's employment
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prior to the Effective Date; or (v) the Executive rights under this Agreement.
10. Indemnification.
To the fullest extent permitted by law and the Company's
certificate of incorporate and by-laws, the Company shall promptly indemnify the
Executive for all amounts (including, without limitation, judgments, fines,
settlement payments, losses, damages, costs and expenses (including reasonable
attorneys' fees)) incurred or paid by the Executive in connection with any
action, proceeding, suit or investigation arising out of or relating to the
performance by the Executive of services for (or acting as a fiduciary of any
employee benefit plans, programs or arrangements of) the Company or other member
of the Group, including as a director, officer or employee of the Company or
other member of the Group. The Company also agrees to maintain a director's and
officers' liability insurance policy covering the Executive to the extent the
Company provides such coverage for its other executive officers. Notwithstanding
any other provision of this Agreement, the provisions of this Paragraph 10 shall
survive any termination or expiration of this Agreement.
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11. Miscellaneous.
(a) This Agreement is intended to be performed in, and shall
be construed and enforced in accordance with the laws of, the State of Kentucky
without reference to principles of conflict of laws.
(b) Upon the Effective Date, this Agreement shall incorporate
the complete understanding and agreement between the parties with respect to the
subject matter hereof and (subject to Paragraph 9 hereof) supersede any and all
other prior or contemporaneous agreements, written or oral, between the
Executive and any member of the Group or any predecessor thereof with respect to
such subject matter including the Severance Arrangement, other than the
Change-in-Control Agreement, of even date herewith, between the Company, GCC and
the Executive (the "Change-in-Control Agreement"); provided, however, that no
payment or benefit shall be made or provided hereunder if and to the extent such
payment or benefit would be duplicative of a payment or benefit to which the
Executive is then entitled under the Change-in-Control Agreement. No provision
hereof may be modified or waived except by a written instrument duly executed by
the Executive and the Company with the express approval of the Compensation
Committee.
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(c) All differences, claims or matters in dispute arising out
of this Agreement, the breach hereof or otherwise arising between the Company or
any of its affiliates and the Executive shall, at the election of either party,
by notice to the other, be submitted to arbitration by the American Arbitration
Association or its successor, in Cincinnati, Ohio. Such arbitration shall be
governed by the then existing rules of the American Arbitration Association and
the laws of the State of Kentucky as then in effect. Any arbitration conducted
pursuant to the provisions of this Agreement shall be conducted by a recognized
independent and impartial arbitrator mutually agreed to by the parties or, if
they cannot agree within thirty (30) days after the initial demand for
arbitration, by three arbitrators, one chosen by the Company, one chosen by the
Executive and the third (who shall be a recognized independent and impartial
arbitrator and who shall act as chairperson and will be compensated at a rate
generally equivalent to his or her normal billing rate or compensation) selected
by the two so chosen; provided, that if either party fails to appoint an
arbitrator within 20 days of written notice by the other that it has appointed
an arbitrator, then the arbitration shall be conducted by an arbitrator selected
by the American
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Arbitration Association in accordance with its then existing rules. If the
arbitrators selected by the parties fail to agree on the third arbitrator within
thirty (30) days of the appointment of the second arbitrator, the third
arbitrator shall be selected by the American Arbitration Association in
accordance with its then existing rules. The impartial arbitrator shall set a
time for hearing within sixty (60) days of his/her selection. Each party shall
have an opportunity to present evidence on the issues in dispute before the
arbitrator and each party may be represented by legal counsel. The decision of
the arbitrator(s) shall be rendered within thirty (30) days of the close of the
hearing. The fees and expenses of the impartial arbitrator shall be shared
equally by the parties and each party shall bear the cost of any arbitrator
chosen unilaterally by that party. Any determination reached or award granted
pursuant to arbitration shall be final, non-appealable and binding on the
parties. The judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction. The parties acknowledge that their agreement
pursuant to the terms of this Paragraph 11(c) to submit the resolution of all
disputes arising out of this Agreement to arbitration by the American
Arbitration Association is the result of their mutual and voluntary negotiation
and agreement, and is not
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intended to and does not constitute a "condition or precondition of employment"
within the meaning or interpretation of that phrase as used in Kentucky Revised
Statutes 336.700(2).
(d) The Executive acknowledges that before entering into this
Agreement he has received a reasonable period of time to consider this Agreement
and has had sufficient time and an opportunity to consult with any attorney or
other advisor of his choice in connection with this Agreement and all matters
contained herein, and that he has been advised to do so if he so chooses. The
Executive further acknowledges that this Agreement and all terms hereof are
fair, reasonable and are not the result of any fraud, duress, coercion, pressure
or undue influence exercised by the Company, that he has approved and entered
into this Agreement and all of the terms hereof on his own free will, and that
no promises or representations have been made to him by any person to induce him
to enter into this Agreement other than the express terms set forth herein.
(e) The Company shall be entitled to deduct and withhold from
all compensation payable to the Executive pursuant to this Agreement all amounts
required to be deducted and withheld therefrom pursuant to any present or future
law, regulation or ordinance of the United States of
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America or any state or local jurisdiction therein or any foreign taxing
jurisdiction.
(f) Paragraph headings are included in this Agreement for
convenience of reference only and shall not affect the interpretation of the
text hereof.
(g) Any and all notices, demands or other communications to be
given or made hereunder shall be in writing and shall be deemed to have been
fully given or made when personally delivered, or on the third business day
after mailing from within the continental United States by registered mail,
postage prepaid, addressed as follows:
If to the Company:
General Cable Corporation
4 Tesseneer Drive
Highland Heights, KY 41076
Attention: President
If to the Executive:
Robert J. Siverd
8051 Brill Road
Cincinnati, OH 45243
Either party may change the address to which any notices to it shall be sent by
giving to the other party written notice of such change in conformity with the
foregoing.
(h) This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but
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all of which together shall constitute one and the same instrument.
(i) This Agreement may be assigned by the Company to, and
shall inure to the benefit of, any successor to substantially all the assets and
business of the Company as a going concern, whether by merger, consolidation or
purchase of substantially all of the assets of the Company or otherwise,
provided that such successor shall assume the Company's obligations under this
Agreement. This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
(j) The Company shall be deemed to have performed its
obligations to make payments or provide benefits to the
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Executive under this Agreement if it has caused a member of the Group to make
such payments or provide such benefits.
IN WITNESS WHEREOF, each of the Company and the Executive has
executed this Agreement this _____ day of May, 1997, to become effective on the
Effective Date.
GENERAL CABLE CORPORATION
By:
-------------------------
Stephen Rabinowitz
Chairman, Chief Executive
Officer and President
GCC CORPORATION
By:
-------------------------
Stephen Rabinowitz
Chairman, Chief Executive
Officer and President
-------------------------
Robert J. Siverd
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CHANGE-IN-CONTROL AGREEMENT
AGREEMENT, made and entered into as of the 13th day of May, 1997 by and
between General Cable Corporation, a Delaware corporation (the "Company"), and
Stephen Rabinowitz (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is a key employee of the Company or one of its
subsidiaries; and
WHEREAS, it is proposed that the Company become a publicly-traded company
by means of a public offering (the "Public Offering") and the Company's Board of
Directors has determined that, in light of the uncertainties affecting the
industry in which the Company operates, it would be in the best interests of the
Company and its future public shareholders to induce key employees, including
the Executive, to remain with the Company after it becomes a public company and
to reinforce and encourage their continued attention and dedication to the
Company; and
WHEREAS, the Company and the Executive have entered into an Employment
Agreement as of the date hereof to become effective as of the Effective Date, as
hereinafter defined (such agreement, as amended from time to time, being
hereinafter referred to as the "Employment Agreement"); and
WHEREAS, the Company desires to enter into this agreement ("Agreement")
with the Executive providing for, among other things, (i) the acceleration of
vesting of the Executive's restricted stock and stock options upon the
occurrence of a Change-in-Control (as hereinafter defined) and (ii) a severance
payment to the Executive and the continuation of the Executive's welfare
benefits if the Executive's employment is terminated in connection with a
Change-in-Control, subject to the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive agree as follows:
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1. TERM
(a) This Agreement shall become effective upon the consummation of the
Public Offering (the "Effective Date") and shall terminate and be of no further
force or effect upon the expiration of the Employment Agreement (the "Term");
provided, however, that, if a Change-in-Control shall have occurred during the
Term or within six months after Executive's employment terminates, as described
in Paragraph 2(a) hereof, the Term shall expire on the last day of the
twenty-fourth (24th) month following the month in which the Change-in-Control
occurs.
(b) If the consummation of the Public Offering does not occur on or before
October 31, 1997, this Agreement shall terminate and be of no further force or
effect.
2. TERMINATION OF EXECUTIVE'S EMPLOYMENT PRIOR TO OR FOLLOWING A
CHANGE-IN-CONTROL
(a) If the Executive's employment is terminated by the Company or any of
its subsidiaries or by the Company's successor without Cause (as hereinafter
defined), or the Executive terminates his employment with the Company or any of
its subsidiaries or with the Company's successor for Good Reason (as hereinafter
defined), and such termination occurs within six months preceding, or within two
years following, a Change-in-Control, the Executive shall be entitled to receive
a Change-in-Control Payment (as hereinafter defined).
(b) Notwithstanding the foregoing, the Executive shall not be entitled to
receive the Change-in-Control Payment if any of the Circumstances of
Ineligibility (as hereinafter defined) apply to the Executive.
(c) "CHANGE-IN-CONTROL PAYMENT" means the product of (i) three times (ii)
the sum of (x) the Executive's annual base salary at the time of the termination
of the Executive's employment (or, in the case of a termination of employment
for Good Reason based on a reduction of the Executive's annual base salary, the
annual base salary in effect immediately prior to such reduction) plus (y) the
Executive's target annual incentive bonus in effect for the year in which the
Executive's employment is terminated or the year in which the Change-in-Control
occurs, whichever target bonus is greater.
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(d) "CHANGE-IN-CONTROL" means that any of the following has occurred:
(i) any person or other entity (other than any of the Company's
subsidiaries or any employee benefit plan sponsored by the
Company or any of its subsidiaries) including any person as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), becomes the beneficial
owner, as defined in Rule 13d-3 under the Exchange Act, directly
or indirectly, of more than fifty percent (50%) of the total com-
bined voting power of all classes of capital stock of the Company
normally entitled to vote for the election of directors of the
Company (the "Voting Stock"),
(ii) the stockholders of the Company approve the sale of all or
substantially all of the property or assets of the Company and
such sale occurs;
(iii) the stockholders of the Company approve a consolidation or
merger of the Company with another corporation (other than with
any of the Company's subsidiaries), the consummation of which
would result in the shareholders of the Company immediately
before the occurrence of the consolidation or merger owning, in
the aggregate, less than 60% of the Voting Stock of the surviving
entity, and such consolidation or merger occurs; or
(iv) a change in the Company's Board of Directors occurs with the
result that the members of the Board on the Effective Date (the
"Incumbent Directors") no longer constitute a majority of such
Board of Directors, provided that any person becoming a director
(other than a director whose initial assumption of office is in
connection with an actual or threatened election contest or the
settlement thereof, including but not limited to a consent
solicitation, relating to the election of directors of the
Company) whose election or nomination for election was
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supported by two-thirds (2/3) of the then Incumbent Directors
shall be considered an Incumbent Director for purposes hereof.
Notwithstanding anything contained herein to the contrary, a Change-in-Control
shall not include the Public Offering.
(e) "CAUSE" shall have the meaning set forth in the Employment Agreement
and shall be subject to the procedures set forth therein.
(f) "GOOD REASON" means the occurrence of any of the following without the
prior written consent of the Executive:
(i) removal from any of the positions held by the Executive with
respect to the Company or any of its significant subsidiaries (as
defined in Regulation S-X under the Securities Exchange Act of
1934) on the 181st day prior to the Change-in-Control or any
senior position that the Executive subsequently achieves;
(ii) the assignment of duties or responsibilities materially
inconsistent with those customarily associated with the position
held by the Executive on the 181st day prior to the
Change-in-Control or any senior position that the Executive
subsequently achieves (alternatively, the "Measuring Position"),
or any other action by the Company or a successor that results in
a diminution of the Executive's position, authority, duties or
responsibilities compared to the Measuring Position, other than
an isolated action that is not taken in bad faith and is remedied
by the Company or a successor promptly after receipt of written
notice thereof from the Executive;
(iii) a reduction in the Executive's annual base salary or Executive's
annual bonus opportunity set forth in the Employment Agreement
from that in effect on the 181st day prior to the
Change-in-Control (or any greater salary or bonus that the
Executive is
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subsequently entitled to) or a material reduction in any other
material benefit provided the Executive by the Company;
(iv) notice by the Company not to extend the Employment Agreement;
(v) the relocation of the Executive's principal place of employment
to a location more than fifty (50) miles from the Executive's
principal place of employment (unless such relocation does not
increase the Executive's commute by more than twenty (20) miles)
on the 181st day prior to the Change-in-Control, except for
required travel on the Company's business to an extent
substantially consistent with the Executive's business travel
obligations as of such day; or
(vi) the failure by the Company to obtain an agreement from any
successor to assume and agree to perform this Agreement.
(g) "CIRCUMSTANCES OF INELIGIBILITY" mean any one or more of the following
circumstances:
(i) Death, Disability or Voluntary Termination. If the Executive is
terminated due to death or Disability (as defined in the
Employment Agreement) or if the Executive elects to voluntarily
terminate his employment, including a termination due to
retirement, with the Company or a successor, the Executive shall
not be eligible to receive the Change-in-Control Payment;
provided, however, that termination of employment by the
Executive for Good Reason shall not constitute a Circumstance of
Ineligibility.
(ii) Termination for Cause. If the Executive's employment with the
Company or a successor is terminated for Cause at any time
preceding or following a Change-in-Control, the Executive shall
not be eligible to receive the Change-in-Control Payment.
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3. TIME OF PAYMENT OF CHANGE-IN-CONTROL PAYMENT
The Change-in-Control Payment (if any) shall be paid to the Executive in
cash in a lump sum within 10 business days following the later of (i) the date
of the termination of the Executive's employment with the Company or the
successor or (ii) the date of the Change-in-Control.
4. VESTING OF RESTRICTED STOCK AND STOCK OPTIONS
Upon the occurrence of a Change-in-Control, (i) any and all restricted
stock held by the Executive as of such date shall become immediately vested and
fully transferable and (ii) any and all unexercisable stock options held by the
Executive as of such date shall become fully vested and immediately exercisable
and shall remain exercisable until their expiration in accordance with the terms
of the applicable plan.
5. CONTINUATION OF EXECUTIVE WELFARE BENEFITS
Notwithstanding anything contained herein to the contrary, if the Executive
is entitled to receive the Change-in-Control Payment, the Company or any of its
subsidiaries or successor shall continue his participation, as if he were still
an employee, in the medical, dental, hospitalization and life insurance plans,
programs and/or arrangements of the Company or any of its subsidiaries in which
he was participating on the date of the termination of his employment (or on the
181st day prior to the Change-in-Control, if more favorable to the Executive) on
the same terms and conditions as other executives under such plans, programs
and/or arrangements until the earlier of (i) the end of the 36-month period
following the date of the termination of his employment or (ii) the date, or
dates, he receives equivalent coverage and benefits under the plans, programs
and/or arrangements of a subsequent employer (such coverage and benefits to be
determined on a coverage-by-coverage or benefit-by-benefit basis).
6. LIMITATION ON PAYMENTS; GROSS-UP PAYMENT
(a) If any of the payments or benefits received or to be received by the
Executive in connection with a Change in Control or the Executive's termination
of employment (whether such payments or benefits are provided pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with the
Company, any person whose
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actions result in a Change in Control or any person affiliated with the Company
or such person) (such payments or benefits, excluding the Gross-Up Payment,
being hereinafter referred to as the "Total Payments") will be subject to the
excise tax (the "Excise Tax") imposed under Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), the Company shall pay to the Executive,
as soon as practicable following the Change in Control (but in any event not
later than the later of (1) thirty (30) days following Executive's termination
of employment or (2) thirty (30) days following the Change in Control), an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments; provided, however, that
the Executive shall not be entitled to the Gross-Up Payment if any amount of
compensation (otherwise includible in income for any year commencing with 1997)
has been deferred by the Executive and is not included in Executive's gross
income in the calendar year in which it would have been includible for federal
income tax purposes as determined by Tax Counsel (as hereinafter defined);
provided, further, however, in the event that the Executive has so deferred
compensation and it is determined that such Excise Tax would cause the net
after-tax Total Payments to be paid to or on behalf of Executive to be less than
what he would have netted, after federal, state and local income taxes, had the
present value of his Total Payments equalled $1 less than three times his base
amount, as defined under Section 280G(b)(3)(A) of the Code, then the payments
under Paragraph 5 hereof shall be reduced and thereafter, if necessary, the
Change in Control Payment shall be reduced (but not below the minimum possible
amount), so that no portion of the Total Payments is subject to the Excise Tax.
For purposes of the preceding sentence, the failure of the Executive to exercise
a stock option shall not be construed to be a deferral of compensation.
(b) For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments" (within the meaning of
Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") selected by the Company and reasonably acceptable to the Executive,
such payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of
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the Code, (ii) all "excess parachute payments" within the meaning of Section
280G(b)(1) of the Code shall be treated as subject to the Excise Tax unless, in
the opinion of Tax Counsel, such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code) in excess of the "base amount" (as
defined in Section 280G(b)(3) of the Code) allocable to such payment, or are
otherwise not subject to the Excise Tax, and (iii) the value of any noncash
benefits or any deferred payment or benefit shall be determined by Tax Counsel
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment, the Executive
shall be deemed to pay federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive's residence in the calendar
year in which the Gross-Up Payment is to be made, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such state and
local taxes.
(c) In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder in calculating the Gross-Up Payment (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), the Company shall make an additional Gross-Up
Payment in respect of such excess (plus any interest, penalties or additions
payable by the Executive with respect to such excess) within five (5) business
days following the time that the amount of such excess is finally determined. In
the event that the Excise Tax is determined to be less than the amount taken
into account hereunder in calculating the Gross-Up Payment, the Executive shall
repay to the Company within five (5) business days following the time that such
difference is finally determined the portion of the Gross-Up Payment
attributable to such reduction (plus the portion of the Gross-Up Payment
attributable to such Excise Tax and federal, state and local income tax imposed
on the Gross-Up Payment being repaid by the Executive if such repayment results
in a reduction in such Excise Tax or a federal, state and local income tax
deduction) plus any interest received by the Executive on the amount of such
repayment. The Executive and the Company shall each reasonably cooperate with
the other in connection with any
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administrative or judicial proceedings concerning the existence or amount of
liability for any Excise Tax with respect to the Total Payments.
7. MISCELLANEOUS
(a) No Employment Agreement. This Agreement does not constitute a contract
of employment or impose on the Company any obligation to retain the Executive as
an employee.
(b) Deductions and Withholding. The Executive agrees that the Company shall
withhold from any and all compensation required to be paid to the Executive
pursuant to this Agreement all federal, state, local and/or other taxes which
the Company determines are required to be withheld in accordance with applicable
statutes and/or regulations from time to time in effect.
(c) Waiver and Release. The Executive acknowledges that (i) the
Change-in-Control Payment is in excess of the amounts that the Executive would
otherwise be entitled to receive under any employment or severance agreement,
plan, program or arrangement of the Company or between the Company and the
Executive and (ii) the Company has no obligation to enter into this Agreement.
In consideration of the Company assuming these additional obligations and
entering into this Agreement, the Executive agrees to execute a customary
release of all claims related to the Executive's employment or termination
thereof, in substantially the same form as annexed hereto other than any
modifications which may be required to effectuate such release based upon any
changes in law.
(d) Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration conducted in
Cincinnati, Ohio under the Commercial Arbitration Rules then prevailing of the
American Arbitration Association and such submission shall request the American
Arbitration Association to: (i) appoint an arbitrator experienced and
knowledgeable concerning the matter then in dispute; (ii) require the testimony
to be transcribed; (iii) require the award to be accompanied by findings of fact
and a statement of reasons for the decision; and (iv) request the matter to be
handled by and in accordance with the expedited procedures provided for in the
Commercial Arbitration Rules. The determination of the arbitrators, which shall
be based upon a de novo
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interpretation of this Agreement, shall be final and binding and judgment may be
entered on the arbitrators' award in any court having jurisdiction. All costs of
the American Arbitration Association and the arbitrator shall be borne by the
Company, unless the position advanced by the Executive is determined by the
arbitrator to be frivolous in nature.
(e) Legal Fees. The Company or the successor shall pay to the Executive all
reasonable legal fees and expenses incurred by the Executive in disputing in
good faith any issues hereunder relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made within 30
days after delivery of the Executive's written request for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require. The Company or the successor shall pay to the Executive interest at the
prime lending rate as announced from time to time by The Chase Manhattan Bank on
all or any part of the Change-in-Control Payment that is not paid when due. The
prime rate for each calendar quarter shall be the prime rate in effect on the
first day of the calendar quarter.
(f) No Duty to Mitigate/Set-off. The Company agrees that if the Executive's
employment with the Company or a successor is terminated during the Term, the
Executive shall not be required to seek other employment. Further, the amount of
any payment or benefit hereunder shall not be reduced by any compensation earned
by the Executive or any benefit provided to the Executive as the result of
employment by another employer or otherwise, except as provided in Paragraph 5
or 7(g) hereof. The Company's obligations to make any payment or provide any
benefit hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company or a successor corporation may have against the Executive.
(g) Offset. The Change-in-Control Payment shall be reduced by any severance
payment made by the Company or any subsidiary of the Company to the Executive
pursuant to (i) any severance plan, program, policy or arrangement of the
Company or any subsidiary of the Company, (ii) the Employment Agreement or any
other employment agreement
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between the Company or any subsidiary of the Company and the Executive, and
(iii) any federal, state or local statute, rule, regulation or ordinance.
(h) Entire Agreement. This Agreement embodies the entire agreement of the
parties with respect to any payment due the Executive in the event of a
Change-in-Control and supersedes any other prior oral or written agreements
between the Executive and the Company with respect thereto, except that nothing
herein shall be construed to adversely affect the Executive's right to receive
any non-duplicative payment or benefit to which he is entitled under the
Employment Agreement or any other employment agreement between the Company or
any subsidiary of the Company and the Executive in connection with his
termination of employment. No party may amend, modify or terminate this
Agreement without the express written consent of the other party.
(i) Binding Agreement. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devises and legatees.
(j) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Kentucky without reference to
principles of conflict of laws.
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(k) Counterparts. This Agreement may be executed and delivered in separate
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first written above.
GENERAL CABLE CORPORATION
By: ___________________________
Robert J. Siverd
Executive Vice President,
General Counsel and
Secretary
ACCEPTED AND AGREED TO
as of the date first written above
By: _________________________________
Stephen Rabinowitz
Address: 900 Adams Crossing
Cincinnati, Ohio 45202
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CHANGE-IN-CONTROL AGREEMENT
AGREEMENT, made and entered into as of the 13th day of May, 1997 by and
between General Cable Corporation, a Delaware corporation (the "Company"), and
Gregory B. Kenny (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is a key employee of the Company or one of its
subsidiaries; and
WHEREAS, it is proposed that the Company become a publicly-traded company
by means of a public offering (the "Public Offering") and the Company's Board of
Directors has determined that, in light of the uncertainties affecting the
industry in which the Company operates, it would be in the best interests of the
Company and its future public shareholders to induce key employees, including
the Executive, to remain with the Company after it becomes a public company and
to reinforce and encourage their continued attention and dedication to the
Company; and
WHEREAS, the Company and the Executive have entered into an Employment
Agreement as of the date hereof to become effective as of the Effective Date, as
hereinafter defined (such agreement, as amended from time to time, being
hereinafter referred to as the "Employment Agreement"); and
WHEREAS, the Company desires to enter into this agreement ("Agreement")
with the Executive providing for, among other things, (i) the acceleration of
vesting of the Executive's restricted stock and stock options upon the
occurrence of a Change-in-Control (as hereinafter defined) and (ii) a severance
payment to the Executive and the continuation of the Executive's welfare
benefits if the Executive's employment is terminated in connection with a
Change-in-Control, subject to the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive agree as follows:
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1. TERM
(a) This Agreement shall become effective upon the consummation of the
Public Offering (the "Effective Date") and shall terminate and be of no further
force or effect upon the expiration of the Employment Agreement (the "Term");
provided, however, that, if a Change-in-Control shall have occurred during the
Term or within six months after Executive's employment terminates, as described
in Paragraph 2(a) hereof, the Term shall expire on the last day of the
twenty-fourth (24th) month following the month in which the Change-in-Control
occurs.
(b) If the consummation of the Public Offering does not occur on or before
October 31, 1997, this Agreement shall terminate and be of no further force or
effect.
2. TERMINATION OF EXECUTIVE'S EMPLOYMENT PRIOR TO OR
FOLLOWING A CHANGE-IN-CONTROL
(a) If the Executive's employment is terminated by the Company or any of
its subsidiaries or by the Company's successor without Cause (as hereinafter
defined), or the Executive terminates his employment with the Company or any of
its subsidiaries or with the Company's successor for Good Reason (as hereinafter
defined), and such termination occurs within six months preceding, or within two
years following, a Change-in-Control, the Executive shall be entitled to receive
a Change-in-Control Payment (as hereinafter defined).
(b) Notwithstanding the foregoing, the Executive shall not be entitled to
receive the Change-in-Control Payment if any of the Circumstances of
Ineligibility (as hereinafter defined) apply to the Executive.
(c) "CHANGE-IN-CONTROL PAYMENT" means the product of (i) two and one-half
times (ii) the sum of (x) the Executive's annual base salary at the time of the
termination of the Executive's employment (or, in the case of a termination of
employment for Good Reason based on a reduction of the Executive's annual base
salary, the annual base salary in effect immediately prior to such reduction)
plus (y) the Executive's target annual incentive bonus in effect for the year in
which the Executive's employment is terminated or the year in which the
Change-in-Control occurs, whichever target bonus is greater.
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(d) "CHANGE-IN-CONTROL" means that any of the following has occurred:
(i) any person or other entity (other than any of the Company's
subsidiaries or any employee benefit plan sponsored by the
Company or any of its subsidiaries) including any person as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), becomes the beneficial
owner, as defined in Rule 13d-3 under the Exchange Act, directly
or indirectly, of more than fifty percent (50%) of the total com-
bined voting power of all classes of capital stock of the Company
normally entitled to vote for the election of directors of the
Company (the "Voting Stock"),
(ii) the stockholders of the Company approve the sale of all or
substantially all of the property or assets of the Company and
such sale occurs;
(iii) the stockholders of the Company approve a consolidation or
merger of the Company with another corporation (other than with
any of the Company's subsidiaries), the consummation of which
would result in the shareholders of the Company immediately
before the occurrence of the consolidation or merger owning, in
the aggregate, less than 60% of the Voting Stock of the surviving
entity, and such consolidation or merger occurs; or
(iv) a change in the Company's Board of Directors occurs with the
result that the members of the Board on the Effective Date (the
"Incumbent Directors") no longer constitute a majority of such
Board of Directors, provided that any person becoming a director
(other than a director whose initial assumption of office is in
connection with an actual or threatened election contest or the
settlement thereof, including but not limited to a consent
solicitation, relating to the election of directors of the
Company) whose election or nomination for election was supported
by two-thirds (2/3) of the then
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Incumbent Directors shall be considered an Incumbent Director for
purposes hereof.
Notwithstanding anything contained herein to the contrary, a Change-in-Control
shall not include the Public Offering.
(e) "CAUSE" shall have the meaning set forth in the Employment Agreement
and shall be subject to the procedures set forth therein.
(f) "GOOD REASON" means the occurrence of any of the following without the
prior written consent of the Executive:
(i) removal from any of the positions held by the Executive with
respect to the Company or any of its significant subsidiaries (as
defined in Regulation S-X under the Securities Exchange Act of
1934) on the 181st day prior to the Change-in-Control or any
senior position that the Executive subsequently achieves;
(ii) the assignment of duties or responsibilities materially
inconsistent with those customarily associated with the position
held by the Executive on the 181st day prior to the
Change-in-Control or any senior position that the Executive
subsequently achieves (alternatively, the "Measuring Position"),
or any other action by the Company or a successor that results in
a diminution of the Executive's position, authority, duties or
responsibilities compared to the Measuring Position, other than
an isolated action that is not taken in bad faith and is remedied
by the Company or a successor promptly after receipt of written
notice thereof from the Executive;
(iii) a reduction in the Executive's annual base salary or Executive's
annual bonus opportunity set forth in the Employment Agreement
from that in effect on the 181st day prior to the
Change-in-Control (or any greater salary or bonus that the
Executive is subsequently entitled to) or a material
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reduction in any other material benefit provided the Executive by
the Company;
(iv) notice by the Company not to extend the Employment Agreement;
(v) the relocation of the Executive's principal place of employment
to a location more than fifty (50) miles from the Executive's
principal place of employment (unless such relocation does not
increase the Executive's commute by more than twenty (20) miles)
on the 181st day prior to the Change-in-Control, except for
required travel on the Company's business to an extent
substantially consistent with the Executive's business travel
obligations as of such day; or
(vi) the failure by the Company to obtain an agreement from any
successor to assume and agree to perform this Agreement.
(g) "CIRCUMSTANCES OF INELIGIBILITY" mean any one or more of the following
circumstances:
(i) Death, Disability or Voluntary Termination. If the Executive is
terminated due to death or Disability (as defined in the
Employment Agreement) or if the Executive elects to voluntarily
terminate his employment, including a termination due to
retirement, with the Company or a successor, the Executive shall
not be eligible to receive the Change-in-Control Payment;
provided, however, that termination of employment by the
Executive for Good Reason shall not constitute a Circumstance of
Ineligibility.
(ii) Termination for Cause. If the Executive's employment with the
Company or a successor is terminated for Cause at any time
preceding or following a Change-in-Control, the Executive shall
not be eligible to receive the Change-in-Control Payment.
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3. TIME OF PAYMENT OF CHANGE-IN-CONTROL PAYMENT
The Change-in-Control Payment (if any) shall be paid to the Executive in
cash in a lump sum within 10 business days following the later of (i) the date
of the termination of the Executive's employment with the Company or the
successor or (ii) the date of the Change-in-Control.
4. VESTING OF RESTRICTED STOCK AND STOCK OPTIONS
Upon the occurrence of a Change-in-Control, (i) any and all restricted
stock held by the Executive as of such date shall become immediately vested and
fully transferable and (ii) any and all unexercisable stock options held by the
Executive as of such date shall become fully vested and immediately exercisable
and shall remain exercisable until their expiration in accordance with the terms
of the applicable plan.
5. CONTINUATION OF EXECUTIVE WELFARE BENEFITS
Notwithstanding anything contained herein to the contrary, if the Executive
is entitled to receive the Change-in-Control Payment, the Company or any of its
subsidiaries or successor shall continue his participation, as if he were still
an employee, in the medical, dental, hospitalization and life insurance plans,
programs and/or arrangements of the Company or any of its subsidiaries in which
he was participating on the date of the termination of his employment (or on the
181st day prior to the Change-in-Control, if more favorable to the Executive) on
the same terms and conditions as other executives under such plans, programs
and/or arrangements until the earlier of (i) the end of the 30-month period
following the date of the termination of his employment or (ii) the date, or
dates, he receives equivalent coverage and benefits under the plans, programs
and/or arrangements of a subsequent employer (such coverage and benefits to be
determined on a coverage-by-coverage or benefit-by-benefit basis).
6. LIMITATION ON PAYMENTS
(a) If any of the payments or benefits received or to be received by the
Executive in connection with a Change in Control or the Executive's termination
of employment (whether such payments or benefits are provided pursuant to the
terms of this Agreement or any other plan,
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arrangement or agreement with the Company, any person whose actions result in a
Change in Control or any person affiliated with the Company or such person)
(such payments or benefits being hereinafter referred to as the "Total
Payments") would be subject to the excise tax (the "Excise Tax") imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then
the payments under Paragraph 5 hereof shall be reduced and thereafter, if
necessary, the Change-in-Control Payment shall be reduced (but not below the
minimum possible amount), so that no portion of the Total Payments is subject to
the Excise Tax.
(b) For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments" (within the meaning of
Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") selected by the Company and reasonably acceptable to the Executive,
such payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of Section 280G(b)(1) of the Code
shall be treated as subject to the Excise Tax unless, in the opinion of Tax
Counsel, such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the "base amount" (as defined in
Section 280G(b)(3) of the Code) allocable to such payment, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by Tax Counsel in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code.
7. MISCELLANEOUS
(a) No Employment Agreement. This Agreement does not constitute a contract
of employment or impose on the Company any obligation to retain the Executive as
an employee.
(b) Deductions and Withholding. The Executive agrees that the Company shall
withhold from any and all compensation required to be paid to the Executive
pursuant to this Agreement all federal, state, local and/or other taxes which
the Company determines are required to be withheld in accor-
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dance with applicable statutes and/or regulations from time to time in effect.
(c) Waiver and Release. The Executive acknowledges that (i) the
Change-in-Control Payment is in excess of the amounts that the Executive would
otherwise be entitled to receive under any employment or severance agreement,
plan, program or arrangement of the Company or between the Company and the
Executive and (ii) the Company has no obligation to enter into this Agreement.
In consideration of the Company assuming these additional obligations and
entering into this Agreement, the Executive agrees to execute a customary
release of all claims related to the Executive's employment or termination
thereof, in substantially the same form as annexed hereto other than any
modifications which may be required to effectuate such release based upon any
changes in law.
(d) Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration conducted in
Cincinnati, Ohio under the Commercial Arbitration Rules then prevailing of the
American Arbitration Association and such submission shall request the American
Arbitration Association to: (i) appoint an arbitrator experienced and
knowledgeable concerning the matter then in dispute; (ii) require the testimony
to be transcribed; (iii) require the award to be accompanied by findings of fact
and a statement of reasons for the decision; and (iv) request the matter to be
handled by and in accordance with the expedited procedures provided for in the
Commercial Arbitration Rules. The determination of the arbitrators, which shall
be based upon a de novo interpretation of this Agreement, shall be final and
binding and judgment may be entered on the arbitrators' award in any court
having jurisdiction. All costs of the American Arbitration Association and the
arbitrator shall be borne by the Company, unless the position advanced by the
Executive is determined by the arbitrator to be frivolous in nature.
(e) Legal Fees. The Company or the successor shall pay to the Executive all
reasonable legal fees and expenses incurred by the Executive in disputing in
good faith any issues hereunder relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder. Such
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payments shall be made within 30 days after delivery of the Executive's written
request for payment accompanied with such evidence of fees and expenses incurred
as the Company reasonably may require. The Company or the successor shall pay to
the Executive interest at the prime lending rate as announced from time to time
by The Chase Manhattan Bank on all or any part of the Change-in-Control Payment
that is not paid when due. The prime rate for each calendar quarter shall be the
prime rate in effect on the first day of the calendar quarter.
(f) No Duty to Mitigate/Set-off. The Company agrees that if the Executive's
employment with the Company or a successor is terminated during the Term, the
Executive shall not be required to seek other employment. Further, the amount of
any payment or benefit hereunder shall not be reduced by any compensation earned
by the Executive or any benefit provided to the Executive as the result of
employment by another employer or otherwise, except as provided in Paragraph 5
or 7(g) hereof. The Company's obligations to make any payment or provide any
benefit hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company or a successor corporation may have against the Executive.
(g) Offset. The Change-in-Control Payment shall be reduced by any severance
payment made by the Company or any subsidiary of the Company to the Executive
pursuant to (i) any severance plan, program, policy or arrangement of the
Company or any subsidiary of the Company, (ii) the Employment Agreement or any
other employment agreement between the Company or any subsidiary of the Company
and the Executive, and (iii) any federal, state or local statute, rule,
regulation or ordinance.
(h) Entire Agreement. This Agreement embodies the entire agreement of the
parties with respect to any payment due the Executive in the event of a
Change-in-Control and supersedes any other prior oral or written agreements
between the Executive and the Company with respect thereto, except that nothing
herein shall be construed to adversely affect the Executive's right to receive
any non-duplicative payment or benefit to which he is entitled under the
Employment Agreement or any other employment agreement between the Company or
any subsidiary of the Company and the Executive in connection with his
termination of employment.
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No party may amend, modify or terminate this Agreement without the express
written consent of the other party.
(i) Binding Agreement. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devises and legatees.
(j) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Kentucky without reference to
principles of conflict of laws.
(k) Counterparts. This Agreement may be executed and delivered in separate
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first written above.
GENERAL CABLE CORPORATION
By: ___________________________
Stephen Rabinowitz
Chairman, Chief Executive
Officer and President
ACCEPTED AND AGREED TO
as of the date first written above
By: __________________________________
Gregory B. Kenny
Address: 6622 Pleasant Street
Cincinnati, OH 45227
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CHANGE-IN-CONTROL AGREEMENT
AGREEMENT, made and entered into as of the 13th day of May, 1997 by and
between General Cable Corporation, a Delaware corporation (the "Company"), and
Christopher F. Virgulak (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is a key employee of the Company or one of its
subsidiaries; and
WHEREAS, it is proposed that the Company become a publicly-traded
company by means of a public offering (the "Public Offering") and the Company's
Board of Directors has determined that, in light of the uncertainties affecting
the industry in which the Company operates, it would be in the best interests of
the Company and its future public shareholders to induce key employees,
including the Executive, to remain with the Company after it becomes a public
company and to reinforce and encourage their continued attention and dedication
to the Company; and
WHEREAS, the Company and the Executive have entered into an Employment
Agreement as of the date hereof to become effective as of the Effective Date, as
hereinafter defined (such agreement, as amended from time to time, being
hereinafter referred to as the "Employment Agreement"); and
WHEREAS, the Company desires to enter into this agreement ("Agreement")
with the Executive providing for, among other things, (i) the acceleration of
vesting of the Executive's restricted stock and stock options upon the
occurrence of a Change-in-Control (as hereinafter defined) and (ii) a severance
payment to the Executive and the continuation of the Executive's welfare
benefits if the Executive's employment is terminated in connection with a
Change-in-Control, subject to the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive agree as follows:
<PAGE>
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1. TERM
(a) This Agreement shall become effective upon the consummation of the
Public Offering (the "Effective Date") and shall terminate and be of no further
force or effect upon the expiration of the Employment Agreement (the "Term");
provided, however, that, if a Change-in-Control shall have occurred during the
Term or within six months after Executive's employment terminates, as described
in Paragraph 2(a) hereof, the Term shall expire on the last day of the
twenty-fourth (24th) month following the month in which the Change-in-Control
occurs.
(b) If the consummation of the Public Offering does not occur on or
before October 31, 1997, this Agreement shall terminate and be of no further
force or effect.
2. TERMINATION OF EXECUTIVE'S EMPLOYMENT PRIOR TO OR
FOLLOWING A CHANGE-IN-CONTROL
(a) If the Executive's employment is terminated by the Company or any
of its subsidiaries or by the Company's successor without Cause (as hereinafter
defined), or the Executive terminates his employment with the Company or any of
its subsidiaries or with the Company's successor for Good Reason (as hereinafter
defined), and such termination occurs within six months preceding, or within two
years following, a Change-in-Control, the Executive shall be entitled to receive
a Change-in-Control Payment (as hereinafter defined).
(b) Notwithstanding the foregoing, the Executive shall
not be entitled to receive the Change-in-Control Payment if any of the
Circumstances of Ineligibility (as hereinafter defined) apply to the Executive.
(c) "CHANGE-IN-CONTROL PAYMENT" means the product of (i) one and
one-half times (ii) the sum of (x) the Executive's annual base salary at the
time of the termination of the Executive's employment (or, in the case of a
termination of employment for Good Reason based on a reduction of the
Executive's annual base salary, the annual base salary in effect immediately
prior to such reduction) plus (y) the Executive's target annual incentive bonus
in effect for the year in which the Executive's employment is terminated or the
year in which the Change-in-Control occurs, whichever target bonus is greater.
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(d) "CHANGE-IN-CONTROL" means that any of the following has occurred:
(i) any person or other entity (other than any
of the Company's subsidiaries or any
employee benefit plan sponsored by the
Company or any of its subsidiaries)
including any person as defined in Section
13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"),
becomes the beneficial owner, as defined in
Rule 13d-3 under the Exchange Act, directly
or indirectly, of more than fifty percent
(50%) of the total com- bined voting power
of all classes of capital stock of the
Company normally entitled to vote for the
election of directors of the Company (the
"Voting Stock"),
(ii) the stockholders of the Company approve the
sale of all or substantially all of the
property or assets of the Company and such
sale occurs;
(iii) the stockholders of the Company approve a
consolidation or merger of the Company with
another corporation (other than with any of
the Company's subsidiaries), the
consummation of which would result in the
shareholders of the Company immediately
before the occurrence of the consolidation
or merger owning, in the aggregate, less
than 60% of the Voting Stock of the
surviving entity, and such consolidation or
merger occurs; or
(iv) a change in the Company's Board of Directors
occurs with the result that the members of
the Board on the Effective Date (the
"Incumbent Directors") no longer constitute
a majority of such Board of Directors,
provided that any person becoming a director
(other than a director whose initial
assumption of office is in connection with
an actual or threatened election contest or
the settlement thereof, including but not
limited to a consent solicitation, relating
to the election of directors of the Company)
whose election or nomination for election
was supported by two-thirds (2/3) of the
then
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Incumbent Directors shall be considered an
Incumbent Director for purposes hereof.
Notwithstanding anything contained herein to the contrary, a Change-in-Control
shall not include the Public Offering.
(e) "CAUSE" shall have the meaning set forth in the Employment
Agreement and shall be subject to the procedures set forth therein.
(f) "GOOD REASON" means the occurrence of any of the following
without the prior written consent of the Executive:
(i) removal from the position of Executive Vice
President or Chief Financial Officer held by
the Executive with respect to the Company or
any of its significant subsidiaries (as
defined in Regulation S-X under the
Securities Exchange Act of 1934) on the
181st day prior to the Change-in-Control or
any senior position that the Executive
subse- quently achieves;
(ii) the assignment of duties or responsibilities
materially inconsistent with those
customarily associated with the position
held by the Executive on the 181st day prior
to the Change-in-Control or any senior
position that the Executive subsequently
achieves (alternatively, the "Measuring
Position"), or any other action by the
Company or a successor that results in a
diminution of the Executive's position,
authority, duties or responsibilities
compared to the Measuring Position, other
than an isolated action that is not taken in
bad faith and is remedied by the Company or
a successor promptly after receipt of
written notice thereof from the Executive;
(iii) a reduction in the Executive's annual base
salary or a material reduction in any other
material benefit provided the Executive by
the Company;
(iv) notice by the Company not to extend the
Employment Agreement;
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(v) the relocation of the Executive's principal
place of employment to a location more than
fifty (50) miles from the Executive's
principal place of employment (unless such
relocation does not increase the Executive's
commute by more than twenty (20) miles) on
the 181st day prior to the
Change-in-Control, except for required
travel on the Company's business to an
extent substantially consistent with the
Executive's business travel obligations as
of such day; or
(vi) the failure by the Company to obtain an
agreement from any successor to assume and
agree to perform this Agreement.
(g) "CIRCUMSTANCES OF INELIGIBILITY" mean any one or more of the
following circumstances:
(i) Death, Disability or Voluntary Termination.
If the Executive is terminated due to death
or Disability (as defined in the Employment
Agreement) or if the Executive elects to
voluntarily terminate his employment,
including a termination due to retirement,
with the Company or a successor, the
Executive shall not be eligible to receive
the Change-in-Control Payment; provided,
however, that termination of employment by
the Executive for Good Reason shall not
constitute a Circumstance of Ineligibility.
(ii) Termination for Cause. If the Executive's
employment with the Company or a successor
is terminated for Cause at any time
preceding or following a Change-in-Control,
the Executive shall not be eligible to
receive the Change-in-Control Payment.
3. TIME OF PAYMENT OF CHANGE-IN-CONTROL PAYMENT
The Change-in-Control Payment (if any) shall be paid to the Executive
in cash in a lump sum within 10 business days following the later of (i) the
date of the termination of the Executive's employment with the Company or the
successor or (ii) the date of the Change-in-Control.
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4. VESTING OF RESTRICTED STOCK AND STOCK OPTIONS
Upon the occurrence of a Change-in-Control, (i) any and all restricted
stock held by the Executive as of such date shall become immediately vested and
fully transferable and (ii) any and all unexercisable stock options held by the
Executive as of such date shall become fully vested and immediately exercisable
and shall remain exercisable until their expiration in accordance with the terms
of the applicable plan.
5. CONTINUATION OF EXECUTIVE WELFARE BENEFITS
Notwithstanding anything contained herein to the contrary, if the
Executive is entitled to receive the Change-in-Control Payment, the Company or
any of its subsidiaries or successor shall continue his participation, as if he
were still an employee, in the medical, dental, hospitalization and life
insurance plans, programs and/or arrangements of the Company or any of its
subsidiaries in which he was participating on the date of the termination of his
employment (or on the 181st day prior to the Change-in-Control, if more
favorable to the Executive) on the same terms and conditions as other executives
under such plans, programs and/or arrangements until the earlier of (i) the end
of the 18-month period following the date of the termination of his employment
or (ii) the date, or dates, he receives equivalent coverage and benefits under
the plans, programs and/or arrangements of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage or benefit-by-benefit
basis).
6. LIMITATION ON PAYMENTS
(a) If any of the payments or benefits received or to be
received by the Executive in connection with a Change in Control or the
Executive's termination of employment (whether such payments or benefits are
provided pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any person whose actions result in a Change in
Control or any person affiliated with the Company or such person) (such payments
or benefits being hereinafter referred to as the "Total Payments") would be
subject to the excise tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), then the payments under
Paragraph 5 hereof shall be reduced and thereafter, if
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necessary, the Change-in-Control Payment shall be reduced (but not below the
minimum possible amount), so that no portion of the Total Payments is subject to
the Excise Tax.
(b) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) all of the Total Payments shall be treated as "parachute payments" (within
the meaning of Section 280G(b)(2) of the Code) unless, in the opinion of tax
counsel ("Tax Counsel") selected by the Company and reasonably acceptable to the
Executive, such payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of Section 280G(b)(4)(A) of the Code,
(ii) all "excess parachute payments" within the meaning of Section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax unless, in the opinion of
Tax Counsel, such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the "base amount" (as defined in
Section 280G(b)(3) of the Code) allocable to such payment, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by Tax Counsel in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code.
7. MISCELLANEOUS
(a) No Employment Agreement. This Agreement does not constitute a
contract of employment or impose on the Company any obligation to retain the
Executive as an employee.
(b) Deductions and Withholding. The Executive agrees that the Company
shall withhold from any and all compensation required to be paid to the
Executive pursuant to this Agreement all federal, state, local and/or other
taxes which the Company determines are required to be withheld in accordance
with applicable statutes and/or regulations from time to time in effect.
(c) Waiver and Release. The Executive acknowledges that (i) the
Change-in-Control Payment is in excess of the amounts that the Executive would
otherwise be entitled to receive under any employment or severance agreement,
plan, program or arrangement of the Company or between the Company and the
Executive and (ii) the Company has no obligation to
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enter into this Agreement. In consideration of the Company assuming these
additional obligations and entering into this Agreement, the Executive agrees to
execute a customary release of all claims related to the Executive's employment
or termination thereof, in substantially the same form as annexed hereto other
than any modifications which may be required to effectuate such release based
upon any changes in law.
(d) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in Cincinnati, Ohio under the Commercial Arbitration Rules then
prevailing of the American Arbitration Association and such submission shall
request the American Arbitration Association to: (i) appoint an arbitrator
experienced and knowledgeable concerning the matter then in dispute; (ii)
require the testimony to be transcribed; (iii) require the award to be
accompanied by findings of fact and a statement of reasons for the decision; and
(iv) request the matter to be handled by and in accordance with the expedited
procedures provided for in the Commercial Arbitration Rules. The determination
of the arbitrators, which shall be based upon a de novo interpretation of this
Agreement, shall be final and binding and judgment may be entered on the
arbitrators' award in any court having jurisdiction. All costs of the American
Arbitration Association and the arbitrator shall be borne by the Company, unless
the position advanced by the Executive is determined by the arbitrator to be
frivolous in nature.
(e) Legal Fees. The Company or the successor shall pay to the Executive
all reasonable legal fees and expenses incurred by the Executive in disputing in
good faith any issues hereunder relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made within 30
days after delivery of the Executive's written request for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require. The Company or the successor shall pay to the Executive interest at the
prime lending rate as announced from time to time by The Chase Manhattan Bank on
all or any part of the Change-in-Control Payment that is not paid when due. The
prime rate for each calendar quarter
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shall be the prime rate in effect on the first day of the calendar quarter.
(f) No Duty to Mitigate/Set-off. The Company agrees that if the
Executive's employment with the Company or a successor is terminated during the
Term, the Executive shall not be required to seek other employment. Further, the
amount of any payment or benefit hereunder shall not be reduced by any
compensation earned by the Executive or any benefit provided to the Executive as
the result of employment by another employer or otherwise, except as provided in
Paragraph 5 or 7(g) hereof. The Company's obligations to make any payment or
provide any benefit hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company or a successor corporation may have against the
Executive.
(g) Offset. The Change-in-Control Payment shall be reduced by any
severance payment made by the Company or any subsidiary of the Company to the
Executive pursuant to (i) any severance plan, program, policy or arrangement of
the Company or any subsidiary of the Company, (ii) the Employment Agreement or
any other employment agreement between the Company or any subsidiary of the
Company and the Executive, and (iii) any federal, state or local statute, rule,
regulation or ordinance.
(h) Entire Agreement. This Agreement embodies the entire agreement of
the parties with respect to any payment due the Executive in the event of a
Change-in-Control and supersedes any other prior oral or written agreements
between the Executive and the Company with respect thereto, except that nothing
herein shall be construed to adversely affect the Executive's right to receive
any non-duplicative payment or benefit to which he is entitled under the
Employment Agreement or any other employment agreement between the Company or
any subsidiary of the Company and the Executive in connection with his
termination of employment. No party may amend, modify or terminate this
Agreement without the express written consent of the other party.
(i) Binding Agreement. This Agreement shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devises and
legatees.
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(j) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the Commonwealth of Kentucky without reference to
principles of conflict of laws.
(k) Counterparts. This Agreement may be executed and delivered in
separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
GENERAL CABLE CORPORATION
By:___________________________________
Stephen Rabinowitz
Chairman, Chief Executive
Officer and President
ACCEPTED AND AGREED TO
as of the date first written above
By:____________________________________
Christopher F. Virgulak
Address: 8124 Starting Gate Lane
Cincinnati, OH 45249
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<PAGE>
CHANGE-IN-CONTROL AGREEMENT
AGREEMENT, made and entered into as of the 13th day of May, 1997 by and
between General Cable Corporation, a Delaware corporation (the "Company"), and
Robert J. Siverd (the "Executive").
W I T N E S S E T H :
WHEREAS, the Executive is a key employee of the Company or one of its
subsidiaries; and
WHEREAS, it is proposed that the Company become a publicly-traded
company by means of a public offering (the "Public Offering") and the Company's
Board of Directors has determined that, in light of the uncertainties affecting
the industry in which the Company operates, it would be in the best interests of
the Company and its future public shareholders to induce key employees,
including the Executive, to remain with the Company after it becomes a public
company and to reinforce and encourage their continued attention and dedication
to the Company; and
WHEREAS, the Company and the Executive have entered into an Employment
Agreement as of the date hereof to become effective as of the Effective Date, as
hereinafter defined (such agreement, as amended from time to time, being
hereinafter referred to as the "Employment Agreement"); and
WHEREAS, the Company desires to enter into this agreement ("Agreement")
with the Executive providing for, among other things, (i) the acceleration of
vesting of the Executive's restricted stock and stock options upon the
occurrence of a Change-in-Control (as hereinafter defined) and (ii) a severance
payment to the Executive and the continuation of the Executive's welfare
benefits if the Executive's employment is terminated in connection with a
Change-in-Control, subject to the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Executive agree as follows:
<PAGE>
<PAGE>
1. TERM
(a) This Agreement shall become effective upon the consummation of the
Public Offering (the "Effective Date") and shall terminate and be of no further
force or effect upon the expiration of the Employment Agreement (the "Term");
provided, however, that, if a Change-in-Control shall have occurred during the
Term or within six months after Executive's employment terminates, as described
in Paragraph 2(a) hereof, the Term shall expire on the last day of the
twenty-fourth (24th) month following the month in which the Change-in-Control
occurs.
(b) If the consummation of the Public Offering does not occur on or
before October 31, 1997, this Agreement shall terminate and be of no further
force or effect.
2. TERMINATION OF EXECUTIVE'S EMPLOYMENT PRIOR TO OR
FOLLOWING A CHANGE-IN-CONTROL
(a) If the Executive's employment is terminated by the Company or any
of its subsidiaries or by the Company's successor without Cause (as hereinafter
defined), or the Executive terminates his employment with the Company or any of
its subsidiaries or with the Company's successor for Good Reason (as hereinafter
defined), and such termination occurs within six months preceding, or within two
years following, a Change-in-Control, the Executive shall be entitled to receive
a Change-in-Control Payment (as hereinafter defined).
(b) Notwithstanding the foregoing, the Executive shall not be entitled
to receive the Change-in-Control Payment if any of the Circumstances of
Ineligibility (as hereinafter defined) apply to the Executive.
(c) "CHANGE-IN-CONTROL PAYMENT" means the product of (i) one and
one-half times (ii) the sum of (x) the Executive's annual base salary at the
time of the termination of the Executive's employment (or, in the case of a
termination of employment for Good Reason based on a reduction of the
Executive's annual base salary, the annual base salary in effect immediately
prior to such reduction) plus (y) the Executive's target annual incentive bonus
in effect for the year in which the Executive's employment is terminated or the
year in which the Change-in-Control occurs, whichever target bonus is greater.
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(d) "CHANGE-IN-CONTROL" means that any of the following has occurred:
(i) any person or other entity (other than any of the Company's
subsidiaries or any employee benefit plan sponsored by the
Company or any of its subsidiaries) including any person as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), becomes the beneficial
owner, as defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of more than fifty percent (50%) of
the total com- bined voting power of all classes of capital
stock of the Company normally entitled to vote for the
election of directors of the Company (the "Voting Stock"),
(ii) the stockholders of the Company approve the sale of all or
substantially all of the property or assets of the Company and
such sale occurs;
(iii) the stockholders of the Company approve a consolidation or
merger of the Company with another corporation (other than
with any of the Company's subsidiaries), the consummation of
which would result in the shareholders of the Company
immediately before the occurrence of the consolidation or
merger owning, in the aggregate, less than 60% of the Voting
Stock of the surviving entity, and such consolidation or
merger occurs; or
(iv) a change in the Company's Board of Directors occurs with the
result that the members of the Board on the Effective Date
(the "Incumbent Directors") no longer constitute a majority of
such Board of Directors, provided that any person becoming a
director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest or the settlement thereof, including but not limited
to a consent solicitation, relating to the election of
directors of the Company) whose election or nomination for
election was supported by two-thirds (2/3) of the then
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Incumbent Directors shall be considered an Incumbent Director
for purposes hereof.
Notwithstanding anything contained herein to the contrary, a Change-in-Control
shall not include the Public Offering.
(e) "CAUSE" shall have the meaning set forth in the Employment
Agreement and shall be subject to the procedures set forth therein.
(f) "GOOD REASON" means the occurrence of any of the following without
the prior written consent of the Executive:
(i) removal from the positions of Executive Vice President or
General Counsel held by the Executive with respect to the
Company or any of its significant subsidiaries (as defined in
Regulation S-X under the Securities Exchange Act of 1934) on
the 181st day prior to the Change-in-Control or any senior
position that the Executive subsequently achieves;
(ii) the assignment of duties or responsibilities materially
inconsistent with those customarily associated with the
position held by the Executive on the 181st day prior to the
Change-in-Control or any senior position that the Executive
subsequently achieves (alternatively, the "Measuring
Position"), or any other action by the Company or a successor
that results in a diminution of the Executive's position,
authority, duties or responsibilities compared to the
Measuring Position, other than an isolated action that is not
taken in bad faith and is remedied by the Company or a
successor promptly after receipt of written notice thereof
from the Executive;
(iii) a reduction in the Executive's annual base salary or a
material reduction in any other material benefit provided the
Executive by the Company;
(iv) notice by the Company not to extend the Employment Agreement;
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(v) the relocation of the Executive's principal place of
employment to a location more than fifty (50) miles from the
Executive's principal place of employment (unless such
relocation does not increase the Executive's commute by more
than twenty (20) miles) on the 181st day prior to the
Change-in-Control, except for required travel on the Company's
business to an extent substantially consistent with the
Executive's business travel obligations as of such day; or
(vi) the failure by the Company to obtain an agreement from any
successor to assume and agree to perform this Agreement.
(g) "CIRCUMSTANCES OF INELIGIBILITY" mean any one or more of the
following circumstances:
(i) Death, Disability or Voluntary Termination. If the Executive
is terminated due to death or Disability (as defined in the
Employment Agreement) or if the Executive elects to
voluntarily terminate his employment, including a termination
due to retirement, with the Company or a successor, the
Executive shall not be eligible to receive the
Change-in-Control Payment; provided, however, that termination
of employment by the Executive for Good Reason shall not
constitute a Circumstance of Ineligibility.
(ii) Termination for Cause. If the Executive's employment with the
Company or a successor is terminated for Cause at any time
preceding or following a Change-in-Control, the Executive
shall not be eligible to receive the Change-in-Control
Payment.
3. TIME OF PAYMENT OF CHANGE-IN-CONTROL PAYMENT
The Change-in-Control Payment (if any) shall be paid to the Executive
in cash in a lump sum within 10 business days following the later of (i) the
date of the termination of the Executive's employment with the Company or the
successor or (ii) the date of the Change-in-Control.
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4. VESTING OF RESTRICTED STOCK AND STOCK OPTIONS
Upon the occurrence of a Change-in-Control, (i) any and all restricted
stock held by the Executive as of such date shall become immediately vested and
fully transferable and (ii) any and all unexercisable stock options held by the
Executive as of such date shall become fully vested and immediately exercisable
and shall remain exercisable until their expiration in accordance with the terms
of the applicable plan.
5. CONTINUATION OF EXECUTIVE WELFARE BENEFITS
Notwithstanding anything contained herein to the contrary, if the
Executive is entitled to receive the Change-in-Control Payment, the Company or
any of its subsidiaries or successor shall continue his participation, as if he
were still an employee, in the medical, dental, hospitalization and life
insurance plans, programs and/or arrangements of the Company or any of its
subsidiaries in which he was participating on the date of the termination of his
employment (or on the 181st day prior to the Change-in-Control, if more
favorable to the Executive) on the same terms and conditions as other executives
under such plans, programs and/or arrangements until the earlier of (i) the end
of the 18-month period following the date of the termination of his employment
or (ii) the date, or dates, he receives equivalent coverage and benefits under
the plans, programs and/or arrangements of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage or benefit-by-benefit
basis).
6. LIMITATION ON PAYMENTS
(a) If any of the payments or benefits received or to be received by
the Executive in connection with a Change in Control or the Executive's
termination of employment (whether such payments or benefits are provided
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any person whose actions result in a Change in
Control or any person affiliated with the Company or such person) (such payments
or benefits being hereinafter referred to as the "Total Payments") would be
subject to the excise tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), then the payments under
Paragraph 5 hereof shall be reduced and thereafter, if
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necessary, the Change-in-Control Payment shall be reduced (but not below the
minimum possible amount), so that no portion of the Total Payments is subject to
the Excise Tax.
(b) For purposes of determining whether any of the Total Payments will
be subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments" (within the meaning of
Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") selected by the Company and reasonably acceptable to the Executive,
such payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of Section 280G(b)(1) of the Code
shall be treated as subject to the Excise Tax unless, in the opinion of Tax
Counsel, such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the Code) in excess of the "base amount" (as defined in
Section 280G(b)(3) of the Code) allocable to such payment, or are otherwise not
subject to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by Tax Counsel in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code.
7. MISCELLANEOUS
(a) No Employment Agreement. This Agreement does not constitute a
contract of employment or impose on the Company any obligation to retain the
Executive as an employee.
(b) Deductions and Withholding. The Executive agrees that the Company
shall withhold from any and all compensation required to be paid to the
Executive pursuant to this Agreement all federal, state, local and/or other
taxes which the Company determines are required to be withheld in accordance
with applicable statutes and/or regulations from time to time in effect.
(c) Waiver and Release. The Executive acknowledges that (i) the
Change-in-Control Payment is in excess of the amounts that the Executive would
otherwise be entitled to receive under any employment or severance agreement,
plan, program or arrangement of the Company or between the Company and the
Executive and (ii) the Company has no obligation to
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enter into this Agreement. In consideration of the Company assuming these
additional obligations and entering into this Agreement, the Executive agrees to
execute a customary release of all claims related to the Executive's employment
or termination thereof, in substantially the same form as annexed hereto other
than any modifications which may be required to effectuate such release based
upon any changes in law.
(d) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in Cincinnati, Ohio under the Commercial Arbitration Rules then
prevailing of the American Arbitration Association and such submission shall
request the American Arbitration Association to: (i) appoint an arbitrator
experienced and knowledgeable concerning the matter then in dispute; (ii)
require the testimony to be transcribed; (iii) require the award to be
accompanied by findings of fact and a statement of reasons for the decision; and
(iv) request the matter to be handled by and in accordance with the expedited
procedures provided for in the Commercial Arbitration Rules. The determination
of the arbitrators, which shall be based upon a de novo interpretation of this
Agreement, shall be final and binding and judgment may be entered on the
arbitrators' award in any court having jurisdiction. All costs of the American
Arbitration Association and the arbitrator shall be borne by the Company, unless
the position advanced by the Executive is determined by the arbitrator to be
frivolous in nature.
(e) Legal Fees. The Company or the successor shall pay to the Executive
all reasonable legal fees and expenses incurred by the Executive in disputing in
good faith any issues hereunder relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax audit or proceeding to
the extent attributable to the application of Section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made within 30
days after delivery of the Executive's written request for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require. The Company or the successor shall pay to the Executive interest at the
prime lending rate as announced from time to time by The Chase Manhattan Bank on
all or any part of the Change-in-Control Payment that is not paid when due. The
prime rate for each calendar quarter
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shall be the prime rate in effect on the first day of the calendar quarter.
(f) No Duty to Mitigate/Set-off. The Company agrees that if the
Executive's employment with the Company or a successor is terminated during the
Term, the Executive shall not be required to seek other employment. Further, the
amount of any payment or benefit hereunder shall not be reduced by any
compensation earned by the Executive or any benefit provided to the Executive as
the result of employment by another employer or otherwise, except as provided in
Paragraph 5 or 7(g) hereof. The Company's obligations to make any payment or
provide any benefit hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Company or a successor corporation may have against the
Executive.
(g) Offset. The Change-in-Control Payment shall be reduced by any
severance payment made by the Company or any subsidiary of the Company to the
Executive pursuant to (i) any severance plan, program, policy or arrangement of
the Company or any subsidiary of the Company, (ii) the Employment Agreement or
any other employment agreement between the Company or any subsidiary of the
Company and the Executive, and (iii) any federal, state or local statute, rule,
regulation or ordinance.
(h) Entire Agreement. This Agreement embodies the entire agreement of
the parties with respect to any payment due the Executive in the event of a
Change-in-Control and supersedes any other prior oral or written agreements
between the Executive and the Company with respect thereto, except that nothing
herein shall be construed to adversely affect the Executive's right to receive
any non-duplicative payment or benefit to which he is entitled under the
Employment Agreement or any other employment agreement between the Company or
any subsidiary of the Company and the Executive in connection with his
termination of employment. No party may amend, modify or terminate this
Agreement without the express written consent of the other party.
(i) Binding Agreement. This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devises and legatees.
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(j) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Kentucky without reference to
principles of conflict of laws.
(k) Counterparts. This Agreement may be executed and delivered in
separate counterparts, each of which when so executed and delivered shall be
deemed an original and all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
GENERAL CABLE CORPORATION
By:______________________________
Stephen Rabinowitz
Chairman, Chief Executive
Officer and President
ACCEPTED AND AGREED TO
as of the date first written above
By:__________________________________
Robert J. Siverd
Address: 8051 Brill Road
Cincinnati, OH 45243
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<PAGE>
REGISTRATION RIGHTS AGREEMENT
dated as of
May 13, 1997
between
General Cable Corporation
and
Wassall Netherlands Cable BV
<PAGE>
<PAGE>
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of May 13, 1997, between General Cable
Corporation, a Delaware corporation (the "Company"), and Wassall Netherlands
Cable BV, a Netherlands corporation ("Shareholder").
W I T N E S S E T H:
WHEREAS, on the date hereof the Company is a wholly-owned
subsidiary of Shareholder; and
WHEREAS, Shareholder intends to dispose of a substantial
portion of the shares of the common stock, par value $0.01 per share (the
"Common Stock"), of the Company owned by it by means of a public offering of
such shares (herein referred to as the "Offerings");
WHEREAS, in connection with the Offerings, the Company has
agreed to grant to the Shareholder certain registration rights; and
WHEREAS, the parties hereto desire to enter into this
Agreement, which sets forth the terms of such registration rights.
NOW THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions.
(a) The following terms, as used herein, have the following
meanings:
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under common control with,
such other Person. For the purposes of this definition, "control" when used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise; the
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terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Demand Registration" means a Demand Registration as defined
in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Holder" means the Shareholder and/or any member of the
Shareholder Group.
"Person" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Piggyback Registration" means a Piggyback Registration as
defined in Section 2.3.
"Registrable Securities" means all shares of Common Stock
owned by the Shareholder immediately following the consummation of the Offerings
(including any exercise the over-allotment option in connection therewith),
whether owned at the relevant date by the Shareholder or any other member of the
Shareholder Group, and any stock or other securities into which or for which
such Common Stock may hereafter be changed, converted or exchanged and any other
shares or securities issued to the holders of such Common Stock (or such stock
or other securities into which or for which such shares are so changed,
converted or exchanged) upon any reclassification, share combination, share
subdivision, share dividend, share exchange, merger, consolidation or similar
transaction or event.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Selling Holder" means any Holder that has requested
registration of its Registrable Securities pursuant to Section 2.1 or 2.3
hereof.
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"Shareholder Group" means Shareholder and its Affiliates
(other than the Company and its subsidiaries), including, without limitation,
Wassall PLC.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
ARTICLE II
REGISTRATION RIGHTS
2.1. Demand Registration. (a) A Holder or Holders may make a
written request (a "Demand Request") for registration under the Securities Act
of all or part of its Registrable Securities (a "Demand Registration"); provided
that the Company shall not be obligated (i) to effect a demand Registration for
the registration of fewer than 1,000,000 Registrable Shares or, if the number of
Registrable Shares held by the Holders is less than 1,000,000, all of the
Registrable Shares then held by the Holders, (ii) to effect more than one Demand
Registration in any six-month period or (iii) to effect a Demand Registration on
more than three occasions. Such request will specify the number of shares of
Registrable Securities proposed to be sold and will also specify the intended
method of disposition thereof. Subject to Section 2.2, the Company shall file a
registration statement with respect to the Demand Registration as soon as
practicable thereafter and in any event within 60 days after receiving a Demand
Request (such 60th day being referred to herein as the "Required Filing Date")
and shall use its best efforts to cause the same to be declared effective by the
Commission as promptly as practicable after such filing.
(b) If the Holders of a majority of the Registrable Securities
to be registered pursuant to a Demand Registration so elect, the offering of
such Registrable Securities pursuant to such Demand Registration shall be in the
form of a "firm commitment" underwritten offering (which may be divided into
separate U.S. and international offerings, and which shall together constitute
one and only one Demand Registration). Such Holders shall select the managing
Underwriters and any additional investment bankers and managers to be used in
connection with the offering; provided that such managing Underwriters and
additional investment bankers must be reasonably satisfactory to the Company (it
being acknowledged and agreed by the Company
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that each of Dillon, Read & Co. Inc. and Merrill Lynch & Co. are acceptable for
such purposes).
(c) If the Holders of a majority of the Registrable Securities
to be registered pursuant to a Demand Registration so elect, the registration
shall be a "shelf registration" pursuant to Rule 415 under the Securities Act (a
"Shelf Registration"), which the Company shall maintain effective for a period
of up to three years; provided, however, that for so long as such Shelf
Registration shall be effective, no Holder may request a Demand Registration
pursuant to this Agreement. The Holders may demand registration pursuant to this
Section 2.1(c) on no more than one occasion.
(d) A registration will not count as a Demand Registration
unless a registration statement with respect thereto has been declared effective
by the Commission and remains effective in compliance with, and subject to, the
provisions of Section 3.1 hereof and the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement.
2.2. Deferral of Filing.
(a) The Company may defer the filing (but not the preparation)
of a registration statement with respect to a Demand Registration required by
Section 2.1 until a date not later than 60 days after the Required Filing Date
if (i) at any time prior to the Required Filing Date, the Company is engaged in
confidential negotiations or other confidential business activities, disclosure
of which (in the written opinion of outside counsel to the Company) would be
required in such registration statement and would not be required if such
registration statement were not filed, and the Board of Directors of the Company
determines in good faith that such disclosure would be materially detrimental to
the Company and its stockholders or would have a material adverse effect on any
such confidential negotiations or other confidential business activities, or
(ii) prior to receiving the Demand Request, the Company is actively engaged in
discussions with underwriters with respect to a registered underwritten public
offering of the Company's securities for the Company's account and is proceeding
with reasonable diligence to effect such offering, provided that piggyback
registration rights under Section 2.3 shall be available (subject to the
limitations set forth therein).
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(b) A deferral of the filing of a registration statement
pursuant to this Section 2.2 shall be lifted if, in the case of a deferral
pursuant to clause (ii) of Section 2.2(a), the negotiations or other activities
are disclosed or terminated, or, in the case of a deferral pursuant to clause
(ii) of Section 2.2(a), the proposed registration for the Company's account is
completed or abandoned.
(c) In order to defer the filing of a registration statement
pursuant to this Section 2.2, the Company shall promptly (but in any event
within 10 days), upon determining to seek such deferral, deliver to each
requesting Holder a certificate signed by an executive officer of the Company
stating that the Company is deferring such filing pursuant to this Section 2.2
and a general statement of the reason for such deferral and an approximation of
the anticipated delay. Each Holder hereby agrees to keep confidential any
information disclosed to such Holder in any such certificate (including the fact
that such a certificate was delivered) and further agrees that such Holder will
not, prior to the public disclosure of such information, purchase or sell any
securities of the Company. Within 20 days after receiving such certificate,
Holders holding a majority of the shares of Common Stock for which registration
was previously requested may withdraw such request by giving notice to the
Company; if withdrawn, the Demand Request shall be deemed not to have been made
for all purposes of this Agreement. The Company may defer the filing of a
particular registration statement pursuant to clauses (i) or (ii) of Section 2.2
only twice.
2.3. Piggyback Registration. (a) If the Company proposes to
file a registration statement under the Securities Act with respect to an
offering of Common Stock (i) for the Company's own account (other than a
registration statement on Form S-4 or S-8 (or any substitute form that may be
adopted by the Commission)) or (ii) for the account of any of its holders of
Common Stock, then the Company shall give written notice of such proposed filing
to each Holder as soon as practicable (but in no event less than 20 business
days before the anticipated filing date), and such notice shall offer such
Holder the opportunity to register such number of shares of Registrable
Securities as such Holder may request on the same terms and conditions as the
Company's or such holder's Common Stock (a "Piggyback Registration"). Each
Holder who desires to have its or his Registrable Securities included in such
registration statement shall so advise the Company in writing (stating the
number of shares of Common Stock desired to be
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registered) within 15 business days after the date of such notice from the
Company. Any Holder shall have the right to withdraw such request for inclusion
of such Holder's Registrable Securities in any registration statement pursuant
to this Section 2.3(a) by giving written notice to the Company of such
withdrawal prior to the effective date of the Registration Statement. Subject to
Section 2.4 below, the Company shall include in such registration statement all
such Registrable Securities requested to be included therein; provided, however,
that the Company may at any time withdraw or cease proceeding with any such
registration if it shall at the same time withdraw or cease proceeding with the
registration of all other securities originally proposed to be registered.
(b) If securities are proposed to be registered by the Company
pursuant to Section 2.3(a) hereof, the Holder or Holders (acting together as a
group) that have elected to have its or their Registrable Securities included
therein, if any, shall have the right to select a managing Underwriter to be
used in connection with the offering; provided that such managing Underwriter
must be reasonably satisfactory to the Company (it being acknowledged and agreed
by the Company that each of Dillon, Read & Co. Inc. and Merrill Lynch & Co. are
acceptable for such purposes).
2.4. Reduction of Offering. Notwithstanding anything contained
herein, if the managing Underwriter of an offering described in Section 2.3
delivers a written opinion to the Company that the size of the offering that
Holders, the Company and any other Persons intend to make are such that the
success of the offering would be materially and adversely affected, then the
Company shall include in such registration (i) first, in any offering described
in Section 2.3(a)(i), the securities being offered for the account of the
Company, (ii) second, the number of Registrable Securities requested to be
included that, in the opinion of such Underwriter, can be sold, pro rata among
the Holders on the basis of the amount of Registrable Securities then owned by
each Holder; (iii) third, in any offering described in Section 2.3(a)(ii), any
securities being offered for the account of the Company that, in the opinion of
such Underwriter, can be sold, and (iv) fourth, any other securities requested
to be registered by any stockholder of the Company other than any Holder that,
in the opinion of such Underwriter, can be sold.
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ARTICLE III
REGISTRATION PROCEDURES
3.1. Filings; Information. Whenever a Holder requests that any
Registrable Securities be registered pursuant to Section 2.1 or 2.3 hereof, the
Company will use its reasonable efforts to effect the registration of such
Registrable Securities as promptly as is practicable, and in connection with any
such request:
(a) The Company will as expeditiously as possible prepare and
file with the Commission a registration statement on any form for which
the Company then qualifies and which counsel for the Company shall deem
appropriate and available for the sale of the Registrable Securities to
be registered thereunder in accordance with the intended method of
distribution thereof (including in a Rule 415 offering), and use its
reasonable efforts to cause such filed registration statement to become
effective as promptly as practicable, and thereafter prepare and file
with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a
period of not less than (i) 120 days in the case of any registration
that is not a Shelf Registration, and (ii) in the case of a Shelf
Registration, until the earlier of (x) such time as all of the
Registrable Securities registered thereunder shall have been disposed
of in accordance with the intended methods of distribution set forth in
such registration statement, and (y) the third anniversary of the
effective date of such registration statement.
(b) The Company will, prior to filing such registration
statement or any amendment or supplement thereto, furnish to each
Selling Holder and each applicable managing Underwriter, if any, copies
thereof, and thereafter furnish to each such Holder and Underwriter, if
any, such number of copies of such registration statement, amendment
and supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and the prospectus
included in such registration statement (including each preliminary
prospectus) as each such Holder or Underwriter may reasonably request
in order to facilitate the sale of the Registrable Securities.
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(c) The Company will promptly notify each Selling Holder of
any stop order issued or, to the Company's knowledge, threatened to be
issued by the Commission and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered (and in
the event any stop order is issued, the Selling Holders may withdraw
their request for registration, in which case such request will not be
deemed a Demand Registration hereunder).
(d) The Company will endeavor to qualify the Registrable
Securities for offer and sale under such other securities or blue sky
laws of such jurisdictions in the United States as each Selling Holder
reasonably requests; provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this paragraph (d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction.
(e) The Company will, as promptly as is practicable, notify
each Selling Holder, at any time when a prospectus relating to the sale
of the Registrable Securities is required by law to be delivered in
connection with sales by an Underwriter or dealer, of the occurrence of
any event requiring the preparation of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of
such securities, such prospectus will not contain an untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading
and promptly make available to such Holders and to the Underwriters any
such supplement or amendment. Each Selling Holder, by exercising its
registration rights hereunder, agrees that, upon receipt of any notice
from the Company of the occurrence of any event of the kind described
in the preceding sentence, such Holder will forthwith discontinue the
offer and sale of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until receipt by such
Holders and the Underwriters of the copies of such supplemented or
amended prospectus and, if so directed by the Company, each Selling
Holder will deliver to the Company all copies, other than permanent
file copies then in such
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Holder's possession, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the
event the Company shall give such notice, the Company shall extend the
period during which such registration statement shall be maintained
effective as provided in Section 3.1(a) hereof by the number of days
during the period from and including the date of the giving of such
notice to the date when the Company shall make available to each
Selling Holding such supplemented or amended prospectus.
(f) In the event that, prior to the time that the Company is
eligible to use Form S-3 for a secondary offering pursuant to Rule 415
under the Securities Act, a Holder or Holders request a Shelf
Registration in accordance with Section 2.1(c) hereof, the Company may
take all action necessary to convert the registration statement to a
registration statement on Form S-3 on or after the date that the
Company is so eligible to use Form S-3 for a secondary offering.
(g) The Company will enter into customary agreements
(including an underwriting agreement in customary form containing
customary lock-up provisions extending up to 90 days) and take such
other actions as are reasonably required in order to expedite or
facilitate the sale of such Registrable Securities.
(h) The Company will furnish to each Selling Holder and to
each Underwriter a signed counterpart, addressed to such Holder or such
Underwriter, of (i) an opinion or opinions of external and/or internal
counsel to the Company and (ii) a comfort letter or comfort letters
from the Company's independent public accountants, each in customary
form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as such Holder or the
managing Underwriter reasonably requests.
(i) The Company will make generally available to its security
holders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within three months after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
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(j) The Company will use its reasonable efforts to cause all
such Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Company are then listed.
(k) Upon request of the managing Underwriter, the Company will
use its best efforts to cause such members of management as are
requested by such Underwriter to participate in the preparation and
presentation of a "road show" with respect to any offering pursuant to
Section 2.1 or 2.3 hereof.
(l) Subject to execution of confidentiality agreements
satisfactory in form and substance to the Company in the exercise of
reasonable judgment, the Company will give the Selling Holders and the
Underwriters, if any, and their respective counsel and accountants (i)
reasonable and customary access to its books and records and (ii) such
opportunities to discuss the business of the Company with its
directors, officers, employees, counsel and the independent public
accountants who have certified its financial statements, as shall be
appropriate, in the reasonable judgment of counsel for such Selling
Holders and/or Underwriters, to conduct a reasonable investigation
within the meaning of the Securities Act.
The Company may require each Selling Holder promptly to
furnish in writing to the Company such information regarding such Holder, the
plan of distribution of the Registrable Securities and other information as the
Company may from time to time reasonably request or as may be legally required
in connection with such registration.
3.2. Registration Expenses. (a) In connection with any Demand
Registration or any Piggyback Registration, the Company shall pay the following
expenses incurred in connection with such registration: (i) filing fees with the
Commission, (ii) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the Registrable Securities), (iii) expenses in
connection with printing and delivery of prospectuses and all amendments and
supplements thereto during the applicable prospectus delivery period and
securities engraving expenses, (iv) fees and expenses incurred in connection
with the listing of the Registrable Securities and with obtaining any necessary
clearance by The National Association of Securities Dealers, Inc., (v) fees
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and expenses of counsel and independent certified public accountants for the
Company and of counsel for the Underwriters, if any, (vi) the fees and expenses
of any additional experts retained by the Company in connection with such
registration and (vii) fees and expenses of counsel for the Selling Holders;
provided however that the Company shall only be responsible for the fees of one
separate firm of attorneys for the Selling Holders. In addition, the Company
shall pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit or quarterly review, the expense of any
liability insurance and the expenses and fees for listing the securities to be
registered on each securities exchange on which they are to be listed. Each
Selling Holder, by exercising its registration rights hereunder, agrees to pay
any underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities by such Holder.
(b) The obligation of the Company to bear the expenses
described in Section 3.2(a) shall apply irrespective of whether and when a
registration, once properly demanded, if applicable, becomes effective, is
withdrawn or suspended, or is converted to another form of registration.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1. Indemnification by the Company -- Registrable Securities.
The Company agrees to indemnify and hold harmless each Selling Holder and each
Person, if any, who controls each Selling Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
officers, directors, Affiliates, employees and agents of each of the foregoing,
from and against any and all losses, claims, judgments, damages and liabilities
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any registration statement relating to the
Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary or final
prospectus contained therein or arising out of or based upon any omission or
alleged omission to state in any such registration statement or prospectus a
material fact required to be stated therein
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or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
judgments, damages or liabilities arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in conformity
with information relating to such Holder or the plan of distribution of
Registrable Securities to be sold by such Holder, in each case furnished in
writing to the Company by such Holder expressly for use therein; provided that
except in the case of an underwritten offering, the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of a Selling Holder if a copy of the final prospectus was furnished to
such Selling Holder and was not provided to a purchaser and such final
prospectus would have cured the defect giving rise to such loss, claim, damage
or liability. The Company also agrees to indemnify any Underwriters of the
Registrable Securities, their officers and directors and each person who
controls such Underwriters on substantially the same basis as that of the
indemnification of the Selling Holders provided in this Section 4.1.
4.2. Indemnification by Selling Holders -- Registrable
Securities. Each Selling Holder agrees to indemnify and hold harmless the
Company, and each Person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and
the officers, directors, Affiliates, employees and agents of each of the
foregoing, from and against any and all losses, claims, judgments, damages and
liabilities arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement relating to
the Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary or final
prospectus contained therein, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, but only insofar as such losses, claims,
judgments, damages or liabilities arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in conformity
with information relating to such Holder or the plan of distribution of
Registrable Securities to be sold by such Holder, in each case furnished in
writing to the Company by such Holder expressly for use therein. Each Holder, by
exercising its registration rights hereunder, also agrees to indemnify and
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hold harmless any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 4.2.
4.3. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Sections 4.1 or 4.2, such Person (the "Indemnified Party") shall promptly notify
the Person against whom such indemnity may be sought (the "Indemnifying Party")
in writing of such proceeding; provided, that the failure to notify the
Indemnifying Party shall not relieve it from any liability that it may have to
an Indemnified Party on account of the indemnity agreement contained in Section
4.1 or 4.2 above except to the extent that the Indemnifying Party was actually
prejudiced by such failure, and in no event shall such failure relieve the
Indemnifying Party from any other liability that it may have to such Indemnified
Party. If the Indemnified Party, at its option, elects to defend any such
proceeding with counsel retained by it, the Indemnifying Party shall pay the
fees and disbursements of such counsel related to such proceeding. Upon the
request of the Indemnified Party, the Indemnifying Party shall retain counsel
reasonably satisfactory to such Indemnified Party to represent such Indemnified
Party and any others the Indemnifying Party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
If, pursuant to the immediately preceding sentence, the Indemnified Party shall
have requested the Indemnifying Party to retain counsel to represent such
Indemnified Party with respect to any such proceeding, any Indemnified Party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnified Party and the
Indemnifying Party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses
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shall be reimbursed as they are incurred. Any Indemnifying Party against whom
indemnity may be sought under this Section 4.3 shall not be liable to indemnify
any Indemnified Party if such Indemnified Party settles such claim or action
without the consent of the Indemnifying Party. The Indemnifying Party may not
agree to any settlement of any such claim or action, other than solely for
monetary damages for which the Indemnifying Party shall be responsible
hereunder, resulting in any remedy or relief applied to or against the
Indemnified Party, without the prior written consent of the Indemnified Party.
4.4. Contribution -- Offerings. If the indemnification
provided for in Sections 4.1 or 4.2 is unavailable to an Indemnified Party in
respect of any losses, claims, judgments, damages or liabilities referred to
herein, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, judgments, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, the Selling Holders and the Underwriters from
the offering of the securities, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Company, the Selling Holders and the Underwriters in
connection with the statements or omissions that resulted in such losses,
claims, judgments, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Selling Holders and the Underwriters shall be deemed to be in the same
respective proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by each of the Company and the Selling Holders and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the prospectus, bear to the aggregate public
offering price of the securities. The relative fault of the Company, the Selling
Holders and the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
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The Company and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling Holder
shall be required to contribute any amount in excess of the amount by which the
net proceeds of the offering (before deducting expenses) received by such
Selling Holder exceeds the amount of any damages which such Selling Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE V
ADDITIONAL REGISTRATION RIGHTS PROVISIONS
5.1. Participation in Underwritten Registrations. No Person
may participate in any underwritten registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements and these
Registration Rights.
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5.2. Rule 144. The Company covenants that it will file any
reports required to be filed by it under the Securities Act and the Exchange Act
and that it will take such further action as any Holder may reasonably request
to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission. Upon the request of a Holder, the Company
will deliver to such Holder a written statement as to whether it has complied
with such reporting requirements.
5.3. Holdback Agreements. Each Holder, by exercising its
registration rights hereunder, agrees not to offer, sell, contract to sell or
otherwise dispose of any Registrable Securities, or any securities convertible
into or exchangeable or exercisable for such securities, during the 14 days
prior to, and during the 90-day period (or such lesser period as the lead or
managing underwriters may permit) beginning on, the effective date of such
registration statement (or the commencement of the offering to the public of
such Registrable Securities in the case of Rule 415 offerings) other than (i)
the Registrable Securities to be sold pursuant to such registration statement,
(ii) in a transaction not involving a public offering, provided that the
purchaser (or purchasers) of such shares agrees to be bound by such lock-up
restrictions for the remainder of the lock-up period or (iii) to a member of the
Shareholder Group.
ARTICLE VI
MISCELLANEOUS
6.1. Notices. All notices, requests and other
communications to either party hereunder shall be in writing
(including telecopy or similar writing) and shall be given,
if to the Company, to:
General Cable Corporation
4 Tesseneer Drive
Highland Heights, KY 41076
Attention: General Counsel
Telecopier: (606) 572-8444
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if to Shareholder, to:
Wassall Netherlands Cable BV
c/o Wassall USA, Inc.
The Moorings
301 Riverside Avenue
Westport, CT 06880
Attention: General Counsel
Telecopier: (203) 221-6443
or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to the other party hereto. Notices, requests and other
communications to other Holders shall also be in writing (including telecopy or
similar writing) and shall be given at the address or telecopier number
specified pursuant to Section 6.1. Each such notice, request or other
communication shall be effective when delivered at the address specified in this
Section 6.1.
6.2. Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by Holders of a majority of the Registrable Securities and the
Company, or in the case of a waiver, by the party against whom the waiver is to
be effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
6.3. Successors and Assigns. The parties hereto may assign all
or any portion of their rights, but not their obligations, to any other Person
without the consent of the other party hereto. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any
provision hereof is intended to confer upon any Person other than the parties
hereto, this respective successors and permitted assigns or an Indemnified
Party, any rights or remedies hereunder.
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6.4. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, and all of
which together shall constitute one and the same instrument.
6.5. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect thereto. No representation,
inducement, promise, understanding, condition or warranty not set forth herein
or therein has been made or relied upon by any of the parties hereto.
6.6. Governing Law. The Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
giving effect to the conflict of laws principles thereof.
6.7. Severability. In the event that any one or more of the
provisions contained herein, or the application hereof in any circumstance, is
held invalid, illegal, or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
6.8. Confidentiality. Each Holder acknowledges that the
information received by it pursuant hereto may be confidential and for its use
only, and it will not use such confidential information in violation of the
Exchange Act or reproduce, disclose or disseminate such information to any other
person (other than the Underwriter, if any, its attorneys, or its employees or
agents having a need to know the contents of such information), except in
connection with the exercise of rights under this Agreement, unless the Company
has made such information available to the public generally or such Holder is
required by applicable law or stock exchange rules to disclose such information;
it being understood that nothing contained herein shall restrict or otherwise
affect the ability of any Holder to disclose or use any information provided
hereunder that is also provided to such Holder pursuant to any other agreement
(to the extent permitted under such other agreement) or that is otherwise
provided to any Holder in a capacity other than as a Holder hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
GENERAL CABLE CORPORATION
By ______________________________
Name:
Title:
WASSALL NETHERLANDS CABLE BV
By ______________________________
Name:
Title:
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INTERCOMPANY AGREEMENT
INTERCOMPANY AGREEMENT, dated as of May __, 1997, by and
between Wassall PLC, a corporation organized under the laws of England
("Wassall"), Wassall Netherlands Cable BV, a corporation organized under the
laws of the Netherlands and a wholly owned subsidiary of Wassall ("Cable"), and
General Cable Corporation, a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, on the date hereof the Company is a wholly-owned
subsidiary of Cable; and
WHEREAS, Cable intends to dispose of all or a substantial
portion of the shares of the common stock, par value $0.01 per share (the
"Common Stock"), of the Company owned by it by means of a United States and
Canadian public offering and an international public offering of such shares
(herein referred to as the "Offerings");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto hereby agree as
follows:
SECTION 1. Definitions. As used herein, the following terms
shall have the meanings as set forth below:
"Affiliate" shall mean, with respect to any Person, a Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person (it being understood
that, for purposes of this Agreement, members of the Wassall Group, on the one
hand, and members of the GCC Group, on the other hand, shall not be deemed to be
Affiliates of each other).
"Closing Date" shall mean the date of the consummation of the
Offerings.
"Confidentiality Agreements" shall mean those agreements
listed on Annex A hereto.
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"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"GCC Group" shall mean the Company and all Subsidiaries of the
Company (including, from and after the consummation of the transactions
contemplated by the Stock Purchase Agreement, Carol Cable Europe Ltd. and Carol
Cable Ltd.).
"Information" shall mean any books, records, contracts,
instruments, data, facts and other information in the possession or under the
control of the members of the Wassall Group or the members of the GCC Group, as
the case may be, necessary or desirable for use in legal, administrative, or
other proceedings or for auditing, accounting or tax purposes.
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or other entity.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Stock Incentive Plan" shall mean the Company's 1997 Stock
Incentive Plan.
"Stock Purchase Agreement" shall mean that certain Stock
Purchase Agreement entered into by and among Wassall, General Cable Industries,
Inc. ("GCI") and the Company providing for, among other things, the purchase by
GCI from Wassall, and the sale by Wassall to GCI, of all of the outstanding
shares of capital stock of Carol Cable Europe Ltd. and Carol Cable Ltd.
"Subsidiary" shall mean, with respect to any Person, any other
Person of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons performing
similar functions (or, if there are no such voting interests, more than 50% of
the equity interests of which) are owned, directly or indirectly, by such
Person; it being understood that, for purposes of this Agreement, neither the
Company nor any Subsidiary of the Company shall be deemed to be a Subsidiary of
Wassall.
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"Wassall Group" shall mean Wassall and all Subsidiaries of
Wassall, it being understood that in no event shall the Company or any other
member of the GCC Group be deemed to be a member of the Wassall Group for
purposes of this Agreement.
"Wassall Letters of Credit" shall mean all letters of credit
issued under any credit facility of Wassall on behalf of any member of the GCC
Group.
SECTION 2. Director Approval and Designation Rights.
SECTION 2.1 Approval of Initial Board. The Company hereby
agrees that all directors to be appointed to the Company's Board of Directors
prior to the first annual meeting of the Company's stockholders following
consummation of the Offerings shall be subject to the prior written approval of
Cable, and further agrees to take all action necessary to cause its Board of
Directors to comply with the provisions of this Section 2.1.
SECTION 2.2 Designation of Directors.
(a) For so long as Cable and its Affiliates continue
to own in the aggregate Common Stock representing at least 10% of the
Company's issued and outstanding Common Stock, excluding any Common
Stock issued pursuant to the Company's Stock Incentive Plan or pursuant
to any other employee benefit plan or arrangement now existing or
hereinafter adopted (the "Minimum Shares"), the Company will take all
action necessary to, and further agrees to take all action necessary to
cause its Board of Directors to, nominate and support the nomination of
one individual designated by Cable (who shall be a director or senior
executive of Wassall or any subsidiary of Wassall) for election as a
director of the Company and to solicit proxies in favor of (and
otherwise recommend to its stockholders) the election of such nominee
as a director. If and for so long as the number of directors
constituting the entire Board of Directors is greater than eight (8),
the number of directors that Cable has the right to designate pursuant
to this Section 2.2(a) shall immediately be increased to two (2) and
the Company will take all action necessary to, and further agrees to
take all action necessary to cause its Board of
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Directors to, appoint and subsequently nominate for election an
additional individual designated by Cable.
(b) If Cable ceases to continue to beneficially own
the Minimum Shares, the Company will have no obligation to nominate or
support the nomination of any individual or individuals designated by
Cable for election as a director of the Company or to solicit proxies
in favor of (or otherwise recommend to its stockholders) the election
of such nominee or nominees as director.
(c) In the event of the death, resignation or removal
of any director designated for nomination by Cable, the Company shall
take all action necessary to cause another person designated by Cable
(who shall be a director or senior executive of Wassall or any
subsidiary of Wassall) to be elected as a director to fill the
resulting vacancy on the Board of Directors of the Company (which may
include the election of such replacement director by the remaining
directors then in office).
(d) The Company may change the number of directors;
provided that in no event shall any decrease in the number of directors
by the Company or the Company's Board of Directors shorten the term of
any director of the Company that was designated by Cable for nomination
pursuant to this Section 2.2.
(e) If at any time there is a change in the number of
outstanding shares of Common Stock or the class of Common Stock, by
reason of any reclassification, recapitalization, split-up,
combination, exchange of shares, readjustment, or if a stock dividend
thereon is declared, then the number of shares of Common Stock
comprising the Minimum Shares shall be appropriately and equitably
adjusted.
SECTION 3. Indemnification.
SECTION 3.1 Indemnification by the Company. The Company hereby
agrees to indemnify, defend and hold harmless the members of the Wassall Group
(including, without limitation, Cable) and each Person, if any, who controls any
of the foregoing within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, and the respective directors, officers,
shareholders, partners,
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attorneys, accountants, agents and employees and their heirs, successors and
assigns of each of the foregoing (the "Wassall Indemnified Parties") from,
against and in respect of any damages, claims, losses, charges, actions, suits,
judgments, proceedings, deficiencies, taxes (excluding taxes referred to in
Section 3.2(d)), interest, penalties and costs and expenses (including, without
limitation, reasonable attorneys' fees) (collectively, "Losses") imposed on,
sustained, incurred or suffered by or asserted against any Wassall Indemnified
Party, directly or indirectly, relating to or arising out of:
(a) the breach of any representation, warranty or
covenant made by the Company in this Agreement;
(b) the breach of any covenant of the Company set
forth in this Agreement;
(c) (i) claims made by any member of the GCC Group
under any insurance policy maintained by the Wassall Group under which
any member of the GCC Group is an insured party including, without
limitation, all premiums (including (A) pre-paid premiums and (B)
premiums relating to periods prior to the consummation of the Offerings
resulting from any retroactive adjustment of such prior period premiums
under the terms of any such policies), deductibles, retention amounts
and other expenses, and (ii) all expenses attributable to any member of
the GCC Group under the Agreement Letters for Paid Loss Program between
Wassall USA, Inc. and The Travelers Insurance Company, dated November
20, 1996, November 20, 1995 and July 6, 1995, respectively;
(d) the ownership by any member of the Wassall Group
of the Common Stock or the conduct, ownership and/or operation by any
member of the GCC Group or any predecessor thereof of any of its
respective current, former or future businesses or assets, whether, in
each case, prior to, on or after the date hereof;
(e) any Wassall Letter of Credit including, without
limitation, drawings under, and any fees paid or payable in connection
with the issuance of, or with maintaining outstanding, any such Wassall
Letter of Credit;
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(f) the offering or sale of securities of the Company
(including, without limitation, liabilities under the federal
securities laws in connection with the Offerings), except insofar as
such Losses are Losses with respect to which any GCC Indemnified Party
is entitled to be indemnified by Wassall pursuant to Section 3.2(c)
hereof;
(g) any Exchange Act report by the Company, except
insofar as such Losses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission made in
conformity with information relating to a Wassall Indemnified Party
furnished in writing to the Company by or on behalf of such Wassall
Indemnified Party expressly for use therein; or
(h) any member of the Wassall Group being deemed a
member of a controlled group, or under common control and treated as a
single employer, with the Company under Section 414(b), (c), (m) or (o)
of the Code or Section 4001(b)(1) of the Employee Retirement Income
Security Act of 1974, as amended.
SECTION 3.2 Indemnification by Wassall. Wassall hereby agrees
to indemnify, defend and hold harmless the member of the GCC Group and their
respective directors, officers, shareholders, partners, attorneys, accountants,
agents and employees and their heirs, successors and assigns (the "GCC
Indemnified Parties") from, against and in respect of any Losses imposed on,
sustained, incurred or suffered by or asserted against any GCC Indemnified
Party, directly or indirectly, relating to or arising out of:
(a) the breach of any representation, warranty or
covenant made by Wassall in this Agreement;
(b) (i) claims made by any member of the Wassall
Group under any insurance policy maintained by the GCC Group under
which any member of the Wassall Group is an insured party including,
without limitation, all premiums (including (A) pre-paid premiums and
(B) premiums relating to periods prior to the consummation of the
Offerings resulting from any retroactive adjustment of such prior
period premiums under the terms of any such policies), deductibles,
retention amounts and other expenses, and (ii) all
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expenses attributable to any member of the Wassall Group under the
Agreement Letters for Paid Loss Program between Wassall USA, Inc. and
The Travelers Insurance Company, dated November 20, 1996, November 20,
1995 and July 6, 1995, respectively;
(c) the Offerings, insofar (and only insofar) as such
Losses arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the "Selling
Stockholder" section of any preliminary or final prospectus for the
Offerings, or arise out of or are based upon an omission or alleged
omission to state in such section a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(d) any United States federal, state or local
withholding tax, penalties or interest (after utilization of all
available reserves in excess of requirements) imposed on the Company
with respect to any dividends declared and paid by the Company to a
member of the Wassall Group on or before the Closing Date; or
(e) any member of the GCC Group being deemed a member
of a controlled group, or under common control and treated as a single
employer, with the Wassall Group under Section 414(b), (c), (m) or (o)
of the Code or Section 4001(b)(1) of the Employee Retirement Income
Security Act of 1974, as amended.
SECTION 3.3 Indemnification Procedures.
(a) If Wassall and the Company shall receive notice pursuant
to Section 10 of either of the Underwriting Agreements that an action or
proceeding has been brought or asserted against any Underwriter indemnified
party (as such term is defined in the Underwriting Agreements) with respect to
which indemnity may be sought against Wassall and the Company pursuant to such
Section 10, Wassall shall have the right to assume the defense thereof in
accordance with Section 10(b) of the applicable Underwriting Agreement (and
shall, if it so elects, be the "Defending Party" for purposes of such Section
10). If Wassall exercises such right, the fees and expenses of its counsel shall
be paid by the Company and Wassall shall have the right to effect
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a settlement of any such action or proceeding in its sole discretion.
(b) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to Section 3.1 or 3.2, such Person (the
"Indemnified Party") shall promptly notify the person against whom such
indemnify may be sought (the "Indemnifying Party") in writing. If the
Indemnified Party, at its option, elects to defend any such proceeding with
counsel retained by it, the Indemnifying Party shall pay the fees and
expenses of such counsel related to such proceeding. Upon the request of
the Indemnified Party, the Indemnifying Party shall assume the defense thereof
with counsel reasonably satisfactory to such Indemnified Party and shall pay the
fees and expenses of such counsel related to such proceeding. In any such
proceeding in which the Indemnifying Party so assumes the defense thereof, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnified Party
and the Indemnifying Party and representation of both parties by the same
counsel would be inappropriate in the reasonable judgment of the Indemnified
Party due to actual or potential differing interests between them. It is
understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) at any time for all such Indemnified Parties, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Indemnified Parties, such firm shall be
designated in writing by the Indemnified Parties. Except as provided in
Section 3.3(a), the Indemnifying Party shall not be liable for any settlement
of any proceeding effected without its written consent, which shall not be
unreasonably withheld. Any settlement shall include a full release of all
Indemnified Parties.
Section 3.4. Contribution. If the indemnification provided for
in Sections 3.1(f), 3.1(g) or 3.2(c) is unavailable to an Indemnified Party in
respect of any Losses referred to therein, then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall
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contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and the Indemnified Party in connection with the
statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by a particular party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and Wassall agree that it would not be just and equitable
if contribution pursuant to this Section 3.4 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 3.4, no Indemnified Party shall be required to contribute any amount in
excess of the amount by which the net proceeds of the offering (before deducting
expenses) received by such Indemnified Party exceeds the amount of any damages
which such Indemnified Party has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
Section 3.5. Survival of Indemnification; Prior Knowledge. The
indemnification provisions of this Section 3 shall survive the Offerings and any
investigation made at any time by any of the parties hereto, without limitation
as to time or amount. Actual prior knowledge by any Indemnified Party with
respect to any matter as to which indemnification may be sought shall not
constitute a defense to any Indemnified Party's rights to indemnification
pursuant to the provisions hereof.
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SECTION 4. Non-Solicitation.
(a) Wassall and the Company each hereby agrees that for a
period of two (2) years following the Closing Date it shall not, and it shall
not permit any member of the Wassall Group or the GCC Group, respectively, to,
without the prior written consent of the other party hereto, directly or
indirectly, solicit any employee of the Wassall Group or the GCC Group, as the
case may be, for employment by such party; provided, however, that nothing
herein shall preclude any member of the Wassall Group or the GCC Group from
soliciting for employment any employee of the Wassall Group or the GCC Group,
respectively, whose employment with such party has been involuntarily terminated
(other than termination for cause); and provided, further, that nothing herein
shall preclude the Wassall Group or the GCC Group from engaging in ordinary
course general solicitations of employees, or the use of any independent
employment agency or search firm, not specifically directed at employees of the
Wassall Group or the GCC Group, as the case may be.
(b) Wassall and the Company each acknowledges and agrees that
a remedy at law for any breach, or threatened breach, of any of the provisions
of this Section 3 will be inadequate and, accordingly, each covenants and agrees
that the other shall, in addition to any other rights and remedies which the
other may have, be entitled to equitable relief, including injunctive relief,
and to the remedy of specific performance with respect to any breach or
threatened breach of such covenant, as may be available from any court of
competent jurisdiction. Such right to obtain equitable relief may be exercised,
at the option of such other party, concurrently with, prior to, after, or in
lieu of, the exercise of any other rights or remedies which such party may have
as a result of any such breach or threatened breach. Wassall and the Company
each hereby waive any requirement of the posting of a surety bond in connection
with the granting of any equitable relief or specific performance.
SECTION 5. Accounting Matters. The Company covenants and
agrees that for so long as Wassall continues to account for its stock interest
in the Company on an equity basis:
(a) the Company will not change its fiscal year end without
the prior written consent of Wassall;
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(b) the Company shall provide to Wassall the following:
(i) monthly consolidated management accounts for the
GCC Group, in the form given to executive management of the Company
within 7 days of receipt thereof by executive management (which, with
respect to the monthly consolidated management accounts for the month
of May 1997, notwithstanding the foregoing, shall be delivered to
Wassall no later than June 6, 1997 and shall be prepared in a format
consistent with the format used for the April 1997 management
accounts);
(ii) each annual budget of the GCC Group within one month
following the end of each fiscal year of the Company;
(iii) promptly following preparation or delivery thereof,
any written forecasts prepared by or delivered to executive management
of the Company relating to the Company on a consolidated basis;
(iv) promptly following availability thereof, the results of
each audit committee meeting (including, without limitation, minutes
of, and any letters written by or to, the Company's auditors); and
(v) any other information reasonably requested by Wassall and
necessary to assist Wassall with its equity accounting with respect to
its stock interest in the Company and its public reporting obligations
and practices in the U.K.
(c) the Company shall give Wassall at least seven (7) days
prior notice of any public announcement by the Company or any member of the GCC
Group; provided, however, that if, in the reasonable judgment of the Company,
the requirements of applicable law or any stock exchange rule or requirement
would not permit the Company to give Wassall seven days prior notice of any
announcement, the Company may, to the extent required by such law or rules, make
such public announcement without complying with such seven-day notice
requirement, but in such event the Company shall provide Wassall with as much
prior notice of such announcement as is reasonably practicable.
(d) the Company will publicly report its annual and second
quarter earnings, and will file each Annual
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Report on Form 10-K and each Quarterly Report on Form 10-Q for the Company's
second fiscal quarter, at least three business days prior to the respective
dates of Wassall's public announcement of its annual and semi-annual earnings
(the "Wassall Announcement Dates").
Wassall shall provide the Company with adequate (and, in any event, not less
than ten days or such greater time as reasonably practicable) prior notice of
each Wassall Announcement Date, and the Company and Wassall agree to cooperate
and coordinate with each other with respect to the matters described in clause
(d) above.
SECTION 6. Information.
(a) Wassall shall, and shall cause the other members of the
Wassall Group to, provide to any member of the GCC Group and Company shall, and
shall cause the other members of the GCC Group to, provide to any member of the
Wassall Group, upon the other's written request and (except as hereinafter
provided) at the cost and expense of the requesting party, at reasonable times,
full and complete access to, and duplication rights with respect to, any and all
such Information as the other may reasonably request in connection with any
legal, administrative or other proceedings or for auditing, accounting and tax
purposes, and Wassall shall use its best efforts to make available to the
Company, and the Company shall use its best efforts to make available to
Wassall, upon the other's written request, the officers, directors, employees
and agents of the members of the Wassall Group and of the GCC Group,
respectively, as witnesses to the extent that such persons may reasonably be
required in connection with any legal, administrative or other proceedings in
which members of the GCC Group or members of the Wassall Group, as the case may
be, may from time to time be a party. Without limiting the generality of the
foregoing, the GCC Group shall make available to the Wassall Group and its
auditors from time to time such information (including work papers) as may be
necessary or useful in connection with the Wassall earnings releases
contemplated by Section 5(b) hereof including, without limitation, (i) such
information as may be necessary or useful to Wassall to reconcile financial
information of the Company prepared in accordance with U.S. generally accepted
accounting principles ("GAAP") to U.K. GAAP, (ii) documentation showing, in
reasonable detail, the Company's calculations with respect to (A) copper
inventories and (B)
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any tax provisions, and (iii) information, in reasonable detail, regarding any
contingent liabilities of the Company; provided, however, that (x) the Company
shall not be required to perform such reconciliation or to maintain separate
financial books or accounting for U.K. GAAP purposes, and (y) in no event will
Wassall report earnings or financial results of the GCC Group in advance of such
disclosure by the GCC Group unless the Company shall have failed to comply with
the requirements of Section 5(d) hereof in a timely manner.
(b) Notwithstanding the provisions of Section 6(a), neither
Wassall nor the Company need provide any Information or make available witnesses
to the other (i) to the extent that doing so would (A) result in a waiver of any
attorney-client or work product privilege of such party or its legal counsel,
(B) require either Wassall or the Company to provide any Information which
relates to the subject matter of any legal, administrative or other proceeding
in which any member of the Wassall Group and any member of the GCC Group are
adverse parties, (C) result in any breach of any agreement with a third party,
or (D) result in a violation of any law, regulation or rule to which either
Wassall or the Company is subject; and (ii) with respect to any legal,
administrative or other proceeding which has been finally determined by any
court or other body having jurisdiction and which shall not be subject to
judicial review (by appeal or otherwise). Each party shall use reasonable
efforts, if requested by the other, to obtain waivers of any provision of any
agreement which restricts the provision of any Information.
(c) The Company shall provide Information and make available
witnesses pursuant to Section 6(a) at its own cost and expense (except that
Wassall shall reimburse the Company for the reasonable expenses incurred by the
Company of making witnesses available outside of the United States) in
connection with (i) any legal, administrative or other proceeding in respect of,
or any audit or investigation by any applicable taxing authority of, the federal
and state tax returns of Wassall which shall include within its scope any audit
or investigation with respect to any member of the GCC Group; and (ii) any
legal, administrative or other proceeding relating to or arising out of
Information provided by any member of the GCC Group to Wassall and included in
or relied on in preparing Wassall's consolidated financial statements, whether
before, at or after the date hereof (audited or unaudited).
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SECTION 7. Additional Covenants.
(a) The Company hereby covenants and agrees that (i) all
federal, state, local and foreign tax returns ("Tax Returns") of the Company
and, if applicable, other members of the GCC Group, shall be filed in a manner
consistent with past practice and past tax reporting since June 9, 1994, (ii)
the Company shall not amend any Tax Returns for periods prior to or including
the Closing Date without the consent of Wassall, and (iii) the Company shall not
withdraw any filing with a tax authority which affects a Tax Return made prior
to the date hereof.
(b) The Company hereby covenants and agrees that it shall, and
shall cause the other members of the GCC Group to, comply with the terms and
conditions of the Confidentiality Agreements applicable to and binding upon
Wassall and/or the other members of the Wassall Group as if such terms and
conditions were directly binding upon the Company and the other members of the
GCC Group.
(c) The Company hereby covenants and agrees that, promptly
following the consummation of the Offerings, it shall use its best efforts to
obtain letters of credit to replace all outstanding Wassall Letters of Credit.
(d) The Company hereby covenants and agrees that from and
after the consummation of the Offerings, it shall not, and shall cause the other
members of the GCC Group not to, submit any claim based upon or arising out of
events occurring or circumstances existing after the consummation of the
Offerings under any insurance policy under which any member of the Wassall Group
is jointly and severally liable, and further acknowledges and agrees that from
and after the consummation of the Offerings, the Wassall Group shall have no
obligation to maintain or provide any insurance coverage for any Loss that may
be incurred by any member of the GCC Group that is based upon or arises out of
events occurring or circumstances existing after the consummation of the
Offerings. The Company hereby further covenants and agrees that, with respect to
any claims by any member of the GCC Group based upon or arising out of events
occurring or circumstances existing prior to the consummation of the Offerings,
the aggregate amount of all such claims with respect to which the GCC Group
shall be entitled to coverage under any class of insurance policy (e.g., primary
liability and related excess liability, primary property and related excess
property) maintained by the Wassall Group shall not exceed an amount equal to
that percentage of the aggregate limit under such policy class equal to the
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percentage of premiums paid by the GCC Group under such policy class (as a
percentage of the total premiums paid with respect to such policy class by all
covered Persons).
(e) Wassall hereby covenants and agrees that it shall pay to
the Company its allocable portion (based upon the amount of premiums pre-paid by
all covered parties) of any pre-paid premiums with respect to any period after
the consummation of the Offerings actually refunded to Wassall, if any, under
any insurance policy maintained by Wassall.
(f) Wassall and the Company hereby acknowledge and agree that
upon consummation of the Offerings the Management Agreement between Wassall USA,
Inc. and GCC Corporation shall automatically and without further action
terminate; provided, however, that such termination shall not eliminate or
affect any obligation of GCC Corporation to pay any accrued and unpaid amounts
owed to Wassall USA, Inc. thereunder.
(g) The Company hereby covenants and agrees that it shall use
the proceeds of its initial borrowing under the New Credit Facility (as such
term is defined in the definitive prospectus for the Offerings (the
"Prospectus") as described under the caption "Prospectus Summary - The
Refinancing" in the Prospectus.
SECTION 8. Representations and Warranties. As an inducement to
enter into this Agreement, each of Wassall and Cable represents and warrants to
the Company, and the Company hereby represents and warrants to each of Wassall
and Cable, that:
(a) it is a corporation duly organized and validly existing
under the laws of its jurisdiction of incorporation;
(b) it has duly and validly taken all corporate action
necessary to authorize the execution, delivery and performance of this Agreement
and the consummation of the transaction contemplated hereby;
(c) this Agreement has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to
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general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity); and
(d) none of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or the compliance with any
of the provisions of this Agreement will (i) conflict with or result in a breach
of any provision of its corporate charter or bylaws or other similar
organizational documents or instruments, (ii) breach, violate or result in a
default under any of the terms of any agreement or other instrument or
obligation to which it is a party or by which it or any of its properties or
assets may be bound, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to it or affecting any of its properties
or assets, other than, in each case, any conflict, breach, violation or default
that would not be reasonable likely to materially impair the ability of such
party to perform its obligations under this Agreement.
SECTION 9. Confidentiality. Except as otherwise required by
applicable law or stock exchange rule or requirement and subject to the right of
each party to enforce its rights hereunder in any legal action, each party shall
keep strictly confidential and shall cause its employees and agents to keep
strictly confidential, any Information which it or any of its agents or
employees may acquire pursuant to any provision of this Agreement; provided,
however, that such obligation to maintain confidentiality shall not apply to
Information which (a) at the time of disclosure was in the public domain other
than as a result a disclosure by the receiving party or its employees, agents or
Affiliates, or (b) is or becomes available to the receiving party on a
non-confidential basis and without restriction on use or disclosure from a
source which, to the best of the receiving party's knowledge, is not prohibited
from using or disclosing such Information by a legal, contractual or fiduciary
obligation.
SECTION 10. Effective Date of Agreement. Following execution
of this Agreement by the parties hereto, this Agreement shall become effective
on (and shall not be effective until) the Closing Date.
SECTION 11. Benefits of this Agreement; Assignment. Nothing in
this Agreement shall be construed to
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give to any person or entity, other than the parties hereto and (to the extent
provided herein) their respective Affiliates, any legal or equitable right,
remedy or claim under this Agreement. This Agreement is for the sole and
exclusive benefit of, and shall be binding upon, the parties hereto and (to the
extent provided herein) their respective Affiliates and their respective heirs,
personal representatives, successors and permitted assigns. No assignment of any
obligations hereunder may be made by any party to this Agreement (by operation
of law or otherwise) without the prior written consent of the other parties
hereto, and any attempted assignment without such consent shall be void.
SECTION 12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF DELAWARE, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
SECTION 13. Severability. If any provision of this Agreement
is held to be invalid or unenforceable, such provision shall be automatically
severed from this Agreement and there shall be added to this Agreement a
provision as similar as possible to such severed provision as may be valid and
enforceable, and the validity and enforceability of the other provisions of this
Agreement shall not be affected thereby.
SECTION 14. Entire Agreement; Amendments. This Agreement
(including the annex hereto) and the Stock Purchase Agreement represent the
entire understanding and agreement between the parties hereto with respect to
the subject matter hereof and supersede all prior and contemporaneous
agreements, understandings and arrangements, whether oral or written, of the
parties with respect thereto. Except as otherwise provided herein, this
Agreement may be amended, supplemented or changed, and any provision hereof may
be waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought.
SECTION 15. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed given when
delivered personally, on the fifth business day after mailed by certified mail,
return receipt requested, the next business day after delivery to a recognized
overnight courier or when sent by facsimile to
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the parties (and shall also be transmitted by facsimile to the Persons receiving
copies thereof) at the following addresses (or to such other address as a party
may have specified by notice given to the other party pursuant to this
provision):
If to the Company:
General Cable Corporation
4 Tesseneer Drive
Highland Heights, Kentucky 41076
Attention: General Counsel
Facsimile: 606-572-8444
If to Wassall or Cable:
Wassall PLC
39 Victoria Street
London SW1H OEE
Attention: Group Solicitor
Facsimile: 171-333-0304
with a copy to:
Wassall USA, Inc.
The Moorings
301 Riverside Avenue
Westport, Connecticut 06880
Attention: General Counsel
Facsimile: 203-221-6443
SECTION 16. Headings. The section headings used in this
Agreement are for convenience only and do not in any way limit or modify the
terms and provisions hereof.
SECTION 17. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
WASSALL PLC
By:
-------------------------------
Name:
Title:
WASSALL NETHERLANDS CABLE BV
By:
-------------------------------
Name:
Title:
GENERAL CABLE CORPORATION
By:
-------------------------------
Name:
Title:
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT made this 13th day of May, 1997
between Wassall PLC, a corporation organized under the laws of England
("Wassall"), General Cable Industries, Inc., a Delaware corporation ("GCI"), and
General Cable Corporation, a Delaware corporation ("GCC").
W I T N E S S E T H:
WHEREAS, Wassall is the beneficial and record owner of 52,000
ordinary shares (the "Carol Cable Shares") of Carol Cable Ltd., a corporation
organized under the laws of England and Wales ("Carol Cable"), and 775,000
ordinary shares (the "Carol Europe Shares") of Carol Cable Europe Ltd., a
corporation organized under the laws of England and Wales ("Carol Europe" and,
together with Carol Cable, the "Carol Companies"), which represent all of the
issued and outstanding capital stock of the Carol Companies (collectively, the
"Carol Shares"); and
WHEREAS, Wassall desires to sell to GCI, and GCI desires to
purchase from Wassall, the Carol Shares upon the terms and subject to the
conditions set forth herein;
NOW THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto agree as follows:
SECTION 1. Purchase and Sale of Carol Cable Shares. Upon the
terms and subject to the conditions contained herein, GCI hereby agrees to
purchase from Wassall, and Wassall hereby agrees to sell, assign, transfer,
convey and deliver to GCI, the Carol Shares, for an aggregate purchase price
(the "Purchase Price") of U.S. $2 million (which amount shall be allocated
between the Carol Cable Shares and the Carol Europe Shares as set forth on
Exhibit A hereto).
SECTION 2. Payment of Purchase Price. On the Closing Date (as
hereinafter defined), GCI shall pay the Purchase Price to Wassall by delivery to
Wassall of a certified or bank cashier's check in New York Clearing House Funds,
payable to the order of Wassall, or at Wassall's option, by wire transfer of
immediately available funds into an account designated by Wassall.
SECTION 3. Closing. The closing of the purchase and sale of
the Carol Cable Shares (the "Closing") will take place at 10:00 a.m. at the
offices of Weil, Gotshal & Manges
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LLP located at 767 Fifth Avenue, New York, New York (or at such other place as
the parties may mutually agree) on the business day following the satisfaction
of the conditions set forth in Sections 8.1 and 8.2 hereof (or the waiver
thereof by the party entitled to waive that condition), or on such other date as
Wassall and GCI may mutually agree. The date on which the Closing shall be held
is referred to in this Agreement as the "Closing Date".
SECTION 4. Representations and Warranties of
Wassall. Wassall represents and warrants to GCI and GCC as
follows:
(a) Wassall is a corporation duly organized and
validly existing under the laws of England.
(b) Wassall has all requisite corporate power and authority to
execute, deliver and perform this Agreement. The execution, delivery and
performance by Wassall of this Agreement have been duly authorized by all
necessary corporate action on the part of Wassall.
(c) This Agreement has been duly executed and delivered by
Wassall. This Agreement constitutes a legal and valid obligation of Wassall,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(d) None of the execution and delivery by Wassall of this
Agreement, the consummation of the transactions contemplated hereby or thereby,
or compliance by Wassall with any of the provisions hereof or thereof will (i)
conflict with, or result in the breach of, any provision of the memorandum or
articles of association of Wassall; or (ii) violate any statute, rule,
regulation or Order (as hereinafter defined) of any governmental body or
authority by which Wassall is bound; except, in the case of clause (ii), for
such violations, breaches or defaults as would not, individually or in the
aggregate, materially and adversely impair or delay the consummation of the
transactions contemplated by this Agreement.
(e) No consent, waiver, approval, Order, permit or
authorization of, or declaration or filing with, or notification to, any
governmental authority is required
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on the part of Wassall in connection with the execution and delivery of this
Agreement or the compliance by Wassall with any of the provisions hereof or
thereof.
(f) The Carol Cable Shares constitute all of the issued and
outstanding shares of capital stock of the Carol Cable Companies. Wassall is the
beneficial owner of the Carol Cable Shares, free and clear of any liens, claims,
security interests, pledges, restrictions, or other encumbrances whatsoever
(collectively, "Liens").
SECTION 5. Representations and Warranties of GCI and GCC. GCI
and GCC jointly and severally represent and warrant to Wassall as follows:
(a) Each of GCI and GCC is a corporation duly organized and
validly existing under the laws of State of Delaware.
(b) Each of GCI and GCC has all requisite corporate power and
authority to execute, deliver and perform this Agreement. The execution,
delivery and performance of this Agreement by each of GCI and GCC have been duly
authorized by all necessary corporate action on the part of GCI and GCC,
respectively.
(c) This Agreement has been duly executed and delivered by
each of GCI and GCC. This Agreement constitutes a legal and valid obligation of
each of GCI and GCC, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
(d) None of the execution and delivery by GCI or GCC of this
Agreement, the consummation of the transactions contemplated hereby or thereby,
or compliance by GCI or GCC with any of the provisions hereof or thereof will
(i) conflict with, or result in the breach of, any provision of the certificate
of incorporation or by-laws of GCI or GCC; or (ii) violate any statute, rule,
regulation or Order of any governmental body or authority by which GCI or GCC is
bound; except, in the case of clause (ii), for such violations, breaches or
defaults as would not, individually or in the aggregate, materially and
adversely impair or delay the consummation of the transactions contemplated by
this Agreement.
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(e) No consent, waiver, approval, Order, permit or
authorization of, or declaration or filing with, or notification to, any
governmental authority is required on the part of GCI or GCC in connection with
the execution and delivery of this Agreement or the compliance by GCI or GCC
with any of the provisions hereof or thereof.
(f) GCI is purchasing the Carol Cable Shares for investment
purposes only and not with a view to the sale or distribution thereof in
violation of the Securities Act of 1933, as amended.
SECTION 6. No Warranty. Except as set forth in Section 4
hereof, Wassall does not make and expressly, completely and absolutely disclaims
any representations, warranties or agreements of any kind whatsoever with
respect to Wassall, the Carol Companies or the business and assets of Wassall or
the Carol Companies. It is therefore expressly understood and agreed that Buyer
accepts the condition of the properties of the Carol Companies "AS IS, WHERE IS"
without any representation, warranty or guarantee, express or implied, as to
merchantability, fitness for a particular purpose or otherwise as to the
condition, size, extent, quantity, type or value of such property.
SECTION 7. Covenants.
SECTION 7.1 Repayment of Debt; Assumption of Obligations.
(a) On the Closing Date, GCI shall provide the Carol Companies
with the funds necessary to, and shall cause the Carol Companies to, (i) repay
in full to Wassall all outstanding loans and other advances (including any
accrued and unpaid interest through the Closing Date thereon) owed to Wassall or
any affiliate of Wassall by either of the Carol Cable Companies (collectively,
"Intercompany Loans"), (ii) discharge Wassall or any subsidiary of Wassall from
all liability in respect of any letters of credit outstanding on the Closing
Date on behalf of either of the Carol Cable Companies, and (iii) pay the
principal amount of, and all accrued and unpaid interest through the Closing
Date on, all outstanding borrowings of Carol Cable and Carol Europe under any
credit facility of Wassall or any subsidiary of Wassall.
(b) GCI hereby expressly assumes and agrees to punctually pay,
perform, satisfy, become primarily liable for and discharge as and when due all
obligations, claims, liabilities, debts or other expenses of any kind or nature,
whether known or unknown, fixed, contingent, absolute, determined,
undeterminable, liquidated or unliquidated or
4
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otherwise, of Wassall (or any affiliate of Wassall) directly or indirectly
relating to or arising under (i) Wassall's 'L'37,155 floating rate Unsecured
Loan Note 2001, consisting of (A) an Unsecured Loan Note in the amount of
'L'19,655 (Certificate No. 1) held by D J Scanes Esq., (B) an Unsecured Loan
Note in the amount of 'L'13,710 (Certificate No. 2) held by R B Scanes Esq.,
and (C) an Unsecured Loan Note in the amount of 'L'3,790 (Certificate No. 3)
held by S P Chapman Esq. (collectively, the "Notes") (including, without
limitation, any accrued and unpaid amounts thereunder), (ii) any automobile
leases made in Wassall's name for or on behalf of any employee of either of the
Carol Companies (collectively, the "Leases"), and (iii) any severance agreement
or arrangement entered into by Wassall or any affiliate of Wassall and any
employee of the Carol Companies (the "Severence Agreements"). GCI further
undertakes to use its commercially reasonable efforts, promptly following the
Closing Date, to enter into an amendment to each such Note, Lease and Severence
Agreement or to enter into new notes, leases or severence agreements in
substitution for and replacement of the Notes, Leases and Severence Agreements,
in either case providing for the full and unconditional release of Wassall from
all obligations and liabilities under each of the Notes, the Leases and the
Severence Agreements.
SECTION 7.2 Other Actions. Each of Wassall GCC and GCI shall
use its reasonable efforts to (i) take (or cause to be taken) all actions
necessary or appropriate to consummate the transactions contemplated by this
Agreement, and (ii) cause the fulfillment at the earliest practicable date of
all of the conditions to their respective obligations to consummate the
transactions contemplated by this Agreement.
SECTION 8. Conditions to Closing.
SECTION 8.1 Conditions to the Obligations of GCI and GCC. The
obligation of each of GCI and GCC to consummate the transactions contemplated by
this Agreement is subject to the fulfillment, on or prior to the Closing Date,
of each of the following conditions (any or all of which may be waived by GCC in
whole or in part to the extent permitted by applicable law):
(a) all representations and warranties of Wassall contained
herein shall be true and correct in all material respects as of the Closing
Date;
(b) Wassall shall have performed and complied in all material
respects with all obligations and covenants
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required by this Agreement to be performed or complied withby it on or prior to
the Closing Date;
(c) certificates representing 100% of the Carol Company Shares
(or, in lieu thereof, a certificate attesting to the loss of any such
certificate, in form reasonably satisfactory to GCC (a "Lost Stock
Certificate")) shall have been, or shall at the Closing be, validly delivered
and transferred to GCC, free and clear of any and all Liens; and
(d) there shall not be in effect any order, injunction,
judgment, decree, ruling, writ or assessment (collectively, "Order") by a
governmental authority of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
and
(e) the initial public offerings of all or a portion of the
shares of common stock of GCC owned by a subsidiary of Wassall (the "Offerings")
shall have been consummated.
SECTION 8.2 Conditions Precedent to Obligations of the
Wassall. The obligations of Wassall to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, prior to or on the Closing
Date, of each of the following conditions (any or all of which may be waived by
Wassall in whole or in part to the extent permitted by applicable law):
(a) all representations and warranties of GCI and GCC
contained herein shall be true and correct in all material respects as of the
Closing Date;
(b) Each of GCI and GCC shall have performed and complied in
all material respects with all obligations and covenants required by this
Agreement to be performed or complied with by such party on or prior to the
Closing Date;
(c) there shall not be in effect any Order by a governmental
authority of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby; and
(d) the Offerings shall have been consummated.
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SECTION 9. Documents to be Delivered at Closing.
SECTION 9.1 Documents to be Delivered by GCI. At the Closing,
GCI shall deliver to Wassall the following:
(a) evidence of the wire transfer referred to in Section 2
hereof; and
(b) evidence, in form and substance reasonably satisfactory to
Wassall, of the repayments and discharges referred to in clauses (ii) and (iii)
of Section 7.1(a).
SECTION 9.2 Documents to be Delivered by Wassall. At the
Closing, Wassall shall deliver, or cause to be delivered, to GCI:
(a) the stock certificates representing the Carol Cable
Shares, duly endorsed in blank or accompanied by stock transfer powers and with
all requisite stock transfer tax stamps attached (or, in lieu of any thereof, a
Lost Stock Certificate), in each case accompanied by stock powers or stock
transfer forms duly endorsed in blank or accompanied by duly executed
instruments of transfer; and
(b) resignations of Messrs. Miller and Roper from the board of
directors of each Carol Company, effective upon the Closing.
SECTION 10. Indemnification.
SECTION 10.1 Indemnification for Breaches of Representations.
Wassall agrees to indemnify and hold harmless GCI and GCC, and GCI and GCC
jointly and severally agree to indemnify and hold harmless Wassall, from and
against any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs and expenses (including reasonable attorneys'
fees) (collectively, "Losses") of any kind which may be imposed upon, incurred
by or asserted against such other party arising out of or resulting from the
failure of any representations or warranty made by such party hereunder to be
true and correct.
SECTION 10.2 Additional Indemnification. GCI and GCC further
jointly and severally agree to indemnify and hold harmless Wassall and its
affiliates against Losses of any kind which may be imposed upon, incurred by or
asserted against Wassall or any such affiliates arising out of or resulting from
ownership by Wassall or any such affiliate of the Carol Cable Shares or the
conduct, ownership or operation by the Carol Companies, GCC or any affiliate
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thereof of any of the current, former or future businesses or assets of Carol
Cable or Carol Europe or any predecessor thereof regardless of when such Losses
arose or arise and regardless of by whom or when such Losses are asserted.
SECTION 11. Further Assurances. The parties each agree that
if, at any time after the date hereof, any party shall consider or be advised
that any further assignments, conveyances, certificates, filings, instruments or
documents or any other things are necessary or desirable to vest, perfect or
confirm in GCI title to the Carol Cable Shares, or to consummate any of the
transactions contemplated by this Agreement, the appropriate other party shall,
upon request, promptly execute and deliver all such proper deeds, assignments,
certificates, filings, instruments and documents and do all things reasonably
necessary and proper to vest, perfect or confirm title to the Carol Cable Shares
in GCI, or otherwise to carry out the purposes of this Agreement.
SECTION 12. Benefits of this Agreement; Assignment. Nothing in
this Agreement shall be construed to give to any person or entity, other than
the parties hereto, any legal or equitable right, remedy or claim under this
Agreement. This Agreement is for the sole and exclusive benefit of, and shall be
binding upon, the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns. No assignment of this
Agreement or any rights or obligations hereunder may be made by any party to
this Agreement (by operation of law or otherwise) without the prior written
consent of the other parties hereto, and any attempted assignment without such
consent shall be void.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF DELAWARE, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
SECTION 14. Severability. If any provision of this Agreement
is held to be invalid or unenforceable, such provision shall be automatically
severed from this Agreement and there shall be added to this Agreement a
provision as similar as possible to such severed provision as may be valid and
enforceable, and the validity and enforceability of the other provisions of this
Agreement shall not be affected thereby.
SECTION 15. Entire Agreement; Amendments. This Agreement
(including the exhibits hereto) and the Intercompany Agreement between Wassall,
Wassall Netherlands
8
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Cable BV and GCC dated as of the date hereof, represent the entire understanding
and agreement between the parties hereto with respect to the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings
and arrangements, whether oral or written, of the parties with respect thereto.
Except as otherwise provided herein, this Agreement can be amended, supplemented
or changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the party against whom
enforcement of any such amendment, supplement, modification or waiver is sought.
SECTION 16. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed given when
delivered personally, on the fifth business day after mailed by certified mail,
return receipt requested, the next business day after delivery to a recognized
overnight courier or when sent by facsimile to the parties (and shall also be
transmitted by facsimile to the Persons receiving copies thereof) at the
following addresses (or to such other address as a party may have specified by
notice given to the other party pursuant to this provision):
If to GCI or GCC:
General Cable Corporation
4 Tesseneer Drive
Highland Heights, Kentucky 41076
Attention: General Counsel
Facsimile: 606-572-8444
If to Wassall:
Wassall PLC
39 Victoria Street
London SW1H OEE
Attention: Group Solicitor
Facsimile: 171-333-0304
with a copy to:
Wassall USA, Inc.
The Moorings
301 Riverside Avenue
Westport, CT 06880
Attention: General Counsel
Facsimile: 203-221-6443
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SECTION 17. Headings. The section headings used in this
Agreement are for convenience only and do not in any way limit or modify the
terms and provisions hereof.
SECTION 18. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
WASSALL PLC
By:_________________________________
Name:
Title:
GENERAL CABLE INDUSTRIES, INC.
By:_________________________________
Name:
Title:
GENERAL CABLE CORPORATION
By:_________________________________
Name:
Title:
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EXHIBIT A
ALLOCATION OF PURCHASE PRICE
Amount Allocated
-----------------
Carol Cable Shares $1,250,000
Carol Europe Shares $750,000
11
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE
GENERAL CABLE CORPORATION
We consent to the use in this Amendment No. 3 to Registration Statement No.
333-22961 of General Cable Corporation on Form S-1 of our report dated February
7, 1997 (except for Note 19 as to which the date is April 18, 1997) on the
combined financial statements of General Cable Corporation and related companies
appearing in the Prospectus, which is a part of this Registration Statement, and
to the reference to us under the heading 'Experts' in such Prospectus.
We also consent to the use in this Amendment No. 3 to Registration
Statement No. 333-22961 of General Cable Corporation on Form S-1 of our report
dated February 3, 1997 on the consolidated financial statements of General Cable
Corporation and subsidiaries (Predecessor), appearing in the Prospectus, which
is a part of this Registration Statement.
Our audits of the financial statements referred to in our reports dated
February 7, 1997 (except for Note 19 as to which the date is April 18, 1997) and
February 3, 1997 also included the financial statement schedule of General Cable
Corporation, listed in Item 16. This financial statement schedule is the
responsibility of the Corporation's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
DELOITTE & TOUCHE LLP
Cincinnati, Ohio
May 14, 1997
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